# 01 4102(L)

01-4103(CON), 02-4160(COM), 02-4189(CON), 02-6139(CON)



## 1uiteb 'tate (Court of tppeaf^

for the 

## 'uoub (Circuit
NATURAL RESOURCES DEFENSE COUNCIL, PUBLIC UTILITY LAW PROJECT, STATE OF CONNECTICUT, STATE OF VERMONT, STATE OF MAINE, STATE OF NEW JERSEY, STATE OF NEVADA, STATE OF CALIFORNIA, CONSUMER FEDERATION OF AMERICA & STATE OF NEW YORK, - against - Petitioners, SPENCER ABRAHAM, As Secretary of the United States Department of Energy & UNITED STATES DEPARTMENT OF ENERGY,

- and - Respondents,
AIR-CONDITIONING & REFRIGERATION INSTITUTE, STATE OF NEW HAMPSHIRE, TEXAS RATEPAYERS' ORGANIZATION TO SAVE ENERGY, MASSACHUSETTS UNION OF PUBLIC HOUSING TENANTS, COMMONWEALTH OF MASSACHUSETTS, NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, & STATE OF RHODE ISLAND,

PETITIONS FOR REVIEW OF UNITED STATES DEPARTMENT OF ENERGY RULES Intervenors.

BRIEF FOR INTERVENORS NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS

SHARLA M. BARKLIND Assistant General Counsel JAMES BRADFORD RAMSAY General Counsel National Association of Regulatory Utilities Commissioners 1101 Vermont Avenue, N.W., Suite 200 Washington, D.C. 20005 (202) 898-1350 

# -

# ..... 01-4103(CON), 02-4160(COM), 02-4189(CON), 02-6139(CON) 

## Wniteb**~tate5** 

## ([ourt of**~ppeal5** for the 

## $econb (!Circuit

NATURAL RESOURCES DEFENSE COUNCIL, PUBLICUTILITYLAWPROJECT, STATE OF CONNECTICUT, STATE OF VERMONT, STATE OF MAINE, STATE OFNEW JERSEY, STATE OFNEVADA, STATE OFCALIFORNIA, CONSUMERFEDERATION OF AMERICA & STATE OF NEWYORK, Petitioners,

- againstSPENCER ABRAHAM, As Secretary ofthe United States Department ofEnergy & UNITED STATES DEPARTMENT OF ENERGY, Respondents,

- andAIR-CONDITIONING & REFRIGERATION INSTITUTE, STATE OF NEWHAMPSHIRE, TEXAS RATEPAYERS' ORGANIZATION TO SAVEENERGY, MASSACHUSETTS UNION OF PUBLIC HOUSINGTENANTS, COMMONWEALTH OF MASSACHUSETTS, NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, & STATE OFRHODE ISLAND,

PETITIONS FORREVIEW OF UNITED STATES DEPARTMENTOF ENERGYRULES Intervenors.

BRIEF FORINTERVENORS NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS

SHARLAM. BARKLIND Assistant General Counsel JAMES BRADFORD RAMSAY General Counsel National Association ofRegulatory Utilities Commissioners 1101 VennontAvenue, N.W., Suite 200 Washington, D.C. 20005 (202) 898-1350CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and 2d Circuit Rules 26.1 and 28, the National Association of Regulatory Utility Commissioners (NARUC) respectfully submits this disclosure statement. NARUC is a quasi-governmental nonprofit organization founded in 1889 and incorporated in the District of Columbia. NARUC asserts it is a "trade association" as that term is defined in Federal Rules of Appellate Procedure Rule 26.1(b) and thus is not required to submit a disclosure statement. However, for the Court's convenience, we offer the following. NARUC has no parent company. No publicly held company has any ownership interested in NARUC. NARUC represents those government officials in the fifty States, the District of Columbia, Puerto Rico, and the Virgin Islands, charged with the duty of regulating public utilities and common carriers. NARUC's mission is to serve the public interest by improving the quality and effectiveness of public utility regulation. Under State law, NARUC's members have the obligation to ensure the establishment and maintenance of such energy utility services as may be required by the public convenience and necessity, and to ensure that such services are provided at rates and conditions that are just, reasonable and nondiscriminatory for all consumers. The obligation NARUC's members have to ensure the integrity of energy services gives NARUC's members the unique opportunity to work to

i CORPORATEDISCLOSURE STATEMENT Pursuant to Rule 26.1 ofthe Federal Rules ofAppellate Procedure and 2d Circuit Rules 26.1 and 28, the National Association of Regulatory Utility Commissioners (NARUC) respectfully submits this disclosure statement. NARUC is a quasi-governmental nonprofit organization founded in 1889 and incorporated in the District ofColumbia. NARUC asserts it is a "trade association" as that term is defined in Federal Rules of Appellate Procedure Rule 26.1(b) and thus is not required to submit a disclosure statement. However, for the Court's convenience,

we offer the following. NARUC has no parent company. No publicly held companyhas any ownership interested in NARUC. NARUC represents those government officials in the fifty States, the District of Columbia, Puerto Rico, and the Virgin Islands, charged with the duty of regulating public utilities and common carriers. NARUC's mission is to serve the public interest by improving the quality and effectiveness of public utility regulation. Under State law, NARUC's members have the obligation to ensure the establishment and maintenance ofsuch energy utility services as may be required by the public convenience and necessity, and to ensure that such services are provided at rates and conditions that arejust, reasonable and nondiscriminatory for all consumers. The obligation NARUC's members have to ensure the integrity of energy services gives NARUC's members the unique opportunity to work toimprove and enhance the delivery of energy services in our country. Working with

standing committees, NARUC Energy and Environmental Programs support the interests of public utility regulation via technical outreach and research. To this end, NARUC cooperates with the U.S. Department of Energy (DOE), the U.S. Environmental Protection Agency (EPA), and other donors to support environmentally sustainable energy production and use. Additionally, NARUC's members serve on the Secretary of Energy's Electricity Advisory Board and other organizations that are actively engaged in developing proposals and policies that will ensure that our nation will continue to have access to reliable and sufficient electricity sources. Both the United States Congress and federal courts have recognized that NARUC is a proper party to represent the collective interest of the State regulatory commissions.'

1 See e. g., 47 U.S.C. § 410 (1986), where Congress calls NARUC "the national organization of the State commissions" responsible for economic and safety regulation of the intrastate operation of carriers and utilities. Cf., 47 U.S.C. § 254 (1996). See, also, USA v. Southern Motor Carrier Rate Conference et al., 467 F.Supp. 471 (N.D. Ga. 1979), aff. 672 F.2d 469 (5th Cir. Unit "B" 1982; aff. en banc, 702 F.2d 532 (5t'' Cir. Unit "B" 1983), rev'd, 471 U.S. 48 (1985). See, also Indianapolis Power and Light C. v. ICC, 587 F.2d 1098 (7t" Cir. 1982); Washington Utilities and Transportation Commission v. FCC, 513 F.2d 1142 (9t' Cir. 1976).

ii improve and enhance the delivery ofenergy services in our country. Working with standing committees, NARUC Energy and Environmental Programs support the interests ofpublic utility regulation via technical outreach and research. To this end, NARUC cooperates with the U.S. Department of Energy (DOE), the U.S. Environmental Protection Agency (EPA), and other donors to support environmentally sustainable energy production and use. Additionally, NARUC's members serve on the Secretary ofEnergy's Electricity Advisory Board and other organizations that are actively engaged in developing proposals and policies that will ensure that our nation will continue to have access to reliable and sufficient electricity sources. Both the United States Congress and federal courts have recognized that NARUC is a properparty to represent the collective interest ofthe Stateregulatory comn1issions. 1

See, e.g., 47 U.S.C. § 410 (1986), where Congress calls NARUC "the national organization of the State commissions" responsible for economic and safety regulation ofthe intrastate operation ofcarriers and utilities. Cf., 47 U.S.C. § 254 (1996). See, also, USA v. Southern Motor Carrier Rate Conference, et al., 467 F.Supp. 471 (N.D. Ga. 1979), aff. 672 F.2d469 (5th CiT. Unit "B" 1982; aff. en banc, 702 F.2d 532 (5 th CiT. Unit "B" 1983), rev'd, 471 U.S. 48 (1985). See, also Indianapolis Power and Light C. v. ICC, 587 F.2d 1098 (7th CiT. 1982); Washington Utilities and Transportation Commission v. FCC, 513 F.2d 1142 (9th CiT. 1976).

.

11TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................iv PRELIMINARY STATEMENT ....................................................1 JURISDICTIONAL STATEMENT ................................................ 3 ISSUE PRESENTED .................................................................4 STATEMENT OF THE CASE ......................................................4 STATEMENT OF THE FACTS ....................................................5 SUMMARY OF ARGUMENT ................................................... 12 ARGUMENT ........................................................................15 1. A 12 SEER Standard Is Not the Maximum Improvement in Energy Efficiency that is Technologically Feasible ....................................................................15 II. DOE Fails To Justify, Nor Does The Record Provide Evidence To Conclude, That the Revised 12 SEER Standard Is the Maximum Improvement in Energy Efficiency that is Economically Justified ....................................................................1 6

CONCLUSION ......................................................................27 CERTIFICATE OF COMPLIANCE ............................................. 28

111 TABLE OF CONTENTS TABLE OF AUTHORITIES

.......................................................iv**J>~LIrvfI~AFl1{ STATErviE~T** ....................................................1**JURlSDICTIO~AL STATErviE~T** ..........................................'"

...3 ISSUE**J>~SE~TED**.................................................................4 STATErvfENT OF THE CASE

......................................................4**STATErviE~T** OF THE FACTS

....................................................5 SUrvirvfAFl1{ OF ARGUMENT

...................................................12**AFlGUME~T**........................................................................15 1. A 12 SEEFl Standard Is Notthe MaximumImprovement in Energy Efficiencythat is Technologically Feasible

....................................................................15 II. DOEFails To Justify,**~or** Does The Flecord J>rovide Evidence To Conclude, Thatthe Flevised 12 SEER Standard Is the Maximum Improvementin EnergyEfficiency that is Economically Justified

....................................................................16**CO~CLUSION**......................................................................27 CEFlTIFICATE OF**COMJ>LIA~CE**.............................................28

111TABLE OF AUTHORITIES Cases California v. Watt, 668 F.2d 1290, 1302 (D.C.Cir.1981) ...........................19n.8 Callaway v. Commissioner of Internal Revenue, 231 F.2d 106, (2d Cir. 2000) .........................................................................11 Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89-90 (2d Cir. 2000) .......... 10,11 Cellular Tel. Co. v. Town of Oyster Bay, 166 F.3d 490, 494 (2d Cir. 1999)...11,12 Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984) ........................................10 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971) ... 19n.8 Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993) ...............................11 Gooding v. Willard, 209 F.2d 913 (2d Cir. 1954) .......................................12 Illinois Bell Tel. Co. V. FCC, 966 F.2d 1478 (D.C. Cir. 1992) .......................10 Indianapolis Power and Light Co. v. ICC, 587 F.2d 1098 (7t" Cir. 1982).........iin.1 INS v. Cardoza-Fonseca, 480 U.S. 421 (1987) ..........................................11 Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, (1983) ..............................................................................10, 11, 19n.9 NRDC v. Herrington, 768 F.2d 1355 (1985) ............................5, 6, 7,15,16, 18 Schulz v. Williams, 44 F.3d 48, 51 (2d Cir. 1994) ....................................4n.1 Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515 (1994) ........................11 Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) ........................12

iv TABLE OFAUTHORITIES Cases Californiav. Watt, 668 F.2d 1290, 1302 (D.C.Cir.1981)

...........................19n.8 Callawayv. Commissioner ofInternal Revenue, 231 F.2d 106, (2d Cir. 2000)

.........................................................................11 CellularPhone Taskforce v. FCC, 205 F.3d 82, 89-90 (2d Cir. 2000)

..........10, 11 Cellular Tel. Co. v. Town ofOysterBay, 166 F.3d490,494 (2d Cir. 1999)

... 11,12 ChevronU.S.A. v. NRDC, 467 U.S. 837 (1984)

........................................10 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971)

... 19n.8 Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (1993)

...............................11 Gooding v. Willard, 209 F.2d 913 (2d Cir. 1954)

.......................................12 Illinois Bell Tel. Co. V. FCC, 966 F.2d 1478 (D.C. Cir. 1992)

.......................10 Indianapolis Power and Light Co. v. ICC, 587 F.2d 1098 (7th Cir. 1982)

.........iin.l INS v. Cardoza-Fonseca, 480 U.S. 421 (1987)

..........................................11 MotorVehicles Mfrs. Ass'nv. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, (1983)

..............................................................................10,11, 19n.9 NRDC v. Herrington, 768 F.2d 1355 (1985)

............................5,6,7,15,16,18 Schulzv. Williams, 44 F.3d48, 51 (2d Cir. 1994)

....................................4n.1 Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515 (1994)

........................11 Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951)

........................12

IVUSA v. Southern Motor Carrier Rate Conference, et al., 467 F.Supp. 471

(N.D. Ga. 1979), aff. 672 F.2d 469 (5t" Cir. Unit "B" 1982; aff. en banc, 702 F.2d 532 (5t' Cir. Unit "B" 1983), rev'd, 471 U.S. 48 (1985)....... iin.I Warth v. Seldin, 422 U.S. 490, 501-02, 95 S.Ct. 2197, 2206-07, 45 L.Ed.2d 343 (1975) ..........................................................4n.1 Washington Utilities and Transportation Commission v. FCC, 513 F.2d 1142 (9t' Cir. 1976) ......................................................................iin.I Williams v. Bowen, 859 F.2d 255, 256 (2d Cir. 1988) ............................14, 14,26 Statutes 5 U.S.C. §§ 553 et seg ........................................................ .............2 5 U.S.C. § 706 (2)(A) (1988) ...............................................................10 28 U.S.C. § 1291 ..............................................................................3 42 U.S.C. § 6201 (4), (5) ....................................................................5 42 U.S.C. §§ 6291-6309 .....................................................................3 42 U.S.C. 6295(d)(3)(A) and (B) ...........................................................7 42 U.S.C. 6295(o)(1) ......................................................................2, 2,7 42 U.S.C. § 6295 (o)(2)(A) ............................................................12, 12,15 42 U.S.C. § 6295 (o)(2)(B)(i) ...............................................................4 42 U.S.C. § 6306(b) ..................................................................2, 11, 15 42 U.S.C. § 6306(b)(2) .......................................................................4

Other Authorities Federal Rules of Appellate Procedure 26.1 ..............................................i Federal Rules of Appellate Procedure 28(1) ....................................... i, 5, 18

v USAv. Southern Motor CarrierRate Conference, et al., 467 F.Supp. 471 (N.D. Ga. 1979), aff. 672 F.2d 469 (5 th Cir. Unit "B" 1982; aff. en bane, 702 F.2d 532 (5 th Cir. Unit "B" 1983), rev'd, 471 U.S. 48 (1985)

.......iin.1 Warth v. Seldin, 422 U.S. 490, 501-02, 95 S.Ct. 2197, 2206-07, 45 L.Ed.2d 343 (1975)

..........................................................4n.l Washington Utilities and Transportation Commission v. FCC, 513 F.2d 1142 (9th Cir. 1976)

.....................................................................jin.1 Williams v. Bowen, 859 F.2d255,256 (2d Cir. 1988)

............................14, 26 Statutes 5 U.S.C. §§ 553 et seq........................................................................2 5 U.S.C. § 706 (2)(A) (1988)

...............................................................10 28 U.S.C. § 1291-

..............................................................................3 42 U.S.C. § 6201 (4), (5)

....................................................................5 42 U.S.C. §§ 6291-6309

.....................................................................3 42 U.S.C. 6295(d)(3)(A) and (B)

...........................................................7 42 U.S.C. 6295(0)(1)

......................................................................2, 7 42 U.S.C. § 6295 (o)(2)(A)

............................................................ 12,15 42 U.S.C. § 6295 (0)(2)(B)(i)

...............................................................4 42 U.S.C. § 6306(b)

..................................................................2, 11, 15 42 U.S.C. § 6306(b)(2)

.....................................................,.................4

Other Authorities Federal Rules ofAppellate Procedure 26.1

..............................................i Federal Rules ofAppellate Procedure 28(i)

.......................................i, 5, 18

v66 Fed. Reg. 59590 (October 5, 2000) ...................................................7

66 Fed. Reg. 7169 (January 21, 2001) ..............................................passim 66 Fed. Reg. 7701 (January 24, 2001) ......................................................8 66 Fed. Reg. 8745 (February 2, 2001) ......................................................9 66 Fed. Reg. 20191 (April 20, 2001) ...................................................... 9 66 Fed. Reg. 38822 (July 25, 2001) ........................................................9 67 Fed. Reg. 36368 (May 23, 2002) ................................................. passim H.Rep. 94-340 (1975) ........................................................................ 5 H.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 46 (1977) .................................6 S.Rep. 100-6 ..................................................................................6 S.Rep. No. 409, 95th Cong., 1st Sess. 38 (1977) ..........................................6 Miscellaneous Report of the U.S. Department of Energy's Power Outage Study Team: Findings and Recommendations to Enhance Reliability from the Summer of 1999, March 2000" ....................................................................................21, 21,22 Comments of the American Council for an Energy Efficient Economy filed in DOE EE-RM-97-500 (December 1, 2000) ....................................23, 24, 25 Comments of Mayor Kirk Watson filed in DOE EE-RM-97-500 (November 30, 2000) ........................................................................................24 Comments of the Natural Resources Defense Council filed in DOE EE-RM-97-500 (December 1, 2000) .........................................................................22 Comments of the Texas Public Utility Commission filed in DOE EE-RM-97-500 (November 29, 2000) ............................................ .....................23, 23,24

vi 66 Fed. Reg. 59590 (October 5, 2000)

...................................................7 66 Fed. Reg. 7169 (January 21,2001)

.......................................... ....passim 66 Fed. Reg. 7701 (January 24,2001)

......................................................8 66 Fed. Reg. 8745 (February 2,2001)

......................................................9 66 Fed. Reg. 20191 (April 20, 2001)

......................................................9 66 Fed. Reg. 38822 (July 25, 2001)

........................................................9 67 Fed. Reg. 36368 (May 23,2002)

.............................................. ... passim R.Rep. 94-340 (1975)

........................................................................5 R.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 46 (1977)

.................................6 S.Rep. 100-6

..................................................................................6 S.Rep. No. 409, 95th Cong., 1 st Sess. 38 (1977)

..........................................6 Miscellaneous Report ofthe U.S. Department ofEnergy's Power Outage StudyTeam: Findings and Recommendations to Enhance Reliability from the Summer of 1999, March 2000"

....................................................................................21, 22 Comments ofthe American Council for an EnergyEfficient Economy filed in DOE EE-RM-97-500 (December 1,2000)

....................................23,24,25 Comments ofMayor Kirk Watson filed in DOE EE-RM-97-500 (November 30, 2000)

........................................................................................24 Comments ofthe Natural Resources Defense Council filed in DOE EE-RM-97-500 (December 1, 2000)

.........................................................................22 Comments ofthe Texas Public Utility Commission filed inDOE EE-RM-97-500 (November 29, 2000)

......,............................................................23, 24

VIPRELIMINARY STATEMENT

After seven years of delay, Respondent/Appellee, the United States Department of Energy ("DOE" or "Department") issued a final rule on January 21, 2001, improving the energy efficiency of residential central air conditioners to a Seasonal Energy Efficiency Ratio ("SEER") of 13 ("Final SEER 13 Rule). This important rule was based on extensive comment and support from numerous stakeholders, including the National Association of Regulatory Utility Commissioners ("NARUC"). Shortly after the issuance of the Final SEER 13 Rule, DOE abruptly announced on February 2, 2001, its intent to delay the effective date of that final rule. That announcement set the stage for subsequent proceedings, which ultimately resulted in DOE reducing the 13 SEER energy efficiency standard. Petitioners/Appellants' and several Intervenors, including the National Association of Regulatory Utility Commissioners, (collectively "Petitioners") brought these consolidated cases2 to challenge the DOE's suspension, withdrawal,

' The main Petitioners' brief was submitted on behalf of: the States of New York, California, Connecticut, Vermont, Maine, New Jersey, Nevada, Massachusetts, New Hampshire, Rhode Island; the Natural Resources Defense Council, Inc., Consumer Federation of America, Public Utility Law Project. 2 The consolidated cases are comprised of original petitions for review (Docket Nos. 02-4160 and 02-4189), reactivated petitions for review (Docket Nos. 01-4102 and 01-4103) and an appeal from a judgment entered in the district court in the Southern District of New York (Docket No. 02-6139). 1 PRELIMINARY STATEMENT After seven years of delay, Respondent! Appellee, the United States Department ofEnergy ("DOE" or "Department") issued a final rule on January 21, 2001, improving the energy efficiency ofresidential central air conditioners to 

### a Seasonal Energy Efficiency Ratio ("SEER") of 13 ("Final SEER 13 Rule). This important rule was based on extensive comment and support from numerous stakeholders, including the National Association of Regulatory Utility Commissioners ("NARUC"). Shortly after the issuance of the Final SEER 13 Rule, DOE abruptly announced on February 2, 2001, its intent to delay the effective date ofthat final rule. That announcement set the stage for subsequent proceedings, which ultimately resulted in DOE reducing the 13 SEER energy efficiency standard. Petitioners/Appellants1 and several Intervenors, including the National Association of Regulatory Utility Comn1issioners, (collectively "Petitioners") brought these consolidated cases2 to challenge the DOE's suspension, withdrawal,

The main Petitioners' briefwas submitted on behalfof: the States ofNew York, California, Connecticut, Vermont, Maine, New Jersey, Nevada, Massachusetts, New Hampshire, Rhode Island; the Natural Resources Defense Council, Inc., ConsumerFederation ofAmerica, Public UtilityLaw Project. 2 The consolidated cases are comprised of original petitions for review (Docket Nos. 02-4160 and 02-4189), reactivatedpetitions for review (DocketNos. 01-4102 and 01-4103) and an appeal from ajudgment entered in the district court inthe SouthernDistrictofNew York (DocketNo. 02-6139). 1and ultimate revision of the Final SEER 13 Rule as unlawful on several grounds.

DOE's actions conflict with the Energy Policy and Conservation Act ("EPCA") 42 U.S.C. § 6291-6309, as amended by the National Appliance Energy Conservation Act ("NAECA"), 42 U.S.C. § 6201 note, Pub. L. 100-12, 101 Stat. 103 (1987). The agency's replacement of SEER 13 with a lower energy efficiency standard violates EPCA because these actions were not supported by substantial evidence as required under 42 U.S.C. § 6306(b)(2). Moreover, EPCA prohibits DOE from decreasing an energy efficiency standard that it has already prescribed through the regulatory process. See 42 U.S.C. § 6295(0)(1). Finally, the agency's failure to provide prior notice of and an opportunity to comment upon the two final rules purporting to delay the effective date of the Final SEER 13 Rule violates the Administrative Procedure Act ("APA"), 5 U.S.C. § 553 et M. This case asks whether an agency that has issued a final rule in tardy compliance with a statutory deadline can suddenly reverse course in violation of all applicable statutes. This case presents numerous substantive and procedural issues regarding DOE's actions. To avoid unnecessary repetition, NARUC endorses and adopts all the arguments presented in the main Petitioner brief.3
3 See, September 27, 2002 filed "Brief for Petitioners National Resources Defense Council, State of New York, State of California,, State of Connecticut, State of Vermont, State of Maine, State of New Jersey, State of Nevada, Consumer Federation of America, Public Utility Law Project and Interveners State of New 2 and ultimate revision ofthe Final SEER 13 Rule as unlawful on several grounds. DOE's actions conflict with the Energy Policy and Conservation Act ("EPCA"), 42 U.S.C. § 6291-6309, as amended by the National Appliance Energy Conservation Act ("NAECA"), 42 U.S.C. § 6201 note, Pub. L. 100-12, 101 Stat. 103 (1987). The agency'sreplacement ofSEER 13 with a lower energy efficiency standard violates EPCA because these actions were not supported by substantial evidence as required under 42 U.S.C. § 6306(b)(2). Moreover, EPCA prohibits DOE from decreasing an energyefficiency standard that it has already prescribed through the regulatory process. See 42 U.S.C. § 6295(0)(1). Finally, the agency's failure to providepriornotice ofand an opportunityto commentupon the two final rules purporting to delay the effective date ofthe Final SEER 13 Rule violates the Administrative Procedure Act ("APA"), 5 U.S.C. § 553 et seq. This case asks whether an agency that has issued a final rule in tardy compliance with a statutory deadline can suddenlyreverse course in violation ofall applicable statutes. This case presents numerous substantive andprocedural issues regarding DOE's actions. To avoid unnecessary repetition, NARUC endorses and adopts all the arguments presentedinthe mainPetitionerbrief.3

See, September 27,2002 filed "Brieffor Petitioners National Resources Defense Council, State ofNew York, State ofCalifornia,_State ofConnecticut, State ofVermont, State ofMaine, State ofNew Jersey, State ofNevada, Consumer Federation ofAmerica, Public UtilityLaw Project andInterveners State ofNew 2NARUC 's State regulator members' have unique experience with respect to

conservation policy and the interwoven effects of such energy conservation on system reliability

. Drawing on that expertise, this brief will provide additional insights on why DOE's discussion of the impact of the change in standards on conservation and reliability finds no support in the record

. NARUC urges this Court to find that DOE has not provided an adequate explanation for its actions and that those actions are inconsistent with the applicable statutes and have no support in the record. JURISDICTIONAL STATEMENT DOE's jurisdiction over the rulemakings challenged in this appeal derives from EPCA. The EPCA requires DOE to, inter alia, prescribe amended standards for energy efficiency for various consumer products such as central air conditioners and heat pumps. See, 42 U.S.C. § 6291-6309. This Court has original jurisdiction over the original and reactivated Petitions for Review (Docket Nos. 01-4102, 01-4103, 02-4160 and 02-4189) pursuant to EPCA, 42 U.S.C. § 6306(b). In addition, the Court has jurisdiction over the appeal from the Southern District of New York (Docket No. 02-6139) pursuant to 28 U.S.C. § 1291. Petitioners timely filed their notices of appeal on
Hampshire, State of Rhode Island, Commonwealth of Massachusetts" at pages 5 - 132 ("Petitioners' Brief').. 3 NARUC's State regulator members' have unique experience withrespect to conservation policy and the interwoven effects of such energy conservation on system reliability. Drawing on that expertise, this brief will provide additional insights on why DOE's discussion of the impact of the change in standards op conservation and reliability finds no support in the record. NARUC urges this Court to find that DOE has not provided an adequate explanation for its actions and that those actions are inconsistent with the applicable statutes and have no support inthe record. JURISDICTIONAL STATEMENT DOE'sjurisdiction over the rulemakings challenged in this appeal derives from EPCA. The EPCA requires DOE to, inter alia, prescribe amended standards for energy efficiency for various consumer products such as central air conditioners andheatpumps. See, 42 U.S.c. § 6291-6309. This Court has original jurisdiction over the original and reactivated Petitions for Review (Docket Nos. 01-4102, 01-4103, 02-4160 and 02-4189) pursuant to EPCA, 42 U.S.C. § 6306(b). In addition, the Court has jurisdiction

over the appeal from the Southern District of New York (Docket No. 02-6139) pursuant to 28 U.S.C. § 1291. Petitioners timely filed their notices of appeal on Hampshire, State ofRhode Island, Commonwealth ofMassachusetts" atpages 5 - 132 ("Petitioners' Brief'). 3May 21, 2002. JA-580. NARUC timely filed its motion to intervene on June 19,

2002.4 ISSUE PRESENTED Whether the United States Department of Energy acted in conformance with the "substantial evidence" requirements of section 6306 of the Energy Policy and Conservation Act when it promulgated a SEER 12 energy efficiency standard? STATEMENT OF THE CASE This appeal concerns DOE's withdrawal of a final rule it published on January 21, 2001, establishing a SEER 13 standard for residential central air conditioners pursuant to the statutory requirements of the Energy Policy and Conservation Act. 42 U.S.C. § 6295 (o)(2)(B)(i). On May 21, 2002, the States of New York, Vermont, and Connecticut filed a Petition for Review in this Court challenging the three actions comprising DOE's May 23, 2002 rule, as published in the May 23, 2002 Federal Register. (Docket No. 02-4160). On May 29, 2002, Natural Resources Defense Council, Inc. and

4 NARUC's standing is evident from the declarations submitted in support of its motion to intervene. This Court's granting of our motion to intervene is a finding of interest tantamount to a finding of standing. Schulz v. Williams, 44 F.3d 48, 51 (2d Cir. 1994)(quoting Warth v. Seldin, 422 U.S. 490, 501-02, 95 S.Ct. 2197, 2206-07, 45 L.Ed.2d 343 (1975) court may review all materials in record to assess standing, including affidavits in support of standing).

4 May 21, 2002. JA-580. NARUC timely filed its motion to intervene on June 19,

ISSUE PRESENTED Whether the United States Department ofEnergy acted in conformance with the "substantial evidence" requirements ofsection 6306 ofthe Energy Policy and ConservationAct when itpromulgated a SEER 12 energy efficiency standard? STATEMENT OF THE CASE This appeal concen1S DOE's withdrawal of a final rule it published on January 21, 2001, establishing a SEER 13 standard for residential central air conditioners pursuant to the statutory requirements of the Energy Policy and ConservationAct. 42 U.S.C. § 6295 (0)(2)(B)(i). OnMay 21,2002, the States ofNew York, Vermont, and Connecticut filed a Petition for Review in this Court challenging the three actions comprising DOE's May 23, 2002 rule, as published in the May 23, 2002 Federal Register. (Docket No. 02-4160). On May 29, 2002, Natural Resources Defense Council, Inc. and

4 NARUC's standing is evident from the declarations submitted in support of its motion to intervene. This Court's granting of our motion to intervene is a finding of interest tantamount to a finding of standing. Schulz v. Williams, 44 F.3d48, 51 (2d Cir. 1994)(quoting Warthv. Seldin, 422 U.S. 490, 501-02,95 S.Ct. 2197,2206-07, 45 L.Ed.2d 343 (1975) court mayreview all materials in record to assess standing, including affidavits in support ofstanding).

4Public Utility Law Project also filed a Petition for Review in this Court challenging

the same DOE actions. (Docket No. 02-4189). On June 19, 2002, NARUC intervened in this case. By Order of this Court filed July 19, 2002, the appeal and the four petitions for review were consolidated. STATEMENT OF FACTS To avoid duplication, pursuant to Federal Rules of Appellate Procedure 28(i), NARUC adopts and incorporates by reference the history of EPCA outlined in Petitioners Brief's "Statement of Facts." See, Petitioners Brief pp. 8-43. However, NARUC will highlight specific portions relevant to our argument. A. DOE's Obligation to Promulgate Energy Efficiency Standards The EPCA was enacted in 1975 in response to the severe energy crisis the United States was experiencing. See, NRDC v. Herrington, 768 F.2d 1355, 1364 (1985). One of the purposes of EPCA is "to conserve energy supplies through energy conservation programs, and, where necessary, the regulation of certain energy uses; [and] to provide for improved energy efficiency ... of major appliances." 42 U.S.C. § 6201 (4), (5). One of the reasons for including energy efficiency standards in the national plan to address the energy crisis was the realization on the part of Congress and the Administration that making appliances more energy efficient "can result in major reductions in net energy consumption." H.Rep. 94-340 at 94 (1975), reprinted in 1975 U.S.C.C.A.N. 1762, 1856. 5 Public Utility Law Project also filed a Petition for Review inthis Court challenging the same DOE actions. (Docket No. 02-4189). On June 19, 2002, NARUC intervened in this case. By Order ofthis Court filed July 19, 2002, the appeal and the four petitions for review were consolidated. STATEMENT OF FACTS To avoid duplication, pursuant to Federal Rules of Appellate Procedure 28(i), NARUC adopts and incorporates by reference the history ofEPCA outlined in Petitioners Briefs "Staten1ent ofFacts." See, PetitionersBriefpp. 8-43. However, NARUC will highlight specificportionsrelevant to our argument. A. DOE's Obligation to PromulgateEnergyEfficiencyStandards The EPCA was enacted in 1975 in response to the severe energy crisis the United States was experiencing. See, NRDC v. Herrington, 768 F.2d 1355, 1364 (1985). One of the purposes of EPCA is "to conserve energy supplies through energy conservation programs, and, where necessary, the regulation of certain energy uses; [and] to provide for improved energy efficiency... of major appliances." 42 U.S.C. § 6201 (4), (5). One ofthe reasons for including energy efficiency standards in the national plan to address the energy crisis was the realization on the part ofCongress and the Administration that making appliances

more energy efficient "can result in major reductions in net energy consumption." H.Rep. 94-340 at 94 (1975), reprinted in 1975 U.S.C.C.A.N. 1762, 1856. 5In 1978, Congress amended EPCA to "eliminate[] the target approach and

improve[] the procedures for establishing standards to ensure that efficiency improvements will be made expeditiously." NRDC v. Herrington, 768 F

.2d 1355, 1362 (1985)(citing H.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 46 (1977)(emphasis added)). The appliances covered by EPCA "were selected because they consumed relatively large amounts of electricity - together , about 80 percent of the energy used in American households." Herrington, at 1366 (1985)(citing S.Rep. No. 409, 95th Cong., 1st Sess

. 38 (1977)). Additionally, in enacting amendments to EPCA, Congress adopted a provision that "decided DOE should not prescribe standards that would not result in `significant' energy conservation." Id. at 1366

-67 (citing H.R.Rep

. No. 496, Pt. 4, 95th Cong., 1st Sess. 46-47 (1977)(emphasis added)). In 1987, Congress adopted the National Appliance Energy Conservation Act, Publ.L. 100-12 (1987)("NAECA"). NAECA amended EPCA "to reduce the Nation's consumption of energy and to reduce the regulatory and economic burdens on the appliance manufacturing industry through the establishment of national energy conservation standards for major residential appliances ." S.Rep. 100-6 at 2 (1987). The amendments outlined specific requirements and deadlines that DOE was to meet over the years to continue to improve energy efficiency for certain 6 In 

### 1978, Congress amended EPCA to "eliminate[] the target approach and improve[] the procedures for establishing standards to ensure that efficiency improvements will be made expeditiously." NRDC v. Herrington, 768 F.2d 1355, 1362 (1985)(citing H.R.Rep. No. 496, Pt. 4, 95th 

### Cong., 1st 

### Sess. 46 (1977)(emphasis added». The appliances covered by EPCA "were selected because they consumed relatively large amounts ofelectricity

- together, about 80 percent of the energy used in American households." Herrington, at 1366 (l985)(citing S.Rep. No. 409, 95th 

### Cong., 1st 

### Sess. 38 (1977». Additionally, in enacting amendments to EPCA, Congress adopted a provision that "decided DOE should not prescribe standards that would not result in 'significant' energy conservation." Id. at 1366-67 (citing H.R.Rep. No. 496, Pt. 4, 95th 

### Cong., 1st 

### Sess. 46-47 (1977)(emphasis added». In 1987, Congress adopted the National Appliance Energy Conservation Act, Publ.L. 100-12 (l987)("NAECA"). NAECA amended EPCA "to reduce the Nation's consumption of energy and to reduce the regulatory and economic burdens on the appliance manufacturing industry through the establishment of national energy conservation standards for major residential appliances." S.Rep. 100-6 at 2 (1987). The amendments outlined specific requirements and deadlines that DOE was to meet over the years to continue to improve energy efficiency for certain 6appliances

. The NAECA amendments to EPCA, thus, accomplished two important

objectives of the Congress: that DOE would not be able to "roll back" an energy efficiency standard once it has been prescribed pursuant to the rulemaking process outlined in the statute; and that energy conservation standards would only improve over time. Herrington at 1366 See 42 U.S.C. 6295(0)(1); 42 U.S.C. 6295(d)(3)(A) and (B). A DOE's Promulgation of the Final SEER 13 Rule Six years after it was required to publish an amended rule for energy efficiency standards for central air conditioners, DOE finally issued a Notice of Proposed Rulemaking proposing an energy efficiency standard of SEER 12. 65 Fed. Reg. 59590 (October 5, 2000). JA-3816. Over 800 stakeholders, including NARUC, submitted comments on this proposal. See 66 Fed. Reg. 7169, 7174 (January 21, 2001). JA-5549, 5554. In its comments, NARUC urged DOE "to consider implementing an upgraded residential central air conditioner standard that achieves the greatest level of cost

-effective energy savings based on independent cost estimates and assures peak demand reductions, e.g. a 30 % improvement in the standard with a minimum peak efficiency performance requirement." JA-5211. On January 21, 2001, DOE published in the Federal Register its announcement that it was adopting the Final SEER 13 rule. 66 Fed. Reg. 7169 (January 21, 2001). JA-5549. DOE stated that the "final rule adopts standards that 7 appliances. TheNAECA amendments to EPCA, thus, accomplished two important objectives ofthe Congress: that DOE would not be able to "roll back" an energy efficiency standard once it has been prescribedpursuant to the rulemaking process outlined in the statute; and that energy conservation standards would only**improv~** over time. Herrington at 1366 See 42 U.S.C. 6295(0)(1); 42 U.S.C. 6295(d)(3)(A) and (B). B. DOE'sPromulgation of theFinalSEER 13Rule Six years after it was required to publish an amended rule for energy efficiency standards for central air conditioners, DOE finally issued a Notice of Proposed Rulemaking proposing an energy efficiency standard of SEER 12. 65 Fed. Reg. 59590 (October 5,2000). JA-3816. Over 800 stakeholders, including NARUC, submitted comments on this proposal. See 66 Fed. Reg. 7169, 7174 (January 21, 2001). JA-5549, 5554. In its comments, NARUC urged DOE "to consider implementing an upgradedresidential central air conditioner standard that achieves the greatest level ofcost-effective energy savings based on independent cost estimates and assures peak demand reductions, e.g. a 30% improvement in the standardwith aminimumpeak efficiencyperformancerequirement." JA-5211. On January 21, 2001, DOE published in the Federal Register its announcement that it was adopting the Final SEER 13 rule. 66 Fed. Reg. 7169 (January 21, 2001). JA-5549. DOE stated that the "finalrule adopts standards that 7are consistent with the requirements of [EPCA]." 66 Fed. Reg. at 7170. JA-5550-

The Final SEER Rule increased energy efficiency standards for central air conditioners and heat pumps by 30%. Id. at 7171. JA-5551 . Pursuant to the requirements of SPCA, DOE stated that it "had determined that the new standards are the highest efficiency levels that are technically feasible and economically justified as required by law." Id. DOE based its decision to adopt a SEER 13 Final Rule on the numerous comments DOE received. Id. DOE noted that a majority of the comments it received "made [] claims regarding the benefits that would be associated with a 13 SEER standard .... These benefits included savings for consumers, avoided emissions and electrical capacity, and the reduced occurrence of brownouts and blackouts." Id. at 7176. JA-5556.

C. Withdrawal of the SEER 13 Final Rule Shortly after the SEER 13 Final Rule was issued, the recently inaugurated administration began a course of action to ultimately roll back the 13 SEER standard

. On January 24, 2001, a memorandum that directed heads and acting heads of federal agencies to "temporarily postpone the effective date ... for 60 days" of "regulations that have been published in the OFR [Office of Federal Register] but have not taken effect" ("Administration Memo") was published in the Federal Register. 66 Fed. Reg. 7701 (January 24, 2001). JA5717. This temporary 

### 8 are consistent with the requirements of [EPCA]." 66 Fed. Reg. at 7170. JA-5550. The Final SEER Rule increased energy efficiency standards for· central air conditioners and heat pun1ps by 30%. rd. at 7171. JA-5551. Pursuant to the requirements ofEPCA, DOE stated that it "had determined that the new standards

are the highest efficiency levels that are technically feasible and economically justified as requiredbylaw." rd. DOE based its decision to adopt a SEER 13 Final Rule on the numerous comments DOE received. Id. DOE noted that a majority of the comments it received "made [] claims regarding the benefits that wouldbe associated with a 13 SEER standard

.... These benefits included savings for consumers, avoided emissions and electrical capacity, and the reduced occurrence ofbrownouts and blackouts." rd. at 7176. JA-5556. C. Withdrawal of theSEER 

### 13 FinalRule Shortly after the SEER 13 Final Rule was issued, the recently inaugurated administration began a course of action to ultimately roll back the 13 SEER standard. On January 24, 2001, a memorandum that directed heads and acting heads of federal agencies to "temporarily postpone the effective date

... for 60 days" of "regulations that have been published in the OFR [Office of Federal Register}buthave nottaken effect" ("AdministrationMemo") was publishedin the Federal Register. 66 Fed. Reg. 7701 (January 24,2001). JA5717. This temporary 8delay was meant to "ensure that the President's appointees have the opportunity to

review any new or pending regulations." Id. Based on this directive, DOE published in the Federal Register a notice "temporarily delaying the effective date of the SEER 13 Final Rule for 60 days ("February 2 Delay Rule"). 66 Fed. Reg. 8745 (February 2, 2001). JA-5722 DOE stated, "The temporary 60-day delay in effective date is necessary to give DOE officials the opportunity for further review and consideration of new regulations, consistent with the [Administration Memo]." Id. On April 13, 2001, DOE issued a press release announcing its intention to propose "a new ... standard for central air conditioners and heat pumps" of 12 SEER. JA-5907. Shortly after this press release was issued, DOE further delayed the SEER 13 Final Rule when it issued a notice delaying the effective dateindefinitely (April 20th Delay Rule). 66 Fed. Reg. 20,191 (April 20, 2001). JA5916. Regardless of the fact that a Final Rule had already been issued, on July 25, 2001, DOE issued a notice proposing "to withdraw its January 22, 2001 final rule setting forth energy conservation standards for residential central air conditioners and central air conditioning heat pumps." 66 Fed. Reg. 38,822 (July 25, 2001). JA6049. Additionally in this notice, DOE proposed a lower 12 SEER energy efficiency standard ("12 SEER Rule"). Id. Not surprisingly, DOE finally issued a 9 

### delay was meant to "ensure that the President's appointees have the opportunity to review any new orpending regulations." rd. Based on this directive, DOE published in 

### the Federal Register a notice "temporarily delaying the effective date ofthe SEER 13 Final Rule for 60 days ("February 2DelayRule"). 66 Fed. Reg. 8745 (February 2, 2001). JA-5722 DOE stated, "The temporary 60-day delay in effective date is necessary to give DOE officials the opportunity for further review and consideration ofnew regulations, consistent withthe [AdministrationMemo]." rd. On April 13, 2001, DOE issued a press release announcing its intention to propose "a new ... standard for central air conditioners and heat pumps" of 12 SEER. JA-5907. Shortly after this press release was issued, DOE further delayed· the SEER 13 Final Rule when it 

### issued a notice delaying the effective date indefinitely (April 20th 

### Delay Rule). 66 Fed. Reg. 20,191 (April 20, 2001). JA5916. Regardless ofthe fact that a Final Rule had already been issued, on July 25, 2001, DOE issued a notice proposing "to withdraw its January 22, 2001 final rule setting forth energy conservation standards for residential central air conditioners and central air conditioning heat pumps." 66 Fed. Reg. 38,822 (July 25, 2001). JA6049. Additionally in this notice, DOE proposed a lower 12 SEER energy efficiency standard ("12 SEER Rule"). Id. Not surprisingly, DOE finally issued a 9reduced SEER 12 standard as "Final Rule" on May 23, 2002, withdrawing the

finalized SEER 13 standard it had promulgated just 16 months earlier. 67 Fed., Reg. 36,368 (May 23, 2002). JA-7260. STANDARD OF REVIEW The standard of review for a federal agency decision established in the Administrative Procedure Act, 5 U.S.C. § 706 (2)(A) (1988), requires this Court to set aside any agency action if it is "...arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). An agency acts arbitrarily and capriciously where it does not "examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 295 43 (1983)(internal quotations omitted). "Normally, an agency rule would be arbitrary and capricious if the agency has ... offered an explanation for its decision that runs counter to the evidence .... Id. at 43. see also Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89-90 (2d Cir. 2000). Courts will defer to an agency's interpretation of a statute "only where the intent of Congress is unclear and the agency's interpretation is a reasonable one." Illinois Bell Tel. Co. v. FCC, 966 F.2d 1478, 1481 (D.C. Cir. 1992); See, Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984).

10 reduced SEER 12 standard as "Final Rule" on May 23, 2002, withdrawing the finalized SEER 13 standard it had promulgatedjust 16 months earlier. 67 Fed., Reg. 36,368 (May 23, 2002). JA-7260. STANDARD OF REVIEW The standard of review for a federal agency decision established in the Administrative Procedure Act, 5 U.S.C. § 706 (2)(A) (1988), requires this Courtto set aside any agency action ifit is "

...arbitrary, capricious, an abuse ofdiscretion,

or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). An agency acts arbitrarily and capriciously where it does not "examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." Motor Vehicles Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)(intemal quotations omitted). "Normally, an agency rule would be arbitrary and capricious if the agency has

... offered an explanation for its decision that runs counter to the evidence...

. Id. at 43. see also Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89-90 (2d Cir. 2000). Courts will defer to an agency's interpretation ofa statute "only where the intent ofCongress is unclear and the agency's interpretation isa reasonable one." Illinois Bell Tel. Co. v. FCC, 966 F.2d 1478, 1481 (D.C. Cir. 1992); See, Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984).

10Moreover, "[a]n agency interpretation of a relevant provision which

conflicts with the agency's earlier interpretation is entitled to considerably less deference than a consistently held agency view." INS v. Cardoza-Fonseca, 480 U.S. 421, 447 n.30 (1987)(intemal quotations omitted); accord Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515 (1994). Notwithstanding the fact that agencies "may change their minds," the consistency of an agency's position remains a factor to be considered in assessing the deference due that position." Callaway v. Commissioner of Internal Revenue, 231 F.2d 106, 132 (2d Cir. 2000) citing Good Samaritan Hosp. v. Shalala, 508 U.S. 4025 417 (1993). As the Supreme Court has stated, "a new administration may not choose not to enforce laws of which it does not approve...." State Farm, 463 U.S. at 59 (Rehnquist, J., concurring). In addition to the standard of review for agency decisions in general, the statute underlying this appeal imposes an additional direct standard that must be considered. The Energy Policy and Conservation Act ("SPCA"),5 requires that "[n]o rule under [42 U.S.C.] section ... 6295 ... may be affirmed unless supported by substantial evidence." 42 U.S.C. § 6306(b)(2). "Substantial evidence" has "been construed to mean less than a preponderance, but more than a scintilla." Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89 (2d Cir. 2000) citing Cellular

5 42 U.S.C. § 6291-6309, as amended by the National Appliance Energy Conservation Act, 42 U.S.C. § 6201 note, Pub. L. 100-12, 101 Stat

. 103 (1987). 11 Moreover, "[a]n agency interpretation of a relevant provIsIon which conflicts with the agency's earlier interpretation is entitled to considerably less deference than a consistently held agency view." INS v. Cardoza-Fonseca, 480 U.S. 421, 447 n.30 (l987)(intemal quotations omitted); accord Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515 (1994). Notwithstanding the fact that agencies "may change theirminds," the consistency ofan agency's positionremains afactor to be considered in assessing the deference due that position." Callaway v. Commissioner ofInternal Revenue, 231 F.2d 106, 132 (2d Cir. 2000) citing Good Samaritan Hosp. v. Shalala, 508 U.S. 402,417 (1993). As the Supreme Court has stated, "anew administration may not choose not to enforce laws ofwhich it does not approve...." State Fann, 463 U.S. at 59 (Rehnquist, J., concurring). In addition to the standard ofreview for agency decisions in general, the statute underlying this appeal imposes an additional direct standard that must be considered. The Energy Policy and Conservation Act ("EPCA"),5 requires that "[n]o rule under [42 U.S.C.] section

... 6295

... may be affirmed unless supported by substantial evidence." 42 U.S.C. § 6306(b)(2). "Substantial evidence" has "been construed to mean less than a preponderance, but more than a scintilla." Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89 (2d Cir. 2000) citing Cellular

5 42 U.S.C. § 6291-6309, as amended by the National Appliance Energy ConservationAct, 42 U.S.C. § 6201 note, Pub. L. 100-12, 101 Stat. 103 (1987). 11Tel. Co. v. Town of Oyster Bay, 166 F.3d 490, 494 (2d Cir. 1999). "[Substantial

evidence] means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951). Substantial evidence "means more than evidence which, considered by itself alone, would be sufficiently persuasive to induce the trier of fact to give it the credence and weight essential to support findings. It must have those characteristics to such an extent that in the setting made by the entire record the trier may reasonably find in accordance with it after giving due consideration to whatever else is shown both in opposition or in accord." Gooding v. Willard, 209 F.2d 913, 916 (2d Cir. 1954). SUMMARY OF ARGUMENT In the disputed proceeding, DOE suspends a prior order accepting the more efficient SEER 13 air conditioner standard and implements the less efficient SEER 12 standard. The EPCA requires energy conservation standards to " . . . be designed to achieve the maximum improvement in energy efficiency . . . the Secretary determines is technologically feasible and economically justified." 42 U.S.C. § 6295(o)(2)(A). DOE must concede that the SEER 13 standard is "technologically feasible" as most manufacturers sell one or more of the 600 models meeting or exceeding the SEER 13 standard today. Because "technological feasibility" cannot be disputed, the only issue is whether there is 12 Tel. Co. v. Town ofOyster Bay, 166 F.3d 490, 494 (2d Cir. 1999). "[Substantial evidence] means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951). Substantial evidence "means mOre than evidenc.e which, considered by itself alone, would be sufficiently persuasive to induce the trier offact to give itthe credence and weight essential to support findings. Itmust have those characteristics to such an extent that in the setting made by the entire record the trier may reasonably find in accordance with it after giving due consideration to whatever else is shown bothin opposition orin accord." Gooding

v. Willard, 209 F.2d 913,916 (2d Cir. 1954). SUMMARY OF ARGUMENT In the disputed proceeding, DOE suspends a prior order accepting the more efficient SEER 13 air conditioner standard and implements the less efficient SEER 12 standard. The EPCA requires energy conservation standards to " . . . be designed to achieve the maximum improvement in energy efficiency

. . . the Secretary determines is tec1mo10gically feasible and economicallyjustified." 42 U.S.C. § 6295(0)(2)(A). DOE must concede that the SEER 13 standard is "technologically feasible" as most manufacturers sell one or more of the 600 models meeting or exceeding the SEER 13 standard today. Because "technological feasibility" cannot be disputed, the only issue is whether there is 12substantial evidence to justify DOE's reversal of its previous on-the-record

determination that the SEER 13 standard is "economically justified." NARUC contends DOE's discussion of the impact of its rule changes on conservation and reliability fails to rebut its original findings with respect to economic feasibility and has no support in the record. {To avoid duplication, NARUC endorses and adopts by reference all the arguments raised in Petitioners brief.} In its original assessment of the record, DOE concluded SEER 13 was economically justified. DOE's subsequent analysis obviously ignores its own earlier findings. Whenever an agency "changes its course," it is "obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance." [CITE] The DOE SEER 12 opinion fails to provide the needed "reasoned analysis" and ignores the substantial evidence presented by numerous federal and State regulators that demonstrate the importance of energy efficiency in energy system operations. In its original analysis, DOE estimated that a 13 SEER standard will "save approximately 4.2 quads of energy over 25 years" or the equivalent of "all the energy consumed by nearly 26 million American households in a single year.... In 2020, the standards will avoid the construction of five 400 megawatt coal-fired plants and thirty-four 400 megawatt gas-fired plants." 66 Fed. Reg. 7170, 7171 (January 22, 2001); JA-5549, 5551. The revised standard significantly reduces these energy savings eliminating 1.4 13 

### substantial evidence to justify DOE's reversal of its prevIOus on-the-record determination that the SEER 13 standard is "economicallyjustified." NARUC contends DOE's discussion ofthe in1pact ofits rule changes on conservation and reliability fails to rebut its original findings with respect to economic feasibility and has no support in the record. {To avoid duplication, NARUC endorses and adopts by reference all the arguments raised in Petitioners brief.} In its original assessment of the record, DOE concluded SEER 13 was economicallyjustified. DOE's subsequent analysis obviously ignores its own earlier findings. Whenever an agency "changes its course," it is "obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance." [CITE] The DOE SEER 12 opinion fails to provide the needed "reasoned analysis" and ignores the substantial evidence presented by

numerous federal and State regulators that demonstrate the importance ofenergy efficiency in energy system operations. In its original analysis, DOE estimated that a 13 SEER standard will "save approximately 4.2 quads of energy over 25 years" or the equivalent of "all the energy consumed by nearly 26 million American households in a single year.... In 2020, the standards will avoid the construction offive 400 megawatt coal-fired plants and thirty-four 400 megawatt gas-fired plants." 66 Fed. Reg. 7170, 7171 (January 22, 2001); JA-5549, 5551. The revised standard significantly reduces these energy savings eliminating 1.4 13quads of energy savings over 25 years, or the equivalent of all the energy

consumed by 9 million American households in a single year. This reduction in the standard will require in 2020 the construction of almost twice as many generation plants. The prospect of eliminating such expansive savings is especially significant when viewed against the backdrop of the impact of recent market disruptions and climate extremes on the reliability of the United States' electricity. system. Moreover, it appears DOE's basis for its recanting adoption of a 13 SEER standard in favor of the 12 SEER standard is based squarely on Southern Company claims that there is no direct relationship between peak demand growth and reduced electric system reliability. 67 Fed. Reg. at 36392. JA7350-52. This conclusion cannot be squared with DOE's statement in the same notice that "higher efficiency standards for central air conditioners and heat pumps are expected to reduce significantly the peak loads of electric systems in the future, thus enabling a reduction in the number of new power plants and transmission lines required to meet future demand. " Id. at 36392. JA-7351-52. As this Court has found, "an agency decision that runs sharply against virtually all the ... evidence presented and makes no specific finding as to the credibility of the claimant's otherwise uncontroverted testimony" will not be supported. Williams v. Bowen, 859 F.2d 255, 256 (2d Cir. 1988). DOE's reasoning for adopting a 12 SEER standard is not 14 

### quads of energy savmgs over 25 years, or the equivalent of all the energy consumed by 9 million American households in a single year. This reduction in the standard will require in 2020 the construction of almost twice as many generationplants. The prospect ofeliminating such expansive savings is especially significant when viewed against the backdrop ofthe impact ofrecent market disruptions and climate extremes on the reliability of the United States' electricity system. Moreover, it appears DOE's basis for its recanting adoption ofa 13 SEER standard in favor ofthe 12 SEER standard is based squarely on Southern Company claims that there is no direct relationship between peak demand growth and reduced electric system reliability. 67 Fed. Reg. at 36392. JA7350-52. This conclusion call110t be squared with DOE's statement in the same notice that "higher efficiency standards for central air conditioners and heat pumps are expected to reduce significantly the peak loads of electric systems in the future, thus enabling a reduction in the number ofnew power plants and transmission lines required to meet future demand." Id. at 36392. JA-7351-52. As this Court has found, "an agency decision that runs sharply against virtually all the

... evidence presented and makes no specific finding as to the credibility of the claimant's otherwise uncontroverted testimony" will not be supported. Williams v. Bowen, 859 F.2d 255, 256 (2d Cir. 1988). DOE's reasoning for adopting a 12 SEER standard is not 14based on the substantial evidence presented on the effects of energy conservation

on reducing peak load and should thus be vacated. ARGUMENT DOE'S Finding That SEER 12 Is The Maximum Standard That Is Technologically Feasible And Economically Justified Lacks Record Support. I. A 12 SEER Standard Is Not the Maximum Improvement in Energy Efficiency that is Technologically Feasible Section 6295(o)(2)(A) of the Energy Policy and Conservation Act ("EPCA"), requires that any "new or amended energy conservation standard prescribed by the Secretary under this section for [central air conditioners] shall be designed to achieve the maximum improvement in energy efficiency ... which the Secretary determines is technologically feasible and economically justified." 42 U.S.C. § 6295(o)(2)(A). A determination that a standard is "technologically feasible and economically justified" must be based on substantial evidence. 42 U.S.C. § 6306(b)(2). In NRDC v. Herrington, the Court provides useful insights on how DOE should detennine the maximum level of energy efficiency that is technologically feasible and economically justified: "[EPCA] establishes a clear decision-making procedure. DOE must first identify, for all product types and classes, the maximum improvement in energy efficiency that is technologically feasible. If a standard at that level would be economically justified, DOE must set the standard there. If a standard requiring the maximum technologically feasible level would not be economically justified, 15 based on the substantial evidence presented on the effects ofenergy conservation

onreducingpeakloadand shouldthus be vacated. ARGUMENT

DOE'SFindingThat SEER 12 Is TheMaximum StandardThatIs TechnologicallyFeasibleAndEconomicallyJustifiedLacks Record Support. 

### L A 12 

### SEER Standard Is Not the Maximum Improvement in Energy Efficiency thatis Technologically Feasible Section 6295(0)(2)(A) of the Energy Policy and Conservation Act ("EPCA"), requires that any "new or amended energy conservation standard prescribedbythe Secretaryunder this section for [central air conditioners] shall be designed to achieve the maximum improvement in energy efficiency

...which the Secretary determines is technologically feasible and economicallyjustified." 42 U.S.C. 

### § 6295(0)(2)(A). A detem1ination that a standard is "technologically feasible and economically justified" must be based on substantial evidence. 42 U.S.C. § 6306(b)(2). In NRDC v. Herrington, the Court provides useful insights

on how DOE should detennine the maximum level of energy efficiency that is technologically feasible and economicallyjustified: "[EPCA] establishes a clear decision-making procedure. DOE must first identify, for

.all product types and classes, the maximum improvement in energy efficiency that is technologically feasible. Ifa standard at that level would be economicallyjustified, DOE must set the standard there. If a standard requiring the maximum technologically feasible level would not be economically justified, 15DOE must set the standard at the highest level that is both

technologically feasible and economically justified. " NRDC v. Herrington, 768 F.2d 1355, 1391-92 (D.C. Cir. 1986). DOE must concede that the SEER 13 standard is "technologically feasible." SEER technology has been available to manufacturers for at least 15 years and almost all manufacturers produce one or more of the 600 models meeting or exceeding the SEER 13 standard available for purchase today. Indeed, in the 12 SEER Rule, DOE found that the maximum technologically feasible efficiency level for residential central air conditioners is actually considerably higher than SEER 13.6 IL DOE Fails To Justify, Nor Does The Record Provide Evidence To Conclude, That the Revised 12 SEER Standard Is the Maximum Improvement in Energy Efficiency that is Economically Justified Because "technological feasibility" cannot be disputed, the only issue this Court must decide is whether there is substantial record evidence or an adequate rationale provided to justify DOE's reversal of its previous on-the-record determination that the SEER 13 standard is "economically justified." Again, as the Herrington Court observed, the Act outlines a very specific procedure. Specifically, EPCA requires that to determine if an air conditioner energy efficiency standard is "economically justified:

6 Specifically, DOE found that SEER 18, with a corresponding maximum Heating Seasonal Performance Factor ("HSPF") of 9.4 for residential heat pumps,was "technologically feasible." 67 Fed. Reg. 36368, 36378 (May 23, 2002). 3A16 DOE must set the standard at the highest level that is both technologically feasible and economically justified." NRDC v. Herrington, 768 F.2d 1355, 1391-92 (D.C. Cir. 1986). DOE must concede that the SEER 13 standardis "technologicallyfeasible." SEER technology has been available to manufacturers for at least 15 years and almost all manufacturers produce one or more ofthe 600 models meeting or exceeding the SEER 13 standard available for purchase today. Indeed, in the 12 SEER Rule, DOE found that the maximUlTI technologically feasible efficiency level for residential central air conditioners is actually considerablyhigherthan SEER 13.6 

### II DOE Fails To Justify, Nor Does The Record Provide Evidence To Conclude,· That the Revised 12 

### SEER Standard Is the Maximum Improvement in EnergyEfficiency that isEconomicallyJustified. Because "technological feasibility" cannot be disputed, the only issue this Court must decide is whether there is substantial record evidence or an adequate rationale provided to justify DOE's reversal of its previous on-the-record determination that the SEER 13 standard is "economicallyjustified." Again, as the Herrington Court observed, the Act outlines a very specific procedure. Specifically, EPCA requires that to determine if an air conditioner energy efficiency standardis "economicallyjustified:

6 Specifically, DOE found that SEER 18, with a corresponding maximum Heating Seasonal Perfom1ance Factor ("HSPF") of9.4 for residential heat pumps, was "technologically feasible." 67 Fed. Reg. 36368, 36378 (May 23, 2002). JA16"... the Secretary shall determine whether the benefits of the standard

exceed its burdens by, to the greatest extent practicable, considering - (I) the economic impact of the standard on the manufacturers and on the consumers of the products subject to such standard; (II) the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the covered products which are likely to result from the imposition of the standard; (III) the total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; any lessening of the utility or the performance of the covered products likely to result from the imposition of the standard; (IV) the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition of the standard; (V) the need for national energy and water conservation; and (VI) other factors the Secretary considers relevant. 42 U.S.C. § 6295(o)(2)(B)(i)(I)-(VII). In its issuance of the Final 13 SEER Rule, DOE outlined the framework for its consideration of each of the previously listed factors. NARUC will not duplicate the discussion in Petitioners' brief that clearly demonstrates DOE's revised analysis of impacts on manufacturers is unsubstantiated by the evidence. Nor will NARUC engage in a lengthy discussion regarding DOE's flawed analysis regarding the impacts on consumers.' In keeping with our pledge to the Court to avoid duplicative arguments, we will instead simply adopt by reference all of those arguments pursuant to Federal Rules of 7 Indeed, NARUC specifically endorses and adopts by reference all of the arguments presented in the Petitioner Brief at pp

. 5 - 132. 17 "

...the Secretary shall determine whetherthe benefits ofthe standard exceedits burdens by, to the greatest extentpracticable, considering- (1) the economic impact ofthe standard on the manufacturers and onthe consumers ofthe products subjectto such standard; (II) the savings in operating costs throughout the estimated average life of the covered product in the type (or class) compared to any increase in the price of, or in the initial charges for, or maintenance expenses of, the coveredproducts which are likely to result from the in1position ofthe standard; (III) the total projected amount of energy, or as applicable, water, savings likely to result directly from the imposition of the standard; any lessening ofthe utility or the performance ofthe covered products likely to result from the imposition ofthe standard; (IV) the impact of any lessening of competition, as determined in writing by the Attorney General, that is likely to result from the imposition ofthe standard; (V) theneedfor national energy and water conservation; and (VI) other factors the Secretary considers relevant. 42 U.S.C. § 6295(0)(2)(B)(i)(I)-(VII). In its issuance ofthe Final 13 SEERRule, DOE outlined the frameworkfor its consideration ofeachofthe previously listed factors. NARUC will not duplicate the discussion in Petitioners' brief that clearly demonstrates DOE's revised analysis of impacts on manufacturers is unsubstantiatedbythe evidence. Nor will NARUC engage in a lengthy discussion regarding DOE's flawed analysis regarding the impacts on consumers.7 Inkeeping with our pledge to the Court to avoid duplicative arguments, we will instead simply adopt by reference all of those arguments pursuant to Federal Rules of 7 Indeed, NARUC specifically endorses and adopts by reference all of the arguments presentedin the PetitionerBriefat pp. 5 - 132. 17Appellate Procedure Rule 28(1). However, because of NARUC's members' unique

qualifications and experience with respect to conservation policy and the interwoven effects of such energy conservation on system reliability, we will provide some additional insight as to why DOE's discussion of factors six (conservation impact) and seven (reliability impacts) does not rebut its original findings with respect to economic feasibility and has no support in the record. For example, in DOE's explanation of factor six "Need of the Nation to Conserve Energy" the agency stated, "the Secretary recognizes that energy conservation benefits the Nation in several important ways. Enhanced energy efficiency improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts of energy production." 67 Fed. Reg. 36368, 36379 (January 21, 2001); JA-7303-04. Under the "Other Factors" factor, "[DOE] considered the potential improvement to the reliability of the electrical system." Id. DOE's consideration of all these factors must be based on substantial evidence presented during the public comment process.g In its original assessment

8 See, NRDC v. Herrington,768 F.2d 1355)( EPCA expressly provides that the substantial evidence standard guides review). Moreover, "[w]hen reviewing the policy judgments made by the Secretary, including those predictive and difficult judgment calls the Secretary is called upon to make, [this Court] will subject them to searching scrutiny to ensure that they are neither arbitrary nor irrational - in other words, [the reviewing Court] must determine whether `the decision is based 18 Appellate Procedure Rule 28(i). However, because ofNARUC'smembers' unique qualifications and expenence with respect to conservation policy and the interwoven effects of such energy conservation on system reliability, we will provide some additional insight as to why DOE's discussion of factors Sl;X (conservation impact) and seven (reliability impacts) does not rebut its original findings withrespect to economic feasibility andhasno support in the record. For example, in DOE's explanation of factor six "Need of the Nation to Conserve Energy" the agency stated, "the Secretary recognizes that energy conservation benefits the Nation in several important ways. Enhanced energy efficiency improves the Nation's energy security, strengthens the economy, and reduces the environmental impacts of energy production." 67 Fed. Reg. 36368, 36379 (January 21, 2001); JA-7303-04. Under the "Other Factors" factor, "[DOE] considered the potential improvement to the reliability of the electrical system." Id. DOE's consideration of all these factors must be based on substantial evidence presented during the public comment process. 8 In its original assessment

8 See, NRDC v. Herrington,768 F.2d 1355)(EPCA expresslyprovides that the substantial evidence standard guides review). Moreover, "[w]hen reviewing the policyjudgments made by the Secretary, including those predictive and difficult judgment calls the Secretary is called upon to make, [this Court] will subject them to searching scrutiny to ensure that they are neither arbitrary nor irrational

- in other words, [the reviewing Court] must determine whether 'the decision is based 18of that record, DOE concluded in the issuance of the Final 13 SEER Rule in

January 2001 that SEER 13 was economically justified because: "the benefits of energy savings, the projected amount of avoided power plant capacity or improvement in system reliability that accompanies expected reduction in peak demand, consumer life cycle cost savings, national net present value increase and emission reductions resulting from the standards outweigh the burdens." 66 Fed. Reg. at 7196. JA-5576 DOE's analysis finding the 12 SEER standard as the "maximum improvement" that is "economically justified" obviously ignores its own earlier findings. Whenever an agency "changes its course," it is "obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance."9 The DOE SEER 12 opinion fails to provide the needed "reasoned analysis" and ignores the substantial evidence presented by numerous federal and State government regulators, including the U.S. Environmental Protection Agency, and private and public electric utilities, that demonstrates the importance of energy efficiency in energy system operations.

on a consideration of the relevant factors and whether there has been a clear error of judgment."' Herrington at 1369, citing California v. Watt, 668 F.2d 1290, 1302 (D.C.Cir.1981)(quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 4021 416 (1971)(Emphasis added). 9 Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 42 (1983). 19 of that record, DOE concluded in the issuance of the Final 13 SEER Rule in January 2001 that SEER 13 was economicallyjustified because: "the benefits of energy savings, the projected amount of avoided power plant capacity or improvement in system reliability that accompanies expected reduction in peale demand, consumer life cycle cost savings, national net present value increase and emission reductions resulting from the standards outweigh the burdens." 66 Fed. Reg. at 7196. JA-5576 DOE's analysis finding the 12 SEER standard as the "maximum improvement" that is "economically justified" obviously ignores its own earlier findings. Whenever an agency "changes its course," it is "obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance."g The DOE SEER 12 opinion fails to provide the needed "reasoned analysis" and ignores the substantial evidence presentedbynumerous federal and State governlnentregulators, includingthe U.S. Environmental Protection Agency, and private and public electric utilities, that demonstrates the importance ofenergy efficiencyin energy system operations.

on a consideration ofthe relevant factors and whether there has been a clear error ofjudgment.'" Herrington at 1369, citing California v. Watt, 668 F.2d 1290,1302 (D.C.Cir.1981)(quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,416 (1971)(Emphasis added). 9 Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 42 (1983). 19In its original analysis, DOE estimated that a 13 SEER standard will "save

approximately 4.2 quads of energy over 25 years" or the equivalent of "all the energy consumed by nearly 26 million American households in a single year.... In 2020, the standards will avoid the construction of five 400 megawatt coal-fired plants and thirty-four 400 megawatt gas-fired plants." 66 Fed. Reg. 7170, 7171 (January 22, 2001). JA-5551 The revised standard significantly reduces these energy savings. Specifically, the new standard eliminates 1.4 quads of energy savings over 25 years, or the equivalent of all the energy consumed by approximately 9 million American households in a single year. By revising the standard down, DOE has, by its own estimates, changed the standard in a way that will require in 2020 the construction of almost twice as many generation plants. Specifically, the drop to the SEER 12 standard will require the construction of two additional 400 megawatt coal-fired plants and seventeen additional 400 megawatt gas-fired plants. 67 Fed. Reg. 36368, 36377 (May 23, 2002). JA-7296. The prospect of eliminating such expansive savings are especially significant when viewed against the backdrop of the impact of recent market disruptions and climate extremes on the reliability of the United States' electricity system. As DOE noted in the Final 13 SEER Rule:

20 

### In its original analysis, DOE estimated that a 13 SEER standard will "save approximately 4.2 quads of energy over 25 years" or the equivalent of "all the energy consumed by nearly 26 million An1erican households in a single year.... In 2020, the standards will avoid the construction of five 400 megawatt coal-fired plants and thirty-four 400 megawatt gas-fired plants." 66 Fed. Reg. 7170, 7171 (January 22, 2001). JA-5551 The revised standard significantly reduces these energy savIngs. Specifically, the new standard eliminates 1.4 quads of energy savings over 25 years, or the equivalent of all the energy consumed by approximately 9 million American households in a single year. By revising the standard down, DOE has, by its own estimates, changed the standard in a way that will require in 2020 the construction ofalmost twice as many generation plants. Specifically, the drop to the SEER 12 standard will require the construction oftwo additional 400 megawatt coal-fired plants and seventeen additional 400 megawatt gas-fired plants. 67 Fed. Reg. 36368, 36377 (May 23, 2002). JA-7296. The prospect ofeliminating such expansive savings are especially significant when viewed against the backdrop ofthe iInpact ofrecent market disruptions and climate extremes on the reliability of the United States' electricity system. As DOE notedinthe Final 13 SEERRule:

20"Recent summertime electric power outages in various regions of our

country resulted in disruption of many peoples' lives and businesses. ... While central air conditioning accounts for about 10 percent of residential electricity consumption, it can account for several times this amount during peak hours on hot summer days, when electricity reliability is most strained.... peak load reductions are critical given that the conditions leading to grid instability can occur well before peak demand even equals supply." 66 Fed. Reg. at 7173. JA-5553. Because of concerns about such outages, the Secretary of Energy, at NARUC's 1999 Summer Committee Meetings, pledged "to investigate several recent major electric power disturbances as part of a six-point plan to improve the reliability of the U.S. electric power system." See, "Report of the U.S. Department of Energy's Power Outage Study Team: Findings and Recommendations to Enhance Reliability from the Summer of 1999," March 2000, JA-2163. According to DOE, the recommendations contained in the report led the Secretary to put this rulemaking on the fast track and to advance the publication of [the Final 13 SEER Rule]." 66 Fed. Reg. 7170, 7173 (January 22, 2001). This team recommended increasing the energy efficiency of central air conditioners as one key method for policy makers to quickly enhance reliability. Id. "The increased adoption of energy efficiency measures can enhance electric system reliability by reducing demand growth in areas experiencing shortages in electric generation or constraints in electric transmission or distribution. Programs to stimulate adoption of energy efficient technologies and practices can provide more rapid relief to areas with fast-growing demand. Further, they 21 "Recent summertime electric power outages in various regions ofour country resulted in disruption ofmany peoples' lives and businesses.

... While central air conditioning accounts for about 1

# °percent of residential electricity consumption, it can account for several times this amount during peak hours on hot summer days, when electricity reliability is most strained

.... peak load reductions are critical given that the conditions leading to grid instability can occur well before peakdemand even equals supply." 66 Fed. Reg. at 7173. JA-5553. Because of concerns about such outages, the Secretary of Energy, at NARUC's 1'999 Summer Committee Meetings, pledged "to investigate several recent major electric power disturbances as part ofa six-point plan to improve the reliability ofthe U.S. electric power system." See, "Report ofthe U.S. Department of Energy's Power Outage Study Tean1: Findings and Recommendations to Enhance Reliability from the Summer of 1999," March 2000, JA-2163. According to DOE, the recommendations contained in the report led the Secretary to put this rulemaking on the fast track and to advance the publication of [the Final 13 SEER Rule]." 66 Fed. Reg. 7170,7173 (January 22, 2001). This team recommended increasing the energy efficiency of central aIr conditioners as one key method for policy makers to quickly enhance reliability.

"The increased adoption ofenergy efficiencymeasures can enhance electric system reliability by reducing demand growth in areas experiencing shortages in electric generation or constraints in electric transmission or distribution. Programs to stimulate adoption ofenergy efficient technologies and practices can provide more rapidreliefto areas with fast-growing demand. Further, they 21can do so with fewer negative impacts than would occur during the

construction of new generation, transmission, and distribution facilities. Such programs might be especially helpful in areas where growth in electric demand is high; ...Technologies and practices that reduce loads during times of peak demand, such as high-efficiency air conditioning and lighting equipment, are especially valuable. JA-2163, 2178. (emphasis added). As part of its study reflecting the need for national energy conservation measures, the team, focused on power outages and depressed voltages on Long Island in the summer of 1999 and found: "[tlraditional methods (., construction of new transmission and central generation) for supplying electric power to load pockets were not able to keep up with load growth.... There has been local resistance to the construction of new, higher-voltage transmission lines and new generating stations in the area." Id. By contrast, the maximum permissible economically feasible energy efficiency standards, can do much more to alleviate load pockets in areas such as Long Island and other parts of the country. The need for immediate implementation of the maximum permissible efficiency standards is not projected to end anytime soon. As NRDC pointed out in December 1, 2000 comments, since the record of this proceeding closed in January of 2001: " ...rates for large residential electricity users in California increased 40%; throughout the four states of the Pacific Northwest, rates went up typically by 31%; Massachusetts and Pennsylvania have also experienced hikes in electricity prices far beyond those consistent with what was projected by DOE." 22 

### can do so with fewer negative impacts than would occur during the construction of new generation, transmission, and distribution facilities. Such programs might be especially helpful in areas where growth in electric demand is high;

..,Technologies and practices that reduce loads during times ofpeak demand, such as high-efficiency air conditioning and lighting equipment, are especiallyvaluable. JA-2163, 2178. (emphasis adOed). As part of its study reflecting the need for national energy conservation measures, the team, focused on power outages and depressed voltages on Long Island in the summer of 1999 and found: "[t]raditional methods**(~.,** 

### construction ofnew transmission and central generation) for supplying electric power to load pockets were not able to keep up with load growth

.... There has been local resistance to the construction ofnew, higher-voltage transmission lines and new generating stations in the area." Id. By contrast, the maximum permissible economically feasible energy efficiency standards, can do much more to alleviate loadpockets in areas such as Long Island and otherparts ofthe country. The need for immediate implementation of tp.e maximum permissible efficiency standards is not projected to end anytime soon. As NRDC pointed out in December 1, 2000 comments, since the record of this proceeding closed in January of 2001: "

... rates for large residential electricity users in California increased 40%; throughout the four states ofthe Pacific Northwest, rates went up typically by 31%; Massachusetts and Pennsylvania have also experienced hikes in electricity prices far beyond those consistent with what was projected by DOE." 22JA-4720. The comments filed by American Council for an Energy-Efficient

Economy ("ACEEE") builds on the NRDC statement. Specifically ACEEE highlights data from the North American Electric Reliability Council ("NERC") to outline the overall potential impact of conservation on system reliability. JA 4969.10 According to ACEEE, NERC projects that between "now and 2020, approximately 370,000 MW of new generation capacity will be needed to maintain 1999 capacity margins. Thus air conditioner standards can provide more than 15% of needed capacity over the next 20 years." JA-4969. As referenced above, a significant fraction of the percentage "gains" in capacity is lost under the revised SEER 12 standard. The Texas Public Utility Commission, then chaired by the current head of the Federal Energy Regulatory Comnssion Pat Wood, also commented on how a 13 SEER standard reduces demand and improve system reliability: "On July 23, 1999, the Entergy electric system (Entergy) implemented emergency curtailment of retail customers when system demands exceeded the available power supply. These curtailments affected 557,354 retail customers in Louisiana, Texas, Arkansas, and Mississippi. Updated central air-conditioning standards, effective in to Since its formation in 1968, the North American Electric Reliability Council (NERC) has operated as a voluntary organization to promote bulk electric system reliability and security - one dependent on reciprocity, peer pressure, and the mutual self-interest of all those involved. Through this model, NERC has helped to make the North American electric system the most reliable system in the world. 23 

### JA-4720. The comments filed by American Council for an Energy-Efficient Economy ("ACEEE") builds on the NRDC statement. Specifically ACEEE highlights data from the North American Electric Reliability Council ("NERC") to outline the overall potential impact of conservation on system reliability. JA4969. 10 

### According to ACEEE, NERC projects that between "now and 2020, approximately 370,000 MW ofnew generation capacity will be needed to maintain 1999 capacitymargins. Thus air conditioner standards can provide more than 15% ofneeded capacity over the next 20 years." JA-4969. As referenced above, a significant fraction ofthe percentage "gains" in 

### capacity is lost under the revised SEER 12 standard. The Texas Public Utility Commission, then chaired by the current head of the Federal Energy Regulatory Commission Pat Wood, also commented on how a 13 SEER standard reduces demand and improve system reliability: "On July 23, 1999, the Entergy electric system (Entergy) implemented emergency curtailment ofretail customers when system demands exceeded the available power supply. These curtailments affected 557,354 retail customers in Louisiana, Texas, Arkansas, andMississippi. Updated central air-conditioning standards, effective in

10 

### Since its formation in 1968, the North American Electric Reliability Council (NERC) has operated as a voluntary organization to promote bulk electric system reliability and security

- one dependent on reciprocity, peer pressure, and the mutual self-interest ofall those involved. Through this model, NERC hashelpedto make the NorthAmerican electric systemthemostreliable systemin the world. 231990, would have cut the 1999 peak demand in the Entergy service area by more

than 1,260 MW, thus eliminating the capacity shortage that occurred in 1999." See, the Comments of the Public Utility Commission of Texas filed in DOE EE-RN-97- 500 (Nov. 29, 2000), JA--4661. Similarly, Austin, Texas Mayor Kirk Watson quantified the impact of DOE's adoption of a 12 instead of a 13 SEER standard. The City of Austin owns and operates its serving electric utility. According to Mayor Watson, the revision sacrifices, just for Texas, "about 135 MW of avoided peak growth per year, totaling more than 2,000 MW by 2020; annual bill savings that would grow to $200 million per year by 2020 (annual savings grow as people buy new air conditioners); annual electric savings that would reach more than 2,700 gigawatt hours by 2020; and significant reductions in power plant pollution including NOx. Comments of Mayor Kirk Watson filed in DOE EE-RN-97-500 (Nov. 29, 2000), JA-4697. Cities like Austin, are particularly concerned about energy efficiency because the city owns the electric utility. The Alliance to Save Energy also quantified the impact of the change of the efficiency standards on reliability. JA-4935-36. The Alliance and other sponsors of the Appliance Standards Awareness Project (ASAP) produced a report in July 2000 called "Staying Cool: How Energy-Efficient Air Conditioners Can Prevent Blackouts, Cut Pollution, and Save Energy." Id. The Reported documented peak load reduction impacts of the SEER 13 standard level. 24 1990, would have cut the 1999 peak demand in the Entergy service area bymore than 1,260 MW, thus eliminating the capacity shortage that occurredin 1999." See, the Comments ofthe Public Utility Commission ofTexas filed in DOE EE-RN-97- 500 (Nov. 29, 2000), JA--4661. Similarly, Austin, Texas Mayor Kirk Watsop quantified the impact ofDOE's adoption ofa 12 instead ofa 13 SEER standard. The City ofAustin owns and operates its serving electric utility. According to Mayor Watson, the revision sacrifices,just for Texas, "about 135 MW ofavoided peak growth per year, totaling more than 2,000 MW by 2020; annual bill savings that would grow to $200 million per year by 2020 (annual savings grow as people buy new air conditioners); annual electric savings that would reach more than 2,700 gigawatt hours by 2020; and significant reductions in power plant pollution including NOx." Comments ofMayor Kirk Watson filed in DOE EE-RN-97-500 (Nov. 29, 2000), JA-4697. Cities like Austin, are particularly concerned about energy efficiencybecause the city owns the electricutility. The Alliance to Save Energy also quantified the impact ofthe change ofthe efficiency standards on reliability. JA-4935-36. The Alliance and other sponsors ofthe Appliance Standards Awareness Project (ASAP) produced a report in July 2000 called "Staying Cool: How Energy-Efficient Air Conditioners Can Prevent Blackouts, Cut Pollution, and Save Energy." Id. The Reported documented peak loadreduction impacts ofthe SEER13 standardlevel. 24"[The Report] showed that raising the standard from SEER 12 to

SEER 13 with median EER will save 16,700 MW of additional peak power demand, equal to the generation of 33 large power plants (or more than a hundred typical pecker units). While it is true that many other factors contribute to peak demand, residential air conditioning is a major contributor to peak loads. It is also true that power outages are typically triggered by small shortfalls in capacity relative to peak load; in California this year, it was reported that shortfalls as small as 100 MW triggered reliability problems." Id. While some commenters, such as the Electric Edison Institute, suggested that the effect of annual air conditioner energy use as a proportion of total energy use is, while measurable, insignificant, see comments at JA-4165, its analysis fails to take into account how air conditioners are disproportionately on at the time of peak demand. The American Council for an Energy-Efficient Economy (ACEEE) presented evidence that shows the effect of residential air conditioning on peak demand. See, JA-4968 ("A recent data collection and analysis effort by utilities in New Jersey estimates that residential air conditioning accounts for about 26% of peak demand in the state.") DOE's basis for recanting its adoption of a 13 SEER standard in favor of the 12 SEER standard is apparently based squarely on Southern Company claims that there is no direct relationship between peals demand growth and reduced electric system reliability. 67 Fed. Reg. 36392. JA-7350. This conclusion cannot be squared with DOE's statement in the salve notice that "higher efficiency standards

25 "[The Report] showed that raising the standard from SEER 12 to SEER 13 with median EER will save 16,700 MW of additional peak power demand, equal to the generation of 33 large power plants (or more than a hundred typical peaker units). While it is true that many other factors contribute to peak demand, residential air conditioning is a major contributor to peak loads. Itis also true that power outages are typically triggered by small shortfalls in capacity relative to peak load; in California this year, it was reported that shortfalls as small as 100 MW triggered reliability problems." Id. While some commenters, such as the Electric Edison Institute, suggested that the effect ofannual air conditioner energy use as a proportion oftotal energy
use is, while measurable, insignificant, see comments at JA-4l65, its analysis fails to take into account how air conditioners are disproportionately on at the time of peak demand. The American Council for an Energy-Efficient Economy (ACEEE) presented evidence that shows the effect ofresidential air conditioning on peak demand. See, JA-4968 ("A recent data collection and analysis effortbyutilities in New Jersey estimates that residential air conditioning accounts for about 26% of peak demand inthe state.") DOE'sbasis for recanting its adoption ofa 13 SEER standard in favor ofthe 12 SEER standard is apparently based squarely on Southern Company claims that there is no direct relationship between peak demand growth and reduced electric system reliability. 67 Fed. Reg. 36392. JA-7350. This conclusion cannot be squared with DOE's statement in the Saine notice that "higher efficiency standards
25for central air conditioners and heat pumps are expected to reduce significantly the

peak loads of electric systems in the future, thus enabling a reduction in the number of new power plants and transmission lines required to meet future demand. Electric system planners will take these efficiency improvements and other factors affecting future electricity demand into account when estimating how many new plants and transmission lines will be required to meet future demand, while maintaining or improving system reliability." Id. As this Court has found, "an agency decision that runs sharply against virtually all the ... evidence presented and makes no specific finding as to the credibility of the claimant's otherwise uncontroverted testimony" will not be supported. Williams v. Bowen, 859 F.2d 255, 256 (2d Cir. 1988). DOE's reasoning for adopting a 12 SEER standard is not based on the substantial evidence presented on the effects of energy conservation on reducing peak load and should thus be vacated.

26 for central air conditioners and heat pumps are expected to reduce significantly the peak loads of electric systems in the future, thus enabling a reduction in the number of new power plants and transmission lines required to meet future demand. Electric system planners will take these efficiency improvements and other factors affecting future electricity demand into account when estimating how many new plants and transmission lines will be required to meet future demand, while maintaining orimproving systemreliability." Id. As this Court has found, "an agency decision that runs sharply against virtually all the

... evidence presented and makes no specific finding as to the credibility of the claimant's otherwise uncontroverted testimony" will not be supported. Williams v. Bowen, 859 F.2d 255, 256 (2d Cir. 1988). DOE's reasoning for adopting a 12 SEER standardis notbased onthe substantial evidence presented on the effects ofenergy conservation on reducing peak load and should thus be vacated.

26CONCLUSION

For the foregoing reasons, NARUC urges this Court to (1) vacate the DOE's withdrawal of the Final SEER 13 rule, (2) vacate the SEER 12 rule, and (3) reinstate the Final SEER 13 Rule as the current amended energy efficiency standard under 42 U.S.C. § 6295.

Dated: September 27, 2002 Respectfully submitted,

National Association of Regulatory Utility Commissioners i James Bradford Ramsay General Counsel Sharla M. Barklind Assistant General Counsel 1101 Vermont Ave., NW, Suite 200 Washington, DC 20005 202-898-1350

27 CONCLUSION For the foregoing reasons, NARUC urges this Court to (1) vacate the DOE's withdrawal of the Final SEER 13 rule, (2) vacate the SEER 12 rule, and (3) reinstate the Final SEER 13 Rule as the current amended energy efficiency standardunder 42 U.S.C. § 6295.

Dated: September27, 2002

BY:

27 Respectfully submitted,

National Association

- ofRegulatory UtilityCommissioners • /}

# ~11.J)~~ J

ames BradfordRamsay General Counsel SharlaM. Barklind Assistant General Counsel 1101 VermontAve., NW, Suite 200 Washington, DC 20005 202-898-1350CERTIFICATE OF COMPLIANCE

Pursuant to Rule 32(a)(7)(C) of the Federal Rules of Appellate Procedure,the undersigned counsel hereby certifies that this brief complies with the typevolume limitation of Rule 32(a)(7)(B). As measured by the word processing system used to prepare this brief, there are 6,765 words in the brief.

28 CERTIFICATE OF COMPLIANCE
Pursuant to Rule 32(a)(7)(C) ofthe Federal Rules ofAppellate Procedure, the undersigned counsel hereby certifies that this briefcomplies with the typevolume limitation ofRule 32(a)(7)(B). As measured by the wordprocessing systemused to prepare this brief, there are 6,765 words in the brief.

28CERTIFICATE OF SERVICE

I hereby certify that on this 27th day of September, 2002, I caused to be served copies of the foregoing "BRIEF OF INTERVENORS NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS" via first class mail upon the parties listed on the Service List attached below.

Sharla M

. Barkl' d ELIOT SPITZER Attorney General, State of New York PETER H. LEHNER D. SCOTT BASSINSON Assistant Attorneys General New York State Department of Law The Capitol Albany, New York 12224 Tel: (518) 473-5843 Attorney for Petitioner State of New York KATHERINE KENNEDY, Esq. NATURAL RESOURCES DEFENSE COUNCIL, INC. 40 West 20`h Street New York, New York 10011 Tel: (212) 727-4463 Attorney for Petitioners Natural Resources Defense Council, Inc. and Public Utility Law Project and for Petitioner-hatervenor Consumer Federation of America BILL LOCKYER Attorney General of the State of California RICHARD M. FRANK Chief Assistant Attorney General, Public Rights Division California Attorney General's Office 1300 "I" Street, P. O. Box 944255 Sacramento, California 94244-2550 (916) 445-9555 Attorney for Petitioner State of California 29 CERTIFICATE OF SERVICE Ihereby certifythat on this 2ih day ofSeptember, 2002, I caused to be served copies ofthe foregoing "BRIEF OF INTERVENORS NATIONAL ASSOCIATION OF REGULATORYUTILITY COMMISSIONERS" viafirst class mail upon theparties listed on the Service List attachedbelow.

ELIOT SPITZER Attorney General, State ofNewYork PETERH. LEHNER D. SCOTTBASSINSON AssistantAttorneys General NewYork State DepartmentofLaw The Capitol Albany, New York 12224 Tel: (518) 473-5843 Attorneyfor Petitioner StateofNewYork KATHERINE KENNEDY, Esq. NATURALRESOURCES DEFENSE COUNCIL, INC. 40 West 20th Street NewYork, NewYork 10011 Tel: (212) 727-4463 Attorneyfor Petitioners Natural Resources Defense Council, Inc. andPublic UtilityLawProject and for Petitioner-Intervenor ConsumerFederation ofAmerica BILLLOCKYER Attorney General ofthe State ofCalifomia RICHARD M. FRANK ChiefAssistantAttorney General, PublicRights Division CaliforniaAttorneyGeneral's Office 1300 "I" Street, P. O. Box 944255 Sacramento, California 94244-2550 (916) 445-9555 Attorney for Petitioner State ofCalifornia 29RICHARD BLUMENTHAL

Attorney General State of Connecticut MARK KINDALL Assistant Attorney General 55 Elm Street P.O. Box 120 Hartford, CT 06141-0120 (860) 808-5250 Attorney for Petitioner State of Connecticut WILLIAM H. SORRELL Attorney General, State of Vermont S. MARK SCIARROTTA Assistant Attorney General Office of the Attorney General 109 State Street Montpelier, Vermont 05609-1001 (802) 828-3185 Attorney for Petitioner State of Vermont G. STEVEN ROWE Attorney General, State of Maine PAUL STERN Deputy Attorney General GERALD D. REID Assistant Attorney General Department of the Attorney General State House Station #6 Augusta, ME 04333-0006 (207) 626-8800 Attorney for Petitioner-Intervenor State of Maine DAVID SAMSON Attorney Gcneral, State of New Jersey HOWARD GEDULDIG Deputy Attorney General Richard J. Hughes Justice Complex 25 Market Street, P.O. Box 093 Trenton, NJ 08625-0093 (609) 633-8109 Attorney for Petitioner-Intervenor State of New Jersey 30 ruCHARDBLUMENTHAL Attorney General State ofConnecticut MARK KINDALL AssistantAttorney General 55 Elm Street P.O. Box 120 Hartford, CT 06141-0120 (860) 808-5250 Attorney for Petitioner StateofConnecticut WILLIAM H. SORRELL Attorney General,State ofVermont S. MARKSCIARROTTA Assistant Attorney General Office ofthe Attorney General 109 State Street Montpelier, Vermont 05609-1001 (802) 828-3185 Attorney for PetitionerState ofVennont G. STEVENROWE Attorney General, State ofMaine PAUL STERN DeputyAttorney General GERALD D. REID Assistant Attorney General Department ofthe Attorney General State House Station#6 Augusta, ME 04333-0006 (207) 626-8800 Attorney for Petitioner-Intervenor State ofMaine DAVID SAMSON Attorney General, State ofNew Jersey HOWARD GEDULDIG DeputyAttorney General Richard J. Hughes Justice Complex 25 Market Street, P.O. Box 093 Trenton, NJ 08625-0093 (609) 633-8109 Attorney for Petitioner-Intervenor State ofNew Jersey 30FRANKIE SUE DEL PAPA

Attorney General of the State of Nevada TIMOTHY HAY Chief Deputy Attorney General Bureau of Consumer Protection 1000 E. William St., Ste. 200 Carson City, NV 89701 (775) 687-6300 Attorney for Petitioner State of Nevada PHILIP T. MCLAUGHLIN Attorney General of the State of New Hair-.pshire AMY B. MILLS, Attorney Environmental Protection Bureau 33 Capitol Street Concord, NH 03301 ( 603) 271-3679 Attorney . or Intervenor State of New Hampshire SHELDCN WHITEHOUSE Attorney General of Rhode Island TRICIA K. JEDELE, Special Assistant Attorney General 150 Soutll Main Street Provide:, Rhode Island 02903 (401) 274-4400 Attorney :or Intervenor State of Rhode Island

31 FRANKIE SUE DELPAPA Attorney General ofthe State ofNevada TIMOTHYHAY ChiefDeputyAttorney General BureauofConsumerProtection 1000E. William St., Ste. 200 CarsonCity, NY 89701 (775) 687-6300 Attorney for Petitioner State ofNevada 

### PHILIP T. MCLAUGHLIN Attorney General ofthe State of NewHan",pshire AMYB. MILLS, Attorney Environn1ental ProtectionBureau 33 Capitol Street Concord, NH 03301 ( 603) 27l-3679 Attorney orIntervenor State ofNewHampshire SHELDeNWHITEHOUSE Attorney General ofRhode Island TRICIA K. JEDELE, Special Assistant Attorney General 150 SoutllMain Street Provide:) c, Rhode Island02903 (401) 274-4400 Attorney ;or Intervenor State ofRhode Island

31THOM.i\:: F. REILLY

AttorneyGneral of the Commonwealth of Massachusetts FREDERICK AUGENSTERN, WILLIAM L. PARDEE, Assistar ' Attorneys General 200 Portland Street Boston, ' A 02114 (617) 7/_ -2200 Attornc or Petitioner

- Intervenor Commonwealth of Massachusetts CHARLES HARAK, ESQ. NATIC . * AL CONSUMER LAW CENTER 77 Sun,.,- 2r Street, 10th Flr. Bostoi, .. A 02111 (617) 5 8010 Attom, jr Petitioners-Intervenors Massachusetts Union of Public Housing Tenants and Texas Ratepayers' Organization to Save Energy JAME: COMEY United tes Attorney Southc- )istrict of New York WENL CHWARTZ AssistL. united States Attorney U.S. A -aey's Office Southe. District of New York 100 Ci. -ch Street, 19th Floor New _^', k, New York 10007 (718) -608 Attorr, )r Respondents Spencer Abraham and U; States Department of Energy

32 THOM/\:) F. REILLY Attornev General ofthe Commonwealth ofMassachusetts -' FREDERICKAUGENSTERN, WILLIAM L. PARDEE, Assistan' Attorneys General 200 Portland Street Boston,**~** :A02114 (617) 7 _ -2200 Attornc ,'orPetitioner- Intervenor CommonwealthofMassachusetts CHARLES HARAK, ESQ. NATIC

..AL CONSUMERLA W CENTER 77**Sum.~' ~r**  Street, 10th FIr. BostOll_. A 02111 (617)5 SOlO Attorn,

.JfPetitioners-Intervenors Massachusetts Union ofPublic Housing Tenants ,md Texas Ratepayers' Organizationto Save Energy**JAME~** .'. COMEY United. .tes Attorney Southc- )istrict ofNewYork WENL;CHWARTZ Assist U.S.A Southe 100 Ci. NewY, (718)

. Jnited StatesAttorney -aey's Office District ofNew York -ell Street, 19th Floor k, New York 10007 -5608 AttoTI,} andU] JfRespondents SpencerAbraham**.~** States DepartmentofEnergy

32JOHN %,. HODGES

WILE`' REIN & FIELDING LLP 1776 Y Street NW Washi ;ton, D

.C. 20006 (202) 9-7000 Attorn s for Respondent-Intervenor Air-Conditioning and Refrigeration Institute

33 JOHN \. HODGES WILEvREIN & FIELDINGLLP 1776 :F**~treet** NW Wasbi**~ton,** D.C. 20006 (202)**~** 9-7000 Attorn s for Respondent-IntervenorAir-Conditioning and Refrigeration Institute

33