BEFORE THE U.S. DEPARTMENT OF ENERGY
OFFICE OF HEARINGS AND APPEALS

CASE NO. VEE-0054

COMMENTS OF MAYTAG CORPORATION
REGARDING APPLICATION FOR EXCEPTION BY AMANA APPLIANCES

FROM PROVISIONS OF 10 C.F.R. PART 430 - ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS; ENERGYCONSERVATION STANDARDS FOR REFRIGERATORS, REFRIGERATORFREEZERS AND FREEZERS

Maytag Corporation 403 West Fourth Street North Newton, Iowa 50208 .

March 15, 1999 , ...,"



### BEFORE THE u.s. DEPARTMENT OFENERGY**~-"** .- . '.
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### OFFICE OF HEARINGS AND APPEALS CASE NO. VEE-00S4 

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### COMMENTS OFMAYTAG CORPORATION
REGARDING APPLICAnON FOREXCEPTION BY AMANA APPLIANCES FROM PROVISIONS OF 10 C.F.R. PART 430

- ENERGY CONSERVATION PROGRAM FORCONSUMERPRODUCTS; ENERGY CONSERVAnON STANDARDS FORREFRIGERATORS, REFRIGERATORFREEZERS AND FREEZERS

March 15, 1999 May tag Corporation 403 West Fourth Street North Newton, Iowa 50208BEFORE THE U.S. DEPARTMENT OF ENERGY OFFICE OF HEARINGS AND APPEALS

Energy Conservation Program for Consumer Products: Energy ConservationStandards for Refrigerators, RefrigeratorFreezers and Freezers CASE NO. VEE-0054

COMMENTS OF MAYTAG CORPORATION REGARDING APPLICATION FOR EXCEPTION FILED BY AMANA APPLIANCES
Maytag Corporation (Maytag) submits these comments regarding Amana Appliances' Application for Exception relief from the provisions of 10 C.F.R. Part 43.0, Energy Conservation Program for Consumer Products: Energy Conservation Standards for Refrigerators, RefrigeratorFreezers and Freezers. Maytag Corporation is a leading manufacturer of home and commercial appliances. The corporation's home appliance brands include Maytag, Jenn-Air and Magic Chefmajor appliances, and Hoover floor care products
. Maytag manufactures a complete line of refrigerator

-freezers, including top and side freezer models, at its facilities in Galesburg, Illinois.

2 

### BEFORE THE 

# u.s. DEPARTMENT OF ENERGY OFFICE OF HEARINGS AND APPEALS

Energy Conservation Program for Consumer Products: Energy Conservation Standards for Refrigerators, RefrigeratorFreezers and Freezers CASE NO. VEE-0054

COMMENTS OF MAYTAG CORPORATION REGARDING APPLICATION FOREXCEPTION FILED BYAMANA APPLIANCES
Maytag Corporation (Maytag) submits these comments regarding Amana Appliances' Application for Exception relieffrom the provisions of 10 C.F.R Part 430, Energy Conservation Program for ConsumerProducts: Energy Conservation Standards for Refrigerators, RefrigeratorFreezers and Freezers. Maytag Corporation is a leading manufacturer ofhome and commercial appliances. The corporation's home appliance brands include Maytag, Jenn-Air and Magic Chefmajor appliances, and Hoover floor care products. Maytag manufactures a complete line ofrefrigerator-freezers, including top and side freezer models, at its facilities in Galesburg, Illinois.

2Maytag believes that Amana's application for exception relief from the refrigerator energy

standards that will be implemented on July 1, 2001 is premature and should not be approved. Maytag is faced with the same regulatory concerns as Amana -- the Department's new refrigerator/freezer standards, as well as the requirement to replace the current foam blowing agent, HCFC-141b, with an acceptable alternative by January 1, 2003. Maytag asserts, however, that exception relief should not be granted to Amana for the following reasons: • Exception relief would be a disincentive for the introduction of HFC-245fa as a substitute blowing agent. • Exception relief would be a disincentive for the development of alternative blowing agents. • Exception relief would provide Amana with an unreasonable and significant competitive advantage. • Exception relief would penalize Maytag and other manufacturers who have already made significant capital investments in anticipation of the new mandated refrigerator standards. • Exception relief would not address the probability that refrigerators manufactured in Mexico containing HCFC-141b may be exported to the U.S. after the U.S. phaseout is implemented. Further, Maytag believes that exception relief should only be considered when it can be demonstrated that: a) all potential alternative blowing agents have been thoroughly tested and an acceptable substitute is not available; and b) no single manufacturer would gain a competitive advantage in the marketplace as a result of the exception. Maytag and other refrigerator manufacturers are currently engaged in negotiations with Allied Signal for the supply of HFC-245fa on or before 1/1/03. Maytag is also investigating the use of other blowing agents which maybe suitable alternatives to HCFC-141b. HCFC-124 is commercially available and shows promise as an interim substitute for HCFC-141b. Other 3 Maytag believes that Amana's application for exception relieffrom the refrigerator energy standards that will be implemented on July 1, 2001 is premature and should not be approved. Maytag is faced with the same regulatory concerns as Amana

-- the Department's new refrigerator/freezer standards, as well as the requirement to replace the current foam blowing agent, HCFC-141b, with an acceptable alternative by January 1,2003. Maytag asserts, however, that exception reliefshould not be granted to Amana for the following reasons:
• Exception reliefwould be a disincentive for the introduction ofHFC-245fa as a substitute blowing agent.
• Exception reliefwould be a disincentive for the development ofalternative blowing agents.
• Exception reliefwould provide Amana with an unreasonable and significant competitive advantage.
• Exception reliefwould penalize Maytag and other manufacturers who have already made significant capital investments in anticipation ofthe new mandated refrigerator standards.
. • Exception reliefwould not addressthe probability that refrigerators manufactured 

### in Mexico containing HCFC-141b may be exported to the U.S. after the U.S. phaseout is implemented. Further, Maytag believes that exception reliefshould only be considered when 

### it canbe demonstrated that: a) all potential alternative blowing agents have been thoroughly tested and an acceptable substitute is not**available~** and b) no single manufacturer would gain a competitive advantage 

### in the marketplace as a result ofthe exception. Maytag and otherrefrigerator manufacturers are currently engaged in negotiations with Allied Signal for the supply ofHFC-245fa on orbefore 1/1/03. Maytag is also investigating the
use ofotherblowing agents which may be suitable alternatives to HCFC-141b. HCFC-124 is commercially available and shows promise as an interim substitute for HCFC-141b. Other 3blowing agents and blends are also being investigated. These ongoing activities are crucial to

rapid development of technologies which achieve the optimum balance between energy use, ozone depletion, and global warming concerns. Granting of exception relief to Amana at this time would jeopardize the successful conclusion of these negotiations and investigations. A margin of 10% relief from the new energy standards would provide Amana with a very significant competitive advantage. Refrigerator/freezer manufacturers will be employing many of the technologies that were reviewed by the Department prior to the issuance of the new energy standards. Each incremental reduction in energy usage accelerates the costs of the technologies employed to achieve that target. If the requested relief is granted, Amana will be able -to avoid the most costly of these technologies. This would seriously, and unfairly, disadvantage other manufacturers by providing Amana with a significant cost advantage. This product cost differential would be harmful to Maytag and other refrigerator manufacturers who compete in one of the most highly competitive markets in the U.S. Over the past five years, Maytag has invested extraordinary capital and human resources in retooling its entire line of refrigerators in anticipation of complying with the new federal energy standards. Today, Maytag offers a full line of refrigerators many of which qualify for the Department's "Energy Star" label which illustrate its commitment to innovative, energy efficient appliances. Granting an exception for relief to any single company would jeopardize these investments by permitting a competitor to avoid similar investments, thereby enjoying a lower overall cost structure. Maytag shares Amana's concern that other manufacturers may produce refrigerators containing HCFC-141b at locations outside the United States, including Mexico, and export those products to the U. S. beyond the January 1, 2003 phaseout date for HCFC's. While this issue
4 blowing agents and blends are also being investigated. These ongoing activities are crucial to rapid development oftechnologies which achieve the optimum balance between energy use, ozone depletion., and global warming concerns. Granting ofexception reliefto Amana at this time wouldjeopardizethe successful conclusion ofthese negotiations and investigations. A margin of 10% relieffrom the new energy standards would provide Amana with a very significant competitive advantage. Refrigerator/freezer manufacturers "WIll be employing many of the technologies that were reviewed by the Department prior to the issuance ofthe new energy standards. Each incremental reduction in energy usage accelerates the costs ofthe technologies employed to achieve that target. 

### If the requested reliefis granted, Amana will be able-to avoid the most costly ofthese technologies. This would seriously, and unfairly, disadvantage other manufacturers by providing Amana with a significant cost advantage. This product cost differential would be hannful toMaytag and other refrigerator manufacturers who competein one ofthe most highly competitive markets in the U.S. Over the past five years, Maytag has invested extraordinary capital and human resources in retooling its entire line ofrefrigerators in anticipation ofcomplying with the new federal energy standards. Today, Maytag offers a full line ofrefrigerators many ofwhich qualify for the Department's "EnergyStar" label which illustrate its commitment to innovative, energy"efficient appliances. Granting an exception for reliefto any single company wouldjeopardizethese investments by permitting a competitorto avoid similar investments, thereby enjoying a lower overall cost structure. Maytag shares Amana's concern that other manufacturers may produce refrigerators containing HCFC-141b at locations outside the United States, including Mexico, and export those products to the U.S. beyond the January 1, 2003 phaseout date for HCFC's. While this issue

4must be addressed, granting exception relief to Amana at this time does not address or resolve this

potential problem. In summary, Maytag believes that Amana's application for exception relief is premature and should not be approved. However, should the Department determine that such relief can be justified, it should then be extended to all manufacturers rather than to an individual company which would, by virtue of the exception, immediately achieve a significant competitive advantage.

5 · must'be addressed, granting exception reliefto Amana at this time does not address orresolve this

potential problem, 

### In summary, Maytag believes that Amana's application for exception reliefis premature and should not be approved. However, should the Department determine that such reliefcan be justified, it should then be extended to all manufacturers rather than to an individual company which would, by virtue ofthe exception, immediately achieve a significant competitive advantage.



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