The Honorable Dr. Steven Chu Secretary of Energy Department of Energy 1000 Independence Ave., SW Washington, D.C. 20585 October 20, 2011

Re: Closing ofloophole regarding HCFC-22 condensing units forair-conditioning systems
Dear Secretary Chu:
We, the undersigned companies, are writing regarding a significant loophole in current federal law regarding air-conditioning condensing units that use hydrochlorofluorocarbon-22 refrigerant ("HCFC-22"). Using HCFC-22 as a refrigerant in air-conditioning systems harms the environment and prolongs the use ofoutdated, less efficient cooling systems. This HCFC-22 air-conditioning condensing unit loophole, ifleft unaddressed, could eliminate for adecade or more critical benefits from DOE energy efficiency regulations.

In late 2009, the U.S. Environmental Protection Agency ("EPA") published afinal rule that in relevant part bans, as ofJanuary 1, 2010, the sale ordistribution ofair-conditioning appliance components that are pre-chargedwith HCFC-22 atthe time when they are manufactured in or imported intothe United States. 1 However, EPA did notapplythe same prohibition to appliance components that are uncharged. Instead, a loophole allows air-conditioning componentsto be shipped without refrigerant and then installed and charged with refrigerant on-site.
Of particular concern, this loophole allows new air-conditioning condensing unitsto be installed as "replacement" condensers in outdated HCFC-22 systems. Condensing units (the "outdoor" equipment in air-conditioning systems) are by farthe largest component ofair-conditioning systems, and they are in effect self-contained subsystems that incorporate compressors, fans, motors, heat exchanger coils and various valves. The sale or distribution of new HCFC-22 condensing units that are then shoe-horned togetherwith existing evaporator coils effectively create newcooling systems, which are banned for pre-charged manufacturing. While smaller components in air-conditioning systems (such as fans and motors) may be replaced as part ofthe normal servicing ofexisting HCFC-22 air-conditioning systems, replacing entire condensing units does not represent typical servicing. This condensing unit loophole has resulted in the widespread installation of newly-manufactured HCFC-22 air-conditioning condensing units, which dramatically undercuts DOE energy efficiency regulations and increases leaked harmful emissions tothe environment (as HCFC-22 is both an ozone depletingsubstance and a greenhouse gas).
DOE should immediately communicate to EPA thatthis condensing unit loophole must be closed for both commercial and residential air-conditioning systems. Moreover, DOE should avoid issuing any

1 Protection ofStratospheric Ozone: Ban on the Sale or Distribution of Pre-Charged Appliances, 74 Fed. Reg. 66,450 (December 15, 2009).guidance thatwould exacerbate the problems created bythis condensing unit loophole. Whilethis loophole should be closed as soon as possible, in orderto avoid stranding air-conditioning condensing units in inventory manufacturers should be given adequate notice ofthis phase-out so thatthey can stop production.
On February 3, 2011, EPA received aformal petition to close this air-conditioning condensing unit loophole through an amendmenttothe EPA regulations that have already banned pre-charged HCFC-22 equipment. Furthermore, a broad cross-section ofthe industry has communicated to EPAthe need for closing this loophole, including members ofthe undersigned companies. Our understanding is that EPA may rule on this petition imminently, so the need for DOE to communicate with EPA is urgent in orderto preserve the benefits of DOE energy efficiency regulations.
The sale ofuncharged HCFC-22 air-conditioning condensing units through this loophole is dramatically proliferating, with significant adverse energy efficiency and environmental impacts. Third party estimates indicate that uncharged HCFC-22 condensing units represent up to 30% ofthetotal condensing units currentlysold by the industry. In the absence ofagovernment intiated prohibition, DOE should considerthese current estimatesto only increase in the nearterm. Regarding energy efficiency impacts, HCFC-22 air-conditioning systems are less efficientthan modern systems that use non-ozone depleting refrigerants. Furthermore, allowingthe replacement of HCFC-22 condensing units results in unmatched outdoor and indoorsystem components that

### further degrade energy efficiency. For instance, studies have shown that 13 SEER HCFC-22 condensing units installed with older 10 SEER indoorcoils result in cooling efficiency and capacity losses in the range of37 to 39%. 2 Consequently, analysis provided bythe Air-conditioning, Heating 

### &Refrigeration Instituteto EPA indicates that nearly 10% ofallthe efficiency gains from the DOE 13 SEER rule is forfeited when HCFC-22 units comprise 20% ofthe air-conditioning market, athreshold that estimates indicate has already been passed. In addition, the sale ofuncharged HCFC-22 air-conditioning condensing units through this loophole has caused manufacturersto redirect resources from the development ofnew, more energy efficient solutions. Ifthis loophole is notclosed, we anticipate thatthis trend will continue and will result in slowerdevelopment and market introductions of more energy efficient equipment. Given the useful life ofdry-charged condensing units and thefact that units installed today may be used intothe next decade, and also the diversion ofengineering resources away from designing improved equipment and the lead times necessaryto manufacture any such new equipment, this loophole's harm to critical DOE energy efficiency measures and the harm to related consumer benefits could last a decade or more.
DOE issued draftguidance regarding residential split system air conditioners in October 2010 that was titled "Testing of R-22 Systems" (Docket No EERE-2010-BT-TP-0038). Such DOE guidance should 

### not be finalized as itwould facilitate the use ofmismatched equipment and endorsethe installation ofdryshipped condensing units, thus further prolongingthe operation ofless efficient cooling systems beyond their useful life.

2 See e.g., comments ofthe Heating, Airconditioning and Refrigeration Distributors International (HARDI), Guidance Documentfor Testing ofR-22 ResidentialAir-Conditioning andHeat Pump Systems (November 22, 2010).We do not believe the continuing availability ofthe HCFC-22 air-conditioning condensing unit loophole is what DOE, EPA and Administration policy support. Although EPA has recognized the harms caused bythis loophole, it is unclear ifthe EPA is movingwith urgencyto close this loophole. Therefore, we respectfully request that DOE formally encourage EPAto endorsethe pending petitionthat closes the current loophole (and at a minimum DOE should not issue guidance that would worsen the situation). We would welcome the opportunityto meetwithyou to discuss these important issues as soon as may be convenientforyou.

Lennox International Contact: Kyle Gilley kyle.gilley@Lennoxintl.com
Johnson Controls Contact: Mark Wagner mark.f.wagner@jci.com Ingersoll Rand/Trane Contact: David Modi dmodi@irco.com

cc: Dr. Henry Kelly Sean Lev Sincerely,
Carrier Corporation Contact: John Mandyck john.m.mandyck@carrier.utc.com Daikin/McQuay International Contact: Bruce Dorey bruce.dorey@mcguay.com

### Secretary Chu
From: Sent: To: Subject:
Attachments: 

### Gilley, Kyle [kyle.gilley@Lennoxintl.com] Thursday, October 20, 2011 2:09 PM Secretary Chu Industry Coalition Letterto DOE--Dry Shipped HCFC-22 Air-Conditioning Condensing Units Dry HCFC-221ndustry Letterto DOE (10 20 11).pdf

Attached is an industry coalition letter requesting DOE take action to uphold energy efficiency standards for residential unitary air conditioners intended for use with HCFC-22 refrigerant. It is imperative that DOE encourage EPA to reverse theircurrent policy permittingthe installation ofdryshipped air-conditioning condensing units. Installations ofthese units prolongthe use of less efficient central air-conditioning systems and undermine DOE energy efficiency regulations. DOE inquiries regarding this lettershould be directed to Kyle Gilley. Kyle can be reached at kyle.gilley@lennoxintl.com and 214-415-4564. Regards, Kyle E. Gilley Vice President, GovernmentAffairs Lennox International

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