Client:
A leading manufacturer of walk-in coolers and freezers.
Challenge:
The US Department of Energy (DOE) was concerned that the company had sold hundreds of thousands of walk-in coolers and freezers that were potentially not in compliance with federal energy conservation standards.
The risk:
Had the DOE pursued the full range of available enforcement actions, the manufacturer could have faced:
- Civil penalties
- Injunctive relief
- Product recalls
- Reputational damage
Actions taken:
Our Forensic Services team, leveraging deep Model Risk Management expertise, conducted a thorough forensic analysis of the client’s energy efficiency calculations.
We identified key errors and governance failures in its underlying models that led to overstated product efficiency claims. However, we independently verified that these overstated claims were limited to specific product configurations, the majority of which still exceeded minimum federal efficiency standards.
Outcome:
Our work enabled the manufacturer to confidently and accurately characterize the extent of its noncompliance, and to take efficient remedial actions, including revising its labeling to comply with DOE requirements. The company was able to avoid severe penalties and secure a favorable regulatory resolution.
