DOE Energy Rule Update

The Manufactured Housing Consensus Committee (MHCC) began its second week of meetings on Tuesday regarding the incorporation of the Department of Energy’s (DOE) manufactured housing energy conservation standards (Energy Rule) into the HUD Code. At the prior meeting in October, the MHCC agreed with MHI’s recommendation to reject the incorporation of the DOE energy standards into the HUD Code by reference. Instead, the MHCC began the vital task of drafting specific language into the HUD Code applying energy standards that adhere to the realities of manufactured home construction. MHI is pleased that the MHCC utilized its proposal to help draft the language.

Much of the discussion throughout Tuesday’s meeting was informed by MHI’s in-depth analysis of the DOE rule and dealt with the potential for increased costs associated with DOE’s proposed standards. Specifically, the costs associated with DOE’s standards often increase the costs of a new manufactured home to such an extent that the homeowner cannot recoup the frontend expense through energy savings. Further, in order to meet these standards, manufacturers would lose the ability to include features, such as vaulted ceilings and windows, that consumers find desirable in a home. MHI CEO Lesli Gooch spoke at the meeting noting that the MHCC should “encourage HUD to craft its own standard that balances energy efficiency with affordability and encourages homeownership” as is HUD’s mandate.

Additionally, in advance of Tuesday’s meeting, MHI provided the MHCC with additional analysis of MHI’s alternative proposal and highlighted flaws in the DOE’s economic analysis about cost effectiveness. MHI’s submission clearly demonstrates that MHI’s proposed thermal requirements provide better cost savings for consumers with comparable energy efficiency to the DOE rule. Furthermore, MHI shared results of a third-party economic analysis of the DOE rule establishing that DOE failed to consider key cost inputs in its analysis so its findings cannot be relied upon to show cost effectiveness, as required by law. MHI also provided architectural drawings to show the negative impacts of the DOE rule on the design and aesthetics of manufactured homes.

 The Manufactured Housing Consensus Committee agreed with MHI’s proof that the DOE did not follow its statutory mandate that the Energy Rule result in energy efficiency requirements that are cost effective. On Wednesday, the MHCC voted to recommend HUD code revisions, consistent with MHI’s initial proposal, by a voice vote. Furthermore, the MHCC attached MHI’s documentation supporting its proposal to its submission to HUD. Click here to read MHI’s submissions to the MHCC in advance of the November meeting.

Additionally, the MHCC included a series of comments explaining their rationale for the revisions:

• The MHCC agrees that the energy efficiency requirements need to be updated but believes the updates should be done incrementally. The recommended changes shown in this document accomplish this incremental approach.
• HUD, by statute, is the body responsible for the development and enforcement of manufactured housing standards.
• The MHCC has reviewed the DOE Final Rule and has determined DOE circumvented the standards development process prescribed in EISA which requires cost justification and consultation with HUD.
• DOE provided an energy conservation standard which was based on site-built construction and applied it to a performance-based national code. If adopted as written, the final rule would adversely impact the entire Manufactured Housing program and cost increases associated with compliance would reduce prospective purchasers (especially minorities and low-income consumers) from durable, safe, high quality and affordable housing. 
• The MHCC reviewed the DOE Final Rule and is recommending modifications to the MHCSS based largely on the final rule. The recommended changes increase energy efficiency while maintaining affordability and consumer options.
• The MHCC previously recommended that DOE include the substantial cost of testing, enforcement, and regulatory compliance in its costing analysis. The final rule did not consider these costs.  The recommended changes implemented into the MHCSS allow for testing, enforcement, and regulatory compliance within HUD’s existing framework which help minimize costs to manufacturers and ultimately consumers.  However, there still may be a gap in enforcement between HUD’s final standards and DOE’s final rule, which may need to be resolved.
• The MHCC has a statutory obligation to consider the cost impacts of all recommended changes to the MHCSS and preserve affordability to increase American home ownership and this obligation is reflected in the recommended changes.
• The MHCC expects, in accordance with normal practice, the recommendations contained in this document will be subject, as required in 42 USC 5403, to publication as a proposed rule and full notice and comment rulemaking in accordance with the 1974 Act as amended. 

See Appendix A [referencing materials submitted by MHI] for information and data supporting recommended changes.