Correspondence on HPBA policy on calculating efficiency for the IRS tax credit

After the $300 tax credit was extended to Dec. 31, 2020, AGH began seeing a number of manufacturers issues certificates statements claiming stoves from as low as 59% efficient were eligible for the tax credit. We were not as concerned with any claims of stoves between 70 - 75% efficiency as that could be explained by using lower heating value (LHV).  Our concern was with the many stoves between 59 and 69%.

As is our practice, we first contact companies to clarify what may be an error or a misunderstanding and we were told by one major manufacturer that HPBA had advised manufacturers that they could use a single efficiency number from a single burn rate, rather than using the average efficiency from all four burn rates. We then wrote to HPBA to confirm this.

HPBA published a letter they sent to us on their blog, claiming we posted incorrect information on our blog about the tax credit. They were correct that one sentence was misleading and we immediately changed it (our readers often suggest changes and we often make them).

We took this opportunity to post our communication to HPBA, which gives a flavor of scores of similar back and forths between AGH and HPBA over scores of issues where we have differences.  AGH is also an HPBA member and we have always worked to improve the functioning of the association.

Excerpt of a Jan. 17, 2020 email sent by John Ackerly to Jack Goldman, John Crouch and Rachel Feinstein of the HPBA

I would strongly request that you urge manufacturers to only use their average efficiency from certification testing to determine eligibility for the federal tax credit. While I don't believe there is any legal basis for using LHV, I realize that is a non-starter so I would at least urge you to tell manufacturers not to cherry pick from the efficiency of a single burn rate. Currently, there are a number of manufacturers claiming stoves that are below 70% efficient and at least one that is listed by the EPA at 66% efficient. Some manufacturer defend using an efficiency from a low burn rate saying that is where most customers use their stove (which also happens to be the most likely burn rate to smolder). And at least one says that HPBA provided guidance saying that it was acceptable to choose which burn rate had the highest efficiency. Enabling companies to mislead consumers into thinking they are buying a 75% efficient stove is bad policy for a trade group. Please help create an atmosphere where consumers are steered towards stoves that are at least 70% efficient, HHV.

Excerpt of an email from John Ackerly to Jack Goldman on Jan. 28, 2020

Thanks again for your reply last Friday…. As for the efficiency calculation, I will reach out to Rachel for a quote. As I said, I'm wondering if HPBA has any position - and it seems not - on whether manufacturers should use any common way of determining efficiency. For example, should they only use the weighted average efficiency, or should they pick which ever burn rate is best? The "law" doesn't stipulate some of the finer points for other appliances and that is where trade associations can help build or undermine consensus within their industry. I have been told by some manufacturers that they were advised by HPBA that using an efficiency of a single burn rate was acceptable. I want to get HPBA on record about that, and for the reputation of our industry, I very much hope HPBA can distance itself from such shenanigans that mislead consumers and waste taxpayer dollars.

HPBA lawsuit extended again in hopes of renewed talks with EPA

The US Court of Appeals for the DC Circuit agreed to yet another extension to the lawsuit brought by the Hearth Patio & Barbecue Association (HPBA) and the Pellet Fuel Institute (PFI) against portions of the EPA’s 2015 residential wood heater regulations.

HPBA “hopes to be back in talks with the EPA” said Rachel Feinstein, Government Affairs Manager for HPBA. In the motion requesting the extension, HPBA explained that talks between them and HPBA had broken down under the Obama Administration, but after Trump's election, HPBA is again “attempting to discuss with DOJ and EPA whether the agencies are willing to engage in further discussions concerning the Rule.”

The Trump Administration has been re-opening rule making on many regulations, but some observers say it will likely be an uphill battle for the hearth industry because the EPA is already contending with many higher profile rules. In addition, even if the EPA were to agree to review parts of the NSPS, the rule would have to go through the notice and comment process that can take 1 to 3 years, at which point there could be a new President and a new head of the EPA.

The EPA can revise regulations at any point, with or without a pending lawsuit. It can commit to a new rule making process on selected parts of the NSPS, but it cannot necessarily guarantee any particular outcome. In cases of voluntary remand, petitioners can also lose their right to appeal.

If the case goes to court in 2018, the outcome partially depends on which panel of judges get appointed to the case and the result could be more unpredictable and potentially more favorable to the groups that intervened in the suit – the American Lung Association, the Clean Air Council and Environment and Human Health. If the case goes to court, the best outcome for HPBA would likely be a settlement agreement that puts part of the NSPS on hold until another rule making is complete.

HPBA and PFI now have until August 25 to file their brief laying out their grievances with the new regulations. HPBA is not challenging the requirement that when tested with cribwood, wood stoves must emit no more than 2 grams an hour as of 2020. This means that all stove manufacturers remain under this deadline to retest their stoves to achieve 2 grams an hour or less under the revised test method. All stoves that tested at 2 or under prior to May 15, 2015 still have to retest to be compliant with the 2020 limits. 

HPBA is challenging the requirement that if a stove is voluntarily tested with cordwood, it must achieve 2.5 grams per hour or less. HPBA asserts that since there is not yet an approved test method, it was premature for the EPA to set an emission limit. HPBA is also challenging emission limits for wood and pellet boilers and furnaces.

Related posts:

What consumers need to know about the new EPA wood stove rules. (Updated, June 2017)
HPBA gets delay in lawsuit to give Trump administration time to review.  (April 2017)
Paper undermines stove industry variability study. (August 2014)