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Zero Zone, Inc. v. United States Department of Energy

ELR Citation: 46 ELR 20137
Nos. 14-2147 et al., (7th Cir., 08/08/2016)

The Seventh Circuit denied petitions for review challenging two DOE rules aimed at improving the energy efficiency of commercial refrigeration equipment. The first rule adopted new energy efficiency standards for commercial refrigeration equipment, and the second rule, issued a month later, clarified the test procedures that DOE uses to implement those standards. The court held that the new standards rule was premised on an analytical model that is supported by substantial evidence and is neither arbitrary nor capricious. DOE conducted a cost-benefit analysis that is within its statutory authority and is supported by substantial evidence. Its methodology and conclusions were not arbitrary or capricious, and it gave appropriate consideration to the rule’s effect on small businesses and the role of other agency regulations. Notably, in so ruling, the court upheld DOE's estimated "social cost of carbon," holding that Congress intended that DOE have the authority under the Energy Policy and Conservation Act to consider the reduction in the social cost of carbon. DOE similarly acted within its authority, and within reason, when it promulgated the test procedure rule. The court therefore denied the petitions in their entirety.