Northeast Gas Association 2014 Fall Operations Conference Saratoga Springs, NY Overview and Status of Federal Appliance Minimum Efficiency Regulations & Potential Impacts on Natural Gas Applications & LDC s Jim Ranfone Managing Director, Codes & Standards American Gas Association Washington, DC Oct. 2, 2014
AGA and the Fuel Switching Survey 1. About the American Gas Association. 2. What will be covered this evening. 3. Federal Appliance Minimum Efficiency Legislation & Regulations. 4. DOE s role in issuing new federal regulations. 5. Products include residential furnaces, water heaters, etc. 6. Impact on energy use, product availability and consumers. 7. AGA fuel switching survey and why it is important. 8. Thanks for Your Help! 1
Three Times More Energy Reaches the Customer with Natural Gas Electricity 32% Efficient Extraction, Processing, & Transportation 100 MMBtu Energy Source Conversion 1 Distribution 95 34 Delivered To Customer 32 CO 2 equivalent 2 emissions from typical household use 3 (metric tons) 1.0 6.4 0 0 Total CO 2 e 7.4 Natural Gas 92% Efficient 100 MMBTU Energy Source Not Applicable 93 92 CO 2 equivalent 2 emissions from typical household use 3 (metric tons) 0.4 0.1 5.4 Total CO 2 e 5.9 1 Includes all energy inputs, including renewable sources based on actual fuel mix in 2007 2 Includes greenhouse gas impact from unburned methane 3 Energy consumed in space and water heating, clothes drying, and cooking. NOTE: This full-fuel-cycle examines all impacts from the energy source through consumption July 2014 version
Direct Use of Natural Gas Results in 20% Less CO 2 e Annual CO 2 equivalent* emissions from typical home heating, water heating, cooking, and clothes drying energy uses during the full-fuel-cycle Natural Gas One Million Homes Total CO 2 e 5.9 Million Metric Tons/Year Electricity Total CO 2 e 7.4 Million Metric Tons/Year NOTES: 1. Fuels used in electricity generation based on 2007 actual generation mix of fossil fuels, nuclear, and renewable energy 2. 1.1 million new homes were built in 2008 * Includes greenhouse gas impact from unburned methane July 2014 version
Full-Fuel-Cycle Impacts from Energy Consumption in a Typical Home Electric Home Natural Gas Home 7.4 metric tons CO 2 e* 5.9 metric tons CO 2 e* Full-Fuel-Cycle Energy Consumption: 131 MMBtu/yr Full-Fuel-Cycle Energy Consumption: 101 MMBtu/yr Site Energy Consumption: 42 MMBtu/yr Site Energy Consumption: 88 MMBtu/yr Total Annual Energy Cost: $1,499 Total Annual Energy Cost: $1,057 Based on a 2,000 square foot home in an average climate, using national average energy prices. Analysis includes the following only: space heating, water heating, cooking, and clothes drying. Home meets 2009 International Energy Conservation Code standards. * Includes greenhouse gas impact from unburned methane July 2014 version
Residential Energy Efficiency Ratings Water Heaters DOE site-specific energy ratings are misleading. While DOE rates an electric appliance with a more efficient energy rating than a similar gas appliance, in reality that electric appliance consumes more source energy, pollutes more, and costs the consumer more to operate. Environmental Impact: 1.3 million tons of CO 2 e A 10% market shift in shipments/sales would reduce CO 2 e emissions by 1.3 million metric tons per year. Electric Resistance Natural Gas DOE NAECA Efficiency Rating 1 : Full-Fuel-Cycle Energy Consumption (MMBtu/yr): Energy Cost 2 /yr : CO 2 e* Emissions (metric tons/unit/yr): Average Installed Cost 4.95 EF 49.7 $576 2.8 $662.86 EF 26.5 $275 1.5 $967 1 Energy factors (EF) based on a 40-50 gallon storage water heaters of equivalent first hour rating 2 Energy Cost is based on 2014 DOE representative average unit costs for energy where electric rate is 12.40 cents/kwh; gas rate is $11.28/MMBtu 4 New installations, from: Preliminary Technical Support Document: Energy Efficiency Program for Consumer Products, January 5, 2009 EF=Energy Factor * Includes greenhouse gas impact from unburned methane July 2014 version
Residential Energy Efficiency Ratings Space Heating Electric Heat Pump Electric Resistance Furnace Natural Gas Furnace DOE site-specific energy ratings are misleading. While DOE rates an electric appliance with a more efficient energy rating than a similar gas appliance, in reality that electric appliance consumes more source energy, pollutes more, and costs the consumer more to operate. DOE NAECA Efficiency Rating: Full-Fuel-Cycle Energy Consumption (MMBtu/yr): Energy Cost 1 /year CO 2 e* Emissions (metric tons/unit/yr): 7.7 HSPF 96.5 $1,119 5.47 99 AFUE 155.8 $1,806 8.83 80 AFUE 68.3 $714 3.97 1 Energy Cost is based on 2014 DOE representative average unit costs for energy where electric rate is 12.40 cents/kwh; gas rate is $11.28/MMBtu HSPF=Heating Seasonal Performance Factor, AFUE=Annual Fuel Utilization Efficiency * Includes greenhouse gas impact from unburned methane July 2014 version
Comparison of Residential Space Heating Appliances Electric Heat Pump Electric Resistance Furnace Natural Gas Furnace DOE/NAECA Efficiency 7.7 HSPF 9.0 HSPF 99 AFUE 80 AFUE 94 AFUE Full-Fuel-Cycle Energy Use per Year* 96 MMBtu 89 MMBtu 156 MMBtu 68 MMBtu 52 MMBtu CO 2 e** Emissions/Yr* 5.5 Metric Tons 5.0 Metric Tons 8.8 Metric Tons 4.0 Metric Tons 2.6 Metric Tons Equipment Cost*** $2,720 $3,975 $2,800 $2,855 $3,895 Excludes A/C operations ** Includes greenhouse gas impact from unburned methane *** Package price includes cost for air conditioning equipment July 2014 version
Residential Energy Efficiency Ratings Clothes Drying DOE site-specific energy ratings are misleading. While DOE rates an electric appliance with a more efficient energy rating than a similar gas appliance, in reality that electric appliance consumes more source energy, pollutes more, and costs the consumer more to operate. Environmental impact: 240,000 tons of CO 2 e A 10% market shift on shipments/sales would reduce CO 2 e emissions by 240,000 tons per year. Electric Natural Gas DOE NAECA Efficiency Rating: Full-Fuel-Cycle Energy Consumption (MMBtu/yr): Energy Cost 1 /yr: CO 2 e* Emissions (metric tons/unit/yr): 3.01 EF 7.3 $81 0.4 2.67 EF 3.0 $29.5 0.16 1 Energy Cost is based on 2014 DOE representative average unit costs for energy where electric rate is 12.40 cents/kwh; gas rate is $11.28/MMBtu EF = Energy Factor * Includes greenhouse gas impact from unburned methane July 2014 version
Residential Energy Efficiency Ratings Cooking Equipment DOE site-specific energy ratings are misleading. While DOE rates an electric appliance with a more efficient energy rating than a similar gas appliance, in reality that electric appliance consumes more source energy, pollutes more, and costs the consumer more to operate. Environmental Impact: 131,000 tons of CO 2 e A 10% market shift on shipments/sales would reduce CO 2 e emissions by 131,000 tons per year. Electric Natural Gas Energy Factor Full-Fuel-Cycle Energy Consumption (MMBtu/yr): Energy Cost 1 /yr: CO 2 e* Emissions (metric tons/unit/yr): 10.9 EF 5.7 $63 0.3 5.8 EF 3.8 $39 0.2 1 Energy Cost is based on 2014 DOE representative average unit costs for energy where electric rate is 12.40 cents/kwh; gas rate is $11.28/MMBtu * Includes greenhouse gas impact from unburned methane July 2014 version
DOE Direct Final Furnace Rule Promulgated on October 25, 2011 after DOE Determined that No Adverse Comments Received Effective Date was of New Minimum Efficiency Levels May 1, 2013. The DFR: Set a Minimum Efficiency of 90% AFUE for Gas Furnaces in the 30 Northern U. S. States Where the Population-Weighed Heating Requirements >/= 5,000 Heating Degree Days (HHD) A Regional Standard. Set a Minimum Efficiency Standard of 80% AFUE in the Remaining States. Other Impacts (e.g., standards for electric furnaces, etc.) Would Accrue But Are Not Discussed Here. 10
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Implications for Non-Weatherized Residential Gas Furnaces A Ban of Gas Furnaces Currently Manufactured as Direct Replacements to Negative Pressure, Non-Condensing (Category I) Furnaces Ban Affects 30 Northern U. S. States Where the Population-Weighed Heating Requirements >/= 5,000 Heating Degree Days (HHD) A Regional Standard. Where Existing Category I Furnaces are Replaced, Incentivizes Installation of Heat Pumps as the Heating System Installation of Electric Furnaces as the Heating System in All Air Handling Systems Replacement of Gas-Fired Storage Water Heaters with Electric Water Heaters. Replacement Incentives Controlled by Installation Costs and Venting System Modification Costs. In New Construction and Rehabs, Also Incentivizes Installation of These Other Systems. 12
DOE Sued Over DFR for Furnaces In December 2011, DOE sued by the American Public Gas Association (APGA) over the DOE Regional Furnace Standard APGA argued DOE didn t follow proper procedures Regional Standard will cause fuel switching from natural gas to electric Based on the litigation, DOE issued statement that it would not enforce the furnace minimums that were to go into effect may 1, 2013 This past April, DOE and APGA received court approval on an agreement that requires DOE to reissue a new analysis on furnaces standards and come out with a revised Notice of Proposed Rulemaking in an open and transparent manor. Industry currently awaiting a DOE NOPR. On Sept. 22, DOE made public available, its analysis available for public review. DOE needs consider the unintended consequences of the Regional standard 15
Residential Water Heater Minimum Requirements What are the current requirements? Who is responsible for issuing new requirements? Who is responsible for enforcing new requirements? How often are requirements evaluated? What are the new requirements and when do they go into effect? 16
Water heater (Effective Date April 16, 2015) Manufacturer can not make product less efficient Gas Storage Water Heaters Gas Instantaneous (Tankless) Current Federal Minimum:.62 Revised Federal Minimum:.82 17
Water heater (Effective Date April 16, 2015) Manufacturer can not make product less efficient Electric Storage Water Heaters The efficiency standards for electric table top water heaters and for electric instantaneous (tankless) water heaters are not changed. 18
Water heater (Effective Date April 16, 2015) Manufacturer can not make product less efficient Oil Storage Water Heaters 19
Gas-Fired Pool Heaters (Effective Date April 16, 2013) Manufacturer can not make product less efficient Current Federal Minimum: Revised Federal Minimum: 78% Thermal Efficiency 82% Thermal Efficiency 20
Direct Heating Equipment Effective Date April 16, 2013 Manufacturer can not make product less efficient Highlighted - Gas Decorative Appliance Minimums successfully challenged in court by the Hearth Products and Barbecue Association (HPBA) 21
DOE Timetable for Revising Water Heater Standards DOE to initiate Water Heater and other covered products rulemaking process to determine if new minimum efficiency requirements are technically feasible and economically justified beginning end of 2012 Framework Document - End of 2012 early 2013 Preliminary Technical Support Document (PTSD) - Mid 2013 Notice of Proposed Rulemaking (NOPR) - Sept. 2014 Final Rule - July 2015 Effective Date 2020 DOE well behind schedule and currently no information on new schedule available. 22
DOE Appliance Website http://www1.eere.energy.gov/buildings/appliance_s tandards/about_standards.html Home About Laws & Regulations ENERGY STAR Testing & Verification EPACT 2005 Test Procedures Information Resources Notices & Rules Certification & Enforcement Schedule Setting Public Workshops & Hearings State Petitions Useful Links Guidance & FAQs Commercial Equipment Residential Products 24
Major U.S. Fuel Gas Codes 25
QUESTIONS? Jim Ranfone Managing Director, Codes & Standards American Gas Association Washington, DC jranfone@aga.org 202.824.7310