By STEPHEN YUREK, President and Chief Executive Officer, Air-Conditioning, Heating, and Refrigeration Institute

We begin 2017 in a very good place as an industry. Year-over-year shipments were up in many categories, including commercial gas and electric water heaters, in 2016. This is an indication our industry is strong and vibrant, which we expect to continue this year.

The 2016 elections have brought about significant changes. Our industry will be collaborating with an administration, a House of Representatives, and a Senate that are pro-business to some degree. Therefore, it is reasonable to expect a willingness to hear and address our concerns with respect to energy and environmental issues. Importantly, the regulatory structure under which we have operated appears to be in for a dramatic change with the ushering in of a new administration.

Over the last several years, both our staff and our member companies have spent considerable time on Capitol Hill talking to representatives and senators about changes in the regulatory structure we would like to see. Additionally, we have engaged in discussions about the manner in which our products and equipment are treated in the tax code.

In 2016, our current vice chairman, Chris Peel of Rheem Manufacturing Co., and I testified before the House Subcommittee on Energy and Power to present commonsense changes to the Energy Policy and Conservation Act (EPCA), the law governing regulation of many of the products our members manufacture.

Our industry supported the EPCA when it was passed during the 1970s because one national efficiency standard for each covered product, combined with strong federal preemption, made more sense than a mishmash of state and local efficiency standards that would have challenged our ability to provide the products and equipment our customers desired. The law worked fairly well for a number of years, but with industry advances and several amendments by Congress, it has devolved into an endless cycle of ever-more-stringent efficiency requirements for an ever-increasing number of HVACR and water-heating products. The law has become so rigid, in fact, it prohibits the U.S. Department of Energy from making changes to a published standard even if the changes are needed to correct errors in the rule.

In the new political environment, we will seek positive, commonsense changes to eliminate unnecessary serial rule-making, raise the bar of economic justification, and promote negotiated solutions. Our goal is to advocate for smart, science-based rules instead of rigid, out-of-date regulations that stifle growth and opportunity.

Tax policy is another area in which we are looking to enact reforms that encourage growth and more accurately reflect the realities of our industry. For example, the depreciation schedule for commercial equipment is set at 39 years, which, at nearly twice the average lifespan, discourages building owners from replacing older, less efficient equipment in a time frame making environmental or economic sense.

In addition to these policy objectives, we will continue our Industry Awareness Campaign, which demonstrates to policy-makers at all levels our commitment to a regulatory structure that brings stability and consistency to our marketplace while providing the quality, energy-efficient products and equipment our customers want and expect.

We will work with the new administration to promote the benefits our industry provides to its customers and the 1.2 million individuals it employs in the United States. At the same time, we will continue to work with all stakeholders, including environmental advocacy groups, to affect positive change.

Being successful in all of our objectives means working together as one industry, with one voice. We need to continue working closely with like-minded partners, such as ACCA, HARDI, PHCC, ASHRAE, and appliance and electrical manufacturers. We need to continue to engage with them as part of a broader coalition of stakeholders to bring about commonsense reforms. My hope is we all can commit to moving forward as a united industry because the successes we hope to achieve will make a real difference in American manufacturing and the lives of every American.