A petition from the conservative Landmark Legal Foundation (LLF) to throw out final federal energy efficiency standards for microwave ovens was denied by the Department of Energy (DOE).  The petitioner argued that DOE’s final rule used updated social-cost-of-carbon (SCC) values that were not included in the proposed standards. 

The entirety of the petition was supported by a large number of high-profile industry associations, supported in part by three industry associations, and opposed in its entirety by the Association of Home Appliance Manufacturers’ three environmental/energy-efficiency advocacy groups.  While conceding that the updated SCC values were not available for public comment, the DOE claims that the final standards would have been no different if they had been available.

Cost and benefits

DOE’s final action (June 17, 2013, FR) specifically adopted standby-mode and off-mode standards for microwave ovens.  In its proposal, the DOE sought to monetize the cost savings associated with reduced carbon dioxide (CO2) emissions that would result from the expected energy savings.  To do this, the DOE used the SCC values the Interagency Working Group on Social Cost of Carbon (IWG) released in 2010. 

In May 2013, subsequent to publication of DOE’s proposed standards, but before issuance of the final rule, the IWG released revised SCC values.  The DOE says it considered both the 2010 and 2013 SCC values in the final standards. 

Fundamental change

In July 2013, the LLF submitted its petition.  According to the LLF, the SCC value change was a fundamental component of DOE’s analysis, which the Department was required to publish and provide an opportunity for public comment on before its use in the final rules.  Also, the LLF argued that the changes in SCC values are “significant and wide reaching” because the changes could affect how other agencies calculate the cost and benefits of other rules relating to greenhouse gases (GHGs).

Logical outgrowth

In its denial of the petition, the DOE made the following points:

• DOE’s SCC analysis did not affect either the proposed rule or the final rule because the estimated benefits to consumers of the standard exceeded the costs of the standard even without considering the SCC values.  “DOE would have chosen the same energy conservation standards at both the proposed rule and final rule stage regardless of its SCC analysis,” says the DOE.
• Because the DOE adopted the same standard in the final rule that it had proposed, the LLF did not demonstrate that the Department would—or even might—have changed the standard adopted in the final rule if the LLF (and others) had been given an opportunity to comment on the 2013 SCC values.
• Use of the 2013 SCC values in the final standards rule was a “logical outgrowth” (a term the courts have applied to rulemaking under the Administrative Procedures Act) of the proposed standards because the DOE stated in the proposal that the current SCC estimates should be treated as “provisional and revisable” since the values will evolve with improved scientific and economic understanding.  The DOE refers to the D.C. Court of Appeals opinion (Northeast Maryland Waste Disposal Authority v. EPA) in which the court stated that a final rule satisfies the “logical outgrowth” test if parties should have anticipated that the change at issue was possible and, thus, reasonably should have filed their comments during the comment period.  
• Finally, the DOE pointed out that the 2013 SCC values were generated by the same computer models that produced the 2010 values.  “In Solite Corporation v. EPA, the DC Circuit held that an agency is not required to provide additional notice and opportunity for comment when its ‘methodology remain[s] constant’ and new data is used to ‘check or confirm prior assessments,’” said the DOE.