Jun 06 2008 16:11 JUN-06-2008 13:18 HP LASERJET FAX 

### OOJ-ATR

; 202 353 8856 

### DEPARTMENT OF

## WSTICE Antitrust 

### Divisioo 

## !

,



### Main Ju&1i.c.e**BuUdi~g** 

### 950 Pennsylvania J\(venue, N.W. Washington, D.C. ?oS30-0001 (202) 514-i4011 (2P2) 616--2645 

### (f)**antitrUst@iustice.~doj** .gov http://www.usdoj.g?v



### June 6, 

## 2908

Warren Belmar •.

Deputy General Counsel for Energy Policy Department ofEnergy

.. Washington, D.C. 20585

Dear 

### Deputy General Counsel Belmar:
I 

### am responding to your April:>, 20081etter seeking the views

### ~fthe Attorney General 

### about the potential impact on competition 

### of two proposed energy colJlservation standards for packaged terminal air conditioners ("PTACs") and packaged terminal heat pumps (UPTHPs'). Your request 

### was submitted pursuant to Section 

### 325(0)(2)(B)(i)(V) of the Energy Policy and Conservation 

### Act, 

## as amended, (UEPCA"). 

### 42 U.S.C. 

### § 6295(o)(B)(i)(V), which requires the 

### Attorney General to make a determination 

### ofthe impact ofany**les~ng** 

### ofcompetition that 

### is likely to result from the 

### imposition 

### ()fproposed 

### energy conservation**~tandards.** The 

### Attorney General's responsibility for responding 

### to requests from other departJlnents about the effect of a program on competition has been delegated to the 

### Assistant Attorney! General 

### for the 

### AntitNst Division in 28 CFR § ().40(g). i p. 1 P.12!2



### In conducting its analysis the Antitrust 

### Division examines**wh~ther** 

### a proposed standard may lessen competition, for eX'ample.)Jy placing certain**manufacturd,r~** ofa product at an unjustified competitive disadvantage compared to othermanufaeeurets. or by inducing avoidable inefficiencies in 

### production or distribution ofparticular products. ln l addition to harming 

### consumers dlrectly through higher 

### prices, these effects Gould

### under~t the ultimate goals of the**l~gislatjon.** J 

### We have reviewed the proposed standards and the**supplemen~** 

### infonnaiion submitted to the Attorney General, including the 

### transcript ofthe May 

### 1 

### publicj m!=(:ting on 

### the proposed standards. We have additionally conducted interviews with 

### members of

### the industry. 

### , "''hat we have heard raises legitimate issues about whether**~** proposed standards may 

### adversely affect comperition. The proposed standard for 

### non-standatrl PT ACs and PTHPs may create a 

### risk that 

### is too strict for 

### the manufacturers to satisfy, 

### given. the state oftechnology.

i [Jun 06 2008 16:11 JUN-06-2008 13:19 HP LASER JET FAX 

### DOl-ATR

'.

" .r. 202 353 6856

Customers that own older buildings with non-standard wall openings 

### fot air conditioning and heating 

### Wlits could face the 

### choice ofincuning capital expenditures 

### to 

## aJlter the**~ize** of the wall openings so that they could use standard sized units. or ofnot being**abl~** to replace their nonstandardslzed units 

### with units that are appropriately Sized and 

### meet the i J)t'OPosed energy consetVatlon standards. Similarly, we haveheardthat 

### the proposed**s~dards** for standard sized PTHPs 

### may be too strict for manufacturers to satisfy. 

### Since there arc 

## fe.w manufactureI'$ of standard. PTHPs and ofnonstandard PTACs and PTHPs, ifsome

### manu~acturers cannot 

### meet the proposed standards, consumers 

### will have fewer competiti'\7e**altcmati~~** and may pay higher prices

. ' p.2 P.03

The Department ofJustice is not in a position to judge Whether manufacturers will be able I to meet the prop()scd standards- we urge, however, 

### the Department of: .Encrgy to take into account these possible impacts on competition in determining its 

### final**~ergy** 

### efficienc), standard for 

### PTACs and PTHPs.

.



### - . 

# . Sincerely, j

# 7)/~**~ ~.** **6Ofr~** Deborah 

## A. Garza Acting**~istant** 

### Attorney General



## .**~.**

TOTAL. P.03