Date: August 20, 1999 

## FAX COVE SHEET

FAX TO: Fred Brown , Office ofHearings and Appeals , U.S. DOE Fait Number : (202-426-1415) FROM: David B. Goldstein No. of Pages: 14 (including cover) If you do not receive this complete transmission, Please call: Andrea at (415) 777-0220

Re: Supplemental Comments of the Natural Resources Defense Council on Arnana Company L.P.'s Application for Exception to the Department of Energy's Refrigerator Efficiency Standards. 

### Case Number VEE-0054

Submitted by:

David B_ Goldstein, Ph.D. Natural Resources Defense Council 71 Stevenson Street, #1825 San Francisco, CA 94105 (415) 777-0220 Fax: (415) 495-5996 E-mail: dgoldstein@nrdc.org

71 Stevenson Street 6310 San Vicente Boulevard 1200 New York Ave_, NW 40 West 201h street 5ulte X825 Suite 250 Suits 400 New York, NY 10011 San Francisco , CA 94105 Los Angeles, CA 90048 Washington, DC 20005 212 727-2700 414 777-022o 323 934-6900 202 289-6868 Fax 212 727-1773 Fax 415 495.5996
www.urdc.org Fax 323 934-1210 Fax 202 289-1060 

# FAX COVER SHEET

Date: August 20. 1999 

### FAX TO: Fred Brown, Office ofHearings and Appeals, U.S. DOE
Fax Number: (202-426-1415) 

### FROM: David B. Goldstein
No. ofPages! 14 (including cover)



# ----------------------------- Ifyou do not receive this complete transmission,**Ple~se** call:

. Andrea at (415) 777-0220

Re: Supplemental Comments oftha Natural Re/i;ources Defertse Council 

### on Amana Company L.P.'8 

### Application fOl" 

### Exception to the Department ofEnergy's Refrigerator Efficiency Standards.
Case Number VEE-0054

Submitted by:

David B- Goldstein, 

### Ph.D. Natural Resources Defense Council 71 Stevenson Street, #1825 San Francisco, CA 94105 (415) 777-0220 Fax: (415) 495-5996 E-mail: dgoldstein@nrdc,org

11**Steln~** Street Sufle 1m 6310 San Vicente BouJeYan/**Sui~2S0** sao FrBncisco. CA 94105**41g1?'7~o** Fu 415 495·5996 www.nrdc.org WS Angeles, CA 00048 323 934-6000 Fax 323 934-1210 1200 New York AYe.• NW Suite 400 Wnsbingron, DC 20005 202 289.a68 F8I' 202 289·1060 40**Wes~** 20'" Street New York. NY 10011 212 727·2700 Fax 212 727-1773NATURAL

RESouRCF

S ' DEFENSE .COUNCLL
Supplemental Comments of the Natural Resources Defense Council

on Amana Company L.P: s Application for Exception

to the Department of Energy's Refrigerator Efficiency Standards.'
Case Number WE-0054
David Goldstein, Ph.D. Natural Resources Defense Council 71 Stevenson Street, #1825 San Francisco. CA 94105 DGoldstein@nrdc.org

I. Introduction

The Natural Resources Defense Council (NRDC) is a national environmental organization with over 400,000 members. NRDC has promoted energy efficiency at the state, regional, national and international levels for 25 years, and has participated in DOE appliance efficiency rulemakings since 1980 and state appliance efficiency proceedings since 1975. The National Appliance Energy' Conservation Act of 1987 follows from an agreement negotiated' between NRDC and the major appliance manufacturer trade associations.
On February 18, 1999, Amana Company L.P. filed with the Department of Energy (DOE) an Application for Exception (Application) to the energy efficiency standards for refrigerators, refrigerator-freezers, and freezers that are established in 10 CFA § 430.32(a)' and that go into effect on July 1, 2001. Amana's Application was filed pursuant to 10 CFR Part 1003, Subparts A and B.

NRDC submitted Joint Comments with Amana as well as other manufacturers and stakeholders in the DOE proceeding on.November 15th, 1994, and was a party to discussions with Amana and the other parties leading to-thefinal standard issued by DOE with the support of all stakeholders71 Stevenson Screec 6310 SanVicente Boulevard 1200 New York Ave,, N.W. 40 Wcst 20th Strcct Suite 1825 Suite 250 Suitt 400 NewYork, NY 10011 San FtInd MCA 94105 Los Angcics, CA 900i18 Washington, DC 20005 212 727-2700 415'777-0120 323 934-6900 202 289-6868 Fax 212 727-1773 Fac 415 495-5996 www.nrdc.org Fax 323 934-121(1 Fax 202 289-1060

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# .~ DEFENSE CoUNCIL



### Supplemental Comments althe 

### Natural Resources Defense Council
on

### Amana Company L.P"$ Application for Exception

I. 

### Introduction to the Department ofEnergy's Refrigerator Efflci,ency Standards. '
Case 

### Number VEE-0054

David Qoldl3tein, J.:>h.D. 

### Natural Resources Defense Council 71 Stevenson Street,#1825

San 

### Francisco. CA 94105



### DGoldstein@nrdc.org

The Natural Resources Defense Council (NRDC) is a 

### national environmental organization with over 400,'000 

### members. NRDC has 

### promoted energy efflriency at the state, regional, nationa.l a.nd international 

### levels for 25 years, and has 

### participated in DOE appliance efficiency rulemakings since**1~80** 

### and state appliance efficiency proceedings since 1975. The National Appliance Energy' ConservationAct of 1987 follows from an agreement negotia.ted'between NRDC and the major appliance manufacturer trade associations.

On February 18. 1999. 

### Amana Company L.P. filed with the Department of Energy (DOE) an Application for Exception (Application) to the energy efficiency standards for refrigerlltor::s, refrigerator-freezers, and freezers that are established 

### in 10 CFR § 

### 430.32(a} and that go into effect onJuly 1, 2001. Amana's Application
was filed pursuant to 10 

### CFR :rart 1003, Subparts A and B.

NRDC 

### submitted Joint**Comm~nts** 

### with Amana as well as other manufacturers and stakeholders in the 

### DOE proceeding on,November 15th• 1994, and was a party to dil!lcussions with Amllna llnd the other parties leading to'the 

### fmal standard issued by DOE with the support ofall stakeholders.

71 SlevenllOnSrrllCt Suite 1825 San l't'drtdscn, CA !l4105 415777-0120**l:1~415** 495-5996 'www.nrdc.org 6310 SunVicenlt: Boulevard SLlile2S0 [.os Angl.!lcs, CA 90048 323934·6900 Fax 32.3 934- 12)0 1200 NewYorkAve" N,W, Suit<;40f) Washington, DC 20005 202 289·t\!l6R fax 202 289·1060 40 West 20th Sucd New¥ork,NY 10011 212127-1700 Fax 212 727-1773H. Background

Amana's Application for Exception is asking for relief from a standard-level that was recommended by all stakeholders in our.Joint Comments of November 1,5th, 1994 for effectiveness beginning in 1998 (for products .containin.g. HCFCs such as the blowing agent 141b, which is scheduled to be phased out by the Environmental Protection Agency on January 18t, 2003),
The.Joint.Comments filed by all. major stakeholders were based on two years of extensive multi-party negotiations, in which the issue of HCFC replacement was discussed extensively. Everyone knew at the.time that 141b , a -low-ozone -depletingchemical that was only recently being phased in to replace the higher-ozonedepleting blowing agent used up.until that time, -would be phased out in 2003. All known replacements were subject to a large number of uncertainties concerning toxicity, the likelihood of regulatory approval, and the extent of energy penalty.
The way the Joint Comments addressed these problems was to recommend that a 10% lower energy standard go into effect for non-ozone-depleting chemical using refrigerators beginning in mid-2001 and phasing out at the end of 2003; assuming no further DOE action- At the time, it was anticipated that DOE would set the standard at the same level as that eventually promulgated in the Final Rule, but.with an effectiveness date of January 1Ak, 1998, (rather than mid-2001.).
DOE is authorized 'under law to adopt a new standard for refrigerators 5 years after the effectiveness date of the old standard.. Thus, there remained the possibility that DOE would set a 2003 standard that was more stringent -than this lower, non-HCFC standard, essentially nullifying the 10% exception as of January 18t, 2003. Even if DOE failed to do that, the more stringent standard would go back into effect for all refrigerators, effective, in January Is', 2004.

These recommendations, made jointly by NRDC and Amana, as well as other parties, assumed a market situation for blowing agents considerably more difficult than that which'has'materialized since then. One can search the Joint Comments in vain for a reference to refrigerant HFC-245fa, or indeed to-the potential for an "drop-in" replacement for HCFC-141b that did not have a substantial energy penalty associated with it.
Notwithstanding the perceived unreliability of any alternative blowing agent . better than the cyclopentane on which Amana now says it has decided to rely, Amana .along with others agreed to meet the standards --- from which Amana is now seeking exception - unconditionally. in the year 2004. '

NRDC Supplemental Comma th; o, Case VEE-0054: Amato 2



### II. Background

Amana's Application for Exception is askingfor relieff:r;-om a standard'level that was recommended

### py all stakehold'ers in out·Joint Comments ofNovember 15th; 1994 for effectiveness beginning in 1998 (for products.contaip.ing,HCFCs such
as the blowing agent 141b, which is scheduled to be phased out by the Environmental Protection Agency on January 'lilt, 2003). 

### .'

"

,The"Joint,Comments filed'by all,major stakeholders were

### ba~ed on two years ofextensive multi-party negotiations, in whiGh the issue ofHCFC replacement was discussed extensively. Everyone knew filt the,time that 141b, a 'low-ozone-depleting , chemical tha.t was only recently heing phased in to replace the**higher-ozone~**

, depleting blowing agent used up,until that time, 'would be phased out in 2003. All,

known replacements were subject to a large number ofuncertainties concerning toxicity, the likelihood'ofregulatory approval, and the**ex~ent** ofenergy penalty.

The way the Joint Comments addressed these problems was to recommend that a 10% lower energy standl;lrd go into effect for non-ozone-depleting chemical using**r~frigerators** beginning in mid-200l and phasing out at the end of**2003~** . assuming no further DOE action. At the time, 

### it was anticipated ,that DOE would set the standard at the same level as that eventually promulgated in the Final Rule. but,with a.n effectiveness da.te ofJanuary**1"~,** 1998, (rat,her than mid-200!).

DOE is authonzedunder law to adopt a new standard for refrigerators 5 years**~fter** the effectivenesl3 date ofthe old standard,.**Thu~,** there remained the possibility that POE would set a 2003 standard that was more stringentthan this lower, non-HCFC standard, essentially nullifying the 10% ex,?eption as ofJanuary 1st, 2003. Even j£DOE failed to do that, the more**~tnngent ~tandard**  would go bQ.ck into effect for all refrigerators'effective.in January }St, 2004.

These recommendations, mt;lde jointly by NRDC Q.nd AmanQ., as well as other parties, assumed a market situationfor blowing agents con'siderably more difficult than that which'hasrnaterialized since then. One can search the Joint' Comments in vain for a reference to refrigerant HFC-245fa.. Or indeed to,th@ potential**fo~** any "drop-in"**repl~cement** for HCFC-141b that 

### did not haye a sub'stantial energy penalty associated with 

### it.
Notwithstanding the perceived unreliability ofany alternative blowing agent. better than the cyclopentane on whichAmana now says it has decided to rely, Amana along with others agreed to meet the standards

- from which. Amana is now seeking exception

- unconditionally in the year 2004.

. '

Naoe'Supplemental**COIIl.lr/.o~ts** 01:1' Csse VEE-0054:**~Il'na** 2Following submission of the Joint Comments, DOE proposed a standard

along similar lines, but the Notice of Proposed Rulemaking was not issued until later than all of the stakeholders expected. In the interim, Amana changed its position and began to advocate for the lower level as a standard. Some of the. comments included in the supplemental Application reflect this advocacy.
Amana's position ultimately was rejected by DOE; and indeed by Amana itself. The final rule from which .Am' ana is now seeking exception was adopted with the explicit support of Amana as well as all the other stakeholders.
From a technology point of view, the changes in the area of energy efficiency and foam blowing agents have been more. favorable ,than anyone anticipated at the time. New blowing agents, the most. attractive of which appears to be HFC-245fa, have come into existence and passed all of the relevant toxicity and performance tests, and have better energy performance than most observers had feared was likely during the time the refrigerator rule was being developed. In addition, new technologies have been introduced in commercial refrigerators that result in energysavings of more than.10% beyond the level adopted by DOE for 2001 effectivenessII. ' DOE 's Final Rule and the Role of HCFC Substitutes
During the year preceding the DOE Final.Rule from which exception is being sought by Amana, the likelihood that additional options for replacing refrigerant 141b without significant energy penalty would emerge began to look higher. Discussions began to focus on HFC-245fa, which could replace HCFC-141b at virtually no energy penalty and with no requirement for-retooling,

Some uncertainties persisted concerning the suitability of 245fa. Thus, the Final Rule promulgated by DOE refers to the possibility of an application for exception such as the one in question.
But the grounds for such an application are. not the ones being suggested now by Amana. The Final Rule notes that commenters, including Amana:
stated that switching to HCFC substitutes as early 2000 was not technically feasibly, given what.is know about the timeline for testing and production of HFC-245fa. They asserted that toxicity testing might not be completed until 200.1, that-the transition of ' manufacturers facilities to produce.the'stabstitute would take additional time, and that chemical manufacturers might not be able to provide adequate supplies "of the substitute product to all appliancecompanies on a timely basisNRDC Supplemental Cpuptdonts ou•Csee VFE-0054: tLnuna Following submission ofthe Joint**Comments~** 

### DOE pfoposed a standard along similar**lines~** but the Notice ofProposed Rulems.king .wal3 not issued l,lntil later 

### than all ofthe stakeholders**e~pected.** In the**interim~** Amana changed its position and began to advocate for the lower level as a standard. Some ofthe comments included in the supplementalApplication reflect this advocacy.

Amana's position ultimately was rejected by 

### DOE; anc-t indeed

### by Amana itself. The final rule from whichAmana is now seeking exception was adopted with the explicit support ofAmana as well as all the other stakeholders

.

.From a technology point ofView, the changes in the area ofenergy efficiency and foam blowing agents have**b~en** more. favorable than anyone anticipated at the time. New blowing**ag~nts;** the most. attractive ·ofwhich appears to be**~FC-245fa,** have come into existence andpassed 

### all ofthe relevant toxicity and**perfor~ance** tests, and have better energy performance than most observers had feared was
.

.likely during the time the refrigerator :rule was being developed. In addition, new technologies have been introduced iIi commerci.al refrigerators that result in energy savings 

### ofmore than 10% beyond the level adopted by

### DOE for 2001 effectiveness

.

.II.

.**DOE~s** Final Rule and thel\ole ofHOFO Substitutes

, . . . During the year preceding the 

### DOE Final.Rule from which exception is being sought by**Aznana~** the likelihood that additional options for replacing refrigerant 141b without significant energy penalty would emerge began to look higher. Discussions began to focus on HFC-245fa, which could replace**HCFC~141b** at**virt~ally** no**~mergy** pen8.Ity and with no requirement for.retooling.**Som~** uncertainties persisted concerning the suitability of245fa. Thus, the Final Rule promulgated

### by DOE refers to the possibility ofan application for exception such as the one in ques.tion.

But**~he** groundt:J for such an applicatil;ln are not the one/S being suggestednow by Amana. The Final Rule notes that cornmenters, includingAmana:

stated that switching to HCFC substitutes as early 2000 was not technlcally·feasibly, given what.is know about the**timel~ne** for testing and productIon ofHFC-245fa. They asserte(j that toxicity testing might not be cornplet!'!d 1.l:p.ti1200.l, that·the**tran~ition** of ' "manufactl,J.ters facilities to produce.the·substitute would take additional time, and that chemical manufacturers 

### might not be able to provide adequate $upplies·ofthe substitute product to aU appliance companies on a**timel~** basis.

3In response, DOE:

concluded that it is likely that the chosen substitute for HCFC- l41b will be HFC-245fa, or another blowing agent with comparable characteristics; and that a substitute will be available for use in the manufacture of refrigerators prior to the 2003 phase-out date for the production of HCFC-141b... The Department recognizes that there will be considerable costs associated with the product redesign necessary to meet the new efficiency standards as well as some additional costs associated with the conversion to a new insulation blowing agent, even assuming that agent is HFC-245fa or another chemical with comparable characteristics.

DOE went on to open the possibility of an application for exception with the following preface:

This approach is founded on the best current information about substitutes for HCFC-141b, i.e-, that 1HFC-245fa will receive the necessary regulatory approvals, and that AlliedSignal will make it available in sufficient quantities for all manufacturers to-use prior to 2003. However, given that all testing on HFC-245fa has not been completed, some commenters urge the Department to provide for appropriate exceptional relief for manufacturers in the event that HFC-245fa or comparable products do not become available to. manufacturers an a timely basis.
DOE recognizes that some uncertainties. still exist about the ultimate acceptability about HFC-245fa or other comparable blowing agents, as well as some uncertainty about the timing ofcommercial production of the product. The results, to date, of HFC245fa toxicology tests have generally been positive, but the testing process is not likely to be completed-until late-1997, consequently it is still possible that subsequent tests will identify an acceptable risk associated- with the use of this product, or that commercial availability will be delayed beyond 2003. Under such circumstances, DOE may grant manufacturers exceptional relief. -
This discussion shows that the primary concerns considered by DOE. and expressed by manufacturers relate to- the legal and physical acceptability of the 245fa product - or other alternatives - and its equitable distribution among manuf'acturers. But by. August 1999, no problems with the legal or physical acceptability of HFC-245fa have emerged.

NRDC'8upplemeatal Comments an Caae V5E-0054: Amana

In response, DOE:

concluded that it is likely that the chosen substitute for**HCFC~141b** will be HFC-245fa, or**a~other** blowIng agent with comparable characteristics; and that a substitute will be available for use in the

,**manufactur~** ofrefrigerators prior to the 2003 phase-o\lt'date for the

produ,ction of**HCFC~141b**... The Department recognizes that there will b,e considerable costs associated with the**pr~duct** :redesign necessary to meet the new efflciency standards as well !=lS some additional costs associated with**th~** conversion to a**n~w** inSUlation blowing agent, even assuming that agent is HFC"245fa or another**chemic~** with comparable characteristics.

DOE went on to open the possibility of**~n** applicationfor exception with the following preface: '.

This approach is founded on the best C1:lrrent information about·substitutes for HCFC-141b, 

### Le., that HFC-245fa will receive the necessary regulatory approvals, and thatAll1edSignal will make .' it available 

### in sufficient quantities for all manufactu:rers to'use prior to 2003. However, given that all testing on HFC-245fa has not been completed, some COnl;menters urge the Depa.rtment to provide for appropriate exceptional relieffor manufacturers in the 'event that HFC-245fa or comparable products do not become available to manufacturers on a timely basis.

DOE**recognize~** that some uncertail1:ties. stili exist about the ultimate acceptability abo'llt HFC:245fa or othel' comparable blowing agents, as well as some uncertainty about the timing of commercial production ofthe product. The results, to date, ofHFC245fa toxicology tests have generally been positive. but the testing process is not likely to be completed'untillate-1997; con,sequently it is still pO::;/5ible that subsequent tests will identify an acceptable risk associated'with the use ofthis product, or that commercial availability will be delayed beyond 2003. Under such .' circumstances, DOE may 

### grant manufacturers exceptional relief.'


### This discussion shows that 

### the primary concerns considered by

### DOE· 'and expressedby manufa.cturers relate to,the legal and physical acceptability of the 245fa.product

- or ather alternatives

- and Its equitable distribution among manufacturers.,But by' August 1999, no problems With the legal or physical '. acceptability ofH;FC-245fa have emerged.

NRDC 'SUpplBlIlBnt:a1**Comme~til** Oil dnila VEE·OOM: Amana '4Note that Amana's letter to Kyle Simpson of the Department of Energy dated

April 15th, 1997 endorsing the final rule. shortly thereafter adopted by DOE, states that "Aniana agrees to the proposal subject to the availability of HFC-245fa. If a shortage. of HFC-245fa occurs, DOE must assure fair and equitable allocation of supply, so that the smaller firms, such as Amana Company, do not get squeezed out." This letter contains no reference to the .risk of an industry-wide delay in the availability of HFC-245fa, nor to the need to make a decision on availability long in advance.

111. Criteria for Acceptance of the Application for Exception
DOE can grant an application such as Amana's if it is necessary to prevent serious hardship, gross'inequity, or unfair distribution of burdens- 10 CFR Sec. 1003.20(a) (DOS's "Final Rule refers to "special hardship, inequity or unfair distribution of burdens."). Amana has failed to demonstrate that any of these criteria are met. Indeed, Amana's Supplement seems very unclear on which of these criteria it believes would be triggered by continuation of the efficiency. .standards as promulgated. Some of its discussion appears to argue for inequity or unfair distribution of burdens among manufacturers. Yet,'other parts of its Application seem to be arguing for industry-wide hardship, which may not be consistent with special or serious hardship. -

The Amana Application is based on an argument that relies on several implicit assumptions that are either ignored by Amana or discussed in the most superficial manner possible

. These include:
+ The assumption that HFC-245fa and cyclopentane are the only feasible alternatives;
+ The assumption that the unavailability of HFC-245fa will be somehow more burdensome on Amana than on its competitors; -
The assumption that DOE promulgated this standard on the condition that HFC-245& is the only blowing agent that will allow compliance with the standards at a reasonable cost;
• The assumption that there are no other technologies available to meet the efficiency standards level using lower efficiency blowing agents such as cyclopentane; and
The assumption that the DOE compliance schedule of July Tat, 2001 was based on AlliedSignal's representation concerning commercial

.N$DC supplemental CotamtWa on Case VEE-0054: Amana Note that Amana's letter

# to Kyle Simpson ofthe Department of. Energy dated April 15th
, 1997 endorsing the fill.al rule, shortly thereafter adopted by DOE, state/!! that "Amana agrees to the proposal subject to the availability offIFC-245fa. 

### Ifa shortage.ofHFC-245fa occurs, DOE must ass'ute fair and equitable allocation of supply, so that the smaller firms, such as Amana Company, do not get squeezed qut:" This letter contains n.o reference to the risk of an-industry-wide delay in the availability ofHFC-245fa, nor to the need to make a decision on availability long in advance.



### III. Criteria for 

### Acceptance ofthe 

### Application

### for Exception

DOE can'grant an application such as Amana's ifit is necessary to prevent serious hardship, gross'inequity, or unfair distribution

# ofburdens. 10 CFR Sec. iOOa.20(a) (DOWs''Final Rule refers to "special hardship, inequity or unfair distribution ofburden!=l.")' Amana has failed to demonstrate that any ofthese**~riteria** are·met. Indeed, Amana's Supplement seems very unclear on which 

### of these criteria it**believe~** would be triggered by continuation ofthe efficiency'. standa:r:ds as promulgated. Some ofits discussion appears to argue for inequity or unfail.' distrihuti.on ofburdens among manufacturers. Yet,'otherparts ofits Application seem to be arguingfor**industry~wide** hardship, which may not be consistent with special or s,enous hardship,.

The AmanaApplicatiQn

# is based on an argument that relies on several implicit assumptions that are either**igno~ed** byAmana or di;scussed in the most superficial manner possible. These include:

, . • The assumption that HFC-245fa and cyclopentane are the only feasible alterns.tives;
. .

• The assumptionthat the unavailability ofHFC-245fa will be somehow more burd.ensome· on Amana than on its competitors;

• .**T~e** assumption that DOE promulgated this standard on tl1e condition that HFe-245fa is the only blowing agent that will allow compliance with the standards at a reasonable cost;

..

• The· assum.ption that there ate no other technologies available to meet the efficiency standards level usinglower efficiency blowing agents such as cyclopentane; and

• The assumption that the DOE compiiance schedule ofJuly ll>t, 2001 was based on AlliedSignal's representation concerning commercial

NRDC SupplementJil Comments on Case VEE·0054: AaiUl:Ifl 5availability of HFC-245fa beginning in 1999 and widespread conversions by manufacturers before the and of 2000.
These assumptions are all'incorrect..But, if one cannot rely- upon them, the basis for an argument for serious hardship; gross inequity, or unfair distribution of burdens collapses.
First; 245fa and cyclopentane are not the only alternatives available to the refrigerator industry. HFC-134a is an alternative blowing agent that is already used in refrigerators as the refrigerant' fluid. and is being used by one manufacturer as the blowing agent for its foam, - It has an energy penalty, but it is smaller than the penalty associated by cyclopentane.
Another potential blowing agent is carbon dioxide (COa). While there is also an energy penalty associated with C02, it should be less difficult of a design change than the switch to cyclopentane. Thus, Amana's arguments about the long lead times necessary to make the decision would be incorrect if the backup to 245fa that it chose to rely on instead were carbon dioxide. An additional feasible alternative is 365rnfc. This is already commercialized in Europe and could potentially be available in the United States in the necessary time frame. An implicit assumption underlying Amara s Application for Exception is that its competitors somehow have 245 substitutes. Amara is arguing that it will have trouble meeting the standards when 14-1b is phased-out due to the difficulty of finding appropriate technologies. Why don 't its competitors have similar problems? What is it about Amana that makes the standards inequitable or, an unfair distribution of burdens upon them, but not upon others?
Their Supplement does not answer these questions

. It implies, but does not demonstrate , that competitors can use 141b through production in Mexico. This possibility 'could require that EPA recognize but refuse to close a loophole in its regulations concerning phase-out of ozone depleters.
This assertion of competitive-disadvantage is highly speculative, First, not all. of its competitors have plants in Mexico. Amana's own Attachment C to Exhibit 3 shows that imports of refrigerators from Mexico are only 400,000 per year in the latest year for which data are available. This amounts to only about 5% of total sales . While these imports are growing quickly, it is hard to make a reasonable extrapolation from about 5% of sales in. 1997 to 80% or 50% of sales in 2003. Yet any percentage much below this would be clear indication that other manufacturers have found ways to solve the technical problems even under the (unlikely) scenarios that 245fa is not available.

NRDC supplamantal Comments on •Caso VEX -0064 Amana 6 availability ofHFC-245fa beginning in 1999 and widespread conversions by manufactUl'e:rs hefore the end of 2000. '

These assuniptions are allincorrect. ,But, 

### ifone cannot rely, upon them, the' basis for an argum!:'lnt for serious hardship; gross inequity, or unfair distribution of burdens <;ollapses.**Fi;rst~** 245fa and cyclopentane are not the only alternati'V'e:s available to the refrigerator industry. HFC"134a is an alternative blowing agent that**i~** 'already used 

### in refrigerators as the refrigerantfluid. and 

### is being used by one mariufacturer
as the blowing agent for its foam.' Ithas an energy penalty. but it is smaller than the penalty associated by cyclopentane.

Another**pot~ntial** blowing**~gent** is ,carbon dioxide (C02). While there i:5 also an energy penalty associated WIth CO2 , it should be less difficult of a design change than the switch to cYclopentane.**Thus~** Amana's arguments**~bout** the long lead times necessary to make the decision would be incorrect ifthe backup to 245£a that it chose to rely on instead were carbon djoxide. An additional feasible alternative is 865mfc. This is alreadY commercialized in Europe and could potentially ,be available in the United States in the necessary time frame.

An implicit assumption**underl~ng** Amana's Application for Exception is that its competitors somehow have 2.45 substitutes. Amana 

### is arguing 

### that it will h,ave trouble meeting the standards when 141his phased-out due to the diffic1.dty of fmding appropriate technologies. Why don't its competitors have similarproblems? What is it about Amana 

### that makes the standards inequitable or· an unfair distribution ofburdens upon them, but not upon others? , Their Suppiement does not answer these questions. Itimplies, hut does not demonstrate. that competitors can use 14lh through prod,uction 

### in Mexico. This possibility"couldrequil'a that EPA recognize but refuse to clos,e f.lloophole in its regulations poncerning phase-out ofozone depleters. '

'l;his asse:rtion 

### 0.£**competitive'disadv~ntQge** is highly specull1tive. First, not all oflts competitors have plants in Mexico. Amana's own Attachment C to Exhibit 3 shoW's that imports ofrefrigerator,s from Mexico**ar~** only 400,000 per year in the latest year for which data are available. This amounts to only about 5% oftotal sales. While these imports are growing' quickly, it is hard to**mak~** a reasonable**extr.ap'ol~tiop.** from about 5% of salesin 1997 to 80% or 50% of sales in 2003. Yet any percentage much below this would be clear indication that other manufacturers have fQund ways to solve the technical problems even under

### the (unlikely) scenarios that 245fa is not**ava~lable.** ' "

NRDC Sup:pIOfnAut.lll Comments on 'Caso VEE,OO,54; Amana 6Second, Amana has not demonstrated either that the loophole for 14 lb-laden

'imports will exist in 2003, or that any other manufacturer would exploit this loophole if it did exist.
Third, Amana has not indicated that it has requested EPA to close the loophole

. This would appear to solve its problems more'thoroughly than relaxing the DOE energy standard

. Before coming to DOE for relief, Amana should at least attempt to get a more, comprehensive solution from. EPA.
This issue of unfair distribution of burdens is particularly important because the stated concern during the DOE Rulemaking by Amana itself, as well as by DOE, was insufficient production of 245fa for the whole industry, suggesting that smaller manufacturers such as Arnana could be shut out by larger ones . This concern should be considered as fully alleviated by AlliedSignal' s negotiations earlier this year with the whole industry. Even though the negotiations did not bear fruit, the industry-wide approach suggests that small manufacturers' needs will not be•shortchanged.
Amana dismissively states that it has looked for other technologies that could replace the efficiency loss from •cyelopentane, but failed to -find them. This is the
same unsubstantiated whining that Amana (and other refrigerator manufacturers) have submitted to DOE and the California Energy Commission at virtually every rulemaking that has eventuated in a standard; and in every. case, Amana and, its competitors found ways of meeting the standards at such a low cost that the consumer price of the product did not rise measurably when the standard went into effect.
DOE should note that Whirlpool produced refrigerators in 1996 that saved well over 10% compared to the 2001 standard, even without the technological gains of the past 3 years. This approach would have allowed compliance with the DOE standard even with a 10% energy penalty from cyclopentane. Technologies considered by DOE in the rulemaking, including vacuum 'insulation panels, now seeing increasing usage in Europe, and improvements to the automatic defrost cycle, are not-even mentioned by Amana.

Because Amana has not addressed the question of demonstrating that any of these assumptions is correct, it has not met the burden of proof for demonstrating either serious hardship, gross inequity, or unfair distribution of burdens. Indeed, the only conditions referred to in the DOE final rule'for the possibility of HFC-245fa being unavailable - namely its potential failure to pass, toxicity tests. or other tests of feasibility - has not eventuated.

•NRDC Supplemental Comments on •CaBe VEF. 0054: Amana**Second~** Amana**ha~** not demonstrated either that the loophole for 141b-Iaden**import~** will exist in 2003. or th;"'tany other manufacturer woUlq exp19it this

, ,lo«;lphola ifit did**exis~. 'rhird~**  Amana has not indicated that 

### it

# has requested EPA to closethe·

loophole. This would appear to solve its problems more'thoroughly than relaxing the DOE energy standard. Before coming to 

### DOE for relief, Amana should at least attempt

# to**~et** 

### a more,l;!omprehensive**solutio~** from. E.PA. '


### This issue ofunfair distribution pfburdens is particularlyimportant because the stated concern during the DOE Rulemaking byAmanaitself, as well as by DOE,
was**insufficie~t** production of245fa for the whole**iIidustry~** suggesting that smaller manufacturers such asAmana could be shut out by larger ones. This concern. should be considered as fully alleviated by AlliedSignal's negotiations earlier this year with the whole industry. Even though the negotiations did not bear**f.ruit~** the industry-wide approach**suggest~** that small manufacturers· needs will not**be~s,h.ort** changed.

Amana dismissively states that it has looked for other technoiogies that could replace the efficiency loss from·cyclopentane; putfailed to·findthem. This is the same ·unsubstantiated whiriing that Amana (and other refrigerator manufacturers) have aubmitped to DOE and the California Energy .Commisaion at virtually 

### eve:ry rulemaking that has eventuated in·a standard; and in every.case, Amana andits competitors found ways ofmeeting t.he standards at 

### such a low cost that the consumer.price ofthe produl;!t did riot rise measul"ably when the standard went into effect.

DOE**~hould** note that Whirlpool produced**refrigeratol'~** in Hl96 that saved well over 10% compared to the 2001 standard, even without the technological gains of the past'3 years. This approach would**hav~** allowed compliance with the DOE' standard even with a 10% energy penaltyfrom cyclopentane. 'fechnologies considered by DOE in the rulemaking, including vacuum'insulation panels, nOW seeing increasing·uS/'.tgein Europe, and improvements to the automatic defrost**cyc1e~** . are not'eVen mentioned byAmana.

.. Because Amana 4as not addressed the question 

### ofdemonstrating that any of

. these assumptions is correct, it has not met the burden ofprooffor demonstrating

. either serious hardship, gross inequity, or unfair distribution ofburdens. Indeed, the only cop.ditiona**r~ferred** to in the DOE final rule'for the possibility of**HFC~245fa**

. being unavailable

- namely 

### its potential failure to pass, toxicity tests· or other tests

offeasibility

- has not eventuated.

. .

·NRDC Supplemental Comments O(i,CII/iS VEE.0054: Amllllll ' 7It would further be, anomalous for DOE to grant Amana's Application based

on the asserted unavailability of 245fa when such unavailability, if it is the case atall, is solely the result of -A-ma-ma's refusal to contract for the supply of this productAs noted in Amana's own Attachment A to exhibit 1, Amana, 'along with other refrigerator manufacturers, was negotiating with.-AlliedSignal to purchase 245fa. These negotiations broke down because the cost and financial conditions that AlliedSignal requested in its contract were not acceptable to Amana and to other manufacturers. Thus, if HFC-245fa-is unavailable, it is because Arnana made a business decision to cause it to be unavailable, This sort of circular reasoning does not justify an application for exception from standards.
Amana hypothetically -could make the argument that-the price and conditions requested by AlhedSignal were so high as to*impose a serious hardship, gross inequity, or unfair distribution of burdens. But the potential for inequity or unfair distribution of burdens is directly contradicted by the facts in the attachment referred to .above, namely that AlliodSignal was proposing to offer the identical terms to- all companies within the industry.. Even if these terms were unacceptable to the industry, they certainly were not inequitable or unfair to Amana relative to other companies.
An argument for special hardship would have to be based on a demonstration that the additional cost of. blowing agent. HFC-245fa would- raise the cost of producing a refrigerator that would met the energy standards so much that it would create special hardship for Amana. This would require a quantitative analysis of economic costs imposed per refrigerator .and the comparative disadvantage of Amana compared to other 'manufacturers. No evidence concerning either of these factual issues was presented by Amana.
NRDC submits that the additional costs, even assuming Arnana's stated tripling of blowing' agent unit cost, would be sit all enough that they could be passed on to the consumer without disruption in the marketplace. This is particularly true if all manufacturers are at *the same disadvantage with respect to the option of improving efficiency through selecting an efficient blowing agent. Of course, there are other technological options for meeting the standard. But there is no evidence that these are not equally available to Amana as to any other manufacturer.
In short, nothing has changed since the final rule was issued to suggest a special hardship, gross inequity or' unfair distribution of burdens. The only "surprise" since then is that AlliedSignal requested more money-and greater financial commitment for 245fa in their initial negotiating session than the refrigerator manufacturers had anticipated. This insistence in one negotiation does' not rise to the standards' of special hardship and certainly does not impose any inequity or unfair distribution of burden on Amana relative to any other manufacturer.

1vRDC supplemental Cow43anto on Case VEE•0054; A.gxaga 8 

### It 

### would further be" anomalous for DOE to giant Amana's Application based on the a"f;}s8rtad unavailability 

### of 245fa 

### when 8ueh unavailability, ifit is the ca.se at 

### aU, 

### is solely the result ofAmana's refusal to contract for the supply of

### this product. As noted in**Am~na;s** 

### own Attachment A to exhibit I, Amana, "along with other

" "" 

### :refrigerator manl:lfacturers, was negotiating with·AlliedSignal to purchase 245fa. These negotiations broke down because the cost and financial conditions that AlliedSignal requested in its 

### contract were not acceptable to Amana and to other manufacturers. Thus, ifHFC·245fa"is unavailab.le, it is"because Amana made a " " 

### business decision to caqse it to be unavailable. This sort ofcircular reasoning does notjustify an application for exception from standards. "



### Amana hypothetically"could make the argument th'a.

### t the price "and conditions " requested by

### AlliedSignal were so high 

### as to"impose a serious hardship, grO$S



### inequity, or unfair distribution of

### hurdeqs. But 

### tlw potential for inequity or unfair distribution ofburdens is directly contradicted by**th~** 

### facts in the attachment raferred to "above, namely that 

### AlliadSignal was**pl;'~posing** to 

### offer the identical 

### terms to" all companies within the industry. Even 

### ifthese terms were 

### unacceptable to the industry, they certainly were not inequitable or unfair to Amana. relative to other**compan.{e~.** 

### "

An 

### argument for special hardship would" have to be based on a 

### demonstration that the additional cpstofblowing 

### agent. HFC.245£a would" raise the qost of 

### producing 

### a refri.gerator that**w~uld** 

### met the energy standards**s~** 

### much that it would creq.te specialhardship for Amana. This 

### would require a 

### qy.antitative analysis of 

### economic costs impqsedper refrigerat'or .and 

### the comparative disadvantage of Amana compared to other manufacturers. No evidence concerning either 

### ofthese " factual issues wa.s presented byAmana,

NRDC 

### submits that the additional costs, even as"surning" Amana's stated tripling ofblowing"agent unit cost, would be**sma~l** 

### enough that they could be passed 

### on to the consumer .without disruption in the marketplace. This 

### is particularlytrue 

### if

### all manufacturers are atthe same disadvantage with respect to the option of improving efficiency thrQ'Llgh selecting

# an efficient blowing agent. Of**qours~i** there 

### "are other technological options for meeting the standard. But there is 

### no evidence that these are not equally' available to Amana as 

### to any other ma,nufacturer.

In short, nothing has changed since the final rule was issued to suggest a 

### special hardship, gross inequity or"unfair distribution ofburdens. The only**~'surprise"** 

### since then is 

### that AlliedSignal requested more money"

### and greater financial commitment

### for 245fa 

### in their initial negotiating session than the refrigerator manufacturers had anticipated. This insistence in one negotiation does not rise to the standards o{special hardship and certainly does not impose any inequity or unfair distnbution ofburden on Amana relative to any other manuiactureJ;'

.

NItric Supplemental Commsnt./l on Case VEE;·o054: Aina):HI 8Indeed, the fact-that AlliedSignal was negotiating with the refrigerator

industry earlier this year, and apparently is still open'to negotiations with individual manufacturers, suggests that the availability of 245fa is not an issue extrinsic to the business decisions of the refrigerator industry i n general or Amana in particular, but rather is a choice that refrigerator companies can make. This chemical is available today in the sense that Amana or anyone, else cQI4d contract with AlliedSienal to produce it in the desire quantities. The only sense in which it could be called unavailable is that there are not firm commitments for such production without a contract. This is not really unavailability.
IV. Amana's Application is Based on Circular Reasoning or a Deliberate Attempt to Circumvent the Standard.
Amana's basic argument for requiring an exception is that it, has already made a business decision to commit to cyclopentane and that it doesn't see how it can achieve the required energy savings level after having made that decision.

This is circular reasoning at best. The logic.goes as follows: Amana first agrees to a standard conditionally, based on the availability of HFC-245fa. It then looks at what would happen in the speculative scenario in which 24,5 isn't available. Of all the possible alternative approaches, it selects the one that it alleges has the longest lead time. (NRDC has not verified that these lead times are correct, and we note that Amana's are much longer than the lead times for efficiency improvements that have been undertaken in response to 'previous standards and incentive programs). Having assumed this worst case, Amana concludes that lead time considerations would not permit it to switch to 245fa, even if the chemical becomes available. Amana then petitions DOE from relief from these standards, because allegedly it would be too difficult to .meet them, given its current decisions.
But the decision to switch to cyclopentane is a business decision : one of a myriad of other decisions that could affect energy efficiency and compliance with regulations and that could have been made differently

. No one forced Amana to accept cyclopentane and no one forced it to commit to it now. Amana seems to be telling DOE that it is planning on breaking the law in 2003 unless the regulations implementinng the law are modified to come down to the level that it is requesting.
Caving,iri to this sort of threat would be extremely bad public policy for DOE. A cynical observer might argue that Amana's agreement to accept the standard was in bad faith from the get-go. NRDC notes that there have been no known setbacks from the path to acceptance of 245fa except in its availability since the final rule was issued. At worst, AlliedSignal has failed to indicate affirmatively when that product will be available without a contract with Amana. Even then, it was in the context of failed negotiations over a specific industry-wide. contract,

NRDC Supplemental Comments on Case VEE .0054 : Amana 9 Indeed, the factthatAlliedSignal was negotiating with the refrigeJ;'ator '

, industry earlier 

### troIS year, and**~pparently** is still open'to negotiations with

in4,ividual m'anufacturers, suggests that the availability'of245fa is not an issue extrinsic to the business c;iecisions 

### ofthe refrigerator industry in generalor Amana in particular, butratherjs'a t;:hoice that refrigerator comparues can 

### make, This chemical is available todayin the sense.that Amana or anyone else coyld contract withAlliedSignal to prodyce it in the desired quantities. The only sense in which it could be called unavailable is that there are not firm commitments for such '

, , ' production without a contract. This is not really unavailability,

IV. 

### Amana's Application is Based on 

### Circular Reasoning 

### or a**Deliber~te** 

### Attempt to Circumvent the**Stand~i'd.** 

### ' ' ,

, Amana's basic argument for requiring an exception is that ithas already made a business decision to commit to cyclopentane and that it doesn't see how it
can achieve the required energy savings level after having madethat decision.

, This is circular reasoning at best. The logicgoas as follows: Amana {lIst agrees to a standard conditionally, based on the availabUity of**HFC~245fa.** Itthen looks at what would happen in the speculative scenario in which 2415 isn't available. Ofall the possible alternative approaches, it selects the OI1,e that it alleges hasthe longest lead time. (NRDC has not verified that these lead times are correct, and we note that Amana's are much longer than the lead times for efficiency improvements that have been undertaken in response to'previous standards and inceIitive programs). Having assumed this worst case, Amana concludes that lead time considerations would not permit it to switch to 245fa, even 

### ifthechamical becomes available. Amana then petitions DOE from relieffrom these standards, because aiIegedly it would be too difficult to ,meet them, given'its current decisions.

, But the decision to switch to cyclopentane is a business decision: one ofa myriad ofother decisions that could**aff~ct** energy effiCiency and. compliance with regulations and that could have been made differently, No one forced Amana to accept cyclopentane and no one forced it to commit to it now.' Amana seems to be telling 

### DOE that it

### 'is planning on breaking

### the law in 2003 unless the regul,ations implementing the**l~w** are modified to come down to the level that 

### it is requesting. Caving,iIi to this sort ofthreat would be extremelybad public; policy for DOE. 

### A. cynical observer might**~rgue** that Amana's agreement to accept the standard was in bad**f~ith** from the get-go. NRDC notes that there have been no known setbacks from the path to acceptance of 245fa**e~cept** in itl5 availability since the final rule was issued. At worst, AlliedSignal has failed to indicate affirmatively when that product will be available without a contract withAmana. Even then, it was in the context offailed negotiation.s over a specific ind'Q.atry·wide'Qontract. '

NRDC Supplementlll Comments on C'ase VEE·0054: Amonu 9Thus, the situation in which Amana now finds itself should have been 100%

foreseeable when Amana

. agreed to accept the standards

. The only thing that is different is that AlliedSignal appears to be demanding a higher cost that refrigerator manufacturers had anticipated

. Even if this is correct, and even if the costs are worse than those predicted by DOE , the magnitude of such increase to the consumer or the producer is small ; far short of the threshold of "special hardship." And, since the hardship, if any, appears to be affecting the whole industry uniformly, there is not a hint of inequity or unfair distribution of burdens.
Amana's decision to swi.teh'to cyclopentane is, if we take the rest of its Application seriously, a direct threat to disobey the law. A more-responsible decision would be to plan on the availability of 245fa, make contingency plans for some other.temporary substitute, including stockpiling of 141b if necessary, or perhaps even petitioning EPA for a slight delay in the phaseout of 141b (closer to 2003, of course) - while waiting to see what the true availability of 245fa and other substitutes is. If there is a problem when the latest date approaches by which actual production line decisions need to be made, then an Application for Exception or other action would be more appropriate. At that point,.the Application can be based on the reduced energy performance of the best available set of technological substitutes that comes closest to meeting the standard.

Aznana's Claim f

or Inequity or 'Unfair Distribution of Burdens is Undercut by their Acceptance of an Industry Wide Rollback
Amana- inexplicably states on page 6 of their "Supplement to Application for Exception" of 12 July 1999 that: "Amapa does not oppose DOE granting similar exceptions to other refrigerator manufacturers who make 'similar requests." This totally undercuts any arguments about unfair distribution of burdens, inequity, or special hardship. The DOE record clearly. establishes that there is a smooth curve relating costs and difficulty of achieving energy savings with extent of energy savings: the higher the level of energy savings targeted, the greater the costs, and. the more difficult the design options. There are no "thresholds" below which efficiency gains are cheap and easy and above which they suddenly become difficult and expensive. Rather, there is a continuous curve.
If Amana is unfairly burdened compared to other manufacturers- because it must rely on cyclopentane while they may use 1.41b in. meeting a standard at the level promulgated, it is at the exact same competitive disadvantage even if the standard is lower to the level requested by Amana. ,mans will always be at a 10% energy disadvantage if it uses cyclopentane and is competing against manufacturers that use 141b. There is no evidence that this advantage gets any bigger as the level of stringency varies from today's level to 20% or 30% savings or any other level of savings; Amana will always need to make up a 10% energy deficit compared to

NRDC Bepplemoht4l Commento on Case 'V'EE-0054: Amdna 10 

### Thus, the situa.tion in which Amana now finds itselfshould have been 100%

.**forese~ablewhen** Amana ag:t'eed to accept the I3tandards. The only thing that is different is that AlliedSignal appears to be demanding a higher cost that refrigerator manufacturers had anticipated. Even if**thi~** is correct, and even 

### ifthe costs are worse than those predicted by PO

# m, the magnitude of such**incre~se** to the
consumer or the producer is small; far short ofthe threshold of "sp'ecial hardship." And, since the hardship, ifany, appears to be affecting the whole industry uniformly, there is not a hint ofinequity or unfair distribution ofburdens.

Amana's

### deCisi~n to switch'to cyclopentane 

### iS t ifwe ta.ke t.he rest of.its Application seriouslYt a direct threat 

### to disobey the law. A**more're~ponsible** decision woult;l be to plan on the availability of 245fa, make contingency plans for some othertemporary substit1;:l.te, including stockpiling of 141b ifne«::essary, or perhaps even petitIoning EPA for a slight delay in the phaseout of 141b (closer to 2003, ofcourse)

- w;hile waitIng to see what the**tru~** availability of245fa and other substituteI'! is. Ifthel'e is a problem when the latest date approaches by which actual production line decisions need to "be made; then anApplication for Exception
or other action would be more appropriate. At that point, .the Application can be based on the reduced energy performance of the best available set oftechnological substitutes that comes closest to meeting the standard.



## v. Antana's Claim for**Ineq~ity·or·Unfa:ir Dist~ibution**  ofBurdens**i~** Undercut by their Acceptance ofan Industry-Wide Rollback

Amana:inexplicably states on page 6 oftheir "Supplement to Application for

. Exception" of 12 

### J1,1.1y 19.99 that: 

### "Amana does not oppose DOEgranting similar



### exceptions to other 

### refrigerator manufacturers who make 'similar 

### requests." This totally undercuts any arguments about unfa1r distribution ofburdens; inequity, or special hardship. The 

### DOE record clearly,estahlishes that there 

### is a smooth curve relating costs 

### and difficulty of achieving energy savings with**exte~t** ofenergy saVings: the higher the level of energy sa.ving/!! targete.d, the great.er the**co~u;,** and. the more difficult the design options. There are no "thresholds" below which efficiency gains are cheap and easy and above which they suddenly become difficult and expensive. Rather, there is a continuous.curve.
. IfAm.ana is unfairly burdened compared to other manufacturers'pecause it must rely on cyclopentane while they may USB 141h in. meeting 

### a standard at the level promUlgated, it is ·at the exact**~ame** competitive disf;t.dvantage even 

### ifthe standard'is lower to the level requested by Amana. Amana will always be at a 10% energy disaQ,vantage 

### ifit uses cyclopentane and is competing against manufacturers

. that use 14lh. There is no evid,ence that this advantage gets any bigger as the level of stringency varies frottl today's level to 20% or 30% savings 01:'**~ny** other level of savings; Amana 

### will a,lways 'need to make up a 10% energy deficit compared to

10competitors if we accept the validity of its arguments on cyclopentane vs. 141b_

This might be an argument to tighten the regulations on im ports of refrigerators containing 14.1b,' or it might simply be an unforeseen burden of the 141b phase-out, but it is not a consequence of the energy standards. Thus, revising the standards will not solve the problem.

VI. Amana is Turning DOE's Rationales for Timing in the- Final Rule Upside Down by Requesting an Exception Now.

In the final rule, DOE stated that it: recognizes that there will be considerable costs associated with the, product redesign necessary to meet, the new efficiency standards, as well as some additional costs associated with the conversion to a new insulation blowing agent, even assuming that the agent is HFC-245fa or another chemical with comparable characteristics. In addition, the redesign for meeting revised efficiency standards can be. done with greater confidence if , the substitute blowing agent is known at the time of the redesign. For these reasons, the Department has decided to give the manufacturers 14 months more than the minimum of 3 years from the date of publication until the standard becomes effective. This will allow more time for the development of HCFC-141b substitutes, and for manufacturers for make the required changes. Furthermore, because of the comparability of HCFC-141b and HFC-245fa, DOE believes that some manufacturers could choose to delay their conversion to HFC-245fa until sometime after July 111t, 2001, without incurring substantial additional costs.
As seen from this quote, DO Ks- response to the uncertainty issue, which Amana raises repeatedly in its Application, was to delay the effectiveness of the standard for 14 months. Otherwise, it would have been effective mid-April 2000. Had this been the case, Amana would already have to be fully embarked on a track that would bring it into compliance with the standard. Amana might or might not have to deal With issues of 245 availability in 2003, but its products would at least' be currently under development in a way that meets the standard. Yet, ironically, by affording manufacturers 14 months additional time DOE has allowed Amana to hold off for an additional 14 months before making commitments to efficiency improvements, and now to request that the level of improvement demanded be less. The 14 months has not been used for better engineering and business decisions, but rather to develop legal stratagems . DOE should not support this approach to "compliance." ,
While Arnana argues that it is seeking increasing certainty, in fact it is undercutting the certainty DOE tried to provide for the industry by offering an

NRDC Supplemental Cogpmants

. on Case VEE-0054: Amuna 11

competitors if we

### acc·~pt the valIdity

### of~ts arguments on cyciapentane VS. 14lb. This might he an argument to tighten the regulatioll.s on imports ofrefrigerators containing 141b;or it might simply be an unforeseen b.urden ofthe l£,llh phase-out, but it is not a consequence ofthe energy standards. Thus, revising the standards

. will not solve the problem.



### VI. Ama,na is 

### Turning DOE's Rationales·for Timing in**th~·Final** 

### Rule

• Upside -Down by**R~questing** an Exception Now.

.
In the final rule, DOE stated that it: recognizes that there 

### will be considerable costs associated with the. productredesign. necessary to meet.the Il:eW efficiency standards, as well as. some additional costs associated with the conversion to a new insulation· blowing agent;; even assuming that the 'agent is 

### HFC-245fa or another chemical with**~ompa:rable** characteristics. In addition, the reQesign for.**meet~ng** revised efficiency standards c.an be.done with greater confic:ience if

. the substitute blowing agent is known at the time ofthe redesign. For these reasons. the Department has decided to give the manufacturers 14 mOJ::!,ths "
more than the minimum of 3 years froin the date ofpublication until the standard becomes effective. This 

### will allow more time for the development of HCFe-14lh substitutes, andfor manufacturers for :make the required changes. Furthermore, because ofthe comparability ofHCFC-141b and**HFC~245fa,** DOE believes that some manufacturers could choose to delay their converelion to HFC-245fa until elometime after July l"t, 2001,· without**incu~ng** substantial**a:ddition~l** costs.

As seen f'rom this quote, DOE·s· resPQnse to the uncertainty issue, which Amana raises repeatedly in its**Applicatio~.** was 

## to delay the effectiveness ofthe standard for 14 months. Otherwise, 

### i"t would have been effective mid-April 2000. Had this 1;>een the case, Amana wou.ld already have to be 

### fully embarked on a track: that would bring it into compliance with the standard. Amana might or might not have to**de~l** with issues of245 availability in 2003, but its products would atleast" be currently under development"in a way that meets the standa,rd. yet, ironically. by affording manufacturers 14 months additional time DOE has allowed Amana to hold offfor an additional 14 months "before making commitments to efficiency

. improvements, and now to requet;it that the level ofimprovement"demanded be less. The 14 :months has not been used for better engineering and business decisions,. but rather to develop legal stratagems. DOE should not support this approach to "compliance."

.
While**Am~:na** argues that it is seeking increasing certainty;infact it is undercutting the certainty DOE tried to provide 

### for the**indu~try** by**.off~ring** an

11extended lead time for implementation of the standards. While complaining about.

uncertainty, Amana is acting, by its asaertedly already-accomplished decision to convert to cyclopentane before it even knows the result of this appeal, to greatly increase uncertainty for itself as well as the rest of the industry. Since it will not know what level of efficiency it will have to meet in mid-2001 until DOE renders its decision and potential judicial challenges are resolved, it cannot possibly have a lead time of more than 22 months, and may well have less than 12 months of lead time, before it _is affected by the standard. This i ssue of uncertainty is particularly exacerbated by the scenario in which the.appeal is denied; assuming that Amana doesn't really know how to meet the efficiency level with cyclopentane. 

### In short, if there is any special burden it is that Amana encounters as a result of the energy standard, it will only be because of the legal/strategic box that it has placed itself in by committing to a blowing agent. that will make it (if we are to believe Amana's statements)'diffi.cult or impossible for it to meet the standard if the Application is denied. This box is, of Amana's own making, and there is no public policy rationale for DOE's getting Amana out of it, assuming that it is truly in it at all.

VII. Amana is Operating in the Wrong Forum: Amana Should be Petitioning EPA for Import Limits on HCFCs Rather Than Petitioning DOE for Reductions in Energy Standards
Amana's Application requests an exception from the refrigerator standard all' the way until the year 2010, which is noted as the year in which the special allowance under which HCFC-141b can be produced in Mexico phases out. This request is outrageous on its, face. As noted, Amana previously agreed to the standard in question (without amendments or conditions) beginning January lot, 2004. It did so before the prospect of an alternative blowing agent nearly as good as 245fa was even being discussed-..
Surely, with the additional technological progress on blowing agents and other components, if it knew as of 1994 that it could live with the current standard effective in 2004, Amana should at most be petitioning for a one-year exception from the standards - from 2003 through January Is' 2004. The fact that it is requesting an exception all the way to 2010 - note that DOE has the authority to set a new standard that would override any of these petitions as early as mid-2,006 effectiveness date - suggests that Amana's problem is not with DOE at all, but rather with EPA.

As NRDC demonstrated above, the hypothetical unavailability of 245fa coupled with the hypothesized ability of competitors to import refrigerators containing 141b after it is phased out in the united States would provide some

NWX Supplemental Comments on Cgso VBE•005g_ Amapa 12 

## . . extended lead time for implementation ofthestandal'ds. While complaining about uncertain:ty, Amana is acting, by its assertedly already-accomplished**decisi~m** to convert to cYclopentane ·before it.even knows the result ofthis· appeal, to greatly increase uncertainty for itselfas well as the rest ofthe industry. Since it will not know what level ofefficiency it will have to meet" in mid-2001 until 

### DOE renders its decision and potentialjudicial challenges a,re resolved, it cannot possibly have a lead time ofmore than 22 months, and may well have less than 12 months oflead time, before it is affected by the standard. This issue ofuncertainty is particularly exacerbated by the scenario in which the.appeal 

### is denied; 

### assuming 

### that Amana doesn't really know how to meet the efficiency level with cyclopentane.

In**short~** 

### ifthere is any special purden it is thatAmana encounters as a result ofthe energy standard, it will only be pecause ofthe legal/strategic box that it has placed itself

### inby committing to a blowing agent· that

### will make 

### it (ifwe are to believe Amana's statements)"difficult or impossible for it 

### to meet the standard ifthe Applica.tion is denied.**Thi~** box is. of**Amana'~** own making, and there is no public policy rationale for DOEts gettingAmana out ofit, assuming 

### that it is truly. in it at alL

VII. Amana is Operating in 

### the Wrong Forum: Amana Should be 

### Petitioning EPA for Import 

### Limits on 

### HCFCs**Ratb~r** 

### Than Petitioning DOE for Reductions**~n** Energy Standards

.
Amana's Application requests an exception from the refrigerator stanClard all· the way until the year 2010, whlch is noted as the year in which-the special allowance under which HCFC·141b can be produced in Mexico phases out. This request is outrageous 

### On its'face. As noted, Amana previously agreed' to the standard in question (without amendments or conditions) beginning January ll'lt, 2004. 

### It did so before the prospect of an alternative blowing agent nearly as good as 245fa was even being discussed-.

. . Surely. with the additional technological progress on )Jlowing agents and other components, ifit knew as of 1994 that it could live with the CUrrent**st~ndard** effective in 2004, Amau& should at mOISt be petitioningf(?r a one-year exceptionfrom the standards

- from 2003 through January 1 st 2004. The fact that it is requesting
an exception all the way to 2010

- note that 

### DOE has the authority to set a new standard that would override any ofthese petitions as early as mid-2.006 effectiveness**dat~** -**sugg~sts** that Amana's problem 

## is not with DOE at all, but

. rather with 

### EPA..

As 

### NRDC demonstrated above, the hypothetical unavailability of245fa coupled with the hypothesized ability ofcompetitors to import refrigerators containing 141b after 

### it**~s** phased out in the United Statej;l would provide some 

### Nape Supplemental Commen.ts on C&SIl VEE·o054-: Amlillli 

### 12competitive disadvantage - it is arguable how much - to Amana regardless of the

level of an energy standard_. The potential inequitable burden, regardless of its magnitude, is due to the loophole in ozone protection regulations that allows the import of 141b indirectly when direct import is banned.
NRDC submits that correcting this problemri would solve Amana's difficulties much more effectively than the relief it is requested. In the meantime, EPA action would also protect human 'health by reducing global emissions of ozone depleters and thus have public policy benefits, In contrast, rolling back the refrigerator standard would result in unnecessary air pollution, leading to the loss of human lives that could otherwise have been preserved and the exacerbation of global climate change.
DOE should deny Amana's Application for Exception if for no other reason that the fact that there are, much more beneficial public policy mechanisms that could truly level the playing field. for Amana and its competitors.

VIII. Conclusion
Amana has failed to demonstrate how the standard would impose any serioushardship, inequity, or unfair distribution of burdens on it. It has argued that HFC245fa is unavailable, when in fact this prospect, even if it were. to eventuate, would only be true'because Amana failed to contract for its supply- It has made a number of unsubstantiated and false or dubious assumptions about the alternatives 

### available to itself and to its competitors.

For these reasons, DOE should deny the Application.

Submitted to: Office of Hearings and Appeals COMMENTS U. S. Department of Energy 1000 Independence Avenue, SW Washington, DC 20585 Attn: Mr_ Fred Brown
BY FAX (202-426-14i5)

NRDC Supplemental Comments ot CASA 

### VEE-0054 Amana . . 1 13



### competitive disadvantage

- it 

### is arguable how**m~ch** 

### - to Amana regardless ofthe level of an enerllY standard

.. The potential inequitable burden, l"egardler;;;s ofits 

### magnitude, is due to the loophole in ozone proteetion regulations that allows the import of 141b 

### indirectly when direct 

### import il3 banned.

. 

### :NJ;tDC submits that correctiD.g this problem would solve Amana's**difficult~es** 

### muchmore effectively than the reliefit is requested. 

### Inthe meantime, EPA action would also protect human·health by reducing global emissions ofozone depleters 

### and thus have pu,blic policy benefits. In contrast, rolling back the refrigerator stllndard would result in· unnecessary air pollution, leading 

### to the loss of

### human lives**th~t** 

### could otherwise have been preserved and the exacerba,tion ofglobal

.climate change.



### DOE shoulc:l deny Amana's Application for Exception 

### iffor no other reason that the fact that there are'much m9re beneficial public p.olicy mechanisms that could truly level the plaYing field· for Amana and its competitors.

VIII. Conclusion



### Amana**ha~** 

### failed to demonstrate how the standard would impose any serious

..hardship, inequity, or unfair**distl;ibutio~** 

### 6fburdens on it. It 

### has argued that**HFC~**



### . 245fa is unavailable, when infact this prospect, even nit were. to eventuate", would



### only be true·because Amana failed to contract for its supply. 

### Ithas**m~de** 

### a**numb~r** 

### ofunsubstantiated and false or dubious assumptions about the alternatives available to itselfand to its competitors.

. 

## For these reasons, 

## POE should deny th.e Application.

Submitted to:
Office of Heanngs and Appeals

. COMMENTS



### u.S. Depal'tment of Energy .1000 

### Independence Avenue, SW 

### Washington. DC 20585

. Attn: 

### Mr. Fred Brown

.BY FAX**(202~426~1415)**

NRDC Supplemental Commellts**o~** Case VEE·0054: Amllnll

. 13