Date: August 20, 1999

FAX COVE SHEET

FAX TO: Fred Brown, Office of Hearings 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

 EE-RM-93-801 COMMENT 348

FAX COVER SHEET 

Date: August 20. 1999 

FAX TO: Fred Brown, Office of Hearings and Appeals, U.S. DOE 

Fax Number: (202-426-1415) 

FROM: David B. Goldstein 

No. of Pages! 14 (including cover) 

----------------------------- If you 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 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 

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 212 727-1773 
NATURAL

RESouRCFS ' 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-the

final 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

1(X146YnstmnsprnorRrcyrf4!4 ,""^^^

 EE-RM-93-801 COMMENT 348

.~ 

DEFENSE 

CoUNCIL 

Supplemental Comments althe Natural Resources Defense Council 

on Amana Company L.P"$ Application for Exception 

I. Introduction 

to the Department of Energy'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 rule makings since 1~80 and state 

appliance efficiency proceedings since 1975. The National Appliance Energy' 

Conservation Act 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 on July 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 of all stakeholders. 

71 SlevenllOn SrrllCt 

Suite 1825 

San l't'drtdscn, CA !l4105 

415777-0120 

l:1~415 495-5996 

'www.nrdc.org 

6310 Sun Vicenlt: Boulevard 

SLlile2S0 

[.os Angl.!lcs, CA 90048 

323934·6900 

Fax 32.3 934- 12)0 

1200 New York Ave" 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 212 727-1773 
H. 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 -depleting

chemical 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

 EE-RM-93-801 COMMENT 348

II. Background 

Amana's Application for Exception is asking for relief f:r;-om a standard' level 

that was recommended py all stakehold'ers in out·Joint Comments of November 

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 

of extensive multi-party negotiations, in whiGh the issue of HCFC 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 of uncertainties concerning 

toxicity, the likelihood 'of regulatory approval, and the ex~ent of energy 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 of January 1"~, 1998, (rat,her than mid-200!). 

DOE is authonzedunder law to adopt a new standard for refrigerators 5 

years ~fter the effectivenesl3 date of the old standard,. Thu~, there remained the 

possibility that POE would set a 2003 standard that was more stringent than this 

lower, non-HCFC standard, essentially nullifying the 10% ex,?eption as of January 

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 situation for 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 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. . ' 

Naoe' Supplemental COIIl.lr/.o~ts 01:1' Csse VEE-0054: ~Il'na 2 
Following 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 energy

savings 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 appliance

companies on a timely basisNRDC Supplemental Cpuptdonts ou•Csee VFE-0054: tLnuna

 EE-RM-93-801 COMMENT 348

Following submission of the Joint Comments~ DOE pfoposed a standard 

along similar lines~ but the Notice of Proposed Rulems.king .wal3 not issued l,lntil 

later than all of the stakeholders e~pected. 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; anc-t indeed by Amana 

itself. The final rule from which Amana 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 b~en more. favorable than anyone anticipated at the 

time. New blowing ag~nts; the most. attractive ·of which appears to be ~FC-245fa, 

have come into existence and passed all of the 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 of more than 10% beyond the level adopted by DOE for 2001 effectiveness . 

. II. . DOE~s Final Rule and thel\ole of HOFO 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 of 245fa. Thus, the 

Final Rule promulgated by DOE refers to the possibility of an 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 suggested now 

by Amana. The Final Rule notes that cornmenters, including Amana: 

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 of HFC-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·of the substitute product to aU appliance 

companies on a timel~ basis. 

3 
In 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 of

commercial 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

 EE-RM-93-801 COMMENT 348

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~ of refrigerators 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 application for 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 that All1edSignal 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 relief for 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 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'untillate-1997; con,sequently it 

is still pO::;/5ible 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 DO E· 'and 

expressed by 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 of H;FC-245fa have emerged. 

NRDC 'SUpplBlIlBnt:a1 Comme~til Oil dnila VEE·OOM: Amana '4 
Note 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

 EE-RM-93-801 COMMENT 348

Note that Amana's letter to Kyle Simpson of the 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 of fIFC-245fa. If a 

shortage. of HFC-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 of HFC-245fa, nor to the need to make a decision on availability long in 

advance. 

III. 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. 

iOOa.20(a) (DOWs' 'Final Rule refers to "special hardship, inequity or unfair 

distribution of burden!=l.")' Amana has failed to demonstrate that any of these 

~riteria are·met. Indeed, Amana's Supplement seems very unclear on which of 

these criteria it believe~ would be triggered by continuation of the efficiency'. 

standa:r:ds as promulgated. Some of its discussion appears to argue for inequity or 

unfail.' distrihuti.on 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 s,enous hardship,. 

The Amana ApplicatiQn is based on an argument that relies on several 

implicit assumptions that are either igno~ed by Amana or di;scussed in the most 

superficial manner possible. These include: 

, . 

• The assumption that HFC-245fa and cyclopentane are the only feasible 

al terns. ti ves; . . 

• The assumption that the unavailability of HFC-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 using lower efficiency blowing agents 

such as cyclopentane; and 

• The assumption that the DOE compiiance schedule of July ll>t, 2001 

was based on AlliedSignal's representation concerning commercial 

NRDC SupplementJil Comments on Case VEE·0054: AaiUl:Ifl 5 
availability 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

 EE-RM-93-801 COMMENT 348

availability of HFC-245fa beginning in 1999 and widespread 

conversions by manufactUl'e:rs hefore the end of 2000. ' 

These assuniptions are allincorrect. ,But, if one 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 refrigerant fluid. and is being used by one mariufacturer 

as the blowing agent for its foam.' It has 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 if the 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 141h is phased-out due to the diffic1.dty of 

fmding 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 Suppiement does not answer these questions. It implies, hut does not 

demonstrate. that competitors can use 14lh through prod,uction in Mexico. This 

possibility"could requil'a that EPA recognize but refuse to clos,e f.lloophole in its 

regulations poncerning phase-out of ozone depleters. ' 

'l;his asse:rtion 0.£ competitive'disadv~ntQge is highly specull1tive. First, not 

all of lts competitors have plants in Mexico. Amana's own Attachment C to Exhibit 

3 shoW's that imports of refrigerator,s from Mexico ar~ 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 mak~ a reasonable 

extr.ap'ol~tiop. 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 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 6 
Second, 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

 EE-RM-93-801 COMMENT 348

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 if it 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 of unfair distribution pf burdens is particularly important because 

the stated concern during the DOE Rulemaking by Amana itself, as well as by DOE, 

was insufficie~t production of 245fa for the whole iIidustry~ suggesting that smaller 

manufacturers such as Amana 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.ortchanged. 

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 and its 

competitors found ways of meeting t.he standards at such a low cost that the 

consumer .price of the 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 penalty from 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 by Amana. 

.. Because Amana 4as 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 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 

of feasibility - has not eventuated. . . 

·NRDC Supplemental Comments O(i,CII/iS VEE.0054: Amllllll ' 7 
It 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 at

all, 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

 EE-RM-93-801 COMMENT 348

It would further be" anomalous for DOE to giant Amana's Application based 

on the a"f;}s8rtad unavailability of 245fa when 8ueh unavailability, if it is the ca.se at 

aU, is solely the result of Amana'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, if HFC·245fa"is unavailab.le, it is "because Amana made a " " 

business decision to caqse it to be unavailable. This sort of circular reasoning does 

not justify 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 of burdens 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 if these 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 special hardship for Amana. This would require a qy.antitative analysis of 

economic costs impqsed per refrigerat'or .and the comparative disadvantage of 

Amana compared to other manufacturers. No evidence concerning either of these " 

factual issues wa.s presented by Amana, 

NRDC submits that the additional costs, even as"surning" Amana's stated 

tripling of blowing" agent unit cost, would be sma~l 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 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 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 o{special hardship and certainly does not impose any 

inequity or unfair distnbution of burden on Amana relative to any other 

manuiactureJ;' . 

NItric Supplemental Commsnt./l on Case VEE;·o054: Aina):HI 8 
Indeed, 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

 EE-RM-93-801 COMMENT 348

Indeed, the fact that AlliedSignal 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 'of 245fa is not an issue 

extrinsic to the business c;iecisions of the refrigerator industry in general or Amana 

in particular, but rather js'a t;:hoice that refrigerator comparues can make, This 

chemical is available today in the sense .that Amana or anyone else coyld contract 

with AlliedSignal 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 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 logicgoas as follows: Amana {lIst 

agrees to a standard conditionally, based on the availabUity of HFC~245fa. It then 

looks at what would happen in the speculative scenario in which 2415 isn't available. 

Of all the possible alternative approaches, it selects the OI1,e 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 inceIitive 

programs). Having assumed this worst case, Amana concludes that lead time 

considerations would not permit it to switch to 245fa, even if thechamical becomes 

available. Amana then petitions DOE from relief from 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 of a 

myriad of other 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 of threat would be extremely bad 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 with Amana. Even then, it was in the 

context of failed negotiation.s over a specific ind'Q.atry·wide'Qontract. ' 

NRDC Supplementlll Comments on C'ase VEE·0054: Amonu 9 
Thus, 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 for 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

 EE-RM-93-801 COMMENT 348

Thus, the situa.tion in which Amana now finds itself should 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 if the 

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 of the threshold of "sp'ecial 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 deCisi~n to switch'to cyclopentane iSt if we 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 other temporary substit1;:l.te, including stockpiling of 141b if ne«::essary, or 

perhaps even petitIoning EPA for a slight delay in the phaseout of 141b (closer to 

2003, of course) - w;hile waitIng to see what the tru~ availability of 245fa and other 

substituteI'! is. If thel'e 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. 

v. Antana's Claim for Ineq~ity·or·Unfa:ir Dist~ibution of Burdens i~ 

Undercut by their Acceptance of an Industry-Wide Rollback 

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

. Exception" of 12 J1,1.1y 19.99 that: "Amana does not oppose DOE granting similar 

exceptions to other refrigerator manufacturers who make 'similar requests." This 

totally undercuts any arguments about unfa1r distribution of burdens; 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 of energy 

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. . 

If Am.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 if the 

standard' is lower to the level requested by Amana. Amana will always be at a 10% 

energy disaQ,vantage if it 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 to day'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 

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

This might be an argument to tighten the regulations on imports 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

 EE-RM-93-801 COMMENT 348

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 of refrigerators 

containing 141b; or it might simply be an unforeseen b.urden of the l£,llh phase-out, 

but it is not a consequence of the 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. 

product redesign. 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 of the 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 of publication until the 

standard becomes effective. This will allow more time for the development of 

HCFe-14lh 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 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 of the 

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 of 245 availability in 2003, but its products would at least" 

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 off for an additional 14 months "before making commitments to efficiency . 

improvements, and now to requet;it 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 Am~:na argues that it is seeking increasing certainty; in fact it is 

undercutting the certainty DOE tried to provide for the indu~try by .off~ring an 

11 
extended 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 CgsoVBE•005g_ Amapa 12

 EE-RM-93-801 COMMENT 348

. . 

extended lead time for implementation of thestandal'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 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 a,re 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 issue 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 purden it is that Amana encounters as a 

result of the energy standard, it will only be pecause 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)" difficult or impossible for it to meet the standard if the 

Applica.tion is denied. Thi~ box is. of Amana'~ own making, and there is no public 

policy rationale for DOEts 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 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, if it knew as of 1994 that it could live with the CUrrent st~ndard 

effective in 2004, Amau& should at mOISt be petitioning f(?r a one-year exception from 

the standards - from 2003 through January 1st 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 dat~ - sugg~sts 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 ~s phased out in the United Statej;l would provide some 

Nape Supplemental Commen.ts on C&SIl VEE·o054-: Amlillli 12 
competitive 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 serious

hardship, 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

 EE-RM-93-801 COMMENT 348

competitive disadvantage - it is arguable how m~ch - to Amana regardless of the 

level of an enerllY standard .. The potential inequitable burden, l"egardler;;;s of its 

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 

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 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 of global 

. climate change. 

DOE shoulc:l deny Amana's Application for Exception if for 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 in fact this prospect, even nit were. to eventuate", would 

only be true·because Amana failed to contract for its supply. It has m~de a numb~r 

of unsubstantiated and false or dubious assumptions about the alternatives 

available to itself and 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