THE COMMONWEALTH OF

MASSACHUSETTS

EXECUTIVE OFFICE OF ENERGY

& ENVIRONMENTAL AFFAIRS

100 CAMBRIDGE STREET

SUITE 900

BOSTON, MA 02114

(617) 626·1 000

www.mass.gov/eoeea

en

2,

OFFICE OF THE ATTORNEY GEN

ONE ASHBURTON PLACE

BOSTON, MA 02108

(617) 727-2200

www.mass.gov/ag

October 1, 2009

BY OVERNIGHT DELIVERY - UNITED PARCEL SERVICE

Ms. Catherine Zoi

Assistant Secretary for Energy Efficiency and Renewable Energy

United States Department ofEnergy

Section 327 Petitions

Appliance Efficiency Standards

Forrestal Building

1000 Independence Avenue, SW

Washington, D.C. 20585

Re: Petition for Waiver of Federal Preemption Pursuant to § 327(d), 42 U.S.C.

§ 6297(d), ofthe Energy Policy and Conservation Act ("EPCA").

Dear Assistant Secretary Zoi:

Pursuant to 42 U.S.C. § 6297(d), 10 C.F.R. §§ 430.40 - 430.49, and

Massachusetts General Laws c. 25B, §§ 5 and 9, the Massachusetts Department of

Energy Resources (a Department ofthe Massachusetts Executive Office of Energy &

Environmental Affairs) and the Massachusetts Office ofAttorney General Martha

Coakley jointly and respectfully submit for filing and consideration by the United States

Department ofEnergy an original and three copies ofthe following document:

Petition ofthe Commonwealth of Massachusetts to Exempt from Federal

Preemption Massachusetts' 90% Annual Fuel Utilization Efficiency Standard for

Non-weatherized Gas Furnaces, dated October 1,2009, with included Exhibits A

through E.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
The Commonwealth maintains that it comfortably meets the legal standard for the

granting of a waiver that is set forth in § 327(d) of EPCA. As demonstrated in the

Petition, the Commonwealth's 90% AFUE standard is needed to meet unusual and

compelling state interests that cannot be met in any other feasible manner using

alternative, non-regulatory approaches, which the Commonwealth has already

aggressively tried to utilize. The costs and implementation times ofsuch alternatives,

even were they able to meet the Commonwealth's needs, would be much greater than the

costs and implementation times ofthe new regulatory standard, and are therefore far

inferior to it. Further, the Commonwealth has shown that the proposed 90% AFUE

standard will not significantly burden manufacturing, marketing, distribution, sales, or

servicing ofthe type of gas furnaces that the new standard covers, because high

efficiency furnaces are already manufactured and marketed into Massachusetts and the

region in high numbers.

For all these reasons, the United States Department of Energy should grant the

Commonwealth's Petition and prescribe the requested waiver rule.

Thank you for your assistance.

Sincerely,

e~ommiSSione""'r-~ Massachusetts Department of

Energy Resources

cc: Representative Edward J. Markey

Energy & Commerce Committee

U.S. House ofRepresentatives

Attorney General Martha Coakley

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
ITNITED STATES DEPARTMENT OF ENERGY

PETITION OF THE COMMONWEALTH OF

MASSACHUSETTS TO EXEMPT FROM FEDERAL

PREEMPTION MASSACHUSETTS' 90% ANNUAL FUEL

UTILIZATION EFFICIENCY STANDARD FOR NONWEATHERIZED GAS FURNACES

Submitted by:

The Commonwealth of Massachusetts, acting by and through the

Massachusetts Department of Energy Resources, a Department ofthe

Massachusetts Executive Office ofEnergy & Environmental Affairs

and

Massachusetts Attorney General Martha Coakley

October 1, 2009

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Table of Contents

Page

1. Introduction and Overview ofthe Petition 1

A. Nature ofthe Petition and Relevant State Law .1

B. Summary ofthe Commonwealth's "Unusual and Compelling"

Interests That Warrant the Granting ofthe Petition 3

C. Granting the Waiver Will Provide Substantial Benefits

to Massachusetts 5

D. Implementation ofthe 90% AFUE Standard is Far Preferable to

Alternative Approaches, Almost All ofWhich Massachusetts

Has Already Tried 5

E. The Commonwealth's Waiver Request Seeks to Tighten DOE's Recently

Promulgated Furnace Standard 6

II. The Legal Standard for Obtaining a Waiver 7

A. The Federal Statute and Regulations 7

B. DOE Has Provided Guidance for States That Seek Waivers

ofPreemption 10

1. The October 6, 2006 NOPR Guidance 10

2. Comments to the November 2007 Final Rule 13

III. Massachusetts Has Met the Requirements for Its Waiver Petition to Be Granted 14

A. Massachusetts Has Shown By a Preponderance ofthe Evidence

That It Has Unusual And Compelling Interests in Having the

Waiver Granted 14

1. Massachusetts Has Far More HDDs Than the National Average 15

2. Massachusetts Has Higher Gas Rates Than the Country

As a Whole 16

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Page

3. Massachusetts Residential Heating Loads Compete with Power

Plant Loads 17

4. The High Percentage ofRental Housing Creates

Market Barriers 18

5. Massachusetts Has a Unique Set ofStatutes and Policies

Promoting Increased Energy Efficiency and Reductions in

Greenhouse Gas Emissions 21

B. The Costs) Benefits, Burdens and Reliability ofthe Savings from State

Regulation are Preferable to the Costs and Benefits ofAlternative

Approaches to Increasing the Penetration ofHigh Efficiency Furnaces 24

C. The Proposed State Regulation Will Not Significantly Burden

Manufacturing, Marketing, Distribution, or Sale or Servicing

ofFurnaces 28

IV. Conclusion 31

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
List ofTables

Table 1 - 150% Poverty Status in New England Households by Housing Tenure .20

Table 2 - Age ofHeating Equipment in New England Households by Housing Tenure 20

Table 3 - Age ofheating equipment in New England Households by 1500/0 Poverty Status.....21

Attachments

A. Statute and Regulations - M.G.L. c. 25B, §§ 1 - 10, and 225 C.M.R. 9.01 - 9.06

(including the HState standard for which a rule exempting such standard is sought,"

M.G.L. c. 25B, § 5(3), and 225 C.M.R. 9.03(10)).

B. The Commonwealth ofMassachusetts' Energy Plan, dated September 30, 2009.

C. The Commonwealth's Energy Forecast, dated September 30,2009.

D. Report and Analysis in Support ofthe Commonwealth ofMassachusetts' Petition to

Exempt from Federal Preemption Massachusetts' 90% Annual Fuel Utilization Efficiency

Standard for Non-Weatherized Gas Furnaces, II prepared by Tom Franks & Alek Antczak

ofOptimal Energy Inc., dated September 30,2009.

E. Alternatives and Economic Analysis in Support ofthe Commonwealth ofMassachusetts'

Petition to Exempt from Federal Preemption Massachusetts' 90% Annual Fuel Utilization

Efficiency Standard for Non-Weatherized Gas Furnaces," prepared by Vivek Mohta and

Vivek Sakhrani ofthe Massachusetts Department ofEnergy Resources, dated September

30,2009.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
I. INTRODUCTION AND OVERVIEW OF PETITION.

A. Nature of the Petition and Relevant State Law.

The Commonwealth ofMassachusetts ("Commonwealth" or "Massachusetts"), through

its Department ofEnergy Resources ("DOER") and the Office ofMassachusetts Attorney

General Martha Coakley, hereby petitions the United States Department ofEnergy ("DOE") to

approve a waiver offederal preemption under § 327(d) ofthe Energy Policy and Conservation

Act ("EPCA"), 42 U.S.C. § 6297(d), so as to allow the Commonwealth to implement the 90%

Annual Fuel Utilization Efficiency ("AFUE") standard for residential furnaces adopted by the

Massachusetts Legislature in § 11 ofChapter 139 ofthe Acts of2005, entitled "An Act

Establishing Minimum Energy-Efficiency Standards for Certain Products," which is now

codified at Massachusetts General Laws ("M.G.L.It) c. 25B, §5.

Furnaces are a "covered product" under federal law (42 U.S.C. §§ 6291(2), 6292(a)(5»

for which DOE is explicitly authorized to set energy efficiency standards, and DOE most

recently set a standard of 80% AFUE for "non-weatherized gas furnaces" ("NWGF,,)l in a final

rule published November 19,2007.2 Because DOE-set standards generally preempt states from

implementing their own standards, the Commonwealth is precluded from instituting its 90%

AFUE standard without obtaining a waiver from DOE pursuant to 42 U.S.C. § 6297(d).

1 A weatherized furnace is one "designed for installation outdoors, approved for resistance to wind, rain and snow,

and supplied with its own venting system." 10 C.F.R. § 430.2. Conversely, a non-weatherized furnace is the far

more typical system that is located inside the dwelling space (including in the basement or ancillary structure) and

therefore need not be weatherized against the elements.

2 72 Fed. Reg. 65136, 65137 (Nov. 19,2007). Various parties petitioned for review ofthis rule in the United

States Court ofAppeals for the Second Circuit) in State ofNew York et al. v. Department afEnergy et al., #08-311-

ag(L), 08-312-ag(con) (petitions filed Jan. 17,2008). Under order ofthe Court dated April 21, 2009, the rule was

voluntarily remanded to DOE for further notice and comment mlemaking.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Pursuant to M.G.L. c. 25B, §5, DOER is in fact required to seek such a waiver from DOE. See

also 225 Code ofMassachusetts Regulations (ltC.M.R.") 9.04(5).

Previously revised in 1989, the Massachusetts Legislature amended M.G.L. c. 25B, §5, in

November 2005 to update certain appliance efficiency standards and to include several new

products and appliances within its scope to significantly reduce energy usage in the

Commonwealth. The Legislature included higher efficiency standards for residential furnaces

because ofthe significant contribution furnaces make to overall energy consumption.

Infonnation presented to the Legislature as it considered the revision projected that the

Commonwealth would avoid consuming one billion cubic feet ofnatural gas annually, by the

year 2020, ifthe 90% AFUE standard was implemented, and that the net present value ofthe

economic savings to consumers could be as high as $100 million.3

Following its authority in M.G.L. c. 25B, §5, DOER subsequently adopted implementing

regulations setting the efficiency ofresidential gas and propane furnaces at 9q% AFUE. 225

C.M.R.9.03(10). Because the Commonwealth must seek a waiver in order for the 90% AFUE

standard to go into effect, the effective date for the 90% AFUE standard is, pursuant to 225

C.M.R.9.04(5), "the earliest date pennitted by federal law."

The Commonwealth's entire Petition packet includes:

• this Petition;

• a technical report entitled "Report and Analysis in Support ofthe Commonwealth

ofMassachusetts' Petition to Exempt from Federal Preemption Massachusetts'

90% Annual Fuel Utilization Efficiency Standard for Non-Weatherized Gas

Furnaces," prepared for the Commonwealth by Tom Franks & Alek Antczak of

Optimal Energy Inc.(the "Optimal Report");

• an analysis that addresses the costs and benefits of alternatives to granting the

3 A recent analysis prepared by the Appliance Standards Awareness Project estimates $144 million in net present

value savings from the adoption of90% AFUE in Massachusetts. Analysis available at:

http://www.standardsasap.orglstateI2009%20federal%20analysis/states/fedappCrna.pdf.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
waiver Petition, in comparison to the costs and benefits ofthe Petition being

granted, as required by 42 U.S.C. § 6297(d)(91)(C)(ii), entitled "Alternatives and

Economic Analysis in Support ofthe Commonwealth ofMassachusetts' Petition

to Exempt from Federal Preemption Massachusetts' 90% Annual Fuel Utilization

Efficiency Standard for Non-Weatherized Gas Furnaces," prepared for the

Commonwealth by DOER's Vivek Mohta and Vivek Sakhrani (hereinafter, the

"Alternatives Analysis");

• the Commonwealth's Energy Plan and forecast; and

• the Commonwealth's furnace efficiency regulation for which the DOE waiver is

sought, 225 C.M.R. 9.03(10).4

The Optimal Report, Alternatives Analysis, Energy Plan and forecast are fully incorporated into

this Petition.

B. Summary ofthe Commonwealth's "Unusual and Compelling" Interests That

Warrant the Granting ofthe Petition.

Under 42 U.S.C. § 6297(d)(1)(B), Massachusetts must establish that its 90% AFUE

standard "is needed to meet unusual and compelling state ... interests.'~ As is demonstrated

more fully below, in § III. A., Massachusetts has several unusual and compelling interests that

merit DOE approving this waiver Petition. First, residential heating consumers in the

Commonwealth are burdened by some ofthe highest energy prices in the country, more than

twice as high as some ofthe lowest-cost states,S and well above the national average.

6 Second,

those same customers need to consume far more natural gas to operate their furnaces than

4 Additionally, within the Petition are references to various documents located on the World Wide Web. Should

DOE require any ofthese web-cited documents in hard copy, the Commonwealth will gladly provide them.

5 In 2008, residential natural gas prices averaged $17.11 per thousand cubic feet ("mcf') in Massachusetts,

according to the Energy Information Administrations listing of"Natural Gas Prices" by area (available at:

http://tonto.eia.doe.gov/dnav/ng/ngprisumaEPGOPRSDMcfa.htm). For comparison, during 2008, there

were 13 states where average residential gas prices were under $13 per mcf; in Colorado the average price was even

lower, $9.76 per mef.

6 The Optimal Report, Figure 2, shows that Massachusetts residential natural gas prices have been 20% to 30%

above the national average since the year 2000.

- 3 -

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
customers in many other states, as the number ofheating degree days ("HDDs") in

Massachusetts generally exceeds 6000. In most winters, HDDs in Massachusetts exceed the

national average by approximately 50%.7 The combination ofhigh gas prices and cold winters

provides Massachusetts with an unusual and compelling interest in increasing the efficiency of

residential furnaces because ofhow expensive it is to keep a home wann.8 Third, Massachusetts

experiences unusual and compelling concerns around consumption ofnatural gas by residential

furnaces because residential heating loads and natural gas-fired electric generation loads compete

for relatively scarce supplies of natural gas in the region. 9 Policymakers in New England have

voiced concerns that contracts to supply natural gas to power plants could be interrupted during

the winter ifresidential heating demand too severely strains supplies. Massachusetts thus has an

unusual and compelling interest in reducing the demand for natural gas in the residential heating

sector because heating demands can place reliability ofthe electric generating system at risk.

Fourth, Massachusetts has one ofthe highest rates ofrental housing in the country, creating

unusual barriers to increasing the percentage ofhouseholds that install high-efficiency

furnaces. to Fifth, Massachusetts has unusual and compelling legal interests in increasing the

7 Optimal Report, Figure 1. Note that the Commonwealth has carefully checked the underlying HDD data from

such public sources as the National Oceanic and Atmospheric Administration, and concludes that DOE made a

typographical or calculation error in stating: "Nationwide, the U.S. averages 5528 HDDs." Notice ofProposed

Rulemaking, 71 Fed. Reg. 59209, n. 7 (Oct. 6,2006). Regardless ofthe year one could choose, the U.S. average is

generally in the range between 4000 and 4500 HDDs, and Massachusetts' HDDs are generally 40% to 50% higher

than the U.S. average in any year.

g The Optimal Report (Figures 4, 5 and 6) highlights the heavy burden low-income households, in particular, face in

keeping wann.

9 Optimal Report, Section II.D., at 7. See also ISO- New England, "CIGRE 2008 Case Study: Electric and Natural

Gas Market Interdependencies Within New England" (September 1,2008), available at: http://www.isone.com/pubs/spcl mts/2008/fmal isone cigre case study 090108.pdf. As this study notes (Id. p. 8), "There is no

natural gas production ofunderground storage in New England," unlike much ofthe rest ofthe country, thus

creating a relative scarcity ofsupply. Moreover, "gas-fired peaking generation" in New England "can also

experience fuel related problems, exacerbated during winter conditions~ because that gas-fIred generation is

sometimes 'treated as secondary on the priority list with respect to fuel delivery needs." ld., p. 2I.

10 Optimal Report, at 8 & Figure 8.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
efficiency ofheating furnaces, not only because its legislature has adopted a 90% AFUE

standard for those furnaces in M.G.L. c. 25B, §5, as amended, but also because reducing the

consumption of natural gas in furnaces meets the requirements of other state laws, including the

Global Wanning Solutions Act1l and Green Communities ACt. 12

c. Granting the Waiver Will Provide Substantial Benefits to Massachusetts.

The 90% AFUE standard that Massachusetts seeks to implement will provide very

substantial benefits to the Commonwealth ofMassachusetts. Estimates ofthe Net Present Value

savings to Massachusetts consumers range from $77 million13 to a recently-revised estimate of

$144 million. 14 In addition, adoption ofthe 90% AFUE standard is projected to avoid

consumption of 19 million thenns ofnatural gas by 2030. 15 DOE's own economic analysis

found that the 90% AFUE standard is technically feasible as well as economically-justified in

states with more than 5,000 HDDs, and the Commonwealth's consultant, Optimal Energy,

similarly concluded that implementing a 900/0 standard in Massachusetts provides significant net

benefits. 16

D. Implementation ofthe 90% AFUE Standard is Far Preferable to Alternative

Approaches, Almost All ofWhich Massachusetts Has Already Tried.

Under 42 U.S.C. § 6297(d)(1)(C), Massachusetts must demonstrate that the "costs,

benefits, burdens and reliability of energy ... savings resulting from the State regulation [e.g.,

the 900/0 AFUE standard] make such regulation preferable or necessary when measured against

11 2008 Mass. Acts. Ch. 298

12 2008 Mass. Acts, Ch. 169.

13 "State-by-State Savings from New Furnace and Boiler Standards," available at:

http://www.standardsasap.org/documents/statefurnaceboiler.htm.

14 See Appliance Standards Awareness Project analysis at

http://www.standardsasap.org/stateJ2009%20federal%20analysis/statesIfedappl_ma.pdf.

15 See Appliance Standards Awareness Project analysis at

http://www.standardsasap.org/stateI2009%20federal%20analysis/states/fedappl_ma.pdf.

16 Optimal Report, Section III.C.2, at 21.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
the costs, benefits, burdens and reliability of alternative approaches to energy ... savings ...."

The Commonwealth includes with this Petition the Alternatives Analysis prepared by its staff

that so demonstrates and discusses this point at greater length below. Moreover, and as also

discussed more fully below, implementing the 90% AFUE standard is fully consistent with the

state's Energy Plan and forecast~ which has also been submitted with this Petition.

E. The Commonwealth's Waiver Request Seeks to Tighten DOE's Recently

Promulgated Furnace Standard.

On October 6,2006, DOE issued a Notice ofProposed Rulemaking ("NOPR") for

residential furnace and boiler efficiency standards. 71 Fed. Reg. 59204. Among many other

issues addressed in the NOPR, DOE responded to "numerous comments regarding the setting of

separate furnace and boiler standards for different regions ofthe country." 71 Fed. Reg. 59209.

While DOE concluded that it did not at that time have the authority to "set regional energy

conservation standards," it did stress that "EPCA allows states to seek from the Department a

waiver ofFederal preemption ofstate or local energy conservation standards." ld.; 42 U.S.C. §

6297(d). DOE then discussed at length the types of evidence that might be relevant to any such

waiver petition and some ofthe factors that DOE would consider in evaluating a waiver petition.

ld., at 59209 - 59210.

On November 19,2007, DOE issued a final rule on residential furnace and boiler

efficiency standards, setting 80% as the standard for NWGFs. 17 72 Fed. Reg. 65136 - 65137.

17 It is worth noting here that numerous parties (including the State ofNew York and several other governmental

entities, and, separately, the Natural Resources Defense Council) sought review ofthe November 19,2007 final rule

through petitions filed in the Second Circuit Court ofAppeals on January 17,2008. State ofNew York et al. v.

Department ofEnergy et al., docket 08-311-ag(L), 08-312-ag(con). On April 21, 2009, the Court granted the

motion ofDOE for a voluntary remand ofthe furnace and boiler rule "for further notice and comment rulemaking

proceedings leading to a revised fmal rule." Massachusetts still must seek a waiver of preemption to implement its

90% AFUE standard, as there is a pre-existing federal efficiency standard for furnaces and boilers, 10 C.F.R. §

430.32(e). Moreover, there is no question that a state can seek a waiver and enforce its own furnace standard even

though DOE now clearly has the authority to adopt regional standards. 42 U.S.C. § 6295(o)(6)(F)(iv).

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
DOE again addressed "numerous comments advocating the adoption ofseparate standards for

northern and southern regions," including, inter alia, comments from the City ofBoston and the

Belmont [Massachusetts] Housing Trust. 72 Fed. Reg. 65150. DOE once again concluded that

it did not have the authority to set regional standards.IS DOE also reiterated that "States can

apply for waivers from federal preemption" and referred back to the October 6, 2006 NOPR, in

which it "discussed the necessary conditions in order for it to grant States a waiver from Federal

preemption." 72 Fed. Reg. 65151. In these comments to the final rule, DOE also provided some

additional guidance and clarifications regarding the waiver process. 72 Fed. Reg. 65152.

Consistent with the comments to the NOPR and the final rule regarding waiver offederal

preemption, Massachusetts now seeks a waiver under 42 U.S.C. § 6297(d) and 10 C.F.R. §§

430.40 - 430.49 so that it may implement the 90% furnace standard currently set forth in M.G.L.

c. 25B, §5, and 225 C.M.R. 9.03(10).

II. THE LEGAL STANDARD FOR OBTAINING A WAIVER.

A. The Federal Statute and Regulations.

Section 327(d)(1)(A) ofEPCA provides that:

Any state ... with a state regulation which provides for any energy conservation standard

or other requirement with respect to energy use, energy efficiency or water use for any

type (or class) of covered product for which there is a Federal energy conservation

standard ... may file a petition with the Secretary [ofDOE] requesting a rule that such

State regulation become effective with respect to such covered product.

42 U.S.C. § 6297(d)(1)(A). The Commonwealth has filed this Petition in order to obtain a ruling

from DOE that its state regulation setting a furnace efficiency standard of 900/0 may go into

18 Just after DOE detennined that it did not have the authority to adopt regionally-differentiated efficiency

standards, the President signed into law the Energy Independence and Security Act, which gave DOE the authority

to set regional standards for furnaces, central air conditioners, and heat pumps. Pub. L. 110-140, § 306, codified at

42 U.S.C. § 6295(0)(6).

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
effect three years after DOE may so rule on the Commonwealth's Petition. 19

Section 327(d)(1)(B) ofEPCA requires that the:

Secretary shall ... prescribe such rule if... the state ... has established by a

preponderance ofthe evidence that such state regulation is needed to meet unusual and

compelling State or local energy or water interests.

As summarized above and discussed more fully in Section UI.A., below, Massachusetts has

several '~usual and compelling interests" which merit DOE granting this waiver Petition.

The phrase "unusual and compelling State interests" is defined in 42 U.S.C.

§ 6297(d)(1)(C) to mean interests which:

(1) are substantially different in nature or magnitude than those prevailing in the

United States generally; and

(2) are such that the costs, benefits, burdens and reliability of energy or water savings

resulting from such state regulation are preferable or necessary when measured

against the costs, benefits, burdens, and reliability of alternative approaches to

energy or water savings or production, including reliance on reasonably

predictable market-induced improvement in efficiency of all products subject to

state regulation.

The Commonwealth addresses the first prong ofthis definition, regarding how the

interests ofMassachusetts are different in nature and magnitude from those generally prevailing

in the United States generally, in Section III.A., below. The analysis and comparisons of costs

and benefits described in the second prong are addressed in Section III.B., below.

19 42 U.S.C. § 6297(d)(5)(A) provides, in relevant part: "No final rule prescribed by the Secretary under this

subsection may ... pennit any State regulation to become effective with respect to any covered product

manufactured within three years after such rule is published in the Federal Register or within five years ifthe

Secretary finds that such additional time is necessary due to the substantial burdens ofretooling, redesign, or

distribution needed to comply with the State regulation; ..." DOER's regulation at 225 C.M.R. 9.04(5) provides

that if "a waiver from federal preemption is necessary for residential furnaces or boiler standards . . . the state

standard shall go into effect at the earliest date permitted by federal law."

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
DOE has adopted implementing regulations at 10 C.F.R. §§ 430.40 -430.49. In

accordance with § 430.41 (a)(1), the Commonwealth states the following:

(i) The name, address and telephone number ofthe actual Petitioner are:

Philip Giudice, Commissioner

Department ofEnergy Resources

100 Cambridge Street, Rm. 1020

Boston, Massachusetts 02114

(617) 626-7321

(ii) A copy ofthe "State standard for which a rule exempting such standard is sought,"

M.G.L. c.25B, § 5(3), and 225 C.M.R. 9.03(10), is attached as Exhibit A (inclusive of

M.G.L. c. 25B, §§ 1-10, and 225 C.M.R. 9.01 - 9.06).

(iii) A copy ofthe Commonwealth's Energy Plan is attached as Exhibit B and its gas

forecast as Exhibit C.

(iv) The Commonwealth seeks a rule from DOE exempting from federal preemption the

90% AFUE standard for residential gas and propane furnaces adopted in M.G.L. c. 25B, § 5, and

225 C.M.R. 9.03(10).

(v) As additional support for its Petition, the Commonwealth submits:

a. the Optimal Report, Exhibit D hereto; and

b. the Alternatives Analysis, Exhibit E hereto.

In accordance with § 430.42(c), the Petitioner states the following: that to the best ofthe

Petitioner's knowledge, issues related to whether a 90% AFUE standard for NWGF should be

implemented in other states have been and are being considered by various state agencies,

departments, or instrumentalities. In this Petition, the Commonwealth notes that the states of

Rhode Island, Vermont, New Hampshire and Maryland have adopted a 90% AFUE furnace

standard.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
B. DOE Has Provided Guidance for States That Seek Waivers of Preemption.

DOE provided additional guidance to states seeking waivers ofthe standards for furnace

and boilers in comments to the October 6,2006 NOPR and to the final rule published on

November 19,2007. The Commonwealth summarizes the guidance below, as much ofit is

relevant to the issues addressed in this Petition.

1. The October 6,2006 NOPR Guidance.

In the NOPR published October 6, 2006, DOE noted that it had "received numerous

comments regarding the setting ofseparate furnace and boiler standards for different regions of

the country." 71 Fed. Reg. 59209. Several parties supported the adoption ofregional standards,

believing that a higher AFUE standard in northern, colder states was both technologically

feasible and economically-justified.

DOE did not reject the policy arguments made in support ofregional standards, but rather

concluded "that EPCA does not authorize DOE to set regional conservation standards ....,,20 ld.

Nevertheless, DOE did underscore the ability ofstates to seek "waiver offederal preemption,"

and provided comments on some ofthe factors it would consider in evaluating petitions to waive

preemption of any state furnace or boiler standards.

First, DOE noted:

[1]n the context ofresidential furnaces and boilers, where regional climatic effects can

have significant impact on whether a specified energy conservation standard would be

technologically feasible and economically justified in that region, such regional climatic

effects will be important in DOE's assessment ofwhether there are "unusual and

compelling State or local energy interests" for State energy conservation standards.

States having higher-than-average, population-weighted heating degree days

(BDDs) based on long-term National Oceanic and Atmospheric Administration data

20 As described in footnote 18, supra, Congress, DOE's authority has been expanded. Pub. L. 110-140, § 306,

codified at 42 U.S.C. § 6295(0)(6).

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
would seem to have the best prospects for demonstrating "unusual and compelling"

interests to support a waiver ofpreemption in the particular circumstances presented

here.... States with significantly higher heating requirements have significantly higher

furnace use. This may indicate that, for those States, a State energy conservation

standard which is higher than the Federal standard would be cost-effective and

would provide significantly more energy savings than the Federal standard.

ld. (emphasis added). As discussed in Section III.A.I., below, Massachusetts has documented

that the average number ofHDDs in the state exceeds the national average by a substantial

amount.

DOE also noted that if contiguous states with an above-average number ofHDDs were to

petition DOE for a rule allowing a higher AFUE standard to go into effect, this "would lessen the

impact on manufacturers," 71 Fed. Reg. 59210, and, presumably, make it more likely that the

waiver petition would be granted. While Massachusetts is the only state currently petitioning

DOE for a waiver rule regarding furnaces, all ofthe other states that have adopted standards

higher than the current DOE-set standard have chosen 90% AFUE as their standard. Three of

those four states (Rhode Island, Vermont, and New Hampshire) are contiguous to Massachusetts.

DOE also highlighted the importance of a state "identify[ing] the saturation ofhomes

with products that already meet those higher standards ... [by] provid[ing] evidence that a

significant percentage of gas furnaces sold today in the State already meets, for example, a 90-

percent-AFUE condensing standard." 71 Fed. Reg. 59210. As discussed in Section III.C.I.,

below, the most recent data available shows that furnaces with at least 90% AFUE efficiency

have comprised a majority ofthe furnace shipments to Massachusetts for the past ten years,

helping to demonstrate that industry already has the ability to deliver units at this efficiency to

the Massachusetts market without undergoing any substantial burden.

In regard to the statutory requirement in 42 U.S.C. § 6297(d)(l)(C)(ii), DOE noted:

A state ... also could identify any subsidies and/or incentives, such as tax rebates or

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
purchase price rebates that the state or other entities are offering. To the extent States

demonstrate that these programs have not worked, they may be able to show that the

"costs, benefits, burdens and reliability" of energy savings from mandatory State energy

conservation regulations make such regulations preferable to their voluntary programs.

71 Fed. Reg. 59210. In the Alternatives Analysis that is attached to this Petition as Exhibit E,

DOER concluded that allowing the Commonwealth to implement its 90% AFUE standard

provides a much better result than the types of alternative approaches listed in the above quote,

because those alternatives will not succeed in terms ofsubstantially increasing the penetration of

high-efficiency furnaces. Moreover, the costs ofimplementing any ofthose alternatives would

be much higher than simply allowing the state's 90% AFUE standard to be implemented.

Under 42 U.S.C. § 6297(d)(3), the burden is on "interested parties" -- most likely those

who would oppose the waiver petition -- to show "by a preponderance ofthe evidence" that

granting the waiver petition would "significantly burden manufacturing, marketing, distribution,

sale or servicing ofthe covered product on a national basis." In its guidance, DOE has suggested

several categories ofinformation a state could bring forward that would, presumably, rebut

efforts by ~'interestedparties" to demonstrate the types ofburdens described in § 6297(d)(3). As

DOE notes, a state "would want to address the extent to which manufacturers already produce

and sell products that would meet the state's proposed standard" and "how efficiencies of

shipments to that state already vary from current DOE efficiency levels." 71 Fed. Reg. 59210.

As discussed more fully below in Section IILe., and in the Optimal Report, at p.13,

manufacturers already produce and sell a very large number ofmodels that meet or exceed the

state's 900/0 AFUE standard, and those units already command a large share ofthe Massachusetts

market,21 far larger than the share ofthe national market. Optimal Report, at p. 15 & Figure 13.

21 See 71 Fed. Reg. 59210 (a state seeking a waiver might seek to demonstrate "that high-efficiency equipment, such

as condensing furnaces, already have achieved significant market shares in that State. H

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
DOE also noted that a state "might wish to provide evidence that demonstrates that there are no,

or insignificant, differences between small and large manufacturers with respect to producing

and selling furnaces in that state," 71 Fed. Reg. 59210, which the attached Optimal Report, at p.

10, does. The Optimal Report, at p. 10, also shows that high efficiency furnaces already have all

ofthe characteristics and features available in less efficient furnaces sold in the Commonwealth.

Lastly, the October 6,2006 NOPR guidance addressed the issue ofwhether approval of

one state's waiver petition "is likely to contribute significantly to a proliferation ofState

appliance efficiency requirements." 71 Fed. Reg. 59210. The Commonwealth has already noted

that "it has chosen identical [furnace efficiency] standard levels as other States that have

developed proposed regulations or States that have regulations already in place." See this

Section, above.

2. Comments to the November 2007 Final Rule.

In comments to the final rule published November 19,2007, DOE again addressed the

issues ofregional standards and the ability ofstates to seek waivers. DOE restated its prior legal

conclusion that "it does not have the authority under EPCA to establish regional standards." 72

Fed. Reg. 65151. However, DOE highlighted its analytic conclusion that:

the TSL [Trial Standard Level] projected to yield the maximum consumer NPV [Net

Present Value] at a seven-percent discount rate for the cold-climates (i.e. 5,000 heating

degree days and 6,000 heating degree days) was the proposed TSL 4 22••••

71 Fed. Reg. 65151. DOE's own analysis thus showed that a 90% AFUE was economic in

climates (such as in Massachusetts) which have more than 5,000 HDDs per year, even

discounting the benefit offuture savings at a 70/0 rate.

22 TSL 4 included a 90% AFUE standard for NWGF. 71 Fed. Reg. 65155.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
While the fact that DOE found a 90% AFUE standard to be economic is not alone

sufficient to find that the Massachusetts waiver Petition should be granted, it is worth noting that

in those same November 2007 comments DOE again underscored the ability ofstates to seek

waivers from Federal preemption. In addition to referring to the comments included with the

October 2006 NOPR, DOE clarified that a state can show an "unusual and compelling state

interest" by comparing itselfto national averages, and need not distinguish itselffrom adjacent

states that may have, e.g., similar climatic conditions. 71 Fed. Reg. 65152. DOE's comments

also noted that the Nation would experience quite substantial savings of2 quads if all states with

more than 5000 HDDs annually adopted a 90°A> AFUE furnace standard. ld.

III. MASSACHUSETTS HAS MET THE REQUIREMENTS FOR ITS WAIVER

PETITION TO BE GRANTED.

A. Massachusetts Has Shown By a Preponderance ofthe Evidence That It Has

Unusual And Compelling Interests in Having the Waiver Granted.

As required by 42 U.S.C. § 6297(d)(l)(B):23

The Secretary shall ... prescribe such [waiver] rule ifthe Secretary finds ... that the

State ... has established by a preponderance ofthe evidence that such State regulation is

needed to meet unusual and compelling State or local energy ... interests.

As noted in Section II.B.2, above, DOE has explained that a state can demonstrate '~nusual and

compelling interests" by comparing its circumstances and interests relative to the Nation as a

whole, and need not do so in comparison to other states or even discrete regions ofthe country.

71 Fed. Reg. 58161 (Dec. 28, 2006); 72 Fed. Reg. 65152 (Nov. 19,2007). Therefore, in order to

obtain a waiver, Massachusetts need not show, e.g., that it is colder than other states in the north,

or that it has higher natural gas prices than any particular state or region in the country. It need

only demonstrate, e.g., that its HDDs, energy costs and other circumstances are significantly

23 "Unusual and compelling State or local energy ... interests" is further defined in § 6297(d)(I)(C).

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
different than "the U.S. as a whole," 72 Fed. Reg. 58161, and that the costs, benefits and burdens

ofthe standard make regulation preferable or necessary over other alternatives. 42 U.S.C.

§ 6297(d)(1)(C)(ii); 71 Fed. Reg. 78162 - 78163.24

As required by Section 6297(d)(1)(C)(i), the five Massachusetts interests/characteristics

discussed below are "different in nature or magnitude than those prevailing in the United States

generally":

(1) Massachusetts has significantly more heating degree days than the national average;

(2) Massachusetts has significantly higher natural gas prices than the national average;

(3) Massachusetts has a significant~y greater dependence on natural gas both to heat

homes and fuel its electrical generation;

(4) Massachusetts has a disproportionately high percentage ofrenters (versus owners)

which creates much higher barriers to the penetration ofhigh-efficiency furnaces than in the

United States generally; and

(5) Massachusetts has laws different than most states in the country, in that it requires

the installation of90% AFUE furnaces (subject to the DOE waiver) and has adopted other laws

that require increased levels of energy efficiency (e.g., the Green Communities Act, Chapter 169

ofthe Acts of 2008) and the reduction of greenhouse gas emissions (the Global Wanning

Solutions Act, Chapter 298 ofthe Acts of 2008).

1. Massachusetts Has Far More HDDs Than the National Average.

As the attached Optimal Report, Exhibit D, demonstrates, the number ofHDDs25 in

24 Ifthe Secretary finds certain facts listed in § 6297(d)(3), he may not prescribe a waiver rule requested by a state.

However, the burden on the opponents ofthe waiver is heavy: "interested persons" must establish "by a

preponderance ofthe evidence, that su~h state regulation will significantly burden manufacturing, marketing,

distribution, sale, or servicing ofthe covered product on a national basis... " Id. See Section lII.e., infra.

25 Heating Degree Days measure the difference between the mean temperature and 65 degrees Fahrenheit on a daily

basis, over the course of a heating season. Optimal Report, Section II.A., at p. 3.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Massachusetts has varied between 5709 and 6704 during the period 2000 to 2007, inclusive, with

an average of6197. Optimal Report, at p. 1, Figure 1. Over the same period, the number of

HDDs nationally ranged from 3915 to 4469, with an average of4245 HDDs. ld. Thus, even the

wannest Massachusetts winter (5709 HDDs) had 28% more HDDs than the coldest winter

nation-wide (4469 HDDs), and Massachusetts generally has 40% to 50% more HDDs than the

Nation as a whole. ld. As the Optimal Report noted, at p. 3: ~'There is a direct correlation

between HDD and fuel use." Gas-heated households in Massachusetts will consume

significantly more energy to keep their homes wann than the average household in the country.

Massachusetts therefore has "a higher public interest in [furnace] efficiency than exists in the

Nation as a whole.,,26

2. Massachusetts Has Higher Gas Rates Than the Country As a Whole.

Prices for natural gas in Massachusetts prices are generally 200/0 to 30% higher than the

national average. Optimal Report, Figure 2, and accompanying text. There are only some half

dozen states in the country with higher natural gas prices, and prices in Massachusetts are

approximately twice as high as in the lowest cost states. Optimal Report, Figure 3.

The compound effect ofliving in a state with roughly 450/0 more HDDs than the national

average and paying 25% more per unit of gas means that Massachusetts residents who heat with

natural gas tend to pay 175% or more than the national average for winter heating. Low-income

households, which by definition have the hardest time paying their energy bills, bear unusually

heavy burdens iflocated in Massachusetts. The Optimal Report shows that Massachusetts is

among the eight most expensive states in the country, in tenns ofthe heating costs for lowincome households. Optimal Report, Figures 4 and 5.

26 DOE itselfflagged the importance ofa state demonstrating that it has more degree days than the national average,

ifit seeks a waiver from the furnace standards. 71 Fed. Reg. 59209.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Because ofthe high cost ofheating a home in Massachusetts, compared to the Nation as a

whole, Massachusetts has a unique and compelling interest in increasing the efficiency of natural

gas-fired furnaces and in reducing the amount ofmoney households pay for home heating.

3. Massachusetts Residential Heating Loads Compete with Power Plant Loads.

Natural gas is not only the predominant heating fuel in Massachusetts, it is also the single

largest fuel supply source for power generation in the state.27 As explained in the Optimal

Report, at pp. 5 - 6, residential heating loads do not directly compete with power plant loads

because ofvarious regulatory and operational structures, but:

inefficient consumption ofnatural gas in home furnaces needlessly increases overall

demand and thus raises prices for all users. Moreover, electric generating units on the

natural gas system have a lower priority than residential heating customers, accounting

for the likelihood that gas-fired generators' contracts for natural gas transportation could

be interrupted during the winter months.

(internal quotations and citation omitted). As ISO-New England (the regional electric

transmission organization) has noted, fuel-procurement strategies used by New England power

generators make:

the availability offuels less certain and challenges the ISO to maintain short-term

operable capacity to reliably serve demand. This is particularly so during the winter

months when both the core natural gas and gas-fired electricity generation sectors have

coincident demand for natural gas.

ISO-NE 2008 Regional System Plan, p. 64.28 Massachusetts thus has a unique and compelling

interest in reducing the inefficiency of gas-fired furnaces, thus decreasing the consumption of

27 The 2008 Regional System Plan prepared by ISO-New England (available at: http://www.isone.com/trans/rsp/2008/rsp08 [mal 101608 public version.pdf) shows that 42% ofthe kilowatt-hours generated in

2007 came from natural gas-fIred plants, followed by nuc1earplants at 28%. Id., p. 62~ Figure 7-2.

28 Available at www.iso-ne.com/trans/rsp/2008/rsp08_final_l01608--'public_version.pdf.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
natural gas and reducing the risk that there wiII not be adequate supplies of natural gas during the

winter months to meet both heating loads and the needs ofregional power plants.

4. The High Percentage of Rental Housing Creates Market Barriers.

Massachusetts has one ofthe highest percentages ofrental housing in the country. As

the Optimal Report demonstrates at Figure 8, only seven states have higher percentages ofrental

housing than Massachusetts. This condition creates unique barriers for the state's efforts to

increase the percentage ofhigh-efficiency furnaces. Property owners, not tenants, are legally

responsible for maintaining tenants' heating systems. 105 C.M.R, 410.200 - 410.201. Tenants,

however, are often responsible for paYing the heating bills. Thus, the owner has an "interest in

reducing first cost, that is, putting in the least expensive equipment" while the tenant's interest is

"focused on reducing operation cost." Optimal Report, at p. 8. These "split incentives" make it

"significantly more challenging [in Massachusetts] to influence purchasing decisions through

means other than standards." Id. Because ofthe high percentage ofrental housing in

Massachusetts, the Commonwealth thus has a unique and compelling interest in being allowed to

implement its 90% AFUE regulation as a means ofreducing inefficient consumption ofnatural

gas.

There is an extensive body ofliterature describing market barriers that inhibit investment

in energy efficient appliances and equipment,29 including the barrier ofsplit incentives

mentioned above. When tenants are responsible for paying energy and utility bills, there is little

incentive for a landlord to purchase efficient equipment that often includes a higher purchase

price than that for less energy efficient equipment. The benefits ofreduced operating costs,

29 See, e.g., Blumstein, C., et a1., 1980, "Overcoming Social and Institutional Barriers to Energy Efficiency,"

Energy, 5(4):355-372; Golove, W. and Eto, J., "Market Barriers to Energy Efficiency: A Critical Reappraisal ofthe

Rationale for Public Policies to Promote Energy Efficiency," 1996, Lawrence Berkeley National Laboratory.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
which over time may far exceed the difference between efficient and non-efficient heating

equipment purchase prices, accrue to the tenant rather than the landlord. At the same time,

tenants are often not able or willing to pay for expensive new heating equipment that they will

not own. Further, tenants are typically prohibited by law from replacing heating equipment in

their dwelling units. Because ofthis split incentive, tenants will often bear the higher operating

costs ofinefficient heating equipment, unless government regulations require the owner to install

high-efficiency equipment. Low-income households, which are far more likely than higherincome households to rent rather than own, are disproportionately disadvantaged.

Analysis based on results from the most recent U.S. Energy Information

Administration's 2005 Residential Energy Consumption Survey ("RECS") clearly demonstrates

that in the New England Census Division:30 (1) low-income31 households tend to be renters

rather than homeowners; (2) newer, more efficient heating equipment is concentrated heavily in

owner-occupied housing; and (3) newer, more efficient heating equipment is concentrated

heavily in non-low-income households. Table 1, below, shows that among nearly 5.5 million

households in New England, 1.2 million, or 23%, lived below 150% ofthe federal poverty level

in 2005.32

In total, 69% ofthe New England housing stock was owner-occupied, 30% was renteroccupied, and 1% was occupied without payment ofrent. Fifty-four percent ofNew England

low-income households were renters while only 23% of non-law-income households were

30 RECS data may be sorted by Census Division or Census Region. State-level data are not provided.

31 For purposes ofthis discussion, a "low-income" household is defined as a household living below 150% ofthe

U.S. Health and Human Services poverty guidelines. A two-person household living below 150% ofthe 2009 HHS

~overty guidelines has income ofless than $21,855.

2 In Table 1, "row %" refers to the percentage of households in either ofthe two numerical rows that own, as

opposed to rent, as opposed to occupy without the payment ofrent. For example, 22.9% ofthe 970,328 households

with income above 150% ofthe poverty level rent their dwelling units.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
renters. Thus, low-income households were more than twice as likely as non-low-income

households to rent.

Table 1. 150% Poverty Status in New England Households by Housing Tenure

150% Poverty OwnlBuying Rent Occupied Without Payment All Households

ofRent

Status

Households row % Households row % Households row % Households %

Household

lncome Above

150% Federal

Poverty

Guidelines 3,203,704 75.7% 970,328 22.9% 55,8% 1.3% 4,229,928 77.4%

Household

Income At or

Below 150%

Federal Poverty

Guidelines 560,748 45.4% 662,017 53.6% 13,303 1.1% 1,236,068 22.6%

Column Totals 3,764.452 69% 1,632,345 30% 69,199 1% 5.465.996 100%

Table 2, below, demonstrates that heating equipment under ten years old, which tends to

be more energy efficient than older equipment, is disproportionately concentrated in owneroccupied housing units. While 69% ofNew England housing units were owner-occupied, 84%

ofthe heating equipment under ten years old was concentrated in these units. Thirty-one percent

ofhousing units were occupied by renters or occupied without payment ofrent. However, only

15% ofthe newer heating equipment inventory was operating in those units.

Table 2. Age ofHeatingEquipment in New England Households by Housing Tenure

Age ofHeating Own/Buying Rent Occupied Without Payment All Households

Equipment of Rent

(Years) Households row % Households row % Households row % Households %

Less than 2 356,491 79.8% 90,223 20.2% - 0.0% 446,714 8.2%

2~4 525,163 77.4% 153,205 22.6% - 0.0% 678,368 12.4%

5-9 620,631 94.3% 22,021 3.3% 15,598 2.4% 658,250 12.0%

10 19 1,034,832 88.0% 140,848 12.0% - 0.0% 1,175,679 21.5%

200r More 1,048,411 83.3% 173,837 13.8% 35,982 2.9% 1,258,230 23.0%

Don't Know 160,373 13.2% 1,033,310 85.3% 17,619 1.5% 1,211,302 22.2%

No AnswerlNA 18,553 49.5% 18,900 50.5% 0 0.0% 37,453 0.7%

Column Totals 3,764,453 690,/0 1,632,344 30% 69,199 1% 5,465.996 100.0%

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Table 3, below, indicates that newer heating equipment in New England was

concentrated in non-poor households. While about 77% of all New England households were

living above 150% ofthe federal poverty level in 2005, about 86% ofthe heating equipment

under ten years old was operating in those households. Twenty-three percent ofhouseholds were

low-income, but only 14% ofthe newer heating equipment was operating in those households.

Table 3. Age ofHeating Equipment in New England Households

by 150% Poverty Status

Household Income Above Household Income At or

Age ofHeating 150% Federal Poverty Below 150% Federal All Households

Equipment Guidelines Poverty Guidelines

(Years) Households row % Households row % Households %

Less than 2 361,447 80.9% 85,267 19.1% 446,714 8.2%

2-4 605,750 89.3% 72,618 10.7% 678,368 12.4%

5-9 562,831 85.5% 95,419 14.5% 658,250 12.0%

10 - 19 1,018,457 86.6% 157,223 13.4% 1,175,679 21.5%

20 or More 1,004,802 79.9% 253,428 20.1% 1,258,230 23.0%

Don't Know 676,642 55.9% 534,660 44.1% 1,211,302 22.2%

No Answer/NA - 0.0% 37,453 100.0% 37,453 0.7%

Column Totals 4,229,928 77% 1,236,068 23% 5,465,996 100%

In summary, spilt incentives result in sub-optimal investment in efficient heating

equipment and excessive usage ofheating fuels. Renters and low-income households are

particularly disadvantaged by this dynamic because they are forced to pay higher operating costs

associated with older, inefficient heating equipment. Accordingly, Massachusetts has a unique

and compelling interest in adopting a regulation that will substantially mitigate the effects ofthe

split landlord-tenant incentives when heating equipment is replaced.

5. Massachusetts Has a Unique Set of Statutes and Policies Promoting

Increased Energy Efficiency and Reductions in Greenhouse Gas Emissions.

Massachusetts has been regulating the efficiency of appliances sold in the state since

1986. 1986 Mass. Acts, Ch. 489, § 1. The amendment that imposed the 90% AFUE standard on

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
furnaces (subject to DOE approval of a waiver petition) was adopted in 2005. 2005 Mass. Acts,

Ch. 139, amending M.G.L. c. 25B, § 5. Recently, Massachusetts has passed other laws,

discussed herein, that require significant improvements in energy efficiency as well as major

reductions in the emission ofgreenhouse gases. Moreover, as discussed more fully in Section

III.B., below, Massachusetts also has a number ofprograms that broadly promote energy

efficiency, including the efficiency ofresidential appliances such as furnaces. Few states in the

country have this broad and deep a panoply oflaws, policies and programs regarding energy

efficiency, energy resource diversity and reliability, and the reduction ofgreenhouse gas

emissions. Massachusetts thus has a unique and compelling interest in having its waiver Petition

approved, in order to implement the laws, programs, policies and goals adopted by its

Legislature and relevant state agencies.

In 2008, Massachusetts passed two major laws bearing on the issues of energy efficiency,

energy resource diversity and reliability, and greenhouse gas emissions: the Green Communities

Act ("GCA") and the Global Warming Solutions Act ("GWSA"). The GCA, Chapter 169 ofthe

Acts of2008, established a very ambitious goal for the state's energy efficiency programs that

are funded by electric and gas utilities; those companies are required to meet their future

resource needs "first ... through all available energy efficiency and demand reduction resources

that are cost effective or less expensive than supply." Ch. 169, § 11, amending M.G.L. c. 25, §

21A. Consistent with the legal mandates ofthe GCA, Massachusetts gas utilities have filed an

ambitious "Statewide Three-year Gas Energy Efficiency Plan" ("Three-year Plan") that proposes

to more than triple gas utility expenditures on energy efficiency from 2008 to 2012 and to

significantly increase energy savings. Three-year Plan, at p. 10, "Total Gas Budgets 2008-

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
2012.,,33 The Three-Year Plan includes a "Residential High Efficiency Heating Program." Id.,

p.63. DOE approval ofthis waiver Petition will increase the likelihood that the utilities'

ambitious goals will be met because the state regulation, ifimplemented, will require that any

new furnaces installed meet or exceed a 90% AFUE standard.

Also in 2008, the Massachusetts Legislature passed the GWSA, Chapter 298 ofthe Acts

0[2008, which requires that greenhouse gas emission limits be set by January, 2011, so that

emissions in 2020 will be 100/0 to 25% lower than 1990 baseline emissions, and that emissions in

2050 will be 80% below the 1990 baseline level. Chapter 298 ofthe Acts of 2008, § 6, adding

M.G.L. c. 2IN, §§ 3,4.

Massachusetts has a variety of other programs regarding energy efficiency, most of

which are discussed below. It is worth noting that Massachusetts has been operating a lowincome Weatherization Assistance Program ("WAP'') for decades, using federal funds provided

in accordance with 42 U.SC. §§ 6861 - 6873, and has also operated the Heating Emergency

Assistance Retrofit Task Weatherization Assistance Program ("HEARTWAP") that replaces

inoperative and highly inefficient heating systems, using a portion ofthe Low-Income Home

Energy Assistance Funds ("LIHEAP") received by the state pursuant to 42 U.S.C. §§ 8621 -

8630.34 The goals ofthe Massachusetts WAP and HEARTWAP are to increase the efficiency

with which energy is consumed in low-income households so as to reduce unnecessary

consumption and make the total energy bills more affordable. Massachusetts requires that when

furnaces are replaced under WAP or HEARTWAP, the new furnace must have a rating of at

33 Available at: http://www.ma-eeac.org/docs/090430-GasPlan.pdf.

34 The FY 09 HEARTWAP program is described on page 9 ofthe State Plan that the state submitted to the federal

Department ofHealth and Human Services as a condition of obtaining LIHEAP funding (available at:

http://www.mass.goviEhed/docs/dhcd/cdiliheap/smlan.pdfl.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
least 90% AFUE, unless local conditions do not allow the installation of a condensing furnace. 35

Because Massachusetts has a unique panoply ofstatutes, policies and programs regarding

increased energy efficiency and decreased emissions of greenhouse gases, it has a compelling

interest in having its waiver petition approved to ensure compliance with them.

B. The Costs, Benefits, Burdens and Reliability ofthe Savings from State

Regulation are Preferable to the Costs and Benefits ofAlternative

Approaches to Increasing the Penetration of High Efficiency Furnaces.

A state seeking a waiver must show that it has "unusual and compelling" interests in

having the waiver request granted, where those interests are defined:

such that the costs, benefits, burdens, and reliability of energy or water savings resulting

from the State regulation make such regulation preferable or necessary when measured

against the costs, benefits, burdens and reliability of alternative approaches to energy or

water savings or production, including reliance on reasonably predictable market-induced

improvements in efficiency of all products subject to the State regulation.

42 U.S.C. § 6297(d)(1)(C)(ii).

DOER has completed the "Alternatives Analysis," Exhibit E, described above in Section

LA., to compare the costs, benefits, burdens and reliability ofimplementing the proposed 90%

AFUE regulation to the costs, benefits, burdens and reliability offive alternative approaches to

increasing the penetration ofhigh-efficiency gas furnaces. These five alternatives include: a

consumer rebate program, a low-income grant program, tax incentives, a consumer financing

program, and a public information and customer education campaign. Alternatives Analysis,

Exhibit E, at pp. 1, 3, 9-20. In the Introduction and Summary to the Alternatives Analysis, at p.

1-3, DOER makes the key point that Commonwealth regulation in the form of a more stringent

35 Note that only a few hundred low-income households per year have their furnaces replaced by HEARTWAP.

Alternatives Analysis, Table 12, at p. 17. Approval by DOE ofthe waiver request will have practical and

particularly beneficial value for the several thousand low-income households who rent their space because, in the

absence of a state regulation, the owners are likely to install a lower-cost, less-efficient furnace. See Optimal

Report, Section ILE., at pp. 8 - 9.

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
90% AFUE standard is preferable to the alternatives available to the Commonwealth as the most

feasible and cost-effective way to further increase market penetration ofhigh efficiency furnaces.

The Alternatives Analysis states, at p. 2:

We have reached this conclusion supporting the Commonwealth's waiver Petition in part

because there has already been high market penetration ofhigh-efficiency furnaces in

Massachusetts, which makes it difficult and less cost-effective for voluntary

programmatic efforts to further influence market penetration. This existing high market

penetration has resulted, among other reasons, from the Commonwealth's aggressive and

comprehensive implementation of alternative non-regulatory approaches for acquiring

energy savings from the installation ofmore efficient gas furnaces, but those approaches

have largely reached their maximum benefit.

Moreover, the Alternatives Analysis emphasizes, at p. 2, the Commonwealth's position

that it cannot "actually attain 95% penetration ofhigh-efficiency NWGF through any ofthe five

alternatives analyzed" because the Commonwealth has been operating most ofthose alternatives

for years, and penetration has reached a "plateau which cannot be significantly improved upon

through voluntary, non-regulatory approaches." The Optimal Report, at p. 15 & Figure 13,

similarly concludes that penetration ofhigh-efficiency NWGF has reached a plateau. Thus, any

ofthe alternatives provide little "reliability" (42 U.S.C. § 6297(d)(I)(C)(iii» in tenus of

achieving the Commonwealth's furnace efficiency goals, especially in comparison to a

mandatory regulation.

As the Alternatives Analysis shows, the estimated cost to the Commonwealth ofthe

regulatory approach is only $24,000.00 to adopt and implement its proposed 90% AFUE

standard and achieve a 95% penetration rate for those high-efficiency furnaces. Alternatives

Analysis, at pp. 3, 21-23. In stark contrast, the cost of achieving 95% penetration of90% AFUE

furnaces using any ofthe other alternatives ranges from just under $3 million (tax incentives) to

almost $58 million (grant programs). Alternatives Analysis, at pp. 3,21-23. Thus, it would cost

125 to 2,400 times as much for the Commonwealth to achieve 950/0 penetration ofthe high-

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EERE-2009-BT-PET-0024 DOC- ID 1.2.001
efficiency furnaces using any ofthe five alternatives included in the DOER study, compared to

the simple and direct approach of allowing the Commonwealth to implement its proposed 90%

AFUE standard -- assuming that any ofthe alternatives could in fact result in 95% penetration of

high-efficiency NWGF. The Commonwealth maintains that none ofthe alternatives could so

succeed. The robustness ofthe Alternatives Analysis easily demonstrates that the costs, benefits,

burdens and reliability ofstate regulation are immensely more favorable than the costs and

benefits of any ofthe five alternatives studied, and that the Commonwealth has met the

requirements of42 U.S.C. § 6297(d)(1 )(C)(ii).

As noted above, the approach of allowing the state to implement its 900/0 AFUE

regulation provides much more reliability in tenns ofthe desired energy efficiency outcome. If

the regulation is implemented, the Commonwealth can reliably depend on achieving

approximately 95% penetration ofthe high-efficiency furnaces over time.36 However, as the

Alternative Analysis notes:

The non-regulatory alternatives will always result in a penetration ofless than 100%, due

to the nature oftechnology diffusion ... Thus, any realistic goal for the desired

penetration through the use of an alternative will have to be at less than 100%.

Alternative Analysis, at p. 7. The Commonwealth is not aware of any non-regulatory alternative

through which it could reliably expect to get to even 900/0 penetration ofhigh-efficiency

furnaces. Thus, all ofthe alternatives not only would impose significantly higher costs (as noted

above, 125 to 2,400 times more expensive), they would also be less reliable in tenus of achieving

the desired efficiency outcome.

36 The Commonwealth assumes less than 100% penetration because 90% AFUE condensing furnaces cannot be

installed in a small number oflocations, due to the inability to meet venting requirements. See 225 Mass. Code

Regs. § 9.03(l0(b)(authorizing DOER to adopt rules to exempt compliance at locations where local zoning, building

or plumbing-code requirements cannot be met).

- 26-

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Section 6297(d)(1)(C) ofEPCA further requires:

The factors described in clause (ii) [regarding costs and benefits ofthe state regulation

and of alternatives] shall be evaluated with the context ofthe State's energy plan and

forecast ....

The Commonwealth has submitted a "Massachusetts State Energy Plan" ("Energy Plan") and

energy forecast (the "forecast") for its regulated gas companies as Exhibits Band C, respectively.

Obtaining the requested waiver is entirely consistent with the Energy Plan and forecast. As the

Energy Plan notes, the Commonwealth sees increased energy efficiency as "the best costcontainment tool we have to reduce energy use and greenhouse gas emissions that are causing

global wanning." Energy Plan, at p. 2.

Massachusetts not only sees itself as "a leader with respect to energy efficiency," but its

Legislature has recently taken major steps to increase its long-standing focus on energy

efficiency as a key tool in its energy toolbox. Id. During 2008, the Commonwealth adopted the

GWSA, which sets strict greenhouse gas reduction goals, including reducing those emissions

800/0 below 1990 levels by 2050. Energy Plan, at p. 2. It also adopted the GCA, which, inter

alia, will result in utilities in the state tripling their expenditures on energy efficiency between

2009 and 2012, in order to meet a requirement of obtaining all cost-effective energy efficiency.

Energy Plan, at p. 3. The Energy Plan also demonstrates that the Commonwealth has already

adopted a very broad range ofprograms to reduce energy consumption, including, inter alia:

• state appliance efficiency standards for appliances or products not already

regulated by DOE;

• utility-funded energy efficiency programs that already expend over $125 million

per year and that will increase that spending significantly under the GCA;

- 27-

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
• incentives for the installation of combined heat and power facilities; and

• a recently-updated building energy efficiency code.

Moreover, the aggregated forecast for the state's regulated gas companies projects year-to-year

increases in gas consumption through 2015, which reinforces the importance of adopting a 90%

AFUE furnace standard that will help to dampen that projected growth.

c. The Proposed State Regulation Will Not Significantly Burden

Manufacturing, Marketing, Distribution, or Sale or Servicing of Furnaces.

Section 327(d)(3), 42 U.S.C. § 6297(d)(3), provides that:

[t]he Secretary may not prescribe a rule under this subsection ifthe Secretary finds (and

publishes such finding) that interested parties have established, by a preponderance

of the evidence, that such State regulation will significantly burden manufacturing,

marketing, distribution, sale or servicing ofthe covered product on a national basis....

[Emphasis added]. In determining whether to make such a finding, the Secretary is directed to

consider "all relevant factors" including the extent to which there will be:

(1) any increase in manufacturing or distribution costs;

(2) any disadvantage to smaller manufacturers, distributors or dealers, or

lessening of competition;

(3) any burden on manufacturers to redesign and produce the product covered by

the State regulation; and

(4) the likelihood ofwaiver approval contributing significantly to a proliferation

of State appliance efficiency requirements, and the cumulative impact any

such requirements would have.

42 U.S.C. § 6297(d)(3)(A)-(D).

Clearly, the burden is on "interested parties" who oppose the waiver to establish "by a

preponderance ofthe evidence" that the state regulation "will significantly burden

manufacturing, marketing, distribution, sale or servicing ofthe covered product on a national

- 28-

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
basis." 42 U.S.C. § 6297(d)(3). Not only does the statute so require, but DOE's ruling on the

only waiver petition filed to date also clearly places the burden ofproof on the "interested party"

who seeks a detennination that the state regulation will burden manufacturing, distribution, sale

or servicing ofthe covered product.37

While the burden ofproofregarding detenninations under § 6297(d)(3) is thus squarely

on the shoulders ofthose who seek such determinations, and not on the petitioners for a waiver,

the Commonwealth has demonstrated that industry will in fact not be burdened. The Optimal

Report demonstrates the following:

1. A high percentage ofunits shipped to Massachusetts already meet the 90%

standard. Optimal Report, Section III, at pp. 10-21, and Figures therein. The NOPR suggests

that DOE will favor a state which can demonstrate a high ~~saturation ofhomes with products that

already meet those higher standards," as this would help demonstrate that the burden on

manufacturers ofmeeting that standard would be minimal. 71 Fed. Reg. 59210, col. 1. The

NOPR also notes that "a State seeking a waiver offederal preemption likely would want to

demonstrate the extent to which manufacturers already produce and sell products that would

meet the state's proposed standard" and "how efficiencies ofshipments to that state already vary

37 "Notice ofDenial of a Petition for Waiver from Federal Preemption," 71 Fed. Reg. 78157 - 78168 (Dec. 28,

2006). In four instances, DOE squarely placed the burden ofproof on industry and those opposed to the state

regulation. See 71 Fed. Reg. 78165, col. 2 (" AHAM has failed to demonstrate by a preponderance ofthe

evidence ..."); 71 Fed. Reg. 78166, co. 2 (" comments opposed to the California Petition did not adequately

demonstrate ..."); 71 Fed. Reg. 78166, col. 3 ("... commenters opposed to the California Petition have not

provided sufficient evidence or analysis ..."); 71 Fed. Reg. 78167, col. 1 ("... the interested parties opposed to the

California Petition did not satisfy their burden ...").

- 29-

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
from current DOE efficiency levels," 71 Fed. Reg. 59210, col. 1, which the Optimal Report does.

Optimal Report, Section III, at pp. 10-21, and Figures therein.

2. A survey offurnace installers in Massachusetts did not reveal the likelihood of

any serious burdens on the installers, or the distributors that supply them. Optimal Report, at p.

23-24.

3. Based on a survey it completed, Optimal Energy concluded that there are no

manufacturers of gas furnaces in the Commonwealth or adjacent states that would be adversely

affected by the proposed standard. Optimal Report, p. 24.

4. From a consumer perspective, there are no desirable "features" of non-condensing

furnaces compared to condensing furnaces. Optimal Report, at pp.lO-12, 21. As the NOPR

suggested, a state seeking a waiver "might seek to demonstrate ... [that] high efficiency furnaces

already have all ofthe characteristics and features available in less efficient furnaces sold in that

state," 71 Fed. Reg. 59210, col. 3, and the Commonwealth has so demonstrated.

5. The standard that Massachusetts is proposing is identical to the standard that other

-states in New England have also adopted, so that approving the instant waiver is very unlikely to

lead to a proliferation ofstate standards. See 71 Fed. Reg. 59210, col. 2 C'... a State seeking a

waiver from DOE may wish to seek to demonstrate, for example, the extent to which it has

chosen identical standard levels as other States that have developed proposed regulations ...").

- 30-

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
IV. CONCLUSION

The Department ofEnergy should grant the Commonwealth's waiver petition to allow its

900/0 AFUE standard t9 take effect. In accordance with 42 U.S.C. § 6297(d)(1)(B), the

Commonwealth "has established by a preponderance ofthe evidence that such state regulation is

needed to meet unusual and compelling State or local energy or water interests." Therefore, the

Secretary should prescribe the requested waiver rule.

Respectfully submitted,

THE COMMONWEALTH OF MASSACHUSETTS

MARTHA COAKLEY

ATTORNEY GENERAL

BY:--=~-=----=- ----I+-_'l

Frederick D. Augenstem

BBO# 553102

Assistant Attorney General

Environmental Protection Division

1 Ashburton Place, 18th Floor

Boston, Massachusetts 02108

(617) 963-2427

MASSACHUSETTS DEPARTMENT OF

ENERGY RESOURCES

PHILIP GIUDICE, COMMISSIONER

By:~' S'"\b. /'

Robert Sydney I'

BBO# 490840

General Counsel

100 Cambridge Street - Suite 1020

Boston, Massachusetts 02114

(617) 626-7333

- 31 -

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
ATTACHMENT A

MASSACHUSETTS APPLIANCE EFFICIENCY

STANDARDS ACT, M.G.L. c. 25B, §§ 1 - 10

and

225 C.M.R. 9.01 - 9.06

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
M.G.L. c. '25B, §§ 1 - 10

Chapter 25B: Section 1. Short title

This chapter shall be known and may be cited as the "Massachusetts Appliance

Efficiency Standards Act".

Chapter 25B: Section 2. Definitions

As used in this chapter·the following words shall, unless the context requires otherwise,

have the following meanings:

"Ballast", a device used with an electric discharge lamp to obtain necessary circuit

conditions (voltage, current and waveform) for starting and operating the lamp.

"Boiler", a space heater that is a self-contained appliance for supplying steam or hot

water primarily intended for space heating. This tenn does not include hot water supply

boilers.

IICentral furnace", a self-contained space heater designed to supply heated air through

ducts ofmore than 10 inches in length.

[Definition of"Commissioner" effective until July 2, 2008. For text effective July 2, 2008,

see below.]

"Commissioner", the commissioner ofthe division of ~nergy resources.

[Definition of "Commissioner" as amended by 2008, 169, Sec. 45 effective July 2. 2008.

For text-effective July 2,2008, see above.]

"Commissioner", the commissioner of energy resources.

"Compensation", money or any other valuable thing, regardless ofform, received or to be

received by a person for services rendered.

"Electricity ratio (ER)" is the ratio of furnace electricity use to total furnace energy use.

ER = (3.412*EAE)/(1000*EF + 3.412*EAE) where EAE and EF are defmed in title 10 of

the code offederal regulations.

"High-intensity discharge lampll, a lamp in which light is produced by the passage of an

electric current through a vapor or gas and in which the light-producing arc is stabilized

by bulb wall temperature and the arc tube has a bulb wall loading in excess of 3 watts per

square centimeter.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
"Fluorescent lamp ballast" or "fluorescent ballast", a device designed to operate

fluorescent lamps by providing a starting voltage and current, and limiting the current

during normal operation, but shall not include such devices that have a dimming

capability or are intended for use in ambient temperatures of zero degrees fahrenheit or

less or have a power factor ofless than sixty one-hundredths for a single F40T12 lamp.

"Freezer", a cabinet designed as a unit for the storage of food at temperatures of

approximately zero degrees fahrenheit, having the ability to freeze food and having a

source ofrefrigeration requiring an energy input.

"F40T12 lamp", a tubular fluorescent lamp that is a nominal forty watt lamp with a fortyeight inch tube length and one and one-halfinches in diameter.

"F96T12Iamp", a tubular fluorescent lamp that is a nominal seventy-five watt lamp with

a ninety-six inch tube length and one and one-half inches in diameter.

"Lamp", an incandescent, reflector incandescent, tungsten halogen, or fluorescent type

lamp.

"Luminaire", a complete lighting unit consisting of a fluorescent lamp or lamps, together

with parts designed to distribute the light, to position and protect such lamps and to

connect such lamps to the power supply.

"Medium voltage dry-type distribution transformer", a transformer that: (l) has an input

voltage ofmore than 600 volts but less than or equal to-34,500 volts; (2) is air-cooled; (3)

does not use oil as a coolant; and (4) is rated for operation at a frequency of60 Hertz.

"Metal halide lamp", a high-intensity discharge lamp in which the major portion of the

light is produced by radiation ofmetal halides and their products of dissociation, possibly

in combination with metallic vapors.

"Metal halide lamp fixture", a light fixture designed to be operated with a metal halide

lamp and a ballast for a metal halide lamp.

"New appliance", an appliance that is sold, offered for sale or installed for the first time

and specifically includes floor models and demonstration units.

"Probe-start metal halide ballast", a ballast used to operate metal halide lamps which does

not contain an igniter and which instead starts lamps by using a third starting electrode

probe in the arc tube.

':Refrigerator", a .cabinet with one exterior door designed for the refrigerated storage of

food at temperatures above thirty-two degrees fahrenheit and having a source of

refrigeration requiring an energy input; refrigerator may include a compartment for the

freezing and storage offood at temperatures below thirty-two degrees fahrenheit but does

not provide a separate low temperature compartment designed for the freezing and long

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
term storage of food at temperatures below eight degrees fahrenheit. A refrigerator may

have interior doors on compartments.

"Refrigerator-freezer", a cabinet which consists of two or more ,compartments with at

least one of the compartments designed for the refrigerated storage of foods at

temperatures above thirty-two degrees fahrenheit and with at least one of the

compartments designed for the freezing and storage of foods at temperatures of eight

degrees fahrenheit or below. The source ofrefrigeration requires energy input.

"Residential furnace or boilee', a product which utilizes only single-phase electric

current, or single-phase electric current or DC current in conjunction with natural gas,

propane, or home heating oil, and which:-

(1) is designed to be the principle heating source for the living space of a residence;

(2) is not contained within the same cabinet with a central air conditioner with a rated

cooling capacity exceeding 65,000 Btu per hour;

(3) is an electric central furnace, electric boiler, forced-air central furnace, gravity

central furnace or low-pressure steam or hot water boiler; and

(4) has a heat input rate of less than 300,000 Btu per hour for electric boilers and lowpressure steam or hot water boilers, and less than 225,000 Btu per hour for forced-air

central furnaces, gravity central furnace and electric central furnaces.

"Single-voltage external AC to DC power supply", a device that:

(1) is designed to convert line voltage AC input into lower voltage DC output;

(2) is able to convert to only one DC output voltage at a time;

(3) is sold with, or intended to be used with, a separate end-use product that constitutes

the primary power load;

(4) is contained within a separate physical enclosure from the end-use product;

(5) is connected to the end-use product via a removable or hard-wired male/female

electrical connection, cable, cord or other wiring;

(6) does not have batteries or battery packs, including those that are removable, that

physically attach directly to the power supply unit;

(7) does not have a battery chemistry or type selector switch and indicator light, or does

not have a battery chemistry or type selector switch and a state of charge meter; and

(8) has a nameplate output power less than or equal to 250 watts.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
"State-regulated incandescent reflector lampl" a lamp, not colored or designed for rough

or vibration service applications, with an inner reflective coating on the outer bulb to

direct the light, an E26 medium screw base, a rated voltage or voltage range that lies at

least partially within 115 to 130 volts and that falls into either ofthe following categories:

a bulged reflector, elliptical reflector, blown parabolic aluminized reflector or similar

bulb shape with a diameter equal to or greater than 2.25 inches; or a reflector, parabolic

aluminized reflector, bulged reflector or similar bulb shape with a diameter of 2.25 to

2.75 inches, inclusive.

"State plumbing codell

, the uniform state plumbing code, amendments and rules and

regulations thereto, as promulgated by the board ofstate examiners ofplumbers and gas

fitters under the provisions ofsection thirteen of chapter one hundred and forty-two.

"Transformerll

, a device consisting of 2 or more coils of insulated wire and that is

designed to transfer alternating current by electromagnetic induction from 1 coil to

another to change the original voltage or current value. This term does not include: (n

devices with multiple voltage taps, with the highest voltage tap equaling at least 20 per

cent more than the lowest voltage tap; or (2) devices, such as those commonly known as

drive transformers, rectifier transfonners, auto-transformers, uninterruptible power

system transformers, impedance transformers, regulating transformers, sealed and nonventilating transfonners, machine tool transformers, welding transformers, grounding

transfonners or testing transfonners, that are designed to be used in a special-purpose

application and are tUllikely to be used in general-purpose applications.

"Water heater", an automatically controlled vessel designed primarily for heating and

storing water to provide hot water service for domestic or sanitary purposes.

Chapter 25B: Section 3. Application of chapter

The provisions ofthis chapter shall apply to the testing, certification and enforcement of

efficiency standards for lamps and the following types of new appliances sold, offered for

sale or installed in the commonwealth:

(a) refrigerators, refrigerator-freezers and freezers which can be -operated by alternating

current electricity, excluding the following types: those designed to be used without

doors; those which do not include a compressor and a condensor unit as an integral part

ofthe cabinet assembly; refrigerators and refrigerator-freezers with total refrigerated

volume exceeding thirty-nine cubic feet; top mounted refrigerator-freezers with total

refrigerated volume less than sixteen and six-tenths cubic feet; and freezers with total

refrigerated volume exceeding thirty cubic feet.

(b) storage type electric, gas and oil water heaters.

(c) fluorescent ballasts for F40T12 and F96T12 lamps.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
l-'

(d) luminaires with fluorescent ballasts for F40T12 and F96T12 lamps.

(e) showerheads.

(t) medium voltage dry-type distribution transformers.

(g) metal halide lamp fixtures.

(h) residential furnaces or boilers.

(i) single-voltage external AC to DC power supplies.

(D state-regulated incandescent reflector lamps.

The provisions ofthis chapter shall not apply to: new appliances or lamps manufactured

in the commonwealth and sold outside the commonwealth; new appliances or lamps

manufactured outside the commonwealth and sold at wholesale inside the commonwealth

for fmal retail sale and installation outside the commonwealth; appliances or lamps

installed in manufactured homes at the time of construction; or appliances or lamps

designed expressly for installation and use in recreational vehicles.

Chapter 25B: Section 4. Restrictions on sale or installation

No new appliance covered by clauses (a) to (e), inclusive, ofsection 3 may be sold,

offered for sale or installed in the commonwealth on or after January fust, nineteen

hundred and eighty-eight, unless the energy efficiency ofthe appliance meets or exceeds

the standards established pursuant to this act.

No new lamp covered by clauses (a) to (e), inclusive, ofsection 3 shall be installed in the

conimonwealth in a building other than a residence on or after January first, nineteen

hundred and ninety, unless the energy efficiency ofthe lamp meets or exceeds the

standards established by the commissioner pursuant to this chapter. The commissioner

may, through regulation, establish exemptions for certain lamps used for specified

purposes.

Chapter 25B: Section 5. Establishment of energy efficiency standards; revision

The commissioner shall by regulation establish the level of energy efficiency standards

for lamps, so that each lamp covered by said standard shall consume less power in watts

per unit oflight output in lumens than a maximum reference level to be established by the

commissioner; provided, however, that said standards shall not become effective until

January first, nineteen hundred and ninety. The commissioner may by regulation increase

the level ofthe energy efficiency standards for lamps, fluorescent ballasts, luminaires and

showerheads. Said commissioner may also by regulation increase the level ofthe energy

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
efficiency standards for refrigerators, refrigerator-freezers, freezers and water heaters,

provided that said standards shall not become effective until January first, ni~eteen

hundred and ninety. Any revision ofsuch standards shall be based upon the determination

by the commissioner that such efficiency levels are cost-effective to the users, as a group,

of the covered appliance or lamp. Any standard revised pursuant to this section which

conflicts with a corresponding standard in the state plumbing code shall take precedence

over the standard in said code. Any standard revised pursuant to this section shall not take

effect for at least one year after its adoption.

The commissioner, in consultation with the heads of other appropriate agencies, shall

adopt regulations, in accordance with this chapter, establishing minimum energy

efficiency standards for the types of new products set forth in clauses (f) to (s), inclusive,

ofsection 3.

The regulations shall provide for the following minimum efficiency standards:

[Clause (1) ofthe third paragraph effective until December 18, 2007. For text effective

December 18, 2007, see below.]

(1) Medium voltage dry-type distribution transfonners shall meet minimum efficiency

levels 3/10 of a percentage point higher than the Class 1 efficiency levels-for medium

voltage distribution transfonners specified in Table 4-2 of the "Guide for Determining

Energy Efficiency for Distribution Transformers" published by the National Electrical

Manufacturers Association (NEMA Standard TP-1-2002).

[Clause (1) of the third paragraph as amended by 2007, 178 effective December 18,

2007. For text effective until December 18, 2007, see above.]

(1) New medium voltage dry-type distribution transformers, single voltage external AC

to DC power supplies, and state-regulated incandescent reflector lamps manufactured on

or after January 1, 2008, shall not be sold or offered for sale in the commonwealth unless

the efficiency of the new product meets or exceeds the efficiency standards set forth in

225 CMR 9.03.

(2) Metal halide lamp fixtures designed to be operated with lamps rated greater than or

equal to 150 watts but less than or equal to 500 watts shall not contain a probe-start metal

halide ballast.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
(3) Residential furnaces or boilers shall meet or exceed the following Annual Fuel

Utilization Efficiency (AFUE):

Product Type

Gas and propane furnaces

Oil furnaces

Gas and propane hot water boilers

Oil-fued hot water boilers

Gas and propane steam boilers

Oil-fired steam boilers

Minimum Efficiency Level

90%AFUE

83%AFUE

84%AFUE

84%AFUE

82%AFUE

82%AFUE

The commissioner may adopt rules to exempt compliance with these furnace or boiler

standards at any building, site or location where complying with said standards would be

in conflict with any local zoning ordinance, building or plumbing code or other rule

regarding installation and venting ofboilers or furnaces.

Residential furnace air handlers shall have an ER of 2 per cent or less, except residential

oil furnaces with a capacity of less than 94,000 Btu per hour shall have an ER of 2.3 per

cent or less.

(4) Single-voltage external AC to DC power supplies shall meet 'the tier 1 energy

efficiency requirements of California Code of Regulations, Title 20, Section 1605.3 as

published in April 2005. This standard applies to single-voltage AC to DC power

supplies that are sold individually and to those that are sold as a component of or in

conjunction with another product.

(5) State-regulated incandescent reflector lamps shall meet the minimmn average lamp

efficiency requirements for federally-regulated incandescent reflector lamps contained in

42 U.S.C. section 6295 (i)(l)(A). The following lamps are exempt from these

requirements: ER30, BR30) BR40 and ER40 of 50 watts or less; BR30) BR40 and ER40

of 65 watts; and R20 of 45 watts or less.

On or after January 1, 2008, no new medium voltage dry-type distribution transfonner,

single-voltage external AC to DC power supply or state-regulated incandescent reflector

lamp may be sold or offered for sale in the state unless the efficiency ofthe new product

meets or exceeds the efficiency standards set forth in the regulations adopted pursuant to

this section. On or after January 1, 2009, no new metal halide lamp fixture may be sold or

offered for sale in the commonwealth unless the efficiency of the product meets or

exceeds the efficiency standards set forth in the regulations adopted pursuant to this

section. In accordance with section 9, the commissioner, in consultation with the attorney

general, shall determine if implementation of state standards for residential furnaces or

boilers requires a waiver from federal preemption, and shall apply for such waivers if

necessary. If the commissioner determines that a waiver from federal preemption is

necessary for residential furnaces or boiler standards established by this section, the state

standard shall go into effect at the earliest date permitted by federal law. If the

commissioner determines that a waiver from federal preemption is not needed for

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
residential furnaces or boilers, then such state standards shall go into effect on June 1,

2008.

One year after the date upon which sale or offering for sale of certain products is limited

pursuant to the preceding paragraph ofthis section, no new products may be installed for

compensation in the state unless the efficiency of the new product meets or exceeds the

efficiency standards set forth in the regulations adopted pursuant to this section.

Chapter 258: Section 6. Testing procedures

The commissioner shall adopt procedures for testing the energy efficiency ofthe

appliances and lamps covered by this chapter ifsuch procedures are not provided for in

any other applicable code regarding the testing of appliance efficiency. The

commissioner shall use United States Department ofEnergy approved test methods, or in

the absence ofsuch test methods, other appropriate nationally recognized test methods

applicable to the respective appliances and lamps. The manufacturer shall cause the

testing ofsamples of each model of each appliance and lamp covered by this chapter in

accordance with the test procedures adopted pursuant to this section or those specified in

any other applicable code regarding the testing of appliance efficiency.

The commissioner may test products covered by section 3. Ifproducts so tested are found

not to be in compliance with the minimum efficiency standards established under section

5, the commissioner shall: (l) charge the manufacturer ofsuch product for the cost of

product purchase and testing, and (2) provide infonnation to the public on products found

not to be in compliance with the standards.

In adopting test procedures for detennining energy efficiency, the commissioner may

consult with other appropriate department heads and may adopt updated test methods

when new versions oftest procedures become available.

Chapter 25B: Section 7. Certification of compliance; labeling products to connote

compliance with efficiency requirements of chapter

Manufacturers of appliances and lamps covered by this chapter shall certify to the

commissioner that such appliances and lamps are in compliance with the provisions of

this chapter. The commissioner shall promulgate regulations governing the certification

of appliances and lamps covered by this·chapter and shall publish an annual list ofsuch

appliances and lamps. Manufacturers' certifications shall be based on test results. The

commissioner shall coordinate with the certification programs of other states and federal

agencies with similar standards to the maximum extent practicable, including

investigating whether certification in another state can serve as a substitute for

certification in the commonwealth. Single voltage external AC to DC power supplies

shall be exempt from the requirements ofthis section.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Manufacturers of new products covered by section 3 shall identify each product offered

for sale or installed in the state as in compliance with this chapter by means of a mark,

label or tag on the product and packaging at the time ofsale or installation. The

commissioner shall promulgate regulations governing the identification ofsuch products

and packaging, which shall be coordinated to the greatest practical extent with. the

labeling programs of other states and federal agencies with equivalent efficiency

standards. The commissioner shall allow the use of existing marks, labels or tags which

connote compliance with the efficiency requirements ofthis chapter. State regulated

incandescent reflector lamps and metal halide lamp fixtures shall be exempt from the

requirements ofthis paragraph. The commissioner, in consultation with other states,

product manufacturers and other interested parties, shall study and evaluate the

usefulness and effectiveness ofsuch markings for incandescent reflector lamps and metal

halide lamp fixtures.

Chapter 25B: Section 8. Inspections of distributors or retailers; violations; penalties

The commissioner may cause periodic inspections to be made of distributors or retailers

of new appliances in order to detennine compliance with this chapter. The commissioner

may also work with the chairman ofthe board ofbuilding regulations and standards to

coordinate inspections for new products that are also covered by the state building code.

The commissioner shall cause investigations to be made of complaints received -

concerning violations ofthis chapter and shall report the results ofsuch investigations to

the attorney general. The attorney general may institute proceedings to enforce the

provisions ofthis chapter.

Failure to comply with any ofthe provisions ofthis chapter shall constitute an unfair or

deceptive act under the provisions of chapter ninety-three A. Any person who violates

any provision ofthis chapter shall be punished by a civil penalty ofnot more than two

hundred and fifty dollars or as provided in chapter ninety-three A, whichever is greater.

Each violation ofthis chapter shall constitute a separate offense, and each day such

violation continues shall constitute a separate offense.

Chapter 25B: Section 9. Superseding federal statutes, etc.; duties of commissioner

Ifthe commissioner determines that a federal statute, rule or determination would

supersede any requirement ofthis act, or ifthe commissioner is notified by the United

States Department ofEnergy that a petition has been filed to supersede any requirement

ofthis act, the commissioner shall determine (a) whether there is a substantial state or

local need which is sufficient to justify the state requirement at issue, (b) whether the

state requirement at issue does not unduly burden interstate commerce, and (c) whether

the state requirement at issue contains a more stringent energy efficiency standard than a

corresponding federal standard. Ifthe commissioner determines that these criteria are

met, the commissioner shall promptly petition the United States Department ofEnergy

requesting a ruling that the state requirement at issue not be superseded, or shall promptly

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
file with the United States Department ofEnergy a request that the petition to supersede

be denied.

Chapter 25B: Section 10. Study and evaluation of effectiveness of energy efficiency;

report and recommendations on efficiency standards; regulations

The commissioner shall study and evaluate the effectiveness of energy efficiency in the

commonwealth as well recommend new or increased efficiency standards. Such study

and evaluation shall be conducted in consultation with interested parties. The

commissioner shall file a report with the clerk ofthe house ofrepresentatives on or

before September 1 ofthe year before each new legislative session, describing the timing,

scope and findings ofthis study, and shall recommend to the general court new or

increased efficiency standards, ifthese standards would serve to promote conservation in

the commonwealth and would be cost-effective for the users, as a group, ofthe covered

appliance. The clerk shall forward such report to the joint committee on

telecommunications, utilities and energy ofthe general court.

The commissioner may adopt such further regulations as necessary to ensure the proper

implementation and enforcement ofthis chapter.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
225 C.M.R. 9.01 - 9.06

9.00: APPLIANCE ENERGY-EFFICIENCY STANDARDS, TESTING AND

CERTIFICATION PROGRAM .

Section

9.01: Statutory Authorization

9.02: Definitions

9.03:. Product Standards and Test Methods

9.04: Certification

9.05: Identification of Complying App11ances and Lamps

9.06: Enforcement

9,01: Statutory Authorization

M.G.L. c. 25B, §§ 5'thro~gh 10 ~equire tpe Commissioner of Energy

Resources to adopt procedures for testing the- energy efficien~ of

appliances and lamps covered ~y 225 'CMR 9.00 if such procedures are not

covered by the state plumbing code, and,to certify those in compliance

with 225 CMR 9.00.

9.02: Definitions

Terms defined in 42 U.S.C. s. 6291 andN.G.L. c.·25B, 8.2, which are

also used in '225 CMR 9.00, shall have th~·sarne meaning as set forth in

42 U.S.C. s. 6291 and M.G.L c.' 25B, s.2, unless said term is otherwise

defined in 225 CMR 9.02. .

UANSI," the American National Standards Institute.

"Automatic Defrost,N a defrost system in which the defrosting action

for all refrigerated surfaces is initiated and terminated

automatically.

"Ballast -Factor," the ratio of the relative light output of a ballast

expressed as a per cent to the rate of energy consumption expressed in

watts at the test conqitions specified in·M.G~L. c. 25B, s. 6.

"Boiler," a space heater that is a self-contained appliance for

supplying steam or hot water primarily intended for space heating. This

term does not include hot water supply boilers.

"Central furnace," a self-contained space heater desi.gned to supply

heated air through ducts of more than 10 inches in l~gth.

"Chest Freezer," a freezer whose access door is at the ,top of the

appliance.

"Ballast," a device used with an electric discharge lamp to obtain

necessary circuit conditions (voltage, current and waveform) for

starting and operating the lamp.

"Compensation," money or any other valuable thing, regardless of form,

received or to be received by a person for services rendered.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
"Electricity ratio (ER) II is the ratio of furn'ace electricity use to

total furnace energy use. ER = (3.412*EAE)/(lOOO*EF + 3.412*EAE) where

EAE and EF are defined in title 10 of the code of federal regulations.

"Energy Use" shall mean the quantity of energy directly consumed by a

consumer product at point of use, determined in accordance with test

procedures under 42 U.S.C. s.6293.

"Energy Efficiency" shall mean the ratio of the useful output of

services from a consumer product to the energy use of such product,

determined in accordance with test procedures under 42 U.S.C. s. 6293.

"Energy Conservation standard" shall mean a performance standard which

'prescribes a minimum level of energy efficiency or a maximum quantity

of energy use, or in the case of showerheads, faucets, water closets,

and urinals, water use, for a covered product determined in accordance

with tests procedures prescribed under 42 U.S.C. s. 6293.

"High-intensity discharge lamp", a lamp in which light· is produced by

the passage of an electric current through a vapor or gas and in which

the light-producing arc is stabili,zed by bulb wall temperature and the

~rc tube has a bulb wall loading in excess of 3 watts per square

centimeter..

"Manual Defrost," a defrost system in which the defrosting action for

all refrigerated surfaces is initiated manually.

"Medium voltage dry-type distribution transformer, II a transformer that:

{I} has an input voltage of more than 600 volts but less than or eqUal

to 34,500 volts; (2) is air-cooled; (3) does not use oil as a coolant;

and (4) is rated for operati~n at a frequency of 60 Hertz.

"Metal halide lamp,lI a high-intensity discharge lamp in which the major

portion of the light is produced by radiation of metal halides and

their products of dissociation, possibly in combination with metallic

vapors.

"Metal halide lamp fixture," a light fixture designed to be operated

with a metal halide lamp and a ballast for a metal halide lamp.

"Model," all units of a given type of covered product (or class

thereof) manufactured by one manufacturer which do not have any

differing electrical, physical or functional characteristics that

affect energy consumption and : (a) wit~ respect to refrigerators,

refrigerator-freezers ~d freezers, have the same' primary energy

source, have electrical 'characteristics that are essentially identical,

and do not have any differing physical or functional characteristics

that affect energy consUmption; (b) with respect to water heaters, have

the same prima'ry energy source and, with the exception of immersed

heating elements, do not have any differing electrical, physical, or

functional characteristics that affect energy consumption.

"Nominal Input Voltage,lI an input voltage within plus 5% or minus 5% of

a specified value.

\\Norninal -Lamp Watts,lI the wattage at which a lamp is designed to

operate and for which it is therefore rated.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
"Partial Automatic Defrost," a defrost system in which the defrosting

~ction for the refrigerated surfaces in the refrigerator compartment is

initiated and terminated automatically and the defrosting action for

the refrigerated surfaces in the free~er is initiated manually.

"Probe-start metal halide ballast," a ballast used to operate metal

halide lamps which does not contain an igniter and which instead start~

lamps by using a third starting electrode probe in the arc tube.

"Relative Light Output," the test ballast light output divided by a

reference ballast light output using the same reference lamp and

expressing the value as a percent. These measurements are made at the

ballast's rated primary voltage.

"Residential furna~e or boiler," a product which utilizes only singlephase electric current, or single-phase electric current or DC current

in conjunction with natural gas-, propane, or home heating oil, and

which:-

(1) is designed to be the principle heating source for the living

space of a residence;

(2) is not contained within the same cabinet with a central air

conditioner with a rated cooling capacity exceeding 65,000 Btu per

hour;

(3) is an electric central furnace, electric boiler, forced-air

central furnace, gravity central furnace or low-pressure steam orhot water boiler; and

(4) has -a heat- input rate of less than 300,000 Btu per hour for

electric boilers and low-pressure steam or hot water boilers, and

less than 225,000 Btu per hour for forced-air central furnaces I

gravity central furnace and electric central furnaces.

"Single-voltage external AC to DC power supply," a device ~hat:

(1) is designed to convert line voltage AC input into lower voltage

DC output;

(2) is able to convert to only one DC output voltage at a timej

(3) is sold with, or intended to be used with, a separate end-use

product that constitutes the primary power load;

(4) is contained within a separate physical enclosure from the enduse product;

(5) is connected to the end-use product via a removable or hardwired male/female electrical connection J cable, cord or other

wirin~;

(6) does not have batteries or battery packs, including those that

are removable J that physically attach directly to the power supply

unit;

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
(7) does not have a battery chemistrY or type selector switch and

indicator light, or does not have ,a battery chemistry or type

selector switch and a state of charge meterj and

(8) has a nameplate output power less than or equal to 250 watts.

"State-regulated incandescent reflector lamp," a lamp, not colored or

designed for rough or vibration service applications, with an inner

reflective coating on the outer bulb to direct the light, an E26 medium

screw base, a rated voltage or voltage range that lies at least

partially within 115 to 130 volts and that ,falls into either of the

following categories~ a bulged reflector, elliptical reflector, blown

parabolic aluminized reflector or similar bulb shape with a diameter

equal to or greater than 2.25. inches; or a reflector, parabolic

aluminized reflector, bulged reflector or similar bulb shape with a

diameter of 2.25 to 2.75 inches, inclusive.'

"Transformer" II a device consisting of 2 or more coils of insulated wire

and that is designed to transfer alternating current by electromagnetic

induction from 1 coil to another to change the original voltage or

current value. This term does not include: (1) devices with multiple

voltage taps, with the highest voltage tap equaling at least 20 per

cent more than the lowest voltage tap; or (2) devices, such as those

commonly known as drive transformers, rectifier transformers, autotransformers, uninterruptible power system transformers, impedance

transformers, regulating transformers, sealed and non-ventilating

transformers, machine tool transformers, welding transformers,

grounding transformers or testing transformers, that are designed to be

used in a special-purpose application and are unlikely to be used in

general-purpose applications.

"Upright Freezer,1I a freezer whose access door is at the front of the

appliance.

9.03:Product Standards and Test Methods

(1) Product standards and test methods shall be as indicated below for those

appliances and lamps expressly addressed by the Conunonwealth in 225 CMR 9.03.'

Those product.standards and test methods not otherwise explicitly mandated by

the Commonwealth shall be prescribed under 42 U.S.C. s. 6295 and 10 C.F.R s.

430 as of January 1, 2006 and shall be the minimum standards and methods to

be u~ed unti~ such time as more stringent standards are enacted by the

Commonwealth or Federal government and shall become a part of Appliance

Testing and Certification Program guidelines issued

from time to time by DOER.

(2) The manufacturer shall cause the testing of all new appliances and lamps

to be sold for final 'retail sale in Massachusetts on or after January 1, 1988

as prescribed below.

(3) Refrigerators. Refrigerator Freezers and Freezers.

(a) The annual energy consumption of a refrigerator, refrige~ator-freezer

or freezer (excluding the following types: those designed to be used

without doors; those which do not include a compressor and a condenser

unit as an integral' part of ,the cabinet assembly; refrigerator and

refrigerator-freezers with total refrigerated volume exceeding 30 cubic

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
feet; top-mounted refrigerator-freezers with total refrigerated volume

less than 16.6 cubic feet; and freezers with total refrigerated volume

exceeding 30 cubic feet} shall ,not exceed the values derived from the

formulas in 42 U.S.C. s. 6295.

(b) Fresh food refrigerated volumer freezer refrigerated volume r total

refrigerated volume, energy consumption and energy factor shall be

determined using the test procedures for refrigerators and freezers in 10

CFR s. 430.22 and s. 430.23 (2006), or as subsequently amended.

(c) When a.refrigeratorr refrigerator-freezer or freezer can be operated

using either alternating current electricity or one or more other sources

of primarypowerr the test shall be performed using alternating current

electricity only.

(4) Water Heaters.

(a) The energy ·efficiency of all new electric r gas or oil water heaters

shall meet. or exceed the energy factor specified in 42 U.S.C. s. 6295(e).

{b) The manufacturer shall cause the testing of samples of each model of

oil, gas, or electric water heater, to be sold for final retai~ sale in

Massachusetts on or after January 1, 1988, in accordance with test

procedures in 10 C.F.R. s. 430.23(e) and 10 C.F.R. s. 430-B, app E.

(5) Showerheads.

(a) The maximum flow rate for all new showerheads shall not exceed the

values specified in 42 U.S.C. s. 6295 (j).

(b) The manufacturer shall cause the testing of samples of each model of

showerhead by a laboratory approved by the Commissioner. The method of

testing shall be the federal standard pursuant to 42 U.S.C. s. 6295 (i)

and the laboratory shall complete and submit a Laboratory Certification

form available from the Commissioner.

(6) Fluorescent Ballasts-. The.product standard for fluorescent ballasts shall

~e the federal standard prescribed under 42 U.S.C. s. 6295 g(5).

(7) General service fluorescent lamps and incandescent reflector lamps.

The product standards for general service fluorescent lamps and

incandescent reflector lamps shall meet or exceed the lamp efficacy and

CHI standards specified in 42 U.S.C. s. 6295(i).

(8) medium· voltage dry-type distrib~tion·transformers.

(a) Medium voltage dry-type transformers shall have efficiencies not

less than the applicable values in the following table when tested

at 50 percent of the rated output power and at 75 degrees C.

(Following table. copies Table 4-2 of NEMA standard ·TP 1-2002, but

adds 3/10 point for each value per the Massachusetts law. The NEMAstandard is available on their website at www.nema.org)

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Single Phase Three phase

Rated Minimum efficiency % Rated power Minimum efficiency %

power output in

output in kVa

kVa

::;60kV >60kV ~60kV >60kV

BIL BIL BlL BIL

15 97.9 97.9 15<30 97.1 97.1

<25

~25<37.5 98.2 98.2 ~30<45 97.6 97.6

37.5 <50 98.4 98.4 ~45<75 97.9 97.9

;::: 50<75 98.5 ·98.5 ~75<112.5 98.2 98.2

~75<100 98.7 98.7 112.5<150 98.4 98.4

100<167 98.8 98.8 150 <225 98.5 98.5

167<250 99.1 99.0 ~225-<300 98.7 98.7

~250<333 99.2 99.1 ~300<500 98.9 98.8

~333<500 99.3 99.2 ~500<750 99.1 99.0

~500<667 99.4 99:3 ~750 <1000 99.2 99.1

667 <833 99.5 99.3 1000 99'-3 99.2

<1500

833 99.5 99.4 1500 99:4 99.3

<2000

~2000 99.5 99.3

<2500

2500 99.5 99.4

kVa = kilovolt amperes

kV = kilovolts

BIL =basic impulse insulati~n level

(b) The manufacturer shall cause the testing of. samples of mediumvoltage dry-type distribution transformers to.be sold for final

retail sale in Massachusetts on or after January 1 1 2008 in

accordance with the National Electrical Manufacturers Association

(NEMA) standard TP2-2005/ ~Standard Test Method for Measuring the

Energy Consumption of Distribution Transformers. U This test method

is available from NEMA at www. nerna. org.

(9) metal halide lamp fixtures.

(a) Metal halide lamp fixtures designed to be operated with lamps

rated. greater than or equal to 150 watts but less than or equal to

500 watts shall not contain a probe-start metal h~lide"ballast.

(10) residential furnaces or boilers.

(a) Residential furnaces or boilers shall meet or exceed the

following Annual Fuel Utilization Efficiency (AFUE):

Product Type Minimum Efficiency Level

Gas and propane furnaces *90% AFUE

Oil furnaces *83% AFUE

Gas and propane hot water boilers *84% AFUE

Oil-fired hot water boilers *84% AFUE

Gas and propane steam boilers *82% AFUE

Oil-fired steam boilers *82% AFUE

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
b) The commissioner may adopt rules to exempt .compliance with these

furnace or boiler standards at ,any building, site or location where

complying with said standards would be in conflict with any local

zoning ordinance, building or plumbing code or other rule regarding

installation and venting of boilers or furnaces.

(c) Residential furnace air handlers shall have an ER of 2 per cent

or less, except residential oil furnaces with a capacity of less

than 94,000 Btu per hour shall have an ER of 2.3 per cent or less.

Cd) The manufacturer shall caUse the testing of samples of each

model of residential furnaces .and boilers to be sold for final

retail sale in Massachusetts in accordance with the federal test

method contained in Appendix N to subpart B of part 430, title 10,

of the code of Federal Regulations (CFR). The test rnet~od includes

the testing methods required for both elements of Massachusetts

standards (i.e. minimum AFUE standards and maximum electricity ratio

standard. )

(11) single-voltage external AC to DC power supplies.

(a) Single-voltage external AC to DC power supplies shall meet the

requirements in the following table copied from table u-i of th~

April 2005 version of California's Title 20:

Nameplate output ; Minimum Efficiency in Active Mode

<.1 watt 0.49 * Nameplate Output

_> 1 watt and < or = 49 watts 0.09*Ln(Nameplate Output) + 0.49

> 49 watts 0.84

Maximum Energy Consumption in No-Load

Mode

< 10 watts 0.5 watts

> or =10 watts and < or =250 watts 0.75 watts

Where Ln (Nameplate Output) =Natural Logarithm of the nameplate output expressed in Watts

(b) The manufacturer shall cause the testing of samples of each

model of single-volta~e external AC to DC power supplies to be sold

for final retail sale in Massachusetts on or after January 1, 2008 in accordance with the tes~ methodology specified in the United

States Environmental Protection Agency's ~Energy Star program

Requirements for Single Voltage External AC-DC and AC-AC Power

Supplies" as in effect on January 1, 2005 except that products do

not have to be tested at 230 volts. -This document is available from

the U.S. EPA. Manufacturers can access' this document at

http://www.energystar.gov/indes.cfm?c=productspecs.pt~roductspecs

. Manufacturers can also review the underlying testing methodology,

\\Test Method for Calculating the Energy Ef·ficiency of single-Voltage

External AC-DC and AC-AC Power Supplies (august 11, 200-4)" at

http://www.energystar.gov/index.cfm?c=ext-power supplies.power suppl

ies_consumers.

(12) state-regulated incandescent reflector lamps.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
(a) State-regulated incandescent reflector lamps shall meet the

minimum efficacies in the following table:

Nominal Lamp Wattage Minimum average lamp efficacy

(lumens per watt)

40- 50 10.5

51- 66 11.0

67 - 85 12.5

86 - 115 14.0

116-155 14.5

156 - 205 15.0

The following types ofincandescent reflector lamps are exempt from these requ4ements:

(I)lamps rated at 50 watts or less ofthe following types: BR30, ER30, BR40, and ER40;

(II)lamps rated at 65 watts ofthe following types: BR30, BR40, and ER40; and

(IIl)R20 lamps of45 watts or less. .

,(b) The manufacturer shall cause the testing of each model of

state-regulated incandescent reflector lamps to be sold for final

retail sale in Massachusetts on or after January 1, 2008 in

accordance with the federal test method found in Appendix R to

subpart B of part 430, Title 10, of the Code of Federal Regulations.

9.04:Certification

(1) No new appliance or lamp covered by M.G.L. c. 25B, §3 may be sold,

offered for sale or installed in Massachusetts after the .dates

designated for the respective products in M.G.L. c.25B, §S which is not

certified pursuant to paragraph (2) of this section.

(2) The manufacturer shall submit to the Commissioner or to another

state or third-party as designated by the Commissioner in guidelines a

certification statement listing all new appliance models and lamps

covered by 225 CMR 9.00. The certification statement requirements shall

be set forth in the guidelines.

(3) On or after January I, 2008, no new medium voltage dry-type

distribution transformer, single-voltage external AC to DC power supply

or state-regulated incandescent reflector lamp may be sold or offered

for sale in the state unless the efficiency of the new product meets or

exceeds the effici~cy standards. set forth in 225 CMR 9.03."

(4) On or after January 1, 2009, no new metal halide lamp fixture may

be sold or offered for sale in the commonwealth unless the efficiency

of the product meets or exceeds the efficiency standards set forth in

225 CMR 9.03.

(5) In· accordance with M.G.L. c.25B, §9, the commissioner, in

consultation with the attorney general, shall determine if

implementation of state standards for residential furnaces or boilers

requires a waiver from federal preemption, and shall apply for such

waivers if necessary. If the commissioner determines that a waiver from

federal preemption is necessary for.residential furnaces or boiler

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
standards established by this section, the state standard shall go into

effect at the earliest 'date permitted by federal law. If the

commissioner determines that a waiver from federal preemption is not

needed for residential furnaces or boilers, then such state standards

shall go into effect on June 1, 2008.

(6) One year after the date upon wh~ch the sale or .offering for sale of

certain products is limited pursuant to the preceding clauses of 225

CMR 9.04, no new products may be installed for compensation in the

state unless the efficiency of the new product meets or exceeds the

efficiency standa~ds set forth in 225 CMR 9.03 adopted pursuant to

M.G.L. c.25B, §5.

(7) The commissioner may test products covered by M.G.L. c.25B, §3. If

products so tested are found not to be in compliance with the minimum

e~ficiency standards established under M.G.L. c.25B, §S, the

commissioner shall; (1) charge the manufacturer of such product for the

cost of product purchase and testing 1 and (2) provide information to

the public on products found not to be in compliance with the

standards.

(8) In adopting test procedures for determining energy efficiency, the

commissioner may consult with other appropriate department heads and·

may adopt ~pdated test methods when new versions of test procedures

become available.

9.05:ldentification of Complying Appliances and Lamps

(1) Sufficient information shall be shown on the outside of the

shipping carton or packaging and on the product o~ product nameplate

for any appliance or lamp (and unit carton in the case of plumbing

fittings) to permit. the determination of whether the appliance or lamp

complies with the requirements of 225 CMR 9.00. The appropriate measure

of energy consumption or the model·number as it has been certified may

be used for this purpose and shall be deemed as providing sufficient

information to determine compliance.

Additionally, for medium-voltage dry-type transformers and residential

fur.naces and boilersl the label information to be shown shall be marked.

with the words "Meets MA efficiency standardsu , using the two-letter

identification for Massachusetts: MA.

Additionally, for. external power suppl~es, the label information to be

shown shall employ the labeling regime as that described in the

regulations of the State of California Energy Commission for appliance

standards in Section 1607(9)of the California Cod? Of Regulations,

Title 20, as in effect on January 1, 2006 (Cal. Code Regs. tit. '20 1 §

1607 (9) (2006)].

Additionally~ the words "2.5 gpm maxi', the actual tested flow rate, or

other conspicuous' marking approved by the Commissioner, .shall be marked

on each showerhead sold or offered for sale, ?ither by means of ·a

permanent marking on the fitting or on a label attached to the fitting

and also upon the unit carton in which the fitting is offered for

retail sale.

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
(2) The Commissioner or his/her designee may require .additional

information if necessary to permit determination of compliance.

(3) The manufacturer's name or brand name shall appear on each

appl:iance or lamp.

9.06:Enforcement

(1) Notwithstanding the provisions of 225 CMR 9.04, the Commissioner

shall have authority to challenge the efficiency test results provided

by the manufacturer and cause the applianc~ model or lamp to be

retested.

(2) The Commissioner may cause periodic inspections to be made of

manufacturers, distributors or retailers of the new appliances covered

by M.G.L. c. 25B, including appliances that have been or are to be

installed by contractors or builders at building sites, in order· to

determine compliance with 225 CMR 9.00.

(3) Except as expressly provided in the guidelines, any test ordered by

the Commissioner would involve one unit selected by the Commissioner or

his/her designee. (a) If the performance of the unit meets or exceeds

the standard set forth in 225 CMR 9.00, no further action is necessary/

and the Division of Energy Resources will pay the cost of testing;

(b) If the performance of the unit does not meet or exceed the standard

set forth in 2~5 CMR 9.00, the manufacturer must pay the. cost of

testing and/ if the certification for that model has been suspended,

take whatever steps are necessary to recertify the appliance at an

efficiency rating equal to or exceeding the applicable standard

according to the process outlined in the guidelines.

(4) The Commissioner shall cause investigations to be made of

complaints received concerning violations of M.G.L. c. 25B. all such

complaints shall identify the complainant by name and address and

should be in writing. The results of each investigation shall be

reported to the complainant and to the attorI1;ey general.

REGULATORY AUTHORITY

225 CMR 9.00: M.G.L. c.25B, §§ 3 - 10; St. 1986, c.

489; St.2005/ c.139.

The following text is effective 06/01/06

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
ATTACHMENT B

THE CONIMONWEALTH'S ENERGY PLAN

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Deval L. Patrick

Governor

Timothy P. Murray

Lieutenant Governor

Ian A. Bowles

Secretary, Executive Office ofEnergy

and Environmental Affairs

Philip Giudice

Commissioner

COMMONWEALTH OF MASSACHUSETTS

EXECUTNE OFFICE OF

ENERGY AND ENVIRONMENTAL AFFAIRS

DEPARTMENT OF ENERGY RESOITRCES

100 CAMBRIDGE ST., SUITE 1020

BOSTON, MA 02114

Internet: www.Mass.Gov/DOER

Email: Energy@State.MA.US

Commonwealth of Massachusetts

Department of Energy Resources

Massachusetts State Energy Plan

TELEPHONE

617-626-7300

FACSIMILE

617-727-0030

617-727-0093

Prepared in connection with a waiver petition submitted under 42 USC § 6297

to allow Massachusetts to implement a 90% Annual Fuel Utilization Efficiency standard

for residentialfurnaces

September 30, 2009

1

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
I. Introduction and Goals

Urgency is growing across the nation as the impacts of global wanning on our economy, health,

agriculture, and environment become certain. Greenhouse gas emissions associated with our

buildings, transportation, and energy generation are causing our climate to change.

Simultaneously, uncertain supplies and prices offuels threaten our national and economic

security, requiring more than ever that the U.S. achieve energy independence.

While the energy and climate challenges we face as a state and a nation appear daunting, we

have many tools and programs which, when fully deployed, will enable substantial progress.

Here in Massachusetts we are well positioned to mobilize solutions for these challenges and

unleash our fullest potential.

One solution with high impact is energy efficiency. Massachusetts' historically high cost of

energy and our innovative people have combined to establish us as a leader in energy efficiency,

the best cost-containment tool we have to reduce energy use and greenhouse gas emissions that

are causing global warming. Efficiency is a proven, reliable, and extremely valuable tool for

building a greener energy future. It is also a tool that we can quickly deploy to reinvest in our

homes and businesses and, in the longer term, put Massachusetts at the hub of a 21 st century

global clean energy economy.

Massachusetts has long been a leader with respect to energy efficiency. Since 1997, both the

electric and gas investor-owned utilities have been required to provide energy efficiency

programs to their customers. Due to those programs, today, approximately 8% ofthe

Commonwealth's electricity needs are met through efficiency. The Commonwealth's appliance

standards legislation, M.G.L.c. 25B, enacted in 1986 and expanded in 2005, sets stringent

efficiency standards for certain appliances and equipment, driving industry to develop more and

more efficient products that use less energy and create less greenhouse gas emissions. Building

codes set high standards for building energy performance. More recently, in 2008, the state

enacted several pieces oflegislation that, collectively, strengthen the foundation on which

Massachusetts' energy future is based. These laws, summarized in Appendix A, set goals for

statewide reductions in greenhouse gas ("GHG") emissions and energy use; require

establishment of a carbon cap and trade program to reduce carbon dioxide emissions from all

sources; make significant new commitments to electric and natural gas energy efficiency

programs, renewables, and other alternative energy sources; and commit the Commonwealth to

developing a strong clean energy sector and training residents for high quality green jobs.

The Global Warming Solutions Act ("GWSA"), 2008 Mass. Acts Ch. 298, sets the stage for a

dramatic reduction in greenhouse gas emissions in the Commonwealth. GHG emission

reduction goals set forth in the GWSA include:

• By 2050, adoption of a GHG statewide emissions limit that is at least 80% below 1990

GHG emission levels.

• Adoption ofinterim GHG emissions limits for 2020, 2030, and 2040. 2020 limits must

be between 10 and 25% below 1990 GHG levels.

2

EERE-2009-BT-PET-0024 DOC- ID 1.2.001
Energy use goals set forth in the Green Communities Act ("GCA"), 2008 Mass. Acts Ch. 169,

include:

• Reduce fossil fuel use in buildings by 10% from 2007 levels through the increased

efficiency of both equipment (e.g. appliances) and the building envelope;

• Meet at least 250/0 ofthe Commonwealth's electric load, including both capacity and

energy, with demand side resources including: energy efficiency, load management,

demand response and generation that is located behind a customer's meter including

combined heat and power;

• Meet at least 20% ofthe Commonwealth's electric load through new, renewable, and

alternative energy generation.

This Energy Plan describes a set ofprograms, policies, and strategies designed to meet the

Commonwealth's energy and environmental goals. This Plan, set forth by the Massachusetts

Department of Energy Resources ("'DOER") within the Executive Office ofEnergy &

Environmental Affairs, has been developed specifically for the accompanying waiver

application, submitted pursuant to 42 USC § 6297, to allow Massachusetts to implement a 90%

Annual Fuel Utilization Efficiency standard for residential furnaces. This Plan is meant to be

flexible, iterative, and responsive to changing economic and energy-related conditions and

technology. To that end, it should be read as a roadmap for today, with the understanding that it

may change, as circumstances change, to better achieve its goals. In addition, there is no "magic

bullet" in the Plan. Each ofthe programs, policies, and strategies described is critical in telTIlS of

Massachusetts' ability to reach its greenhouse gas emission and energy use reduction goals.

II. Programs, Policies, and Strategies to Achieve Energy Goals

This section describes various efficiency programs, policies, and strategies underway in

Massachusetts to reduce energy use and GHG emissions.

Energy Efficiency

Federal and State Appliance/Product Standards

Appliance and product standards set the bar for minimum energy efficiency of products, and are

one ofthe most effective tools for reducing energy use and GHG emissions. Most such

standards are set by the federal government, and states are only allowed to set standards on those

products which are not federally regulated, or for which they have received from the U.S.

Department ofEnergy ("DOE") a waiver offederal preemption.

The Commonwealth's original appliance standards legislation was enacted in 1986. In

November, 2005, these standards were expanded to cover additional appliances and equipment,

including a standard for gas furnaces that is more stringent than the federal standard.

Massachusetts may not implement this standard until it either receives a waiver offederal

preemption from DOE, or DOE issues a new rule implementing a like standard. In addition,

Massachusetts supports the development and use ofmore efficient appliances and products

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through DOER's involvement in energy efficiency programs offered by Massachusetts utilities,

which include financial incentives for people to buy and install EnergyStar products and

appliances, as well as other higWy efficient products/appliances.

Utility-Administered Energy Efficiency Programs

Under the 1997 electricity restructuring law, 1997 Mass. Acts Ch. 164, a "systems benefit

charge" was added to electricity bills, yielding about $125 million annually in recent years.

These funds are used for industrial, commercial, residential, and low-income efficiency

programs. There is no such charge on natural gas bills, but gas utilities also have consumeroriented efficiency programs (historically funded at lower levels in relation to total revenues than

for electricity). In addition, because it is recognized that much ofthe efficiency potential for

residences is in space,heating, the electric utilities have provided some funding for homes that

use fuel oil for heating. For all three ofthe energy sources, these funds pay for a range of energy

efficiency services, including: energy audits to identify energy efficiency opportunities,

contractors to install energy efficiency measures, financial incentives to install efficiency

measures and appliances, and infonnation about energy use and carbon footprint. Our analyses

indicate that the cumulative impact ofthese investments has reduced the Commonwealth's

annual electricity use by approximately 8%.

All Cost-Effective Energy Efficiency (Expanded Efficiency Programs)

Historically, the utility-run efficiency programs have been limited by the amount offunding

provided by the systems benefit charge for electric utilities and rate case settlements for gas

utilities. The GCA greatly expands the opportunities for savings from utility-run efficiency

programs by: (a) providing the utilities with additional funds, i.e., at least 80% offunds

generated through the Regional Greenhouse Gas Initiative ("RGGltt

) GHG "cap and trade"

program auctions are dedicated to efficiency programs (see below for a more detailed description

of RGGI); (b) mandating that utilities invest in all efficiency and demand-side resources that are

cost-effective, which is defined as costing less per unit of energy saved than supplying more

electricity or natural gas (for example, energy efficiency programs currently cost about 3-4 cents

per kilowatt-hour compared with electricity supply costing 8-10 cents per kilowatt-hour). This

mandate is expected to result in at least a tripling of utility driven efficiency over the next few

years. In addition, the GCA provides for greater oversight of utility energy efficiency plans and

programs. In the past, utilities have developed their plans in consultation with DOER and have

been required to obtain a detennination from the Massachusetts Department ofPublic Utilities

("MDPU") that the programs were cost-effective. The GCA creates an Energy Efficiency

Advisory Council, which is chaired by DOER and includes a variety ofstakeholders. It is

required to oversee and approve each utility's energy efficiency plan to ensure that the GCA

mandate to provide all cost-effective demand side resources is met.

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Low-Income Weatherization Assistance Program

The Massachusetts Weatherization Assistance Program helps low-income households reduce

their heating bills by using federal and state funding to provide full-scale home energy

conservation services. The program is operated by Community Action Agencies throughout the

state, coordinated by the Low Income Energy Affordability Network and the state's Department

ofHousing and Community Development. To the greatest extent possible, work is coordinated

with any utility-funded energy efficiency programs that may be available in an area. Local

weatherization contractors are hired to complete the work at no cost to the occupants. Typical

work completed includes air sealing, attic and/or sidewall insulation, weather-stripping, and

minor repairs associated with the weatherization work. (Heating system work, if needed, is

typically referred to a separate program funded by the federal Low Income Home Energy

Assistance Program (http://www.acf.hhs.gov/programs/ocs/liheap/.) Gas furnaces installed

under this program have an annual fuel utilization efficiency rating of at least 90% except where

local conditions do not allow for the required venting.) All work receives a thorough quality

control inspection by an energy auditor. Funds from the American Recovery and Reinvestment

Act of2009, (Pub. L. 111-5,) ("ARRA",) will help this critical program expand in 2009 and

2010.

Incentives for Combined Heat and Power

Combined heat and power (

ItCHP") facilities produce both electricity and heating/cooling. When

sized properly and located at appropriate host sites, CHP systems are highly efficient and provide

a substantial opportunity for GHG reductions as compared to conventional heating and power

supply. Two significant new incentives are available to customers seeking to install CHP. First,

pursuant to the GCA, CHP is now eligible to receive rebates from the electric utility energy

efficiency programs. The pending utility plans now include [mandai support for: (a) technical

assistance to ensure cost-effectiveness; and (b) rebates for capital costs ofCHP installations.

Second, the GCA directs the creation of an Alternative Energy Portfolio Standard ("APS"),

which requires retail electricity suppliers (both regulated distribution utilities and competitive

suppliers) to obtain a percentage oftheir electricity from sources that qualify as Alternative

Energy Generation Units (of which CHP is currently the most commercially viable resource).

The APS begins with an obligation of 1% of generation in 2009 and increases annually up to 5%

in 2020. The number of certificates created by a facility increases as a host customer maximizes

use ofits thermal output, resulting in a maximum incentive for sites most appropriately using this

technology. Both ofthese new incentives are expected to foster more aggressive adoption of

CHP at locations where it has the best promise ofmitigating GHG emissions.

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Deconpling

The Decoupling Order, MDPU Order 07-50A, issued by the Massachusetts Department ofPublic

Utilities on July 16, 2008, will help ensure that utilities improve their efficiency programs, as

envisioned by the GCA. The old system ofrate structures meant that utilities would lose money

when their customers cut their energy use through efficiency measures. By breaking the link

between utility revenues and energy sales, decoupling removes disincentives for utilities to

provide expanded, quality energy efficiency programs. Pursuant to the Order, over the next few

years utilities will transition to a new set ofrate structures that eliminate the economic

disincentives to their investment in energy efficiency and distributed generation.

Energy Efficiency in Building Codes, Training, and Commissioning

Section 55 ofthe GCA requires the state to adopt the latest revision ofthe International Energy

Conservation Code ("IECC") as part ofthe state building code, within one year of its enactment.

Prior to this legislation there had been long delays in updating the building code to incorporate

current efficiency standards. As a result ofthe GCA, the state's Board ofBuilding Regulation

and Standards ("BBRS") has already adopted the 2006 IECC and the 2007 amendments to it; and

by law the BBRS must adopt the 2009 IECC by the end ofthis year. The BBRS, in conjunction

with DOER, is also empowered to adopt more stringent standards that are deemed warranted.

Section 55 ofthe GCA also requires the BBRS and DOER to develop regulations for training

and certification oflocal building inspectors regarding the energy provisions ofthe building

code, and to ensure that all new construction and renovation passes inspection by inspectors who

have had.such training. Section 55 ofthe GCA also instructs DOER to issue regulations

requiring that buildings larger than 10,000 square feet undergo "commissioning" (which is a

process to ensure that building systems perform in accordance with their design and the owner's

operational needs) or acceptance testing.

Governor's Clean Energy Challenge

In November, 2008, Massachusetts Governor Deval Patrick issued a challenge to Massachusetts

operating companies, service providers, and non-profits to reduce energy consumption and save

money. The Governor's Clean Energy Challenge supports companies in reducing their energy

use and emissions by at least 10% over the next three years. The Challenge is an initiative

developed by the New England Clean Energy Council and the Massachusetts High Technology

Council, in partnership with energy distribution utilities NSTAR, National Grid, Western Mass

Electric, and Unitil. Challenge participants will be supported in their efforts by the utilities and

by mentor companies like Millipore, Pfizer, Genzyme, Staples, and Raytheon. These mentor

companies were an important part ofthe agenda at the Challenge's kick-off conference and

exposition on May 12, 2009.

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Business Development and Workforce Training

Clean Energy Center

The Green Jobs Act of2008, 2008 Mass. Acts Ch. 307, created the Massachusetts Clean Energy

Center to accelerate job growth and economic development in the state's clean energy industry.

This new quasi-public agency serves as a clearinghouse and support center for the clean energy

sector, making direct investments in new and existing companies, providing assistance to enable

companies to access capital and other vital resources for growth, and promoting training

programs to build a strong clean energy workforce that capitalizes on the job opportunities

created by a vital new industry. Recently the Center awarded Springfield Technical Community

College (STCC) a three-year $1.87 million contract to coordinate energy efficiency workforce

training programs under the Center's Energy Efficiency and Building Science Skills Initiative.

STCC will be a statewide clearinghouse for energy efficiency training activities, materials and

services, while coordinating job training at regional centers based at STCC as well as Roxbury,

Berkshire, Bristol, North Shore, Greenfield, and Quinsigamond Community Colleges.

Large-Scale Private Development

Mass. Environmental Policy Act GHG Policy

The Massachusetts Environmental Policy Act ("MEPA"), M.G.L. c. 30, Sections 61-621, is a

planning statute that requires new development projects proposed for construction in

Massachusetts to undergo review to determine whether their environmental impacts can be

mitigated to the greatest extent possible. The MEPA GHG Policy and Protocol requires that

certain projects undergoing MEPA review quantify their GHG emissions and identify measures

to avoid, minimize, or mitigate such emissions. In addition to quantifying project-related

emissions, the Policy also requires proponents to quantify the impact of proposed mitigation in

terms of emissions and energy savings. This Policy is part of a larger effort to focus attention on

the causes of climate change and harness creative thought and technology to implement longterm solutions. This Policy is not intended to create a numerical GHG emission limit or a

numerical emissions reduction target. Rather, in keeping with MEPA's overall purpose to

evaluate alternatives that avoid, minimize and mitigate environmental impacts, the Policy is

intended to ensure that project proponents and reviewers have carefully considered the GHG

impact oftheir projects and taken all feasible means to reduce those impacts. All projects that

require an Environmental Impact Report are subject to review under the Policy unless the

project's emissions are anticipated to be minimal.

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Government Operations

Leading by Example (State Government Operations)

The Leading by Example ("LBE") Program, established in April 2007 by Governor Deval

Patrick's Executive Order No. 484 ("EO 484"), works to reduce environmental impacts at all

executive branch agencies, as well as at the 29 public institutions of higher education and several

authorities. The program oversees efforts to reduce energy and fuel use at the state's 65 million

square feet of buildings and from thousands oflight and heavy duty vehicles. The program also

seeks to increase recycling, reduce water consumption, promote environmentally preferable

purchasing, facilitate the construction of green state buildings, and reduce carbon emissions

across state government. EO 484 sets the following targets for state government: (a) 25%

reduction in GHG emissions by 2012; 40% by 2020; and 80% by 2050; (b) 20% reduction in

energy use by 2012, and 35% by 2020; (c) increase in consumption ofrenewable electricity to

15% oftotal electric use by 2012, and 30% by 2020; and (d) 10% reduction in water

consumption by 2012, and 15% by 2020. The LBE Program is responsible for tracking energy

use ~d GHG emissions for state government, and provides pilot funding, technical assistance

and training for dozens of agencies and hundreds ofstaff each year.

Green Communities Program

Created by the GCA in 2008, the Green Communities Program (the "Program") is intended to

help municipalities become more sustainable, control rising energy costs, and incubate the clean

energy technologies and practices that will put our cities and towns, and the Commonwealth, at

the center ofthe 21st century clean energy economy. Envisioned as a way to encourage

municipalities to make greener energy decisions, the Program is mandated to offer grant and loan

opportunities to municipalities in order to be designated as "green communities." Types of

assistance offered by the Program include helping communities qualify for state funding by

adopting local by-laws and regulations that facilitate the siting and permitting ofrenewable

energy facilities, benchmarking municipal energy use and reducing energy consumption,

purchasing fuel-efficient vehicles for municipal fleets, and taking steps to reduce lifecycle

energy costs for new commercial, industrial and residential buildings. The GCA allows funding

of$10 million per year for the program from the proceeds ofRGGI's allowance auctions. The

Program also serves all Massachusetts cities and towns as a one-stop shop for energy efficiency

and renewable energy opportunities, helping them understand all state programs at their disposal

and providing streamlined delivery ofthose programs. To achieve the goal ofserving all 351

cities and towns in Massachusetts, the Green Communities Division ofDOER offers a number of

programs and services, including the Energy Audit Program, the Green Communities Grant

Program, Energy Management Services technical assistance, stimulus grant programs and

support, an Energy Information Reporting System, an information website, and four Regional

Coordinators to provide direct support to cities and towns.

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Cap-and-Trade (electricity generation)

Regional Greenhouse Gas Initiative ("RGGI")

ROGI, www.rggi.org, is an agreement among 10 northeast states, from Maine through Maryland,

to jointly limit C02 emissions from electricity power plants. Under a Memorandum of

Understanding ("MOU") signed by most ofthe states in December 2005, and later amended as

other states joined, there is an overall limit on emissions from the northeast. The limit ("cap")

went into effect in January 2009, and remains fixed through 2014. It then drops 2.5% a year

through 2018, so that in 2018 emissions are required to be 10% below the 2009 level. Each state

has an individual limit that was negotiated among the states. Each power plant of 25MW

capacity or greater must purchase an "allowance" (or pennit) for each ton ofCO2 emissions.

Power plants able to reduce emissions below their respective allowance totals may sell surplus

allowances to utilities that are unable to meet emission reduction targets. In addition, power

plants may also meet a portion oftheir allowance requirements by using "offsets," which are

methods ofreducing GHG emissions not connected to electricity generation, such as planting

trees.

The MOD requires each state to use at least 25% ofits allowances for a "consumer benefit or

strategic energy purpose;" the remainder can be used as the state wishes, including providing

them to electricity generators at no cost. In practice, the states have chosen to sell by auction the

vast majority ofthe allowances, and the funds are being used predominantly to pay for energy

efficiency and renewable energy programs. Under the terms of Section 7 ofthe GCA,

Massachusetts is auctioning almost 100% ofthe allowances, and using at least 80% ofthe money

generated by the auction to fund utility-run energy efficiency programs. Thus, in addition to

harnessing the power ofthe market to reduce GHG emissions associated with electricity

generation, RGGI is designed to further reduce GHG emissions by investing money in energy

efficiency. As ofJuly 2009, Massachusetts has held four auctions, which have resulted in

approximately $55 million being invested in energy efficiency. RGGI auction proceeds also

fund the Green Communities Program (described above), which provides incentives and

assistance for municipalities to adopt energy efficiency and renewable energy measures.

Renewable Energy

Renewable Portfolio Standard

Created by the Electricity Restructuring Act of 1997 (1997 Mass. Acts ch. 164)

the Massachusetts Renewable Energy Portfolio Standard (RPS) requires retail electricity

suppliers (both regulated distribution utilities and competitive suppliers) to obtain for their retail

customers a percentage of electricity from sources that qualify as New Renewable Generation

Units (i.e., post-1998), with compliance by means ofpurchasing Renewable Energy Credits. The

RPS began with an obligation of 1 percent in 2003and increased by one half percent annually

since then, reaching 4 percent in 2009. Pursuant to the GCA, the RPS annual increase will

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double to 1 percent annually after 2009. Consequently, by 2020, 15% ofthe supply for nonexempt retail sales, or about 7.5 million megawatt-hours (MWh) at current load levels, is to be

from new, renewable resources. This commitment to renewable energy will strengthen the

renewable energy infrastructure, thus paving the way for more widespread use of green energy

sources.

Massachusetts Renewable Energy Trust

The Massachusetts Renewable Energy Trust (MRET) was created as a component of electric

utility industry restructuring to promote the development ofrenewable energy in the

Commonwealth. As such, MRET seeks to maximize environmental and economic benefits for

the Commonwealth's citizens by pioneering and promoting clean energy technologies and

fostering the emergence ofsustainable markets for electricity generated from renewable sources.

The Trust provides financial assistance for development ofsolar, wind, biomass, and hydro

projects. The goal is to generate the maximum economic and environmental benefits from clean

energy resources to citizens ofthe Commonwealth. The Trust also provides critical support to

help the nascent renewable energy industry thrive and create new jobs in Massachusetts.

Funding for MRET derives from a small charge on customers' electricity bills that results in

$25M per year.

Sustainable Forest Bioenergy Initiative

The Department ofEnergy Resources and the Department ofConservation and Recreation (our

forestry agency) have identified biomass as a renewable energy resource with significant

potential in Massachusetts. This initiative facilitates the development of biomass energy projects

while maintaining the highest standards for sustainable forestry. The Initiative has established

essential technical infonnation on the biomass resource, sustainable harvesting silviculture

practices, and macroeconomic benefits that can form the basis ofsound biomass policy and

market development. The initiative will support market development of biomass harvesting

supply infrastructure, biomass CHP projects, and wood pellet production-and thennal boiler

technologies for high efficiency, low emissions heating and cooling applications.

Governor's Wind GoaJ: 2000 by 2020

On January 13, 2009, Governor Patrick announced a goal of2,000 MW ofwind energy installed

in Massachusetts by 2020. This would provide enough power for 800,000 homes, meet 10% of

the state's current electricity load, and reduce GHG emissions by 3.1 million tons, or roughly

12% of emissions from power plants today. Consultants for Mass. DOER estimate that there is

approximately 1,500 MW oftechnical potential for onshore wind and over 6,000 MW offshore

in Massachusetts. Included within this is approximately 947 MW ofpotential commercial scale

wind energy on state-owned lands. It will take a careful balancing of public interests to decide

how much ofthe renewable energy potential ofthese sites on state land should be pursued.

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Commonwealth Wind

The Massachusetts Renewable Energy Trust's (MRET) Commonwealth Wind initiative will

provide an overarching framework to expand investments for wind energy installations in

Massachusetts. The three types of projects listed below could qualify for technical and/or

financial assistance from MRET:

1. Commercial scale projects that primarily serve wholesale markets.

2. Community-scale projects in the 100 kW to approximately 2 MW range, where the project

sponsor and primary beneficiary is a private company or organization, a municipality, or a

government agency.

3. Small-scale projects under 100 kW serving residential, small commercial, or institutional

buildings.-

Offshore Wind and the Oceans Act

Offshore wind is the most plentiful source ofrenewable energy in Massachusetts, and one ofthe

most abundant sources in the United States. The National Renewable Energy Laboratory

(NREL) calculated approximately 900,000 MW of potential in offshore wind, and the US

Department ofEnergy's recent "20% by 2030" report determined that 54,000 MW of offshore

wind could be developed in the US by 2030 with current technology, enough to meet 20 percent

ofUS electricity demand. Consultants for DOER estimate that there is over 6,000 MW of

technical potential in offshore wind in the state. Several other developers aside from EMI (Cape

Wind) have proposed wind projects offthe coast ofMassachusetts, including Jay

CashmanlPatriot Renewables (300 MW), The Town of Hull (12 MW), Blue H (floating platform

design~ 420 MW), and Bluewater. The Commonwealth expects a significant increase in proposed

projects once the federal and state regulatory regimes have been finalized. The Department of

Interior's Minerals Management Service (MMS) recently released its final rule regarding

renewable energy leasing on the outer continental shelf(three miles from shore and beyond),

while Massachusetts plans to complete the nation's first state ocean management plan by

December of 2009. Governor Patrick signed the Oceans Act in 2008, 2008 Mass. Acts Ch. 114,

which mandates the creation ofthis comprehensive plan, which will identify locations in state

waters other than the Cape Cod Ocean Sanctuary, offthe coast ofthe national seashore, for

potential development of "appropriate-scale renewable energy facilities."

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