Cost of Coolness Makes Hot Topic
THE price of staying cool this summer is making some people jalapeno hot.
As consumers are quickly discovering in the first hazy days of summer, it is no longer cheap to give the old air conditioner a boost.
Just ask Marvin Moskowitz. The Manhattan resident recently had two air conditioners readied for the summer. The bill: $300 per machine. "It cost too much for what they did, and I'm not even sure what they did," says Mr. Moskowitz.
Getting an automobile air conditioner repaired is not any better. At Diffuts Auto Repair on Manhattan's upper east side, it costs at least $300 to make it cool inside a car again.
"People think we're ripping them off and they get mad and leave," says Freddy Bonet, the owner, who used to charge only $100 for the service.
Behind the consumer ire is the rising price of chlorofluorocarbons (CFCs), the essential ingredient of the refrigerant. In the 1980s, Freon, manufactured by DuPont, sold for $1 per pound wholesale. Today, it costs $8 to $10 per pound.
A significant part of the price rise is a tax of $5.35 per pound imposed by the federal government to encourage consumers to begin the shift to other products. The US has treaty obligations to progressively reduce the use of CFCs, which deplete the earth's ozone layer. The ozone layer screens out many of the sun's harmful rays.
As the tax has increased, the amount of CFCs produced has been going down. At the end of the year, the chemical companies will have to stop producing the CFCs.
At the retail level, the tax and diminishing supply has meant steadily higher prices. Mr. Bonet says a 30-pound tank of refrigerant used to cost him $100. Now it costs $400. In addition, his repairmen are now required to attend air- conditioning school and obtain a license. And, instead of venting the old Freon into the atmosphere, he now must recycle the chemical. The recycling equipment cost him $5,000.
When Bonet's potential customers find out what it will cost, they often end up at repair shops that get their product from a "black market." The US Customs Service says air-conditioner refrigerant is the second-largest illegal import in dollar value in the port of Miami. The largest is cocaine.
Last October the black market attracted the attention of the US government, which formed a task force with the Environmental Protection Agency, the Customs Service, and the Internal Revenue Service.
Since then the government has beefed up its enforcement abilities. On March 16, a Miami jury found Jose Prieto and Paul Zborovsky guilty of smuggling a cargo container of CFC into the US. It was the first time a jury considered charges under the Clean Air Act of 1990, which bars importing ozone-depleting chemicals without a license.
The case illustrated the convoluted methods used by the CFC smugglers. Mr. Prieto and Mr. Zborovsky shipped a container of CFCs into the port of Newark, N.J. They arranged for the container to be removed from the port purportedly for reshipment out of the US. They had already asked a Customs-licensed broker to make it appear the cargo was being shipped to Venezuela. In return for the fake documents, they paid a $24,750 bribe to the broker. For future shipments, the broker was going to be paid $33,000 per container.
The illegal imports are produced in a variety of countries. "Much of the material is coming from the former Soviet states," says Tony Vogelsberg, environmental manager for DuPont Fluorocarbons in Wilmington, Del. Some imports, however, have also arrived from India and some smaller CFC producing countries, he says. Some of the product has even been produced in the US, shipped overseas, and returned back to the US with false paperwork.
Instead of CFCs, new home air conditioners now use a more ozone-friendly chemical, called HCFC (there is an additional hydrogen molecule). Yet even this chemical will no longer be sold for new units after the year 2010. Chemical companies hope to develop new products in the future.
In the meantime, the black-market operations are inhibiting the aim of the high taxes - to cause consumers to switch to alternatives. "It's slowing the entire process," says Vogelsberg, "while it risks continued damage to the ozone layer."