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Court Deals Bush Setback in Air Conditioner Rules by Chris Baltimore Reuters - January 13, 2004

WASHINGTON (Reuters) - A federal appeals court Tuesday overturned a Bush administration decision to weaken energy-efficiency standards for new air conditioners, a move which could save American consumers $20 billion and avoid the need for 200 new electricity plants by 2030.

In 2001, 10 states including New York, California, New Jersey and Massachusetts sued the U.S. Department of Energy to block it from scaling back an increase in minimum air conditioner energy-efficiency standards.

The Bush administration wanted to require air conditioners and heat pumps manufactured after January 2006 to become 20 percent more efficient, not the stricter 30 percent improvement required under a previous Clinton-era rule.

Air conditioners can account for about one-third of all U.S. electricity use during hot summer days when demand is the highest.

The U.S. Court of Appeals for the Second Circuit ruled that the Energy Department lacks the authority to revoke such rules once they are published as final rules. It cited a "no-rollback" provision contained in an appliance standard law which Congress passed in 1987.

The stricter standards could help U.S. utilities avoid the need to build 200 new power plants and save consumers a cumulative $20 billion in electricity bills by 2030, the American Council for an Energy Efficient Economy said.

The Bush administration withdrew the final rule in May 2002 and weakened it under pressure from some appliance makers. A series of White House environmental policy changes have been criticized by activist groups and Democrats as catering to industry demands for less-costly regulations.

The Energy Department is disappointed by the court's decision and is reviewing it, a spokesman said.

The Air-Conditioning and Refrigeration Institute, an industry group, said the decision was flawed because it was "determined on process rather than on the impact of the regulation on millions of people." The group said it is weighing challenging the decision in court.

Consumer watchdogs said the stricter efficiency standards could help take pressure off tight U.S. natural gas supplies, because summertime electricity demand is met mostly with clean-burning natural gas-fired power plants.

"Air conditioning creates one of the biggest draws on the system when it is most vulnerable -- those hot summer afternoons," said Mark Cooper, an economist with the Consumer Federation of America, which also joined in the lawsuit.