Issue link: https://read.dmtmag.com/i/161166
MHARR VIEWPOINT DOE Needs To Come Clean on Energy Standards Process BY DANNY GHORBANI Nearly 200 years ago, Chief Justice John Marshall wrote that "the power to tax is the power to destroy." The same could be said about the power to regulate, and when that power is exercised in an ethically questionable manner, the potential for real damage to both regulated parties and the general public only gets worse. All of which brings us to the regulatory "process" underway at the Department of Energy (DOE) since 2010 to develop "energy conservation" standards for manufactured homes as required by the ironically-named Energy Independence and Security Act of 2007 (EISA). Recent developments in that process – as pointed out in July 24, 2013 comments filed by MHARR (copies of which were disseminated to industry members) – show that DOE not only needs to go back to the drawing board on the substance of a "draft" proposed energy standards rule, but also needs to come clean about potentially significant ethical questions. Under EISA, DOE is tasked with developing energy conservation standards for HUD Code manufactured homes – notwithstanding existing HUD standards -- "based on the most recent version of the International Energy Conservation Code … except in cases in which the [DOE] Secretary finds that the code is not cost effective, or a more stringent standard would be more cost effective, based on the impact of the code on the purchase price of manufactured housing and on total life-cycle operating costs." EISA instructs DOE to institute those standards "not later than four years after [its] date of enactment," following: (1) public notice and comment; and (2) "consultation with the Secretary of Housing and Urban Development, who may seek further counsel from the Manufactured Housing Consensus Committee" (MHCC). Based on this directive, DOE published an Advance Notice of Proposed Rulemaking (ANPR) back in 2010, seeking public feedback on thirteen conceptual issues. MHARR in written comments and a companion letter to then-DOE Secretary SEPTEMBER 2013 10 THE JOURNAL Steven Chu, called on DOE to "delay the development, implementation and enforcement of any new manufactured home energy conservation standards that are not identical to the existing HUD Code energy standards until such time as industry production levels and the availability of affordable, non-subsidized manufactured housing for lower and moderate-income consumers return to pre-2007 levels." In support of this request, MHARR cited three issues that could undermine the affordability and availability of manufactured homes, with little or no corresponding benefit for consumers, if not handled properly by DOE -i.e., (1) requirements that could upset the careful balance between a tightened thermal envelope and indoor air quality as achieved by the existing HUD standards; (2) the impact of higher energy regulation costs on the availability of public or private purchase financing for lower and moderateincome homebuyers; and (3) potential costs arising from a needless overlap in DOE and HUD regulatory mechanisms. Subsequently – and apparently without resolving any of these issues -- DOE developed a "draft proposed rule" for manufactured housing energy conservation standards, including a regulatory cost-impact analysis. That draft rule was then selectively leaked by DOE or HUD (or both) in 2011 or 2012 to at least one and possibly more affected parties. (MHARR, for the record, was not a recipient). DOE, however, either unsatisfied with the feedback it received as a consequence of that targeted leak, or simply needing to cover its tracks, issued a public Request for Information (RFI) on June 25, 2013, seeking additional data and comments on the same three issues that MHARR raised back in 2010. So what to make of all this? Well, to start with, there is a statutory process for developing and implementing proposed rules – known as the Administrative Procedure Act (APA) – and none of it involves selective leaks to hand-picked parties who get an inside track on the rulemaking process by having the opportunity to submit undisclosed, off-the-record data and comments, with an unknown and potentially unknowable impact on the proceedings, ahead of other affected parties. Even worse, what kind of administrative "process" develops a "draft" rule first and then asks for relevant information – concerning perhaps its most important aspects – second? The June 25, 2013 DOE Request for Information states: "DOE now believes it is important to allow interested parties an additional opportunity to provide information they feel will assist DOE in developing the proposed standards (emphasis added). But, a "draft proposed standard" has already been developed by DOE, without the information now being sought by the agency after-the-fact, which suggests that any new information inconsistent with DOE's preconceptions -- as reflected in the draft proposed rule -- would either be ignored or "cherry-picked" to support the agency's preconceived conclusions. And, while we're on the topic of the APA, administrative rules are supposed to be developed on the basis of a complete and transparent factual record. Yet, that has obviously not occurred here. By the very act of issuing its June 25, 2013 Request for Information, DOE is effectively conceding that the already-developed "draft proposed rule" is not based on a complete record – or a transparent one. There are many other ways – detailed in MHARR's July 24, 2013 RFI comments -- that the DOE process leading to the "draft proposed" energy conservation standards rule fails to live up to the standards of basic regulatory legitimacy. And this doesn't even get into relevant substantive issues, such as the fact that there are already HUD Code energy standards that strike the proper balance between protection and affordability as mandated by the federal manufactured housing law, as well as multi-level energy efficiency option pack- 19 \