Ep 3: Everything you need to know about EPCA reform

This month we’re talking about one of AHRI’s biggest policy priorities: Energy Policy and Conservation Act (EPCA) Modernization. It’s hard to explain just how important this piece of policy is to our industry, and to American manufacturing as a whole. But for a lot of people, EPCA is the most important statute they’ve never heard of.

We have AHRI’s Senior Vice President of Government Affairs Samantha Slater to help de-mystify EPCA and explain the practical ways that it could be amended to serve American manufacturing and consumers better for the next 50 years.

Resources from this episode:

Policy Symposium

State Summit

Lobbying 101 webinar sign up

Lobbying 101 webinar archive  (members only, navigate to the "Meetings and Events" dropdown menu)

Transcript

SPEAKER_00 0:06

Welcome to Making Life Better, an AHRI podcast. Here we'll keep you informed about our upcoming events, important policy issues affecting the industry, updates to our globally recognized and industry-respected equipment certification programs, and we'll even share some fun human interest stories and history related to the world of HPACR. This is the place to learn all the ways our members and AHRI make life better for everyone. Welcome back to Making Life Better, an AHRI podcast. I'm Reagan Spencer, the communications manager at AHRI. This month, we're going to be talking about one of AHRI's biggest policy priorities, EPCA modernization. It's hard to explain just how important this piece of policy is to our industry and to American manufacturing as a whole. But for a lot of people, EPCA is the most important statute they've never heard of. Before I introduce you to today's guest, I want to give you a quick crash course. EPCA stands for the Energy Policy and Conservation Act. It was passed by Congress in 1975 to create a national framework for improving energy efficiency. Aside from major updates in 1987, it has not been substantially modernized since that point. The national framework is maintained in several ways, but mainly through energy efficiency standards developed by the Department of Energy. This federal process ensures that equipment that is considered EPCA compliant can be sold anywhere in the United States. States are preempted from enacting standards that are stricter than federal standards, which gives manufacturers the stability they need to produce efficient and affordable equipment for everyone. The issue here is that EPCA hasn't been meaningfully updated since 2007, almost 20 years ago. AHRI is aiming to change that through an industry-wide awareness campaign and advocacy effort. With that, I'm excited to tell you that we have AHRI's Senior Vice President of Government Affairs, Samantha Slater, here to help demystify EFCA and explain the practical ways EFCA can be amended to serve American manufacturing and consumers for the next 50 years. It's always a wild spring in HRI. It is.

SPEAKER_01 3:03

Yeah, so not just our industry. It really impacts every industry that goes to a federal agency who has regulations that come from those agencies. You hear lots of people in Washington talk about it. But it is that pendulum swing. And I know everybody can't see my hand gestures, but it really is a pendulum swing from one policy to another, depending on who is in the White House and therefore who is in place politically over the Department of Energy or the U.S. Environmental Protection Agency or the U.S. Department of Treasury or any other federal agency that we interact with. And particularly in a time where we see such a wide divergence of policy priorities from Democrats, from Republicans, whether it's even at the federal or the state level, that kind of policy whiplash from one extreme policy to the other is what we mean when we talk about the pendulum swing or policy whiplash. Does that make sense, Reagan?

SPEAKER_00 4:04

I think so. Especially when you list all of those administrations back to back to back. It really spells out how much we've been going from one extreme to another. Right.

SPEAKER_01 4:13

And I mean, I think as an industry, we covered at least 60 different uh rulemakings from the US Department of Energy during the Biden administration as a direct result from what we saw during Trump won. Right. So it'll be very interesting to see uh who is in the White House in January 20th, 2029, which I know seems a little bit far off, but really it's it's not at all. Um, and how that will impact our industry as it has for the last 16 years of regulations. Yeah, what's another four years? Well, that's another four years.

SPEAKER_00 4:44

They fly by. Exactly. So HRI has been saying for some time that EPCA is long overdue for modernization. Can you give us some examples of the challenges that manufacturers are facing with EPCA in its current form?

SPEAKER_01 4:57

Yeah, so you know, EPCA, the Energy Policy and Conservation Act, uh, which is the the law that regulates our appliance standard program over at the U.S. Department of Energy, turned 50 on December 22nd of last year. Now it went through a major amendment in 1987, that's NECA 4. Um, and it has been amended in some ways since. The last time was 2007 uh in ESA. Now, even 2007 was almost 20 years ago. So that's a really long time for no uh substantive amendments to have been made to EPCA as they relate to our industry. So we think here at HRI and lots of our sister stakeholder organizations that we are long overdue because to have a law in place that long, um, you should always do a little check-in on that, on that law to make sure it's still working as it was intended, which we don't think it is at this point in time. It doesn't reflect the current marketplace that we are in. Now, we can think that all we want, right? But you still have to have all the different elements to have Congress and the White House come together to want to pass legislation to update, to modernize, to reform EPCA, which really is the key here, right? Uh as an industry, we have been talking about it since 2007. The last major attempt uh by HRI, by Aham, by NEMA, and others to amend EPCA was in 2014. They got so close to getting that across the finish line. Um, and again, you can never predict Congress, uh, and that didn't ultimately happen. We were a little bit busy with the refrigerant transition and working on the AIM Act and ratifying Kigali in the years in between. Uh, but we really feel that the pieces have come together with Republicans in control of the House and the Senate and the White House, that now might be a great opportunity to go to Congress and ask them to work on legislation to modernize APCA. Now, let me say this. Um, while Republicans control the Senate, they do not control 60 votes in the Senate. They control 53. Um, and 60 is the magic number in the Senate. And so that means that we are going to need at least, and I say at least, seven Democrats to support this effort. Now, that is going to be a tricky thing. I won't make any bones about that. That is going to be difficult, and that is part of the process. Uh, we also don't know if we can get this done by the end of this year. By the end of this year, we will next year start a new Congress. We'll see what happens uh during the midterm elections over in the House. We could next year see a democratically controlled house. That means divided Congress, which is actually my personal favorite. Um, I think that brings everybody to the table and is a much more negotiating friendly um environment to work in, but neither here nor there. Let's still focus on this year. Um, and so all of the different trade associations in Washington that have a stake in EPCA, and there are many, um, have really been talking to each other and talking to Congress and working to see if there is an opportunity this last year, this year, next year, to make that happen. So, certainly the biggest push I've seen in my time at AHRI, um, and I think everybody recognizes that if not now, uh, there might not be a time in the future to make sure Congress is focused on energy efficiency issues. Obviously, Congress is very busy. Um, they have a lot of issues on their plate. Um, partisanship is is pretty high and not a lot of appetite or um opportunity to work together on something. But we really think that energy efficiency and EPCA modernization could be one of those opportunities.

SPEAKER_00 8:49

What are some of the specifics that we're asking, the policy changes regarding EPCA?

SPEAKER_01 8:56

Yeah, so not to get too much in the weeds on you right away here, but um I think the first priority that we are trying to uh make sure Congress understands, and this is a it's a double negative, so I apologize in advance, but we want to maintain the anti-backsliding provisions that are included in EPCA, meaning that regulations cannot be rolled backwards. You cannot advance energy conservation standard rulemaking with a um with an energy conservation standard below the the previous energy conservation standard. That's tricky to understand. It is certainly an issue the Democrats uh feel very strongly about that those anti-backsliding provisions stay in place. Uh, Republicans have an interest in exploring uh what would happen if those provisions would be removed. But that really is a red line for Democrats. And so for EPCA modernization legislation to move forward, it would be necessary uh for the Senate and ultimately the House, because any bill has to go back to the House, but the Senate will not pass a bill that does anything in any way to the anti-backsliding provisions included in EPCA. So that's that is critical to understand. I think there is an there is also an interest, as we have seen over the last oh, five or six years, I would say, with natural gas bans or uh the banning of gas equipment at the state and local level, uh, along with several lawsuits in New York City, in Berkeley, that the industry is seeing, I think from many organizations, there is an interest in trying trying to find a way to strengthen the federal preemption that is included in EPCA. Now, let me tell you, it is great federal preemption language. Nobody is arguing that. But given what we have seen the last five or six years, is there a way to strengthen that federal preemption language? Without a doubt, let me be very clear, that's going to be very hard to do and continue to maintain. Seven to ten Democrats supporting uh this bill in the Senate, but that is of interest to many of the EFCA uh modernization stakeholders. I think the other issue that has folks' attention is uh what we call uh probably a misnomer, the look back provision in EPCA, also uh known as uh serial rulemaking, that every six years an energy conservation standard needs to be um reconsidered. That was added in 2007. Um, and is that you know something? Look, we like the look back in that it brings certainty, it brings a schedule, right? We know administrations and lawsuits aside, we won't go there, but that provides great certainty to the industry. So AHRI supports a look back provision. Uh, we just think that six years might be a little too short a period of time, and that 10 years uh might be better. So AHRI supports a look back provision that is at a minimum 10 years. So I think that is something that could be included in UPCA modernization legislation. Now, there are lots of other things, you know, making sure that we're very clear on what uh technically feasible and economically justified is. Uh the DOE follows uh their process rule, so codifying the process rule, making sure that it is mandatory that uh the Department of Energy follows that, no matter the administration, um things like that. But if I were being really honest, this is not going to be a comprehensive EPCA modernization effort. There is no appetite in this Congress or any other to do that. It is going to be a smaller package uh focused on just a few things because again, uh Democrats have no real need to come to the table. It would be their willingness, which we will we have asked for and we will appreciate. Um, but I in my mind, when I talk about EPCA modernization and just want to get across to members that it is going to be a smaller effort than AHRI and other stakeholders have undertaken in the past, where we really have attempted to do a change everything you've you've ever disliked in EPCA, uh 300 pages of red-lined legislative text. It's not that. This is going to be a small targeted effort to fix the issues that have caused the most issues for industry over the last 20 years.

SPEAKER_00 13:32

So you mentioned a lot of the stakeholder trade associations we're working with. Um, can you tell us about some of those other organizations and kind of how we have a full manufacturing representation in these efforts?

SPEAKER_01 13:44

Yeah, it's nice because uh for the last several years, as I noted, we've really been uh focused on refrigerant transition and the and the coalition that came together. Uh, and it was a big one to get the AIM Act passed and to get Kigali ratified. When it comes to energy efficiency issues, obviously we work very closely with our good friends at AHAM, the home appliance manufacturers, our good friends at NEMA, the electrical manufacturers. It's also been great having the National Association of Manufacturers, NAM, at the table, uh, the American Gas Association folks at the table, obviously, friends with PMI and AMCA and other trade associations. You also want to have PHCC and Hardy at the table as well, because all of these policies ultimately uh will eventually get in the hands of the wholesalers and distributors and contractors so that everybody uh is comfortable with the policy proposals and priorities that are being recommended and we hope uh will ultimately be put in place one day.

SPEAKER_00 14:41

So there is a piece of legislation that would modernize parts of EPCA, which is passed the House, the Allen bill. Can you tell us what that bill would do?

SPEAKER_01 14:48

So uh just making sure I have the bill number correct here, H.R. 4626 is the Allen bill that was introduced in July of 2025. Uh that bill is not going to be the bill that the Senate ultimately takes up. Now, will it have some elements uh of the House bill? Absolutely, it probably will probably work around the same themes, but the Senate is drafting their own bill. So important to remember that. Now, HRI did not take a position on uh Representative Allen's bill. There were some things in there that we liked. There were some things in there that we would have uh preferred to not be included or have an opportunity uh to revise those. So efforts have already moved over to the Senate side where they are working on a discussion draft. I will also note an important distinction that happened in the House and that we expect to happen in the Senate as well. The House separated uh two bills. One, the Allen bill, which which encompassed uh large parts of EPCA modernization uh provisions. But then they also had a separate bill, also known as the Langworthy bill, introduced by Representative Langworthy, that is the Energy Choice Act, that is the House version of strengthening federal preemption. Interesting that they separated those two things uh because again, strengthening federal preemption is going to be very difficult to accomplish. And including those two things together might have sunk the bill in its entirety right off the bat. And I think the Senate is also keeping that in mind and is also expected to introduce two separate bills related to this issue so that we can at least have an opportunity to discuss the issues other than strengthening federal preemption and see if we can make progress on those first before we see what the appetite is to bring those two things together. Now, the House has not passed the Langworthy bill yet. Uh, we'll see if they ultimately decide to bring that to the floor. But the good news about passing the Allen bill is that's a signal to the Senate, right, that the ball's now in your court. And they had been waiting for that to happen, right? Um, so now the ball is in the Senate's court. They are working on a discussion draft. We hope and and uh timelines around here are always here in Washington, D.C. are always a little bit fluid. Uh, I joke that spring takes you all the way to Memorial Day and summer is the end of September. Um obviously it's an election year, so Congress will be gone all of August and all of October out campaigning. Uh, so they're not going to be around a lot in the summer and the fall. So we'll see what opportunities present themselves for legislative briefings and hearings on EPCA this summer. But hope, Hope Springs Eternal that there will be an opportunity to do that. And then we'll see what the Senate does from there. And again, just as a reminder, because the Senate will not take up the House bill in whole, right? Any bill the Senate passes would then have to go back over to the House for the House to consider. And again, if they make changes, then it's got to go back, right? And so important to remember how tight the margins are in the House right now, uh, and certainly for the remainder of the year until we get through the midterm elections and see what we're gonna be looking at for 2027. But again, once it gets over to the Senate, it really has to be a bipartisan effort and make sure that bill includes provisions that are things of interest and importance to Democrats.

SPEAKER_00 18:24

So while all of this is going on in Congress, what is the White House's role?

SPEAKER_01 18:29

So I wish I, you know, I don't I'm trying not to worry about the White House uh until we get there a little bit, right? I'm more concerned about the Senate right now and what we can include to attract Democrats to come to the table and talk to us about these things. Look, if we can get a Republican Senate and a Republican House to pass an EPCA bill, uh, I would imagine that the uh the president would certainly consider that. So we'll worry about the president a little bit later on in this process. But I know that they are looking for bipartisan uh legislation to consider, right? It's an election year. And we don't know what will happen over in the House next year. And we everybody might have to be working together for uh 2027 and 2028 heading into a presidential election year. So fingers crossed that everybody will see the value of a bill that all parties, um, including the White House, can agree to So we've talked a lot about EPCA in the works in DC.

SPEAKER_00 19:34

I want to ask you about something that I've been seeing in our policy brief newsletter, which for anyone who isn't aware comes out every Monday, includes everything you need to know about policy issues at AHRI. So, Samanda, is it my imagination or am I seeing more articles about state legislation introduced this year that would appear to violate EPCA? What is driving that, do you think?

SPEAKER_01 19:54

So, you know, it's tricky at the state level. So let's try and be nice and and uh and maybe they're not violating EPCA. But, you know, I think we are seeing at a state level, uh, and I'll be the first to admit that I thought we might see more state level HFC regulation uh legislation, given the regulatory activity happening at EPA around the technology transitions rule, right? Um, that's definitely something that is in play over at EPA, and we were concerned and will remain concerned once we see a final rule as well, that that activity could happen at a state legislative uh level. What we ended up seeing, because state legislatures always surprise me, uh, what we have seen uh several bills introduced this year are, and speaking of rollbacks, right, regulatory rollbacks, several pieces of legislation. And again, EPCA's federal preemption is very strong. Uh, that is the purview of the Department of Energy for covered products, not for states. Um, and AHRI has not been shy about uh challenging any state level activity. But I think there is concern at a state level, certainly from blue states or states that recently uh elected Democratic governors and have their legislatures uh turn over to democratic control, Virginia being one of those, um, where we are seeing legislation introduced to protect, let's say, against rollbacks of regulations of DOE covered products at a federal level. Um, all kind of looking a little bit the same, but that was an astute observation, uh, Reagan. That definitely is picked up. That is not something that I have seen a lot of in my time here at HRI, something that we quickly spotted and are concerned about as we uh move toward what, you know, by the time we get to May June, we're typically at the end of the state legislative uh sessions for the for the year for most states. Uh, the bigger ones tend to stay in session, but definitely a trend. And we noticed this year and are keeping a very close eye on.

SPEAKER_00 22:05

So if you're a member listening and you now have heard all these aspects of EPCA that need to be updated and you want to get involved, what are the first steps you should take?

SPEAKER_01 22:14

So we have uh a lot of activity going on here at HRI. So if you weren't aware, um as as Reagan said, the first thing you should do is make sure you are signed up to receive AHRI's policy brief. Comes out every Monday around lunchtime, uh Eastern, Eastern time. Um, if AHRI's policy team is working on it, following it, tracking it, it is included in the policy brief. Highly recommend everybody be signed up for the policy brief. We also have our monthly government relations group calls, the GRG, as we call them, calls are open to all HRI members. Again, we have an hour. If the policy team is working on it, we cover it during that GRG call. We usually have over 100 people on that call. And then we even post the slide decks to AHRI Connect afterward so that everybody has all of that information. Really recommend you do that as well. Then we have two events coming up. State Summit is April 14th and 15th in Sacramento, California. We already have a huge uh turnout coming for registration. Registration is open. Um, that is a great opportunity to not only um hear from California uh policymakers, particularly on the regulatory side, but they also have a tendency to hang around uh and talk to members throughout the course of those two days. And we go up to the Capitol in Sacramento and do visits on the afternoon of the second day. Following that, um, a couple weeks later is AHRI's policy symposium in Washington, D.C., uh, May 18th, 19th, and 20th. On May 19th, we're gonna head up to the Capitol. We will be doing House and Senate meetings, uh talking about two main items, but number one is gonna be EPCA modernization legislation. And we're also gonna be talking to members of Congress about workforce development issues. So if EPCA and workforce are important to you and your company, strongly recommend that you come join us here in Washington, sign up for Hill visits. Uh, you will be with a group, you don't have to do them alone. Uh, you will be with a staff leader who will take good care of you, I promise. Uh, but please wear comfortable shoes because we will be running you around uh the hill all day on May 19th.

SPEAKER_00 24:31

And for anyone who's never participated in those hill visits or a fly-in day, how will AHRI prepare members for that specific EPCA modernization ask?

SPEAKER_01 24:41

Good question. So on April 24th, though you can watch any previous year's uh version of our lobbying 101 webinar if you go to AHRI's website and go to our webinar section. But on April 24th, we will do our one-hour webinar on lobbying 101 and we will go through the whole thing, uh, what it takes to set up a meeting, though you don't have to set up any meetings this time. AHRI will take care of that for you. But if you ever decide you want to come back to Washington on your own and do Hill visits, uh we tell you how to do that. But we also tell you that this that's what HRI is here for. And our policy team staff will always help you set up uh your own legislative uh meetings if that is what you would like. But we'll talk about all the issues that we're gonna be talking about on the hill. You will be well prepped with talking points, issue briefs, leave behinds, everything you could possibly need, including uh knowing where all of the restaurants are on Capitol Hill. So when you get hungry, you know where to go to get something to eat and where you might have an opportunity to grab a seat and sit down and rest your feet for just a few minutes. But I will tell you, much like last year, there are a lot of people around Capitol Hill these days. There are a lot of issues that folks want to come to town and talk to their members of Congress about, which you always should. Um, so there are a lot of people along lines of security, not a lot of places to sit down, not a lot of places to grab food, but we tell you where and how to do all of that, and your group leader will also be able to help you with that. And we also supply you with snacks before you get on the bus to go up there, just in case uh you miss lunch that day. Um, we'll we'll take care of you and make sure you're you're not hungry and that we do our best to make sure your feet don't hurt too bad.

SPEAKER_00 26:31

You can't go into advocacy visits with an empty stomach.

SPEAKER_01 26:34

No, not fun.

SPEAKER_00 26:36

All right. Well, I think that that covers everything I wanted to ask you about. Is there anything else you would like to add?

SPEAKER_01 26:42

Just that we appreciate all of the great work that our members do. So many of you do come to Washington regularly to talk to your members of Congress, to talk to the federal agencies that regulate you. That is so important. As I know Reagan uh has heard me say many, many times over, and I will say again on April 24th: you all are much better lobbyists for your industry than I could ever hope to be. You live in their districts and states, you work in their districts and states, you contribute to the community in their districts and states, not to mention the economy. Um, you vote in their districts and states. I do not. Um, and so it means so much to them and to AHRI and to me when you all come to town and do those visits so that they can hear directly from you, so they can see you, so that they know who to call when something happens on energy efficiency conservation standards. They know who to call. That's you, um, and that you're the expert they turn to when they need information. So we appreciate it. Ray and I appreciate the opportunity to come on today and pitch state summit and pitch policy symposium and hill visits, whether you're in Sacramento or Albany or Washington, D.C., how important that is, and we look forward to seeing everybody in April and May.

SPEAKER_00 28:04

All right, Samantha, thank you so much for your time. Again, that was Samantha Slater, the Senior Vice President of Government Affairs at AHRI. We look forward to seeing everyone at AHRI's policy symposium on May 18th, 19th, and 20th. And importantly, we look forward to a successful day on Capitol Hill on May 19th to talk to Congress about EPCA modernization legislation. All of the resources that she mentioned will be posted in our episode notes, as well as a link taking you specifically to our policy symposium event landing page.