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In the Upcoming Rulemaking on Amendments to the Minimum Efficiency Standards for NonWeatherized Residential Gas Furnaces, DOE Should Employ Separate Product Classes for 

Condensing and Noncondensing Furnaces 

October 22, 2014

The Department of Energy should, in pursuing the rulemaking on amended residential 

furnace standards required by the court’s order in American Public Gas Association v. DOE (D.C. 

Circuit Case No. 11-1485), establish separate product classes for condensing and noncondensing non-weatherized residential gas furnaces. 

This paper describes the relevant legal authority that governs DOE’s decision on this 

product class issue, the technical characteristics of condensing and non-condensing furnaces 

indicating that separate product classes are appropriate, and the applicable DOE precedents 

that should guide DOE in its consideration of separate product classes in this case. 

I. Legal Basis for Rulemaking

Under the April 24, 2014 order of the United States Court of Appeals for the District of 

Columbia Circuit approving a settlement among the parties including DOE, the previously 

promulgated amendments to the “energy conservation standards for non-weatherized gas 

furnaces, including but not limited to the Department of Energy’s determination that such 

furnaces constitute a single class of products for purposes of 42 U.S.C. 6295(q)(1)(B),” were 

vacated and remanded to DOE for notice and comment rulemaking. Thus, DOE agreed, and the 

court ordered, that DOE reconsider the question of whether condensing and noncondensing 

non-weatherized gas furnaces should be treated as separate product classes in future 

rulemaking covering these products.

In setting standards, EPCA requires DOE to structure product classes to ensure the 

continued availability of a product’s unique performance characteristics in light of the utility 

those characteristics provide to consumers. Specifically, DOE may not prescribe a standard if 

the standard “is likely to result in the unavailability in the United States in any covered product 

type (or class) of performance characteristics (including reliability), features, sizes, capacities, 

and volumes that are substantially the same” as those already available.1 Moreover, EPCA’s 

“special rule for certain types or classes of products” requires the Secretary to establish 

separate standards for any group of covered products if the products “have a capacity or other 

performance-related feature which other products within such type (or class) do not have and 

such feature justifies a higher or lower standard from that which applies (or will apply) to other 

products within such type (or class).”

2

In determining “whether a performance-related feature 

 

1 42 U.S.C. § 6295(o)(4).

2 42 U.S.C. § 6295(q)(1)(B).
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justifies the establishment of a higher or lower standard, the Secretary shall consider such 

factors as the utility to the consumer of such a feature . . . .”3 

In light of the unique performance-related characteristics and utility that noncondensing non-weatherized residential gas furnaces provide to consumers, these provisions of 

EPCA require DOE to establish separate product classes for condensing and non-condensing 

non-weatherized residential gas furnaces.

II. The Unique Performance-Related Characteristics and Consumer Utility of NonCondensing Furnaces

Condensing and non-condensing non-weatherized gas furnaces are significantly 

different in terms of the venting mechanisms they use, how they produce and dispose of 

condensate and the building environments in which they can be installed.

4

 These differences 

create important differences in consumer utility, and must be appropriately considered in 

DOE’s standards development process. 

A. Distinct Venting Characteristics

 

Non-condensing (also known as Category I) and condensing (also known as Category IV) 

gas furnaces use separate and technically distinct types of venting systems. Non-condensing 

furnaces employ net negative vent pressures and require masonry chimneys or metal vents that 

are installed vertically. Condensing furnaces employ positive net pressures, and use plastic, 

pressurized, gas-tight venting that is typically installed horizontally. Condensing furnaces 

require blowers to exhaust combustion products, while non-condensing furnaces rely on an 

induced draft. Condensing furnaces require condensate drains to operate properly; noncondensing furnaces do not.

Neither type of furnace can be installed with venting designed for the other type of 

furnace, according to design certification standards for safety covering gas furnaces, gas 

installation codes, and safe installation practices. For example, installation of a Category IV 

condensing gas furnace that is certified for positive vent static pressure and vent temperatures 

 

3 42 U.S.C. § 6295(q)(1).

4 The distinguishing technical characteristics of a condensing gas furnace include: (1) exhaust gas temperatures

generally ranging from 120 to 130°F; (2) the use of a fan for venting, because the exhaust gas is not hot enough to 

travel up a vertical chimney without propulsion; (3) PVC vent piping because PVC resists corrosion from moisture in 

the acidic exhaust gas, unlike metal piping, and exhaust gas temperatures remain well below the melting point of 

PVC pipe; and (4) a dedicated condensate drain for moisture produced during gas combustion. The distinguishing 

technical characteristics of a non-condensing gas furnace include: (1) exhaust gas temperatures of 275°F or above; 

(2) atmospheric venting – i.e., venting without propulsion via fan – because the temperature of the exhaust gas 

causes the gas to rise and exit a vertical chimney; (3) no condensate drain, because the moisture produced during 

gas combustion remains in a gaseous state (above 212°F, the boiling point of water) and vents with the exhaust gas

through the chimney. See generally “Fundamentals of Venting and Ventilation,” American Standard Inc., Pub. No. 

34-4010-02 (1993), available at http://hvac.amickracing.com/Venting/Fundamentals%20of%20Venting%2034-

4010-02.pdf.
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that produce condensate from combustion cannot be vented into an “atmospheric” or 

buoyancy-driven venting system designed for a non-condensing appliance under the National 

Fuel Gas Code.

5 Doing so would also violate the furnace manufacturer’s installation instructions 

and terms of sale, and applicable building codes. Such installations would pose a threat to the 

safety of building occupants by increasing the risks of venting system failures due to corrosion 

and of carbon monoxide poisoning due to incomplete venting of combustion products.

Non-condensing furnaces can also be vented through common vents with

atmospherically vented gas water heaters, unlike condensing furnaces which require dedicated 

venting. Common venting non-condensing gas furnaces and atmospherically vented water 

heaters together is standard practice and requires proper sizing of the venting system to serve 

both appliances. In the case of a furnace replacement, a change from a non-condensing to a 

condensing furnace will require a new venting system for the furnace and may require 

significant modifications to the venting system of the existing water heater to maintain safe and 

proper venting of its flue gasses. The venting system requirements underpinning such 

modifications are well established in national installation codes, and if a consumer neglects to 

implement the needed venting system changes for cost or other reasons, he or she may be 

creating a safety hazard.

As discussed in section III.A below, DOE has previously made product class distinctions 

based on type of venting. 

B. Building Constraints on Installation 

Because a venting system is part of a building’s infrastructure, it represents an 

installation constraint associated with the building environment for furnaces that need to be 

replaced in existing structures. Replacing a non-condensing furnace with a condensing furnace 

will require a new venting system. In many installation situations, switching to a condensing 

furnace may require abandonment of the existing venting system, structural changes to 

accommodate a new venting system path, and relocation of the furnace to meet the code and 

installation requirements of the new condensing furnace system. Because of these installation 

hurdles, replacing a non-condensing furnace with another non-condensing furnace has 

significant utility to consumers who, in replacing a furnace, do not anticipate needing to 

significantly alter their home venting system to maintain their safety. 

In some cases, such as in certain multi-family dwellings, these installation hurdles may 

be significant enough to preclude installation of a condensing furnace. For consumers in such a 

situation, a non-condensing furnace may be the only feasible furnace alternative that relies 

upon natural gas. For these consumers, failure to create a separate product class for noncondensing non-weatherized gas furnaces would compel fuel-switching.6

 

5 National Fuel Gas Code, ANSI Z223.1/NFPA 54.

6 The record in the vacated Direct Final Rule proceeding contained voluminous record evidence on the extent of 

the fuel switching that would occur due to the up-front costs associated with replacing a non-condensing furnace 
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In many other circumstances, the building-related hurdles to installing a condensing 

furnace could be overcome as a technical matter but only with very significant installation 

costs. In these situations, building constraints make use of a condensing furnace an 

economically impractical option.

As discussed in section III.B below, DOE has previously made product class distinctions 

for products designed to meet building-related constraints.

C. Distinct Product Utility and Performance-Related Characteristics for Condensing 

and Non-Condensing Furnaces Require Separate Product Classes

Given that non-condensing furnaces provide unique utility and performance-related 

characteristics in terms of venting, condensate management and installation, DOE should 

establish separate product classes for condensing and non-condensing furnaces in its 

rulemaking action pursuant to the court’s order. Failure to create a regulatory framework that 

permits the continued availability of non-condensing furnaces to consumers in building 

circumstances that require the particular utility of these furnaces would contravene the 

purposes of EPCA.

III. Relevant Precedents for Separate Product Classes 

A large body of DOE precedent demonstrates that DOE has frequently considered 

venting characteristics and installation characteristics related to the building environment as 

bases for establishing separate product classes under EPCA. Establishment of separate product 

classes for condensing and non-condensing furnaces would be consistent with all of these 

precedents.

A. Precedents for Using Venting Characteristics as a Basis for Product Class 

Distinctions

DOE has previously created distinct product classes based on relevant venting 

characteristics, as is urged here.

7

 

with a condensing furnace. Energy Conservation Program: Energy Conservation Standards for Residential Furnaces 

and Residential Central Air Conditioners and Heat Pumps, Direct Final Rule, 76 FR 37524 (June 27, 2011)(rule 

vacated in relevant part). This fuel switching scenario was confirmed by a recent nationwide survey conducted by 

GTI (available at http://www.apga.org/i4a/pages/index.cfm?pageid=3881)

7

In 2011, DOE declined to establish separate non-condensing and condensing classes for non-weatherized gas 

furnaces on this basis because the “utility derived by consumers from furnaces is in the form of the space heating 

function that the furnace performs,” and because the two types of gas furnaces provide “virtually the same utility 

with respect to that primary function.” Energy Conservation Standards for Residential Furnaces and Residential 

Central Air Conditioners and Heat Pumps, Notice of Effective Date and Compliance Dates for Direct Final Rule, 76 FR 

67037, 67041 (Oct 31, 2011) (rule vacated in relevant part). That rationale does not square with the precedents

listed here, all of which involve product class distinctions based on venting as a non-primary function
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1. Residential Electric Clothes Dryers. DOE’s standards for electric clothes dryers 

manufactured on or after January 1, 2015 distinguish between vented and ventless dryers, 

and include four vented dryer product classes and two ventless dryer product classes.

8

 For 

example, DOE has created product classes for “Vented Electric, Compact (240V) (less than 

4.4 ft3 capacity)” and “Ventless Electric, Compact (240V) (less than 4.4 ft3 capacity)”; the 

only difference between these two product classes is whether the product is vented or 

ventless. In finalizing these product classes, DOE expressly based its decision to create a 

product class designation on the utility that the relevant venting mechanism provides to 

consumers:

DOE considered four product classes for vented clothes dryers and two product 

classes for ventless clothes dryers, ventless electric compact (240 V) and 

combination washer/dryers, recognizing the unique utility that ventless clothes 

dryers offer to consumers.9

DOE further explained that the new ventless designation “reflects the actual consumer 

utility (that is, no external vent required).”10

2. Residential Furnace Fans. DOE recently established the following product classes for 

furnace fans: (i) Non-weatherized, Non-condensing Gas Furnace Fan (NWG-NC); (ii) Nonweatherized, Condensing Gas Furnace Fan (NWG-C); (iii) Mobile Home Non-weatherized, 

Non-condensing Gas Furnace Fan (MH-NWG-NC); and (iv) Mobile Home Non-weatherized, 

Condensing Gas Furnace Fan (MH-NWG-C).

11

 Thus, DOE created separate non-condensing 

and condensing classes – precisely the same product class distinction sought here – for nonweatherized gas furnace fans and mobile home non-weatherized gas furnace fans. In so 

doing, DOE distinguished between non-condensing and condensing furnaces as an 

appropriate basis for creating separate product classes under EPCA.

3. Commercial Packaged Boilers. DOE’s standards for steam commercial packaged boilers

include product subcategories for “Gas-fired—all, except natural draft” and “Gas-fired—

natural draft.”12 This differentiation based on venting system is directly analogous to the 

“condensing” and “non-condensing” approach to categorizing furnaces – natural draft 

venting corresponds with venting of non-condensing furnaces, and positive vent pressure 

venting corresponds with condensing furnaces. For steam commercial packaged boilers, 

this distinction was based on the product classes defined in ASHRAE Standard 90.1-2007. 

13

 

8 10 C.F.R. § 430.32(h).

9 Energy Conservation Program: Energy Conservation Standards for Residential Clothes Dryers and Room Air 

Conditioners, Direct Final Rule, 76 FR 22453, 22485 (April 21, 2011) (emphasis added).

10 Id. at n.28.

11 10 C.F.R. § 430.32(y).

12 10 C.F.R. § 431.87(b).

13 Energy Conservation Program for Certain Industrial Equipment: Energy Conservation Standards and Test 

Procedures for Commercial Heating, Air-Conditioning, and Water-Heating Equipment, Final Rule, 74 FR 36312, 

36320 (July 22, 2009).
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B. Precedents Using Installation Constraints and Costs as a Basis for Product Class 

Distinctions

DOE has previously created product classes expressly based on relevant installation 

characteristics that permit continued installation of a covered product in an existing building 

condition without undue burden.

14

1. Packaged Terminal Air Conditioners (PTAC) and Heat Pumps (PTHP). In addition to its 

“standard-size” class for PTACs and PTHPs, DOE has adopted a “non-standard size” class for 

PTACs and PTHPs, reasoning that wall sleeve size (the housing into which the product is 

fitted in the wall) is a performance-related feature.15 DOE created the non-standard 

product class because in facilities using non-standard size equipment, “altering the existing 

wall sleeve opening to accommodate the more efficient, standard size equipment could 

include extensive structural changes to the building, which could be very costly . . . DOE was 

concerned that, absent non-standard equipment, commercial customers could be forced to 

invest in costly building modifications to convert non-standard sleeve openings to standard 

size dimensions.”

16

2. Central Air Conditioners and Heat Pumps. DOE adopted a space-constrained product class 

for air conditioners and a space-constrained product class for heat pumps.17 Originally 

established in 2004, DOE continued the space-constrained product class in 2011 - in the 

same rulemaking in which it declined to establish a non-condensing, non-weatherized gas 

furnace product class - pointing out that DOE believes that “a larger through-the-wall unit 

would trigger a considerable increase in the installation cost to accommodate the larger 

unit.”

18

3. Residential Water Heaters. DOE adopted a product class for tabletop water heater in 2001 

due to “strict size limitations” for the products.19

 

14 In 2011, DOE declined to establish separate non-condensing and condensing classes for non-weatherized gas 

furnaces on the ground that avoiding the installation obstacles associated with switching from non-condensing to 

condensing furnaces was an “economic impact” rather than a “special utility” to consumers. 76 FR at 67042 (rule 

vacated in relevant part). That rationale is not consistent with the precedents listed here, all of which involve 

product classes developed to ensure that the installation of new covered products in certain building conditions is 

not foreclosed. This inconsistency is highlighted by the fact that all of the constraints that form the basis for these 

product class distinctions listed here can be overcome with changes to a building condition, but only at 

unreasonable cost.

15 Energy Conservation Program for Commercial and Industrial Equipment: Packaged Terminal Air Conditioner and 

Packaged Terminal Heat Pump Energy Conservation Standards, Final Rule, 73 FR 58772, 58782 (Oct. 7, 2008).

16 Id.

17 10 C.F.R. § 430.32(c).

18 Energy Conservation Program: Energy Conservation Standards for Residential Furnaces and Residential Central 

Air Conditioners and Heat Pumps, Direct Final Rule, 76 FR 37407, 37446 (June 27, 2011)(rule vacated in relevant 

part).

19 Energy Conservation Program for Consumer Products: Energy Conservation Standards for Water Heaters, Final 

Rule, 66 FR 4474, 4478 (Jan. 17, 2001).
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4. Compact Products. DOE has created compact product classes for a large number of 

appliances, including refrigerators/refrigerator-freezers/freezers, dishwashers, clothes 

washers, and clothes dryers.20 DOE has adopted such product classes because of the 

unique utility that compact appliances provide consumers by permitting installation of 

appliances in existing space-constrained environments.21

 

20 See 10 C.F.R. 430.32(a), (f), (g), and (h).

21 See, e.g., Energy Conservation Program: Energy Conservation Standards for Residential Clothes Dryers and Room 

Air Conditioners, Direct Final Rule, 76 FR 22453, 22485 (April 21, 2011) (“DOE also notes that compact-size clothes 

dryers provide utility to consumers by allowing for installation in space-constrained environments.”); Energy 

Conservation Program: Energy Conservation Standards for Residential Dishwashers, Direct Final Rule, 77 FR 31917, 

31926 (May 30, 2012) (“compact dishwashers provide unique utility”).