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July 19, 2013

HH Technologies challenges federal bureaucracy, wins

WASHINGTON —

Owners of a small Alabama company could have thrown up their hands in defeat after learning that a federal rule on energy efficiency wouldn't allow the automated door they had invented for walk-in coolers.

Instead, the brothers who run HH Technologies in Cullman County called their congressman, got a law passed, and earned the Department of Energy's seal of approval for their patented door.

Their roller-coaster ride over the last two years — starting with layoffs and ending with a current hiring boom — proves the federal government can be responsive when ordinary citizens make a stand.

"We knew very little about what went on in Washington," said Shawn Crider, chairman of the company. "We just thought any fool would allow us to sell this door."

But an Energy Department regulation finalized in October 2011 mandated that doors for walk-in coolers have a certain amount of built-in insulation.

The amount of insulation in HH Technologies' RollSeal door wasn't nearly thick enough. Instead, its layers of special fabric roll up and down automatically as people enter and exit the cooler. The door stays open for less time than traditional doors and has an especially tight seal, factors the energy efficiency regulation didn't take into account.

Initially, Crider called a lawyer to help him navigate the agency regulations and figure out if the 2011 rule applied to his door. It did, and sales plummeted. Current customers wouldn't have to tear out their RollSeal doors, but they couldn't buy new ones. Forty of HH Technologies' 100 employees were let go.

The lawyers recommended a political solution, which resulted in Crider hiring a lobbyist.

"I had no idea exactly what a lobbyist did," Crider said. "I figured they were just a channel for money or something."

The lobbyist, Michael Davis of the Balch and Bingham firm in Birmingham, arranged a December 2011 meeting between Crider, Energy Department staff, and Rep. Robert Aderholt, the Haleyville Republican who represents Cullman County.

Crider left the meeting convinced that the law that had spawned the regulation needed to be changed.

So what made a small-town company located "on the outskirts of Bug Tussle" and with no political clout think it could get a new law passed?

"Probably a little bit of it was ignorance on our side," Crider said.

Even Aderholt was skeptical.

"I said we'd see what we could do, but you never make any commitments or promises," Aderholt said Wednesday in a phone interview from Azerbaijan, where he was traveling on congressional business.

Two factors helped HH Technologies' cause: Energy Department staffers supported a new law so they could evaluate advances in technology that weren't envisioned when the old law was written. And the new legislation would give flexibility to regulators as opposed to giving preferential treatment to a specific product.

"It allowed for innovations of components for any part of the box, so it didn't just apply to the doors, but to the walls, the condenser or any other part," said Davis, the lobbyist.

"If we had drafted legislation that was specific to the door, we would have run up against the earmark ban or somebody making the accusation that it benefited only one company, and we didn't think that was in the best interest of the country."

Aderholt's bill passed the House unanimously in the spring of 2012. It later passed the Senate with help from GOP Sens. Richard Shelby and Jeff Sessions, but only after the chamber added energy-related amendments affecting other industries.

After a few months of tense House-Senate negotiations over the unrelated provisions, both chambers passed a final version that President Barack Obama signed into law in December.

The chronology was remarkably rapid in a Congress where energy issues are controversial and rarely bipartisan. But even after the law passed, HH Technologies still had to convince the Energy Department their door could meet energy efficiency standards. They hired an engineering consultant and produced a video to help make their case.

In May, the company formally requested an exemption from the insulation requirements, which was granted on June 14. Energy officials agreed the RollSeal door would be open fewer minutes per day than a conventional door, and would therefore meet the energy standard.

HH Technologies sold 700 doors in 2012 but expects to sell 1,650 this year. Armed with the Energy Department's letter approving the company's technology, his sales team is making calls. He projects selling 4,200 doors in 2015 and adding more jobs.

The company's victory didn't come cheap. Crider figures HH Technologies spent close to $250,000 on consultants, lawyers, lobbyists and travel during the last two years. Federal lobbying reports show the company paid the lobbying firm $40,000 over nine months.

In May 2012, the month after Aderholt's bill passed the House, Crider and his brothers donated a total of $6,500 to Aderholt's campaign account, and a fourth company employee gave another $1,000. In August, Shawn Crider gave $2,500 to Shelby's leadership political action committee.

"Those donations were later in the game. They were more of a thank you for your efforts," Crider said. "I don't think they played a role in it at all."

Sessions and Aderholt said they were happy to help a constituent cut through the federal bureaucracy, save jobs and grow a company.

"HH Technologies is not on anybody's radar screen in Washington, D.C.," Aderholt said. "We're not talking about thousands of jobs, but it meant a lot to the people of Cullman County, Alabama. This is just one of those stories about how Washington is supposed to work."

 

 

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