RE: DESPITE DOE DELAY ENERGY STANDARDS REMAIN
UNACCEPTABLE AS COSTS CONTINUE TO INCREASE 

The U.S. Department of Energy (DOE) has issued a “pre-publication” notice of a final rule to extend the compliance date for its previously-announced “energy conservation” standards for manufactured homes. According to the notice, which was issued on May 19, 2023, but has not yet been officially published in the Federal Register (see, copy attached), compliance with the DOE standards – absent prior judicial or legislative intervention – will be required as of July 1, 2025 for Tier 2 homes and 60 days after the issuance of enforcement procedures (presumably in the form of a separate regulation) for Tier 1 homes.

This delay in the compliance date for the DOE energy standards, at a minimum, represents DOE’s implicit recognition that its May 31, 2022 manufactured housing energy standards “final rule,” published without any corresponding testing, enforcement or compliance criteria and procedures, was necessarily incomplete and invalid, and would not have survived a legal challenge as urged by MHARR immediately after its adoption. (See, e.g., MHARR Issues and Perspectives, August 2022, “Why the DOE Energy Rule Should be DOA.”) As MHARR asserted from the beginning in multiple rounds of written comments to DOE, HUD and the Manufactured Housing Consensus Committee (MHCC), applicable law requires that federal regulations in general – and manufactured housing standards in particular – yield a positive cost-benefit for consumers.

Without either proposing or considering the cost impact of testing, enforcement and compliance criteria, the May 31, 2022 “final rule” did not net-out the rule’s full costs versus alleged “benefits.” As a result, the May 31, 2022 final rule was not properly calculated or promulgated and was vulnerable to court action, which is why MHARR strongly urged the Manufactured Housing Institute (MHI) to seek judicial relief as quickly as possible. It is not surprising, therefore, that DOE, once challenged in court, almost immediately backed-away from its original May 31, 2023 compliance date and opted to delay mandatory compliance with the May 31, 2022 rule, rather than face repudiation and invalidation by the court.

A mere delay, however, does not resolve the fundamental and inherent danger to the industry that is posed by DOE energy regulation based on the International Energy Conservation Code (IECC) – a code that is not appropriate for HUD Code manufactured housing and does not consider or prioritize initial purchase price affordability. By mandating IECC as the base energy code for manufactured housing, section 413 of the Energy Independence and Security Act of 2007 (EISA) would fundamentally undermine the manufactured housing market and would most especially harm the market for what are currently the industry’s most affordable homes. Thus, while MHI, to its credit, took legal action (albeit delayed) against the May 31, 2022 DOE rule, that rule was ultimately a consequence of MHI’s original support for and approval of the 2104-2015 DOE “negotiated rulemaking” process (and Term Sheet).

Because of the inherent danger to the HUD Code industry and consumers that is posed by section 413 and the current DOE rule, there are only two courses that the industry should follow:

1. The industry should seek the full repeal of EISA section 413 based on the continuing threat that it poses to the industry, to the affordability of its homes and to American consumers of affordable housing.
2. At a minimum, it should seek to force DOE “back to the drawing board” on energy regulation by continuing to oppose the current rule in court, including an appeal if the District Court ultimately decides in favor of DOE.

While a compliance delay is clearly warranted, DOE regulation of manufactured housing “energy conservation” under EISA section 413 – under any formulation — is not. The ultimate objective of the industry, therefore, should not be merely delay, but the invalidation and removal of section 413 in its entirety, and the reversion of regulatory authority over manufactured housing “energy” matters back to HUD where it properly belongs. Anything less would result in the complete subversion of manufactured home affordability and the manufactured housing market by energy/climate special interests and their allies with constantly more aggressive, demanding and costly energy mandates. (See, e.g., MHARR Issues and Perspectives, April 2023, “More DOE Energy Outrages Coming for Industry and Consumers.”)

Accordingly, MHARR will continue to vigorously oppose section 413 as inappropriate for manufactured housing, as well as the May 31, 2022 standard (or other standard adopted under EISA section 413).

cc: Other Interested HUD Code Industry Members