Opinion ID: 456159
Heading Depth: 3
Heading Rank: 2

Heading: The FIM Results for Central Air Conditioner Standards

Text: 308 As we noted in Part V.A.3.c, the NRDC criticized two points on one of the cost-efficiency curves for central air conditioners as substantially overstating the cost of achieving certain high efficiency levels. DOE adjusted one point to take account of the NRDC's comment, left the other unchanged, and used the resulting revised curve in the ORNL model. DOE did not, however, incorporate the lower cost data in the information used by the FIM for the following reasons: 309 DOE does not have sufficient data to create a full cost book for a new design option at this efficiency level. DOE does not believe, however, that the change in cost would be substantial enough to affect the conclusions of the FIM. It should be noted that even a lower cost per se does not even necessarily mean that the negative impacts in the FIM would be reduced at all. 310 48 Fed.Reg. 39,376, 39,401 n. 86 (1983). DOE's brief adds that because the impact on manufacturers of standards for that product was minimal to nonexistent even using the uncorrected data, a change in costs would not have substantially affected the conclusions of the FIM. DOE Br. at 68. 311 The disputed points on the cost-efficiency curve were points 5 and 6. Point 6 on the curve described the cost of achieving the degree of appliance efficiency analyzed as standard level 4, which was the highest level considered as a basis for standards. In weighing the factors relevant to economic justification, DOE commented that for a CAC standard [a]t level 4 there are very significant burdens. The impacts on manufacturers, while not overwhelming, are negative for small and medium-size manufacturers. 48 Fed.Reg. at 39,406. Thus, although DOE's brief stated that the financial impact of standards on CAC manufacturers as measured by the FIM was minimal to nonexistent, see DOE Br. at 68, DOE's Federal Register notice described that same impact for level 4 standards as substantial, id. at 39,403, although not overwhelming. 66 We cannot read into DOE's characterization of the financial impact on manufacturers as not overwhelming a finding that the impact was minimal to nonexistent, as DOE's brief would have it, and therefore did not influence DOE's rejection of level 4 standards. The most natural reading of DOE's phrase runs the other way: a burden that is substantial was apparently thought to be worthy of some weight. For us to conclude that the FIM results for level 4 standards did not influence DOE's rejection of those standards would be the merest guesswork about the agency's decisionmaking, and improbable guesswork at that. 312 We therefore cannot accept DOE's suggestion that the FIM impacts of level 4 standards could not have influenced the final rules, and pass to its belief that the changed costs were not substantial enough to affect the conclusions of the FIM. However, we cannot tell on the present record how serious an effect DOE's acknowledged error had on the cost-efficiency curve used in the FIM. The proposition that lower costs do not per se reduce negative impacts in the FIM is not enough: we need some idea whether the lower costs cited by NRDC and accepted in part by DOE for this appliance would noticeably reduce the specific negative impacts predicted for these proposed standards, and DOE hazards nothing more than unsupported conjecture on that central question. 313 Finally, we also have difficulty understanding DOE's explanation that it could not prepare a cost book for the commercially available CACs which furnished the basis for NRDC's criticism of point 6. As we have said, point 6 corresponded to standard level 4. DOE described level 4 as incorporating the use of some technologies not on the market in 1980, but DOE was nonetheless originally able to prepare sufficient manufacturing costs for FIM analysis of level 4 air conditioner standards. Commenters then cited to DOE commercially available models with efficiencies comparable to or higher than standard 4 levels, and DOE agreed that the price of these models was significantly lower than the prices DOE had predicted for models at that level of efficiency. In short, it appears that DOE could analyze hypothetical CACs at level 4 efficiencies under the FIM; but when commenters identified commercially available models at those efficiencies, DOE asserted that it needed unavailable information about manufacturing costs. We do not understand why these costs could be estimated for models that were not available, but could not be determined for appliances on the market. DOE's one-sentence disclaimer relating to cost books in its Federal Register notice does not explain this anomaly or otherwise elaborate on the missing information DOE needed; and its brief drops this line of argument entirely. We must therefore conclude that DOE has not adequately supported its use in the FIM information it knew to be incorrect. As the FIM results were partly based on incorrect information, and as DOE's rejection of CAC standards at level 4 was partly based on the FIM results, we must hold that rejection to have been insufficiently supported in the record. 314