[Federal Register Volume 72, Number 220 (Thursday, November 15, 2007)]
[Proposed Rules]
[Pages 64432-64515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22040]
[[Page 64431]]
-----------------------------------------------------------------------
Part IV
Department of Energy
-----------------------------------------------------------------------
Office of Energy Efficiency and Renewable Energy
-----------------------------------------------------------------------
10 CFR Parts 430 and 431
Energy Conservation Program: Energy Conservation Standards for Certain
Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas Kitchen
Ranges and Ovens, and Microwave Ovens) and for Certain Commercial and
Industrial Equipment (Commercial Clothes Washers); Proposed Rule
Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 /
Proposed Rules
[[Page 64432]]
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Parts 430 and 431
[Docket No. EE-2006-STD-0127]
RIN 1904-AB49
Energy Conservation Program: Energy Conservation Standards for
Certain Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas
Kitchen Ranges and Ovens, and Microwave Ovens) and for Certain
Commercial and Industrial Equipment (Commercial Clothes Washers)
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Advance notice of proposed rulemaking and notice of public
meeting.
-----------------------------------------------------------------------
SUMMARY: The Energy Policy and Conservation Act (EPCA or the Act)
authorizes the Department of Energy (DOE) to establish energy
conservation standards for various consumer products and commercial and
industrial equipment--including residential dishwashers, dehumidifiers,
and electric and gas kitchen ranges and ovens and microwave ovens
(hereafter referred to as ``cooking products''), as well as commercial
clothes washers--if DOE determines that energy conservation standards
would be technologically feasible and economically justified, and would
result in significant energy savings. DOE is publishing this advance
notice of proposed rulemaking (ANOPR) to consider establishing energy
conservation standards for these products and to announce a public
meeting to receive comments on a variety of issues.
DATES: DOE will hold a public meeting on December 13, 2007, starting at
9 a.m. in Washington, DC. DOE must receive requests to speak at the
public meeting no later than 4 p.m., November 29, 2007. DOE must
receive a signed original and an electronic copy of statements to be
given at the public meeting no later than 4 p.m., December 6, 2007.
DOE will accept comments, data, and information regarding the ANOPR
before or after the public meeting, but no later than January 29, 2008.
See section IV, ``Public Participation,'' of this ANOPR for details.
ADDRESSES: The public meeting will be held at the Holiday Inn Capital,
550 C Street, SW., DC 20024.
Any comments submitted must identify the ANOPR for Home Appliance
Products, and provide the docket number EE-2006-STD-0127 and/or
Regulatory Information Number (RIN) 1904-AB49. Comments may be
submitted using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected]. Include the
docket number EE-2006-STD-0127 and/or RIN 1904-AB49 in the subject line
of the message.
Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy,
Building Technologies Program, Mailstop EE-2J, 1000 Independence
Avenue, SW., Washington, DC 20585-0121. Please submit one signed paper
original.
Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S.
Department of Energy, Building Technologies Program, Room 1J-018, 1000
Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-
2945. Please submit one signed paper original.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section IV of this document
(Public Participation).
Docket: For access to the docket to read background documents or
comments received, visit the U.S. Department of Energy, Forrestal
Building, Room 1J-018 (Resource Room of the Building Technologies
Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586-
2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal
holidays. Please call Ms. Brenda Edwards-Jones at the above telephone
number for additional information regarding visiting the Resource Room.
Please note: DOE's Freedom of Information Reading Room (Room 1E-190 at
the Forrestal Building) no longer houses rulemaking materials.
FOR FURTHER INFORMATION CONTACT: Stephen Witkowski, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies, EE-2J, 1000 Independence Avenue, SW., Washington, DC
20585-0121, (202) 586-7463. E-mail: [email protected].
Francine Pinto or Eric Stas, U.S. Department of Energy, Office of
the General Counsel, Forrestal Building, Mail Station GC-72, 1000
Independence Avenue, SW., Washington, DC, 20585. Telephone: (202) 586-
9507. E-mail: [email protected] or [email protected].
Regarding the public meeting, Brenda Edwards-Jones, U.S. Department
of Energy, Building Technologies Program, Room 1J-018, 1000
Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-
2945. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Purpose of the Advance Notice of Proposed Rulemaking
B. Overview of the Analyses Performed
1. Engineering Analysis
2. Energy and Water Use Characterization
3. Markups to Determine Equipment Price
4. Life-Cycle Cost and Payback Period Analyses
5. National Impact Analysis
C. Authority
D. Background
1. History of Standards Rulemaking for Residential Dishwashers,
Dehumidifiers, and Cooking Products; and Commercial Clothes Washers
2. Current Rulemaking Process
3. Analysis Process
4. Miscellaneous Rulemaking Issues
a. Joint Stakeholder Recommendations
b. Standby Power for Dishwashers and Cooking Products
5. Test Procedures
II. Analyses for the Four Appliance Products
A. Market and Technology Assessment
1. Product Classes
a. Dishwashers
b. Dehumidifiers
c. Cooking Products
d. Commercial Clothes Washers
2. Market Assessment
3. Technology Assessment
a. Dishwashers
b. Dehumidifiers
c. Cooking Products
d. Commercial Clothes Washers
B. Screening Analysis
1. Purpose
a. Technological Feasibility
b. Practicability To Manufacture, Install, and Service
c. Adverse Impacts on Product Utility or Product Availability
d. Adverse Impacts on Health or Safety
2. Design Options
a. Dishwashers
b. Dehumidifiers
c. Cooking Products
1. Cooktops and Ovens
2. Microwave Ovens
d. Commercial Clothes Washers
C. Engineering Analysis
1. Approach
2. Technologies Unable To Be Included in the Engineering
Analysis
3. Product Classes, Baseline Models, and Efficiency Levels
Analyzed
a. Dishwashers
b. Dehumidifiers
c. Cooking Products
d. Commercial Clothes Washers
4. Cost-Efficiency Results
a. Dishwashers
b. Dehumidifiers
c. Cooking Products
d. Commercial Clothes Washers
D. Energy Use and End-Use Load Characterization
[[Page 64433]]
1. Dishwashers
2. Dehumidifiers
3. Cooking Products
a. Cooktops and Ovens
b. Microwave Ovens
4. Commercial Clothes Washers
E. Markups To Determine Equipment Price
1. Distribution Channels
2. Approach for Manufacturer Markups
3. Approach for Retailer and Distributor Markups
4. Sales Taxes
5. Summary of Markups
F. Rebuttable Presumption Payback Periods
G. Life-Cycle Cost and Payback Period Analyses
1. Approach Taken in the Life-Cycle Cost Analysis
2. Life-Cycle Cost Inputs
a. Total Installed Cost Inputs
b. Operating Cost Inputs
c. Effective Date
d. Equipment Assignment for the Base Case
3. Payback Period Inputs
4. Life-Cycle Cost and Payback Period Results
H. Shipments Analysis
1. Shipments Model
2. Data Inputs
3. Shipments Forecasts
I. National Impact Analysis
1. Approach
2. Base Case and Standards Case Forecasted Efficiencies
3. National Impact Analysis Inputs
4. National Impact Analysis Results
J. Life-Cycle Cost Subgroup Analysis
K. Manufacturer Impact Analysis
1. Sources of Information for the Manufacturer Impact Analysis
2. Industry Cash Flow Analysis
3. Manufacturer Subgroup Analysis
4. Competitive Impacts Assessment
5. Cumulative Regulatory Burden
6. Preliminary Results for the Manufacturer Impact Analysis
L. Utility Impact Analysis
M. Employment Impact Analysis
N. Environmental Assessment
O. Regulatory Impact Analysis
III. Candidate Energy Conservation Standard Levels
IV. Public Participation
A. Attendance at Public Meeting
B. Procedure for Submitting Requests To Speak
C. Conduct of Public Meeting
D. Submission of Comments
E. Issues on Which the Department of Energy Seeks Comment
1. Microwave Oven Standby Power
2. Product Classes
3. Commercial Clothes Washer Horizontal Axis Designs
4. Compact Dishwashers
5. Microwave Oven Design Options
6. Technologies Unable To Be Analyzed and Exempted Product
Classes
7. Dishwasher Efficiency and Its Impact on Cleaning Performance
8. Dehumidifier Use
9. Commercial Clothes Washer Per-Cycle Energy Consumption
10. Commercial Clothes Washer Consumer Prices
11. Repair and Maintenance Costs
12. Efficiency Distributions in the Base Case
13. Commercial Clothes Washer Shipments Forecasts
14. Base-Case and Standards-Case Forecasted Efficiencies
15. Dehumidifier Cost and Efficiency Relationships
16. Trial Standard Levels
V. Regulatory Review and Procedural Requirements
VI. Approval of the Office of the Secretary
I. Introduction
A. Purpose of the Advance Notice of Proposed Rulemaking
The purpose of this ANOPR is to provide interested persons with an
opportunity to comment on:
1. The product classes that the Department of Energy (DOE) is
planning to analyze in this rulemaking;
2. The analytical framework, models, and tools (e.g., life-cycle
cost (LCC) and national energy savings (NES) spreadsheets) DOE is using
in performing analyses of the impacts of energy conservation standards
for residential dishwashers, dehumidifiers, cooking products, and
commercial clothes washers (CCWs) (collectively referred to in this
ANOPR as ``the four appliance products'');
3. The analyses performed for the ANOPR, including in particular
the results of the engineering analyses, the LCC and payback period
(PBP) analyses, and the NES and national impact analyses, which are
presented in the ANOPR Technical Support Document (TSD): Energy
Efficiency Standards for Consumer Products and Commercial and
Industrial Equipment: Residential Dishwashers, Dehumidifiers, And
Cooking Products And Commercial Clothes Washers, \1\ as summarized in
this ANOPR (2007 TSD); and
---------------------------------------------------------------------------
\1\ To be published on the DOE Web site at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html
---------------------------------------------------------------------------
4. The candidate energy conservation standard levels that DOE has
developed from these analyses.
B. Overview of the Analyses Performed
The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.)
directs DOE to consider establishing or amending energy conservation
standards for various consumer products and commercial and industrial
equipment, including the four appliance products which are the subject
of this ANOPR. For each of these products, DOE conducted in-depth
technical analyses for this ANOPR in the following areas: (1)
Engineering, (2) energy and water use characterization, (3) markups to
determine equipment price, (4) LCC and PBP, (5) shipments, (6) national
impacts, and (7) preliminary manufacturer impacts. The ANOPR presents a
discussion of the methodologies and assumptions utilized in these
analyses. For each type of analysis, Table I.1 identifies the sections
in this document that contain the results of the analysis, and
summarizes the methodologies, key inputs, and assumptions for the
analysis. DOE consulted with interested parties in developing these
analyses, and invites further input from stakeholders on these topics.
Obtaining that input is the purpose of this ANOPR. Thus, it should be
noted that the analytical results presented here are subject to
revision following review and input from stakeholders and other
interested parties. The final rule will contain the final analytical
results.
[[Page 64434]]
Table I.1.--In-Depth Technical Analyses Conducted for the Advance Notice of Proposed Rulemaking
----------------------------------------------------------------------------------------------------------------
ANOPR section for
Analysis area Methodology Key inputs Key assumptions results
----------------------------------------------------------------------------------------------------------------
Engineering (TSD Chapter 5):
Dishwashers............... Efficiency level Component cost Analysis can be Section II.C.3.
Dehumidifiers............. approach data; extended in
supplemented Performance subsequent
with design values. analyses to
option analysis. product classes
and efficiency
levels for which
the Association
of Home Appliance
Manufacturers
(AHAM) did not
provide data.
Cooking Products.......... ................. ................. Historical data
from DOE's 1996
analysis on
residential
cooking products
are still
representative of
current
manufacturing
costs.
Commercial Clothes Washers ................. ................. Analysis can be
extended to
energy and water
efficiency levels
for which AHAM
did not provide
data.
Energy and Water Use
Characterization
(TSD Chapter 6):
Dishwashers............... Establish per- Per-cycle energy Per-cycle water Section II.D.1.
cycle energy and and water use; use is a direct
water use and Average annual function of per-
then multiply by usage of 215 cycle energy use
annual cycles. cycles based on (based on AHAM
DOE test data).
procedure;
Variability of
usage based on
Energy
Information
Administration
(EIA)'s
Residential
Energy
Consumption
Survey (RECS).
Dehumidifiers............. Establish daily Per-cycle energy Average usage of Section II.D.2.
energy use by and water use; 1095 hours is
dividing product Average annual representative of
capacity by usage of 1095 dehumidifier use.
efficiency and hours based on
then multiply by AHAM estimates;
annual hourly Variability of
usage. usage based on
multiple sources.
Cooking Products.......... Use recent survey Recent survey Recent survey data Section II.D.3.
data to estimate data from are indicative of
annual energy California and current household
use. Florida--indicat cooking habits;
es a drop in Historical data
annual energy from DOE's 1996
use of ~40% for analysis on
electric and gas residential
ranges and ~15% cooking products
for microwave are still
ovens relative representative of
to DOE test component energy
procedure use (e.g., self-
estimates; cleaning, clock,
Variability of ignition).
usage based on
EIA's RECS.
Commercial Clothes Washers Establish per- Per-cycle energy Per-cycle energy Section II.D.4.
cycle energy and and water use; use data in DOE's
water use and Average daily 2000 TSD on
then multiply by usage of 3.4 residential
annual cycles. cycles for multi- clothes washers
family and 6 is representative
cycles for of per-cycle
laundromats; drying and per-
Variability of cycle machine
usage based on energy for
multiple sources. commercial
washers.
Markups to Determine
Equipment Price
(TSD Chapter 7):
Dishwashers............... Assess financial Distribution Markups for Section II.E.
Dehumidifiers............. data from: (1) channels; SEC baseline and more-
Cooking Products.......... U.S. Securities reports on efficient
Commercial Clothes Washers and Exchange appliance equipment are
Commission (SEC) manufacturers; different.
reports on U.S. Census
appliance Business
manufacturers to Expenditure
develop Survey; State
manufacturer sales taxes;
markups and (2) Shipments to
the U.S. Census different States.
Business
Expenditure
Survey to
develop retailer
and commercial
distributor
markups. Use
markups to
transform
manufacturer
costs into
consumer prices.
[[Page 64435]]
LCC and PBP
(TSD Chapter 8):
Dishwashers............... Use Monte Carlo Manufacturer Only 3% of II.G.4
simulation in costs; Markups consumers
combination with (including sales purchase
inputs that are taxes); dishwashers at
characterized Installation existing minimum
with probability costs; Annual standards (based
distributions to energy (and on AHAM data);
establish a water) Standards do not
distribution of consumption; impact repair and
consumer Energy (and maintenance
economic impacts water) prices costs; AEO2007
(i.e., LCC and future basis for energy
savings and trends; price forecasts;
PBPs) that Maintenance and Average product
identify the repair costs; lifetime is 12.3
percent of. Product years; Average
lifetime; discount rate is
Discount rates. 5.6%.
Dehumidifiers............. ................. ................. Approximately 30%
of consumers
purchase
dehumidifiers at
existing minimum
standards (based
on AHAM data);
Standards do not
impact repair and
maintenance
costs; Annual
Energy Outlook
(AEO) 2007 basis
for energy price
forecasts;
Average product
lifetime is 11
years; Average
discount rate is
5.6%.
Cooking Products.......... ................. ................. For gas ranges,
only 18 percent
of consumers
purchase
equipment with
standing pilots;
For electric
cooking products
and microwave
ovens, 100
percent of
consumer purchase
equipment at
baseline levels;
Average product
lifetime is 19
years for
electric and gas
ranges and 9
years for
microwave ovens;
Standards do not
impact repair and
maintenance
costs; AEO2007
basis for energy
price forecasts;
Average discount
rate is 5.6%.
Commercial Clothes Washers ................. ................. Approximately 80
percent of
consumers
purchase
equipment at
existing minimum
standards (based
on AHAM data);
Standards do not
impact repair and
maintenance
costs; AEO2007
basis for energy
price forecasts;
Average product
lifetime is 7.1
or 11.3 years
depending on
product
application;
Discount rate can
be estimated by
company-weighted
average cost of
capital.
Shipments (TSD Chapter 9):
[[Page 64436]]
Dishwashers............... Forecast Historical Market segments II.H.3.
Dehumidifiers............. shipments shipments (for are: new
Cooking Products.......... through the use calibration construction,
Commercial Clothes Washers of a product purposes); replacements, and
stock accounting Historical first-time owners
model by product (existing
dividing market saturations; New households
into segments-- construction without the
e.g., new forecasts; product);
construction, Survival Sensitivity to
replacements, functions (based `relative price'
and early on product is low.
replacements, or lifetimes); Market segments
first-time Sensitivity to are: replacements
owners; Use `relative and first-time
increases in price,' i.e., owners;
purchase price sensitivity to Sensitivity to
and savings in the combined `relative price'
operating costs effect of is low.
to forecast the purchase price Market segments
impact of increases, are: new
standards on operating cost construction,
shipments. savings, and replacements, and
household income. early
replacements;
Sensitivity to
`relative price'
is low.
Market segments
are: new
construction and
replacements; New
construction
shipments driven
by multi-family
housing market
only; Sensitivity
to `relative
price' is low.
National Impacts
(TSD Chapter 10):
Dishwashers............... Forecast national Annual forecasted Annual shipments Section II.I.4.
Dehumidifiers............. annual energy shipments; from shipments
Cooking Products.......... (and water) use, Forecasted base model; Forecasted
Commercial Clothes national annual case and base case and
Washers.. equipment costs, standards case standards case
and national efficiencies; efficiencies
annual operating Per-unit annual remain frozen at
cost savings. energy (and levels in the
water) year 2012;
consumption, Per- National Energy
unit total Modeling System
installed costs; (NEMS) basis for
Per-unit site-to-source
operating costs; conversion
Site-to-source factors; Discount
conversion rates are 3
factors for percent and 7
electricity and percent real
natural gas; based on Office
Discount rates; of Management and
Effective date Budget (OMB)
of standard; and guidelines;
Present year. Future costs
discounted to
present year:
2007.
----------------------------------------------------------------------------------------------------------------
1. Engineering Analysis
The engineering analysis establishes the relationship between the
cost and efficiency of a product DOE is evaluating for standards. This
relationship serves as the basis for cost and benefit calculations for
individual consumers, manufacturers, and the Nation. The engineering
analysis identifies representative baseline equipment, which is the
starting point for analyzing technologies that provide energy
efficiency improvements. Baseline equipment here refers to a model or
models having features and technologies typically found in equipment
currently offered for sale. The baseline model in each product class
represents the characteristics of products in that class, and, for
products already subject to energy conservation standards, usually is a
model that just meets the current standard. After identifying the
baseline models, DOE estimates their manufacturing cost, after which,
DOE estimates the incremental manufacturing costs for producing more
efficient equipment.
For dishwashers, dehumidifiers, and CCWs, the engineering analysis
uses industry-supplied cost-efficiency data, which are based on an
efficiency-level approach (which calculates the relative costs of
achieving increases in energy efficiency levels), and cost-efficiency
curves that DOE derived based on a design-option approach (which
calculates the incremental costs of adding specific design options to a
baseline model). For kitchen ranges and ovens (including microwave
ovens), DOE established cost-efficiency curves using its 1996 Technical
Support Document for Residential Cooking Products,\2\ updated to the
present time in the 2007 TSD for this rulemaking, as discussed below.
Some stakeholders provided comments to DOE that the design options and
associated efficiency increments were still valid for cooking products
other than microwave ovens. For microwave ovens, DOE analyzed current
efficiency data to validate the efficiency increments specified in the
1996 technical analysis, after which it was determined that no changes
to those increments were necessary. To determine manufacturing cost
increments, DOE, with the concurrence of manufacturers, used producer
price index (PPI) data from the Bureau of Labor Statistics (BLS) to
scale costs identified in the 1996 analysis to 2006$. Section II.C on
the engineering analysis discusses this cost-efficiency relationship,
as well as the product
[[Page 64437]]
classes analyzed, the representative baseline units, and the
methodology to be used to extend the analysis to product classes for
which DOE did not receive data
---------------------------------------------------------------------------
\2\ Available online at DOE's website: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
---------------------------------------------------------------------------
2. Energy and Water Use Characterization
The energy use and water characterization provides estimates of
annual energy and water consumption for the four appliance products,
which DOE uses in the subsequent LCC and PBP analyses and the national
impact analysis (NIA). DOE developed energy consumption estimates for
all of the product classes analyzed in the engineering analysis, as the
basis for its energy and water use estimates. In the case of
dishwashers, DOE used the annual usage (in cycles per year) established
in its test procedure to estimate the product's annual energy and water
use. For dehumidifiers, DOE relied on industry-supplied estimates of
annual usage (in hours per year) to estimate the product's annual
energy use. For kitchen ranges and ovens, the 2004 California
Residential Appliance Saturation Study (CA RASS) \3\ and a year-long
monitoring study conducted in 1999 by the Florida Solar Energy Center
(FSEC) \4\ indicate that household cooking has continued to drop since
the mid-1990s; DOE used these surveys as the basis for estimating
product annual energy use. For CCWs, DOE used industry-sponsored
research to estimate the product's annual energy and water use. For
further details on the CCW estimates, see section II.D.4 of this ANOPR.
---------------------------------------------------------------------------
\3\ California Energy Commission. California Statewide
Residential Appliance Saturation Study, June 2004. Prepared for the
California Energy Commission by KEMA-XENERY, Itron, and RoperASW.
Contract No. 400-04-009. http://www.energy.ca.gov/appliances/rass/index.html.
\4\ Parker, D. S. Research Highlights from a Large Scale
Residential Monitoring Study in a Hot Climate. Proceeding of
International Symposium on Highly Efficient Use of Energy and
Reduction of its Environmental Impact, January 2002. Japan Society
for the Promotion of Science Research for the Future Program, Osaka,
Japan. JPS-RFTF97P01002: pp. 108-116. Also published as FSEC-PF369-
02, Florida Solar Energy Center, Cocoa, FL. http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-369-02/index.htm.
---------------------------------------------------------------------------
3. Markups to Determine Equipment Price
DOE derives consumer prices for products based on manufacturer
markups, retailer markups (for residential products), distributor
markups (for CCWs), and sales taxes. In deriving these markups, DOE has
determined: (1) The distribution channels for product sales; (2) the
markup associated with each party in the distribution channels, and (3)
the existence and magnitude of differences between markups for baseline
equipment (``baseline markups'') and for more-efficient equipment
(``incremental markups''). DOE calculates both overall baseline and
overall incremental markups based on the product markups at each step
in the distribution channel. It defines the overall baseline markup as
the ratio of consumer price (not including sales tax) and manufacturer
cost for baseline equipment; the overall incremental markup relates the
change in the manufacturer sales price of higher-efficiency models (the
incremental cost increase) to the change in the retailer or distributor
sales price. DOE determined manufacturer markups through the use of
U.S. Securities and Exchange Commission (SEC) reports on appliance
manufacturers, and used U.S. Census Business Expenditure Surveys to
develop retailer and commercial distributor markups. DOE collected
consumer retail prices for each of the four appliance products to
provide a rough validation of its markups for baseline equipment.
Baseline equipment is produced in large volumes, is not heavily laden
with consumer features, and is typically competitively priced by
retailers and distributors; therefore, collected retail prices of
baseline equipment are likely to reflect the actual cost of producing
and selling minimally-compliant products.
Because DOE's approach for calculating baseline retail prices
through the use of manufacturing costs, baseline markups, and sales
taxes are intended to capture only the cost of producing minimally-
compliant equipment, any collected baseline retail prices serve as a
good check on the prices calculated through the markup approach. But
because more-efficient equipment often includes non-energy related
features, DOE cannot rely solely on collected retail prices for high-
efficiency products to validate the prices determined through its
markup approach. Current retail prices for high-efficiency equipment
likely reflect the added cost of consumer amenities that have no impact
on efficiency and, therefore, mask the incremental price associated
with features that only affect product efficiency.
4. Life-Cycle Cost and Payback Period Analyses
The LCC and PBP analyses determine the economic impact of potential
standards on individual consumers. The LCC is the total consumer
expense for a product over the life of the product. The LCC analysis
compares the LCCs of products designed to meet possible energy-
efficiency standards with the LCCs of the products likely to be
installed in the absence of standards. DOE determines LCCs by
considering: (1) Total installed cost to the purchaser (which consists
of manufacturer costs, sales taxes, distribution chain markups, and
installation cost); (2) the operating expenses of the product
(determined by energy and water use, energy and water prices, and
repair and maintenance costs); (3) product lifetime; and (4) a discount
rate that reflects the real consumer cost of capital and puts the LCC
in present value terms.
The PBP represents the number of years needed to recover the
increase in purchase price (including the incremental installation
cost) of more-efficient equipment through savings in the operating cost
of the product. It is the change in total installed cost due to
increased efficiency divided by the change in annual operating cost
from increased efficiency.
5. National Impact Analysis
The NIA estimates both the national energy savings (NES) and the
net present value (NPV) of total customer costs and savings expected to
result from new standards at specific efficiency levels (referred to as
candidate standard levels). In conducting the NIA, DOE calculated NES
and NPV for any given candidate standard level for each of the four
appliance products as the difference between a base case forecast
(without new standards) and the standards case forecast (with
standards). DOE determined national annual energy consumption by
multiplying the number of units in use (by vintage \5\) by the average
unit energy (and water) consumption (also by vintage). Cumulative
energy savings are the sum of the annual NES determined over a
specified time period, which in the NIA consisted of the range of years
for which the forecast was made. The national NPV is the sum over time
of the discounted net savings each year, which consists of the
difference between total operating cost savings and increases in total
installed costs. Critical inputs to this analysis include shipments
projections, retirement rates (based on estimated product or equipment
lifetimes), and estimates of changes in shipments and retirement rates
in response to changes in product or equipment costs due to standards.
---------------------------------------------------------------------------
\5\ The term ``vintage'' refers to the age of the unit in years.
---------------------------------------------------------------------------
[[Page 64438]]
C. Authority
Part B of Title III of EPCA established the energy conservation
program for consumer products other than automobiles, including
dishwashers and electric and gas kitchen ranges and ovens (which
include microwave ovens). (This ANOPR refers to electric and gas
kitchen ranges and ovens and microwave ovens collectively as ``cooking
products.'') Amendments to EPCA in the National Appliance Energy
Conservation Act of 1987 (Pub. L. 100-12; NAECA) established energy
conservation standards for dishwashers and cooking products, as well as
requirements for determining whether these standards should be amended.
(See 42 U.S.C. 6295(g) and (h), respectively) Subsequent amendments
expanded Title III of EPCA to include additional consumer products and
certain commercial and industrial equipment, including dehumidifiers
and CCWs. In particular, sections 135(c)(4) and 136(e) of the Energy
Policy Act of 2005, Public Law 109-58; (EPACT 2005) amended EPCA to
authorize DOE to consider the need to modify the energy conservation
standards that the Act, as amended, prescribed for dehumidifiers (42
U.S.C. 6295(cc)) and for CCWs (42 U.S.C. 6313(e)), respectively. This
includes authority for DOE to amend the water efficiency standard the
Act, as amended, prescribes for commercial clothes washers.
Before DOE prescribes any new or amended standard for any of the
four appliance products, however, it must first solicit comments on a
proposed standard. Moreover, DOE must design each new or amended
standard for these products to achieve the maximum improvement in
energy efficiency that is technologically feasible and economically
justified, and such a standard must also result in significant
conservation of energy. (42 U.S.C. 6295(o)(2)(A) and (o)(3); 42 U.S.C.
6316(a)) To determine whether a proposed standard is economically
justified, DOE must, after receiving comments on the proposed standard,
determine whether the benefits of the standard exceed its burdens to
the greatest extent practicable, weighing the following seven factors:
1. The economic impact of the standard on manufacturers and
consumers of products subject to the standard;
2. The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products which are likely to result from the imposition of the
standard;
3. The total projected amount of energy, or as applicable, water,
savings likely to result directly from the imposition of the standard;
4. Any lessening of the utility or the performance of the covered
products likely to result from the imposition of the standard;
5. The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
imposition of the standard;
6. The need for national energy and water conservation; and
7. Other factors the Secretary of Energy (Secretary) considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i); 42 U.S.C. 6316(a))
D. Background
1. History of Standards Rulemaking for Residential Dishwashers,
Dehumidifiers, and Cooking Products; and Commercial Clothes Washers
For dishwashers, NAECA amended EPCA to establish prescriptive
standards, requiring that dishwashers be equipped with an option to dry
without heat, and further requiring that DOE conduct two cycles of
rulemakings to determine if more stringent standards are justified. (42
U.S.C. 6295 (g)(1) and (4)) On May 14, 1991, DOE issued a final rule
establishing the first set of performance standards for dishwashers (56
FR 22250); the new standards became effective on May 14, 1994 (10 CFR
430.32(f)). DOE initiated a second standards rulemaking for dishwashers
by issuing an ANOPR on November 14, 1994 (59 FR 56423). However, as a
result of the priority-setting process outlined in its Procedures for
Consideration of New or Revised Energy Conservation Standards for
Consumer Products (the ``Process Rule'') (61 FR 36974 (July 15, 1996);
10 CFR part 430, Subpart C, Appendix A), DOE suspended the standards
rulemaking for dishwashers.
Section 135(c)(4) of EPACT 2005 added dehumidifiers as products
covered under EPCA and established standards for them that will become
effective on October 1, 2007. (42 U.S.C. 6295(cc)) DOE has incorporated
these standards into its regulations (70 FR 60407, 60414 (October 18,
2005); 10 CFR 430.32(v)). The amendments to EPCA also require that DOE
issue a final rule by October 1, 2009, to determine whether these
standards should be amended. (42 U.S.C. 6295(cc)) If amended standards
are justified, they must become effective by October 1, 2012. (Id.) In
the event that DOE fails to publish such a final rule, the EPACT 2005
specifies a new set of amended standards with an effective date of
October 1, 2012. (Id.)
As with dishwashers, NAECA amended EPCA to establish prescriptive
standards for cooking products, requiring gas ranges and ovens with an
electrical supply cord that are manufactured on or after January 1,
1990 not to be equipped with a constant burning pilot, and requiring
DOE to conduct two cycles of rulemakings for ranges and ovens to
determine if the standards established should be amended. (42 U.S.C.
6295 (h)(1)-(2)) DOE initially analyzed standards for cooking products
as part of an eight-product standards rulemaking. It issued a notice of
proposed rulemaking (NOPR) on March 4, 1994, proposing performance
standards for gas and electric residential cooking products, including
microwave ovens (59 FR 10464). In accordance with the Process Rule, DOE
refined its standards analysis for cooking products. For gas cooking
products, DOE focused on the economic justification for eliminating
constant burning pilots. Partially due to the difficulty of
conclusively demonstrating that elimination of constant burning pilots
was economically justified for gas cooking products without an
electrical supply cord, DOE issued a final rule on September 8, 1998,
that covered only electric cooking products, including microwave ovens
(63 FR 48038). The final rule found that no standards were justified
for electric cooking products. DOE never completed its standards
rulemaking for gas cooking products.
Similar to dehumidifiers, EPACT 2005 included amendments to EPCA
that added CCWs as covered equipment, and it also established standards
for such equipment that is manufactured on or after January 1, 2007.
(EPACT 2005, section 136(a) and (e); 42 U.S.C. 6311(1) and 6313(e)) DOE
has incorporated these standards into its regulations (70 FR 60407,
60416 (October 18, 2005); 10 CFR 431.156). EPACT 2005 also requires
that DOE issue a final rule by January 1, 2010, to determine whether
these standards should be amended. (EPACT 2005, section 136(e); 42
U.S.C. 6313(e))
2. Current Rulemaking Process
To initiate the current rulemaking to develop standards for the
four appliance products, on March 15, 2006, DOE published on its Web
site the Rulemaking Framework for Commercial Clothes Washers and
Residential Dishwashers, Dehumidifiers, and Cooking Products (the
Framework
[[Page 64439]]
Document). The Framework Document describes the procedural and analytic
approaches DOE anticipates using to evaluate the establishment of
energy conservation standards for these products. This document is
available at: http://www.eere.energy.gov/buildings/appliance_standards/pdfs/home_appl_framework_31506.pdf.
DOE subsequently published a notice announcing the availability of
the Framework Document, inviting written public comments to be
submitted by May 11, 2006, and announcing a public meeting to discuss
the proposed analytical framework for this rulemaking (71 FR 15059
(March 27, 2006)). At the April 27, 2006 public meeting, DOE described
the different analyses it would conduct, such as the LCC and PBP
analyses, the methods proposed for conducting them, and the
relationship among the various analyses. Manufacturers, trade
associations, environmental advocates, regulators, and other interested
parties attended the meeting. The major issues discussed at the public
meeting were: (1) Relevance of the existing DOE test procedure for
microwave ovens; (2) baseline unit definitions for the four appliance
products; (3) product classes for the four appliance products; (4)
consideration of limiting standby power as a design option for all four
appliance products; (5) technology options for improving efficiency for
all four appliance products; (6) type of approach to employ for the
engineering analysis; (7) efficiency levels to consider for all four
appliance products; (8) inclusion of a water factor for dishwashers;
(9) consideration of cleaning performance in setting dishwasher
standards; (10) implications of clothes container volume on CCW
efficiency; (11) proposed approaches for specifying typical annual
energy and water consumption for all four products; (12) potential data
sources for characterizing variability in annual energy and water
consumption; (13) typical distribution channels and markups for all
four appliance products; (14) data sources for retail prices; (15) type
of approach to employ for the LCC and PBP analyses; (16) variability of
forecasted energy and water prices; (17) repair, maintenance, and
installation cost relationship to product efficiency; (18) product
lifetimes; (19) development of consumer discount rates; (20) purchase
price impacts on product shipments; (21) forecasted saturation rates of
commercial clothes washers; (22) consumer subgroups; (23) water and
wastewater utility impacts; and (24) wastewater discharge impacts.
Written comments submitted during the Framework Document comment
period elaborated on the issues raised at the meeting and also
addressed other major issues, including the following: (1) Transparency
of manufacturer cost data development; (2) engineering data
availability for dishwashers, kitchen ranges and ovens, and CCWs; and
(3) inclusion of embedded energy in supplying water and treating
wastewater.
DOE developed two spreadsheet tools for this rulemaking. The first
tool calculates LCC and PBPs. There are six LCC spreadsheets, one each
for the following products: (1) Dishwashers, (2) dehumidifiers, (3)
cooktops, (4) ovens, (5) microwave ovens, and (6) CCWs. Each of the LCC
spreadsheets includes product efficiency distributions and has the
capability to determine LCC savings and PBPs based on average values.
The spreadsheets also can be combined with Crystal Ball (a commercially
available software program) to generate a Monte Carlo simulation, which
incorporates uncertainty and variability considerations. The second
tool (the NIA spreadsheet tool) calculates the impacts of candidate
standards at various levels on shipments and calculates the NES and NPV
at various candidate standard levels. There are five NIA spreadsheets,
one each for the following products and combinations of products: (1)
Dishwashers, (2) dehumidifiers, (3) cooktops and ovens, (4) microwave
ovens, and (5) CCWs. DOE posted these spreadsheets on its Web site on
December 4, 2006, for early stakeholder review and comment.\6\
---------------------------------------------------------------------------
\6\ Available online at DOE's Web site: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html
---------------------------------------------------------------------------
Comments received since publication of the Framework Document have
helped identify issues involved in this rulemaking, and have provided
information that has contributed to DOE's proposed resolution of these
issues. This ANOPR quotes and summarizes many of these public comments.
A parenthetical reference at the end of a quotation or paraphrase
provides the location of the item in the public record.
3. Analysis Process
Table I.2 sets forth the analyses DOE has conducted and intends to
conduct in its evaluation of standards for CCWs, and residential
dishwashers, cooking products, and dehumidifiers. Until recently, DOE
performed the manufacturer impact analysis (MIA) in its entirety
between the ANOPR and NOPR during energy conservation standards
rulemakings. As noted in the table, however, DOE has performed a
preliminary MIA for this ANOPR. DOE believes this change will improve
the rulemaking process.
Table I.2.--The Four Appliance Products--Analysis Process
------------------------------------------------------------------------
ANOPR NOPR Final rule
------------------------------------------------------------------------
Market and technology Revised ANOPR Revised analyses.
assessment. analyses.
Screening analysis........... Life-cycle cost
sub-group
analysis.
Engineering analysis......... Manufacturer
impact
analysis.
Energy use and end-use load Utility impact
characterization. analysis.
Markups for equipment price Net national
determination. employment
impacts.
Life-cycle cost and payback Environmental
period analyses. assessment.
Shipments analysis........... Regulatory
impact
analysis.
National impact analysis.....
Preliminary manufacturer
impact analysis.
------------------------------------------------------------------------
The analyses listed in Table I.2 reflect analyses used in the
rulemaking, including the development of economic models and analytical
tools. In addition, in an effort to support groups of interested
parties seeking to develop and present consensus recommendations on
standards, DOE posted draft versions of its LCC and NIA spreadsheets on
its Web site. If timely new data, models, or tools that enhance the
development of standards become
[[Page 64440]]
available, DOE will incorporate them into this rulemaking.
4. Miscellaneous Rulemaking Issues
a. Joint Stakeholder Recommendations
The Edison Electric Institute (EEI) suggested that DOE should use a
negotiated rulemaking process for residential dishwashers and cooking
equipment, because manufacturers appear to want regulatory certainty
for these products. EEI suggested a separate negotiated process for
CCWs because these products are designed for a different market. For
dehumidifiers, EEI suggested DOE analyze the standards identified in
EPACT 2005 that are due to become effective in 2012, and if they are
technically feasible, economically justified, and will not reduce
competition, consider a negotiated rulemaking so that standards can be
issued before the October 1, 2009 deadline mandated by EPACT 2005.
(EEI, No. 7 at p. 2) \7\
---------------------------------------------------------------------------
\7\ A notation in the form ``EEI, No. 7, p. 2'' identifies a
written comment that DOE has received and has included in the docket
of this rulemaking. This particular notation refers to a comment (1)
by the Edison Electric Institute, (2) in document number 7 in the
docket of this rulemaking, and (3) appearing on page 2 of document
number 7.
---------------------------------------------------------------------------
The Process Rule specifically identifies ``consensus proposals for
new or revised standards as an effective mechanism for balancing the
economic, energy, and environmental interests affected by standards.
Thus, notwithstanding any other policy on selection of proposed
standards, a consensus recommendation on an updated efficiency level
submitted by a group that represents all interested parties will be
proposed by DOE if it is determined to meet the statutory criteria.''
(10 CFR Part 430, Appendix A to Subpart C, section 5(e)(2)). Therefore,
DOE encourages the submittal of any consensus proposals or joint
stakeholder recommendations pertaining to any or all of the four
appliance products. If the supporting analyses provided by the group
address all of the statutory criteria and use valid economic
assumptions and analytical methods, DOE expects to use these supporting
analyses as the basis of a proposed rule.
b. Standby Power for Dishwashers and Cooking Products
Standby power is currently incorporated into the energy factor \8\
(EF) for conventional ovens via the measurement of clock power
consumption and for gas cooktops via the energy consumption of constant
burning pilots, both of which are incorporated into the EF calculation
for their respective products. The dishwasher test procedure includes a
measurement of standby power, but standby energy use is not
incorporated into calculated EF. The issue of whether to include
standby power in the energy efficiency metrics for dishwashers and
cooking products was addressed in several comments that DOE received.
The Alliance to Save Energy, American Council for an Energy-Efficient
Economy (ACEEE), Appliance Standards Awareness Project, Natural
Resources Defense Council, and Northeast Energy Efficiency Partnerships
(hereafter ``Joint Comment'') stated that standby energy use should be
included in the analyses for all products, with the appropriate metric
for the standards being annual energy consumption rather than energy
factor. The Joint Comment stated that EPACT 2005 instructs DOE to
consider standby power in its rulemaking for all products, and where
significant, to include standby power in some fashion into the
appropriate standard. The Joint Comment further stated that standby
energy use can be significant for clothes washers, dishwashers, and
microwave ovens. (Joint Comment, No. 9 at p. 2)
---------------------------------------------------------------------------
\8\ Energy factor (EF) is a measure of the energy consumption
required by the product under the conditions of the DOE test
procedure. The units of EF vary depending on the product. For
example, the EF for dishwashers is expressed in cycles/kWh, while
the EF for dehumidifiers is in liters/kWh.
---------------------------------------------------------------------------
For dishwashers, Potomac Resources Inc. (Potomac) commented that it
would be useful to address standby power directly through design
options such as the power supply. (Public Meeting Transcript, No. 5 at
p. 61) \9\ ACEEE, EEI, and Whirlpool Corporation (Whirlpool) agreed
that standby power is important to include in the energy use
calculations, but EEI and Whirlpool argued that individual system
components should not be regulated, instead stating that standby power
should be addressed for the system as a whole. (Public Meeting
Transcript, No. 5 at pp. 62, 64, and 66) ACEEE commented that if
standby energy use is determined to be significant, then DOE's analysis
should include design options, efficiency levels, or increased annual
energy consumption to capture efficiency improvement opportunities.
(Public Meeting Transcript, No. 5 at p. 64) ACEEE, the Association of
Home Appliance Manufacturers (AHAM), and Whirlpool stated that if DOE
incorporates standby power into the efficiency standard, it should do
this through maximum annual energy usage rather than a prescriptive
standby power level. These commenters argued that such an approach
would allow manufacturers flexibility in meeting the standard. (Public
Meeting Transcript, No. 5 at p. 125; AHAM, No. 14 at p. 8; Whirlpool,
No. 10 at p. 8) Whirlpool further commented that if standby power is
included in annual energy consumption, DOE should add 8.5 kilowatt-
hours (kWh) to the standard, equating to one watt standby power per
covered appliance over the course of a year. In addition, Whirlpool
argued that standby power should not be driven so low that it impacts
the adoption of electronics that can shift start times to off-peak
periods. (Whirlpool, No. 10 at p. 8)
---------------------------------------------------------------------------
\9\ A notation in the form ``Public Meeting Transcript, No. 5 at
p. 61'' identifies an oral comment that DOE received during the
April 27, 2006, Framework public meeting and which was recorded in
the public meeting transcript in the docket for this rulemaking
(Docket No. EE-2006-STD-0127), maintained in the Resource Room of
the Building Technologies Program. This particular notation refers
to a comment (1) made during the public meeting, (2) recorded in
document number 5, which is the public meeting transcript that is
filed in the docket of this rulemaking, and (3) which appears on
pages 61 of document number 5.
---------------------------------------------------------------------------
In response to the comments, we note that the analysis DOE
conducted for dishwashers does not explicitly consider design options
to reduce standby energy consumption. DOE conducted the engineering
analysis to capture the costs associated with improving EF only. The
cost data AHAM provided and the product teardowns did not specifically
account for changes in standby power. The LCC analysis, however, does
account for standby power in the calculation of annual energy
consumption. The LCC assumes a baseline standby power draw of two
watts, totaling 17 kWh of annual energy consumption. DOE assumes this
same consumption level at all EF values. If technologies to decrease
standby power consumption are determined to be a significant source of
energy savings and are technologically feasible and economically
justified, DOE plans to consider standby power as part of an overall
energy efficiency standard focusing on maximum annual energy usage,
rather than a separate standby power level, in order to allow
manufacturers maximum flexibility in specifying features and design
options while still remaining below a certain annual energy consumption
level. As one approach, DOE tentatively believes that a reduction in
the two-watt baseline standby power level could be reflected in a
corresponding reduction in annual energy usage, which could be modeled
for the purposes of this analysis as an equivalent change in EF. DOE
seeks comment on the specification of annual energy usage as the metric
for dishwasher standards.
[[Page 64441]]
ACEEE commented during the Framework public meeting that the use of
standby power needs to be considered for all cooking products. (Public
Meeting Transcript, No. 5 at p. 91) AHAM recognized that standby power
consumption is essentially already included in the test procedure for
ovens and cooktops; however, for microwave ovens, a test procedure
revision would be required. (Public Meeting Transcript, No. 5 at p. 92)
AHAM also stated that manufacturers (driven by consumer/market desires)
want the flexibility to produce microwave ovens with different
displays, and, thus, different levels of standby power consumption, in
order to provide products with market differentiation. Therefore, AHAM
recommended that standby power not be considered as a separate
prescriptive requirement, but instead, if regulated, standby power
should be incorporated in an annual energy consumption metric (AHAM,
No. 17 at p. 4). Contrary to these views, GE Consumer & Industrial (GE)
opposed incorporating standby power into efficiency standards because
that would result in a determination of higher energy consumption under
the regulation for ``intelligent'' appliances. (GE, No. 13 at p. 4)
DOE added low-standby-power electronic controls as design options
for both standard and self-cleaning gas ovens, as well as for both
standard and self-cleaning electric ovens. However, it did not include
these design options when setting overall efficiency levels for these
products because DOE does not have efficiency improvement or
incremental cost information on them. DOE is seeking data to conduct
this analysis and requests stakeholder comment on this issue.
AHAM provided data on microwave standby power for a sample of 21
microwave ovens available in the U.S. market. For the AHAM submission,
standby power was tested in accordance with International
Electrotechnical Commission (IEC) 62301-2005, Household electrical
appliances--Measurement of standby power. These data show a wide range
of standby power use. Microwave oven standby power consumption is
understood to be a function of the digital clock display, with more
complex graphical displays drawing more power. AHAM did not provide the
type of oven characteristics information which could provide more
insight into the factors affecting standby power or the costs
associated with reducing the standby energy consumption.
For the NOPR analysis, DOE is considering purchasing, testing, and
analyzing microwave ovens to better understand the utility, cost, and
cost implications of reducing standby power consumption. Addition of a
standby power test to the existing test procedure would be necessary
before standby power could be included in an efficiency standard. DOE
intends to modify the test procedure accordingly because it believes
that standby power represents a significant portion of microwave oven
annual energy usage. According to the DOE test procedure, the annual
useful cooking energy output of a microwave oven is 79.8 kWh. For a
baseline microwave oven with an efficiency of 55.7 percent, annual
energy consumption for cooking processes is 143.3 kWh. Each watt of
standby power represents an additional 8.76 kWh per year, or 6 percent
of the annual cooking energy consumption. AHAM-supplied data
demonstrated a wide variation in existing standby power levels, with
values ranging between 1.5 and 5.8 watts, such that the likely impact
of a standard would be significant. DOE will conduct testing and
teardown analysis in support of the test procedure NOPR to incorporate
standby power. DOE plans to complete the test procedure change prior to
publishing the NOPR for this standard-setting rulemaking.
DOE specifically seeks data and stakeholder feedback on how to
conduct an analysis of standby power for microwave ovens. This is
identified as Issue 1 under ``Issues on Which DOE Seeks Comment'' in
section IV.E of this ANOPR.
5. Test Procedures
A test procedure outlines the method to determine the energy
efficiency and annual energy use of products and equipment, and it is
used as the basis for representation and determination of compliance
with energy conservation standards. Section 7(b) of the Process Rule
provides that DOE will propose necessary modifications to the test
procedures for a product before issuing an ANOPR concerning energy
conservation standards for that product. Section 7(c) of the Process
Rule states that DOE will issue a final modified test procedure prior
to issuing a proposed rule for energy conservation standards.
DOE has established test procedures for each of the four appliance
products subject to today's notice. DOE last revised its test
procedures for cooking products in 1997, to make several revisions to
more accurately measure the efficiency of these products (62 FR 51976
(Oct. 3, 1997); 10 CFR part 430, Subpart B, Appendix I). Similarly, in
2003, DOE revised its test procedures for dishwashers to more
accurately measure their efficiency, as well as their water use (68 FR
51887 (Aug. 29, 2003); 10 CFR part 430, Subpart B, Appendix C). At this
time, DOE does not expect to make further changes to the dishwasher
test procedure.
EPACT 2005 amended EPCA to require that CCWs be rated according to
the same test procedures established for residential clothes washers.
(EPACT 2005, section 136(f); 42 U.S.C. 6314(a)(8)) DOE adopted those
test procedures for CCWs in its final rule published on October 18,
2005 (70 FR 60407, 60416). EPACT 2005 also amended EPCA to specify that
the U.S. Environmental Protection Agency (EPA) test criteria used under
the Energy Star Program must serve as the basis for DOE's test
procedure for dehumidifiers. (EPACT 2005, section 135(b); 42 U.S.C.
6293(b)(13)) The Energy Star test criteria for dehumidifiers require
that American National Standards Institute (ANSI)/AHAM Standard DH-1-
2003, Dehumidifiers, be used to measure energy use during capacity-
rating tests, and that the Canadian Standards Association (CAN/CSA)
standard CAN/CSA-C749-1994 (R2005), Performance of Dehumidifiers, be
used to calculate the energy factor. DOE has adopted these test
criteria, along with related definitions and tolerances, as its test
procedure for dehumidifiers (71 FR 71340, 71347, 71366, 713667-68 (Dec.
8, 2006); 10 CFR part 430, Subpart B, Appendix X).
DOE received comments pertaining to its test procedures for kitchen
ranges and ovens and CCWs. With regard to kitchen ranges and ovens,
Wolf Appliance Company, LLC , an affiliate of Sub-Zero Freezer Company,
Inc. (Wolf), and Whirlpool suggested that DOE modify its test procedure
for residential kitchen ranges and ovens because it is inadequate for
measuring the energy use of certain product characteristics and
features. Specifically, Wolf stated that the current test procedure
does not accurately measure the performance and efficiency of several
components (such as larger burner rings, heavier burner grates, and
high performance convection systems). (Wolf, No. 6 at p. 1) Whirlpool
stated that the current test procedure does not measure energy
consumption as a function of oven cavity size, does not address the
fundamental differences in commercial-type products \10\ versus more
traditional residential cooking products, and does not recognize that
[[Page 64442]]
gas surface burner efficiency is a function of the burner rate.
Whirlpool added that the microwave oven test procedure does not account
for the variation in the product's size and wattage, both of which
affect microwave oven energy consumption. (Whirlpool, No. 10 at p. 6)
With regard to CCWs, Whirlpool noted that commercial laundry practices
differ from the more familiar residential practices in several key
respects (e.g., the test procedure assumes that a modest eight-pound
load will be used, but commercial washers typically are filled with a
larger load). (Whirlpool, No. 10 at p. 3)
---------------------------------------------------------------------------
\10\ Commercial-type cooktops and ovens are characterized by
higher burner firing rates, larger dimensions, and heavier
components than typical residential cooking products.
---------------------------------------------------------------------------
In response, DOE recognizes that there may be issues with its test
procedures for measuring the energy use impacts of the cooking product
characteristics noted by Wolf and Whirlpool. However, with the
exception of standby power consumption for microwave ovens, DOE does
not intend to initiate rulemakings to modify its test procedures for
appliances covered by this rulemaking, before finalizing amended energy
conservation standards, for the reasons that follow. DOE intends to
initiate a test procedure modification for microwave ovens to include
standby power consumption because the data received from AHAM indicates
that standby power represents a significant portion of annual energy
usage and because the data shows a wide spread in current standby power
levels. DOE does not plan a test procedure change for conventional
ovens because the oven test procedure already measures standby power in
the form of clock power and, for standard gas ovens, the pilot light.
For cooktops, DOE does not believe that standby power not already
captured in the test procedure represents a significant portion of
annual energy consumption. Gas cooktops already measure the energy
consumption of standing pilots, which for the baseline configuration
are assumed to consume 600 kWh annually and which are in addition to
the annual cooking energy consumption. In comparison, each watt of
standby power consumes 8.76 kWh annually. For electric cooktops, DOE
does not have any data on standby power consumption that indicate the
potential for significant energy savings. Therefore, a test procedure
change to measure standby power for cooktops would not be warranted.
With regard to CCWs, although for efficiency rating purposes CCWs use
the residential clothes washer test procedure, DOE's methods for
characterizing the energy and water use for commercial washers (as
described in section II.D.4) accounted for the consumer usage patterns
specific to this product.
DOE specifically seeks data and stakeholder feedback on the
decision to retain the existing test procedures for appliances covered
under this rulemaking other than microwave ovens. This is identified as
Issue 6 under ``Issues on Which DOE Seeks Comment'' in section IV.E of
this ANOPR.
II. Analyses for the Four Appliance Products
This section addresses the analyses DOE has performed and intends
to perform for this rulemaking. For each product covered by this
rulemaking (i.e., residential dishwashers, dehumidifiers, and cooking
products, and CCWs), DOE will perform a set of separate analyses,
including a market and technology assessment, a screening analysis, an
engineering analysis, an energy use and water use characterization, LCC
and PBP analyses, a shipments analysis, a NIA, and a MIA. A separate
sub-section addresses each type of analysis, which contains a general
introduction that describes the analysis and a discussion of related
comments received from interested parties.
A. Market and Technology Assessment
When DOE begins a standards rulemaking, it develops information
that provides an overall picture of the market for the products
concerned, including the nature of the product, the industry structure,
and market characteristics for the product. This activity consists of
both quantitative and qualitative efforts based primarily on publicly
available information. The subjects addressed in the market and
technology assessment for this rulemaking include product classes,
baseline units, technologies for design options, manufacturers,
quantities and types of products sold and offered for sale, retail
market trends, industry cost structure, and regulatory and non-
regulatory programs. This information serves as resource material
throughout the rulemaking.
1. Product Classes
In general, when evaluating and establishing energy efficiency
standards, DOE divides covered products into classes by: (1) The type
of energy used, and (2) capacity or other performance-related features
that affect consumer utility and efficiency. Different energy
conservation standards may apply to different product classes. The
following describes and discusses the product classes DOE plans to use
in this rulemaking.
a. Dishwashers
For dishwashers, the size of the unit significantly affects the
amount of energy consumed due to the corresponding amount of water
heating required. In other words, standard-sized dishwashers with
relatively greater water consumption have significantly greater energy
use than compact units. Because standard dishwashers offer enhanced
consumer utility over compact units (i.e., the ability to wash more
dishes), DOE has established the following product classes, which are
based on the size of the dishwasher (as specified in ANSI/AHAM Standard
DW-1-2005, Dishwashers):
Compact (capacity less than eight place settings plus six
serving pieces); and
Standard (capacity equal to or greater than eight place
settings plus six serving pieces).
AHAM and EEI both commented that the two product classes are
appropriate for the analysis. (Public Meeting Transcript, No. 5 at p.
55; AHAM, No. 14 at p. 8; EEI, No. 7 at p. 3) Potomac, however,
suggested that the standard product class should be disaggregated to at
least several product classes based on place-setting capacity. (Public
Meeting Transcript, No. 5 at pp. 61-62). American Rivers, Association
of Metropolitan Water Agencies, Austin Water Utility, California Urban
Water Conservation Council, East Bay Municipal Utility District, and
Seattle Public Utilities (hereafter ``Multiple Water Organizations'')
recommended that one or more new product classes be defined in addition
to compact and standard sizes, which would allow flexibility for
manufacturers to make smaller or larger machines. According to the
Multiple Water Organizations, consumers would then be encouraged to
wash full dishwasher loads rather than partial or multiple loads.
(Multiple Water Organizations, No. 11 at p. 2) DOE notes that current
dishwasher models include single- and two-drawer units as well as
dishwashers that provide a user-selectable option for upper-or lower-
rack-only washing to aid in running optimal load sizes. Therefore, DOE
believes the current two product classes offer adequate flexibility in
terms of dishwasher loading to maintain consumer utility and wash
performance for different load sizes. Thus, additional product classes
are not warranted.
b. Dehumidifiers
EPACT 2005 sets energy conservation standards for dehumidifiers
based on the capacity of the unit as measured in
[[Page 64443]]
pints of water extracted per day. (EPACT 2005, section 135(c); 42
U.S.C. 6295(cc)) Specifically, for units manufactured on or after
October 1, 2007, EPACT 2005 sets a separate standard for dehumidifiers
in each of the following five categories: (1) 25.00 pints/day or less,
(2) 25.01-35.00 pints/day, (3) 35.01-54.00 pints/day, (4) 54.01-74.99
pints/day, and (5) 75.00 pints/day or more. (Id.) EPACT 2005 also
prescribes more stringent energy conservation standards that would go
into effect if DOE fails to issue amended standards that apply to
products manufactured on or after October 1, 2012. (Id.) In prescribing
these standards, EPACT 2005 subdivides the 35.01-54.00 pints/day
category into two categories: 35.01-45.00 pints/day and 45.01-54.00
pints/day. Therefore, in accordance with EPACT 2005 amendments to EPCA,
DOE is using the following product classes for dehumidifiers:
25.00 pints/day or less;
25.01-35.00 pints/day;
35.01-45.00 pints/day;
45.01-54.00 pints/day;
54.01-74.99 pints/day; and
75.00 pints/day or more.
During the Framework public meeting and Framework comment period,
stakeholders differed as to appropriate specifications for the product
classes for dehumidifiers. EEI asked whether a distinction should be
made between fixed and portable dehumidifers. (EEI, No. 7 at p. 3) AHAM
opposed EEI's suggestions, expressing a preference for the product
classes as identified in EPACT 2005. (Public Meeting Transcript, No. 5
at p. 70; AHAM, No. 14 at p. 9)
While fixed and portable dehumidifiers offer different utility in
terms of ease of installation and flexibility in location, DOE is
unaware of any dehumidification performance differences. Therefore, DOE
has determined that additional product classes are not warranted based
on portability, and for the purpose of this rulemaking, DOE intends to
maintain the dehumidifier product classes as defined by EPACT 2005
(i.e., a ``self-contained, electrically operated, and mechanically
encased assembly''). (EPACT 2005, section 135(a); 42 U.S.C. 6291(34))
DOE also received comments that baseline unit characteristics for
dehumidifiers may not be possible to establish since EPACT 2005 will
not come into effect until October 1, 2007. DOE performed its
engineering analysis across a wide range of unit capacities and
efficiencies to capture as complete a picture of the 25-75 pints/day
dehumidifier market as possible. In total, DOE has disassembled and
analyzed 14 dehumidifiers to date. Furthermore, DOE used market and
technology assessment research and consulted with numerous stakeholders
to determine basline unit characteristics. (Refer to Chapters 3 and 5
of the TSD for further details.) DOE intends to use EPACT 2005-
compliant dehumidifiers as a baseline since manufacturers are already
modifying any non-compliant product they have to meet this new minimum
energy efficiency level.
c. Cooking Products
For cooking products, DOE based its product classes on energy
source (i.e., gas or electric) and cooking method (i.e., cooktops,
ovens, and microwave ovens). DOE identified five categories of cooking
products:
Gas cooktops;
Electric cooktops;
Gas ovens;
Electric ovens; and
Microwave ovens.
In its regulations implementing EPCA, DOE defines a ``conventional
range'' as ``a class of kitchen ranges and ovens which is a household
cooking appliance consisting of a conventional cooking top and one or
more conventional ovens.'' 10 CFR 430.2. In this rulemaking, DOE is not
treating gas and electric ranges as a distinct product category and is
not basing its product classes on that category. Because ranges consist
of both a cooktop and oven, any potential cooktop and oven standards
would apply to the individual components of the range. As a result,
product classes for ranges, for the purpose of standards-setting, are
not warranted.
This general approach for defining product classes was validated in
comments received after the Framework public meeting. EEI stated that
the product classes are appropriate. (EEI, No. 7 at p. 3) Wolf stated
that the burden of considering new product classes since the previous
rulemaking (including modification of existing test procedures) is not
justified by the small potential energy savings. (Wolf, No. 6 at p. 2)
DOE also received comments during the Framework public meeting and
subsequent comment period questioning whether DOE should consider for
analysis product classes for cooking products with small shipment
volumes. Whirlpool noted that the rationale for excluding certain
product classes from analysis in the previous rulemaking (e.g., grills,
griddles, induction cooktops, and warming/simmering burners) was based
upon consideration of factors such as the lack of an appropriate test
procedure, the niche nature of those products, and the small amount of
empirical data. Since these conditions still remain today, Whirlpool
commented that DOE should not analyze these classes. (Whirlpool, No. 10
at p. 5) Wolf stated during the Framework public meeting that product
classes that were not analyzed in the prior rulemaking need to be
considered in this standards rulemaking. (Public Meeting Transcript,
No. 5 at p. 84) DOE is not aware of any data upon which to determine
the measurement of energy efficiency or energy efficiency
characteristics of products in these niche classes. Therefore, DOE will
not conduct analyses on product classes that were identified but
excluded in the previous rulemaking. DOE seeks efficiency data and
inputs to characterize any limitations of the test procedure for these
product classes. This topic is identified as Issue 6 under ``Issues on
Which DOE Seeks Comment'' in section IV.E of this ANOPR.
The single product class that DOE proposes to use for gas cooktops
is gas cooktops/conventional burners, in accordance with the previous
rulemaking.
AHAM commented that if DOE decides to proceed with further analysis
of cooking products, DOE should include an additional product class for
high-performance, commercial-style products. AHAM stated that the
unique utility and performance attributes associated with high-
performance cooking products must be recognized and allowed to continue
under the ``safe harbor'' provisions of NAECA, which prevent Federal
energy efficiency standards from resulting in the unavailability of
product types, classes, performance characteristics, and other key
aspects of the product that are currently available. (42 U.S.C. 6295
(o)(4)) Due to test procedure complexities and small market share, AHAM
recommends that DOE exempt high-performance, commercial-style
residential cooking products. (AHAM, No. 14 at p. 2) DOE received
additional comments specifically regarding commercial-type ranges.
These comments are discussed in the context of gas cooktops, although
it should be recognized that similar responses apply to the oven
component of the range as well. During the Framework public meeting,
EEI suggested a need to establish the market share of commercial-type
ranges for this rulemaking. (Public Meeting Transcript, No. 5 at p. 81)
Both AHAM and Wolf stated that commercial-type ranges warrant a
separate product class. (Public
[[Page 64444]]
Meeting Transcript, No. 5 at pp. 84 and 86). Wolf further elaborated in
the comment period after the Framework public meeting that the unique
utility and performance attributes of commercial-type ranges (explained
below) justify a separate product class. (Wolf, No. 6 at p. 1) DOE
considers commercial-style ranges to be those products which
incorporate gas cooktops with higher input rate burners (i.e., greater
than 14,000 Btu/h) and heavy-duty grates that provide faster cooking
and the ability to cook larger quantities of food in larger cooking
vessels. The burners are optimized for the larger-scale cookware to
maintain high cooking performance. Similarly, DOE considers commercial-
style ovens to have higher input rates (i.e., greater than 22,500 Btu/
h) and dimensions to accommodate larger cooking utensils or greater
quantity of food items, as well as features to optimize cooking
performance. GE stated that commercial-type products should be exempt
from regulation due to their unique utility and cost, but if they are
regulated, they should be categorized into a separate product class.
(GE, No. 13 at p. 2) Whirlpool commented that, although shipments of
commercial-type products have increased since the prior rulemaking,
they still remain a niche product. Whirlpool shared GE's position that
these products should be exempt from regulation, particularly since
there is a lack of efficiency data available and there is little
potential for meaningful energy savings. (Whirlpool, No. 10 at p. 6)
After considering stakeholder comments, DOE has tentatively decided
to exclude high-performance, commercial-style gas cooktops (including
the cooktop component of commercial-style ranges) from the energy
efficiency standard due to the lack of available data for determining
efficiency characteristics of those products. In addition, the test
procedure for gas cooktops is based on measuring temperature rise in an
aluminum block with a diameter dictated by the firing rate of the
burner. The maximum diameter of the test block is sufficient to measure
higher output residential-scale burners. For commercial-type burners
that must have larger diameter burner rings to accomplish complete
combustion, however, this maximum test block diameter may be too small
to achieve proper heat transfer and may not be representative of the
dimensions of suitable cookware. However, DOE is not aware of any data
to determine the measurement of energy efficiency or energy efficiency
characteristics for commercial-style cooktops. DOE seeks data and
inputs regarding the energy efficiency of commerical-type cooktops as
well as any limitations of the test procedure for this product class.
This topic is identified as Issue 6 under ``Issues on Which DOE Seeks
Comment'' in section IV.E of this ANOPR.
Whirlpool and AHAM commented that DOE should add sealed gas burners
as a separate product class. (Public Meeting Transcript, No. 5 at pp.
82 and 85) Whirlpool stated that the added utility of sealed burners
based upon the ease of consumer cleaning justifies this distinction. In
addition, the increasing firing rates of sealed burners since the
previous rulemaking coupled with the necessary grate height increase to
achieve proper combustion make sealed burners less efficient than open
burners. Whirlpool cited the 1983 International Gas Research Conference
(IGRC)\11\ report that claimed an efficiency reduction associated with
sealed burners. In Whirlpool's opinion, the boiling water tests upon
which this conclusion was based represented an inappropriate metric,
and any efficiency determination for sealed burners must be based on
the DOE test procedure. For these reasons, Whirlpool recommended
development of a separate product class for sealed burners. (Public
Meeting Transcript, No. 5 at pp. 82-83 and 88) AHAM stated that gas
sealed burners should be considered as a separate product class within
gas cooktops because changes are required to provide appropriate
amounts of primary and secondary air for proper combustion, which
inherently affects energy efficiency. (AHAM, No. 14 at p. 2)
DOE has observed that there are conflicting data on the impacts of
sealed burners on energy efficiency measurements. In the previous
rulemaking, AHAM had stated that sealed burners often have a lower gas
input rating than conventional burners due to the reduction in
secondary air. The sealed burner must obtain all of its secondary air
from air that is available above the cooktop. To obtain sufficient air
for proper combustion, it becomes necessary to either raise the grate
height or to derate the burner. The IGRC report, however, states that
the reduction in secondary air results in more primary aeration to the
sealed burner. The increased primary aeration allows for a reduced pan-
to-burner separation and increased burner efficiency.
According to the boiling water tests conducted in the report, the
efficiency of conventional burners ranged from 42 percent to 48
percent, while the sealed burner was rated at an efficiency of 53
percent. Commenters have not provided data showing the correlation of
boiling water tests with efficiency testing according to the DOE test
procedure, as would render the IGRC report inapplicable. Accordingly,
without clear indication that the performance of sealed burners is
sufficiently distinct from that of conventional open gas burners, DOE
will retain the single product class for gas cooktops and consider
sealed burners as a design option within that class.
The American Gas Association (AGA) also proposed two product
classes for gas cooktops, differentiated by the method of heat transfer
associated with the burners. The two product classes suggested by the
AGA would consist of direct-flame contact burners that provide
conductive heat transfer and other burner types that employ convective
and radiant heat transfer. (AGA, No. 12 at p. 2) DOE believes that the
method of heat transfer does not provide any unique utility, nor are
there data available that characterize substantially different
performance based on heat transfer means. Thus, DOE will retain a
single product class for gas cooktops.
For electric cooktops, DOE determined that the ease of cleaning
smooth elements means that they have greater utility to the consumer
than coil elements. Because smooth elements typically use more energy
than coil elements, DOE has defined the following product classes for
electric cooktops:
Electric cooktop/low or high wattage open (coil) elements;
and
Electric cooktop/smooth elements.
---------------------------------------------------------------------------
\11\ J. Flood and T. Enga, ``Energy Conservation `Aspects of
Cooking Appliances,'' Proceedings of the 1983 International Gas
Research Conference, June 13, 1983, London, UK, pp 741-54. Available
online at: http://www.osti.gov/energycitations.
---------------------------------------------------------------------------
AHAM stated that if DOE decides to proceed with further analysis of
cooking products, DOE should include an additional product class for
induction cooktops. AHAM commented the utility and performance
attributes associated with high-performance cooking products must be
recognized and allowed to continue under the safe harbor provisions of
NAECA. Due to test procedure complexities, small market share, and lack
of empirical data, AHAM and Whirlpool recommended that DOE exempt
induction cooktops. Whirlpool further commented that if induction
cooktops are analyzed, they must be treated as a separate product
class, which would entail development of a new test procedure. (Public
Meeting Transcript, No. 5 at p. 85; AHAM, No. 14 at pp. 2-4; Whirlpool,
No. 10 at p.
[[Page 64445]]
5) During the engineering analysis (Chapter 5 of the TSD) DOE
determined that induction cooktops cannot be tested according the
existing test procedure, and, therefore, DOE will not consider this
technology for the ANOPR analysis. DOE seeks efficiency data and inputs
to characterize any limitations of the test procedure for induction
cooktops. This topic is identified as Issue 6 under ``Issues on Which
DOE Seeks Comment'' in section IV.E of this ANOPR.
For electric ovens, DOE determined that the type of oven-cleaning
system is a utility feature that affects performance. DOE found that
standard ovens and ovens using a catalytic continuous-cleaning process
use roughly the same amount of energy. On the other hand, self-cleaning
ovens use a pyrolytic process that provides enhanced consumer utility
with different overall energy consumption, as compared to either
standard or catalytically-lined ovens, due to the amount of energy used
during the cleaning cycle and better insulation. Thus, DOE has defined
the following product classes for electric ovens:
Electric oven/standard oven with or without a catalytic
line; and
Electric oven/self-clean oven.
AHAM concurred with this approach during the Framework public
meeting, stating that non-self-cleaning and self-cleaning ovens should
remain as separate product classes. (Public Meeting Transcript, No. 5
at pp. 85-86) AHAM and Whirlpool both commented that the feature of a
``catalytic line'' is obsolete and, therefore, should be removed from
the non-self-cleaning oven product class description. (Public Meeting
Transcript, No. 5 at p. 86; Whirlpool, No. 10 at pp. 9-10) While DOE is
not aware of any electric ovens currently on the market that are
catalytically lined, it will retain the current description for
completeness.
For gas ovens, for the same reasons as for electric ovens, DOE is
using the following product classes:
Gas oven/standard oven with or without a catalytic line;
and
Gas oven/self-clean oven.
AHAM stated that if DOE decides to proceed with further analysis,
DOE should include additional product classes for high-performance,
commercial-style products, which include commercial-style gas ovens
(i.e., with burner firing rates greater than 22,500 Btu/h). AHAM
commented that the utility and performance attributes associated with
high-performance cooking products must be recognized and allowed to
continue under the safe harbor provisions of NAECA. Due to test
procedure complexities and small market share, AHAM recommended that
DOE exempt high-performance, commercial-style products. (Public Meeting
Transcript, No. 5 at pp. 85-86; AHAM, No. 14 at pp. 2-4) DOE recognizes
that the test procedure may not adequately measure performance of
commercial-style ovens. The single test block may not adequately
measure the temperature distribution that is inherent with the larger
cavity volumes and higher firing rates typically found in these
products. DOE is not aware of any data upon which to determine the
measurement of energy efficiency or energy efficiency characteristics
for commercial-style ovens, so therefore will not conduct an analysis
on this product class at this time. DOE seeks data and inputs regarding
the energy efficiency of commercial-type cooktopsstyle ovens as well as
any limitations of the test procedure for this product class. This
topic is identified as Issue 6 under ``Issues on Which DOE Seeks
Comment'' in section IV.E of this ANOPR.
As discussed for electric ovens, AHAM and Whirlpool stated that the
``catalytic line'' descriptor for the standard gas oven product class
is obsolete and should be removed. While DOE is not aware of any gas
ovens currently on the market that are catalytically lined, it will
retain the current description for completeness.
Finally, microwave ovens will constitute a single product class in
this rulemaking. DOE did not break down this category of cooking
product into further product classes. This product class can encompass
microwave ovens with and without browning (thermal) elements, but does
not include microwave ovens that incorporate convection systems. DOE is
unaware of any data evaluating the efficiency characteristics of
microwave ovens incorporating convection systems, so therefore this
type of unit will not be included in the analysis. DOE seeks data and
inputs on the performance of microwave ovens with convection systems.
This topic is identified as Issue 6 under ``Issues on Which DOE Seeks
Comment'' in section IV.E of this ANOPR.
AHAM stated during the Framework public meeting that additional
product classes for microwave ovens are needed that would likely be a
function of volume and wattage, and possibly installation configuration
(i.e., counter-top versus over-the-range ovens). (Public Meeting
Transcript, No. 5 at pp. 86-87) In comments submitted after the
Framework public meeting, AHAM reiterated these comments and added that
humidity sensors would also need to be considered. However, AHAM
conceded that the lack of efficiency data makes it impossible to
determine the appropriate product classes at this time. (AHAM, No. 14
at p. 6) Similarly, Whirlpool stated that, without existing energy
consumption standards, it does not have any data to formulate
appropriate product classes for microwave ovens, and the company
commented that obtaining these data would be costly and time consuming.
(Whirlpool, No. 10 at p. 6) After the Framework public meeting, AHAM
supplied microwave oven efficiency data to DOE that failed to identify
any correlation between efficiency and either rated output power or
cavity volume. Therefore, DOE has decided not to define product classes
as a function of features such as volume or wattage, and instead will
retain the single product class of microwave ovens with or without
thermal elements.
Comments did not strongly support the inclusion of microwave/
thermal ovens in the analyses. In addition, several comments used the
term ``combination ovens'' to refer to not only microwave/thermal ovens
but also other technologies, such as halogen bulbs. EEI questioned
whether DOE would consider combination ovens for future analysis,
referring to both microwave plus thermal and microwave plus convection
units. (Public Meeting Transcript, No. 5 at p. 139) GE and AHAM both
commented that the DOE test procedure is inadequate to measure
combination ovens. AHAM further stated that the small market share of
combination ovens should preclude them from the analysis. (Public
Meeting Transcript, No. 5 at pp. 140-141). In comments submitted after
the Framework meeting, EEI stated that, depending on market share,
combination ovens could impact baseline energy usage. Although EEI did
not suggest including combination ovens in the analyses, it did state
that DOE should ensure that any standards do not eliminate these
products from the market. (EEI, No. 7 at p. 6) Whirlpool, however,
expressed its opinion that combination ovens should not be considered a
separate product class due to variations in design and low market
share. (Whirlpool, No. 10 at p. 6)
DOE recognizes that the microwave oven test procedure can only test
the microwave heating function of microwave/thermal ovens, and that it
cannot test the browning function of the radiant or halogen elements.
However, such browning features are typically a secondary function of a
microwave/thermal unit, with the primary cooking
[[Page 64446]]
being accomplished via microwave heating. In combination units, the
convection system performs a significant portion of the cooking
process, and, therefore, the inability to measure performance of the
convection component would render the test procedure inadequate. DOE
has no information that demonstates a difference in energy performance
between microwave/thermal ovens operating in microwave mode and
microwave ovens. Therefore, DOE will include microwave ovens with
thermal browning elements in the single product class. As discussed
above, DOE will not conduct an analysis at this time of combination
microwave ovens due to a lack of data evaluating energy efficiency or
energy efficiency characteristics of microwave ovens incoporating
convection systems.
DOE received several comments regarding additional product classes
for cooking products not specifically covered in the above product
classes. For example, EEI questioned whether outdoor natural-gas-fired
or propane-fired grills are a covered product for this analysis, and,
if so, it recommended that DOE conduct an investigation into shipments
and usage patterns. (EEI, No. 7 at p. 5) The test procedures
established in 10 CFR Part 430, Subpart B, Appendix I are specified for
kitchen ranges and ovens. Further, the test procedures provide for
estimating annual operating cost for conventional ranges, conventional
cooking tops, conventional ovens, microwave ovens, and microwave/
conventional ranges. In response, DOE believes that the specification
of ``kitchen'' and ``household cooking appliance'' in the definitions
of ``conventional range'' and ``conventional cooking top'' excludes
outdoor gas/propane grills. Therefore, DOE has decided not to include
outdoor gas/propane grills in the present analyses.
EEI also commented after the Framework public meeting that DOE
should include compact cooking products such as toaster ovens in the
analysis. (EEI, No. 7 at p. 3) However, the definition of
``conventional oven'' provided in 10 CFR 430.2 states, in relevant
part, ``It does not include portable or countertop ovens which use
electric resistance heating for the cooking or heating of food and are
designed for an electrical supply of approximately 120 volts.''
Therefore, DOE is not including toaster ovens in the present analyses
because they are not covered products.
In sum, in this rulemaking DOE is using the following eight product
classes in analyzing and setting standards for cooking products:
Gas cooktops/conventional burners;
Electric cooktop/low or high wattage open (coil) elements;
Electric cooktop/smooth elements;
Gas oven/standard oven with or without a catalytic line;
Gas oven/self-clean oven;
Electric oven/standard oven with or without a catalytic
line;
Electric oven/self-clean oven; and
Microwave oven with or without thermal elements.
d. Commercial Clothes Washers
EPACT 2005 amendments to EPCA placed all CCWs in one product class
and applied a single standard for energy efficiency and a single
standard for water efficiency for this equipment. (EPACT 2005, section
136(e); 42 U.S.C. 6313(e)) This class encompasses both top-loading
(vertical-axis) and front-loading (horizontal-axis) units.
During the Framework public meeting and Framework comment period,
DOE received comments expressing opposing viewpoints regarding the use
of one or two product classes for CCWs. Alliance Laundry Systems (ALS)
pressed for two product classes, because ALS believes that in the eyes
of consumers, horizontal- and vertical-axis washers can be
significantly differentiated in terms of utility and cost. (Public
Meeting Transcript, No. 5 at p. 42) However, the Joint Comment argued
for a single product class, saying that consumers only want to clean
their clothes and, thus, make no distinction between washer product
platforms. (Joint Comment, No. 9 at p. 5) The Joint Comment argued
that, according to EPCA's definition of classes found at 42 U.S.C.
6219(a), commercial clothes washers should be treated as one class
because ``the function * * * of commericial clothes washers (i.e.,
cleaning clothes) does not depend on the orientation of the clothes
washer drum axis.'' (Joint Comment, No. 9 at p. 5) In addition, the
Joint Comment contended that DOE chose to maintain one product class
during the residential clothes washer rulemaking \12\ and, as a result,
urged DOE to do the same in this rulemaking. (Joint Comment, No. 9 at
p. 5) EEI also supported DOE's designation of a single commercial
clothes washer product class. (EEI, No. 7 at p. 3) AHAM ``recommends
that the Department conduct its analysis using the product categories
currently provided for in its regulations.'' (AHAM, No. 14 at p. 7) The
Multi-Housing Laundry Association (MLA) deferred to its member
manufacturers' opinions regarding a single product class. (MLA, No. 8
at p. 2) All manufacturers interviewed by DOE as part of the
manufacturer impact analysis opposed the elimination of vertical-axis
washers, which could arise as an issue if a single product class is
analyzed. (See TSD, Chapter 12.)DOE recognizes that, by analyzing a
single product class and applying a single standard for energy
efficiency and a single standard for water efficiency to all CCWs,
absent the consideration of other relevant factors, the highest
economically justified standards could be sufficiently stringent as to
possibly cause manufacturers to cease production of vertical-axis
washers.
---------------------------------------------------------------------------
\12\ DOE notes that the Joint Comment is incorrect. DOE has
established five classes of residential clothes washers, including
top-loading compact, top-loading standard and front-loading (See 10
CFR part 430, section 430.32(g)). DOE understands how some
stakeholders could believe there is only one class of standard-size
residential clothes washers in DOE's regulations since the value of
the energy efficiency standard is the same for both classes. While
the standards are the same, DOE notes they are separate in DOE's
regulations found at 430.32(g). The max tech level for the two
classes are different, because of the utility features, and are,
therefore, separate classes.
---------------------------------------------------------------------------
As noted above, EPCA, as amended by EPACT 2005, applies a single
standard for energy efficiency and a single standard for water
efficiency to all CCWs. The Congress enacted a single standard for CCWs
some years after DOE has established five classes for residential
clothes washers, which may suggest that Congress's initial assessment
was that a single class would be most reasonable when updating these
standards. The statutory provisions do not, however, specifically
prevent DOE from exercising its technical expertise to create separate
product classes subject to the same standards, if such differentiation
is determined to be appropriate.
After considering the comments on the Framework Document, DOE
decided to keep the single class of commercial clothes washers for
today's ANOPR, but remains open to the possibility of changing this
approach if further comments demonstrate that such a change is
warranted. The Joint Comment, for example, argued that the function of
clothes washers is to clean clothes and that all commercial clothes
washers perform this function and, therefore, should be treated as a
single class. DOE has previously rejected this argument. The
residential clothes washer rulemaking history clearly demonstrated that
size, the axis of access and certain technologies (e.g., suds savings)
had consumer utility that affect performance and, therefore, warranted
separate classes for residential products. Nevertheless, DOE has
decided to maintain a single class
[[Page 64447]]
for CCWs in today's ANOPR, for the reasons that follow. First, other
stakeholders did not provide any compelling information to support
proposing multiple product classes for CCWs, Second, even though there
may be some performance-related features on existing CCWs that might
warrant multiple CCW product classes (as was demonstrated in the
residential clothes washer rulemaking), technologies may be available
to enable top-loading units to attain the same efficiency level as
front-loading units, thereby rendering any product class distinction
meaningless.
In tentatively deciding to retain a single product class for CCWs,
DOE was sensitive to other considerations including the likely outcome
of requisite U.S. Department of Justice (DOJ) review of the potential
impacts, if any, of efficiency standards on competition, given that a
large percentage of the overall market for commercial washers is
produced by one manufacturer that specializes in vertical-axis
machines. Another consideration may be the potential effect of
multiple-class standards on the market shares of vertical-axis and
horizontal-axis machines. For example, if separate standards further
widened the first cost differences between these two classes of
washers, then the overall result might be a decline in the market share
of the more energy efficient horizontal-axis machines, which could more
than offset any energy savings achieved in vertical-axis machines.
DOE notes that sections 325 (o)(4) and 327(d)(4) of EPCA require
DOE to consider the availability of performance characteristics,
features, and other characteristics in setting standards and in
considering State petitions for exemption from Federal preemption. (42
U.S.C. 6295(o)(4) and 6297(d)(4)) The California Energy Commission
(CEC) submitted a petition for exemption from Federal preemption by
DOE's residential clothes washer standard.\13\ One of the factors on
which DOE based its denial of the CEC petition was that it would make
top-loading clothes washers unavailable in the market. (71 FR 78157)
---------------------------------------------------------------------------
\13\ DOE Docket No. EE-RM-PET-100, submitted by the California
Energy Commission.
---------------------------------------------------------------------------
Based on the discussion above, DOE requests comments on clothes
washer product classes and, if DOE were to keep a single class for
commercial clothes washers, how to consider the requirements of section
325(o)(4) of EPCA in considering Trial Standard Levels. DOE
specifically seeks feedback on these product classes and invites
interested persons to submit written presentations of data, views, and
arguments as discussed in section IV.E of this ANOPR.
2. Market Assessment
AHAM is the trade association representing the majority of
dishwasher, dehumidifier, and cooking product manufacturers. AHAM
conducts market and consumer research studies and publishes a biennial
Major Appliance Fact Book. AHAM also develops and maintains technical
standards for various appliances to provide uniform, repeatable
procedures for measuring specific product characteristics and
performance features. Other trade associations relevant to this
rulemaking include the Coin Laundry Association (CLA), representing the
30,000 coin laundry owners globally, and the MLA, a trade association
of operator and supplier companies providing professional laundry
services for the multi-housing industry.
The majority of the domestic share of CCWs is held by four major
manufacturers: ALS, the Maytag Corporation (Maytag), Whirlpool, and GE.
Maytag and Whirlpool merged in 2006 but have continued to maintain both
product lines to this date.
DOE estimates that there are approximately 13 manufacturers of
residential dishwashers that serve the domestic market. Approximately
94 percent of the market is served by four manufacturers: AB Electrolux
(Frigidaire), GE, Maytag, and Whirlpool. The merger between Whirlpool
and Maytag resulted in the combined company accounting for 51 percent
of the domestic market.
DOE estimates that there are approximately 18 manufacturers of
residential dehumidifiers that serve the domestic market. Approximately
two thirds of the market is represented by two manufacturers: Whirlpool
and LG Electronics (LG).
DOE estimates that there are approximately 14 manufacturers of
cooking products (including ovens, cooktops, and ranges) that serve the
U.S. market. The majority of the cooking products market is represented
by four companies: Frigidaire, GE, Maytag, and Whirlpool. GE and
Whirlpool represent nearly three quarters of the electric range
products market. GE represents over a third of the gas range products
market, while the combined Whirlpool and Maytag comprise over a
quarter.
The microwave oven market differs from the rest of the domestic
cooking product market in that many of the manufacturers are foreign-
owned companies with manufacturing facilities outside of the United
States. Many of the domestic appliance manufacturers rebrand foreign-
manufactured microwave products. Major microwave oven manufacturers
are: LG, Samsung Electronics America, Inc. (Samsung), and the Sharp
Electronics Corporation (Sharp), serving 67 percent of the domestic
market. The second tier of approximately 9 manufacturers serves the
remaining 33 percent of the domestic market.
Due to mergers and acquisitions, the home appliance industry
continues to consolidate. While the degree of market share
concentration varies by product type, the market shares of a few
companies provide evidence in support of this characterization.
According to the September 2006 issue of Appliance Magazine, Whirlpool,
GE, Frigidaire, and Maytag comprise 92 percent of the U.S. core
appliance market share. ``Core appliances'' include dishwashers,
freezers, ranges, refrigerators, and clothes washers. Whirlpool and
Maytag were allowed by the U.S. Department of Justice (DOJ) to complete
a merger on March 31, 2006, after an investigation that focused
primarily on residential laundry but with consideration of impacts
across all product lines. Although opponents of the merger had asserted
that the combined companies would control as much as 70 percent of the
residential laundry market and as much as 50 percent of the residential
dishwasher market,\14\ DOJ determined that the merger would not give
Whirlpool excessive market power in the sale of its products and that
any attempt to raise prices would likely be unsuccessful. In support of
this claim, DOJ noted: (1) Other U.S. brands, including Sears Brands
LLC (Kenmore), GE, and Frigidaire, are well established; (2) foreign
manufacturers, including LG and Samsung, are gaining market share; (3)
existing U.S. manufacturers are operating below production capacity;
(4) the large home appliance retailers have alternatives available to
resist price increase attempts; and (5) Whirlpool and Maytag
substantiated large cost savings and other efficiencies that would
benefit consumers. The Whirlpool-Maytag merger follows several other
mergers and acquisitions in the home appliance industry. For example,
Maytag acquired Jenn-Air Corporation in 1982, Magic Chef, Inc. in 1986,
and Amana Appliances in 2001. Whirlpool acquired the KitchenAid
division of Hobart Corporation in 1986. White Consolidated Industries
(WCI)
[[Page 64448]]
acquired the Frigidaire division of General Motors Corporation in 1979,
and AB Electrolux acquired WCI (and therefore Frigidaire) in 1986. See
Chapter 3 of the TSD for more information regarding manufacturers of
CCWs and residential dishwashers, dehumidifiers, and cooking products.
---------------------------------------------------------------------------
\14\ P. Hussmann, ``Justice to Extend Maytag-Whirlpool Merger
Review,'' Newton Daily News Online (Feb. 14, 2006).
---------------------------------------------------------------------------
In addition, DOE considers the possibility of small businesses
being impacted by the promulgation of energy conservation standards for
CCWs and residential dishwashers, dehumidifiers, and cooking products.
At this time, DOE is not aware of any small manufacturers, defined by
the Small Business Administration as having 750 employees or fewer, who
produce products that fall under this rulemaking and who, therefore,
would be impacted by a minimum efficiency standard. Should any small
business manufacturers of the four appliance products be identified,
DOE will study the potential impacts on these small businesses in
greater detail during the MIA, which it will conduct as a part of the
NOPR analysis. See Chapter 3 of the TSD for more information regarding
small business manufacturers of CCWs and residential dishwashers,
dehumidifiers, and cooking products.
Next, DOE identified distribution channels for each of the products
covered by this rulemaking. For CCWs, DOE determined that the market
consists of laundromats, private multi-family housing, and large
institutions (e.g., military barracks, universities, and housing
authorities). Most large institutions and a majority of private multi-
family housing (between 50 and 90 percent) do not purchase clothes
washers directly. Rather, these organizations lease their laundry space
to a third party known as a route operator. Route operators supply
laundry equipment and maintain facilities in exchange for a percentage
of the laundry revenue. Laundromats and some private building managers
purchase or lease clothes washers directly from distributors. The main
difference between route operators and distributors is the length of
service provided to their clients. Route operators provide ongoing
support while distributor support ends at the point of sale.
The distribution chain for residential appliances, including
dishwashers, dehumidifiers, and cooking products, differs from
commercial products, since the majority of consumers purchase their
appliances directly from retailers. These retailers include: (1) Home
improvement, appliance, and department stores; (2) Internet retailers;
(3) membership warehouse clubs; and (4) kitchen remodelers. DOE
determined that over 93 percent of residential appliances are
distributed from the manufacturer directly to a retailer. See Chapter 3
of the TSD for more information regarding distribution channels for
CCWs and residential dishwashers, dehumidifiers, and cooking products.
DOE considers regulatory and non-regulatory initiatives that affect
CCWs and residential dishwashers, dehumidifiers, and cooking products.
NAECA established Federal standards for residential dishwashers, which
were subsequently amended by DOE by a final rule published in the
Federal Register on May 14, 1994. (56 FR 22250) NAECA established
prescriptive standards for gas cooking products, requiring gas ranges
and ovens with an electrical supply cord not to be equipped with
constant burning pilots, and directed DOE to conduct two cycles of
rulemakings to determine if more stringent standards are justified. (42
U.S.C. 6295 (h)(1)-(2)) DOE issued a NOPR on March 4, 1994, proposing
performance standards for gas and electric residential cooking
products, including microwave ovens. 59 FR 10464. In accordance with
its 1996 Process Rule, DOE refined its standards analysis of cooking
products. With regard to gas cooking products, DOE focused on the
economic justification for eliminating standing pilot lights. Partially
due to the difficulty of conclusively demonstrating that elimination of
standing pilot lights was economically justified, DOE issued a final
rule on September 8, 1998, that covered only electric cooking products,
including microwave ovens. 63 FR 48038. The final rule found that
standards were not economically justified for electric cooking
products. DOE never completed its standards rulemaking for gas cooking
products.
Section 136(e) of EPACT 20005 amends section 342 of EPCA, 42 U.S.C.
6313, to add subsection (e) for CCWs. Likewise, section 135(c)(4) of
EPACT 2005 amends section 325 of EPCA, 42 U.S.C. 6295, to add
subsection (cc) for dehumidifiers. New subsection 342(e), 42 U.S.C.
6313(e) establishes energy conservation standards for CCWs. Further, it
requires that DOE issue a final rule by January 1, 2010, to determine
whether the standards for CCWs should be amended. New subsection
325(cc), 42 U.S.C. 6295(cc), establishes energy conservation standards
for dehumidifiers based on a unit's capacity to extract moisture from
the surrounding air (in pints/day). These Federally mandated standards
for dehumidifiers will be the national standards when they take effect
on October 1, 2007. In addition, EPACT 2005 requires that by October 1,
2009, DOE issue a final rule for dehumidifiers to determine whether the
standards should be amended. (EPACT 2005, section 135(c)(4)) Further,
in the event that DOE fails to publish a final rule requiring new
standards to take effect by October 1, 2012, EPACT 2005 also prescribes
a new set of amended standards for dehumidifiers. (Id.)
Prior to the passage of EPACT 2005, the following States proposed
and adopted State-level efficiency regulations for CCWs that are
identical, or very similar, to EPACT 2005 regulations: Arizona,
California, Connecticut, Maryland, New Jersey, Oregon, Rhode Island,
and Washington. The EPACT 2005 energy and water use standards for CCWs
preempt any State efficiency standards since they became effective
January 1, 2007.\15\ In addition to the efficiency standards discussed
above, the State of California requires that commercial top-loading,
semi-automatic clothes washers and commercial suds-saving clothes
washers manufactured on or after January 1, 2005 have an unheated rinse
water option.
---------------------------------------------------------------------------
\15\ None of these States submitted a petition for waiver to
DOE, seeking to maintain their existing efficiency standards for
commercial clothes washers.
---------------------------------------------------------------------------
DOE reviewed several voluntary programs that promote energy-
efficient CCWs, residential dishwashers, dehumidifiers, and cooking
products in the United States. Many programs, including the Consortium
for Energy Efficiency (CEE), Energy Star, and the Federal Energy
Management Program (FEMP), establish voluntary energy conservation
standards for these products. CEE issues voluntary specifications for
CCWs and standard-sized dishwashers under its Commercial, Family-Sized
Washer Initiative and Super-Efficient Home Appliance Initiative,
respectively. Energy Star, a voluntary labeling program backed by the
EPA and DOE, identifies energy efficient products through a
qualification process. To qualify, a product must exceed Federal
minimum standards by a specified amount, or if no Federal standard
exists, exhibit selected energy-saving features. The Energy Star
program works to recognize the top quartile of products on the market,
meaning that approximately 25 percent of products on the market meet or
exceed the Energy Star levels. Energy Star specifications exist for
many products, including CCWs, dishwashers, and dehumidifiers. FEMP
[[Page 64449]]
works to reduce the cost and environmental impact of the Federal
government by advancing energy efficiency and water conservation,
promoting the use of distributed and renewable energy, and improving
utility management decisions at Federal sites. FEMP helps Federal
buyers identify and purchase energy efficient equipment, including
CCWs, residential dishwashers, and microwave ovens. See Chapter 3 of
the TSD for more information regarding regulatory and non-regulatory
initiatives. During the engineering analysis (Chapter 5 of the TSD),
efficiency levels specified by many of these initiatives will be
analyzed during the generation of cost-efficiency curves.
DOE reviewed data collected by the U.S. Census Bureau, EPA, and
AHAM to evaluate annual residential appliance product shipment trends
and the value of these shipments. As the number of new home starts and
the percentage of consumers with multiple units of some appliances
increases annually, the unit shipments of most appliances are expected
to increase as well. The shipments of built-in dishwashers increased by
over 76 percent from 1995 to 2005, while the shipments of portable
dishwashers declined 35 percent in the same time period. After a period
of decline from 1995 to 2002, shipments of dehumidifiers increased
sharply in 2003 and have continued to rise through 2005. Shipments of
dehumidifiers nearly doubled between 1995 and 2005. From 1995 to 2005,
shipments of electric and gas free-standing ranges and surface cooking
units, electric built-in ranges, and microwave ovens increased, while
shipments of built-in gas ranges decreased. However, in real dollars,
the value of shipments for the household appliance industry has
declined by nearly 14 percent over the period from 1994 to 2005.
The historical shipments data shown in Tables II.1, II.2, and II.3
and the historical market saturation data shown in Table II.4 provide a
better picture of the market for the four appliance products. The
market saturation data indicate the percentage of the housing stock
with the appliance. The data in Table II.4 also include for each of the
given years the number of appliances in the housing stock. Because
commercial clothes washers are not a household appliance, market
saturation data are not provided. The historical shipments and market
saturation data for dishwashers, dehumidifiers, and cooking products
are from the 2005 AHAM Fact Books,\16\ while the commercial clothes
washer historical shipments data are based on data provided to DOE by
AHAM for the years 2002-2005 and Appliance Magazine for the years 1988-
1998.\17\
---------------------------------------------------------------------------
\16\ AHAM, 2005 Fact Book, 2005. Washington, DC. Available for
purchase at: http://www.aham.org/ht/d/Store/name/FACTBOOK.
\17\ `Statistical Review'. Appliance Magazine, April, 1998,
1999.
Table II.1.--Industry Shipments of Dishwashers and Dehumidifiers
[Domestic and import in thousands of units]
----------------------------------------------------------------------------------------------------------------
Dishwashers
Year ------------------------------------------------ Dehumidifiers
Built-In Portable Total
----------------------------------------------------------------------------------------------------------------
2005............................................ 7,294 133 7,428 1,957
2004............................................ 6,953 153 7,106 1,672
2003............................................ 6,280 148 6,428 1,311
2002............................................ 6,049 158 6,207 799
2001............................................ 5,478 149 5,627 806
2000............................................ 5,663 164 5,827 975
1999............................................ 5,542 170 5,712 950
1998............................................ 4,969 175 5,144 1,031
1997............................................ 4,653 173 4,826 820
1996............................................ 4,417 189 4,606 977
1995............................................ 4,141 205 4,346 1,003
----------------------------------------------------------------------------------------------------------------
Table II.2.--Industry Shipments of Cooking Products
[Domestic and import in thousands of units]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooking products
----------------------------------------------------------------------------------------------------
Electric ranges Gas ranges
Year ----------------------------------------------------------------------------------------
Surface Surface Microwave
Free- Built-In cooking Total Free- Built-In cooking Total ovens
standing units standing units
--------------------------------------------------------------------------------------------------------------------------------------------------------
2005............................................... 4,685 973 542 6,201 3,139 64 560 3,762 13,862
2004............................................... 4,612 963 570 6,145 3,124 67 528 3,719 15,526
2003............................................... 4,238 841 543 5,622 2,897 67 455 3,419 14,274
2002............................................... 4,030 780 528 5,338 2,781 71 416 3,268 13,311
2001............................................... 3,842 726 498 5,066 2,580 72 384 3,036 13,446
2000............................................... 3,826 706 494 5,026 2,729 70 377 3,176 12,644
1999............................................... 3,785 705 493 4,983 2,698 72 367 3,137 11,422
1998............................................... 3,481 652 506 4,639 2,543 71 336 2,950 10,365
1997............................................... 3,177 617 446 4,240 2,391 73 280 2,744 8,883
1996............................................... 3,123 614 418 4,155 2,366 72 272 2,710 8,771
1995............................................... 2,931 598 389 3,917 2,391 84 240 2,715 8,162
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 64450]]
Table II.3.--Industry Shipments of Commercial Clothes Washers
[Thousands of units]
------------------------------------------------------------------------
Year Units
------------------------------------------------------------------------
2005.................................................... 177
2004.................................................... 178
2003.................................................... 191
2002.................................................... 175
2001.................................................... 194
2000.................................................... 215
1999.................................................... 239
1998.................................................... 265
1997.................................................... 241
1996.................................................... 232
1995.................................................... 209
1994.................................................... 205
1993.................................................... 190
1992.................................................... 188
1991.................................................... 193
1990.................................................... 225
1989.................................................... 215
1988.................................................... 213
------------------------------------------------------------------------
Table II.4.--Appliance Market Saturations: Number of Households With Product (in Millions) and Percentage of U.S. Households With Product
--------------------------------------------------------------------------------------------------------------------------------------------------------
1970 1982 1990 2001 2005
Product ---------------------------------------------------------------------------------------------------
Number Percent Number Percent Number Percent Number Percent Number Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers......................................... 12 18.9 37.2 44.5 50.3 53.9 61.8 59.3 80.2 73.7
Dehumidifiers....................................... NA NA 9.2 11 15.6 16.7 14.7 14.1 20.6 18.9
Electric Ranges/Cooktops*........................... 25.8 40.6 48.4 58 58.4 62.6 69.2 66.3 71 65.3
Gas Ranges/Cooktops*................................ 36.6 57.7 35.7 42.7 36.1 38.7 39.4 37.8 42.2 39
Microwave Ovens..................................... Neg. Neg. 21.4 25.6 77.2 82.7 94.6 ** 90.7 97.2 89.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Cooktops not included in 1970 or 1982 data.
** Includes over-the-range and countertop microwave ovens.
During the Framework public meeting, DOE solicited comments
regarding existing databases to track CCW efficiencies. ALS commented
that the existing CEC database contains useful data and should be
reviewed. (Public Meeting Transcript, No. 5 at p. 44) As of March 2007,
the CEC database had 626 entries for dishwashers and 196 entries for
CCWs. This database, however, does not specify which models are
current, and it does not appear to cover the entire range of dishwasher
models. DOE also consulted the Energy Star database for residential
clothes washers, dishwashers, and dehumidifiers. DOE subsequently used
these data to identify units for reverse engineering tear-downs and
other analysis. Whenever possible, DOE investigated the design options
of the listed appliances, which then helped DOE design the interview
guides for the MIA interviews with stakeholders to solicit comments
about design options. DOE used the data for residential clothes washers
as an additional means of validation for the CCW analysis.
Natural Resources Canada (NRCan) publishes a database of electric
cooking appliance performance. Although it is not completely
representative of the current U.S. cooking products market, this
database covers products available in the Canadian market, which
overlaps with the U.S. market. Chapter 3 of the TSD presents data that
detail the energy factors of standard and self-cleaning electric ranges
and ovens, along with coil-element and smooth element electric
cooktops.
DOE also evaluated import and export trends for CCWs and
residential dishwashers, dehumidifiers, and cooking products as
reported by the U.S. Census Bureau and AHAM, as well as the market
saturation for dishwashers, dehumidifiers, and cooking products
according to AHAM. On the whole, major appliance unit imports increased
1.8 percent in 2005 from 2004. Major appliance unit exports increased
13.5 percent over the same period. In terms of market saturation, while
the percentage of U.S. households with electric ranges and/or cooktops
and microwave ovens has decreased slightly since 2001, the market
saturation of dishwashers, dehumidifiers, and gas cooking products has
increased. See Chapter 3 of the TSD for more information regarding
historical shipments and market saturation.
From AHAM data \18\18 and the U.S. Department of Labor's Consumer
Price Index, DOE estimated average retail prices for residential
appliances, including clothes washers, dishwashers, dehumidifiers, and
cooking products. Although prices for electric and gas ranges have
increased in the period from 1980 to 2005, the increase has been at a
much slower rate than the annual rate of inflation. Prices of
residential dishwashers, dehumidifiers, microwave ovens, and clothes
washers have decreased in the same time period. DOE also developed the
household appliance industry cost structure from publicly available
information from the U.S. Census Bureau, the Annual Survey of
Manufacturers (ASM), and the SEC 10-K reports filed by publicly-owned
manufacturers. The statistics illustrate a steady decline in the number
of production and non-production workers in the industry.
---------------------------------------------------------------------------
\18\ Data submitted to DOE as part of this rulemaking, contained
in DOE Docket No. EE-2006-STD-0127.
---------------------------------------------------------------------------
Inventory levels, expressed both in dollars and as a percentage of
value of shipments, have steadily declined since 1995 for the household
appliance industry, according to the ASM. DOE obtained full-production-
capacity utilization rates from the U.S. Census Bureau, Survey of Plant
Capacity from 1994 to 2004. Full production capacity is defined as the
maximum level of production an establishment could attain under normal
operating conditions. In the Survey of Plant Capacity report, the full
production utilization rate is a ratio of the actual level of
operations to the full production level. The full-production-capacity
utilization rate for household appliances in aggregate, along with the
rates for cooking appliances and household laundry appliances, show a
decrease in utilization from 1994 to 2004, although trends in subsets
of that time period have fluctuated. See Chapter 3 of the TSD for more
information regarding retail pricing, industry cost structure,
inventory levels, and production capacity utilization.
[[Page 64451]]
3. Technology Assessment
In the technology assessment, DOE identifies technologies and
design options that appear to be feasible means of improving product
efficiency, and characterizes energy efficiency of residential
dishwashers, dehumidifiers, and cooking products, and CCWs currently
available in the marketplace. This assessment provides the technical
background and structure on which DOE bases its screening and
engineering analyses.
a. Dishwashers
DOE identified technologies to increase the energy efficiency of
residential dishwashers primarily from a review of the following three
sources: (1) DOE's ANOPR initiating a standards rulemaking for
dishwashers, published on November 14, 1994 (59 FR 56423); (2) recent
information provided by trade publications; and (3) design data
identified in manufacturer product offerings. Except where otherwise
noted, design options are taken from the 1994 ANOPR. DOE derived the
variable washing pressure and variable-speed drive technologies from
the February 2006 edition of Appliance Magazine. DOE grouped these
technologies together because they collectively address manufacturers'
design tradeoffs between the mechanical soil removal function of the
water and the cycle time and energy associated with the dishwasher
pump. Condenser and fan/jet drying are technologies listed in one
manufacturer's product offerings. DOE also identified supercritical
carbon dioxide washing from the November 2005 issue of Appliance
Magazine. It added low-standby-loss electronic controls based on DOE's
analysis of controller standby power in dishwashers currently on the
market.
In addition to these design options, the multiple water
organizations commented that DOE should consider a two-drawer design or
similar option which would improve efficiency under partial loads. The
multiple water organizations also believe DOE should consider any
design option that would reduce pre-rinsing. (Multiple Water
Organizations, No. 11 at p. 3) In interviews with manufacturers, DOE
determined that two-drawer designs contain no control systems to link
the operation of one drawer with another, so that each drawer acts in
its own capacity as a compact-size dishwasher. Therefore, a two-drawer
design cannot be considered as a design option. Minimizing consumer
pre-rinsing depends on maintaining cleaning performance; there are no
design options that specifically address pre-rinsing. Any design option
that achieves energy efficiency improvements without incurring
significant performance penalties will indirectly address pre-rinsing.
DOE considered the design options that follow.
Condenser drying
Fan/jet drying
Flow-through heating
Improved fill control
Improved food filter
Improved motor efficiency
Improved spray-arm geometry
Increased insulation
Low-standby-loss electronic controls
Microprocessor controls and fuzzy logic, including
adaptive or soil-sensing controls
Modified sump geometry, with and without dual pumps
Reduced inlet-water temperature
Supercritical carbon dioxide washing
Ultrasonic washing
Variable washing pressure and flow rates
DOE characterized energy efficiency as an EF, expressed as cycles/
kWh for dishwashers currently on the market via a survey of the CEC
database of certified dishwashers.\19\
---------------------------------------------------------------------------
\19\ Available online at: http://www.energy.ca.gov/appliances/appliance/excel_based_files/.
---------------------------------------------------------------------------
b. Dehumidifiers
DOE has not previously conducted a comprehensive analysis of energy
conservation standards for dehumidifiers because there are currently no
Federal standards for these products. The first such standards become
effective October 2007. To build a list of possible design options, DOE
surveyed the marketplace for dehumidifier design options by reviewing a
wide assortment of product literature, through discovery during the
teardown analysis, during stakeholder interviews, and by using its
previous room-air conditioning rulemaking analysis as a source for
further design options. DOE identified the following design options as
possible means to improve dehumidifier performance.
Built-in hygrometer/humidistat
Improved compressor efficiency
Improved condenser performance
Improved controls
Improved defrost methods
Improved demand-defrost controls
Improved evaporator performance
Improved fan and fan-motor efficiency
Improved flow-control devices
Low-standby-loss electronic controls
Washable air filters
Based on product literature research, comments, and teardown
analysis, DOE has identified compressor, heat exchanger, and fan motor
improvements as the most common ways by which manufacturers improve the
energy efficiency of their dehumidifiers as measured by the DOE test
procedure.
During the Framework public meeting and Framework comment period,
stakeholders asked that DOE add improved control systems to the
dehumidifier design options list. ACEEE and other energy efficiency
advocates recommended that improved controls (such as fuzzy logic) be
added to the design option list to better control the dehumidifier.
(Public Meeting Transcript, No. 5 at p. 73; Joint Comment, No. 9 at p.
4) DOE agrees that such control technologies offering potential energy
savings are being implemented by manufacturers, and, therefore, it
added improved controls as a design option for dehumidifiers.
c. Cooking Products
DOE most recently analyzed energy conservation standards for
cooking products in 1996 and 1997. In the 1997 analysis, DOE analyzed
only gas cooking products to determine the technical and economic
feasibility of eliminating standing pilot lights. In its prior
analysis, DOE identified many technologies that have the potential for
improving gas and electric cooking efficiency. It has considered all of
these in this rulemaking. In addition, DOE identified low-standby-loss
electronic controls as a design option for several cooking products,
based on review of standby power data for microwave ovens and the
potential applicability to conventional cooking products as well.
Radiant elements for smooth electric cooktops, which were included in
the previous analysis, were not considered as a design option for this
rulemaking because manufacturer data provided to DOE in the prior
rulemaking indicated that this technology does not offer an efficiency
improvement over the baseline according to the DOE test procedure. DOE
considered the technologies that follow.
For gas cooktops:
Catalytic burners
Electronic ignition
Insulation
Radiant gas burners
Reduced excess air at burner
Reflective surfaces
Sealed burners
Thermostatically-controlled burners
For open (coil) element electric cooktops:
Electronic controls
[[Page 64452]]
Improved contact conductance
Insulation
Low-standby-loss electronic controls
Reflective surfaces
For smooth element electric cooktops:
Electronic controls
Halogen elements
Induction elements
Low-standby-loss electronic controls
For gas and electric ovens:
Bi-radiant oven (electric only)
Forced convection
Halogen lamp oven (electric only)
Improved and added insulation
Improved door seals
Low-standby-loss electronic controls
No oven-door window
Oven separator
Pilotless ignition (gas only)
Radiant burner (gas only)
Reduced conduction losses
Reduced thermal mass
Reduced vent rate
Reflective surfaces
Steam cooking
DOE received several comments that the design options from the
previous rulemaking are still relevant because there have been no major
technological breakthroughs in conventional cooking products since that
time. AHAM recommended looking at the same design options because there
has been no change in the market other than for induction cooking,
which according to AHAM is so expensive it should not be considered.
(Public Meeting Transcript, No. 5 at p. 93) ACEEE and the Joint Comment
agreed with retaining the design options from the previous rulemaking,
stating that only modest updates are needed for conventional cooking
products. (Public Meeting Transcript, No. 5 at p. 97; Joint Comment,
No. 9 at p. 3) Whirlpool stated that many of the previous design
options either are not economically justifiable or have safety issues
(Public Meeting Transcript, No. 5 at p. 94), while Wolf commented that
the cost and risk of modifying today's well-performing products with
questionable design options should not be underestimated. (Wolf, No. 6
at p. 2) DOE believes the aforementioned design options are still
relevant and has retained them for analysis. Consumer safety is a
screening criterion that DOE has applied in the screening analysis
(Chapter 4 of the TSD), and DOE assessed economic viability in the LCC
and PBP analyses (Chapter 8 of the TSD).
For microwave ovens, in the previous rulemaking, DOE identified all
of the technologies listed below, with the exception of cooking
sensors, dual magnetrons, and low-standby-loss electronic controls. DOE
identified cooking sensors from product literature, while dual
magnetrons were identified in the February 2006 edition of Appliance
Design as a means to decrease cooking times. DOE identified low-
standby-loss electronic controls by reviewing AHAM data for standby
power. In addition, DOE received comments stating that it needed to
consider sensors and controls that detect completion of the cooking
process and variable power supplies that adjust power to the magnetron
during cooking. (Public Meeting Transcript, No. 5 at p. 91; Joint
Comment, No. 9 at p. 3) DOE did not receive any information regarding
the energy efficiency impacts of variable power supplies, and,
therefore, will limit the design option relating to variable magnetron
output to dual magnetrons. In view of the above, DOE considered the
design options that follow.
Added insulation
Cooking sensors
Dual magnetrons
Eliminate or improve ceramic stirrer cover
Improved fan efficiency
Improved magnetron efficiency
Improved power supply efficiency
Low-standby-loss electronic controls
Modified wave guide
Reflective surfaces
In written comments, AHAM stated that DOE considered many design
options for microwave ovens in its 1998 rule and that, after extensive
analysis, DOE determined that no design options were technologically
feasible or economically justifiable. AHAM also stated that there have
been no technological or economic breakthroughs since the previous
determination that would change the previous conclusion. (AHAM, No. 17
at p. 1) However, ACEEE disagreed, stating that there have been some
significant changes in microwave oven technology since the prior
rulemaking. Thus, it stated that the previous design options need to be
reviewed. (Public Meeting Transcript, No. 5 at p. 97)
During the Framework public meeting and Framework comment period,
DOE received comments that the lack of efficiency data for microwave
ovens would hinder DOE's ability to establish efficiency levels, and
that DOE should conduct a test program specifically to obtain such
efficiency data since it would be difficult for the manufacturers to do
so themselves. Whirlpool stated that manufacturers are not using the
microwave oven test procedure and, as a result, there is a lack of
efficiency data. (Public Meeting Transcript, No. 5 at p. 86) Whirlpool
commented that the absence of a microwave oven energy efficiency
standard has resulted in a dearth of data on microwave ovens.
(Whirlpool, No. 10 at p. 10). ACEEE commented that, because there are
very few data on microwave ovens, the baseline efficiency level needs
to be updated from the numbers in the previous rulemaking. (Public
Meeting Transcript, No. 5 at p. 91) ACEEE further stated that the
process to update the data should include collecting as much
information from manufacturers as possible, then supplementing these
data with product testing. The purpose of these test data, according to
ACEEE, should be to assess the validity of the efficiency levels
analyzed in the previous rulemaking rather than to quantify a new cost-
efficiency relationship. (Public Meeting Transcript, No. 5 at pp. 142-
143) AHAM concurred with DOE's intention to conduct microwave oven
efficiency testing as part of this rulemaking because it would take
industry a significant amount of time to provide efficiency data. AHAM
suggested DOE may want to commission the National Institute of
Standards and Technology or some other source to do an independent
evaluation. (Public Meeting Transcript, No. 5 at p. 143) The Joint
Comment stated that because microwave oven technology has changed
substantially since the previous rulemaking, DOE should quickly collect
current data on product performance and features from manufacturers,
and fill in gaps where necessary. Manufacturers could then provide
incremental cost data at the selected efficiency levels. (Joint
Comment, No. 9 at p. 3)
Stakeholders questioned which microwave oven test procedure should
be used. he current DOE test procedure requires manufacturers to test
to IEC 705-1988, Household Microwave Ovens--Methods for Measuring
Performance, and Amendment 2-1993. The current IEC test procedure is
designated IEC 60705 Edition 3.2-2006. Differences between the 1988 and
current IEC test procedures can result in differences in measured
microwave oven efficiency. In comments received during the Framework
public meeting, Sharp asked which test procedure would be used to
define microwave oven efficiency. (Public Meeting Transcript, No. 5 at
p. 141)
Recognizing the lack of existing energy efficiency data, AHAM
conducted a test program on 21
[[Page 64453]]
microwave ovens from nine manufacturers, representing a broad spectrum
of units available in the marketplace and incorporating a variety of
capacities and features. AHAM tested microwave oven efficiency
according to DOE's test procedure and standby power according to IEC
62301-2005, Household Electrical Appliances--Measurement of Standby
Power. AHAM found no correlation between energy efficiency and rated
output power or cavity volume. Efficiencies ranged from 54.8 percent to
61.8 percent. Given the uncertainties in the test procedure, resulting
in large test-to-test variations, DOE considers these efficiencies to
be comparable to the efficiencies in the prior rulemaking's analysis.
Standby power also showed no correlation with rated output power,
varied significantly from unit to unit, and ranged from 1.5 watts to
5.8 watts. The FEMP database of microwave oven standby power indicates
that 90 percent of reported microwave ovens consume greater than 2
watts in standby mode.
The energy efficiency data upon which DOE based its analysis was
measured according to the DOE test procedure, which references IEC 705-
1988 and Amendment 2-1993. DOE does not plan to revise the test
procedure to incorporate IEC 60705 Edition 3.2-2006, to measure the
cooking efficiency, because DOE is unaware of any efficiency comparison
data that would justify such a change. However, as discussed above, DOE
is examining changes to the test procedure to measure standby-power
use.
d. Commercial Clothes Washers
DOE identified technologies to improve the energy efficiency of
CCWs. The majority of these technologies are described in the 1996
report entitled Design Options for Clothes Washers. (LBNL-47888,
October 1996, Lawrence Berkeley National Laboratory) Steam washing and
improved horizontal-axis-washer drum design were identified in the
September 2005 edition of Appliance Magazine. DOE identified the low-
standby-power design option during its engineering analysis review of
all AHAM product classes. It added spray rinse and advanced agitator
design options in response to comments received following the Framework
public meeting. DOE considered the design options that follow.
Adaptive control systems
Added insulation
Advanced agitation concepts for vertical-axis machines
Automatic fill control
Bubble action
Direct-drive motor
Electrolytic disassociation of water
Horizontal-axis design
Horizontal-axis design with recirculation
Improved fill control
Improved horizontal-axis-washer drum design
Improved water extraction to lower remaining moisture
content
Increased motor efficiency
Low-standby-power design
Ozonated laundering
Reduced thermal mass
Spray rinse or similar water-reducing rinse technology
Steam washing
Suds savings
Thermostatically-controlled mixing valves
Tighter tub tolerance
Ultrasonic washing
The Multiple Water Organizations requested that DOE add the
following design options: (1) Spray rinse, (2) nutating or other
advanced agitators, (3) advanced power supplies, and (4) steam
cleaning. (Multiple Water Organizations, No. 11 at p. 1 ) ACEEE
requested that DOE consider more water-saving design options (e.g.,
spray rinse), in addition to energy-saving design options. (Public
Meeting Transcript, No. 5 at p. 51) In a joint letter, the Joint
Comment requested the addition of a spray wash design option. (Joint
Comment, No. 9 at p. 5)
DOE has added advanced agitation concepts for vertical-axis
washers. These agitation systems include nutating plates, side-mounted
mounted impellers, and any other agitation technology that eliminates
the need for the traditional large and centrally-mounted agitator found
in vertical-axis clothes washer tubs. While such agitation systems are
currently only found on high-end residential clothes washers, they have
the potential to be adapted for CCWs and can reduce the water
consumption of vertical-axis clothes washers substantially.
DOE has also added spray rinse as a design option but notes that
this design option may not be appropriate for the commercial laundry
market. ALS commented that some water-reduction design options (such as
the ``innovative rinse technology'' in its vertical-axis models) have
faced strong opposition from some consumers. (ALS, No. 19 at p. 1)
Whirlpool noted that commercial customers tend to overload their
washers, which leads to unacceptable rinsing performance. (Whirlpool,
No. 10 at p. 3) Given that the industry has fielded washers with rinse-
water use reduction technologies (such as spray rinse) in the past and
continues to develop other water saving approaches, DOE will consider
this design option.
During the Framework public meeting, stakeholders asked DOE whether
it will address standby power in CCWs. Potomac suggested that DOE
consider technologies that limit standby power in CCWs. Such design
options could include improved power supplies or other technologies
that limit power consumption in standby mode. (Public Meeting
Transcript, No. 5 at p. 52) DOE recognizes the importance of studying
all aspects of power consumption by consumer appliances. With the
growing trend of upgrading consumer appliances to use electronic
controllers, standby power has become a topic of interest across all
appliance categories.
During the Framework public meeting, DOE solicited comments
regarding existing databases to track CCW efficiencies. ALS commented
that the existing CEC database is a good source of information and that
DOE should review it. (Public Meeting Transcript, No. 5 at p. 44) DOE
subsequently used that database and others to identify CCWs that meet
various modified energy factor (MEF) and WF levels. Whenever possible,
DOE investigated the design options of the listed washers, which then
helped DOE design the interview guides for the MIA interviews with
stakeholders to solicit comments about design options.
Additional detail on the technology assessment can be found in
Chapter 3 of the TSD.
B. Screening Analysis
1. Purpose
The purpose of the screening analysis is to evaluate the design
options that improve the efficiency of a product, in order to determine
which options to consider further and which options to screen out
because they may not be technologically feasible, may exhibit
practicability problems (related to manufacture, installation, or
service), may result in adverse impact on product utility or product
availability, or may have an adverse impact on health or safety. DOE
consults with industry, technical experts, and other interested parties
in developing a list of design options for consideration. DOE then
applies the following set of screening criteria to determine which
design options are unsuitable for further consideration in the
rulemaking (10 CFR Part 430, Subpart C, Appendix A at 4(a)(4) and
5(b)).
a. Technological Feasibility
DOE will consider technologies incorporated in commercial products
or in working prototypes to be technologically feasible.
[[Page 64454]]
b. Practicability To Manufacture, Install, and Service
If mass production of a technology in commercial products and
reliable installation and servicing of the technology could be achieved
on the scale necessary to serve the relevant market at the time of the
effective date of the standard, then DOE will consider that technology
practicable to manufacture, install, and service.
c. Adverse Impacts on Product Utility or Product Availability
If DOE determines a technology to have significant adverse impact
on the utility of the product to significant subgroups of consumers, or
to result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the U.S. at the time, it will not consider this
technology further.
d. Adverse Impacts on Health or Safety
If DOE determines that a technology will have significant adverse
impacts on health or safety, it will not consider this technology
further.
2. Design Options
a. Dishwashers
For dishwashers, DOE screened out reduced inlet-water temperature,
supercritical carbon dioxide washing, and ultrasonic washing
technologies, for the reasons that follow.
Reduced inlet-water temperature requires that dishwashers tap the
cold water line for the water supply, which would require significant
alteration of existing dishwasher installations in order to accommodate
newly-purchased units incorporating this design option. Whirlpool
commented that such a retrofit of existing residential plumbing
necessary to accommodate a reduced inlet-water temperature design would
be costly, and, therefore, DOE should eliminate this design option.
(Whirlpool, No. 10 at p. 4) DOE agrees that this design option does not
meet the screening criterion of practicability to install. Therefore,
DOE screened out reduced inlet-water temperature from further analysis.
AHAM supported this decision. (AHAM, No. 14 at p. 8)
Supercritical carbon dioxide washing, in which supercritical carbon
dioxide dissolves grease from the dishware instead of conventional
detergent and water, is in the research stage, so DOE believes it would
not be practicable to manufacture, install, and service at the time of
the effective date of an amended standard. Furthermore, it is also not
yet possible to assess whether it will have any adverse impacts on
equipment utility to consumers or equipment availability, or any
adverse impacts on consumers' health or safety. Therefore, DOE screened
out supercritical carbon dioxide washing from further analysis.
For ultrasonic washing, high frequency energy input into the wash
water creates cavitation bubbles that remove soil from the dishware via
mechanical scrubbing action. With this technology, consumer utility is
decreased due to the potential for the ultrasonic cleaning action to
damage fragile dishware and due to the perception that the low
temperatures do not sterilize dishes. Whirlpool also commented that
ultrasonic dishwashing is beyond the technological scope of current
product development. (Whirlpool, No. 10 at p. 4) Since no manufacturer
currently produces ultrasonic dishwashers, it is impossible to assess
whether this design option would have any impacts on consumer health or
safety, or product availability. Therefore, DOE screened out ultrasonic
dishwashing from further analysis. In comments submitted after the
Framework public meeting, AHAM agreed that DOE should eliminate
ultrasonic dishwashing. (AHAM, No. 14 at p. 8) Table II.5 lists the
dishwasher design options that DOE has retained for analysis.
Table II.5.--Retained Design Options for Dishwashers
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Condenser drying.
2. Fan/jet drying.
3. Flow-through heating.
4. Improved fill control.
5. Improved food filter.
6. Improved motor efficiency.
7. Improved spray-arm geometry.
8. Increased insulation.
9. Low-standby-loss electronic controls.
10. Microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls.
11. Modified sump geometry, with and without dual pumps.
12. Variable washing pressures and flow rates.
------------------------------------------------------------------------
According to Whirlpool, soil sensors have contributed to
significant dishwasher water and energy savings. However, Whirlpool is
unaware of any further technological breakthroughs which would
dramatically change the energy consumption of dishwashers.
Approximately 90 percent of dishwashers are currently Energy Star-
qualified. (Whirlpool, No. 10 at p. 1) DOE has noted that many
dishwashers are able to meet Energy Star requirements without the use
of a soil sensor. It may be assumed that the incorporation of soil
sensors to such models offers the potential for additional energy
savings. DOE also notes that there are multiple technologies that can
be used by themselves or to complement others to determine soiling
levels inside a dishwasher. For example, it is possible to use a
pressure sensor, rather than the more typical turbidity sensors, to
detect clogging of a filter to infer soil loads. The maximum
technologically feasible (``max-tech'') dishwasher that DOE
investigated went a step further, featuring both a turbidity and a
pressure sensor, implying a benefit from using both sensor
technologies. Since there are many approaches to and levels of
sophistication of soil sensing may be taken to depending on the
underlying dishwasher platform, DOE will retain soil sensing for
further analysis.
Whirlpool also stated that variable washing pressures and flow
rates and condenser drying are beyond the technological scope of
current product development, and therefore DOE should eliminate them
from further analysis. (Whirlpool, No. 10 at p. 4) AHAM stated without
elaboration that condenser drying should be eliminated from the
analysis. (AHAM, No. 14 at p. 8) In reviewing current dishwasher
models, DOE noted multiple instances in which manufacturer
specifications indicate variable washing pressures and flow rates. For
example, such a strategy may include alternating wash water to the top
and bottom racks. In addition, DOE is aware of at least one dishwasher
platform on the market with true condensation drying, in which
relatively cool ambient air is drawn across the outside of the
stainless steel dishwasher cavity, providing a surface on which
moisture from the hotter dishware can condense. Since variable washing
pressures and flow rates and condenser drying are already in wide
distribution, DOE will retain these design options for further
analysis.
AHAM also requested that DOE replace the term ``fan/jet drying''
with the term ``fan-assist drying'' and clarify the term ``flow-through
heating.'' (AHAM, No. 14 at p. 8) DOE believes that the change to fan-
assist drying is appropriate, and will designate the design option in
further analyses accordingly.
``Flow-through heating'' is differentiated from conventional
dishwasher heating by the positioning of the heating element.
Conventional dishwasher heaters use a tubular electric resistance
element positioned inside the dishwasher cavity, above the sump, where
it is exposed to the wash
[[Page 64455]]
and rinse water. Flow-through heaters pass the water through a metallic
tube around which a resistive heating element is wrapped. Consequently,
less water is typically required in the dishwasher sump for flow-
through heaters since they form an integrated part of the water flow
path and do not require high levels of standing water above the sump,
as do tubular heating elements. Therefore, the potential exists for
dishwashers using flow-through heating to have reduced water and energy
consumption.
b. Dehumidifiers
For dehumidifiers, all technologies meet the screening criteria.
Table II.6 lists the dehumidifier design options that DOE has
retained for analysis.
Table II.6.--Retained Design Options for Dehumidifiers
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Built-in hygrometer/humidistat.
2. Improved compressor efficiency.
3. Improved condenser performance.
4. Improved controls.
5. Improved defrost methods.
6. Improved demand-defrost controls.
7. Improved evaporator performance.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.
10. Low-standby-loss electronic controls.
11. Washable air filters.
------------------------------------------------------------------------
c. Cooking Products.
For cooking products, Whirlpool commented that DOE should eliminate
from this analysis all design options that DOE eliminated in the
previous rulemaking for reasons of feasibility, cost, and/or consumer
safety. (Whirlpool, No. 10 at pp. 5-7) DOE will evaluate each design
option again, and only will eliminate from further consideration those
technologies that fail to meet one or more of the screening criteria.
1. Cooktops and Ovens
For gas cooktops, DOE screened out catalytic burners, radiant gas
burners, reduced excess air at burner, and reflective surfaces for the
reasons that follow.
DOE is not aware of any commercialized catalytic burners for gas
cooktops. Therefore, DOE believes they would not be practicable to
manufacture, install, and service at the time of the effective date of
an amended standard. Also, because this technology is in the research
stage, it is not possible to assess whether it will have any adverse
impacts on equipment utility to consumers or equipment availability, or
any adverse impacts on consumers' health or safety. Therefore, DOE has
decided to exclude catalytic burners from further analysis.
In the previous rulemaking, manufacturers concluded that infrared
jet-impingement radiant gas burners would not be able to comply with
the ANSI Standard Z21.1-2005, Household Cooking Gas Appliances. Field
testing had shown that users were unable to turn down the burner
satisfactorily, which indicated a potential health and safety risk.
More recently, a silicon carbide radiant burner has been tested to the
Japanese Industrial Standard (JIS) S 2103-1996, Gas Burning Appliances
for Domestic Use, but there is no data to evaluate whether this burner
would conform to the ANSI standard since it is not commercially
available in the U.S. Due to potential impacts on consumer health and
safety, DOE screened out radiant gas burners from further analysis.
Reduced excess air at the burner has not been definitively shown to
increase efficiency. Also, because the technology has not been
commercialized, DOE believes it would not be practicable to
manufacture, install, and service at the time of the effective date of
an amended standard. In addition, DOE cannot assess adverse impacts on
consumers' utility, health, or safety or equipment availability for
this technology. Further, Whirlpool suggests there are combustion-
related issues with reducing excess air. (Public Meeting Transcript,
No. 5 at p. 94) DOE agrees that reducing excess air at the burner
increases the possibility of adverse conditions such as poor flame
quality and elevated carbon monoxide levels, which would suggest
adverse impacts on consumers' utility, health, and safety. For these
reasons, DOE screened out reduced excess air at the burner from further
analysis.
In the previous rulemaking, manufacturers reported adverse impacts
on consumer utility due to the requirement for regular and careful
cleaning of reflective surfaces, and this concern remains at present.
In addition, since this technology has still not been commercialized,
DOE cannot assess the impacts on consumer health and safety or
equipment availability. Therefore, DOE screened out reflective surfaces
for gas cooktops from further analysis.
Table II.7 lists the gas cooktop design options that DOE has
retained for analysis.
Table II.7.--Retained Design Options for Gas Cooktops
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Electronic ignition.
2. Insulation.
3. Sealed burners.
4. Thermostatically-controlled burners.
------------------------------------------------------------------------
The Joint Comment agreed with the inclusion of electronic ignition
for gas ranges, and thereby for gas cooktops and ovens. They stated
that earlier analysis found significant, cost-effective savings
achieved by eliminating pilot lights. (Joint Comment, No. 9 at p. 3)
For electric open (coil) cooktops, DOE screened out reflective
surfaces, for the reasons that follow.
In the previous rulemaking, manufacturers reported adverse impacts
on consumer utility due to the requirement for regular and careful
cleaning of reflective surfaces, and this concern remains at present.
Furthermore, because this technology has still not been commercialized,
DOE cannot assess its impacts on consumer health and safety or
equipment availability. Therefore, DOE screened out reflective surfaces
from further analysis for electric coil cooktops.
Table II.8 lists the electric open (coil) cooktop design options
that DOE has retained for analysis.
Table II.8.--Retained Design Options for Electric Open (Coil) Element
Cooktops
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Electronic controls.
2. Improved contact conductance.
3. Insulation.
4. Low-standby-loss electronic controls.
------------------------------------------------------------------------
For electric smooth cooktops, all technologies meet the screening
criteria.
Table II.9 lists the electric smooth cooktop design options that
DOE has retained for analysis.
Table II.9.--Retained Design Options for Electric Smooth Element
Cooktops
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Electronic controls.
2. Halogen elements.
3. Induction elements.
4. Low-standby-loss electronic controls.
------------------------------------------------------------------------
For ovens, DOE screened out added insulation, bi-radiant oven,
halogen lamp oven, no oven door window, oven separator, reduced thermal
mass, and reflective surfaces, for the reasons that follow.
Although some analyses have shown reduced energy consumption by
increasing the thickness of the insulation in the oven cabinet walls
and doors from two inches to four inches,
[[Page 64456]]
consumer utility would be negatively impacted by the necessary
reduction in cavity volume to maintain the same oven footprint and
overall cabinet volume. Therefore, DOE screened out added insulation.
The improved insulation design option, however, will be retained,
because insulation with a higher density (i.e., greater insulating
value) does not require additional space and thus would not impact oven
cavity size.
The last working prototype of a bi-radiant oven known to DOE was
tested in the 1970s. The technology requires a low-emissivity cavity,
electronic controls, and highly absorptive cooking utensils. The need
for specialized cookware and cavity maintenance issues negatively
impact consumer utility. Therefore, DOE screened out bi-radiant ovens
from further analysis.
While GE currently markets a line of electric ovens that
incorporates halogen elements along with conventional resistance
heating elements, microwave heating, and, optionally, a convection
system, DOE is not aware of any ovens that utilize halogen lamps alone
as the heating element, and no data were found or submitted to
demonstrate how efficiently halogen elements alone perform relative to
conventional ovens. DOE believes that it would not be practicable to
manufacture, install, and service halogen lamps for use in consumer
cooking products on the scale necessary to serve the relevant market at
the time of the standard's effective date. Therefore, DOE screened out
halogen lamp ovens.
The previous rulemaking's analysis reported a small annual energy
savings associated with no oven door window, but that consumer
practices of opening the door to inspect the food while cooking could
negate any benefit. EEI commented during the Framework public meeting
that DOE should eliminate the no oven door window design option due to
the potential impact on utility and safety, and it is likely that the
technology is not a feasible option for most ovens. EEI also suggested
evaluating double-pane or similar oven door windows. (Public Meeting
Transcript, No. 5 at p. 94; EEI, No. 7 at p. 6) DOE agrees that reduced
consumer utility along with decreased safety due to the additional door
openings justify elimination of this design option from further
analysis. In addition, DOE addresses the efficiency impact of double-
pane or other highly insulated oven door windows by means of the
reduced conduction losses design option, which has been retained for
further analysis.
An oven separator has been researched but has never been put into
production. Manufacturers stated during the previous rulemaking that a
separator could not be economically designed for conventional gas
ovens. The use of a separator in electric ovens would require the
installation of an additional element and a non-conventional control
system. Manufacturers also stated that it would be difficult to obtain
Underwriters Laboratory and AGA approvals and meet existing ANSI
standards because of the effect the separator would have on safety and
performance. Manufacturers also stated that consumer acceptance would
probably be low because appliances such as microwave and toaster ovens
already exist to cook small loads. In addition, the separator would
have to be designed to be ``fool-proof'' to prevent consumers from
accidentally installing it incorrectly. With regard to energy use, the
additional metal added to the oven by the separator (increased thermal
mass) might result in increased energy losses, although data provided
by AHAM indicated an increase in efficiency of approximately 0.82
percentage points in an electric oven. However, the anticipated
negative impacts on consumer utility and safety, along with
practicability to manufacture, resulted in DOE screening out the oven
separator from further analysis. Whirlpool expressed support for
elimination of this design option, mentioning consumer safety as one of
many issues. (Public Meeting Transcript, No. 5 at p. 95) For example,
safety issues could arise in a gas oven if the separator is incorrectly
installed, resulting in improper burner operation.
In the previous rulemaking, manufacturers commented that a thermal
mass reduction in ovens was not possible without compromising
structural integrity (during both use and transportation) and
increasing heat losses. Although tests by the Gas Research Institute
(GRI) showed a small efficiency improvement, the issues of structural
integrity and associated consumer product safety led DOE to eliminate
thermal mass reduction from further analysis.
Manufacturers stated in the previous rulemaking that reflective
surfaces degrade throughout the life of the oven, particularly for
self-cleaning ovens, and GRI reported tests that showed this design
option can actually result in a decrease of energy efficiency. The
uncertainty in energy savings, coupled with a lack of sophistication in
the technology in terms of maintaining the reflective surfaces over the
lifetime of the oven, led DOE to eliminate this technology from further
analysis.
Table II.10 lists the gas and electric oven design options that DOE
has retained for analysis.
Table II.10.--Retained Design Options for Gas and Electric Ovens
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Forced convection.
2. Improved door seals.
3. Improved insulation.
4. Low-standby-loss electronic controls.
5. Pilotless ignition (gas only).
6. Radiant burner (gas only).
7. Reduced conduction losses.
8. Reduced vent rate.
9. Steam cooking.
------------------------------------------------------------------------
The Joint Comment recommended that DOE study the energy used by
ignition devices in gas ovens. (Joint Comment, No. 9 at p. 3) DOE will
include the gas energy consumption of pilot lights and electrical
energy consumption of pilotless ignition in the engineering analysis
(see Chapter 5 of the TSD).
2. Microwave Ovens
For microwave ovens, all technologies meet the screening criteria.
Table II.11 lists the microwave oven design options that DOE has
retained for analysis.
Table II.11.--Retained Design Options for Microwave Ovens
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Added insulation.
2. Cooking sensors.
3. Dual magnetrons.
4. Eliminate or improve ceramic stirrer cover.
5. Improved fan efficiency.
6. Improved magnetron efficiency.
7. Improved power supply efficiency.
8. Low-standby-loss electronic controls.
9. Modified wave guide.
10. Reflective surfaces.
------------------------------------------------------------------------
AHAM submitted written comments on the microwave oven design
options. For improved fan efficiency, AHAM commented that, since the
fan accounts for less than 2 percent of the total energy consumption in
the microwave oven, a high efficiency fan would improve energy factor
by less than 0.5 percent. Therefore, AHAM argued that efficient fans
are not economically justified. (AHAM, No. 17 at pp. 2-3) However, AHAM
did not provide any data that supported their conclusion of a lack of
economic justification. Therefore, DOE will consider improved fan
efficiency in its analysis.
According to AHAM, considerable effort has already been expended to
optimize magnetron efficiency.
[[Page 64457]]
Manufacturers' specifications indicate that typical efficiency is about
73 percent with only a plus or minus 2 percentage point variance. Thus,
AHAM argued that there is little opportunity to improve microwave
energy efficiency for manufacturers using magnetrons. (AHAM, No. 17 at
p. 3) A literature review that DOE performed, however, determined that
oscillation efficiencies of up to 78 percent have been reported. DOE
has decided to retain improved magnetron efficiency for analysis,
because this design option: (1) Is technologically feasible; (2) is
practicable to manufacture, install, and service; (3) does not result
in loss of product utility or product availability; and (4) does not
have adverse impacts on health or safety.
AHAM commented that there are two types of high-voltage power
supplies used in microwave ovens, as described below. The most common
type is the inductive capacitance transformer, which has an efficiency
of about 82 percent. More expensive inverter-based power supplies are
about 84 percent efficient. Higher efficiency general purpose
transformers do not have stable enough output power for microwave oven
application. AHAM stated that, among the units tested, there was no
correlation between power supply type and cooking efficiency. AHAM also
does not believe there is a cost-effective opportunity for improving
the efficiency of the power supply. (AHAM, No. 17 at p. 3) However,
AHAM did not submit any data demonstrating a lack of correlation
between power supply type and cooking efficiency or refuting economic
justification. Therefore, DOE will consider improved power supply
efficiency in its analysis, during which it will assess economic
viability.
For reflective surfaces, AHAM commented that manufacturers are
already using surface finishes to optimize efficiency. Also, AHAM
stated that proper oven cavity design would obviate the need to add any
metallic plates inside the cavity to match the highest oscillation
impedance of the magnetron. (AHAM, No. 17 at p. 2) Testing by
manufacturers, however, has shown that a high-grade stainless steel or
reflective material steel coating can improve efficiency by 0.5 percent
over painted cold-rolled steel. Since DOE is aware of data
demonstrating efficiency improvement as a function of surface
reflectivity, DOE will retain reflective surfaces for analysis.
d. Commercial Clothes Washers
During the Framework public meeting and Framework comment period,
DOE solicited comments from stakeholders regarding which design options
found in residential clothes washers would be applicable to CCWs.
However, multiple manufacturers of CCWs cautioned that CCWs are not
just slightly modified extensions of their residential product lines,
and, thus, some design options currently found on their residential
lines may not be applicable for commercial use.
In addition, ALS requested that DOE recognize the unique
environment in which CCWs operate and how that precludes the
implementation of several design options found in the residential
market. Such options could be incompatible with the requirements
regarding ruggedness, reliability, and performance routinely demanded
in a commercial setting. (Public Meeting Transcript, No. 5 at p. 43)
For example, Whirlpool stated that design options such as spray rinse
have not performed adequately in commercial settings due to the routine
problem of overloading by consumers. Commenters also asserted that
inadequate rinsing performance typically leads consumers to re-run
loads, thereby increasing water and energy consumption.
Whirlpool, ALS, and AHAM requested that the following design
options be removed from consideration: Bubble action, electrolytic
disassociation of water, ozonated laundering, reduced thermal mass,
suds saving, ultrasonic washing, and horizontal-axis design. Whirlpool
and AHAM additionally requested that steam washing be removed from
consideration. Whirlpool stated that all of the aforementioned design
options were removed from consideration during the recent residential
clothes washer rulemaking and, therefore, should be removed from
consideration during this rulemaking as well. ALS provided a similar
rationale for the design options it requested to be excluded. AHAM
further requested that the improved horizontal-axis-washer drum design
option be removed. (Whirlpool, No. 10 at p. 3; Public Meeting
Transcript, No. 5 at p. 49; AHAM, No. 14 at p. 7)
In light of the available information, DOE subsequently screened
out bubble action, electrolytic disassociation of water, ozonated
laundering, reduced thermal mass, suds saving, and ultrasonic washing
from further analysis, for the reasons that follow.
Although bubble washing has been incorporated into commercial
products, production is extremely limited and further commercialization
would require manufacturers to develop entirely new platforms.
Therefore, DOE does not believe that this technology would be
practicable to manufacture, install, and service on the scale necessary
to serve the relevant market at the time of the effective date of an
amended standard. For these reasons, DOE screened out the bubble action
design option.
DOE is not considering electrolytic disassociation of water and
ozonated laundering because these technologies are at the research
stage. Therefore, DOE believes that it would not be practicable to
manufacture, install, and service either technology on the scale
necessary to serve the relevant market at the time of the effective
date of an amended standard. Also, because these technologies are in
the research stage, it is not possible to assess whether they will have
any adverse impacts on equipment utility to consumers or equipment
availability, or any adverse impacts on consumers' health or safety.
Therefore, DOE screened out electrolytic disassociation of water and
ozonated laundering as design options for improving the energy
efficiency of CCWs.
Reduced thermal mass has not been incorporated into clothes
washers, so DOE believes that it would not be practicable to
manufacture, install, and service this technology on the scale
necessary to serve the relevant market at the time of the effective
date of an amended standard. Also, because this technology has not been
incorporated into clothes washers, it is not possible to assess whether
it will have any adverse impacts on equipment utility to consumers or
equipment availability, or any adverse impacts on consumers' health or
safety. Therefore, DOE screened out reduced thermal mass as a design
option for improving the energy efficiency of CCWs.
Suds-saving residential clothes washers, in which wash water is
stored for subsequent reuse, were previously commercially available,
but required an adjacent washtub to store suds in between wash cycles.
Due to these installation requirements, DOE believes that suds saving
clothes washers would be impractical to install in many locations.
Suds-saving clothes washers reduce consumer utility by requiring
consumers to occupy space adjacent to the washer with an additional
washtub. In a commercial setting, this may limit the number of clothes
washers that may be installed. Consumers must also wash clothes
sequentially to fully capture the energy saving benefits of suds
saving. Delays between wash cycles allow the saved water to cool,
reducing wash performance and energy savings. Finally, suds-saving
clothes washers can carry over heavy soiling between
[[Page 64458]]
clothing loads, reducing wash performance as well. Therefore, DOE will
not consider suds saving as a design option for improving the energy
efficiency of commercial clothes washers.
Ultrasonic washing promotes mechanical soil removal through the
introduction of ultrasonic vibrations into the wash tub. This
technology has been demonstrated in clothes washers, but the ultrasonic
clothes washer did not adequately remove soil from the clothes. Thus,
ultrasonic clothes washing would reduce consumer utility by not
adequately washing clothes. In addition, bubble cavitations caused by
standing ultrasonic waves could potentially damage some fragile
clothing or clothing fasteners, further reducing consumer utility.
Since no manufacturers currently produce ultrasonic clothes washers, it
is impossible to assess whether it will have any impacts on consumers'
health or safety, or product availability. For these reasons, DOE
screened out ultrasonic washing as a design option for improving the
energy efficiency of CCWs.
In the comment period following the Framework public meeting, EEI
suggested that at least one major detergent manufacturer has formulated
a cold-water detergent, capable of washing all types of clothes in cold
water. According to EEI, such detergents promise significant energy
savings since they could eliminate the need for heated water in CCWs.
(EEI, No. 7 at p. 4) While cold-water detergents show promise, the
present clothes washer test procedure does not recognize the potential
energy benefits of such detergents. DOE will consider possible future
amendments to the test procedure to account for cold-water detergents.
Thus, in the context of the present rulemaking, DOE will not analyze
the potential impact of cold-water detergents.
Table II.12 lists the CCW design options that DOE has retained for
analysis. For further review of the retained design options, please see
Chapter 3 of the TSD.
Table II.12.--Retained Design Options for Commercial Clothes Washers
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Adaptive control systems.
2. Added insulation.
3. Advanced agitation concepts for vertical-axis machines.
4. Automatic water fill control.
5. Direct-drive motor.
6. Horizontal-axis design.
7. Horizontal-axis design with recirculation.
8. Improved fill control.
9. Improved horizontal-axis-washer drum design.
10. Improved water extraction to lower remaining moisture content.
11. Increased motor efficiency.
12. Low-standby-power design.
13. Spray rinse or similar water-reducing rinse technology.
14. Steam washing.
15. Thermostatically-controlled mixing valves.
16. Tighter tub tolerance.
------------------------------------------------------------------------
In general, for more detail on how DOE developed all of the
technology options discussed above and the process for screening these
options, refer to the technology and screening section (Chapter 4) of
the TSD.
C. Engineering Analysis
In the engineering analysis DOE evaluates a range of product
efficiency levels and their associated manufacturing costs. The purpose
of the analysis is to estimate the incremental manufacturer selling
prices for a product that would result from achieving increased
efficiency levels, above the level of the baseline model, in each
product class. The engineering analysis considers technologies and
design option combinations not eliminated in the screening analysis.
The LCC analysis uses the cost-efficiency relationships developed in
the engineering analysis.
DOE typically structures its engineering analysis around one of
three methodologies. These are: (1) The design-option approach, which
calculates the incremental costs of adding specific design options to a
baseline model; (2) the efficiency-level approach, which calculates the
relative costs of achieving increases in energy efficiency levels,
without regard to the particular design options used to achieve such
increases; and/or (3) the reverse engineering or cost-assessment
approach, which involves a ``bottom-up'' manufacturing cost assessment
based on a detailed bill of materials derived from teardowns of the
product being analyzed. Deciding which methodology to use for the
engineering analysis depends on the product, the design options under
study, and any historical data that DOE can draw on.
Traditionally, DOE used a design-approach for all of its cost-
benefit analyses. However, in more recent rulemakings, DOE has shifted
to using an efficiency-level approach that may or may not be
supplemented with a reverse-engineering analysis. The shift is due to
past input from stakeholders who were concerned about the possibility
of double-counting the energy-efficiency benefits of various design
options. While the efficiency-level approach has the benefit of being
absolute (each appliance has a tested efficiency and derivable
manufacturing cost), it depends on the appliance actually having an
efficiency test that manufacturers report. For product classes where
there are no published efficiencies, a design-option approach remains
the best alternative to an efficiency-level approach.
1. Approach
DOE solicited comments during the Framework public meeting and
subsequent comment period on the possible approaches to the engineering
analysis. ALS and AHAM stated during the Framework public meeting that
they support the efficiency-level approach generally, and ACEEE
commented that the efficiency-level approach should be verified with
the design-option approach, recognizing that there is variation in how
manufacturers implement design options. (Public Meeting Transcript, No.
5 at pp. 65, 73 and 107-110) AHAM commented that manufacturers will use
different design options to achieve higher efficiency levels. (Public
Meeting Transcript, No. 5 at p. 55) AHAM stated that the design-option
approach has validity only for cooking products, but can serve as a
means of cross-checking the analysis for the other products. (Public
Meeting Transcript, No. 5 at p. 110) Whirlpool, GE, and AHAM stated
that DOE should analyze CCWs, dishwashers, and dehumidifiers with the
efficiency-level approach, while using a design-option approach for
cooking products. (Whirlpool, No. 10 at pp. 4 and 7; GE, No. 13 at p.
3; AHAM, No 14 at pp. 4-9)
In comments submitted during the comment period after the Framework
public meeting, the Joint Comment disagreed with using the efficiency-
level approach as the primary means to estimate efficiency costs. The
Joint Comment stated that the design-option approach is very important
and should be included for all products as a complement to and
validation of manufacturer estimates. The Joint Comment stated that
manufacturers have historically estimated higher costs during the
rulemaking stage, as compared to the actual costs when the standards
take effect. In addition, the design-option approach allows
interactions between design options to factor into the analysis to take
advantage of synergies between measures and to
[[Page 64459]]
avoid double-counting of energy savings. The Joint Comment also
expressed the need for DOE to make detailed manufacturing cost data
publicly available, while maintaining manufacturers' confidentiality to
protect their competitive positions. They described manufacturer cost
estimates as a ``black box'' for other stakeholders. (Joint Comment,
No. 9 at pp. 1-2)
DOE conducted the engineering analysis for this rulemaking using an
efficiency-level approach supplemented by a design-option approach for
CCWs, dishwashers, and dehumidifiers. DOE based this analysis on
detailed incremental cost data primarily supplied by AHAM. DOE
supplemented these industry-supplied data with its own design-option
analysis by performing limited product efficiency testing and physical
teardown analysis of several dishwashers and dehumidifiers, and by
conducting manufacturer interviews for all three products. The teardown
analysis used the reverse engineering approach and resulted in the
production of detailed bills of materials for dishwashers and
dehumidifiers.
For cooking products, DOE conducted the engineering analysis for
this rulemaking using the design-option approach, under which it
identifies incremental increases in manufacturer selling prices for
each design option or combination of design options. As discussed in
section I.B.1 of this ANOPR, DOE based much of this analysis on cost
and efficiency information supplied in the previous rulemaking's
analysis, with costs updated to reflect current pricing. DOE
supplemented this analysis with new data that AHAM supplied for
microwave ovens.
In summary, DOE used an efficiency-level approach supported by a
design-option approach for CCWs, dishwashers, and dehumidifiers, and a
design-option approach for cooking products. Stakeholders were
supportive of this approach for cooking products. For CCWs,
dishwashers, and dehumidifiers, DOE supplemented the industry-supplied
data with consultation with outside experts and further review of
publicly available cost and performance information. The supplemental
design-option analysis (which included the reverse engineering) allowed
for validation of the efficiency-level data, transparency in
assumptions and results, and the ability to perform independent
analyses for verification. In addition, the supplemental design-option
analysis allowed DOE to generate analytically-derived cost-efficiency
curves for product classes for which industry-supplied curves were not
provided. The methodology DOE used to perform the efficiency-level and
design-option analyses is described in further detail in the
engineering analysis (Chapter 5 of the TSD).
The Joint Comment recommended that the computation of manufacturing
costs also take into account the effect of market forces by using the
simple average of the lowest cost estimate and the weighted-average
cost. The Joint Comment stated that manufacturers with below-average
costs will determine market prices, since higher-priced manufacturers
will need to ``sharpen their pencils'' to reduce costs in order to
maintain market share. Additionally, the Joint Comment stated that
manufacturers should ensure that their cost estimates reflect mass
production, since efficiency standards will make today's niche products
commodity products in the future. (Joint Comment, No. 9 at p. 2) In
response, we note that DOE conducted its analysis using the average
costs provided by industry, because DOE believes these are the most
representative of manufacturer costs. The AHAM-supplied average cost by
efficiency level is shipment-weighted, which thus represents the most
likely average cost for the industry to make an incremental efficiency
change. The limited DOE reverse-engineering analysis based on two
dishwasher platforms that span an efficiency range from 0.58 to 1.11 EF
also largely agreed with the AHAM-supplied average incremental cost
data. The effects of mass production were captured in the cost
estimates and reflected in the production volume estimates that AHAM
provided, as well as in the production volumes used in DOE's cost
modeling.
The methodology DOE used to perform the efficiency-level and
design-option analyses and reverse engineering are described in further
detail in the engineering analysis chapter (Chapter 5) of the TSD.\20\
---------------------------------------------------------------------------
\20\ The engineering analysis does not take into account future
increases in manufacturing efficiency which would affect the cost-
efficiency relationship, due to the inherently speculative nature of
such an inquiry. Accordingly, this analysis is based on extant
products and manufacturing processes.
---------------------------------------------------------------------------
2. Technologies Unable To Be Included in the ANOPR Analysis
In performing the engineering analysis, DOE did not consider for
analysis certain technologies that met the screening criteria but were
unable to be further evaluated for one or more of the following
reasons: (1) Data are not available to evaluate consumer usage of a
product incorporating the technology, and, therefore the test procedure
conditions and methods may not be applicable; (2) data are not
available to evaluate the energy efficiency characteristics of the
technology; and (3) available data suggest that the efficiency benefits
of the technology are negligible. In the first two cases, DOE is unable
to adequately assess how these technologies impact annual energy
consumption. Although it did not consider these technologies further in
the ANOPR analyses, DOE specifically seeks data and inputs on consumer
usage, performance characteristics, and representative test methods and
conditions to extend the analyses to these technologies and to evaluate
the test procedures for the NOPR. This is identified as Issue 6 under
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
For technologies that lack consumer usage details (including
operating conditions, duration, and frequency), DOE believes that the
existing test procedures may specify conditions and methods that are
not representative of actual usage. DOE further believes that even if
data were available to amend the test procedure, such changes could be
extensive enough to require total revision, which in turn could warrant
the creation of a separate product class for that technology in the
event that the test procedure changes indicated unique utility. For
example, many dehumidifiers feature a built-in relative humidity (RH)
sensor, or hygrometer, and most (including all units upon which DOE
conducted reverse-engineering) feature a built-in humidistat, a device
that allows the consumer to set the desired RH level for the room. When
the humidity near the dehumidifier drops below the user-defined or pre-
set value, the dehumidifier automatically shuts off. This sensor-
controlled system presumably saves energy by avoiding running the
dehumidifier when the RH is such that further dehumidification would be
neither effective nor desirable. However, there is no industry
consensus on patterns in ambient conditions and usage. If such
parameters were known to DOE, the test procedure, which currently
specifies constant ambient temperature and humidity, would need to be
revised to measure energy savings associated with these technologies.
Therefore, the built-in hygrometer/humidistat design option was not
considered for further analysis. Similar exclusions based on lack of
information on representative consumer usage were
[[Page 64460]]
made for several other design options. For dehumidifiers, these
included improved controls, improved flow-control devices, and low-
standby-loss controls. For cooking products, these included
thermostatically-controlled gas cooktop burners, electronic controls
for electric cooktops, cooking sensors for microwave ovens, and steam
cooking for electric ovens.
Furthermore, certain technologies cannot be measured according to
the conditions and methods specified in the existing test procedure.
For example, induction cooktops require ferromagnetic cookware in order
to transfer energy to the food contents. The test block specified in
the DOE test procedure is aluminum and thus is unable to measure the
efficiency of induction cooktops. Although DOE is aware of a NIST study
that suggests induction cooktops provide an efficiency improvement over
baseline electric smooth cooktops, DOE did not consider this design
option further in the ANOPR analysis because of the unresolved nature
of the NIST data. DOE seeks input from stakeholders on whether the NIST
data warrants further study for the NOPR. Similarly, for dehumidifiers
DOE excluded improved defrost measures and washable air filters. Low-
standby-loss electronic controls were not analyzed for electric
cooktops, microwave ovens, and commercial clothes washer because, even
though DOE considers consumer usage of these products to be well-
defined, the current test procedures do not measure standby power. For
microwave ovens specifically, for reasons described in section I.D.4.b,
DOE is considering amending the test procedure to incorporate a
measurement of standby power consumption. Other cooking product
technologies that do not have energy benefits captured by the test
procedures include radiant burners for gas ovens. As mentioned above,
DOE specifically seeks data and inputs on representative test methods
and conditions to extend the analyses to these technologies and to
evaluate the test procedures for the NOPR. This is identified as Issue
6 under ``Issues on Which DOE Seeks Comment'' in section IV.E of this
ANOPR.
Available data suggest that some of the design options would result
in such small energy savings as to be negligible. For example,
according to AHAM, dual magnetrons in microwave ovens do not improve
energy efficiency due to the added losses associated with two magnetron
heaters. AHAM also commented that are no significant energy savings
opportunities associated with improved ceramic stirrers, modified
waveguides, or added insulation. (AHAM, No. 17 at pp. 2-3) Similarly,
DOE is unaware of any data that indicates a measurable energy
efficiency impact of insulation in gas and electric coil cooktops. DOE
will be reevaluating microwave oven design options through reverse-
engineering, and will update the design options and efficiency levels
as necessary for the NOPR. For commercial clothes washers, DOE removed
improved drum designs for horizontal-axis clothes washers. Because DOE
intends to focus on the technologies with measurable impact on
efficiency, design options with negligible energy savings have been
eliminated from further consideration.
For further information on these design options, refer to the
market and technology assessment chapter (Chapter 3) and engineering
analysis chapter (Chapter 5) of the TSD.
3. Product Classes, Baseline Models, and Efficiency Levels Analyzed
DOE conducted the engineering analysis on the single product class
for CCWs and on all product classes for cooking products. For
dishwashers, DOE identified baseline models and efficiency levels for
the standard-sized dishwasher product class. It then scaled these
standard dishwasher efficiency levels by the ratio of the current
minimum efficiency standards for standard-versus-compact product
classes to obtain the efficiency levels for compact-sized machines. For
dehumidifiers, DOE conducted the engineering analysis on product
classes for which it received incremental cost data, with the
expectation that the analysis results will be extended to the remaining
product classes in subsequent analyses.
For each product class, DOE selected a baseline model as a
reference point, against which to measure changes resulting from energy
conservation standards. The baseline model in each product class
represents the basic characteristics of products in that class.
Typically, it is a model that just meets current required energy
conservation standards.
Tables II.13 through II.20 provide all of the efficiency levels DOE
analyzed in the engineering analysis and the reference source of each
level for each of the four appliance product classes analyzed. Many of
these efficiency levels correspond to those set by energy efficiency
programs or organizations, including the DOE and EPA Energy Star
Program, and the CEE. DOE calculated other levels from existing levels
to fill in gaps.
For the purpose of today's ANOPR, DOE considers the highest
candidate standard levels, identified in section II.C.3 below, to be
the maximum technologically feasible level. DOE notes that in some
cases the highest efficiency level was identified based on a review of
available product literature for products commercially available (i.e.,
commercial clothes washers and dehumidifiers). For cooking products,
the maximum levels identified in section II.C.3.c are based on data
developed from the design option analysis in the previous rulemaking.
(For more information, see the market and technology assessment
(Chapter 3) and engineering analysis (Chapter 5) of the TSD.) Because
DOE is required to determine the maximum technologically feasible
energy efficiency level(s) in any notice of proposed rulemaking (42
U.S.C. 6295 (p)(2)), DOE seeks comment on the highest energy efficiency
levels identified in today's ANOPR for the purpose of determining
appropriate maximum technologically feasible energy efficiency levels
in the proposed rule.
a. Dishwashers
For dishwashers, the energy conservation standards are expressed as
a minimum EF, which is a function of cycles per kWh. In this
rulemaking, DOE is using baseline models that have the following
efficiencies, which are the current minimum standards for compact and
standard capacity dishwashers (10 CFR 430.32(f)):
Compact = 0.62 EF
Standard = 0.46 EF
For standard dishwasher efficiency levels, DOE used the Energy Star
criteria, CEE Tier 1 and 2 levels, and the current maximum technology
that is commercially available. DOE also added two levels to fill the
gap between CEE Tier 2 and the current maximum technology that is
commercially available. DOE achieved scaling for compact dishwashers by
using the ratio of current standard levels for standard size versus
compact size units, although it determined the max-tech level by a
review of technology in the current Energy Star database of certified
dishwashers. Table II.13 lists the levels DOE analyzed for compact and
standard dishwashers:
Table II.13.--Efficiency Levels for Residential Dishwashers
------------------------------------------------------------------------
Energy Factor,
(cycles/kWh)
Efficiency levels ---------------------
Compact Standard
------------------------------------------------------------------------
Baseline.......................................... 0.62 0.46
[[Page 64461]]
1................................................. 0.78 0.58
2................................................. 0.84 0.62
3................................................. 0.88 0.65
4................................................. 0.92 0.68
5................................................. 1.01 0.72
6................................................. 1.08 0.80
7................................................. 1.74 1.11
------------------------------------------------------------------------
DOE has specified the current Federal dishwasher standard as the
baseline unit efficiency level, recognizing that a significant
percentage of dishwashers on the market meet or exceed Energy Star
levels. Whirlpool agreed with this approach, commenting that this
baseline efficiency level maintains a necessary entry-level product. It
noted that raising the baseline efficiency above the standard could
make entry-level dishwashers unaffordable to low-end consumers, thus
driving down market penetration of dishwashers and increasing hand-
washing and the associated water and energy consumption. Whirlpool also
commented that market-pull programs such as Energy Star are responsible
for higher efficiency units on the market. (Public Meeting Transcript,
No. 5 at pp. 59-60 and 66-67; Whirlpool, No. 10 at p. 8)
Northwest Power and Conservation Council (NWPCC), however,
commented that the baseline EF may need to be raised above the current
Federal standard. (Public Meeting Transcript, No. 5 at p. 57) Other
stakeholders agreed. For example, Potomac commented that the baseline
EF should represent a shipment-weighted average (likely to be between
0.46 and 0.58), which was the Energy Star level in effect at the time
of the Framework public meeting. (Public Meeting Transcript, No. 5 at
pp. 123-124) ACEEE commented that, since over 80 percent of the market
meets the current Energy Star level, that level might be appropriate as
the baseline. (Public Meeting Transcript, No. 5 at p. 124) After the
Framework public meeting, the Multiple Water Organizations stated that
the baseline should be above the current Federal standard, and that
using the standard as the baseline would distort the analyses by making
higher efficiency levels appear more costly and burdensome to achieve
than they really are. (Multiple Water Organizations, No. 11 at p. 3)
In light of the above, DOE believes that setting the baseline at
the current Federal standard appropriately analyzes entry-level
dishwashers, and, thus, we are retaining an engineering baseline EF of
0.46 for standard-sized dishwashers. As will be discussed in section
II.G.2.d, because some consumers already purchase products with
efficiencies greater than the baseline levels, the LCC and PBP analysis
considers the distribution of products currently sold. This is done to
accurately estimate the percentage of consumers that would be affected
by a particular standard level and to prevent overstating the benefits
to consumers of increased minimum efficiency standards. Also, as will
be discussed in section II.I.2, the resulting shipment-weighted
efficiency (SWEF) that is determined from the distribution of products
currently sold, as well as historical SWEFs, are accounted for in the
NIA.
Whirlpool commented that, of the efficiency levels suggested in the
Framework Document, efficiency levels up to an EF of 0.68 are
reasonable, while the ``gap fill'' levels are arbitrary and the max-
tech level is taken from an extremely expensive, niche machine from a
manufacturer with negligible market share. (Whirlpool, No. 10 at p. 4)
ACEEE and the Joint Comment recommended including an efficiency level
for standard dishwashers between the 0.68 and 0.75 EF levels. They
suggested an EF of 0.71 or 0.72 since there are three manufacturers
with models currently at 0.72 EF. (Public Meeting Transcript, No. 5 at
p. 124; Joint Comment, No. 9 at p. 4) DOE selected a 0.72 EF dishwasher
as one of its teardown units on the basis of its highest level of
design option combinations for a given platform. Additionally, AHAM
stated that some efficiency levels exceed the point for which AHAM
members can provide meaningful cost-efficiency data. (AHAM, No. 14 at
p. 8) Thus, AHAM's aggregated manufacturer data were limited to a
maximum EF of 0.72. DOE included this efficiency level in its analysis
because one of the platforms upon which DOE performed the reverse-
engineering analysis included a model at an EF of 0.72 as its highest
efficiency version. DOE extended its analysis to include EF up to the
max-tech level of 1.11 because this unit represented the high end of an
additional product platform that DOE reverse-engineered.
The Joint Comment, Multiple Water Organizations, and Austin Water
Utility (AWU) commented that DOE should conduct an analysis to
determine whether it should define a standard for water consumption in
addition to energy consumption. The Multiple Water Organizations
recommended assigning a water factor to each proposed dishwasher
efficiency level, and substantiating the relationship between energy
and water consumption. They stated that water consumption is not so
tightly correlated with energy consumption as to obviate the need for a
separately stated WF. They referred DOE to databases maintained by
NRCan and the Oregon Department of Energy for data on dishwasher energy
and water consumption. (Public Meeting Transcript, No. 5 at p. 63;
Joint Comment, No. 9 at pp. 3-4; Multiple Water Organizations, No. 11
at p. 3) DOE notes that it does not have statutory authority to
prescribe a water consumption standard for dishwashers.
The City of Seattle suggested that DOE base the efficiency metric
on energy and water use per place setting, rather than an EF according
to the two product classes. (Public Meeting Transcript, No. 5 at p. 58)
In response, we note that the current test procedure does not have any
provision for defining efficiency as a function of the number of place
settings a dishwasher can clean, and, therefore, DOE is currently
unable to define an efficiency metric on this basis.
Whirlpool commented that cleaning performance must be taken into
consideration at higher efficiency levels, and it stated that, at the
max-tech level, cleaning performance would be highly suspect. (Public
Meeting Transcript, No. 5 at p. 123) DOE notes that while there is no
provision in the current DOE test procedure for measuring cleaning
performance, interviews conducted by DOE with manufacturers indicated
that the manufacturers are unwilling to compromise cleaning performance
to achieve higher energy efficiency at the expense of market share.
Manufacturer concerns over the potential loss of consumer utility at
higher standard levels are discussed in Chapter 12, MIA, of the TSD.
b. Dehumidifiers
For dehumidifiers, each energy efficiency level is expressed as a
minimum EF, which is a function of liters per kWh. In this rulemaking,
DOE is using baseline models that have the following efficiencies,
which are the current minimum standards for this product (EPACT 2005,
section 135(c)(4); 42 U.S.C. 6295(cc); 70 FR 60407, 60414, (October 18,
2005); 10 CFR 430.32(v)):
25.00 pints/day or less = 1.00 EF
25.01-35.00 pints/day = 1.20 EF
35.01-45.00 pints/day = 1.30 EF
54.01-74.99 pints/day = 1.50 EF
DOE combined two product classes defined by EPACT 2005--25.00
pints/
[[Page 64462]]
day or less and 25.01-35.00 pints/day--to form a single product class
of 0-35.00 pints/day for this analysis, due to the similar aggregation
of data by AHAM in its manufacturer cost data submittal. EPACT 2005
also defines two other product classes, 45.01-54.00 pints/day and 75.00
pints/day or more, which DOE did not analyze since AHAM did not provide
data for them. For purposes of conducting the NIA, DOE believes that
the results from the product classes analyzed can be extended to the
two statutorily-set product classes for which AHAM data (or comparable
data) are unavailable. This approach is believed to be valid due to
chassis and component similarities among the product classes, with
primary differences due to scaling. DOE's approach for extending the
results to the omitted product classes is discussed further in section
II.I.3 of this ANOPR. DOE seeks comment on this approach to extend the
engineering analysis to product classes for which a complete analysis
was not performed.
In the Framework public meeting and during the Framework comment
period, DOE received comments on the dehumidifier engineering analysis
approach. All stakeholders agreed that DOE should analyze multiple
product classes to capture the particular efficiency characteristics of
varying capacity levels. Instead of extrapolating from one capacity
platform, multiple stakeholders recommended analyzing a minimum of
three capacities (small, medium, and large) to serve as a baseline.
(Public Meeting Transcript, No. 5 at pp. 70 and 126-128; AHAM, No. 14
at p. 9; Joint Comment, No. 9 at p. 4 ; EEI, No. 7 at pp. 3 and 5)
Whirlpool recommended defining ``small'' as <25 pints/day, ``medium''
as 35-45 pints/day, and ``large'' as 75+ pints/day capacity.
(Whirlpool, No. 10 at p. 5) AHAM recommended that DOE analyze
separately each capacity range mentioned in the Framework Document,
because component availability, compressor efficiencies, and other
factors vary widely. (AHAM, No. 14 at p. 9) As discussed above, DOE
performed a complete analysis for the product classes for which AHAM
supplied data, and extended the results to the remaining product
classes in subsequent analyses.
DOE received numerous comments from stakeholders regarding the
appropriateness of the dehumidifier energy efficiency levels under
review in the Framework Document. AHAM stated concerns regarding the
max-tech and some of the intermediate efficiency levels, recommending
that DOE eliminate the EF level of 1.74 for the 35-45 pints/day product
category and replace it with an EF level of 1.45-1.50, which AHAM
argued is more representative of max-tech in that capacity range.
(Public Meeting Transcript, No. 5 at pp. 72 and 129; AHAM, No. 14 at p.
9) EEI questioned some of the max-tech levels set for the lower
capacity ranges. (Public Meeting Transcript, No. 5 at p. 126) Referring
to Table 5.3 in the Framework Document, Whirlpool commented that the
industry considers an EF of 1.4 for 35-45 pints/day as the de facto
baseline efficiency standard. Thus, Whirlpool stated that DOE should
drop the EF levels of 1.35 and below for this product class. Whirlpool
also commented that the efficiency standards described by the EF level
of 1.50 may not be attainable and should be reduced to an EF of 1.45.
Whirlpool stated that an EF of 1.50 would make dehumidifiers so
expensive that consumers would forgo them and live with damp, unhealthy
basements instead. Thus, Whirlpool argued that an even higher EF level
would not be economically justified, and it recommended that DOE drop
the max-tech level EF of 1.74. (Whirlpool, No. 10 at p. 5)
Based on comments received, DOE analyzed three product classes (0-
35.00 pints/day, 35.01-45.00 pints/day, and 54.01-74.99 pints/day) and
five efficiency levels for each product class. The levels DOE analyzed
are set forth in Table II.14. DOE also reviewed the efficiency levels
proposed in the Framework Document using available databases,
stakeholder interviews, and insights from the reverse engineering
efforts. As discussed above, through its tear-down analysis, DOE found
dehumidifiers with energy efficiency levels at the highest candidate
standard level identified in section III of today's notice. Therefore,
DOE believes that the efficiency levels defined in the Framework
Document are representative of currently available models, and,
therefore, we have retained them for further analysis. DOE seeks
comment on the highest energy efficiency levels identified in today's
ANOPR for the purpose of determining appropriate maximum
technologically feasible energy efficiency levels in the proposed rule.
Table II.14.--Efficiency Levels for Residential Dehumidifiers
----------------------------------------------------------------------------------------------------------------
Energy factor (liters/kWh)
----------------------------------------------------------------------------------------------------------------
0-35.00 35.01-45.00 54.01-74.99
Efficiency levels (pints/day) (pints/day) (pints/day)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 1.20 1.30 1.50
1............................................................... 1.25 1.35 1.55
2............................................................... 1.30 1.40 1.60
3............................................................... 1.35 1.45 1.65
4............................................................... 1.40 1.50 1.70
5............................................................... 1.45 1.74 1.80
----------------------------------------------------------------------------------------------------------------
c. Cooking Products
For residential cooking products (except for the prescriptive
standard for gas products), there are no existing minimum energy
conservation standards, as previous analyses failed to determine
economic justification for them. The DOE test procedure uses an EF to
rate the efficiency of cooking products. The EF for these products is
the ratio of the annual useful cooking energy output of the residential
cooking appliance (i.e., the energy conveyed to the item being heated)
to its total annual energy consumption. In accordance with the previous
rulemaking for residential cooking products, DOE has selected the
following baseline EFs for the product classes DOE is using in this
rulemaking:
Electric cooktops, open (coil) elements = 0.737 EF
Electric cooktops, smooth elements = 0.742 EF
Gas cooktops, conventional burners = 0.156 EF
Electric ovens, standard with or without a catalytic line
= 0.107 EF
Electric ovens, self-clean = 0.096 EF
Gas ovens, standard with or without a catalytic line =
0.030 EF
[[Page 64463]]
Gas ovens, self-clean = 0.054 EF
Microwave ovens = 0.557 EF
During the Framework public meeting, Whirlpool suggested that DOE
might need to update baseline efficiency levels to reflect changes in
current oven cavity volumes. DOE has defined baseline volumes for gas
and electric non-self cleaning and self-cleaning ovens as 3.9 cubic
feet in accordance with the previous rulemaking. Whirlpool believes
this volume is too small to be representative of current ovens. At the
Framework public meeting, Whirlpool stated that, since the mid-1990s,
oven volumes have increased due to consumer usage patterns and consumer
demand. As a result, Whirlpool stated that a more representative
baseline volume would be five cubic feet. (Public Meeting Transcript,
No. 5 at pp. 90 and 132) DOE has retained the 3.9 cubic feet volume to
define the efficiency standard at baseline because there are a large
number of ovens on the market sized for a 27-inch built-in installation
which incorporate this cavity volume. The analysis accounts for larger
oven cavity volumes by scaling the efficiency standard according to
linear functions. DOE defined these scaling functions for gas and
electric standard and self-cleaning ovens based on oven volume, since
it is recognized that efficiency is affected by thermal mass and vent
rates that are functions of volume. The scaling functions consist of
linear equations relating EF to volume, which are described in greater
detail in the TSD. DOE believes the slopes and intercepts of these
equations from the previous rulemaking to still be valid. Whirlpool
agreed that oven efficiency is a function of volume, and stated that
the relationship is similar for gas and electric ovens. However,
Whirlpool commented that DOE should review the linear equations from
the previous rulemaking. (Public Meeting Transcript, No. 5 at pp. 90,
133, and 138) DOE has not identified any technological changes that
would impact the efficiency-volume relationship, and, therefore, we are
retaining the equations as defined.
Whirlpool also suggested that baseline efficiency levels might need
to account for sealed burners and high-input-rate burners as separate
product classes. (Public Meeting Transcript, No. 5 at p. 131) As
discussed previously, DOE determined that sealed burners do not warrant
a separate product class due to insufficient evidence that the
performance of sealed burners is distinct from that of conventional
open gas burners. Therefore, DOE analyzed a single product class for
gas cooktops. Given the lack of empirical data, DOE will not analyze
commercial-type ranges (the type of appliances normally incorporating
high-input-rate burners) as a separate product class.
During the Framework public meeting, the AWU questioned whether
baseline units would be equipped with standing pilot ignition systems,
while Whirlpool stated that self-cleaning ovens do not have standing
pilot lights. (Public Meeting Transcript, No. 5 at p. 136 and 138) In
comments received after the Framework public meeting, EEI stated that
gas pilot lights contribute to significant standby energy losses.
According to EEI calculations, gas cooktop pilot lights (assuming 8000
hours of standby) account for 18.72 therms of the total annual baseline
energy consumption of 33 therms, or 56.7 percent. Similarly, of the
29.6 therms annual baseline energy consumption for standard gas ovens,
EEI attributes 14.0 therms, or 47.3 percent, to the pilot light. (EEI,
No. 7 at p. 5) Conversely, AGA disputed DOE's presumption of
significant energy savings associated with the elimination of standing
pilot lights. AGA argued that it is likely that less that 20 percent of
gas ranges currently have pilot ignition, and therefore potential
energy savings will be less than the 0.06 quads over 30 years that DOE
had estimated in the prior rulemaking. AGA concluded that pilot
ignition cooking appliances are a niche product with unique utility,
and their elimination would result in equity issues to consumers for
whom installing electrical service adjacent to the range hookup is not
economically justified. (AGA, No. 12 at pp. 2-3) DOE has structured the
analysis for standing pilot igntion systems as a design option
associated with the baseline configurations because DOE has determined
that cooktops incorporating such ignition systems do not provide unique
utility. Power outages are not frequent and long enough for residential
electricity customers to consider operation during a lack of electric
power a significant utility. Between 90 and 93 percent of such
customers experience no electricity outages longer than four hours per
year.\21\
---------------------------------------------------------------------------
\21\ A. P. Sanghvi, Cost-Benefit Analysis of Power System
Reliability: Determination of Interruption Costs. Prepared by RCG/
Hagler Bailly, Inc., Arlington, VA for Electric Power Research
Institute, Palo Alto, CA, EL-6791. Vol. 2, p. 3-3 and Vol. 3, p. 3-
3. Available online at http://www.epri.com.
---------------------------------------------------------------------------
To analyze the cost-efficiency relationships for each of the
classes of cooking products, DOE retained the efficiency levels from
the previous rulemaking for residential cooking products. For gas
cooktops/conventional burners and gas standard ovens with or without a
catalytic line, the baseline efficiency level assumes that the product
is equipped with standing pilot lights and the first standards
efficiency level corresponds to the elimination of standing pilot
lights. However, because the cleaning cycle of gas self-clean ovens
requires electrical energy use, EPCA in effect requires that such ovens
currently be equipped with a non-standing pilot ignition system because
a standing pilot light ignition system is disallowed if there is an
electrical cord provided on the product. Therefore, the baseline
efficiency level for these ovens assumes they lack a standing pilot
light, as do all of the efficiency levels DOE analyzed for this
rulemaking. Further, the first standards efficiency level is not based
on elimination of a standing pilot, but rather on the addition of the
forced convection design option. For microwave ovens, DOE used the
efficiency levels corresponding to those in the previous rulemaking,
after first determining that these levels are representative of the
range of efficiencies of currently-available products. Tables II.15
through II.19 set forth the levels DOE analyzed for cooking products.
For open coil-type and smooth electric cooktops, only a single
standards efficiency level is analyzed because design options
associated with higher efficiency levels were either screened out, as
described in section II.B.2.c.1, or eliminated from the analysis for
the reasons described in section II.C.2. For gas and electric ovens,
the efficiency levels reported in Tables II.17 and II.18 are slightly
different than those identified in the previous rulemaking's analysis.
Refer to Chapter 5 of the TSD for an explanation of the cause for these
slight differences in the oven efficiency levels.
Table II.15.--Efficiency Levels for Residential Gas Cooktops
------------------------------------------------------------------------
Conventional burners
------------------------------------------------------------------------
Cooking Energy
Efficiency levels efficiency factor
------------------------------------------------------------------------
Baseline...................................... 0.399 0.156
1............................................. 0.399 0.399
2............................................. 0.420 0.420
------------------------------------------------------------------------
Whirlpool and GE both commented that gas cooktop efficiencies
should scale with burner size, in a similar manner as the relationship
between oven efficiency and volume. (Public Meeting Transcript, No. 5
at pp. 134-135) The test procedure, however, currently contains
provisions for testing gas cooktop burners with different size test
blocks, depending on maximum burner firing rate. Because the test
[[Page 64464]]
procedure already accounts for burner size, DOE will retain the
existing efficiency levels without a scaling function for burner size.
Table II.16.--Efficiency Levels for Residential Electric Cooktops
----------------------------------------------------------------------------------------------------------------
Open (coil) elements Smooth elements
Efficiency levels -----------------------------------------------------------------------------
Cooking efficiency Energy factor Cooking efficiency Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline.......................... 0.737................ 0.737 0.742................ 0.742
1................................. 0.769 (max-tech)..... 0.769 0.753 (max-tech)..... 0.753
----------------------------------------------------------------------------------------------------------------
DOE received a comment from Whirlpool that the efficiency levels
for electric cooktops listed in Table II.16 are representative of
currently available technology. (Public Meeting Transcript, No. 5 at p.
137)
Table II.17.--Efficiency Levels for Residential Gas Ovens
----------------------------------------------------------------------------------------------------------------
Standard oven Self-cleaning oven
Efficiency levels -----------------------------------------------------------------------------
Cooking efficiency Energy factor Cooking efficiency Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline.......................... 0.059................ 0.0298 0.071................ 0.0540
1................................. 0.058 (globar 0.0536 0.088................ 0.0625
ignition).
2................................. 0.061................ 0.0566 0.088................ 0.0627
3................................. 0.062................ 0.0572 0.089 (max-tech)..... 0.0632
4................................. 0.065................ 0.0593 ..................... ..............
5................................. 0.065................ 0.0596 ..................... ..............
6................................. 0.066 (max-tech)..... 0.0600 ..................... ..............
1a\(1)\........................... 0.058................ 0.0583 ..................... ..............
----------------------------------------------------------------------------------------------------------------
Note: Efficiency levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the
need for a standing pilot--but the technologies for each design are different. Efficiency level 1 is a hot
surface ignition device while efficiency level 1a is a spark ignition device. Efficiency level 1a is presented
at the end of the table because efficiency levels 2 through 6 are derived from efficiency level 1.
Table II.18.--Efficiency Levels for Residential Electric Ovens
----------------------------------------------------------------------------------------------------------------
Standard oven Self-cleaning oven
Efficiency levels -----------------------------------------------------------------------------
Cooking efficiency Energy factor Cooking efficiency Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline.......................... 0.122................ 0.1066 0.138................ 0.1099
1................................. 0.128................ 0.1113 0.138................ 0.1102
2................................. 0.134................ 0.1163 0.142 (max-tech)..... 0.1123
3................................. 0.137................ 0.1181 ..................... ..............
4................................. 0.140................ 0.1206 ..................... ..............
5................................. 0.141 (max-tech)..... 0.1209 ..................... ..............
----------------------------------------------------------------------------------------------------------------
Table II.19.--Efficiency Levels for Residential Microwave Ovens
------------------------------------------------------------------------
Energy
Efficiency levels factor
------------------------------------------------------------------------
Baseline................................................... 0.557
1.......................................................... 0.586
2.......................................................... 0.588
3.......................................................... 0.597
4 (max-tech)............................................... 0.602
------------------------------------------------------------------------
AHAM noted that many microwave oven design features impact energy
efficiency, and that the choice of features may be dictated by
marketplace demands. For example, higher wattage cavity lamps produce a
brightly illuminated cavity interior, but increasing the lamp wattage
by only 10 watts could lower efficiency by about 0.5 percent. Even so,
some manufacturers select higher wattage lamps for product
differentiation. Manufacturers also may focus on features that optimize
cooking performance, such as mode stirrers, that may also be
accompanied by small increases in energy consumption. (AHAM, No. 17 at
p. 2) DOE recognizes that manufacturers may choose to incorporate
features that enhance product differentiation at the expense of energy
consumption. For a given energy efficiency level, manufacturers must
weigh the appropriate combination of design options and other features
to meet the energy consumption requirement set forth in the relevant
efficiency standard.
d. Commercial Clothes Washers
For all CCWs, EPCA establishes the following energy and water
conservation standards: A minimum MEF of 1.26 and a maximum WF of 9.5.
(EPACT 2005, section 136(e); 42 U.S.C. 6313(e); see also 70 FR 60416
(Oct. 18, 2005), adding 10 CFR 431.156) In this rulemaking, DOE is
using a baseline model that has those efficiencies.
As indicated previously for CCWs, EPCA mandates that DOE determine
both a minimum MEF and a maximum WF. For the purposes of analyzing the
cost-efficiency relationships for this product, DOE based some of the
efficiency levels on the MEF and WF specifications prescribed by the
Energy Star program and the CEE Commercial Clothes Washer Initiative,
and the maximum levels that are currently commercially available. These
levels are set forth in the Table II.20:
[[Page 64465]]
Table II.20.--Efficiency Levels for Commercial Clothes Washers
------------------------------------------------------------------------
Modified Energy Water Factor
Efficiency levels Factor (ft \3\/ (gallons/ft
kWh) \3\)
------------------------------------------------------------------------
Baseline.............................. 1.26 9.5
1..................................... 1.42 9.5
2..................................... 1.60 8.5
3..................................... 1.72 8.0
4..................................... 1.80 7.5
5..................................... 2.00 5.5
6 (max-tech).......................... 2.20 5.1
------------------------------------------------------------------------
In the Framework public meeting and during the Framework comment
period, DOE received comments regarding how some energy efficiency
levels under consideration for CCWs could eliminate vertical-axis
clothes washers. GE stated concerns regarding proposed standards levels
for CCWs. GE commented that low WFs may not be attainable with
vertical-axis clothes washers, thereby eliminating this low-cost
platform from the CCW market, which in turn could lead to a decline in
the number of clothes washers available in multi-family housing due to
increased costs. GE urged DOE to consider the consumer utility of
vertical-axis clothes washers, and it further argued that some proposed
standards levels may not be attainable even with horizontal-axis
clothes washers. (Public Meeting Transcript, No. 5 at p. 45; GE, No. 13
at p. 3) Whirlpool argued that a WF below 9.5 could render a top-
loading CCW incapable of washing clothes properly and that NAECA would
not allow the elimination of a product class. (Whirlpool, No. 10 at p.
7) In response to these comments, DOE notes that it placed all CCWs in
one product class pursuant to EPACT 2005 (see discussion of product
class definition for CCWs in section II.A.1.d of this ANOPR), which
applies a single standard for energy efficiency and a single standard
for water efficiency to all of the CCWs. (EPACT 2005, section 136(e);
42 U.S.C. 6313(e)) Thus, as discussed in II.C.3.d above, DOE is
treating commercial clothes washers as a single class that encompasses
both top- and front-loading units.
Several stakeholders requested that DOE consider additional
efficiency levels for the CCW rulemaking. For example, ACEEE requested
that DOE evaluate a 2.0 MEF and 5.5 WF level, since multiple clothes
washer models with this efficiency level are on the market. (Public
Meeting Transcript, No. 5 at p. 51; Public Meeting Transcript, No. 5 at
p. 121) Potomac recommended that DOE consider the CEC waiver petition's
WF breakpoint of 6.0.\22\ (Public Meeting Transcript, No. 5 at p. 118)
The Joint Comment and the Multiple Water Organizations requested a gap-
fill level between the 1.8 MEF and the 2.79 MEF max-tech efficiency
levels at 2.0 MEF/5.5 WF as per CEE Tier 3B, or 2.0 MEF/6.0 WF. (Joint
Comment, No. 9 at p. 5; Multiple Water Organizations, No. 11 at p. 1)
As shown in Table II.20, DOE is evaluating a level of 2.0 MEF combined
with a 5.5 WF.
---------------------------------------------------------------------------
\22\ DOE published a Federal Register notice on February 6, 2006
acknowledging receipt of and summarizing the California Energy
Commission's Petition for Exemption from Federal Preemption of
California's Water Conservation Standards for Residential Clothes
Washers (71 FR 6022) (Docket No. EE-RM-PET-100).
---------------------------------------------------------------------------
DOE received numerous comments regarding the appropriateness of the
max-tech level defined in the CCW section of the Framework Document.
AHAM objected to the hybrid approach of choosing the MEF from one
washer model while choosing a WF from another, as this does not
represent an actual CCW. (Public Meeting Transcript, No. 5 at p. 46)
AHAM subsequently recommended the elimination of this efficiency level.
(AHAM, No. 14 at p. 7) According to Whirlpool, this max-tech level was
particularly objectionable because of the hybrid origin of the MEF and
WF. (Public Meeting Transcript, No. 5 at p. 118) Some stakeholders
countered that the hybrid approach is a reasonable way to estimate what
could be attainable but that the economics of such a CCW would probably
preclude such a standards level. (Public Meeting Transcript, No. 5 at
p. 121; Joint Comment, No. 9 at p. 5) EEI and multiple stakeholders
also suggested that, if DOE were to reject the hybrid approach, DOE
could instead consider a max-tech level of 2.48 MEF and 3.5 WF, since
that represents an actual clothes washer. (EEI, No. 7 at p. 6; Multiple
Water Organizations, No. 11 at p. 2) In response to these comments, DOE
subsequently altered the Framework Document exploratory efficiency
levels to include a max-tech level where it took the MEF and WF from an
existing clothes washer.
In addition to comments regarding the appropriateness of the max-
tech level, DOE received further comments regarding adding more
efficiency levels to the CCW analysis during the Framework public
meeting and through subsequent written comments. ALS agreed with
analyzing all proposed effiency levels with the exception of max-tech,
which ALS rejected because of the hybrid origin of the MEF and WF, and
because DOE derived these levels from residential clothes washer data.
(Public Meeting Transcript, No. 5 at pp. 117-118) Multiple Water
Organizations recommended that DOE adopt step-like incremental
increases in both MEF and WF for each efficiency level. (Multiple Water
Organizations, No. 11 at p. 2)
During the Framework comment period, DOE received multiple comments
regarding the applicability of residential clothes washer efficiency
levels in a commerical setting. Both Whirlpool and GE submitted that
the efficiency levels achieved by residential clothes washers are not
representative of levels achievable by commercial products, which
experience harder and more frequent use than residential products.
(Whirlpool, No. 10 at p. 9; GE, No. 13 at p. 3) AHAM stated that the
efficiency levels set forth in the Framework Document are not
appropriate and recommended that DOE consider the different nature of
CCWs. (AHAM, No. 14 at p. 7) DOE recognizes that current product
offerings in the commercial laundry market do not include products at
each efficiency level for which DOE is performing an analysis. DOE
notes, however, that products exist that meet all the levels specified,
so manufacturing cost data are available to assess CCWs that meet or
exceed the levels specified. Since the standards are minimum
performance standards, not presciptive standards, these levels do not
represent predetermined technologies and are therefore not tied to the
residential or commercial markets.
DOE also received comments regarding data requests for the CCW
engineering analysis. Whirlpool stated
[[Page 64466]]
that data for the baseline level are readily available, and that data
for some higher efficiency levels are also available. (Whirlpool, No.
10 at p. 9) According to Whirlpool, the low volume of the U.S. CCW
market, the limited scope of products, and the small number of
manufacturers complicates the task of establishing manufacturing cost
data in a way that does not lead to the disclosure of confidential
information. (Whirlpool, No. 10 at p. 12) The Multiple Water
Organizations requested that DOE work closely with manufacturers to
obtain and make manufacturing cost data available before the ANOPR is
published. (Multiple Water Organizations, No. 11 at p. 2) DOE worked
with AHAM and stakeholders to obtain as much data as possible. DOE
withheld from publication whatever data could not be aggregated to
maintain confidentiality.
Additional detail on the product classes, baseline models, and
efficiency levels can be found in Chapter 5 of the TSD.
4. Cost-Efficiency Results
DOE reports the results of the engineering analysis as cost-
efficiency data (or ``curves'') in the form of incremental
manufacturing costs versus EF (or MEF and WF for CCWs). These data form
the basis for subsequent analyses in the ANOPR. DOE received industry-
aggregated curves for CCWs, dishwashers, and dehumidifiers from AHAM.
DOE validated these data through manufacturer interviews for all three
products and the independent generation of similar curves for
dishwashers and dehumidifiers. DOE based these curves on testing and
reverse engineering activities, which resulted in the generation of a
detailed bill of materials for each product.
For cooking products, DOE retained the cost data at each efficiency
level that it had defined in the previous rulemaking's analysis,
updated by scaling incremental manufacturing costs by the PPI from 1990
(the reference year in the prior analysis) to 2006. In addition, for
microwave ovens, DOE received efficiency test data submitted by AHAM.
The following table summarizes the data that DOE's engineering analysis
used to generate the cost-efficiency results.
Table II.21.--Engineering Analysis Methods
----------------------------------------------------------------------------------------------------------------
Products
-----------------------------------------------------------------------
Method Cooking Commercial
products Dishwashers Dehumidifiers clothes washers
----------------------------------------------------------------------------------------------------------------
AHAM Data............................... [radic] [radic] [radic] [radic]
Review of Past TSD...................... [radic] ................ ................ [radic]
Product Teardown........................ ................ [radic] [radic] ................
Product Testing......................... ................ [radic] ................ ................
Manufacturer Interviews................. ................ [radic] [radic] [radic]
----------------------------------------------------------------------------------------------------------------
a. Dishwashers
For dishwashers, AHAM provided manufacturing cost data up to an
efficiency level of 0.72 EF. DOE supplemented AHAM's efficiency-level
cost data submittal with cost information generated from the efficiency
testing and teardown of currently-available dishwashers. DOE conducted
efficiency testing of six dishwashers, representing a range of EFs
across two different product platforms. Beyond the measurements
required to measure the performance according to the DOE test
procedure, the testing consisted of multi-submetering to record
disaggregated energy consumption associated with various design
options. The EFs of the washers tested were 0.58, 0.64, 0.68, 0.78,
0.93, and 1.11.
In addition to efficiency testing, DOE performed reverse
engineering on the six units tested, as well as on an additional
dishwasher with an EF of 0.72. This last dishwasher was not yet
available on the market at the time of testing but was released for
high-volume manufacturing three weeks later. To validate the AHAM data
and supply incremental cost information above the 0.72 EF level, DOE
tore down the seven dishwashers (three high-efficiency dishwashers that
shared the same basic platform and four other washers spanning the
efficiency range 0.58-0.72 EF). A comparison of AHAM's and DOE's costs
indicates that DOE's cost estimates are somewhat lower that the AHAM
average costs, but above the AHAM minimum.
The purpose of comparing DOE's and AHAM's results was to assess the
reasonableness of AHAM's data submission, and DOE believes this has
been demonstrated. DOE's teardown sample size was very small and could
not be expected to adequately capture the variability of all products
in the marketplace. Another reason why DOE's results are lower than
AHAM's average is the influence of product platforms. DOE's teardown
analysis and manufacturer interviews confirmed that upgrading
components can only raise EF to a certain point and that overall system
architecture limits EF. The platform which DOE reverse-engineered is
among the most efficient available from large-volume manufacturers
(with an EF that spans the range of 0.58 to 0.72). Thus, it is
reasonable to assume that starting from a lower efficiency platform
will result in larger incremental costs. The results of the testing and
teardown analysis, including the list of design options identified and
other observations, can be further reviewed in Chapter 5 of the TSD. If
the reverse-engineering sample size had been larger, it is reasonable
to assume that the range of incremental costs by efficiency level would
have broadened. As a result, DOE feels that the AHAM submission is
reasonable and reflective of the gamut of dishwasher platforms and
their inherent efficiencies on the market today.
Standard dishwasher cost-efficiency results are shown in Table
II.22. DOE was unable to obtain incremental manufacturing cost
information for compact dishwashers. Accordingly, DOE particularly
seeks stakeholder feedback on how it can extend the results of the
analysis for the standard-class dishwashers to compact dishwashers.
This is identified as Issue 4 under ``Issues on Which DOE Seeks
Comment'' in section IV.E of this ANOPR.
Table II.22.--Incremental Manufacturing Cost for Residential Standard
Dishwashers
------------------------------------------------------------------------
Standard
-------------------------------------------------------------------------
Incremental
Energy factor (cycles/kWh) cost
------------------------------------------------------------------------
Baseline................................................ ..............
0.58.................................................... $4.01
0.62.................................................... 7.38
[[Page 64467]]
0.65.................................................... 14.00
0.68.................................................... 30.35
0.72.................................................... 71.38
0.80.................................................... 129.28
1.11.................................................... 180.66
------------------------------------------------------------------------
b. Dehumidifiers
For dehumidifiers, AHAM collected incremental manufacturing cost
data from its member companies and submitted them to DOE. DOE validated
AHAM's efficiency-level cost data submittal with a design-options-
based/reverse engineering analysis, tearing down 14 dehumidifiers
representing a range of capacities and efficiencies. In generating the
cost-efficiency results, DOE combined the first two product classes
proposed by EPACT 2005, 25.00 pints/day or less and 25.01-35.00 pints/
day, because some manufacturers did not have shipments in the 25.01 to
35.00 pints/day category. To prevent disclosure of sensitive
information, AHAM did not provide data for the EPACT 2005 categories
45.01-54.00 pints/day and 75 pints/day and greater because fewer than
three manufacturers produce units in these categories. Therefore cost-
efficiency curves were only generated for the following product
classes: 0 to 35.00 pints/day, 35.01 to 45.00 pints/day, and 54.01 to
74.99 pints/day. Results of the reverse engineering analysis for the
product classes analyzed were in good agreement with the AHAM data. The
following table shows the dehumidifier cost-efficiency results. AHAM
provided all of the data for the three product classes analyzed, except
the value for an EF of 1.74 in the 35.01 to 45.00 product class, which
DOE extrapolated from the AHAM data.
Table II.23.--Incremental Manufacturing Cost for Residential
Dehumidifiers
------------------------------------------------------------------------
Energy factor (L/ Incremental
Product class, pints/day kWh) cost
------------------------------------------------------------------------
0 to 35.00........................ Baseline............ ..............
1.25................ $3.12
1.30................ 4.92
1.35................ 10.41
1.40................ 18.80
1.45................ 25.61
35.01 to 45.00.................... Baseline............ ..............
1.35................ 6.11
1.40................ 14.47
1.45................ 22.68
1.50................ 32.84
1.74................ 74.72
54.01 to 74.99.................... Baseline............ ..............
1.55................ 4.18
1.60................ 8.00
1.65................ 12.36
1.70................ 23.18
1.80................ 33.94
------------------------------------------------------------------------
c. Cooking Products
For conventional cooking products, DOE derived the cost-efficiency
curves from the previous rulemaking's analysis, scaling the incremental
manufacturing costs by the PPI in accordance with stakeholder comments.
Tables II.24 through II.30 and Table II.32 detail the cost-efficiency
results.
Table II.24.--Incremental Manufacturing Cost for Residential Gas
Cooktops
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.156 ..............
1................. 0 + Electronic 0.399 $12.06
Ignition.
2................. 1 + Sealed Burners.. 0.420 32.06
------------------------------------------------------------------------
Table II.25.--Incremental Manufacturing Cost for Residential Electric
Coil Cooktops
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.737 ..............
1................. 0 + Improved Contact 0.769 $2.28
Conductance.
------------------------------------------------------------------------
[[Page 64468]]
Table II.26.--Incremental Manufacturing Cost for Residential Electric
Smooth Cooktops
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.742 ..............
1................. 0 + Halogen Lamp 0.753 $89.09
Element.
------------------------------------------------------------------------
Table II.27.--Incremental Manufacturing Cost for Residential Gas
Standard Ovens
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.0298 ..............
1................. 0 + Electric Globar 0.0536 $12.06
Ignition.
2................. 1 + Improved 0.0566 15.64
Insulation.
3................. 2 + Improved Door 0.0572 16.72
Seals.
4................. 3 + Forced 0.0593 38.86
Convection.
5................. 4 + Reduced Vent 0.0596 40.48
Rate.
6................. 5 + Reduced 0.0600 44.11
Conduction Losses.
1a................ 0 + Electronic Spark 0.0583 15.00
Ignition.
------------------------------------------------------------------------
Table II.28.--Incremental Manufacturing Cost for Residential Gas Self-
Cleaning Ovens
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.0540 ..............
1................. 0 + Forced 0.0625 $11.01
Convection.
2................. 1 + Reduced 0.0627 15.38
Conduction Losses.
3................. 2 + Improved Door 0.0632 16.60
Seals.
------------------------------------------------------------------------
Table II.29.--Incremental Manufacturing Cost for Residential Electric
Standard Ovens
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.1066 ..............
1................. 0 + Reduced Vent 0.1113 $1.63
Rate.
2................. 1 + Improved 0.1163 4.84
Insulation.
3................. 2 + Improved Door 0.1181 8.53
Seals.
4................. 3 + Forced 0.1206 48.14
Convection.
5................. 4 + Reduced 0.1209 51.69
Conduction Losses.
------------------------------------------------------------------------
Table II.30.--Incremental Manufacturing Cost for Residential Electric
Self-Cleaning Ovens
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.1099 ..............
1................. 0 + Reduced 0.1102 $4.37
Conduction Losses.
2................. 1 + Forced 0.1123 43.98
Convection.
------------------------------------------------------------------------
For conventional ovens, the linear relationships for EF versus
volume allow scaling of the efficiency levels to cavity volumes other
than the baseline volume. Table II.31 shows the slopes and intercepts
of these relationships. The table does not show values for every oven
efficiency level because the previous rulemaking did not analyze data
at every efficiency level, and because certain design options have been
screened out in the current analysis.
Table II.31.--Slopes and Intercepts for Oven Energy Factor Versus Volume Relationship
----------------------------------------------------------------------------------------------------------------
Intercepts, Electric Intercepts, Gas
---------------------------------------------------------------
Level Slope = -0.0157 Slope = -0.0073
---------------------------------------------------------------
Standard Self-Clean Standard Self-Clean
----------------------------------------------------------------------------------------------------------------
0............................................... .............. 0.1632 0.0865 0.0865
1............................................... 0.1752 .............. 0.0895 ..............
2............................................... 0.1802 .............. .............. ..............
[[Page 64469]]
3............................................... 0.1822 .............. 0.0935 ..............
----------------------------------------------------------------------------------------------------------------
Note: EF = (Slope x Volume) + Intercept where Volume is expressed in cubic feet.
For microwave ovens, the design options and efficiency levels DOE
analyzed are those identified in the previous rulemaking, with
incremental manufacturing costs scaled by the PPI.
DOE specifically seeks stakeholder feedback on the approach of
analyzing additional design options that would result in a lowering of
the energy consumption of non-cooking features (e.g., standby power),
even though the test procedure currently does not account for such
usage in EF. This is identified as Issue 5 under ``Issues on Which DOE
Seeks Comment'' in section IV.E of this ANOPR. It should be noted that
DOE is considering the addition of standby power measurement to the
test procedure, as identified as Issue 1 under ``Issues on Which DOE
Seeks Comment'' in section IV.E of this ANOPR. The table below shows
the cost-efficiency results for microwave ovens.
Table II.32.--Incremental Manufacturing Cost for Residential Microwave
Ovens
------------------------------------------------------------------------
Efficiency level Incremental
Level source EF cost
------------------------------------------------------------------------
0................. Baseline............ 0.557 ..............
1................. 0 + More Efficient 0.586 $8.68
Power Supply.
2................. 1 + More Efficient 0.588 17.95
Fan.
3................. 2 + More Efficient 0.597 32.53
Magnetron.
4................. 3 + Reflective 0.602 51.11
Surfaces.
------------------------------------------------------------------------
d. Commercial Clothes Washers
For CCWs, DOE derived the cost-efficiency curves from AHAM-
submitted data. Due to limited data collected, AHAM supplied cost data
only at 1.42 MEF/9.5 WF and 2.0 MEF/5.5 WF. Based on a survey of CCWs
currently sold, it is DOE's understanding that all products sold which
meet an efficiency level of 1.6 EF/8.5 MEF or greater are based on a
horizontal axis platform. Furthermore, based on interviews with
manufacturers of CCWs, it is DOE's understanding that energy and water
efficient vertical-axis-based designs currently sold in the residential
market are not being considered for market introduction into the
commercial laundry sector. Such designs include spray rinse and non-
agitator vertical-axis clothes washers that replace the agitator with
an impeller, nutating plate, or other alternative manipulator.
Manufacturers commented during interviews that such designs are not
appropriate for the heavy-duty demands of commercial laundry
applications.
Notwithstanding the lack of manufacturing data for CCWs at several
efficiency levels, the information gathered from the market research
and manufacturer interviews suggests that CCWs cannot attain
satisfactory cleaning performance at or above efficiency level 2 (1.6
MEF and 8.5 WF) without the use of horizontal-axis technology. Thus,
since DOE believes vertical-axis CCWs cannot perform satisfactorily at
these efficiency levels, DOE assumes that all units sold at efficiency
level 2 and higher will be horizontal-axis CCWs and likely, more
efficient than required. In determining the incremental costs
associated with these efficiency levels, DOE notes that, like
dishwashers, CCWs are platform-driven products where a given platform
achieves an inherent efficiency based on design and an optimized
control strategy. This inherent efficiency can be further enhanced via
design option improvements that the control strategy can incorporate.
However, a manufacturer may also choose to offer a range of product
efficiencies and redesign existing products to offer a less-efficient
unit for marketing or other reasons. The per-unit cost of redesigning a
product to reduce the efficiency is typically low, though a
manufacturer will have to pay an up-front cost to develop the new
controller, pay for certifications, etc. Thus, there is a disincentive
to develop less-efficient units (i.e., ones that marginally meet the
standard) unless the market is large enough to have the scale to
support multiple price points based in part on energy efficiency.
Thus, it is not surprising that the CCW market currently does not
offer a wide range of efficiencies for a given axis of rotation. The
scale of the market is small, and the presence of an Energy Star
program deters manufacturers from offering CCWs that have efficiencies
that lie between the baseline and Energy Star efficiency levels, as
such units would be more costly than a baseline unit yet not be
eligible for rebates from utilities. Since all manufacturers currently
produce horizontal-axis CCWs in the range of 2.0 MEF/5.5 WF, no
platform change would be required to the existing horizontal-axis CCW
lines to meet any efficiency level up to and including 2.0 MEF/5.5
WF.\23\ During interviews with DOE, manufacturers provided estimates of
the cost increment to meet 2.2 MEF/5.1 WF, ranging from $316 to $450.
DOE notes that $316 is the manufacturing cost increment provided by
AHAM to take a CCW from a baseline efficiency level of 1.26 MEF/9.5 WF
to a level of 2.0 MEF/5.5 WF. Thus, DOE expects that the incremental
costs between 1.60 MEF/8.5 WF and 2.2 MEF/5.1 WF would be constant at
the same value as those provided by AHAM for
[[Page 64470]]
the level 2.0 MEF/5.5 WF. For further information, see Chapter 5 of the
TSD.
---------------------------------------------------------------------------
\23\ DOE recognizes, however, that changes to the horizontal-
axis CCW lines may be needed to meet higher production volumes. Any
investment to the horizontal-axis CCW production lines to
accommodate higher sales volumes were not captured in this analysis.
For a qualitative discussion of capital expenditures required for
such a product conversion, see the preliminary manufacturer impact
analysis chapter (Chapter 12) of the TSD.
---------------------------------------------------------------------------
DOE specifically seeks feedback on the validity of this approach.
DOE seeks information about lower-cost alternatives to horizontal-axis
designs for levels greater than 1.42 MEF/9.5 WF and lower than 2.0 MEF/
5.5 WF. Additionally, DOE seeks information that would enable it to
change the energy and water features of the 2.0 MEF/5.5 WF level to
allow for manufacturer cost differentiation at the lower (and the
higher) levels. DOE is also interested in receiving comment on how to
weigh the impacts of a market-shift from vertical-axis technologies to
horizontal-axis technologies. These issues are identified as Issue 3
under ``Issues on Which DOE Seeks Comment'' in section IV.E of this
ANOPR.
The following table shows the preliminary commercial clothes washer
cost-efficiency results.
Table II.33.--Incremental Manufacturing Cost for Commercial Clothes
Washers
------------------------------------------------------------------------
Incremental
Efficiency levels (MEF/WF) cost
------------------------------------------------------------------------
Baseline................................................ ..............
1.42/9.5................................................ $74.73
1.60/8.5................................................ 316.35
1.72/8.0................................................ 316.35
1.80/7.5................................................ 316.35
2.00/5.5................................................ 316.35
2.20/5.1................................................ 316.35
------------------------------------------------------------------------
Additional detail on the cost-efficiency results can be found in
Chapter 5 of the TSD.
D. Energy Use and Water Use Characterization
The purpose of the energy use characterization, which DOE performed
for the four appliance products covered in the ANOPR, is to help assess
the energy-savings potential of different product efficiencies. The
purpose of the water use characterization, performed only for CCWs and
residential dishwashers, is to help assess the water-savings potential
of more efficient products. DOE relied on existing test procedures, as
well as the Energy Information Administration (EIA)'s Residential
Energy Consumption Survey (RECS) and other sources (which are described
below for each product) to establish a range of energy (and water) use
for the four appliance products.
1. Dishwashers
DOE relied on the information in the DOE test procedure to
establish the typical annual energy and water consumption of
dishwashers. 10 CFR Part 430, Subpart B, Appendix C. In particular, DOE
determined the annual energy and water consumption of dishwashers by
multiplying the per-cycle energy and water use by the number of cycles
per year, consistent with the DOE test procedure.
Dishwasher per-cycle energy consumption consists of three
components: (1) Water-heating energy; (2) machine energy; and (3)
drying energy. The machine energy consists of the motor energy (for
water pumping and food disposal) and booster heater energy. The DOE
test procedure provides equations to calculate the total per-cycle
dishwasher energy consumption.
The largest component of dishwasher energy consumption is water-
heating energy use, which is directly dependent on water use. AHAM
stated that it was not possible to provide either disaggregated per-
cycle energy use or water use data by standard level because, for any
given standard level, the disaggregated energy use components and water
use can vary greatly depending on dishwasher design. (AHAM, No. 14 at
p. 8) However, AHAM did provide data showing how aggregate per-cycle
energy use and per-cycle water use has changed over time since 1993. An
analysis of the submitted AHAM data demonstrated that the relationship
between energy and water use is nearly linear. This correlation is
largely due to the energy required to heat water to the test procedure
inlet temperature of 120 [deg]F (49 [deg]C) that most dishwashers use.
The energy required to heat the inlet water to 120 [deg]F (49 [deg]C)
usually represents the largest proportion of the overall per-cycle
energy usage. Therefore, by knowing the aggregate per-cycle energy use,
DOE determined the per-cycle water use and, in turn, the per-cycle
water-heating energy consumption using DOE test procedure equations.
DOE analyzed the energy and water use for candidate standard levels
ranging from 0.58 EF to 1.11 EF for standard-sized dishwashers. Because
Whirlpool does not produce products with efficiencies higher than 0.68
EF, Whirlpool commented that it cannot provide energy and water
consumption data for efficiency levels 0.72 EF, 0.80 EF, and 1.11 EF.
(Whirlpool, No. 10 at pp. 9 and 12) However, based on the relationship
between aggregate per-cycle energy use (which can be deduced from the
dishwasher EF) and water use, which AHAM provided, DOE was able to
estimate the energy use and water use of dishwashers at all candidate
standard levels. Table II.34 shows the candidate standard levels for
standard-sized dishwashers and their corresponding per-cycle energy and
water use.
Per-cycle energy use is disaggregated into two general categories:
(1) Water heating; and (2) machine (e.g., motor energy for pumping) and
dish drying from an electrical heating element. DOE estimated the per-
cycle energy use by taking the inverse of the EF. It estimated the per-
cycle water consumption based on the relationship between energy and
water use. DOE estimated the per-cycle water-heating energy consumption
by assuming the use of an electric water heater and multiplying the
per-cycle water consumption by an assumed temperature rise of 70 [deg]F
(21 [deg]C) and a specific heat of water of 0.0024 kWh/gal x [deg]F
(4.186 joule/gram x [deg]C). The per-cycle machine and drying energy
were determined by DOE by subtracting the water-heating energy
consumption from the total energy consumption. The table below provides
the standby power, which DOE assumed to be two watts. EEI questioned
the degree to which consumers use the ``heated dry'' option to dry
dishes instead of air-drying. (EEI, No. 7 at p. 5) For purposes of
developing the per-cycle energy use and water use data shown below in
Table II.34, DOE based the amount of time that the heated dry option is
used on the DOE test procedure (i.e., 50 percent of the dishwasher
cycles).
[[Page 64471]]
Table II.34.--Standard Dishwashers: Per-Cycle Energy and Water Use by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
Energy Use Components
----------------------------
Candidate Standard Level EF Energy Use Water Use Water Machine + Standby
Heating Drying
----------------------------------------------------------------------------------------------------------------
cycles/kWh kWh/cycle gal/cycle kWh/cycle kWh/cycle kW
-----------------------------------------------------------------------------------
Baseline.................... 0.46 2.17 8.16 1.37 0.80 0.002
1........................... 0.58 1.72 6.07 1.02 0.70 0.002
2........................... 0.62 1.61 5.56 0.93 0.68 0.002
3........................... 0.65 1.54 5.21 0.88 0.66 0.002
4........................... 0.68 1.47 4.90 0.82 0.65 0.002
5........................... 0.72 1.39 4.52 0.76 0.63 0.002
6........................... 0.80 1.25 3.87 0.65 0.60 0.002
7........................... 1.11 0.90 2.25 0.38 0.52 0.002
----------------------------------------------------------------------------------------------------------------
DOE determined the average annual energy and water consumption by
multiplying the per-cycle energy and water consumption by the number of
cycles per year. In 2003, DOE revised its test procedure for
dishwashers to more accurately establish their efficiency and energy
and water use. The 2003 test procedure amendments included a reduction
in the average use cycles per year, from 264 to 215 cycles per
year.\24\ Arthur D. Little (ADL) conducted a comprehensive analysis of
dishwasher usage in 2001 that revealed that dishwashers are used, on
average, 215 cycles per year. This usage pattern is currently used to
establish the annual energy consumption of dishwashers with the DOE
test procedure.
---------------------------------------------------------------------------
\24\ 68 FR 51887 (August 29, 2003).
---------------------------------------------------------------------------
In the context of the present rulemaking, DOE analyzed additional
sources to determine whether the number of dishwasher cycles per year
has changed. For example, DOE reviewed EIA's 2001 RECS data, which
includes the annual usage of households with dishwashers. Of the more
than 4,800 households in RECS, almost 2,500 have dishwashers. However,
the average-use value for dishwashers is 180 cycles per year, with
minimum and maximum values of 26 and 500 cycles per year, respectively.
The Joint Comment argued that DOE should continue to use 215 cycles per
year in its analysis of dishwashers. The organizations maintained that
any estimate derived from the EIA's 2001 RECS is not nearly as robust
as the estimate derived from the work conducted by ADL to revise the
dishwasher test procedure. For example, the Joint Comment stated that
RECS represents a much smaller sample than the one ADL used (about
2,500 households versus 26,000 households) and that the questions
pertaining to dishwashers in RECS are just one component in a very
large and complex survey instrument dealing with all aspects of home
energy use. (Joint Comment, No. 9 at p. 4) The Multiple Water
Organizations also urged DOE to retain the use of 215 cycles per year
in the analysis. (Multiple Water Organizations, No. 11 at p. 3)
Whirlpool also stated that DOE should retain the use of 215 cycles per
year in its analysis. (Whirlpool, No. 10 at p. 9) Because the ADL
survey is a much more comprehensive and larger survey than the survey
performed for RECS, DOE chose an average usage of 215 cycles per year
as the most representative value for average dishwasher use.
Therefore, the annual energy and water consumption shown in Table
II.35 reflect an annual usage of 215 cycles per year. The annual water-
heating energy consumption reflects the use of either an electric, gas-
fired, or oil-fired water heater.
Table II.35.--Standard Dishwashers: Annual Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Energy Annual energy use Annual
factor --------------------------------------------------------------------------------------- water
-------------- Water heating* Machine + use
Candidate standard level --------------------------------------------------------------------- drying + ---------
Oil standby[dagger] 1000
cycle/kWh Electric Gas ----------------------------------------- ----------------- gal/
kWh/year MMBtu/year MMBtu/year kWh/year year
---------------------------------------------------------------------------------------------------------------------------------- --------------------------
Baseline...................................... 0.46 295 1.34 1.24 190 1.8
1............................................. 0.58 219 1.00 0.92 168 1.3
2............................................. 0.62 201 0.91 0.85 163 1.2
3............................................. 0.65 188 0.86 0.79 160 1.1
4............................................. 0.68 177 0.80 0.74 156 1.1
5............................................. 0.72 163 0.74 0.69 153 1.0
6............................................. 0.80 140 0.64 0.59 146 0.8
7............................................. 1.11 81 0.37 0.34 129 0.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Electric, gas-fired, and oil-fired water heating based on water heater efficiencies of 100 percent for electric, 75 percent for gas, and 81 percent
for oil.
[dagger] Standby annual energy use based on a dishwasher cycle length of one hour. Thus, Standby hours = 8766 hours-215 x 1 hour = 8551 hours.
Whirlpool and EEI stated that DOE must account for the effects of
pre-washing when establishing dishwasher energy use. EEI stated that
DOE should account for pre-washing in estimating the baseline energy
use of dishwashers.
[[Page 64472]]
Whirlpool stated that increasing the efficiency of dishwashers too far
may result in wash performance being compromised, thereby forcing
consumers to pre-wash more and resulting in increased energy and water
consumption. (Whirlpool, No. 10 at p. 2; EEI, No. 7 at p. 5) EEI also
stated that the analysis should capture the effects of reduced
household cooking product usage on dishwasher usage. (EEI, No. 7 at p.
3) Because DOE could not identify sources of data showing whether the
amount of pre-washing is impacted by dishwasher efficiency, DOE
conducted its analysis by assuming that hand- or pre-washing habits are
not affected by product efficiency. But because increased diswasher
energy efficiency may require future designs to utlize less water, DOE
recognizes the possibility that more efficient dishwashers may degrade
wash performance. Therefore, DOE seeks feedback on whether more
efficient dishwasher designs will lead to increased hand- or pre-
washing and, if so, what increase in energy and water use can be
expected. This is identified as Issue 7 under ``Issues on Which DOE
Seeks Comment'' in section IV.E of this ANOPR. Considering the effects
of reduced household cooking product use on dishwasher usage, and
because DOE's dishwasher use assumptions are based on relatively recent
survey data collected by ADL, DOE believes that any impacts from
reduced cooking are captured in the updated use value of 215 cycles per
year.
As previously stated, of the more than 4,800 households in RECS,
almost 2,500 have dishwashers. As will be described later in section
II.G on the LCC and PBP analysis, DOE used the RECS household samples
with their associated baseline annual energy consumption to conduct the
LCC and PBP analyses. Additional detail on the energy and water use
characterization of dishwashers can be found in Chapter 6 of the TSD.
2. Dehumidifiers
The ANSI/AHAM Standard DH-1-2003, ``Dehumidifiers,'' for energy
consumption measurements during capacity-rating tests, and CAN/CSA-
C749-94, ``Performance of Dehumidifiers,'' for energy factor
calculations, that DOE codified under EPCA in a final rule for
dehumidifiers provide a method for determining the product's rated
efficiency in liters/kWh--but provide no method for establishing annual
energy consumption (71 FR 71340 (December 8, 2006); 10 CFR 430.23(z)).
DOE determined the annual energy consumption of dehumidifiers by first
dividing the capacity (in pints per day) by the unit efficiency (in
liters per kWh) and then multiplying it by the usage in hours per year.
Both AHAM and Whirlpool commented on the difficulty of determining
the energy consumption of dehumidifiers. Whirlpool stated that energy
consumption varies considerably depending on geographic location and
that average energy consumption is likely lower than the energy use DOE
suggested in its Framework Document. In consultation with manufacturers
and others familiar with that type of product, AHAM estimated that
dehumidifier use is between 875 and 1,315 hours per year, and it
recommended that DOE use the mid-point (1,095 hours) as the norm (with
sensitivity analyses at 875 and 1,315 hours/year). AHAM also stated
that many dehumidifiers shut off automatically once their condensation
buckets are full, and the organization argued that such feature reduces
use, because it is assumed that consumers do not regularly empty the
bucket. (AHAM, No. 14 at p. 10; Whirlpool, No. 10 at p. 9) Because the
AHAM data were developed based on the experience of manufacturers, DOE
believes that the AHAM data are the most representative of actual use.
Therefore, DOE relied on the data AHAM provided, but DOE did consider
other sources of data for estimating annual energy consumption. In
comparison with AHAM's recommendation that DOE use 1,095 operating
hours per year as the norm, other literature sources from ADL, Energy
Star, and LBNL, provide higher use values of 1,620, 2,851, and 4,320
hours/year, respectively. Therefore, although DOE relied on AHAM's
estimate of 1,095 hours to calculate a dehumidifier's average energy
consumption, DOE used the higher use values from the above sources to
demonstrate how they would impact annual energy consumption.
DOE specifically seeks feedback on whether AHAM's estimate of 1,095
hours per year is representative, on average, of dehumidifier use. This
is identified as Issue 8 under ``Issues on Which DOE Seeks Comment'' in
section IV.E of this ANOPR.
For the six product classes of dehumidifiers, DOE calculated the
baseline annual energy consumption (i.e., the consumption corresponding
to the standards for each product class that take effect in 2007),
based on the annual use assumptions presented in Table II.36 below. As
shown in the table, the calculated annual energy use has an extensive
range based on the capacity and efficiency of the dehumidifier and the
hours of operation.
Table II.36.--Dehumidifier Annual Energy Consumption Derived From Hourly Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class Average size EF Annual energy use (kWh/year)
--------------------------------------------------------------------------------------------------------------------------------------------------------
AHAM
Pints/day Pints/day Liters/day Liters/kWh ------------------------------ ADL Energy LBNL-
Low Mid High Star high
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25.00............................................. 20.0 9.5 1.0 345 432 519 639 1124 1703
25.01-35.00......................................... 30.0 14.2 1.2 431 540 648 798 1405 2129
35.01-45.00......................................... 40.0 18.9 1.3 531 664 798 983 1730 2621
45.01-54.00......................................... 50.0 23.7 1.3 664 830 997 1228 2162 3276
54.01-74.99......................................... 64.5 30.5 1.5 742 928 1115 1373 2417 3662
>=75.00............................................. 85.0 40.2 2.25 652 816 979 1207 2123 3218
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 64473]]
Table II.37 presents the annual energy consumption by candidate
standard level for the predominant dehumidifier product class, 25.0-
35.00 pints/day. The annual energy consumption reflects an annual use
corresponding to AHAM's mid-estimate of annual hourly operation (i.e.,
1,095 hours per year). Refer to Chapter 6 of the TSD for the annual
energy consumption by candidate standard level for the other five
dehumidifier product classes.
Table II.37 25.01.--35.00 Pints/Day Dehumidifiers: Annual Energy Use by
Candidate Standard Level
------------------------------------------------------------------------
Efficiency Annual
-------------- energy use
Candidate standard level -------------
liters/kWh kWh/year
------------------------------------------------------------------------
Baseline.................................... 1.20 540
1........................................... 1.25 518
2........................................... 1.30 498
3........................................... 1.35 480
4........................................... 1.40 463
5........................................... 1.45 447
------------------------------------------------------------------------
Unlike dishwashers, RECS does not have any data that indicate the
use or annual energy consumption of dehumidifiers. Therefore, DOE did
not use RECS to determine the variability of annual energy consumption.
Rather, DOE relied exclusively on the data that AHAM provided (see
Table II.37) to characterize the variability in annual energy
consumption. As discussed previously, DOE used AHAM's estimate of 1,095
hours to calculate the average annual energy consumption. To
characterize the variability of use, DOE used a triangular probability
distribution that had an average value of 1,095 hours per year, ranging
from a minimum value of 875 hours to a maximum value of 1,315 hours. As
will be described later in section II.G on the LCC and PBP analysis,
DOE employed use variability in calculating annual energy consumption
when it conducted the LCC and PBP analyses. Additional detail on the
energy use characterization of dehumidifiers can be found in Chapter 6
of the TSD.
3. Cooking Products
a. Cooktops and Ovens
The annual energy consumption of electric and gas ranges (i.e.,
cooktops and ovens) has been in continual decline since the late 1970s.
DOE's prior rulemaking on residential cooking products identified
several studies that estimated the annual energy consumption of
electric and gas ranges.\25\ The studies that covered the time period
of 1977-1992 showed a steady decline in the annual energy consumption.
Based on these studies, DOE published revisions to its test procedure
as a final rule in 1997, which included a reduction in the annual
useful cooking energy output and a reduction in the number of self-
cleaning oven cycles per year.\26\ The annual useful cooking energy
output relates the energy factor of the cooking appliance to the annual
energy consumption. Therefore, the lower the annual useful cooking
energy output, the lower the annual energy consumption of the cooking
appliance.
---------------------------------------------------------------------------
\25\ U.S. Department of Energy-Office of Codes and Standards.
Technical Support Document for Residential Cooking Products, Volume
2: Potential Impact of Alternative Efficiency Levels for Residential
Cooking Products, April, 1996. Prepared for the U.S. DOE by Lawrence
Berkeley National Laboratory, Berkeley, CA. Appendix A. Available
online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
\26\ 62 FR 51976 (Oct. 3, 1997).
---------------------------------------------------------------------------
Whirlpool and EEI stated that the annual energy consumption of
cooking products is very likely lower than it was in the mid-1990s due
to changes in consumer eating habits (i.e., people eating out more
often). (Whirlpool, No. 10 at p. 10; EEI, No. 7 at p. 3) Based on more
recent studies of cooking annual energy use, DOE confirmed that cooking
energy consumption has continued to decline since the mid-1990s.
Research results from the 2004 California Residential Appliance
Saturation Study (CA RASS) \27\ and the Florida Solar Energy Center
(FSEC) \28\ show that the annual energy consumption for most electric
and gas cooktops and ovens is roughly 40 percent less than the energy
use during the mid-1990s.
---------------------------------------------------------------------------
\27\ California Energy Commission. California Statewide
Residential Appliance Saturation Study, June 2004. (Prepared for the
CEC by KEMA-XNERGY, Itron, and RoperASW. Contract No. 400-04-009).
Available online at: http://www.energy.ca.gov/appliances/rass/index.html.
\28\ Parker, D. S. Research Highlights from a Large Scale
Residential Monitoring Study in a Hot Climate. Proceedings of
International Symposium on Highly Efficient Use of Energy and
Reduction of its Environmental Impact, January 2002. Japan Society
for the Promotion of Science Research for the Future Program, Osaka,
Japan. JPS-RFTF97P01002: pp. 108-116. Also published as FSEC-PF369-
02, Florida Solar Energy Center, Cocoa, FL. Available online at:
http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-369-02/index.htm
---------------------------------------------------------------------------
Based on the more recent annual energy use data, DOE established
the annual energy consumption for cooktops and ovens by candidate
standard level. Tables II.38 through II.40 show the annual energy
consumption by candidate standard level for the electric coil, electric
smooth, and gas cooktop product classes, respectively. Tables II.41
through II.44 show the annual energy consumption by candidate standard
level for the electric standard, electric self-cleaning, gas standard,
and gas self-cleaning oven product classes, respectively. For gas
standard ovens (Table II.43), candidate standard level 1 (globar or hot
surface ignition) and candidate standard level 1a (spark ignition) are
addressed separately because the technologies have different energy use
characteristics. Although both technologies are used for the same
purpose (i.e., to eliminate the need for a standing pilot), hot surface
ignition uses a significant amount of electrical energy while spark
ignition uses a negligible amount of electricity. The use of a globar
ignition device is the technology most commonly used to eliminate the
need for a standing pilot in gas ovens. Therefore, in the case of gas
standard ovens, efficiency levels two through six follow efficiency
level `1' (globar ignition) rather than level `1a' (spark ignition),
and in the case of gas self-cleaning ovens, the baseline efficiency
level is based on the use of a globar ignition device. For more details
on how DOE developed the annual energy consumption for each product
class, refer to Chapter 6 of the TSD.
Table II.38.--Electric Coil Cooktops: Annual Energy Consumption by
Candidate Standard Level
------------------------------------------------------------------------
Annual energy
Energy consumption
Candidate standard level factor ---------------
kWh/year
------------------------------------------------------------------------
Baseline..................................... 0.737 128.2
1............................................ 0.769 122.9
------------------------------------------------------------------------
Table II.39.--Electric Smooth Cooktops: Annual Energy Consumption by
Candidate Standard Level
------------------------------------------------------------------------
Annual energy
Energy consumption
Candidate standard level factor ---------------
kWh/year
------------------------------------------------------------------------
Baseline..................................... 0.742 128.2
1............................................ 0.753 126.3
------------------------------------------------------------------------
[[Page 64474]]
Table II.40.--Gas Cooktops: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
Cooking Cooking Pilot Total
Candidate standard level Energy factor efficiency -----------------------------------------------
(percent) MMBtu/year MMBtu/year MMBtu/year
----------------------------------------------------------------------------------------------------------------
Baseline........................ 0.156 39.9 0.72 2.01 2.74
1............................... 0.399 39.9 0.72 .............. 0.72
2............................... 0.420 42.0 0.69 .............. 0.69
----------------------------------------------------------------------------------------------------------------
Table II.41.--Electric Standard Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
Cooking Cooking Clock Total
Candidate standard level Energy efficiency -----------------------------------------
factor (percent) kWh/year kWh/year kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline.................................. 0.1066 12.2 132.4 34.2 166.5
1......................................... 0.1113 12.8 125.9 34.2 160.1
2......................................... 0.1163 13.4 119.7 34.2 153.9
3......................................... 0.1181 13.7 117.6 34.2 151.8
4......................................... 0.1206 14.0 70.7 34.2 149.0
5......................................... 0.1209 14.1 70.6 34.2 148.6
----------------------------------------------------------------------------------------------------------------
Table II.42.--Electric Self-Cleaning Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
Cooking Cooking Self-clean Clock Total
Candidate standard level Energy efficiency -------------------------------------------------------
factor (percent) kWh/year kWh/year kWh/year kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline.................... 0.1099 13.8 116.6 21.1 33.3 171.0
1........................... 0.1102 13.8 116.2 21.1 33.3 170.6
2........................... 0.1123 14.2 113.5 21.1 33.3 167.9
----------------------------------------------------------------------------------------------------------------
Table II.43.--Gas Standard Ovens: Annual Energy Consumption by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooking Cooking Ignition Total
Candidate standard level Energy efficiency -----------------------------------------------------------------------
factor (percent) MMBtu/yr kWh/yr MMBtu/yr kWh/yr MMBtu/yr kWh/yr
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................ 0.0298 5.9 0.82 .......... 1.01 .......... 1.83 0.0
1*...................................................... 0.0536 5.8 0.84 .......... .......... 21.1 0.84 21.1
2....................................................... 0.0566 6.1 0.80 .......... .......... 21.1 0.80 21.1
3....................................................... 0.0572 6.2 0.79 .......... .......... 21.1 0.79 21.1
4....................................................... 0.0593 6.5 0.75 1.8 .......... 21.1 0.75 22.9
5....................................................... 0.0596 6.5 0.75 1.8 .......... 21.1 0.75 22.9
6....................................................... 0.0600 6.6 0.74 1.8 .......... 21.1 0.74 22.9
1a*..................................................... 0.0583 5.8 0.84 .......... .......... .......... 0.84 0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the
technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2 through 6 are derived from
candidate standard level 1.
Table II.44.--Gas Self-Cleaning Ovens: Annual Energy Consumption by Candidate Standard Level
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Cooking Cooking Self-clean Ignition Clock Total
Candidate standard level Energy effc'y -------------------------------------------------------------------------------------------------------
factor (percent) MMBtu/yr kWh/yr MMBtu/yr kWh/yr kWh/yr kWh/yr MMBtu/yr kWh/yr
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................................................... 0.0540 7.1 0.68 ........... 0.17 0.7 21.1 31.5 0.86 53.3
1............................................................. 0.0625 8.8 0.56 1.8 0.17 0.7 21.1 31.5 0.73 55.1
2............................................................. 0.0627 8.8 0.55 1.8 0.17 0.7 21.1 31.5 0.73 55.1
3............................................................. 0.0632 8.9 0.55 1.8 0.17 0.7 21.1 31.5 0.72 55.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DOE used 2001 RECS data to establish the variability of annual
cooking energy consumption for cooktops and ovens. RECS indicates which
households in the survey of 4,822 households use electric and gas
ranges, ovens, and cooktops. With regard to electric cooking products,
2,895 household records have cooktops; 1,159 household records have
standard ovens, and 1,601 household records have self-cleaning ovens.
With regard to gas cooking products, 1,597 household records have
cooktops either in electric ranges or as stand-alone units; 959
household records have standard ovens, and 494 household records have
self-cleaning ovens. The above totals represent cooktops and ovens in
households either as a stand-alone unit or as part of a range.
Although RECS does not provide the annual energy consumption of the
cooking product for each household record, it does provide the
frequency of cooking use. Thus, DOE used the
[[Page 64475]]
frequency of use to define the variability of the annual energy
consumption. Conducting the analysis in this manner captured the
observed variability in annual energy consumption while maintaining the
average annual energy consumption shown above in Tables II.38 through
II.44. To determine the variability of cooking product energy
consumption, DOE first equated the weighted-average cooking frequency
from RECS with the average energy use values reported in Tables II.38
through II.44. DOE then varied the annual energy consumption for each
RECS household based on its reported cooking frequency.
For more details on cooking frequency variability and its impact on
the variability of annual energy consumption, as well as additional
detail on the energy use characterization of kitchen ranges and ovens,
refer to Chapter 6 of the TSD. As will be described later in section
II.G on the LCC and PBP analyses, DOE used the RECS household samples
with their associated baseline annual energy consumption to conduct the
LCC and PBP analyses.
b. Microwave Ovens
After an increase since the late 1970s, the annual energy
consumption of microwave ovens has remained relatively steady since the
late 1980s. DOE's previous rulemaking on residential cooking products
identified studies that estimated the annual energy consumption of
microwave ovens.\29\ With the exception of one study based on the use
of conditional demand analysis,\30\ the studies, which covered the time
period 1988-1994, showed that annual energy consumption was no more
than 200 kWh/year. Based on these studies, DOE published revisions to
its test procedure as a final rule in 1997 that included an increase in
the annual useful cooking energy output that more than doubled the test
procedure's original value from the late 1970s (62 FR 51976 (October 3,
1997)). The annual useful cooking energy output relates the energy
factor of the microwave oven to the annual energy consumption.
Therefore, the higher the annual useful cooking energy output, the
higher the annual energy consumption.
---------------------------------------------------------------------------
\29\ U.S. Department of Energy--Office of Codes and Standards.
Technical Support Document for Residential Cooking Products, Volume
2: Potential Impact of Alternative Efficiency Levels for Residential
Cooking Products, April, 1996. Prepared for the U.S. DOE by Lawrence
Berkeley National Laboratory, Berkeley, CA. Appendix A. Available
online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html
\30\ Electric Power Research Institute. Residential End-Use
Energy Consumption: A Survey of Conditional Demand Estimates,
October 1989. Palo Alto, CA. CU-6487. Available online at: http://my.epri.com/portal/server.pt?space=CommunityPage&cached=true&parentname=ObjMgr&parentid=2&control=SetCommunity&CommunityID=221&PageIDqueryComId=0
---------------------------------------------------------------------------
A more recent study from the 2004 CA RASS is roughly in line with
the average result from the previous studies showing that annual energy
consumption has declined 15 percent since the mid-1990s. Based on the
CA RASS study, DOE established the annual energy consumption for
microwave ovens by candidate standard level as shown in Table II.45.
For more details on how DOE developed the annual energy consumption for
microwave ovens, refer to Chapter 6 of the TSD.
Table II.45.--Microwave Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
Cooking Total
Candidate standard level Energy factor efficiency ---------------
(percent) kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 0.557 55.7 131.0
1............................................................... 0.586 58.6 124.5
2............................................................... 0.588 58.8 124.1
3............................................................... 0.597 59.7 122.2
4............................................................... 0.602 60.2 121.2
----------------------------------------------------------------------------------------------------------------
In its Framework Document, DOE requested energy use data for the
individual components of the microwave oven (e.g., magnetron filament,
magnetron power supply, and fan and motor). Sharp stated that the
measurement methods in the DOE test procedure require the establishment
of only the total input power of the oven and not the input power
associated with individual components. Therefore, Sharp argued that if
the oven is being tested in accordance with the DOE test procedure,
disaggregated energy use data is neither apposite nor readily
available. (Public Meeting Transcript, No. 5 at p. 108) DOE agrees that
its test procedure only requires the measurement of total energy use,
so, for purposes of this analysis, DOE has decided to only consider the
total energy consumption of the product.
With regard to the variability of annual cooking energy
consumption, as it did for cooktops and ovens, DOE used RECS to
establish microwave oven use variability. The 2001 RECS indicates that
4,149 of the 4,822 households in the survey use microwave ovens.
Similar to electric and gas cooktops and ovens, although RECS does not
provide the annual energy consumption of microwave ovens for each
household record, it does provide the frequency of cooking use. Thus,
DOE used the frequency of microwave use to define the variability of
the annual energy consumption. Conducting the analysis in this manner
captured the observed variability in annual energy consumption while
maintaining the average annual energy consumption shown above in Table
II.45. To determine the variability of cooking product energy
consumption, DOE first equated the weighted-average cooking frequency
from RECS with the average energy use values reported above in Table
II.45. DOE then varied the annual energy consumption for each RECS
household based on its reported cooking frequency.
For more details on cooking frequency variability and its impact on
the variability of annual energy consumption, as well as additional
detail on the energy use characterization of microwave ovens, refer to
Chapter 6 of the TSD. As will be described later in section II.G on the
LCC and PBP analyses, DOE used the RECS household samples with their
associated baseline annual energy consumption to conduct the LCC and
PBP analyses.
4. Commercial Clothes Washers
DOE determined the annual energy and water consumption of CCWs by
multiplying the per-cycle energy and water use by the number of cycles
per year. CCW per-cycle energy consumption has three components: (1)
[[Page 64476]]
Water-heating energy; (2) machine energy; and (3) drying energy. The
machine energy is comprised of the motor energy for turning an agitator
or rotating a drum.
The test procedures DOE recently codified at 10 CFR 431.154 are
based on measuring the performance of residential clothes washers, and,
therefore, the cycles-per-year values only indirectly reflect CCW usage
through comparison with their residential counterparts (71 FR 71340).
However, both ALS and EEI stated that CCW use is highly variable. ALS
stated that CCW use varies based on the clothes washer market (e.g.,
laundry and multi-housing). ALS recommended contacting the MLA, the
CLA, and route operators to obtain relevant use data. (Public Meeting
Transcript, No. 5 at pp. 156-157; EEI, No. 7 at p. 6) As discussed in
more detail below, DOE has relied on several studies including research
sponsored by the MLA and the CLA (trade associations representing the
commercial laundry industry) to establish typical use cycles for CCWs.
As shown in Table II.46, DOE analyzed the energy and water use for
specific candidate standard levels for CCWs. GE commented that because
clothes container volume (capacity) may change with product efficiency,
DOE should not use a constant capacity when determining the energy and
water consumption of CCWs. GE suggested that DOE evaluate energy
consumption on a per-cubic-foot basis. (Public Meeting Transcript, No.
5 at p. 158) DOE agrees that capacity does impact product efficiency,
but no data were provided or identified on how capacity may change with
increased efficiency. Therefore, DOE maintained a constant capacity in
its analysis of annual energy consumption by candidate standard level.
However, DOE invites additional comments and data regarding the
relationship between CCW capacity and efficiency.
EEI requested clarification as to whether the energy consumption
analysis for CCWs would capture reduced dryer energy consumption as a
result of higher clothes washer efficiencies. (Pubic Meeting
Transcript, No. 5 at p. 154) In response, we note that CCWs are rated
with an MEF, and inherent in the determination of the MEF is the energy
required to dry clothes. Therefore, DOE did capture the impact of
higher efficiencies on dryer energy use.
Table II.46 shows the candidate standard levels for CCWs and their
corresponding per-cycle energy and water use. DOE determined the per-
cycle clothes-drying energy use by first establishing the remaining
moisture content (RMC) based on the relationship between RMC and the
MEF, and then using the DOE test procedure equation that determines the
per-cycle energy consumption for the removal of moisture. DOE took the
per-cycle machine energy use from its 2000 TSD for residential clothes
washers.\31\ In the 2000 TSD, for MEFs up to 1.40, machine energy is
0.133 kWh/cycle. For MEFs greater than 1.40, machine energy is 0.114
kWh/cycle. With the per-cycle clothes-drying and machine energy known,
DOE determined the per-cycle water-heating energy use by first
determining the total per-cycle energy use (the clothes container
volume divided by the MEF) and then subtracting from it the per-cycle
clothes-drying and machine energy.
---------------------------------------------------------------------------
\31\ U.S. Department of Energy. Final Rule Technical Support
Document (TSD): Energy Efficiency Standards for Consumer Products:
Clothes Washers, December 2000. Washington, DC. Chapter 4, Table
4.1. Available online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/clothes_washers.html.
---------------------------------------------------------------------------
DOE specifically seeks stakeholder feedback on whether the
residential clothes washer per-cycle energy consumption values for
clothes-drying and machine use taken from its 2000 TSD are
representative of CCWs. This is identified as Issue 9 under ``Issues on
Which DOE Seeks Comment'' in section IV.E of this ANOPR.
EEI commented that detergents formulated for cold-water washes are
now available. Because no hot water will be required if these
detergents are used, the baseline energy consumption will be impacted.
(EEI, No. 7 at p. 4) However, DOE cannot assume that consumers will
routinely use cold-water detergents. Thus, although cold-water
detergents may be available, DOE determined the water-heating energy
use using the specifications set forth in the DOE test procedure. The
per-cycle water-heating energy use in Table II.46 below depicts the use
of an electric water heater and a 2.8 ft\3\ clothes container volume.
DOE determined the per-cycle hot water use by dividing the per-cycle
water-heating energy use by a temperature rise of 75 [deg]F (21 [deg]C)
and a specific heat of 0.0024 kWh/gal x [deg]F (4.186 joule/gram x
[deg]C). DOE determined the total water use by multiplying the WF by
the clothes container volume.
Table II.46.--Commercial Clothes Washers: Per-Cycle Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
MEF WF Energy use Water use
------------------------------- ----------------------------------------------------------------
Candidate standard level RMC Machine Dryer Water Heat Hot Total
cu.ft./kWh/cyc gal/cu.ft. (percent) ----------------------------------------------------------------
kWh/cyc kWh/cyc kWh/cyc gal/cyc gal/cyc
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................... 1.26 9.50 53.7 0.133 1.27 0.82 4.5 26.6
1.......................................... 1.42 9.50 51.2 0.133 1.21 0.63 3.5 26.6
2.......................................... 1.60 8.50 48.4 0.114 1.13 0.50 2.8 23.8
3.......................................... 1.72 8.00 46.5 0.114 1.09 0.43 2.4 22.4
4.......................................... 1.80 7.50 45.3 0.114 1.06 0.39 2.1 21.0
5.......................................... 2.00 5.50 42.2 0.114 0.98 0.31 1.7 15.4
6.......................................... 2.20 5.10 39.0 0.114 0.90 0.26 1.5 14.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE determined the average annual energy and water consumption for
CCWs by multiplying the per-cycle energy and water consumption by the
number of cycles per year. Because the predominant applications of CCWs
are in multi-family buildings and laundromats, DOE focused only on
these two building applications to determine the appropriate number of
CCW cycles per year. Other applications include lodging establishments
(e.g., hotels and motels), in-patient health care facilities, and
nursing homes. Relative to multi-family buildings and laundromats,
these other applications are a small segment of the market. Therefore,
DOE believes it is not critical to the analysis to accurately
characterize CCW usage for these applications. As mentioned above, DOE
relied on several
[[Page 64477]]
studies including research sponsored by the MLA and the CLA to
establish typical use cycles for CCWs. Of the studies on CCW usage,
seven focused on multi-family buildings demonstrating that usage ranged
from one to almost eleven cycles per day.\32\ The sparse data for
laundromats from three studies showed a variation between three to
eight cycles per day.\33\
---------------------------------------------------------------------------
\32\ The seven studies were conducted or commissioned by the
following organizations: (1) City of Toronto (1999); (2) Federal
Energy Management Program (2000); (3),Southern California Edison
(2000); (4) MLA (2002); (5) Wisconsin Focus on Energy (2004); (6)
Equipoise Consulting (2004); and (7) CEE.
\33\ The three studies were conducted or commissioned by the
following organizations: (1) Equipoise Counsulting (2004); (2) CEE;
and (3) the CLA.
---------------------------------------------------------------------------
Tables II.47 and II.48 show the annual energy and water consumption
for multi-family buildings and laundromats, respectively. The energy
and water consumption values provided below are based on average use
cycles of 3.4 cycles per day for multi-family buildings and 6 cycles
per day for laundromats. For details on the studies reviewed by DOE to
develop the average use cycles of CCWs, refer to Chapter 6 of the TSD.
In the tables below, the annual water-heating and clothes-drying energy
consumption reflects the use of both an electric or a gas water heater
and dryer.
Table II.47.--Commercial Clothes Washers, Multi-Family Application: Annual Energy and Water Use by Efficiency Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual energy use
-----------------------------------------------------------------
Candidate standard level MEF WF Water heating Drying Annual water use
---------------------------------------------------- Machine
Electric Gas Electric Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
cu.ft./kWh/cyc gal/cu.ft. kWh/yr MMBtu/yr kWh/yr MMBtu/yr kWh/yr 1000 gal/year
-----------------------------------------------------------------------------------------------------------------
Baseline.............................. 1.26 9.50 1020 4.64 1583 6.05 166 33.1
1..................................... 1.42 9.50 788 3.58 1503 5.74 166 33.1
2..................................... 1.60 8.50 625 2.84 1414 5.40 142 29.7
3..................................... 1.72 8.00 532 2.42 1354 5.18 142 27.9
4..................................... 1.80 7.50 482 2.19 1315 5.02 142 26.2
5..................................... 2.00 5.50 387 1.76 1215 4.64 142 19.2
6..................................... 2.20 5.10 328 1.49 1116 4.26 142 17.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.48.--Commercial Clothes Washers, Laundromat Application: Annual Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual Energy Use
-----------------------------------------------------------------
Candidate standard level MEF WF Water heating Drying Annual water use
---------------------------------------------------- Machine
Electric Gas Electric Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
cu.ft./kWh/cyc gal/cu.ft. kWh/yr MMBtu/yr kWh/yr MMBtu/yr kWh/yr 1000 gal/year
-----------------------------------------------------------------------------------------------------------------
Baseline.............................. 1.26 9.50 1793 8.16 2782 10.63 291 58.3
1..................................... 1.42 9.50 1385 6.30 2642 10.10 291 58.3
2..................................... 1.60 8.50 1098 4.99 2485 9.50 250 52.1
3..................................... 1.72 8.00 935 4.25 2380 9.10 250 49.1
4..................................... 1.80 7.50 847 3.85 2310 8.83 250 46.0
5..................................... 2.00 5.50 680 3.10 2136 8.16 250 33.7
6..................................... 2.20 5.10 576 2.62 1961 7.49 250 31.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE determined the variability in annual energy and water
consumption based on usage data from the several CCW studies cited
above. The studies DOE identified provided eight average use values for
multi-family buildings ranging from a low of 1.5 cycles per day to a
high of 6.4 cycles per day. For laundromats, the low and high values
are three and eight cycles per day, respectively. DOE weighted the
usage from each study to vary the annual energy and water consumption
of CCWs when it conducted the LCC and PBP analyses. To reflect the
usage patterns reported in the various studies, DOE weighted the use
studies equally for multi-family applications. For laundromats, DOE
used a triangular distribution that ranged from three to eight cycles
per day and skewed it to yield an average value of six cycles per day.
This range was based solely on data from the CLA. Of the three studies
that DOE used to establish usage, only the CLA study provided a range.
Because the two other studies, one from Equipoise Consulting and the
other from CEE, provided an average use of six cycles per day, DOE
skewed the triangular distribution to yield an average value of six
cycles per day.
As will be described later in section II.G on the LCC and PBP
analyses, DOE used the usage variability to vary the annual energy and
water consumption for multi-family and laundromat applications when it
conducted the LCC and PBP analyses. Additional detail on the energy and
water use characterization of CCWs can be found in Chapter 6 of the
TSD.
E. Markups To Determine Equipment Price
This section explains how DOE developed the markups to equipment
prices that it used to derive total installed cost for the four
appliance products (see Chapter 7 of the TSD). The total installed cost
is the sum of the consumer equipment price and the installation cost.
DOE multiplied the manufacturing costs developed from the
[[Page 64478]]
engineering analysis by the supply-chain markups it developed (along
with sales taxes) to arrive at the consumer equipment prices, and added
to them the installation costs to arrive at the final, installed prices
for baseline products, as well as higher-efficiency products.
1. Distribution Channels
Before it could develop markups, DOE needed to identify
distribution channels (i.e., how the product is distributed from the
manufacturer to the consumer). AHAM's 2003 Fact Book shows that over 93
percent of residential appliances (including dishwashers,
dehumidifiers, and cooking products) are distributed from the
manufacturer directly to a retailer. Thus, DOE analyzed markups for
residential dishwasher, dehumidifier, and cooking product sales on the
premise that these appliances are sold based on a manufacturer-to-
retailer distribution channel. Wolf commented that for commercial-style
cooking products, distributors are also involved in the distribution of
the equipment. (Public Meeting Transcript, No. 5 at p. 177). For its
analysis of cooking products, DOE designated commercial-style equipment
as a separate product class that was exempted from the analysis due to
the lack of available data for determining efficiency characteristics.
Therefore, DOE did not consider the distribution channels for
commercial-style equipment.
For CCWs, the consumer is usually a commercial establishment. EEI
and ALS both commented on the distribution channels for this product.
EEI stated that national accounts may be applicable if users (e.g.,
hotels) are purchasing units in bulk from dealers. ALS stated that the
distribution channels DOE identified during its Framework workshop were
correct and added that laundromat owners generally go through
distributors to purchase their clothes washers, whereas multi-housing
owners generally go through route operators. (Public Meeting
Transcript, No. 5 at pp. 175-176).
DOE developed the distribution channels for this analysis of CCWs
after reviewing data that CEE developed.\34\ The CEE data indicate that
the relevant portions of the commercial, family-sized clothes washer
market can be divided into three areas: (1) Laundromats; (2) private
multi-family housing; and (3) large institutions (e.g., military
barracks, universities, housing authorities, lodging establishments,
and health care facilities). For these three market areas, the CEE data
indicate that an overwhelming majority of CCWs are sold through either
distributors or route operators. Consistent with ALS's comment, the CEE
data show that laundromats generally purchase their equipment through
distributors, whereas multi-family housing and large institutions
generally lease their equipment from route operators. Because the CEE
data do not indicate that national accounts are a significant
distribution channel, DOE did not consider them in its analysis. Thus,
for purposes of developing the markups for CCWs, DOE based its
calculations on the distribution channel that involves only
distributors. DOE estimated that the markups and the resulting consumer
equipment prices for the distribution channel involving distributors
would be representative of the prices paid by consumers acquiring their
equipment from route operators.
---------------------------------------------------------------------------
\34\ Consortium for Energy Efficiency, Commercial Family-Sized
Washers: An Initiative Description of the Consortium for Energy
Efficiency, 1998. Available online at: http://www.cee1.org/com/cwsh/cwsh-main.php3
---------------------------------------------------------------------------
DOE specifically seeks feedback on whether determining CCW consumer
prices based solely on the distribution channel that includes
distributors will result in representative equipment prices for all CCW
consumers. This is identified as Issue 10 under ``Issues on Which DOE
Seeks Comment'' in section IV.E of this ANOPR.
2. Approach for Manufacturer Markups
DOE developed an average manufacturer markup by examining the
annual Securities and Exchange Commission (SEC) 10-K reports filed by
four publicly-traded manufacturers primarily engaged in appliance
manufacturing and whose combined product range includes residential
dishwashers, dehumidifiers, and cooking products and commercial clothes
washers.\35\ The four manufacturers represent a nearly 50 percent
market share for core appliances. Because these companies are typically
diversified, producing a range of different appliances, an industry
average markup was assumed by DOE to be representative for the
manufacture of each type of appliance. DOE evaluated markups for the
years between 2002 and 2005, inclusive.
---------------------------------------------------------------------------
\35\ Security Exchange Commission, SEC 10-K Reports, Various
dates, 2002-2005, Security Exchange Commission. Available online at:
http://www.sec.gov/
---------------------------------------------------------------------------
3. Approach for Retailer and Distributor Markups
DOE based the retailer markups (for residential products) and
distributor markups (for CCWs) on financial data from the U.S. Census
Business Expenditure Survey (BES).\36\ DOE organized the financial data
into balance sheets that break down cost components incurred by firms
that sell the products.
---------------------------------------------------------------------------
\36\ U.S. Census Bureau. 1997 Economic Census, Business Expense
Survey, Retail Trade, Household Appliance Stores and Merchant
Wholesalers, Machinery, Equipment, and Supplies, 1997. Washington,
DC Available online at: http://www.census.gov/csd/bes/bes97.htm
---------------------------------------------------------------------------
DOE developed baseline and incremental markups to transform the
manufacturer sales price into a consumer equipment price. DOE used the
baseline markups, which cover all of a retailer's or distributor's
costs, to determine the sales price of baseline models (equipment sold
under existing market conditions). The baseline markup relates the
manufacturer sales price to the retailer sales price (in the case of
residential products) or distributor sales price (in the case of CCWs).
Incremental markups cover only those costs that scale with a change in
the manufacturer's sales price. Incremental markups are coefficients
that relate the change in the manufacturer sales price of higher
efficiency models (equipment sold under market conditions with new
efficiency standards) to the change in the retailer or distributor
sales price.
DOE used financial data from the BES, in the ``Household Appliance
Stores'' category, to calculate markups used by retailers that apply to
residential dishwashers, cooking products, and dehumidifiers. It used
financial data from the BES for the category ``Machinery, Equipment,
and Supplies Merchant Wholesalers'' to calculate markups used by
distributors for CCWs. Using these markups, DOE generated retail prices
for each potential standard level, assuming that each level would
represent a new minimum efficiency standard.
For CCWs, DOE undertook efforts to validate the retail prices that
it generated through the use of distributor markups. Both the Seattle
Public Utilities (SPU) and ALS suggested sources for establishing the
retail price of CCWs. SPU stated that it may have relevant data that it
obtained through one of its rebate incentive programs. ALS suggested
that DOE contact the MLA, route operators, and property owners. (Public
Meeting Transcription, No. 5 at pp. 174 and 176) DOE contacted several
national distributors of commercial laundry equipment to collect CCW
retail price data. DOE also identified a few company Web sites that
provided retail price information. DOE did obtain the price data
offered by SPU, but because all of the data corresponded to high-
efficiency, front-
[[Page 64479]]
loading, horizontal-axis washers, the data were not useful for
identifying the price differential between baseline and more-efficient
products. With the price data it did collect, DOE attempted to develop
a retail price-versus-efficiency curve. However, most of the price data
collected from distributors and Web sites did not provide the necessary
information to establish the efficiency of these commercial clothes
washers. Therefore, DOE was only able to establish the retail price
differential between a typical top-loading, vertical-axis machine and a
front-loading, horizontal-axis machine. The retail price difference
(approximately $500) is very close to the retail price DOE generated
through the use of markups. Therefore, for the price difference between
a typical top-loading machine and a typical front-loading machine, DOE
confirmed that its retail price increment for achieving CCW
efficiencies in the range of 1.72 to 2.20 MEF were reasonable. Chapter
3 of the TSD provides details on DOE's CCW retail price data collection
effort.
4. Sales Taxes
The sales tax component of the DOE mark-up analysis represents
State and local sales taxes that are applied to the consumer appliance
price. It is a multiplicative factor that increases the consumer
appliance price. DOE derived State and local taxes from data provided
by the Sales Tax Clearinghouse.\37\ These data represent weighted
averages that include county and city rates. DOE then derived
population-weighted average tax values for each Census division and
large State.
---------------------------------------------------------------------------
\37\ Sales Tax Clearinghouse, Inc. State sales tax rates along
with combined average city and county rates, 2006. Available online
at: http://thestc.com/STrates.com.
---------------------------------------------------------------------------
5. Summary of Markups
Table II.49 summarizes each product's markups at each stage in the
distribution channel and the overall baseline and incremental markups,
as well as sales taxes. AHAM questioned what the typical overall markup
is for home appliances and stated that, for residential clothes
washers, a prior standards rulemaking analysis established an overall
markup of approximately 2.0. (Public Meeting Transcript, No. 5 at p.
177) As shown in Table II.49, the overall baseline markup is
approximately 2.0 for all products, almost the same as the markup DOE
used in its residential clothes washer standard rulemaking. The overall
incremental markup, which DOE applied to an incremental change in
manufacturing costs to develop an incremental change in retail price,
is approximately 1.60. Additional detail on markups can be found in
Chapter 7 of the TSD.
Table II.49.--Summary of Markups
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers Dehumidifiers Cooking products Commercial clothes washers
Markup --------------------------------------------------------------------------------------------------------------------------
Baseline Incr. Baseline Incr. Baseline Incr. Baseline Incr.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer................. 1.26
1.26
1.26
1.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
Retailer..................... 1.45 1.15 1.45 1.15 1.45 1.15
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distributor.................. ............. ............. ............. ............ ............ ............ 1.43 1.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sales Tax.................... 1.068
1.065
1.069*
1.068
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall...................... 1.95 1.55 1.95 1.54 1.95 1.55 1.93 1.59
--------------------------------------------------------------------------------------------------------------------------------------------------------
Represents average of all seven product classes of cooking products.
F. Rebuttable Presumption Payback Periods
A more energy efficient device will usually cost more to buy than a
device of standard energy efficiency. However, the more efficient
device will usually cost less to operate due to reductions in operating
costs (i.e., lower energy bills). The PBP is the time (usually
expressed in years) it takes to recover the additional installed cost
of the more efficient device (i.e., the incremental cost) through
energy cost savings. EPCA establishes a rebuttable presumption that a
standard for any of the four appliance products is economically
justified ``[i]f the Secretary finds that the additional cost to the
consumer of purchasing a product complying with an energy conservation
standard level will be less than three times the value of the energy *
* * savings during the first year that the consumer will receive as a
result of the standard, as calculated under the applicable test
procedure * * * '' (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a))
To evaluate the rebuttable presumption, DOE estimated the
additional cost of purchasing a more efficient, standard-compliant
product, and compared this cost to the value of the energy saved during
the first year of operation of the product. DOE understands that the
increased cost of purchasing a standard-compliant product includes the
cost of installing the product for use by the purchaser. DOE calculated
the rebuttable presumption PBP (rebuttable PBP), as the ratio of the
value of the increased installed price above the baseline efficiency
level to the first year's energy cost savings. When this PBP is less
than three years, the rebuttable presumption is satisfied. When this
PBP is equal to or more than three years, the rebuttable presumption is
not satisfied. In such case, the Secretary must take such information
into account when determining whether a standard is economically
justified. (42 U.S.C. 6295(o)(2)(B)(iii))
Inputs to the PBP calculation are the first seven inputs shown in
Table II.57 found in section II.G.2 of this ANOPR. The rebuttable PBPs
differ from the other PBPs calculated in the LCC analysis, in that the
calculation of rebuttable PBP uses discrete values (rather than
distributions) for inputs. Other than the use of single-point values,
the most notable difference between the distribution PBP and the
rebuttable PBP is the latter's reliance on the DOE test procedure to
determine a product's annual energy (and water) consumption. The
distribution PBP is based on the annual energy and water consumption
data described in section II.D, which are characterized with a range of
values as opposed to the discrete single-point value that is used for
the rebuttable PBP.
[[Page 64480]]
For dishwashers, DOE based the annual energy and water consumption
values that it used to determine the rebuttable PBP on the number of
cycles per year specified in the DOE test procedure. The number of
cycles from the DOE test procedure, 215 cycles per year, is equal to
the average number of cycles that DOE used in its determination of
distribution PBPs. Thus, on average, the rebuttable PBP for dishwashers
is virtually the same as the average distribution PBP.
For dehumidifiers, the DOE test procedure does not provide a method
for determining the product's annual energy consumption. As a result,
the DOE test procedure does not offer a basis for determining the
rebuttable PBP. Therefore, for its determination of rebuttable PBP, DOE
decided to use the same average operational use estimate of 1,095 hours
that it used in its determination of distribution PBPs. Thus, the
rebuttable PBP for dehumidifiers is virtually the same as the average
distribution PBP.
For cooking products, DOE determined the rebuttable PBP based on
DOE test-procedure-derived annual energy consumption values which are,
on average, greater than the annual energy use that DOE used to
determine the distribution PBPs. Thus, the rebuttable PBPs for cooking
products are shorter than the distribution PBPs. Because the
distribution PBPs are based on more recent data that more accurately
reflects the current energy consumption of cooking products, the
distribution PBPs are more reflective of actual PBPs than the
rebuttable PBPs.
For CCWs, DOE based the annual energy and water consumption values
that it used to determine the rebuttable PBP on the number of cycles
per year specified in the DOE test procedure. The CCW test procedure
cites the residential clothes washer test procedure to establish
efficiency ratings as well as annual energy and water consumption. As a
result, the annual number of use cycles, 392 cycles per year, for
determining the annual energy and water consumption of CCWs, is
representative of residential use, not commercial use. Because
residential use is significantly lower than the average usage for
commercial applications--1,241 cycles per year in multi-family
buildings and 2,190 cycles per year in laundromats--the average annual
energy and water consumption DOE used to determine rebuttable PBP is
significantly less than the consumption expected to be associated with
actual usage. As a result, the rebuttable PBP is significantly longer
than the distribution PBPs for both multi-family and laundromat
applications. To emphasize, DOE calculated the rebuttable PBPs based on
residential use to comply with the requirements of EPCA, namely, to
calculate the rebuttable PBP under the applicable test procedure. DOE
understands that the distribution PBP, which is based on commercial
use, reflects the actual PBP of CCW.
DOE calculated rebuttable PBPs for each standard level relative to
the distribution of product efficiencies that were used for the base
case. Section II.G.2.d of this ANOPR provides details on the base case
efficiency distributions for each of the four appliance products.
Tables II.50 through II.56 show the nationally-averaged, rebuttable
PBPs calculated for all product classes and candidate standard levels
for each considered product.
Table II.50.--Standard-Sized Dishwashers: Rebuttable Payback Periods
------------------------------------------------------------------------
PBP
Candidate standard level EF years
------------------------------------------------------------------------
Baseline............................................ 0.46 ........
1................................................... 0.58 0.7
2................................................... 0.62 2.1
3................................................... 0.65 4.6
4................................................... 0.68 9.5
5................................................... 0.72 17.9
6................................................... 0.80 21.8
7................................................... 1.11 16.6
------------------------------------------------------------------------
Table II.51.--Dehumidifiers: Rebuttable Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
0-35.00 pints/day* 35.01-45.00 pints/day 54.01-74.99 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Candidate Standard Level EF PBP years Level EF PBP years Level EF PBP years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline......................... 1.20 ........... Baseline............ 1.30 ........... Baseline............ 1.50 ...........
1................................ 1.25 2.4 1................... 1.35 4.0 1................... 1.55 2.3
2................................ 1.30 1.7 2................... 1.40 5.5 2................... 1.60 2.2
3................................ 1.35 3.0 3................... 1.45 5.8 3................... 1.65 2.6
4................................ 1.40 4.3 4................... 1.50 6.5 4................... 1.70 4.7
5................................ 1.45 5.7 5................... 1.74 8.0 5................... 1.80 4.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* PBP based on the annual energy consumption and operating cost associated with the 25.01-35.00 pints/day class.
Table II.52.--Cooktops: Rebuttable Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric coil Electric smooth Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
Candidate standard level EF PBP years Level EF PBP years Level EF PBP years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 0.737 ........... Baseline............ 0.742 ........... Baseline............ 0.156 ..........
1................................. 0.769 3.7 1................... 0.753 410 1................... 0.399 1.3
.......... ........... .......... ........... 2................... 0.420 34
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.53. Ovens: Rebuttable Payback Periods
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Electric standard Electric self-clean Gas standard Gas self-clean
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
PBP PBP PBP PBP
Candidate standard level EF years Level EF years Level EF years Level EF years
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............................. 0.1066 ........ Baseline................. 0.1099 ........ Baseline................ 0.0298 ........ Baseline................ 0.0540 .......
[[Page 64481]]
1..................................... 0.1113 2.2 1........................ 0.1102 88.6 1*...................... 0.0536 4.2 1....................... 0.0625 6.5
2..................................... 0.1163 3.3 2........................ 0.1123 120.2 2....................... 0.0566 4.8 2....................... 0.0627 8.8
3..................................... 0.1181 5.1 ......................... ....... ........ 3....................... 0.0572 5.2 3....................... 0.0632 9.0
4..................................... 0.1206 24.0 ......................... ....... ........ 4....................... 0.0593 20.0 ........................ ....... .......
5..................................... 0.1209 25.2 ......................... ....... ........ 5....................... 0.0596 20.3 ........................ ....... .......
....... ........ ........ 6....................... 0.0600 21.4 ........................ ....... .......
....... ........ ....... ........ 1a*..................... 0.0583 1.4 ........................ ....... .......
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the technologies for
each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark ignition device. Candidate standard level 1a is presented
at the end of the table because candidate standard levels 2 through 6 are derived from candidate standard level 1.
Table II.54.--Microwave Ovens: Rebuttable Payback Periods
------------------------------------------------------------------------
PBP
Candidate standard level EF years
------------------------------------------------------------------------
Baseline.............................................. 0.557 .......
1..................................................... 0.586 18.9
2..................................................... 0.588 36.8
3..................................................... 0.597 52.5
4..................................................... 0.602 73.9
------------------------------------------------------------------------
Table II.55.--Commercial Clothes Washers, Multi-Family Application:
Rebuttable Payback Periods
------------------------------------------------------------------------
PBP
Candidate standard level MEF WF years
------------------------------------------------------------------------
Baseline..................................... 1.26 9.50 .......
1............................................ 1.42 9.50 24.0
2............................................ 1.60 8.50 34.2
3............................................ 1.72 8.00 25.6
4............................................ 1.80 7.50 21.2
5............................................ 2.00 5.50 13.6
6............................................ 2.20 5.10 9.6
------------------------------------------------------------------------
Table II.56.--Commercial Clothes Washers, Laundromat Application:
Rebuttable Payback Periods
------------------------------------------------------------------------
PBP
Candidate standard level MEF WF years
------------------------------------------------------------------------
Baseline..................................... 1.26 9.50 .......
1............................................ 1.42 9.50 29.8
2............................................ 1.60 8.50 39.1
3............................................ 1.72 8.00 29.1
4............................................ 1.80 7.50 24.0
5............................................ 2.00 5.50 15.0
6............................................ 2.20 5.10 10.7
------------------------------------------------------------------------
Some of the candidate standard levels appear to satisfy the
rebuttable presumption test, but others do not. However, PBPs
calculated based on energy consumption in actual field conditions are
generally more accurate than, and may differ significantly from, the
PBPs calculated under the rebuttable presumption test, which are based
on energy consumption under the DOE test procedure. Therefore, in the
LCC and PBP analyses described in the following section, DOE evaluated
the candidate standard levels for the considered products using
conditions that reflect normal use of the equipment.
While DOE has examined the rebuttable presumption PBPs, DOE does
not expect to determine the economic justification for any of the
standard levels analyzed based on the ANOPR rebuttable presumption
analysis. DOE's decision on standard levels will take into account the
more detailed analysis of the economic impacts of increased efficiency
pursuant to section 325(o)(2)(B)(i) of EPCA. (42 U.S.C.
6295(o)(2)(B)(i))
G. Life-Cycle Cost and Payback Period Analyses
The LCC and PBP analyses determine the economic impact of potential
standards on consumers. The effects of standards on individual
consumers--or commercial consumers in the case of CCWs--include changes
in operating expenses (usually lower) and changes in total installed
cost (usually higher). DOE analyzed the net effect of these changes for
the four appliance products, first, by calculating the changes in
consumers' LCCs likely to result from candidate standard levels as
compared to a base case (no new standards). The LCC calculation
considers total installed cost (which includes manufacturer selling
price, sales taxes, distribution channel markups, and installation
cost), operating expenses (energy, repair, and maintenance costs),
equipment lifetime, and discount rate. DOE performed the LCC analysis
from the perspective of the consumer of each product.
DOE also analyzed the effect of changes in operating expenses and
installed costs by calculating the PBP of potential standards relative
to a base case. The PBP estimates the amount of time it would take the
individual or commercial consumer to recover the assumed higher
purchase expense of more energy efficient equipment through lower
operating costs. Similar to the LCC, the PBP is based on the total
installed cost and the operating expenses. However, unlike in the LCC,
DOE considers only the first year's operating expenses in the
calculation of the PBP. Because the PBP does not account for changes in
operating expense over time or the time value of money, it is also
referred to as a simple PBP. DOE utilizes the simple PBP because of its
simplicity, transparency, and clarity. The simple PBP is a good
approximation of more complex metrics that are based on operating
expenses that do not change significantly from year to year. For
purposes of capturing the annual change in operating expenses, DOE uses
the LCC which accounts for the lifetime operating expenses of the
product. For more detail on the LCC and PBP analyses, refer to Chapter
8 of the TSD.
1. Approach
During the Framework workshop, DOE considered conducting the LCC
and PBP analyses using an approach that characterized inputs to the
analysis with average values and handling any uncertainties or
variability in the inputs through the use of scenarios that analyzed
the effect of high and low values on the results. In recent standards
rulemakings for other products (e.g., residential furnaces and boilers
and distribution transformers), DOE conducted the LCC and PBP analyses
by modeling both the uncertainty and variability in the inputs using
Monte Carlo simulation and probability distributions. Although more
extensive than the aforementioned approach based on the use of average
inputs, the Monte Carlo approach provides additional information,
specifically the percentage of consumers benefiting from and being
burdened by
[[Page 64482]]
a prospective standard. The Joint Comment supported DOE's retention of
Monte Carlo-based LCC and PBP analyses for this rulemaking, as long as
the additional work required to perform the analyses over a simpler
approach is not extensive. The Joint Comment stated that the Monte
Carlo approach provides useful information on the percentage of
consumers benefiting from and being burdened by an efficiency standard.
(Joint Comment, No. 9 at p. 3) EEI and NWPCC also urged DOE to retain
the Monte Carlo approach due to the additional information it provides
over a simpler analysis. (EEI, No. 7 at p. 5; Public Meeting
Transcription, No. 5 at p. 228) DOE agrees with the comments that the
benefits of conducting the LCC and PBP with a Monte Carlo approach
outweigh the extra effort it takes to implement it. Therefore, DOE
developed its LCC and PBP spreadsheet models incorporating both Monte
Carlo simulation and probability distributions by using Microsoft Excel
spreadsheets combined with Crystal Ball (a commercially available add-
in program).
In addition to characterizing several of the inputs to the analysis
with probability distributions, in the case of residential dishwashers,
dehumidifiers, and cooking products, DOE also developed a sample of
individual households that use each of the appliances. The household
sample sizes for these residential products are: 2,476 household
records from dishwashers; 578 for dehumidifiers; 2,895 for electric
cooktops; 1,159 for electric standard ovens; 1,601 for electric self-
cleaning ovens; 1,597 for gas cooktops; 959 for gas standard ovens; and
494 for gas self-cleaning ovens. By developing household samples, DOE
was able to perform the LCC and PBP calculations for each household to
account for the variability in energy (and water) consumption and/or
energy price associated with each household. DOE used EIA's 2001 RECS
to develop household samples for each of the above three sets of
products. The 2001 RECS is a national sample survey of housing units
that collects statistical information on the consumption of and
expenditures for energy in housing units along with data on energy-
related characteristics of the housing units and occupants. The 2001
RECS consists of for 4,822 housing units and was constructed by EIA to
be a national representation of the household population in the U.S. Of
the household sub-samples used in the LCC and PBP analysis, only two
(for dehumidifiers and gas self-cleaning ovens) have a size which is
less than 20 percent of the total 2001 RECS housing unit size. Even so,
the potential errors associated with these smaller sub-sample sizes are
not anticipated to be so large as to affect the validity of the
results. Specifically, the standard error of a sample of size 'n' is
the sample's standard deviation divided by the square root of 'n'. For
the full 2001 RECS sample the associated standard error is the sample's
standard deviation multiplied by 1.5 percent. For the dehumidifier and
gas self-cleaning oven sub-samples, the associated standard error is
the sub-sample's standard deviation multiplied by 4.5 percent. Although
the standard error of the sub-samples is three times the size of the
entire 2001 RECS, it is still less than five percent. DOE believes a
standard error of less than five percent is still small enough to yield
meaningful results. Therefore, DOE believes the results generated from
the household samples for dishwashers, dehumidifiers, and cooking
products are representative of U.S. households using these appliances.
For dishwashers and cooking products, DOE used EIA's 2001 RECS to
establish the variability in annual energy use and energy pricing. (DOE
also established the variability of annual water use and water pricing
for dishwashers using the 2001 RECS.) Note, as discussed previously in
section II.D on the energy and water use of the four appliance
products, DOE characterized the average energy use of dishwashers and
cooking products on relatively recent studies (for dishwashers, a 2001
study performed by ADL, and for cooking products, studies from the 2004
CA RASS and the FSEC). Therefore, to emphasize, DOE used RECS to
establish the variability in annual energy use of dishwashers and
cooking products, not the average consumption. For dehumidifiers, DOE
used RECS to establish only the variability in electricity pricing. By
using RECS, DOE was able to assign a unique annual energy use and/or
energy price to each household in the sample. Due to the large sample
of households considered in the LCC and PBP analyses, the range of
annual energy use and/or energy prices is quite large. Thus, although
the annual energy use and/or energy pricing are not uncertain for any
particular household, their variability across all households
contributes to the range of LCCs and PBPs calculated for any particular
candidate standard level.
For CCWs, DOE was unable to develop a consumer sample, since
neither RECS nor EIA's Commercial Building Energy Consumption Survey
(CBECS) provide the necessary data to develop one. As a result, DOE was
not able to use a consumer sample to establish the variability in
energy use (and water use) and energy pricing (and water pricing) for
CCWs. Instead, DOE established the variability and uncertainty in
energy and water use for CCWs by defining the uncertainty and
variability in the use (cycles per day) of the equipment. The
variability and uncertainty in energy and water pricing are
characterized by regional differences in energy and water prices.
2. Life-Cycle Cost Inputs
For each efficiency level analyzed, the LCC analysis requires input
data for the total installed cost of the equipment, the operating cost,
and the discount rate. Table II.57 summarizes the inputs and key
assumptions DOE used to calculate the customer economic impacts of
various candidate standard levels for each product. A more detailed
discussion of the inputs follows.
Table II.57.--Summary of Inputs and Key Assumptions Used in the Life-
Cycle Cost Analyses
------------------------------------------------------------------------
Input Description
------------------------------------------------------------------------
Baseline Manufacturer Cost........ The baseline manufacturer cost is
the cost incurred by the
manufacturer to produce equipment
meeting existing minimum efficiency
standards.
Standard-Level Manufacturer Cost Standard-level manufacturer cost
Increases. increases are the incremental
change in manufacturer cost
associated with producing equipment
at a standard level.
Markups and Sales Tax............. Markups and sales tax convert the
manufacturer cost to a consumer
equipment price.
Installation Cost................. The installation cost is the cost to
the consumer of installing the
equipment and represents all costs
required to install the equipment
other than the marked-up consumer
equipment price. The installation
cost includes labor, overhead, and
any miscellaneous materials and
parts.
[[Page 64483]]
Annual Energy (and Water) The annual energy consumption is the
Consumption. site energy use associated with
operating the equipment. The annual
water consumption, which is
applicable to dishwashers and CCWs,
is the site water use associated
with operating the equipment. The
annual energy (and water)
consumption vary with the product
efficiency.
Energy and Water Prices........... Energy and water prices are the
prices paid by consumers for energy
(i.e., electricity, gas, or oil)
and water. Multiplying the annual
energy and water consumption by the
energy and water prices yields the
annual energy cost and water cost,
respectively.
Repair and Maintenance Costs...... Repair costs are associated with
repairing or replacing components
that have failed. Maintenance costs
are associated with maintaining the
operation of the equipment.
Energy and Water Price Trends..... DOE uses energy and water price
trends to forecast energy and water
prices into the future and, along
with the product lifetime and
discount rate, to establish the
lifetime energy and water costs.
Product Lifetime.................. The product lifetime is the age at
which the equipment is retired from
service.
Discount Rate..................... The discount rate is the rate at
which DOE discounts future
expenditures to establish their
present value.
------------------------------------------------------------------------
a. Total Installed Cost Inputs
The inputs to calculate total installed cost are as follows.
``Baseline manufacturer cost'' is the cost incurred by the manufacturer
to produce equipment meeting existing minimum efficiency standards.
``Standard-level manufacturer cost increases'' are the change in
manufacturer cost associated with producing equipment to meet a
particular energy efficiency level (i.e., the incremental cost).
Markups and sales tax convert the manufacturer cost to a consumer
equipment price. The installation cost is the cost to the consumer of
installing the equipment and represents all costs required to install
the equipment other than the marked-up consumer equipment price. Thus,
the total installed cost equals the consumer equipment price plus the
installation cost. For a complete discussion on manufacturer costs
refer back to section II.C in this ANOPR. For details on markups and
sales taxes, refer back to section II.E in this ANOPR.
More specifically, installation costs include labor, overhead, and
any miscellaneous materials and parts. DOE determined installation
costs for dishwashers, cooktops and ovens, and CCWs based on data in
the RS Means Plumbing Cost Data, 2005.\38\ RS Means provides estimates
on the labor required to install each of above three products.
---------------------------------------------------------------------------
\38\ RS Means. Plumbing Cost Data, 28th Edition, 2005. Kingston,
MA. p. 97. Available online for purchase at: http://www.remeans.com/.
---------------------------------------------------------------------------
For dishwashers, DOE based its installation cost for baseline
equipment on the nationally representative average cost associated with
the installation of a four-or-more-cycle dishwasher as provided by RS
Means. In addition, DOE determined that installation costs would not be
impacted by increased standard levels. In reference to a design
requiring a reduction in the inlet water temperature, Whirlpool stated
that because it would require a cold water line to be plumbed to the
dishwasher in addition to the hot water line, this design would incur
greater installation costs than a baseline dishwasher. (Public Meeting
Transcript, No. 5 at p. 204) DOE agrees with Whirlpool, but in its
development of the manufacturing cost-versus-efficiency relationship,
DOE did not believe that any of the standard levels would require a
reduction in inlet water temperature. Thus, DOE did not alter its
decision to keep the installation cost constant for more efficient
designs.
For cooktops and ovens, DOE based its installation cost for
baseline equipment on the nationally representative average cost
associated with the installation of 30-inch, free-standing cooking
ranges as provided by RS Means. DOE estimated that the costs of
installing a range are also representative of the costs of installing
either a cooktop or an oven. However, Whirlpool suggested that DOE
should assess whether more efficient cooking products incur increased
installation costs. (Whirlpool, No. 10 at p. 10) As a basis for
assessing whether installation costs vary with product efficiency, DOE
used its own supplemental analysis to the previous rulemaking's TSD. In
the supplemental analysis, DOE determined that only gas cooktops and
ovens with electronic ignition devices would incur added installation
costs.\39\ Because DOE did not receive any information to the contrary,
DOE retained this determination for its current analysis. For gas
cooktops and ovens, the previous analysis estimated, as an upper bound,
that 20 percent of households using gas cooktops and ovens that do not
require electricity to operate would require the installation of an
electrical outlet in the kitchen to bring electrical service to the
product. DOE used data from RS Means to estimate the installation cost
of an electrical outlet.
---------------------------------------------------------------------------
\39\ U.S. Department of Energy. Technical Support Document
Energy Conservation Standards for Consumer Products Cooking
Products, Supplemental Chapter 4--Life Cycle Cost and Payback
Periods, Washington, DC. Available online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
---------------------------------------------------------------------------
For CCWs, GE stated that because CCWs are more difficult to install
than typical residential clothes washers, the installation costs
associated with residential washers should not be used as a basis for
establishing CCW installation costs. (Public Meeting Transcript, No. 5
at p. 46) DOE agrees with GE and based its installation cost for
baseline equipment on the nationally representative average costs
associated with the installation of a four-cycle, coin operating CCW as
provided by RS Means. DOE determined that installation costs would not
be impacted by increased standard levels because none of the CCWs
currently on the market differ from each other in terms of installation
requirements despite existing variations in their level of efficiency.
All CCW have similar connections for electrical power, incoming water,
and drains. In addition to these basic connections, CCW may require
some additional cabling for vending systems and monitoring. However,
neither vending systems nor system monitoring enhances CCW energy
efficiency.
Lastly, for dehumidifiers and microwave ovens, DOE determined that
there are no costs associated with the installation of these products
as a function of energy efficiency. Both types of products only require
an available outlet to begin operating. Some dehumidifiers may require
some additional work to allow condensate to drain directly into a
drain. However, this product functionality is not related to energy
efficiency--it simply relieves the user from having to drain the
condensate bucket from time to time.
Additional details on the development of installation costs can be
found in Chapter 8 of the TSD.
[[Page 64484]]
b. Operating Cost Inputs
The operating cost inputs are as follows. Annual energy consumption
is the site energy use associated with operating an appliance product.
Annual water consumption, which is applicable to dishwashers and CCWs,
is the site water use associated with operating an appliance product.
Energy and water prices are the prices paid by consumers for energy
(i.e., electricity, gas, or oil) and water. DOE used energy and water
price trends to forecast energy and water prices into the future.
Multiplying the annual energy and water consumption by the energy and
water prices yields the annual energy cost and water cost,
respectively. Repair costs are associated with repairing or replacing
components that have failed. Maintenance costs are associated with
maintaining the operation of the equipment. The product lifetime is the
age at which the equipment is retired from service. The discount rate
is the rate at which DOE discounted future expenditures to establish
their present value. The inputs for estimating annual energy (and
water) consumption are discussed in section II.D.
With regard to energy prices, DOE derived average prices for 13
geographic areas consisting of the nine U.S. Census divisions, with
four large States (New York, Florida, Texas, and California) treated
separately. For Census divisions containing one of these large States,
DOE calculated the regional average values leaving out data for the
large State--for example, the Pacific region average does not include
California, and the West South Central does not include Texas. EEI
stated that DOE should use commercial energy prices to conduct the LCC
and PBP analyses of CCWs and residential prices to conduct the analyses
for the residential products. (EEI, No. 7 at p. 4) DOE agreed with
EEI's suggestion, and as described below, DOE developed residential
energy prices for its analysis of dishwashers, dehumidifiers, and
cooking products, and commercial energy prices for CCWs.
With regard to water prices, DOE derived average prices for the
four Census regions. As described below, DOE used survey data survey
covering approximately 300 water utilities and 200 wastewater utilities
to develop water and wastewater prices. Because a sample of 200-300
utilities is not large enough to calculate regional prices for all U.S.
Census divisions and large States (for comparison, DOE used electricity
price data form more than 3000 utilities), DOE calculated regional
values at the Census region level (Northeast, South, Midwest, and
West). Using these energy and water price data, DOE analyzed their
variability at the regional level for each of the four appliance
products.
For the three residential products (i.e., dishwashers,
dehumidifiers, and cooking products), DOE used 2001 RECS data to
develop a sample of individual households that use each of the
appliances. By developing household samples, DOE was able to perform
the LCC and PBP calculations for each household to account for the
regional variability in energy and water prices associated with each
household. Because households use either electric, gas, or oil water
heaters, DOE had to develop residential electricity, natural gas, and
oil prices for its analysis of dishwashers. For dehumidifiers, DOE used
only residential electricity prices because this product runs strictly
using electricity. Since cooking products consist of electric and gas
equipment, DOE had to use both residential electricity and natural gas
prices in its analysis.
For CCWs, DOE was unable to develop a consumer sample, since
neither RECS nor EIA's CBECS provide the necessary data to develop one.
Thus, DOE characterized energy and water price regional variability
with probability distributions. It based the probability associated
with each regional energy and water price on the population weight of
each region. Because commercial laundry establishments use either
electric or gas water heaters and dryers, DOE developed both commercial
electricity and natural gas prices for its analysis of CCWs.
DOE estimated residential and commercial electricity prices for
each of the 13 geographic areas based on data from EIA Form 861, Annual
Electric Power Industry Report. These data are published annually and
include annual electricity sales in kWh, revenues from electricity
sales, and number of consumers, for the residential, commercial, and
industrial sectors, for every utility serving final consumers. DOE
calculated an average residential electricity price by first estimating
an average residential price for each utility--by dividing the
residential revenues by residential sales--and then calculating a
regional average price by weighting each utility with customers in a
region by the number of residential consumers served in that region.
The calculation methodology uses recently available EIA data from 2004.
The calculation methodology of an average commercial electricity price
is identical to that for residential price, except that DOE used
commercial sector data.
DOE estimated residential and commercial natural gas prices in each
of the 13 geographic areas based on data from the EIA publication
Natural Gas Monthly.\40\ This publication includes a compilation of
monthly natural gas delivery volumes and average consumer prices by
State, for residential, commercial, and industrial customers.
Specifically, DOE used the complete annual data for 2005 to calculate
an average summer and winter price for each area. It calculated
seasonal prices because, for some end uses, seasonal variation in
energy consumption is significant. DOE defined summer as the months May
through September, with all other months defined as winter. DOE
calculated an average natural gas price by first calculating the summer
and winter prices for each State, using a simple average over the
appropriate months, and then calculating a regional price by weighting
each State in a region by its population. This method differs from the
method used to calculate electricity prices, because EIA does not
provide consumer-level or utility-level data on gas consumption and
prices. The calculation methodology of an average commercial natural
gas price is identical to that for residential price, except that DOE
used commercial sector data.
---------------------------------------------------------------------------
\40\ DOE-Energy Information Administration, Natural Gas Monthly,
available online at: http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.htm.
---------------------------------------------------------------------------
DOE estimated residential oil prices in each of the 13 geographic
areas based on data from EIA's Petroleum Navigator.\41\ From this Web
site, available data include a compilation of monthly oil delivery
volumes and average consumer prices by State, for residential,
commercial, and industrial customers. Specifically, DOE used the
complete annual data for 2005 to calculate an average oil price. It
first calculated the prices for each State using simple averages and
then calculated a regional price, weighting each State in a region by
its population.
---------------------------------------------------------------------------
\41\ DOE Energy Information Administration, Petroleum Navigator,
available online at: http://tonto.eia.doe.gov/dnav/pet/pet_pri_top.asp.
---------------------------------------------------------------------------
DOE obtained residential water and wastewater price data from the
2004 Water and Wastewater Rate Survey conducted by Raftelis Financial
Consultants and the American Water Works Association.\42\ The survey
covers approximately 300 water utilities and
[[Page 64485]]
200 wastewater utilities, with each industry analyzed separately. The
water survey includes, for each utility, the cost to consumers of
purchasing a given volume of water. In this case, the data include a
division of the total consumer cost into fixed and volumetric charges.
Pacific Gas & Electric Company (PG&E) suggested that DOE determine the
marginal price of water and wastewater for its analysis. PG&E claimed
that the marginal cost of improving wastewater treatment plants to
comply with State and Federal regulations is very high. Because higher
marginal costs translate into higher marginal prices, PG&E states that
the marginal price would be a more accurate representation of the
economic savings due to reduced water consumption. (Public Meeting
Transcript, No. 5 at p. 190) As PG&E suggested, DOE calculated only the
volumetric charge to determine water prices, since only this charge
would be affected by a change in water consumption. Including the fixed
charge in the average water price would lead to a slightly higher water
price. For wastewater utilities, the format is similar, but the cost
refers to the cost of treating a given volume of wastewater.
---------------------------------------------------------------------------
\42\ Raftelis Financial Consultants, Inc. 2004 RFC/AWWA Water
and Wastewater Rate Survey, 2004. Charlotte, NC, Kansas City, MO,
and Pasadena, CA. Available online at: http://www.raftelis.com/ratessurvey.html.
---------------------------------------------------------------------------
EEI stated that price of water and wastewater is highly variable
depending on consumer use or volume and geographic location. (Public
Meeting Transcript, No. 5 at p. 192) DOE agrees with EEI in determining
regional water and wastewater prices. However, a sample of 200-300
utilities is not large enough to calculate regional prices for all U.S.
Census divisions and large States (for comparison, the EIA Form 861
data include more than 3,000 utilities). For this reason, DOE
calculated regional values at the Census-region level (Northeast,
South, Midwest, and West). DOE calculated average per-unit-volume
prices by first calculating the per-unit-volume price for each utility
by dividing the total volumetric cost by the volume delivered, then
calculating a State-level average price by weighting each utility in a
given State by the number of consumers it serves (either residential or
commercial), and finally arriving at a regional average by combining
the State-level averages, weighting each by the population of that
State. This third step helps reduce any bias in the sample that may
occur due to relative under-sampling of large States.
For further details of the methodology that DOE used for deriving
energy and water prices, see Chapter 8 of the TSD.
In terms of trends, DOE used price forecasts by the EIA to estimate
the trends in natural gas, oil, and electricity prices. The Joint
Comment stated that current EIA energy price forecasts are too low and
will likely be revised upwards over the next few years. The Joint
Comment requested that DOE use the latest available price forecasts
from EIA to conduct their analyses. (Joint Comment, No. 9 at p. 2) To
estimate future energy prices, DOE used EIA's Annual Energy Outlook
(AEO) 2007, containing the latest available price forecasts from
EIA.\43\ To arrive at prices in future years, DOE multiplied the
average prices described in the preceding section by the forecast of
annual average price changes in AEO 2007. Because AEO 2007 forecasts
prices to 2030, DOE followed past guidelines provided to the Federal
Energy Management Program (FEMP) by EIA and used the average rate of
change during 2020-2030 for electricity and the average rate of change
during 2015-2020 for natural gas and oil to estimate the price trends
after 2030. More recent guidelines to FEMP suggest that a 10-year
rather than a 15-year historical time period be used to extrapolate
natural gas and oil prices. DOE intends to use the more recent
guidelines to extrapolate gas and oil prices for the NOPR. For the
analyses to be conducted for the NOPR and Final Rule, DOE intends to
update its energy price forecasts at those stages of the rulemaking
based on the latest available AEO.
---------------------------------------------------------------------------
\43\ U.S. Department of Energy-Energy Information
Administration. Annual Energy Outlook 2007 with Projections to 2030,
February, 2007. Washington, DC. DOE/EIA-0383 (2007).
---------------------------------------------------------------------------
NWPCC commented that energy rate caps will be coming off in the
next few years for many States in the U.S. and asked whether EIA's
energy price forecasts take this into account. (Public Meeting
Transcript, No. 5 at p. 193) In response, we note that EIA conducts an
annual review of changes in energy prices by supply region and State in
developing its AEO. In estimating future energy prices, EIA determines
which regions of the country are regulated (i.e., with rate caps) and
which are competitive or will become competitive soon (i.e., without
rate caps). In past AEOs, EIA assumed that prices in fully competitive
regions would reflect spot market prices and would be passed on to
consumers immediately. EIA expects that the end of price reductions and
caps in many States will push competitive regions closer to that
representation of competition; however, EIA anticipates that most
customers in fully competitive regions will not experience price
changes immediately in response to changes in market generation costs.
Consequently, for AEO 2007, EIA built lags into the calculation of
competitive energy prices to simulate the delay from the time suppliers
experience cost changes to the time consumers experience price changes
as a result of the length of fixed-price contracts for standard-offer
service (i.e., rates typically provided by regulated utilities) and
competitive retail service.
National Consumer Law Council (NCLC) asked how DOE will account for
the variability in future electricity prices in the analyses. (Public
Meeting Transcript, No. 5 at p. 188) In response, we note that DOE
addressed future variability in electricity prices by incorporating
three separate projections from AEO 2007 into the spreadsheet models
for calculating LCC and PBP: (1) Reference Case; (2) Low Economic
Growth Case; and (3) High Economic Growth Case. These three cases
reflect the uncertainty of economic growth in the forecast period. The
high and low growth cases show the projected effects of alternative
growth assumptions on energy markets.
To estimate the future trend for water and wastewater prices, DOE
used data on the historic trend in the national water price index (U.S.
city average) from 1970 through 2005 provided by the Bureau of Labor
Statistics. DOE extrapolated a future trend based on the linear growth
over the 1970-2005 time period.
For further details on DOE's method for forecasting energy and
water prices, see Chapter 8 of the TSD.
With respect to repair and maintenance costs, DOE assumed that
small, incremental changes in products related to efficiency result in
either no or only very small changes in repair and maintenance costs,
as compared to baseline products. DOE acknowledges there is a greater
probability that equipment with efficiencies that are significantly
greater than the baseline will incur some level of increased repair and
maintenance costs because such equipment is more likely to incorporate
technologies that are not widely available.
On this point, Whirlpool stated that, in general, more-efficient
products use more sophisticated components and controls, thereby
increasing repair and maintenance costs. (Whirlpool, No. 10 at p. 10)
Whirlpool also stated, in regard to cooking products, that repair and
maintenance costs for more-efficient products will be higher than these
types of costs for current baseline products. For example, Whirlpool
cited two design options--bi-radiant ovens and electronic controls--as
technologies that would incur higher repair and maintenance costs.
Whirlpool suggested that DOE should obtain data on repair
[[Page 64486]]
and maintenance costs during the course of its data collection for the
engineering analysis (similar comment provided by AHAM). (Whirlpool,
No. 10 at p. 10; Public Meeting Transcript, No. 5 at pp. 199-200; AHAM,
No. 14 at p. 5) With respect to CCWs, ALS stated that repair and
maintenance costs for front-loading washers are much higher than for
top-loading washers. (Public Meeting Transcript, No. 5 at p. 201) DOE
requested that manufacturers and other stakeholders provide information
regarding appropriate repair and maintenance costs if stakeholders
believe such estimates are necessary. However, DOE did not receive any
input, and, therefore, did not include any changes in repair and
maintenance costs for products more efficient than baseline products in
this ANOPR.
DOE specifically seeks feedback on its assumption that increases in
product energy efficiency would not have a significant impact on the
repair and maintenance costs for the four appliance products covered by
this rulemaking. This is identified as Issue 11 under ``Issues on Which
DOE Seeks Comment'' in section IV.E of this ANOPR.
With regard to appliance product lifetimes, DOE received several
comments on the appropriate sources for establishing their length. For
dishwashers, ACEEE stated that some sources indicate that dishwasher
lifetime is 14 years, while Whirlpool commented that Appliance
Magazine's estimate of nine years for dishwasher lifetime is reasonable
and the most representative of actual consumer behavior. (Public
Meeting Transcript, No. 5 at p. 206; Whirlpool, No. 10 at p 10) For
dehumidifiers, the Joint Comment estimated a product lifetime of 15
years based on discussions with manufacturers and other sources. The
Joint Comment stated that Appliance Magazine generally provides shorter
lifetimes as compared to other sources. In contrast, Whirlpool
commented that Appliance Magazine's estimate of eight years for
dehumidifier lifetime is reasonable and the most consistent with actual
consumer behavior. (Joint Comment, No. 9 at p. 5; Whirlpool, No. 10 at
p 10) For cooking products, both AHAM and Whirlpool stated that the
best source for cooking product lifetimes is Appliance Magazine, as
they believe it provides estimated lifetimes which are consistent with
actual consumer behavior. (AHAM, No. 14 at p. 5; Whirlpool, No. 10 at
p. 10) Finally, for CCWs, ALS stated that because CCWs are typically
used more often than residential clothes washers, CCW lifetime will be
significantly shorter than the lifetime of residential machines. It
suggested that the best sources for CCW product lifetime data are the
MLA and route operators. (Public Meeting Transcript, No. 5 at p. 206)
To estimate the lifetime for each product covered by this
rulemaking, DOE used only primary sources of data. For example, the
Federal government's Energy Star Web site \44\ provides lifetime
estimates for dishwashers and dehumidifiers, but the estimates are
actually based on data from Appliance Magazine. Because, in this case,
Appliance Magazine is the primary source of data, DOE did not use the
Energy Star Web site as a primary source to estimate product lifetimes.
DOE used a variety of sources to establish the lifetime of each of the
considered products, including Appliance Magazine. Using the primary
sources of data, DOE characterized product lifetimes with uniform
probability distributions ranging from a minimum to a maximum value.
Microwave ovens were the exception, since DOE used a triangular
probability distribution for these products instead. DOE determined the
average product lifetime by calculating the average value from the
applicable primary sources of data. To establish the minimum and
maximum product lifetime, DOE generally used the high and low values
from these sources for each of the four appliance products. See Chapter
8 of the TSD for more details.
---------------------------------------------------------------------------
\44\ Energy Star Web site: http://www.energystar.gov/.
---------------------------------------------------------------------------
To establish discount rates for the residential products (i.e.,
dishwashers, dehumidifiers, and cooking products), DOE derived
estimates of the finance cost of purchasing the considered products.
Following financial theory, the finance cost of raising funds to
purchase appliances can be interpreted as: (1) The financial cost of
any debt incurred to purchase equipment, or (2) the opportunity cost of
any equity used to purchase equipment. For the residential products,
the purchase of equipment for new homes entails different finance costs
for consumers than the purchase of replacement equipment. Thus, DOE
used different discount rates for new construction and replacement
installations. NCLC questioned how DOE would evaluate the cost of
household equity and debt to develop discount rates for residential
products. (Public Meeting Transcript, No. 5 at p. 196) As described
below, DOE used the Federal Reserve Board's Survey of Consumer Finances
(SCF) for the years 1989, 1992, 1995, 1998, 2001, and 2004 as the basis
for using household equity and debt to calculate discount rates for
residential products.\45\ The SCF defines the shares of various equity
and debt classes held by U.S. households, thereby allowing DOE to
properly weight the equity and debt holdings to derive residential
discount rates. EEI commented that because interest rates have been
rising since 2003, making the cost of capital higher for residential
and commercial consumers, DOE should take into account the most recent
financial data when developing discount rates. (EEI, No. 7 at p. 4) As
described below, DOE used the most recent data available, including
data from the SCF to establish appropriate residential discount rates,
and data from Damodaran Online to establish commercial discount
rates.\46\
---------------------------------------------------------------------------
\45\ The Federal Reserve Board. 1989, 1992, 1995, 1998, 2001,
2004 Survey of Consumer Finances, 1989, 1992, 1995, 1998, 2001,
2004. Available online at: http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html.
\46\ Damodaran Online is a widely used source of information
about company debt and equity financing for most types of firms, and
was the source of data for this analysis on educational services,
hotels, and real estate investment trusts. See http://pages.stern.nyu.edu/adamodar/.
---------------------------------------------------------------------------
New equipment is often purchased as part of the purchase of a home,
which is almost always financed with a mortgage loan. DOE estimated
discount rates for new-housing equipment using the effective real
(after-inflation) mortgage rate for homebuyers. This rate corresponds
to the interest rate after deduction of mortgage interest for income
tax purposes and after adjusting for inflation. The data sources DOE
used for mortgage interest rates are the SCFs in 1989, 1992, 1995,
1998, 2001, and 2004. After adjusting for inflation and interest tax
deduction, effective real interest rates on mortgages across the six
surveys averaged 3.2 percent.
For residential replacement equipment, DOE's approach for deriving
discount rate involved identifying all possible debt or asset classes
that might be used to purchase replacement equipment, including
household assets that might be affected indirectly. DOE did not include
debt from primary mortgages and equity of assets considered non-liquid
(such as retirement accounts), since these would likely not be affected
by replacement equipment purchases. DOE estimated the average shares of
the various debt and equity classes in the average U.S. household
equity and debt portfolios using SCF data for 1989, 1992, 1995, 1998,
2001, and 2004. DOE used the mean share of each class across the six
sample years as a basis for estimating the effective financing rate for
replacement equipment. DOE estimated
[[Page 64487]]
interest or return rates associated with each type of equity and debt
using SCF data and other sources. The mean real effective rate across
all types of household debt and equity, weighted by the shares of each
class, is 5.6 percent.
For CCWs, DOE derived the discount rate from the cost of capital of
publicly-traded firms in the sectors that purchase CCWs. These
companies typically finance equipment purchases through debt and equity
capital. DOE estimated the cost of capital of these firms as the
weighted average of the cost of equity financing and the cost of debt
financing. The costs of debt and equity financing are usually
obtainable from publicly available data concerning the major types of
companies in the sectors that purchase CCWs. Damodaran Online is a
widely used source of information about company debt and equity
financing for most types of firms, and it was the source of data for
this analysis on educational services, hotels, and real estate
investment trusts. Since Damodaran Online does not include data for
firms in the personal services sector (Standard Industrial
Classification 7200), DOE used data from Ibbotson's Associates \47\ for
this sector.
---------------------------------------------------------------------------
\47\ Ibbotson Associates is a leading authority on asset
allocation with expertise in capital market expectations and
portfolio implementation. See Ibbotson's Associates Statistics for
SIC 72, available online at: http://www.ibbotson.com
---------------------------------------------------------------------------
DOE estimated the cost of equity using the capital asset pricing
model (CAPM). The CAPM assumes that the cost of equity for a particular
company is proportional to the systematic risk faced by that company,
where high risk is associated with a high cost of equity and low risk
is associated with a low cost of equity. The systematic risk facing a
firm is determined by several variables: (1) The risk coefficient of
the firm; (2) the expected return on risk-free assets; and (3) the
equity risk premium (ERP). The risk coefficient of the firm indicates
the risk associated with that firm relative to the price variability in
the stock market. The expected return on risk-free assets is defined by
the yield on long-term government bonds. The ERP represents the
difference between the expected stock market return and the risk-free
rate.
The cost of debt financing is the interest rate paid on money
borrowed by a company. The cost of debt is estimated by adding a risk
adjustment factor to the risk-free rate. This risk adjustment factor
depends on the variability of stock returns represented by standard
deviations in stock prices.
DOE estimated the weighted-average cost of capital (WACC) using the
respective shares of equity and debt financing for each of the sectors
that purchase CCWs. It calculated the real WACC by adjusting the cost
of capital by the expected rate of inflation. To obtain an average
discount rate value, DOE used additional data from the CEE on the
number of CCWs in use in various sectors. Weighting each sector by its
market share, DOE estimated the average discount rate for companies
that purchase CCWs to be 5.7 percent, using an inflation rate of 2.5
percent (the average of inflation rates over the 2001-2005 time
period). For further details on DOE's method for estimating discount
rates, see Chapter 8 of the TSD.
One additional issue pertaining to the LCC operating cost inputs
concerns the potential ``split incentives'' that exist in the CCW
market. Several organizations commented that under a split incentive
situation, the party purchasing more-efficient and more-expensive
equipment may not realize the operating cost savings from the more-
efficient equipment. For example, commenters asserted that under new
energy efficiency standards, route operators would incur the burden of
higher purchase prices due to more-efficient equipment; property owners
would realize the benefits of operating cost savings, and end-users may
incur the burden of increased costs to use the washers. (Public Meeting
Transcript, No. 5 at p. 239; EEI, No. 7 at p. 4; MLA, No. 8 at p. 2;
Whirlpool, No. 10 at p. 13; Multiple Water Organizations, No. 11 at p.
2) In its LCC and PBP analyses, DOE did not explicitly consider the
potential of split incentives in the CCW market, because it believes
that the probability of such a split incentive was very low. The actual
consumers of this product (primarily property-owners of multi-family
buildings and laundromats) realize both the burden of increased
purchase prices and the benefit of reduced operating cost savings. Any
split incentive that would occur for end-users in the form of increased
vending prices is likely to be very low due to the competitive nature
of the market. For example, if end-users feel as though they are paying
excessively high prices to use a service, they will seek out cheaper
options to obtain the service, thereby forcing providers to adjust
their prices in accordance with what is a reasonable return on their
investment. Due to the checks and balances that occur in the
marketplace, DOE believes it is unnecessary to explicitly account for
the possible inequities to end-users that may arise from a split
incentive.
c. Effective Date
The effective date is the future date when a new standard becomes
effective. Based on DOE's implementation report for energy conservation
standards activities submitted under Section 141 of EPACT 2005, a final
rule for the four appliance products being considered for this
standards rulemaking is scheduled for completion in March 2009. The
effective date of any new energy efficiency standards for these
products will be three years after the final rule is published in the
Federal Register (i.e., March 2012). DOE calculated the LCC for all
consumers as if they each would purchase a new piece of equipment in
the year the standard takes effect.
d. Equipment Assignment for the Base Case
For purposes of conducting the LCC analysis, DOE analyzed candidate
standard levels relative to a baseline efficiency level. However, some
consumers already purchase products with efficiencies greater than the
baseline levels. Thus, to accurately estimate the percentage of
consumers that would be affected by a particular standard level, DOE
took into account the distribution of product efficiencies currently in
the marketplace. In other words, DOE conducted the analysis by taking
into account the full breadth of product efficiencies that consumers
already purchase under the base case (i.e., the case without new energy
efficiency standards).
DOE's approach for conducting the LCC analysis for residential
products (i.e., dishwashers, dehumidifiers, cooking products) relied on
developing samples of households that use each of the products. DOE
used a Monte Carlo simulation technique to perform the LCC calculations
on the households in the sample. Using the current distribution of
product efficiencies, DOE assigned each household in the sample a
specific product efficiency. Because it performed the LCC calculations
on a household-by-household basis, DOE based the LCC for a particular
standard level on the efficiency of the product in the given household.
For example, if a household was assigned a product efficiency that is
greater than or equal to the efficiency of the standard level under
consideration, the LCC calculation would reveal that this household is
not impacted by an increase in product efficiency that is equal to the
standard level.
For dishwashers, DOE characterized base case market shares based on
data that AHAM provided that show the distribution of standard-sized
[[Page 64488]]
dishwasher efficiencies sold in 2005. Table II.58 presents the market
shares of the candidate standard levels in the base case for standard-
sized dishwashers. The market shares in Table II.58 represent the
products that households would have been anticipated to purchase in the
year 2012 in the absence of new standards.
Table II.58.--Standard-Sized Dishwashers: Base Case Market Shares
------------------------------------------------------------------------
Market
Candidate standard level EF share
(percent)
------------------------------------------------------------------------
Baseline........................................ 0.46 3.0
*............................................... 0.50 2.0
*............................................... 0.54 2.0
1............................................... 0.58 43.0
*............................................... 0.60 17.0
2............................................... 0.62 22.0
3............................................... 0.65 8.0
4............................................... 0.68 2.5
5............................................... 0.72 0.2
6............................................... 0.80 0.2
7............................................... 1.11 0.2
------------------------------------------------------------------------
* Intermediate efficiency level.
For dehumidifiers, DOE characterized base case market shares based
on data that AHAM provided that show the distribution of dehumidifier
efficiencies in 2005 for two of the six product classes: 35.01-45.00
pints/day and 54.01-74.99 pints/day. Because DOE conducted the
engineering and LCC and PBP analyses on the combined product class of
0-35.00 pints/day product class as well as these two classes, DOE had
to estimate the market share data for the combined 0-35.00 pints/day
product class. Without any data provided by either AHAM or
manufacturers or available from other sources, DOE assumed that the
market shares for the combined 0-35.00 pints/day class were equivalent
to the market shares for the closest product class--the 35.01-45.00
pint/day product class. For purposes of conducting the NIA, DOE
estimated that the market share data for the 35.01-45.00 pints/day and
54.01-74.99 pints/day classes could be used to characterize the base
case market shares for the 45.01-54.00 pints/day and 75 pints/day and
greater product classes, respectively. Table II.59 presents the market
shares of the efficiency levels in the base case for the three classes
of dehumidifiers that DOE used to conduct the LCC analysis. The market
shares in Table II.59 represent the equipment that households would
have been anticipated to purchase in the year 2012 in the absence of
new standards.
Table II.59.--Dehumidifiers: Base Case Market Shares
--------------------------------------------------------------------------------------------------------------------------------------------------------
0-35.00 pints/day 35.01-45.00 pints/day 54.01-74.99 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market Market Market
Level EF share Level EF share Level EF share
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.......................... 1.20 27 Baseline............ 1.30 27 Baseline............ 1.50 31
1................................. 1.25 35 1................... 1.35 35 1................... 1.55 0
2................................. 1.30 0 2................... 1.40 0 2................... 1.60 57
3................................. 1.35 0 3................... 1.45 0 3................... 1.65 12
4................................. 1.40 38 4................... 1.50 38 4................... 1.70 0
5................................. 1.45 0 5................... 1.74 0 5................... 1.80 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Because DOE currently does not regulate cooking product efficiency
with an energy efficiency descriptor, very little is known regarding
the distribution of product efficiencies that consumers in the United
States currently purchase. Therefore, for all electric cooking
products, including microwave ovens, and gas self-cleaning ovens, DOE
estimated that 100 percent of the market existed at the baseline
efficiency levels. For gas cooktops and gas standard ovens, data are
available, both from DOE's previous rulemaking analysis and the
Appliance Recycling Information Center, to indicate the historical
percentage of products shipped with standing pilots. Therefore, DOE was
able to estimate the percentage of the gas cooktop and gas standard
oven market that is still sold with standing pilot lights. Table II.60
presents the market shares of the efficiency levels in the base case
for gas cooktops and gas standard ovens. In the table, candidate
standard level 1 represents products without standing pilot light
ignition systems. The market shares in Table II.60 represent the
equipment that households would have been anticipated to purchase in
the year 2012 in the absence of new energy conservation standards.
Table II.60.--Gas Cooktops and Gas Standard Ovens: Base Case Market Shares
----------------------------------------------------------------------------------------------------------------
Gas cooktops Gas standard ovens
----------------------------------------------------------------------------------------------------------------
Market share Candidate Market share
Candidate standard level EF (percent) standard level EF (percent)
----------------------------------------------------------------------------------------------------------------
Baseline...................... 0.156 6.8 Baseline........ 0.0298 17.6
1............................. 0.399 93.2 1*.............. 0.0536 82.4
2............................. 0.420 0 2............... 0.0566 0
.............. .............. 3............... 0.0572 0
.............. .............. 4............... 0.0593 0
.............. .............. 5............... 0.0596 0
.............. .............. 6............... 0.0600 0
[[Page 64489]]
.............. .............. 1a*............. 0.0583 0
----------------------------------------------------------------------------------------------------------------
\*\ For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the
same purpose--eliminate the need for a standing pilot--but the technologies for each design are different.
Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard
levels 2 through 6 are derived from candidate standard level 1.
For CCWs, DOE was unable to develop a consumer sample. However, it
took into account the base case mix of CCW efficiencies by
characterizing the current mix of product efficiencies as a probability
distribution. In other words, as DOE performed the Monte Carlo
simulation, it evaluated each standard level analyzed against the
distribution of product efficiencies in the base case.
DOE derived its base case market share data for CCWs based on
shipment-weighted efficiency data that AHAM provided. Table II.61
presents the market shares of the candidate standard levels in the base
case for standard-sized dishwashers. The market shares in Table II.61
represent the products that households would have been anticipated to
purchase in the year 2012 in the absence of new energy conservation
standards.
Table II.61.--Commercial Clothes Washers: Base Case Market Shares
----------------------------------------------------------------------------------------------------------------
Market share
Level MEF WF (percent)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................ 1.26 9.50 79.7
1............................................................... 1.42 9.50 0.0
2............................................................... 1.60 8.50 0.0
3............................................................... 1.72 8.00 0.0
4............................................................... 1.80 7.50 0.0
5............................................................... 2.00 5.50 20.3
6............................................................... 2.20 5.10 0.0
----------------------------------------------------------------------------------------------------------------
For more details on how DOE developed the base case product
efficiency distributions for the four appliance products in the LCC
analysis, refer to Chapter 8 of the TSD.
DOE specifically seeks feedback on its methodology and data sources
for developing the base case product efficiency distributions for the
four appliance products. This is identified as Issue 12 under ``Issues
on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
3. Payback Period Inputs
As described above, the PBP is the amount of time it takes the
consumer to recover the additional installed cost of more-efficient
equipment through energy (and water) cost savings, as compared to
baseline equipment. Simple payback period does not take into account
changes in operating expense over time or the time value of money.
Payback periods are expressed in years. Payback periods greater than
the life of the product mean that the increased total installed cost is
not recovered in reduced operating expenses.
The inputs to the calculation of the PBP are the total installed
cost of the equipment to the customer for each efficiency level and the
annual (first-year) operating expenditures for each efficiency level.
The PBP calculation uses the same inputs as the LCC analysis, except
that energy (and water) price trends and discount rates are not needed.
The calculation needs energy prices only for the year in which a new
standard is expected to take effect, in this case the year 2012.
4. Life-Cycle Cost and Payback Period Results
DOE calculated the LCC and PBP results relative to the base case
forecast for each product class. As mentioned above, the base case
consists of the projected pattern of equipment purchases that would
occur in the absence of new efficiency standards.
The following tables (Table II.62 through Table II.75) present the
findings from the LCC and PBP analyses DOE performed for this ANOPR.
DOE determined the values at each candidate standard level by excluding
the percentage of households not impacted by the standard (i.e., those
who, in base case, already purchase a unit at or above the given
efficiency level). Figures showing the distribution of LCCs, LCC
impacts, and PBPs with their corresponding probability of occurrence
are presented in Chapter 8 of the TSD.
Table II.62 shows the LCC and PBP results for standard-sized
dishwashers. For example, candidate standard level 3 (0.65 EF) shows an
average LCC savings of $17. Note that for standard level 3, 10.6
percent of the housing units in 2012 are shown to have already
purchased a dishwasher at standard level 3 in the base case and, thus,
have zero savings due to the standard. If one compares the LCC of the
baseline at 0.46 EF ($1124) to the standards case at 0.65 EF ($1025),
then the difference in the LCCs is $99. However, since the base case
includes a significant number of households that are not impacted by
the standard, the average savings over all of the households is
actually $17, not $99. With regard to the PBPs shown below, DOE
determined the median and average values by excluding the percentage of
households not impacted by the standard. For example, in the case of
standard level 3, 10.6 percent of the households did not factor into
the calculation of the median and average PBP.
[[Page 64490]]
Table II.62.--Standard-Sized Dishwashers: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average ------------------------------------
installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.46 $700 $424 $1,124 .......... .......... .......... .......... ..........
1............................... 0.58 706 339 1,045 $4 0.1 92.8 7.1 0.9 1.5
2............................... 0.62 712 318 1,029 13 11.3 32.8 56.0 2.8 5.1
3............................... 0.65 722 303 1,025 17 32.6 10.6 56.8 5.9 10.9
4............................... 0.68 747 291 1,038 5 58.6 3.1 38.4 11.9 22.2
5............................... 0.72 811 275 1,086 -43 82.9 0.6 16.5 22.5 42.3
6............................... 0.80 900 249 1,149 -106 90.1 0.4 9.5 28.3 51.5
7............................... 1.11 980 183 1,162 -119 83.3 0.3 16.4 21.9 39.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables II.63, II.64, and II.65 show the LCC and PBP results for
dehumidifiers. For example, in the case of the 35.01-45.00 pints/day
class, candidate standard level 3 (1.45 EF) shows an average LCC
savings of $8. Note that for standard level 3, 38.2 percent of the
housing units in 2012 are shown to have already purchased a
dehumidifier at standard level 3 in the base case and, thus, have zero
savings due to the standard. If one compares the LCC of the base case
at 1.30 EF ($676) to the standards case at 1.45 EF ($657), then the
difference in the LCCs is $19. However, since the base case includes a
significant number of households that are not impacted by the standard,
the average savings over all of the households is actually $8, not $19.
With regard to the PBPs shown below, DOE determined the median and
average values by excluding the percentage of households not impacted
by the standard. For example, in the case of standard level 3 for the
35.01-45.00 pints/day class, 38.2 percent of the households did not
factor into the calculation of the median and average PBP.
Table II.63.--Dehumidifiers, 0-35.00 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost * Life-cycle cost savings * Payback period
------------------------------------------------------------------------------------ (years) *
Households with -----------------------
Candidate standard level Efficiency Average Average ------------------------------------
liters/kWh installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 1.20 $137 $422 $558 .......... .......... .......... .......... .......... ..........
1............................... 1.25 142 405 546 $3 0.0 73.1 26.9 2.6 2.5
2............................... 1.30 142 389 533 11 0.0 38.4 61.6 1.7 1.8
3............................... 1.35 153 375 528 15 0.2 38.4 61.4 3.2 3.1
4............................... 1.40 166 361 527 15 5.5 38.4 56.2 4.6 4.5
5............................... 1.45 176 349 525 17 25.9 0.0 74.1 5.7 5.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* LCC, LCC savings, and PBP based on the annual energy consumption and operating cost associated with the 25.01-35.00 pints/day product class.
Table II.64.--Dehumidifiers, 35.01-45.00 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level Efficiency Average Average ------------------------------------
liters/kWh installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 1.30 $157 $519 $676 .......... .......... .......... .......... .......... ..........
1............................... 1.35 167 500 666 $3 1.5 73.1 25.5 4.4 4.2
2............................... 1.40 167 482 661 6 15.2 38.2 46.6 5.9 5.8
3............................... 1.45 192 465 657 8 17.5 38.2 44.3 6.2 6.1
4............................... 1.50 208 450 658 8 22.7 38.2 39.1 7.0 6.8
5............................... 1.74 272 388 660 5 54.1 0.0 45.9 8.5 8.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.65.--Dehumidifiers, 54.01-74.99 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level Efficiency Average Average ------------------------------------
liters/kWh installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 1.50 $189 $725 $914 .......... .......... .......... .......... .......... ..........
[[Page 64491]]
1............................... 1.55 195 702 897 $5 0.0 68.5 31.5 2.5 2.4
2............................... 1.60 195 680 881 10 0.0 68.5 31.5 2.4 2.4
3............................... 1.65 208 659 867 22 0.0 12.3 87.7 2.8 2.7
4............................... 1.70 224 640 864 25 14.1 0.0 85.9 4.8 4.9
5............................... 1.80 241 604 845 44 7.8 0.0 92.2 4.4 4.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables II.66, II.67, and II.68 show the LCC and PBP results for
cooktops. For example, in the case of gas cooktops, candidate standard
level 1 (pilotless ignition with an efficiency of 0.399 EF) shows an
average LCC savings of $19. Note that for standard level 1, 93.4
percent of the housing units in 2012 are shown to have already
purchased a gas cooktop with pilotless ignition in the base case and,
thus, have zero savings due to the standard. If one compares the LCC of
the baseline at 0.106 EF ($716) to the standards case at 0.399 EF
($435), then the difference in the LCCs is $281. However, since the
base case includes a significant number of households that are not
impacted by the standard, the average savings over all of the
households is actually $19, not $281. With regard to the PBPs shown
below, DOE determined the median and average values by excluding the
percentage of households not impacted by the standard. For example, in
the case of standard level 1 for gas cooktops, 93.4 percent of the
households did not factor into the calculation of the median and
average PBP.
Table II.66.--Electric Coil Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average Average Average ------------------------------------
installed operating LCC savings Net Median Average
price cost Net cost No impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.737 $251 $150 $401 .......... .......... .......... .......... .......... ..........
1............................... 0.769 255 144 399 $3 35.0% 0.0% 65.0% 8.1 18.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.67.--Electric Smooth Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average Average Average ------------------------------------
installed operating LCC savings Net Median Average
price cost Net cost No impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.742 $288 $150 $438 .......... .......... .......... .......... .......... ..........
1............................... 0.753 528 148 676 -$238 100.0% 0.0% 0.0% 1,685.2 4,266.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.68.--Gas Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average ------------------------------------
installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.106 $289 $428 $716 .......... .......... .......... .......... .......... ..........
1............................... 0.399 322 113 435 $19 0.0 93.4 6.7 1.3 1.4
2............................... 0.420 351 107 458 -5 93.2 0.0 6.8 75.3 195.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables II.69 through II.72 show the LCC and PBP results for ovens.
For example, in the case of gas standard ovens, candidate standard
level 1 (pilotless ignition with an efficiency of 0.058 EF) shows an
average LCC savings of $16. Note that for standard level 1, 83 percent
of the housing units in 2012 are shown to have already purchased a gas
standard oven with pilotless ignition in the base case and, thus, have
zero savings due to the standard. If one compares the LCC of the base
case at 0.030 EF ($697) to the standards case at 0.058 EF ($603), then
the difference in the LCCs is $94. However, since the base case
includes a significant number of households that are not impacted by
the standard, the average savings over all of the households is
actually $16, not $94. With regard to the PBPs shown below, DOE
determined the median and average values by excluding the percentage of
households not impacted by the standard. For example, in the case of
standard level 1 for gas standard ovens, 83 percent of the households
did
[[Page 64492]]
not factor into the calculation of the median and average PBP. Also of
note regarding PBPs, the large difference in the average and median
values for electric self-cleaning ovens and standard level 5 for gas
standard ovens are due to outliers in the distribution of results. The
Monte Carlo simulation for electric self-cleaning ovens and standard
level 5 for gas ovens yielded a few results with PBPs in excess of one
million years. A limited number of excessively long PBPs produce an
average PBP that is very long. Therefore, in these cases, the median
PBP is a more representative value to gauge the length of the PBP.
Table II.69.--Electric Standard Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period (years)
-----------------------------------------------------------------------------------------------------------
Households with
Candidate standard level EF Average Average ------------------------------------
installed operating Average Average Net Median Average
price cost LCC savings Net cost No impact benefit
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.1066 $392 $189 $581 .......... .......... .......... .......... .......... ..........
1............................... 0.1113 395 182 576 $5 38.3 0.0 61.8 6.0 45.6
2............................... 0.1163 399 175 574 7 46.5 0.0 53.5 9.1 68.7
3............................... 0.1181 405 172 577 4 54.5 0.0 45.5 13.8 103.9
4............................... 0.1206 462 169 631 -50 96.4 0.0 3.6 65.5 493.6
5............................... 0.1209 467 169 636 -55 97.1 0.0 2.9 68.7 517.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.70.--Electric Self-Cleaning Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average Average Average ------------------------------------
installed operating LCC savings Net cost No impact No benefit Median Average
price cost (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.1099 $463 $200 $663 .......... .......... .......... .......... .......... ..........
1............................... 0.1102 469 199 669 -$88 74.6 0.0 25.4 196.7 1,071.7
2............................... 0.1123 527 196 723 -142 81.9 0.0 18.1 266.7 1,453.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.71.--Gas Standard Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------------ (years)
Households with -----------------------
Candidate standard level EF Average Average Average Average ------------------------------------
installed operating LCC savings Net cost No impact No benefit Median Average
price cost (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.0298 $409 $288 $697 .......... .......... .......... .......... .......... ..........
1*.............................. 0.0536 442 162 603 $16 0.0 83.0 17.0 3.3 3.4
2............................... 0.0566 447 154 601 18 46.1 0.0 53.9 8.4 136.1
3............................... 0.0572 448 153 601 18 47.9 0.0 52.1 9.4 152.3
4............................... 0.0593 481 149 630 -11 77.4 0.0 22.6 27.2 460.1
5............................... 0.0596 483 148 632 -12 77.9 0.0 22.1 27.9 1,907.4
6............................... 0.0600 488 148 636 -17 79.5 0.0 20.5 30.1 426.3
1a*............................. 0.0583 446 134 580 39 0.0 0.0 100.0 2.2 2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the
technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2 through 6 are derived from
candidate standard level 1.
Table II.72.--Gas Self-Cleaning Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period (years)
-----------------------------------------------------------------------------------------------------------
Households with
Candidate standard level EF Average Average Average Average ------------------------------------
installed operating LCC savings Net cost No impact No benefit Median Average
price cost (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.0540 $529 $200 $729 .......... .......... .......... .......... .......... ..........
1............................... 0.0625 545 183 727 $1 58.3 0.0 41.7 11.8 158.0
2............................... 0.0627 551 182 733 -5 67.3 0.0 32.7 16.1 235.3
3............................... 0.0632 553 182 734 -6 68.4 0.0 31.6 16.7 149.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 64493]]
Table II.73 shows the LCC and PBP results for microwave ovens. For
example, candidate standard level 4 (0.602 EF) shows an average LCC
cost increase of $68. The median and average PBPs for standard level 4
are 132.2 and 327.5 years, respectively.
Table II.73.--Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period (years)
-----------------------------------------------------------------------------------------------------------
Households with
Candidate standard level EF Average Average ------------------------------------
installed operating Average Average Net Median Average
price cost LCC savings Net cost No impact benefit
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................ 0.557 $219 $89 $308 .......... .......... .......... .......... .......... ..........
1............................... 0.586 232 84 316 -8 93.0 0.0 7.0 33.9 84.0
2............................... 0.588 246 84 329 -21 98.6 0.0 1.4 65.8 163.1
3............................... 0.597 267 83 349 -41 99.6 0.0 0.4 93.9 232.5
4............................... 0.602 294 82 376 -68 99.9 0.0 0.1 132.2 327.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables II.74 and II.75 show the LCC and PBP results for both
product applications of CCWs. For example, in the case of the multi-
family application, candidate standard level 5 (2.00 MEF/5.50 WF) shows
an average LCC savings of $404. Note that for standard level 5, 20.9
percent of consumers in 2012 are assumed to already be using a CCW in
the base case at standard level 5 and, thus, have zero savings due to
the standard. If one compares the LCC of the base case at 1.26 MEF/9.50
WF ($3303) to the standards case at 2.00 MEF/5.50 WF ($2794), then the
difference in the LCCs is $509. However, since the base case includes a
significant number of consumers that are not impacted by the standard,
the average savings over all of the consumers is actually $404, not
$509. With regard to the PBPs shown below, DOE determined the median
and average values by excluding the percentage of households not
impacted by the standard. For example, in the case of standard level 5,
20.9 percent of the consumers did not factor into the calculation of
the median and average PBP.
Table II.74.--Commercial Clothes Washers, Multi-Family Application: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------- (years)
Households with -------------------
Candidate standard level MEF/WF Average Average ------------------------------------
installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................. 1.26/9.50 $722 $2,581 $3,303 ........ .......... .......... .......... ........ ........
1......................................... 1.42/9.50 840 2,454 3,294 7 42.0 20.9 37.1 8.4 8.9
2......................................... 1.60/8.50 1,224 2,189 3,413 -86 61.5 20.9 17.6 11.9 12.8
3......................................... 1.72/8.00 1,224 2,053 3,277 21 43.3 20.9 35.9 8.8 9.5
4......................................... 1.80/7.50 1,224 1,943 3,167 109 30.4 20.9 48.8 7.3 7.9
5......................................... 2.00/5.50 1,224 1,571 2,794 404 9.3 20.9 69.9 4.6 5.1
6......................................... 2.20/5.10 1,224 1,446 2,670 529 6.3 0.0 93.7 3.8 3.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.75.--Commercial Clothes Washers, Laundromat Application: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost Life-cycle cost savings Payback period
------------------------------------------------------------------------------- (years)
Households with -------------------
Candidate standard level MEF/WF Average Average ------------------------------------
installed operating Average Average Net
price cost LCC savings Net cost No impact benefit Median Average
(percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.................................. 1.26/9.50 $722 $2,772 $3,494 ........ .......... .......... .......... ........ ........
1......................................... 1.42/9.50 840 2,647 3,487 5 35.9 20.9 43.2 5.3 5.6
2......................................... 1.60/8.50 1,224 2,354 3,577 -66 61.5 20.9 17.7 6.9 7.3
3......................................... 1.72/8.00 1,224 2,207 3,431 50 29.2 20.9 50.0 5.1 5.4
4......................................... 1.80/7.50 1,224 2,085 3,308 147 13.6 20.9 65.5 4.3 4.5
5......................................... 2.00/5.50 1,224 1,661 2,885 482 0.7 20.9 78.5 2.7 2.8
6......................................... 2.20/5.10 1,224 1,532 2,755 612 0.2 0.0 99.8 2.2 2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE presents these findings to facilitate stakeholder review of the
LCC and PBP analyses. DOE seeks information and comments relevant to
the assumptions, methodology, and results for these analyses. See
Chapter 8 of the TSD for additional detail on the LCC and PBP analyses.
H. Shipments Analysis
This section presents DOE's shipments analysis, which is an input
into the NIA (section II.I). DOE will also
[[Page 64494]]
use shipments estimates as input to the MIA, which is discussed in
section II.K. DOE will undertake the MIA after the ANOPR is published,
and will report the MIA findings in the NOPR.
As indicated above and in the discussion below of the NIA, for each
product, DOE has developed a base case forecast to depict what would
happen to energy and water use, and to consumer costs for purchase and
operation of the product, if DOE does not adopt new energy conservation
standards. To evaluate the impacts of such new standards, DOE compares
these base case forecasts to forecasts of what would happen if DOE
adopts new standards at various higher efficiency levels. One element
of both types of forecasts is product shipments. In determining the
base case, DOE considered historical shipments, the mix of efficiencies
sold in the absence of standards, and how that mix might change over
time.
1. Shipments Model
DOE estimated shipments for each of the four appliance products
using a separate Shipments Model. Furthermore, in the case of cooking
products, DOE developed two separate Shipments Models--one for cooktops
and ovens and another for microwave ovens. Therefore, DOE developed a
total of five separate Shipments Models (i.e., two for cooking products
and one each for dishwashers, dehumidifiers, and CCWs). Each Shipments
Model was calibrated against historical shipments. For purposes of
estimating the impacts of prospective candidate standard levels on
product shipments, each Shipments Model accounts for the combined
effects of changes in purchase price, annual operating cost, and
household income on the consumer purchase decision.
In overview, each Shipments Model considers specific market
segments, the results for which are then aggregated to estimate total
product shipments. In the case of all of the four appliance products
(with the exception of dehumidifiers), DOE accounted for at least two
market segments: (1) New construction and (2) existing buildings (i.e.,
replacing failed equipment). For dehumidifiers, DOE did not consider
the new construction market since this product, unlike most major
household appliances, is not standard equipment for new households.
Instead, in addition to accounting for replacements, DOE accounted for
the market of existing households acquiring new dehumidifiers for the
first time. Furthermore, for the following products, DOE accounted for
a third market segment: Cooking products (early replacements);
dishwashers (existing households acquiring the equipment for the first
time); and CCWs (retired units not replaced).
With regard to the market of existing households purchasing
dehumidifiers, Whirlpool commented that shipments to existing
households that do not already own a dehumidifier are likely very low
for two reasons. First, Whirlpool stated that historical data indicate
that annual dehumidifier shipments have been relatively constant, and
second, the most significant new housing growth has been in the
Southern and Western regions of the U.S. where central air conditioning
(as opposed to dehumidifiers) is used to condition the space.
(Whirlpool, No. 10 at p. 12) Contrary to Whirlpool's claim, based on
historical data, DOE found that shipments have more than doubled since
1990, with an increase of nearly 50 percent over the 2003-2005 time
period. In allocating shipments to existing households with a
dehumidifier, DOE used the historical data to estimate which portion of
the shipments went to these existing households. DOE first determined
that portion of the shipments that served as replacements and then
allocated the remaining portion to existing households without a
dehumidifier. As a result of this calculation, DOE estimated that 0.6
percent of existing households without a dehumidifier would annually
purchase this product over the period 2005-2042.
With regard to the estimation of forecasted commercial clothes
washer shipments, ALS stated that the market for CCWs is already
saturated and may decline in the future. ALS believes that the trend in
multi-housing is to install in-apartment washers rather than provide
common area commercial laundry. Both ALS and MLA stated that
approximately 200,000 to 230,000 commercial washers are shipped per
year. Whirlpool stated that a saturation-based Shipments Model could be
developed to forecast shipments. However, because historical industry
shipments have been constant, Whirlpool suggested that DOE either hold
future product saturations constant or allow them to decline. (Public
Meeting Transcript, No. 5 at pp. 213 and 219; MLA, No. 8 at p. 1;
Whirlpool, No. 10 at p. 12)
DOE confirmed that over the period of 1988-1998, annual shipments
of clothes washers stayed roughly in the range between 200,000 to
230,000 units per year. But based on data provided by AHAM, shipments
dropped to approximately 180,000 units for the year 2005. DOE confirmed
this shipments drop (from a peak of 265,000 units in 1998) using
commercial laundry quantity index data from the U.S. Census Bureau.\48\
For purposes of calibrating its Shipments Model, DOE attributed this
drop to non-replacements (i.e., a portion of CCWs that were retired
from service over the period 1999-2005 were not replaced). Because DOE
tied its CCW shipments estimates to forecasts of new multi-family
construction as provided by EIA's AEO 2007, and because AEO 2007
forecasts modest growth in multi-family construction starts, DOE's
Shipments Model projected that shipments would recover and gradually
increase after the drop witnessed over the 1999-2005 period.
---------------------------------------------------------------------------
\48\ U.S. Department of Commerce-Bureau of Economic Analysis.
Industry Economic Accounts, Gross-Domestic-Product-(GDP)-by-
Industry-Data, 1998- NAICS data: GDPbyInd--SHIP--NAICS and SIC Data:
GDPhyind--SHIP--SIC, Commercial Laundry Quantity Index Data, NAICS
code 333312. Washington, DC. Available online at: http://preview.bea.gov/industry/gdpbyind_data.htm.
---------------------------------------------------------------------------
Due to the dramatic drop in shipments seen in the historical data,
DOE specifically seeks feedback on its assumptions regarding the
shipments forecasts for CCWs. This is identified as Issue 13 under
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
In principle, each market segment and each product class responds
differently to both the base case demographic and economic trends and
to the implementation of standards. Furthermore, retirements, early
replacements, and efficiency trends are dynamic and can vary among
product classes. Rather than simply extrapolating a current shipments
trend, the base case shipments analysis uses driver input variables,
such as construction forecasts and product lifetime distributions, to
forecast sales in each market segment.
DOE's Shipments Models take an accounting approach, by tracking
market shares of each product class, the vintage of units in the
existing stock, and expected construction trends. The Models estimate
shipments due to replacements using sales in previous years and
assumptions about the life of the equipment. Therefore, estimated sales
due to replacements in a given year are equal to the total stock of the
appliance minus the sum of the appliances sold in previous years that
still remain in the stock. DOE must determine the useful service life
of the appliance to determine how long the appliance is likely to
remain in stock.
2. Data Inputs
As discussed above, shipments are driven primarily by two market
[[Page 64495]]
segments: (1) New construction and (2) replacements.
New housing forecasts and market saturation data comprised the two
primary inputs for DOE's estimates of new construction shipments. ``New
housing'' includes newly-constructed single-family and multi-family
units (referred to as ``new housing completions'') and mobile home
placements. As noted above for CCWs, DOE's Shipments Model used only
newly-constructed multi-family units, as DOE estimated shipments are
driven solely by multi-family construction starts. For new housing
completions and mobile home placements, DOE used actual data through
2005, and adopted the projections from EIA's AEO 2007 for the period of
2006-2030.\49\ To determine new construction shipments for each of the
four appliance products (except dehumidifiers), DOE used forecasts of
housing starts coupled with the product market saturation data for new
housing. DOE used the 2001 RECS to establish dishwasher and cooktop
market saturations for new housing. For commercial clothes washers, DOE
relied on the new construction market saturation data from CEE.\50\
---------------------------------------------------------------------------
\49\ 49 U.S. Department of Energy-Energy Information
Administration. Annual Energy Outlook 2007 with Projections to 2030,
February, 2007. Washington, DC. DOE/EIA-0383 (2007). Available
online at: http://www.eia.doe.gov/oiaf/aeo/index.html
\50\ Consortium for Energy Efficiency. Commercial Family-Sized
Washers: An Initiative Description of the Consortium for Energy
Efficiency, 1998. Boston, MA. Available online at: http://www.cee1.org/com/cwsh/cwsh-main.php3.
---------------------------------------------------------------------------
In the specific case of dehumidifiers, EEI stated that DOE should
account for the market saturation of dehumidifying equipment integrated
into central space-conditioning systems when evaluating the overall
dehumidifier market saturation. (Public Meeting Transcript, No. 5 at p.
220) In response, we note that DOE's Shipments Model for dehumidifiers
takes into consideration saturation data pertaining only to
dehumidifiers manufactured as independent units. Although growth in
central space-conditioning systems with fully-integrated dehumidifying
equipment may have an impact on forecasted dehumidifier shipments, DOE
was unable to obtain any data that indicate the growth of these systems
and their impact on the overall dehumidifier market.
In general, DOE estimated replacements using product retirement
functions that it developed from product lifetimes. For all of the four
appliance products (with the exception of microwave ovens), DOE based
the retirement function on a uniform probability distribution for the
product lifetime. The Shipments Models assume that no units are retired
below a minimum product lifetime and that all units are retired before
exceeding a maximum product lifetime. NWPCC noted that DOE should
calibrate the Shipments Models to historical shipments data to ensure
that the estimates of product lifetimes are reasonable. (Public Meeting
Transcript, No. 5 at p. 215) As noted previously, DOE calibrated each
Shipments Model against historical shipments. In its calibrations,
which entailed estimating which portion of shipments are replacements,
DOE used the product lifetimes that it established for the LCC analysis
(refer to section II.G.2.b for more details). DOE found that the
product lifetimes provided reasonable estimates of overall shipments
for each of the products.
3. Shipments Forecasts
Table II.76 shows the results of the shipments analysis for the
base case for each of the products. Of the products listed in Table
II.76, dehumidifiers, gas cooktops and ovens, and electric cooktops and
ovens are comprised of several product classes. Specifically,
dehumidifiers consist of six product classes; gas cooktops and ovens
consist of three classes, and electric cooktops and ovens consist of
four classes. For each of these products (with each product consisting
of more than one product class, except CCW) DOE's analysis estimated
the aggregate shipments. Once it had established the aggregate
shipments estimate, DOE then allocated the shipments to each product
class based on historical market share data. Chapter 9 of the TSD
provides details on the product class market shares for dehumidifiers,
gas cooktops and ovens, and electric cooktops and ovens.
Table II.76.--Forecasted Shipments for Home Appliances, 2012-2042, Base Case (million units)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product 2012 2015 2020 2025 2030 2035 2040 2042 Cumulative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers................................................ 8.12 8.73 9.62 10.36 11.17 11.76 12.28 12.48 328
Dehumidifiers.............................................. 1.82 1.99 2.39 2.65 2.98 3.30 3.59 3.71 86
Gas cooktops and ovens..................................... 3.80 3.82 4.05 4.26 4.43 4.57 4.75 4.82 133
Electric cooktops and ovens................................ 6.24 6.41 7.03 7.52 7.88 8.26 8.72 8.91 235
Microwave ovens............................................ 16.11 15.41 17.54 17.67 19.61 20.01 21.50 21.53 578
Commercial clothes washers................................. 0.24 0.24 0.27 0.29 0.32 0.34 0.37 0.38 9.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
To estimate the combined effects on product shipments from
increases in equipment purchase price and decreases in equipment
operating costs due to new efficiency standards, DOE conducted a
literature review and a statistical analysis on a limited set of
appliance price, efficiency, and shipments data.
In the literature, DOE found only a few studies of appliance
markets that are relevant to this rulemaking analysis, and identified
no studies that use time-series of equipment price and shipments data
after 1980. The information that DOE summarized from the literature
suggests that the demand for appliances is price inelastic.
DOE did not find enough equipment purchase price and operating cost
data to perform a complex analysis of dynamic changes in the appliance
market. Rather, DOE used purchase price and efficiency data specific to
residential refrigerators, clothes washers, and dishwashers over the
period 1980-2002 to evaluate broad market trends and to conduct simple
regression analyses. These data indicate that there has been a rise in
appliance shipments and a decline in appliance purchase price and
operating costs over the time period. Household income has also risen
during this time. DOE combined the available economic information into
one variable, termed the ``relative price,'' which is the sum of the
purchase price and the present value of operating cost savings divided
by household income, and used this variable to conduct a regression
analysis. DOE's regression analysis suggested that the relative price
elasticity of demand, averaged over the three appliances, is -0.34. For
example,
[[Page 64496]]
for a relative price increase of 10 percent, shipments decrease by 3.4
percent. Note that because the relative price elasticity incorporates
the impacts from three effects (i.e., purchase price, operating cost,
and household income), the impact from any single effect is mitigated
by changes from the other two effects. The relative price elasticity of
-0.34 is consistent with estimates in the literature. Nevertheless, DOE
stresses that the measure is based on a small data set, using simple
statistical analysis. More important, the measure is based on the
premise that economic variables (including purchase price, operating
costs, and household income) explain most of the trend in appliances
per household in the U.S. since 1980. Changes in appliance quality and
consumer preferences may have occurred during this period, but DOE did
not account for them in this analysis. Despite these uncertainties, DOE
believes that its estimate of the relative price elasticity of demand
provides a reasonable assessment of the impact that purchase price,
operating cost, and household income have on product shipments.
Because DOE's forecasts of shipments and national impacts due to
standards is over a 30-year time period, consideration must be given as
to how the relative price elasticity is affected once a new standard
takes effect. DOE considers the relative price elasticity of -0.34 to
be a short-run value. DOE was unable to identify sources specific to
household durable goods, such as appliances, to indicate how short-run
and long-run price elasticities differ. Therefore, to estimate how the
relative price elasticity changes over time, DOE relied on a study
pertaining to automobiles showing that the automobile price elasticity
of demand changes in the years following a purchase price change.\51\
With increasing years after the purchase price change, the price
elasticity becomes more inelastic until it reaches a terminal value
around the tenth year after the price change. For its shipments
analysis, DOE incorporated a relative price elasticity change that
resulted in a terminal value of approximately one-third (-0.11) of the
short-run elasticity (-0.34). In other words, consumer purchase
decisions, in time, become less sensitive to the initial change in the
product's relative price.
---------------------------------------------------------------------------
\51\ S. Hymans. Consumer Durable Spending: Explanation and
Prediction, Brookings Papers on Economic Activity, 1971. Vol. 1971,
No. 1, pp. 234-239. Available for purchase online at: http://links.jstor.org/sici?sici=0007-2303(1970)1970%3A2%3C173%3ACDSEAP%3E2.0.CO%3B2-S.
---------------------------------------------------------------------------
PG&E commented that consumers will replace failed equipment
regardless of the increased purchase price due to efficiency standards.
(Public Meeting Transcript, No. 5 at p. 224) In its regression analysis
of appliance purchase price, efficiency, and shipments data, DOE did
not attempt to quantify the shipments impacts to separate markets
(i.e., new construction and replacements). Because DOE's regression
analysis focused on the impacts to aggregate shipments, it applied the
sensitivity to purchase price, operating cost, and household income
equally to all markets. DOE believes this level of precision is
sufficient for capturing the effect that these three factors have on
overall product shipments.
Additional detail on the shipments analysis can be found in Chapter
9 of the TSD.
I. National Impact Analysis
The NIA assesses cumulative NES and the cumulative national
economic impacts of candidate standards levels. The analysis measures
economic impacts using the NPV metric, which represents the net present
value (i.e., future amounts discounted to the present) of total
customer costs and savings expected to result from new standards at
specific efficiency levels. For a given candidate standard level, DOE
calculated both the NPV and the NES as the difference between a base
case forecast and the standards case. A summary of this analysis is
provided below, but additional detail on the NIA for the four appliance
products may be found in Chapter 10 of the TSD.
DOE determined national annual energy consumption as the product of
the annual energy consumption per unit and the number of units of each
vintage. This approach accounts for differences in per-unit energy
consumption from year to year. Cumulative energy savings are the sum of
the annual NES determined over a specified time period. DOE calculated
net economic savings each year as the difference between total
operating cost savings and increases in total installed costs.
Cumulative savings are the sum of the annual NPV determined over a
specified time period.
1. Approach
Over time, in the standards case, more-efficient products gradually
replace less efficient products. This affects the calculation of the
NES and NPV, which are both a function of the total number of units in
use and their efficiencies, and, thus, are dependent on annual
shipments and the lifetime of a product. Both calculations start by
using the estimate of shipments and the quantity of units in service
that DOE derived from the Shipments Model.
With regard to the estimation of NES, because more-efficient units
of a product gradually replace less efficient ones, the per-unit energy
consumption of the products in service gradually decreases in the
standards case relative to the base case. To estimate the resulting
total energy savings for each candidate efficiency level, DOE first
calculated the national site-energy consumption for each of the four
appliance products for each year, beginning with the expected effective
date of the standards (2012), for the base case forecast and each
standards case forecast. (Site energy is the energy directly consumed
by the units of the product in operation.) Second, DOE determined the
annual site-energy savings, consisting of the difference in site-energy
consumption between the base case and the standards case. Third, DOE
converted the annual site-energy savings into the annual amount of
energy saved at the source of electricity generation or of natural gas
production (the source energy) using site-to-source conversion factors.
Finally, DOE summed the annual source-energy savings from 2012 to 2042
to calculate the total NES for that period. DOE performed these
calculations for each candidate standard level.
To estimate NPV, DOE calculated the net impact each year as the
difference between total operating cost savings (including gas and/or
electricity and water, repair, and maintenance cost savings) and
increases in total installed costs (which consist of the incremental
increase in manufacturer selling price, sales taxes, distribution chain
markups, and installation cost). DOE calculated the NPV of each
candidate standard level over the life of the equipment, using the
following three steps. First, DOE determined the difference between the
equipment costs under the candidate standard level case and the base
case, to get the net equipment cost increase resulting from the
candidate standard level. Second, DOE determined the difference between
the base case operating costs and the candidate standard level
operating costs, to get the net operating cost savings resulting from
the candidate standard level. Third, DOE determined the difference
between the net operating cost savings and the net equipment cost
increase to get the net savings (or expense) for each year. DOE then
discounted the annual net savings (or expenses) to the year 2006 for
products bought in or before 2042 and summed the discounted values to
provide the NPV of a candidate standard
[[Page 64497]]
level. An NPV greater than zero shows net savings (i.e., the candidate
standard level would reduce customer expenditures relative to the base
case in present value terms). An NPV that is less than zero indicates
that the candidate standard level would result in a net increase in
customer expenditures in present value terms.
Another aspect of the NIA is the consideration of market-pull or
voluntary programs that promote the adoption of more-efficient
equipment. PG&E stated that market-pull programs do not necessarily
diminish the impact of mandatory efficiency standards. Whirlpool stated
that the effectiveness of one type of market-pull program (Energy Star)
could be diminished if mandatory standards are set prematurely.
Whirlpool argued that existing product efficiencies are approaching
Energy Star levels, thereby diminishing the effectiveness of the
program if mandatory standards are set too high. (Public Meeting
Transcript, No. 5 at p. 223; Whirlpool, No. 10 at p. 11) In response,
DOE notes that for some products, market-pull programs (e.g., Energy
Star) have likely increased the share of energy-efficient equipment
both prior to and after the implementation date of any new standards.
For example, in the case of dishwashers, the shipment-weighted
efficiency has increased at an average annul rate of approximately 2.5
percent since mandatory efficiency standards came into effect in 1994.
The Energy Star program, which came into effect for dishwashers in
1996, was likely responsible for at least some of the gain in
dishwasher efficiency. Although DOE recognizes that market-pull
programs such as Energy Star play a factor in increasing the energy
efficiency of appliances, DOE was not able to obtain information that
quantified precisely how such programs affect equipment efficiencies on
a national basis. Consequently, DOE did not explicitly incorporate the
impact of market-based initiatives that may be implemented in the
future into the analysis.
2. Base Case and Standards Case Forecasted Efficiencies
A key component of DOE's estimates of NES and NPV are the energy
efficiencies that it forecasts over time for the base case (without new
standards) and each of the standards cases. The forecasted efficiencies
represent the annual shipment-weighted energy efficiency of the
products under consideration over the forecast period (i.e., from the
estimated effective date of a new standard to 30 years after the
standard becomes effective). Because key inputs to the calculation of
the NES and NPV are dependent on the estimated efficiencies, they are
of great importance to the analysis. In the case of the NES, the per-
unit annual energy (and water) consumption is a direct function of
product efficiency. With regard to the NPV, two inputs (the per-unit
total installed cost and the per-unit annual operating cost), both
depend on efficiency. The per-unit total installed cost is a direct
function of efficiency while the per-unit annual operating cost,
because it is a direct function of the per-unit energy (and water)
consumption, is indirectly dependent on product efficiency.
As first discussed in section II.G.2.d on the development of base
case efficiencies, for each of the four appliance products, DOE, using
data provided by AHAM, based its development of the product
efficiencies in the base case on the assignment of equipment
efficiencies in the year 2005. The year 2005 is the latest year for
which AHAM provided product efficiency data. In other words, DOE
determined the distribution of product efficiencies currently in the
marketplace to develop a shipment-weighted energy efficiency for the
year 2005. For dehumidifiers, it is important to reiterate that DOE
estimated that the product efficiencies in the base case for the 25.00
pints/day and less, 25.01-35.00 pints/day, and the 45.01-54.00 pints/
day product classes were equivalent to those developed for the 35.01-
45.00 pints/day class. DOE also estimated the base case product
efficiencies developed for the 54.01-74.99 product class could be
applied to the 75.00 pints/day and greater product class.
Using the shipment-weighted efficiency for the year 2005 as a
starting point, DOE developed base case forecasted efficiencies based
on estimates of future efficiency growth. For the period spanning 2005-
2012 (2012 being the estimated effective date of a new standard), DOE
estimated that there would be no growth in shipment-weighted efficiency
(i.e., no change in the distribution of product efficiencies). With the
exception of dishwashers (discussed below), because there are no
historical data to indicate how product efficiencies have changed over
time, DOE estimated that forecasted efficiencies would remain frozen at
the 2012 efficiency level until the end of the forecast period (30
years after the effective date (i.e., 2042)). Although DOE recognizes
the possibility that product efficiencies may change over time, DOE is
not in a position to speculate as to how these product efficiencies may
change without historical information. DOE did forecast the market
share of gas standard ranges equipped with standing pilot lights to
estimate the impact of eliminating standing pilot lights for gas
cooktops and gas standard ovens.
In the case of dishwashers, historical data show that shipment-
weighted efficiencies have grown at an average annual rate of
approximately two percent since 1980. As discussed earlier, some of
this efficiency gain during the 1990s is likely attributable to the
Energy Star program. However, historical data also show that the
consumer dishwasher retail price has dropped considerably (almost 50
percent) over the same time period. Because the per-unit installed cost
(or consumer retail price) is tied to efficiency, using an efficiency
growth of two percent per year would be expected to result in ever-
increasing dishwasher retail prices over time. However, since
forecasting an increasing retail price is counter to the historical
data, DOE believes that the most plausible assumption is that
dishwasher efficiencies will remain frozen at the 2012 efficiency level
until the end of the forecast period.
For its determination of standards-case forecasted efficiencies,
DOE used a ``roll-up'' scenario to establish the shipment-weighted
efficiency for the year that standards would become effective (i.e.,
2012). DOE believed that product efficiencies in the base case, which
did not meet the standard level under consideration, would ``roll-up''
to meet the new standard level. Also, DOE believed that all product
efficiencies in the base case that were above the standard level under
consideration would not be affected. Using the shipment-weighted
efficiency in the year 2012 as a starting point, DOE developed
standards case forecasted efficiencies. For all of the four appliance
products, DOE made the same estimates regarding forecasted standards-
case efficiencies as for the base case, namely, that forecasted
efficiencies remained frozen at the 2012 efficiency level until the end
of the forecast period. By maintaining the same growth rate for
forecasted efficiencies in the standards case as in the base case
(i.e., zero growth), DOE retained a constant efficiency difference or
gap between the two cases over the length of the forecast period.
Although frozen trends may not reflect what happens to base case and
standards case product efficiencies in the future, DOE believes that
maintaining a frozen efficiency difference between the base case and
standards case provides a reasonable
[[Page 64498]]
estimate of the impact that standards have on product efficiency.
DOE specifically seeks feedback on its estimates of forecasted
base-case and standards-case efficiencies and its view of how standards
impact product efficiency distributions in the year that standards take
effect. This is identified as Issue 14 under ``Issues on Which DOE
Seeks Comment'' in section IV.E of this ANOPR.
3. National Impact Analysis Inputs
The inputs for the determination of NES are annual energy (and
water) consumption per unit, shipments, equipment stock, national
annual energy consumption, and site-to-source conversion factors.
Because the annual energy (and water) consumption per unit are
directly dependent on efficiency, DOE used the SWEFs associated with
the base case and each standards case, in combination with the annual
energy (and water use) data, to estimate the shipment-weighted average
annual per-unit energy (and water) consumption under the base case and
standards cases.
The NIA uses forecasted shipments for the base case and all
standards cases. As noted earlier, the increased total installed cost
of more-efficient equipment causes some customers to forego equipment
purchases. Consequently, shipments forecasted under the standards cases
are lower than under the base case. For dehumidifiers and microwave
ovens, to avoid the inclusion of savings due to displaced shipments,
DOE used the standards-case shipments projection and the standards-case
stock to calculate the annual energy consumption in the base case.
However, in the case of dishwashers and CCWs, because DOE explicitly
accounted for the energy and water consumption of the displaced
shipments, DOE maintained the use of the base-case shipments to
determine the annual energy consumption in the base case.
In the case of dishwashers, Whirlpool and AHAM commented that an
increase in purchase price due to standards may result in some
consumers foregoing dishwasher purchases. Any consumers who had to
switch to hand washing would increase their energy and water
consumption, since dishwashing is more energy and water efficient than
hand washing. (Whirlpool, No. 10 at p. 10; AHAM, No. 14 at p. 9) DOE
agrees with Whirlpool and AHAM. DOE envisioned in its analysis that
consumers foregoing the purchase of a new unit due to an increase in
the efficiency standard would hand wash their dishes, and accounted for
the energy and water consumption associated with these consumers
switching to hand washing. Based on the results of two recent European
studies, DOE estimated that hand washing would use 140 percent more
energy and 350 percent more water than dishwashing.\52\ \53\
---------------------------------------------------------------------------
\52\ R. Stamminger, Badura, R., Broil, G., Dorr, S., and
Elschendroich, A., A European Comparison of Cleaning Dishes by Hand,
2004. University of Bonn, Germany. Available online at: http://www.landtechnik.uni-bonn.de/ifl_research/ifl_research_project.php?sec=HT&no=1.
\53\ Market Transformation Programme--Briefing Note. BNW16: A
comparison of washing up by hand with a domestic dishwasher,
February 13, 2006. Market Transformation Programme, United Kingdom.
Available online at: http://www.mtprog.com/.
---------------------------------------------------------------------------
In the case of electric and gas cooking products, because the
housing market is fully saturated (i.e., all households have cooking
appliances), available information suggested that standards would
neither impact shipments nor cause shifts in electric and gas cooking
product market shares. Therefore, DOE's standards case shipments for
electric and gas cooking products were identical to its base case
shipments.
With regard to CCWs, MLA stated some apartment builders would
install in-apartment washers (i.e., washers for each apartment unit)
rather than common-area washers if the increase in CCW purchase prices
caused by standards is too high. MLA commented that a market switch
from common-area washers to in-apartment washers would result in
increased energy and water consumption, since consumers would tend to
use their in-apartment washers more frequently. (MLA, No. 8 at p. 3)
DOE did account for the drop in CCW shipments caused by standards, but
did not factor in that builders may install more in-apartment washers
when faced with higher CCW purchase prices. Rather, because there is a
significant used CCW market, DOE believes that establishments that
forgo the purchase of a CCW due to standards would instead purchase a
used clothes washer with an efficiency equal to the baseline level
(i.e., 1.26 MEF/9.5 WF). DOE believes that the option of purchasing
used CCWs is more likely, as used CCWs are a less expensive option to
builders than installing in-apartment washers.
An extensive description of the methodology for conducting and
generating the shipments forecasts for each of the four appliance
products can be found in Chapter 9 of the TSD.
The equipment stock in a given year is the number of products
shipped and installed from earlier years and which survive in the given
year. The NIA spreadsheet models keep track of the number of units
shipped each year. DOE believes that the products have an increasing
probability of retiring as they age.
The national energy consumption is the product of the annual energy
consumption per unit and the number of units of each vintage. This
calculation accounts for differences in unit energy consumption from
year to year.
The site-to-source conversion factor is the multiplicative factor
DOE uses for converting site energy consumption into primary or source
energy consumption. In the analysis for today's ANOPR, DOE used annual
site-to-source conversion factors based on the version of the National
Energy Modeling System (NEMS) that corresponds to EIA's AEO 2006.\54\
These conversion factors take into account natural gas losses from
pipeline leakage and natural gas used for pumping energy and
transportation fuel. For electricity, the conversion factors vary over
time due to projected changes in generation sources (i.e., the power
plant types projected to provide electricity to the country). DOE
estimated that conversion factors remain constant at 2030 values
throughout the remainder of the forecast. EEI stated that mandated
increases in renewable energy use throughout the country will affect
the overall efficiency of electricity generation, thereby resulting in
less primary energy being saved from energy savings realized at the
site. (EEI, No. 7 at p. 4) In response, we note that AEO 2006 provided
a review of renewable energy programs that were in effect in 23 States
at the end of 2005. Therefore, it is anticipated that the site-to-
source conversion factors that DOE used in its analysis capture the
effects of renewable energy use.
---------------------------------------------------------------------------
\54\ For the standards rulemakings, DOE will generally use the
same economic growth and development assumptions that underlie the
most current AEO published by EIA. For its determination of site-to-
source conversion factors, DOE used the version of NEMS
corresponding to AEO 2006 for the ANOPR due to the unavailability of
the AEO 2007 version at the time DOE conducted the NIA. For its
analyses for the NOPR and final rule, DOE is committed to using the
latest available version of NEMS.
---------------------------------------------------------------------------
The Joint Comment stated that the NIA for dishwashers and CCWs
should include energy saved as a result of reduced water use, including
water savings in power generation, water pumping (particularly in the
West), water treatment, and sewage treatment. (Joint Comment, No. 9 at
pp. 3 and 5) Multiple Water Organizations also stated that DOE should
account for the embedded energy in water supply and wastewater
treatment when establishing the energy savings due to increases in
[[Page 64499]]
dishwasher and CCW efficiency. (Multiple Water Organizations, No. 11 at
p. 2) To include the energy required for treatment and delivery of
water in the NIA would require the development of new analytical tools.
As just noted above, DOE currently takes savings in site energy
consumption and uses EIA's NEMS to calculate source energy savings at
the generation plant, using site-to-source conversion factors from NEMS
that take into account the economic interactions between the energy
sector and the rest of the economy. Proper accounting of embedded
energy impacts at a national scale, including the embedded energy due
to water savings, would require a new version of NEMS that analyzes
spending and energy use in dozens, if not hundreds, of economic
sectors. In addition, this version of NEMS would need to account for
shifts in spending between these various sectors to account for the
marginal embedded energy differences between these sectors. DOE
currently does not have access to such a tool, nor does it have the
capability to accurately estimate the source energy savings impacts of
decreased water or wastewater consumption and expenditures. There are
activites being conducted or initiated by the U.S. Geological Survey
(USGS), EPA, and DOE to study water and wastewater issues. The USGS
compiles national water data but not at the utility level. The EPA is
sponsoring the WaterSense Program and programs to promote energy
efficiency in water and wastewater treatment. Finally, DOE is in the
midst of a National Energy-Water Roadmap Program that it initiated in
2005, as requested in congressional appropriations in FY 2005. However,
none of these activites has yet provided the necessary sources of data
or tools to allow calculation of the embedded energy in water. Although
DOE cannot yet determine the embedded energy in water savings, both the
LCC and PBP analyses and the NIA do include the economic savings from
decreased water and wastewater charges. Such economic savings should
include the economic value of any energy savings that may be included
in the provision of consumer water and wastewater services.
The inputs to the NPV calculation are total installed cost per
unit, annual operating cost savings per unit, total annual installed
cost increases, total annual operating cost savings, discount factor,
present value of increased installed costs, and present value of
operating cost savings.
For each of the four appliance products, the NPV calculation uses
the total installed cost per unit as a function of product efficiency.
Because the per-unit total annual installed cost is directly dependent
on efficiency, DOE used the base case and standards case SWEFs in
combination with the total installed costs to estimate the shipment-
weighted average annual per-unit total installed cost under the base
case and standards cases.
As first discussed in the engineering analysis for dehumidifiers
(see section II.C.2.b), total installed cost and efficiency
relationships were defined for a subset of the six product classes.
Therefore, for purposes of conducting the NIA for dehumidifiers, DOE
applied the cost-efficiency data that were developed for this product
class subset to those classes for which no cost-efficiency
relationships were developed. Specifically, DOE applied the costs
developed for the combined 0-35.00 pints/day class to the two
individual classes that comprise the combined class--25.00 pints/day
and less and 25.01-35.00 pints/day. Further, DOE applied the costs
developed for the 35.01-45.00 pints/day and 54.01-74.99 pints/day
product classes to the 45.01-54.00 pints/day and 75.00 pints/day and
greater product classes, respectively. In its application of total
installed costs to those product classes where no cost data were
developed, DOE did not interpolate or extrapolate the cost data to
account for product efficiency differences between the classes. For
example, DOE utilized the exact same total installed costs that were
developed for the baseline and standard levels for the 35.01-45.00
pints/day product class to characterize the baseline and standard level
total installed costs for the 45.01-54.00 pints/day product class.
Chapter 10 of the ANOPR provides additional details on DOE's approach
for estimating the total installed costs for the dehumidifier product
classes.
DOE specifically seeks feedback on its approach for characterizing
the total installed costs for those dehumidifier product classes in
which DOE was not able to develop cost-efficiency relationships. This
is identified as Issue 15 under ``Issues on Which DOE Seeks Comment''
in section IV.E of this ANOPR.
The annual operating cost savings per unit includes changes in the
energy, water, repair, and maintenance costs. DOE believed there would
be no increase in maintenance and repair costs due to standards for the
four appliance products. Therefore, for each of the products, DOE
determined the per-unit annual operating cost savings based only on the
energy (and water) cost savings due to a standard efficiency level. EEI
suggested that DOE should include water and wastewater prices in the
analysis. (Public Meeting Transcript, No. 5 at p. 231) In response, we
note that DOE determined the per-unit annual operating cost savings by
taking the per-unit annual energy (and water) consumption savings
developed for each product and multiplying it by the appropriate energy
(and water) price. As described previously, DOE forecasted the per-unit
annual energy (and water) consumption for the base case and each
standards case for all four appliance products by freezing the
consumption at levels estimated for the year 2012. DOE forecasted
energy prices based on EIA's AEO 2007. DOE forecasted water prices
based on trends in the national water price index as provided by the
BLS.\55\
---------------------------------------------------------------------------
\55\ U.S. Department of Labor--Bureau of Labor Statistics.
Consumer Price Indexes, Item: Water and sewerage maintenance, Series
Id: CUUR0000SEHG01, U.S. city average (not seasonally adjusted),
2006. Washington, DC. Available online at: http://www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------
The total annual installed cost increase is equal to the annual
change in the per-unit total installed cost (difference between base
case and standards case) multiplied by the shipments forecasted in the
standards case. As with the calculation of the NES, DOE did not
calculate total annual installed costs using base case shipments.
Rather, to avoid the inclusion of savings due to displaced shipments in
the case of dehumidifiers and microwave ovens, DOE used the standards
case shipments projection and, in turn, the standards case stock, to
calculate the costs. In the case of dishwashers, DOE believes that any
consumers foregoing the purchase of a new unit due to standards would
shift to hand washing. In the case of CCWs, DOE believes that any drop
in shipments caused by standards would result in the purchase of used
machines. Electric and gas cooking products are the notable exception.
For electric and gas cooking products, because the market is fully
saturated, DOE believed that standards would neither impact shipments
nor cause shifts in electric and gas cooking product market shares.
Therefore, for electric and gas cooking products, DOE used the base
case shipments to determine costs for all standards cases.
The total annual operating cost savings are equal to the change in
the annual operating costs (difference between base case and standards
case) per unit multiplied by the shipments forecasted in the standards
case. As noted above for the calculation of total annual installed
costs, DOE did not
[[Page 64500]]
necessarily calculate operating cost savings using the base case
shipments.
DOE multiplies monetary values in future years by the discount
factor to determine the present value. DOE estimated national impacts
using both a three-percent and a seven-percent real discount rate as
the average real rate of return on private investment in the U.S.
economy. DOE uses these discount rates in accordance with guidance
provided by the Office of Management and Budget (OMB) to Federal
agencies on the development of regulatory analysis (OMB Circular A-4
(Sept. 17, 2003), particularly section E, ``Identifying and Measuring
Benefits and Costs''). For the sake of these analyses, DOE defines the
present year as 2007.
The present value of increased installed costs is the annual
installed cost increase in each year (i.e., the difference between the
standards case and base case), discounted to the present, and summed
for the time period over which DOE is considering the installation of
equipment (i.e., from the effective date of standards, 2012, to the
year 2042). The increase in total installed cost refers to both the
incremental equipment cost and the incremental installation cost
associated with the higher energy efficiency of equipment purchased in
the standards case compared to the base case.
The present value of operating cost savings is the annual operating
cost savings (i.e., the difference between the base case and standards
case), discounted to the present, and summed over the period from the
effective date (2012) to the time when the last unit installed in 2042
is retired from service. Savings are decreases in operating costs
associated with the higher energy efficiency of equipment purchased in
the standards case compared to the base case. Total annual operating
cost savings is the savings per unit multiplied by the number of units
of each vintage surviving in a particular year. Equipment consumes
energy over its entire lifetime, and for units purchased in 2042, the
consumption includes energy consumed until the unit is retired from
service.
Table II.77 summarizes the NES and NPV inputs to the NIA
spreadsheet model. For each input, the table gives a brief description
of the data source. For details, see Chapter 10 of the TSD.
Table II.77.--National Energy Savings and Net Present Value Inputs
------------------------------------------------------------------------
Input Data description
------------------------------------------------------------------------
Shipments.................... Annual shipments from Shipments Model.
(See Chapter 9 of the TSD for more
details.)
Effective Date of Standard... 2012.
Base-Case Forecasted Shipment-weighted efficiency (SWEF)
Efficiencies. determined in the year 2005 for each of
the four appliance products. SWEF held
constant over forecast period of 2005-
2042. (See Chapter 10 of the TSD for
more details.)
Standards-Case Efficiencies.. ``Roll-up'' scenario used for determining
SWEF in the year 2012 for each standards
case and for each of the four appliance
products. SWEF held constant over
forecast period of 2012-2042. (See
Chapter 10 of the TSD for more details.)
Annual Energy Consumption per Annual weighted-average values are a
Unit. function of SWEF. (See Chapter 10 of the
TSD for more details.)
Total Installed Cost per Unit Annual weighted-average values are a
function of SWEF. (See Chapter 10 of the
TSD for more details.)
Energy and Water Cost per Annual weighted-average values are a
Unit. function of the annual energy
consumption per unit and energy (and
water) prices. (For more details on
energy and water prices, see Chapter 8
of the TSD.)
Repair Cost and Maintenance No changes in repair and maintenance cost
Cost per Unit. due to standards.
Escalation of Energy and Energy Prices: 2007 EIA AEO forecasts (to
Water Prices. 2030) and extrapolation to 2042. (See
Chapter 8 of the TSD for more details.)
Water Prices: Linear extrapolation of
historical trend in national water price
index. (See Chapter 8 of the TSD for
more details.)
Energy Site-to-Source Conversion varies yearly and is generated
Conversion. by DOE/EIA's NEMS* program (a time-
series conversion factor; includes
electric generation, transmission, and
distribution losses).
Discount Rate................ 3 and 7 percent real.
Present Year................. Future expenses are discounted to year
2007.
------------------------------------------------------------------------
* Chapter 13 on the utility impact analysis and the environmental
assessment report of the TSD provide more details on NEMS.
4. National Impact Analysis Results
Below are the NES results (and national water savings results for
dishwashers and CCWs) for the candidate standard levels analyzed for
the four appliance products. NES results are cumulative to 2042 and are
shown as primary energy savings in quads. National water savings (NWS)
results are expressed in billions of gallons. DOE based the inputs to
the NIA spreadsheet model on weighted-average values, yielding results
that are discrete point values, rather than a distribution of values as
in the LCC and PBP analyses. Chapter 10 of the TSD provides discounted
NES and NWS results based on discount rates of three and seven percent.
Table II.78 shows the NES and NWS results for the candidate
standard levels analyzed for standard-sized dishwashers.
Table II.78.--Dishwashers: Cumulative National Energy Savings and National Water Savings Results
----------------------------------------------------------------------------------------------------------------
NWS billion
Candidate standard level EF NES quads gallons
----------------------------------------------------------------------------------------------------------------
1............................................................ 0.46 0.09 72
2............................................................ 0.58 0.35 271
3............................................................ 0.62 0.61 458
4............................................................ 0.65 0.86 595
5............................................................ 0.72 1.11 659
6............................................................ 0.80 1.54 808
[[Page 64501]]
7............................................................ 1.11 2.77 1611
----------------------------------------------------------------------------------------------------------------
Table II.79 shows the NES results for the candidate standard levels
analyzed for dehumidifiers.
Table II.79.--Dehumidifiers: Cumulative National Energy Savings Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
<= 25.00 25.01-35.00 35.01-45.00 45.01-54.00 54.01-74.99 <= 75.00 ALL
--------------------------------------------------------------------------------------------------------------------
Candidate standard level NES NES NES NES NES NES * NES
EF quads EF quads EF quads EF quads EF quads EF quads quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1.10 0.01 1.25 0.01 1.35 0.01 1.45 0.01 1.55 0.01 2.38 0.00 0.04
2.................................. 1.20 0.02 1.30 0.02 1.40 0.02 1.50 0.02 1.60 0.02 2.50 0.00 0.11
3.................................. 1.25 0.02 1.35 0.04 1.45 0.04 1.55 0.04 1.65 0.05 2.55 0.00 0.18
4.................................. 1.30 0.02 1.40 0.05 1.50 0.05 1.60 0.05 1.70 0.07 2.60 0.00 0.25
5.................................. 1.38 0.03 1.45 0.06 1.74 0.13 2.02 0.18 1.80 0.12 2.75 0.00 0.53
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NES greater than zero but less than 0.005 quads.
Tables II.80 and II.81 show the NES results for the candidate
standard levels analyzed for cooktops and ovens, respectively.
Table II.80.--Cooktops: Cumulative National Energy Savings Results
----------------------------------------------------------------------------------------------------------------
Electric coil Electric smooth Gas
Candidate standard level -----------------------------------------------------------------
EF NES quads EF NES quads EF NES quads
----------------------------------------------------------------------------------------------------------------
1............................................. 0.769 0.04 0.753 0.02 0.399 0.10
2............................................. ......... ......... ......... ......... 0.420 0.15
----------------------------------------------------------------------------------------------------------------
Table II.81.--Ovens: Cumulative National Energy Savings Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Elec standard Elec self-clean Gas standard Gas self-clean
---------------------------------------------------------------------------------------
Candidate standard level NES NES NES NES
EF quads EF quads EF quads EF quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 *............................................................. 0.1113 0.03 0.1102 0.01 0.0536 0.04 0.0625 0.09
2............................................................... 0.1163 0.05 0.1123 0.04 0.0566 0.07 0.0627 0.09
3............................................................... 0.1181 0.06 ......... ......... 0.0572 0.08 0.0632 0.10
4............................................................... 0.1206 0.07 ......... ......... 0.0593 0.09 ......... .........
5............................................................... 0.1209 0.08 ......... ......... 0.0596 0.09 ......... .........
6............................................................... ......... ......... ......... ......... 0.0600 0.10 ......... .........
1a *............................................................ ......... ......... ......... ......... 0.0583 0.13 ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
standing pilot--but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
through 6 are derived from candidate standard level 1.
Table II.82 shows the NES results for the candidate standard levels
analyzed for microwave ovens.
Table II.82.--Microwave Ovens: Cumulative National Energy Savings
Results
------------------------------------------------------------------------
Candidate standard level EF NES quads
------------------------------------------------------------------------
1....................................... 0.586 0.19
[[Page 64502]]
2....................................... 0.588 0.20
3....................................... 0.597 0.25
4....................................... 0.602 0.26
------------------------------------------------------------------------
Table II.83 shows the NES and NWS results for the candidate
standard levels analyzed for CCWs.
Table II.83.--Commercial Clothes Washers: Cumulative National Energy Savings and National Water Savings Results
----------------------------------------------------------------------------------------------------------------
NWS billion
Candidate standard level MEF/WF NES quads gallons
----------------------------------------------------------------------------------------------------------------
1............................................................... 1.42/9.50 0.12 0
2............................................................... 1.60/8.50 0.21 233
3............................................................... 1.72/8.00 0.26 350
4............................................................... 1.80/7.50 0.30 466
5............................................................... 2.00/5.50 0.36 933
6............................................................... 2.20/5.10 0.43 1050
----------------------------------------------------------------------------------------------------------------
Below are the NPV results for the candidate standard levels
considered for the product classes of each of the four appliance
products. Results are cumulative and are shown as the discounted value
of these savings in dollar terms. The present value of increased total
installed costs is the total installed cost increase (i.e., the
difference between the standards case and base case), discounted to the
present, and summed over the time period in which DOE evaluates the
impact of standards (i.e., from the effective date of standards (2012)
to the year 2042).
Savings are decreases in operating costs (including energy and
water) associated with the higher energy efficiency of equipment
purchased in the standards case compared to the base case. Total
operating cost savings are the savings per unit multiplied by the
number of units of each vintage (i.e., the year of manufacture)
surviving in a particular year. Equipment consumes energy and must be
maintained over its entire lifetime. For units purchased in 2042, the
operating cost includes energy and water consumed until the last unit
is retired from service.
The tables below show the NPV results for the candidate standard
levels analyzed for each of the four appliance products, based on
discount rates of three and seven percent.
Table II.84 shows the NPV results for the candidate standard levels
analyzed for standard-sized dishwashers.
Table II.84.--Dishwashers: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent
Discount Rates
----------------------------------------------------------------------------------------------------------------
NPV
-------------------------------
Candidate standard level EF 7% Discount 3% Discount
rate billion rate billion
2006$ 2006$
----------------------------------------------------------------------------------------------------------------
1............................................................... 0.46 0.38 0.94
2............................................................... 0.58 1.29 3.29
3............................................................... 0.62 1.73 4.72
4............................................................... 0.65 0.90 3.61
5............................................................... 0.72 -2.75 -2.94
6............................................................... 0.80 -7.25 -10.77
7............................................................... 1.11 -7.28 -8.16
----------------------------------------------------------------------------------------------------------------
Tables II.85 and II.86 show the NPV results for the candidate
standard levels analyzed for dehumidifiers.
[[Page 64503]]
Table II.85.--Dehumidifiers: Cumulative Net Present Value Results Based on a Seven-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
<= 25.00 25.01-35.00 35.01-45.00 45.01-54.00 54.01-74.99 >=75.00 ALL
--------------------------------------------------------------------------------------------------------------------
NPV @ NPV @ NPV @ NPV @ NPV @ NPV * @ NPV @
Candidate standard level 7% 7% 7% 7% 7% 7% 7%
EF billion EF billion EF billion EF billion EF billion EF billion billion
2006$ 2006$ 2006$ 2006$ 2006$ 2006$ 2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1.10 0.01 1.25 0.02 1.35 0.01 1.45 0.01 1.55 0.02 2.38 0.00 0.08
2.................................. 1.20 0.05 1.30 0.06 1.40 0.03 1.50 0.03 1.60 0.05 2.50 0.00 0.21
3.................................. 1.25 0.05 1.35 0.07 1.45 0.04 1.55 0.04 1.65 0.10 2.55 0.00 0.31
4.................................. 1.30 0.04 1.40 0.07 1.50 0.03 1.60 0.04 1.70 0.11 2.60 0.00 0.31
5.................................. 1.38 0.05 1.45 0.08 1.74 0.00 2.02 0.21 1.80 0.19 2.75 0.00 0.54
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NPV greater than zero but less than $0.005 billlion.
Table II.86.--Dehumidifiers: Cumulative Net Present Value Results Based on a Three-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
<= 25.00 25.01-35.00 35.01-45.00 45.01-54.00 54.01-74.99 [gteqt]75.00 ALL
--------------------------------------------------------------------------------------------------------------------
NPV @ NPV @ NPV @ NPV @ NPV @ NPV * @ NPV @
Candidate standard level 3% 3% 3% 3% 7% 3% 3%
EF billion EF billion EF billion EF billion EF billion EF billion billion
2006$ 2006$ 2006$ 2006$ 2006$ 2006$ 2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................. 1.10 0.04 1.25 0.04 1.35 0.04 1.45 0.04 1.55 0.06 2.38 0.00 0.22
2.................................. 1.20 0.11 1.30 0.14 1.40 0.09 1.50 0.09 1.60 0.12 2.50 0.01 0.57
3.................................. 1.25 0.13 1.35 0.20 1.45 0.13 1.55 0.14 1.65 0.27 2.55 0.01 0.87
4.................................. 1.30 0.12 1.40 0.21 1.50 0.14 1.60 0.16 1.70 0.32 2.60 0.01 0.96
5.................................. 1.38 0.15 1.45 0.25 1.74 0.19 2.02 0.66 1.80 0.55 2.75 0.01 1.81
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables II.87 and II.88 show the NPV results for the candidate
standard levels analyzed for cooktops and ovens, respectively.
Table II.87.--Cooktops: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric coil Electric smooth Gas
-----------------------------------------------------------------------------------------------------------
Candidate standard level NPV @ 7% NPV @ 3% NPV @ 7% NPV @ 3% NPV @ 7% NPV @ 3%
EF billion billion EF billion billion EF billion billion
2006$ 2006$ 2006$ 2006$ 2006$ 2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................... 0.769 0.05 0.18 0.753 -7.48 -14.28 0.399 0.29 0.67
2........................................... .......... .......... .......... .......... .......... .......... 0.420 -0.65 -0.98
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table II.88.--Ovens: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
Elec standard Elec self-clean Gas standard Gas self-clean
-----------------------------------------------------------------------------------------------------------
NPV @ NPV @ NPV @ NPV @ NPV 2 @ NPV @ NPV 2 @ NPV 2 @
Candidate standard level 7% 3% 7% 3% 7% 35 7% 3%
EF billion billion EF billion billion EF billion billion EF billion billion
2006$ 2006$ 2006$ 2006$ 2006$ 2006$ 2006$ 2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 *......................................... 0.1113 0.06 0.17 0.1102 -0.28 -0.53 0.0536 0.10 0.24 0.0625 -0.01 0.18
2........................................... 0.1163 0.08 0.27 0.1123 -2.87 -5.41 0.0566 0.11 0.34 0.0627 -0.12 0.02
3........................................... 0.1181 0.03 0.19 ....... ....... ....... 0.0572 0.11 0.34 0.0632 -0.14 -0.05
4........................................... 0.1206 -0.81 -1.39 ....... ....... ....... 0.0593 -0.33 -0.45 ....... ....... .......
5........................................... 0.1209 -0.88 -1.52 ....... ....... ....... 0.0596 -0.36 -0.50 ....... ....... .......
6........................................... ....... ....... ....... ....... ....... ....... 0.0600 -0.42 -0.62 ....... ....... .......
1a *........................................ ....... ....... ....... ....... ....... ....... 0.0583 0.35 0.92 ....... ....... .......
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
standing pilot--but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
through 6 are derived from candidate standard level 1.
[[Page 64504]]
Tables II.89 shows the NPV results for the candidate standard
levels analyzed for microwave ovens.
Table II.89.--Microwave Ovens: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent
Discount Rates
----------------------------------------------------------------------------------------------------------------
NPV
-------------------------------
Candidate standard level EF 7% Discount 3% Discount
rate billion rate billion
2006$ 2006$
----------------------------------------------------------------------------------------------------------------
1............................................................... 0.586 -1.40 -2.48
2............................................................... 0.588 -3.52 -6.51
3............................................................... 0.597 -6.58 -12.28
4............................................................... 0.602 -10.35 -19.40
----------------------------------------------------------------------------------------------------------------
Table II.90 shows the NPV results for the candidate standard levels
analyzed for CCWs.
Table II.90.--Commercial Clothes Washers: Cumulative Net Present Value Results Based on Seven-Percent and Three-
Percent Discount Rates
----------------------------------------------------------------------------------------------------------------
NPV
-------------------------------
Candidate standard level MEF/WF 7% Discount 3% Discount
rate billion rate billion
2006$ 2006$
----------------------------------------------------------------------------------------------------------------
1............................................................... 1.42/9.50 0.04 0.20
2............................................................... 1.60/8.50 -0.09 0.22
3............................................................... 1.72/8.00 0.23 0.99
4............................................................... 1.80/7.50 0.49 1.64
5............................................................... 2.00/5.50 1.41 3.87
6............................................................... 2.20/5.10 1.77 4.74
----------------------------------------------------------------------------------------------------------------
J. Life-Cycle Cost Subgroup Analysis
The LCC subgroup analysis evaluates impacts of standards on
identifiable groups of customers, such as different population groups
of consumers or different business types, which may be
disproportionately affected by any national energy efficiency standard
level. In the NOPR phase of this rulemaking, DOE will analyze the LCCs
and PBPs for customers that fall into such groups. The analysis will
determine whether any particular group of consumers would be adversely
affected by any of the trial standard levels.
Also, DOE plans to examine variations in energy prices and energy
use that might affect the NPV of a standard for customer sub-
populations. To the extent possible, DOE will obtain estimates of the
variability of each input parameter and consider this variability in
the calculation of customer impacts. Variations in energy use for a
particular product depend on a number of factors, such as climate and
type of user. DOE plans to perform sensitivity analyses to consider how
differences in energy use will affect subgroups of customers.
DOE will determine the effect on customer subgroups using the LCC
spreadsheet model. NWPCC stated that the Monte Carlo approach, if
implemented in the LCC and PBP analyses, can be used to conduct the
subgroup analysis. NWPCC stated that the Monte Carlo approach is
suitable for identifying different subgroups, such as regional
subgroups, that may be impacted differently by standards. (Public
Meeting Transcript, No. 5 at p. 235) As described in section II.G on
the LCC and PBP analyses, DOE used a Monte Carlo approach to conduct
the LCC and PBP analyses. The spreadsheet model it used for the LCC
analysis, which incorporates the use of Monte Carlo sampling, can be
used with different data inputs. The standard LCC analysis includes
various customer types that use the four appliance products. DOE can
analyze the LCC for any subgroup, such as low-income consumers, by
using the LCC spreadsheet model and sampling only that subgroup.
Details of this model are explained in section II.G.
DOE received several comments as to which subgroups it should
analyze. EEI suggested that DOE consider low-income and senior
subgroups. It stated that low-income consumers are more likely to use
CCWs, and that seniors tend to use dishwashers and cooking products
less frequently than the overall population. (EEE, No. 7 at p. 6) For
CCWs, ALS stated that DOE should consider low-income consumers and
senior citizens, especially if standards cause an increase in vending
prices. ALS stated that the resulting increase in vending price would
lead to less available disposable income for low-income and senior
consumers to use commercial laundry. MLA expressed the same concerns,
but only for low-income consumers. (Public Meeting Transcript, No. 5 at
p. 237; MLA, No. 8 at p. 2)
GE and PG&E suggested that DOE consider regional subgroups. GE
stated that regional subgroups for dishwashers and cooking products
would be appropriate because the regional saturations for both sets of
products vary significantly. (Public Meeting Transcript, No. 5 at pp.
240-241) PG&E stated that DOE should consider regional subgroups for
dehumidifiers. (Public Meeting Transcript, No. 5 at p. 237) Lastly, the
EPA thought it would be
[[Page 64505]]
prudent to consider subgroups that are not served by water and sewer
service providers, but by wells and septic systems. EPA believes that
these consumers use less water than the overall population. (Public
Meeting Transcript, No. 5 at p. 234)
DOE intends to analyze the impacts of candidate standards on low-
income and senior subgroups. DOE also will evaluate whether regional
variations are significant enough to warrant an analysis of regional
subgroups for dishwashers, dehumidifiers, and cooking products. In its
analysis of dishwashers and CCWs, DOE will also consider evaluating
those consumer subgroups not served by water and sewer. In its analysis
of subgroups, DOE will be especially sensitive to purchase price
increases (``first-cost'' increases) to avoid negative impacts on
identifiable population groups such as low-income households (in the
case of residential products) or small businesses with low annual
revenues (in the case of CCWs), which may not be able to afford a
significant increase in product or equipment prices.
K. Manufacturer Impact Analysis
The purpose of the MIA is to identify the likely impacts of energy
conservation standards on manufacturers. DOE has begun and will
continue to conduct this analysis with input from manufacturers and
other interested parties. DOE will subsequently apply a similar
methodology to its evaluation of standards. During the MIA, DOE will
consider financial impacts and a wide range of quantitative and
qualitative industry impacts that might occur following the adoption of
a standard. For example, if DOE adopts a particular standard level, it
could require changes to manufacturing practices. DOE will identify and
understand these impacts through interviews with manufacturers and
other stakeholders during the NOPR stage of its analysis.
Recently, DOE announced changes to the MIA format through a report
issued to Congress on January 31, 2006 (as required by section 141 of
EPACT 2005), entitled ``Energy Conservation Standards Activities.''
Previously, DOE did not report any MIA results during the ANOPR phase
of energy conservation standards rulemakings; however, under this new
format, DOE has collected, evaluated, and reported some preliminary
information and data in section II.K.6 of this ANOPR. For further
information on the MIA process, the analysis, and the results, please
refer to Chapter 12 of the TSD.
DOE conducts the MIA in three phases. In Phase I, DOE creates an
industry profile to characterize the industry, and conducts a
preliminary MIA to identify important issues that require
consideration. Results of the Phase I analysis are presented in Chapter
12 of the TSD. In Phase II, DOE prepares an industry cash flow model
and an interview questionnaire to guide subsequent discussions. In
Phase III, DOE interviews manufacturers, and assesses the impacts of
standards both quantitatively and qualitatively. It assesses industry
and subgroup cash flow and net present value through use of the
Government Regulatory Impact Model (GRIM). DOE then assesses impacts on
competition, manufacturing capacity, employment, and regulatory burden
based on manufacturer interview feedback and discussions. Results of
the Phase II and Phase III analyses are presented in the NOPR TSD.
1. Sources of Information for the Manufacturer Impact Analysis
Many of the analyses described above provide important inputs to
the MIA. Such inputs include manufacturing costs and prices from the
engineering analysis, retail price forecasts, and shipments forecasts.
DOE supplements this information with company financial data and other
information gathered during interviews with manufacturers. As discussed
below, this interview process plays a key role in the MIA because it
allows interested parties to privately express their views on important
issues. To preserve confidentiality, DOE aggregates these perspectives
across manufacturers, creating a combined opinion or estimate for use
in its analyses. This process enables DOE to incorporate sensitive
information from manufacturers in the rulemaking process without
specifying precisely which manufacturer provided a certain set of data.
DOE conducts detailed interviews with manufacturers to gain insight
into the range of potential impacts of standards. During the
interviews, DOE typically solicits both quantitative and qualitative
information on the potential impacts of efficiency levels on sales,
direct employment, capital assets, and industrial competitiveness. DOE
prefers an interactive interview process, rather than a written
response to a questionnaire, because it helps clarify responses and
identify additional issues. Before each interview, DOE circulates a
draft document showing its estimates of financial parameters based on
publicly available information, such as filings with the SEC, articles
in trade publications, etc. DOE subsequently solicits comments and
suggestions on these estimates during the interviews.
DOE asks interview participants to identify any confidential
information that they have provided, either orally or in writing. DOE
considers all information collected, as appropriate, in its decision-
making process. However, DOE does not make confidential information
available in the public record. DOE also asks participants to identify
all information that they wish to have included in the public record,
but that they do not want to have associated with their interview or
company; DOE incorporates such information into the public record, but
reports it without attribution.
Finally, DOE collates the completed interview questionnaires and
prepares a summary of the major issues. For more detail on the
methodology used in the MIA, refer to Chapter 12 of the TSD.
2. Industry Cash Flow Analysis
The industry cash flow analysis relies primarily on the GRIM, which
helps identify the effects of various efficiency regulations and other
regulations on manufacturers. The basic structure of the GRIM is a
standard annual cash flow analysis that uses price and volume
information as an input, builds on fundamental base cost information,
and accepts a set of regulatory conditions as changes in costs and
investments. DOE uses the GRIM to analyze the financial impacts of more
stringent energy conservation standards on the industry.
The GRIM analysis uses several factors to determine annual cash
flows from a new standard: (1) Annual expected revenues; (2)
manufacturer costs including cost of goods sold; (3) depreciation; (4)
research and development; (5) selling, general, and administrative
expenses; (6) taxes; and (7) conversion capital expenditures. DOE
compares the results against base case projections that involve no new
standards. The financial impact of new standards is the difference
between the two sets of discounted annual cash flows. For more
information on the industry cash flow analysis, refer to Chapter 12 of
the TSD.
3. Manufacturer Subgroup Analysis
Industry cost estimates are not adequate to assess differential
impacts among subgroups of manufacturers. For example, small and niche
manufacturers, or manufacturers whose cost structure differs
significantly from the industry average, could experience a
disproportionate impact due to standards changes. Because DOE cannot
consider the impact on every firm
[[Page 64506]]
individually, the results of the industry characterization are
typically used to group manufacturers exhibiting similar
characteristics.
During MIA interviews, DOE discusses the potential subgroups and
subgroup members it has identified for the analysis. DOE encourages the
manufacturers to recommend subgroups or characteristics that are
appropriate for the subgroup analysis. For more detail on the
manufacturer subgroup analysis, refer to Chapter 12 of the TSD.
4. Competitive Impacts Assessment
Another factor which DOE must consider in standard setting is
whether a new standard is likely to reduce industry competition, and
the Attorney General must determine the impacts, if any, of reduced
competition. DOE makes a determined effort to gather and report firm-
specific financial information and impacts. In particular, the
competitive impacts assessment focuses on the impacts of new energy
efficiency standards on smaller manufacturers. DOE bases this
assessment on manufacturing cost data and on information collected from
interviews with manufacturers. Hence, manufacturer interviews also
focus on gathering information to help assess asymmetrical cost
increases to some manufacturers, increased proportions of fixed costs
that could increase business risks, and potential barriers to market
entry (e.g., proprietary technologies).
5. Cumulative Regulatory Burden
DOE recognizes and seeks to mitigate the overlapping effects on
manufacturers of new or revised DOE standards and other regulatory
actions affecting the same equipment. Thus, DOE analyzes and considers
the impact on manufacturers of multiple, product-specific regulatory
actions.
Based on its own research and discussions with manufacturers, DOE
has identified several regulations relevant to dishwasher,
dehumidifier, cooking product, and CCW manufacturers, including
existing or new standards, the phase-out of hydrochlorofluorocarbon
refrigerants, the prohibition of phosphate-containing detergents in
some jurisdictions, standards for other products made by dishwasher,
dehumidifier, cooking product, and CCW manufacturers, including State
standards, and foreign energy conservation standards. (Although foreign
standards do not directly affect products entering the U.S., they do
impact manufacturer operations, in that they represent additional
business expenses for manufacturers selling outside the U.S. market.)
DOE will study the potential impacts of these cumulative burdens in
greater detail during the MIA conducted during the NOPR phase.
6. Preliminary Results for the Manufacturer Impact Analysis
DOE conducted a preliminary evaluation of the impact of potential
new regulations for the products to be covered by this rulemaking on
manufacturer financial performance, manufacturing capacity and
employment levels, and product utility and innovation. A primary focus
was to identify the cumulative burden that industry faces from the
overlapping effect of new or recent energy conservation standards and/
or other regulatory action affecting the same product or industry.
The primary sources of information for this analysis were telephone
interviews with manufacturers of dishwashers, dehumidifiers, and CCWs
carried out during the first quarter of FY 2007. To maintain
confidentiality, DOE did not identify the individual manufacturers that
disclosed information. Instead, the evaluation only reports aggregated
information and does not disclose sensitive information or identify
company-specific information. For the preliminary MIA, DOE conducted
interviews with manufacturers primarily to identify key issues and gain
insights into the qualitative impacts of energy conservation standards.
For each product, DOE used an interview guide to gather responses from
multiple manufacturers on several issues. All the interview guides
covered the same general topic areas, but DOE adapted them, as
appropriate, to address each product category. (Copies of the interview
guides for CCW, dehumidifier, and dishwasher manufacturers are
contained in Appendix B of the TSD.)
However, DOE did not interview cooking product manufacturers at
this stage due to feedback from stakeholders such as AHAM and several
cooking product manufacturers, suggesting that DOE limit its efforts to
updating the extensive 1996 cooking product technical analysis; these
stakeholders reasoned that such an update would properly represent
prices, design options, and manufacturer issues for products covered by
the present rulemaking. Thus, DOE updated the 1996 cooking products
analysis and plans to interview manufacturers of cooking products
during the NOPR stage of this rulemaking to get feedback on its
analysis and results.
During the course of the preliminary MIA, DOE interviewed
manufacturers representing over 80 percent of domestic dishwasher
sales, 66 percent of domestic dehumidifier sales, and practically 100
percent of CCW sales. DOE used these same interviews to review the
engineering analysis cost and performance data contained in chapter 5
of the TSD. However, during the course of the MIA interviews, focus of
the discussion was shifted from technology-related topics to business-
related topics. DOE's objective was to become familiar with each
company's particular market approach and financial structure, and its
concerns and issues related to new efficiency standards. Most of the
information received from these meetings is protected by non-disclosure
agreements and resides with DOE's contractors. Before each visit, DOE
provided company representatives with an interview guide that included
the topics that DOE hoped to cover. The topics included:
Key issues--the most important things to consider in
setting new standards from the perspective of manufacturers;
Product mix--effects of potential standard levels on a
manufacturer's product mix;
Profitability--insights into market forces which could
affect a manufacturer's profitability;
Conversion costs--estimates of costs required to meet new
standards;
Manufacturing capacity and employment levels--decisions to
upgrade, remodel, or relocate existing facilities and resulting changes
in employment patterns resulting from new energy efficiency standards;
Market share and industry consolidation--changes to
competitive dynamics of the marketplace and the possible consequences
for consumers;
Product utility and innovation--effect of standards on
product utility and innovation; and
Cumulative burden--assessment of the level and timing of
investments manufacturers are expecting to incur as a result of other
regulations.
Additionally, DOE often introduced, entertained, and discussed
other topics during the course of the interviews, such as the impact of
various design options on energy efficiency, how testing standards and
usage patterns vary by market, and performance issues.
Perhaps the most important aspect of the preliminary MIA was the
opportunity it created for DOE to identify key manufacturer issues
early in the development of new standards.
[[Page 64507]]
During the interviews, DOE engaged the manufacturers in a discussion of
their perception of the key issues in the rulemaking. DOE then added
these key issues to the list of questions and topics explored during
the interviews.
The concerns that rose to the level of key issues in the opinion of
dishwasher manufacturers included: (1) The potential elimination of
entry-level dishwashers from the market; (2) a possible reduction in
dishwasher washing performance; (3) the increased likelihood of
consumers hand washing and pre-rinsing dishes; and (4) the potential
relocation of production facilities overseas.
The key issues expressed by dehumidifier manufacturers included:
(1) The ability to pass cost increases on to consumers; (2) increased
pressure from foreign competition; and (3) the ability to maintain
Energy Star product offerings.
The key issues for CCW manufacturers included: (1) The risk of
eliminating vertical-axis washers from the market; (2) reduced product
shipments due to a move away from central laundry facilities to in-unit
residential laundry and prolonging the life of existing equipment; (3)
reduced cleaning performance of some energy-saving design options; (4)
the possible relocation of production facilities outside the country;
and (5) the potential for industry consolidation and/or the elimination
of the low-volume manufacturer.
For more preliminary results for the MIA, such as other impacts on
financial performance, impacts on product utility and performance, and
additional details on the impacts of cumulative regulatory burden,
refer to Chapter 12 of the TSD.
L. Utility Impact Analysis
The utility impact analysis estimates the effects on the utility
industry of reduced energy consumption due to improved appliance
efficiency. The analysis compares modeling results for the base case
with results for each candidate standards case. For each of the four
appliance products, the analysis will consist of forecasted differences
between the base and standards cases for electricity generation,
installed capacity, sales, and prices. For CCWs, as well as residential
dishwashers and cooking products, the analysis also will examine
differences in sales of natural gas.
To estimate these effects of proposed standards on the electric and
gas utility industries, DOE intends to use a variant of the EIA's
NEMS.\56\ EIA uses NEMS to produce its AEO. NEMS produces a widely
recognized reference case forecast for the United States and is
available in the public domain. DOE will use a variant known as NEMS-
Building Technologies (BT) to provide key inputs to the analysis.
---------------------------------------------------------------------------
\56\ For more information on NEMS, please refer to the U.S.
Department of Energy, Energy Information Administration
documentation. A useful summary is National Energy Modeling System:
An Overview 2003, DOE/EIA-0581(2003), March 2003. DOE/EIA approves
use of the name NEMS to describe only an official version of the
model without any modification to code or data. Because this
analysis entails some minor code modifications and the model is run
under various policy scenarios that are variations on DOE/EIA
assumptions, in this analysis, DOE refers to it by the name NEMS-BT.
---------------------------------------------------------------------------
The use of NEMS for the utility impact analysis offers several
advantages. As the official DOE energy forecasting model, NEMS relies
on a set of premises that are transparent and have received wide
exposure and commentary. NEMS allows an estimate of the interactions
between the various energy supply and demand sectors and the economy as
a whole. The utility impact analysis will determine the changes for
electric utilities in installed capacity and in generation by fuel type
produced by each candidate standard level, as well as changes in gas
and electricity sales to the commercial sector (for CCWs) and the
consumer sector (for residential dishwashers, dehumidifiers, and
cooking products). (Because dehumidifiers neither operate on gas nor
rely on water heated by gas, standards for this product do not affect
gas sales.)
DOE plans to conduct the utility impact analysis as a variant of
the NEMS used to produce the AEO 2007, applying the same basic set of
premises. For example, the utility impact analysis uses the operating
characteristics (e.g., energy conversion efficiency, emissions rates)
of future electricity generating plants and the prospects for natural
gas supply as specified in the AEO reference case.
DOE will also explore deviations from some of the AEO 2007
reference case premises to represent alternative futures. Two
alternative scenarios use the high- and low-economic-growth cases of
AEO 2007. (The reference case corresponds to medium growth.) The high-
economic-growth case uses higher projected growth rates for population,
labor force, and labor productivity, resulting in lower predicted
inflation and interest rates relative to the reference case. The
opposite is true for the low-growth case. Starting in 2012, the high-
growth case predicts growth in per capita gross domestic product of 3.4
percent per year, compared with 2.9 percent per year in the reference
case and 2.2 percent per year in the low-growth case. As part of
varying supply-side growth determinants in these cases, AEO 2007 also
varies the forecasted energy prices for all three economic growth
cases. Different economic growth cases affect the rate of growth of
electricity demand.
The electric utility industry analysis will consist of NEMS-BT
forecasts for generation, installed capacity, sales, and prices. The
gas utility industry analysis will consist of NEMS-BT forecasts of
sales and prices. The NEMS-BT provides reference case load shapes for
several end uses, including residential dishwashing and cooking, but
does not provide load shapes \57\ specifically for dehumidifiers and
CCWs. Because most of the energy consumed by clothes washers is
expended on water heating, DOE intends to use NEMS-BT's commercial
water-heating load shapes to characterize CCWs. For dehumidifiers,
because this end use is operated in a similar manner to air-
conditioning equipment, DOE intends to use NEMS-BT residential space-
cooling load shapes to characterize it. For electrical end uses, NEMS-
BT uses predicted growth in demand for each end use to build up a
projection of the total electrical system load growth for each region,
which it uses in turn to predict the necessary additions to capacity.
For both electrical and gas end uses, NEMS-BT accounts for the
implementation of efficiency standards by decrementing the appropriate
reference case load shape. DOE will determine the size of the decrement
using data for the per-unit energy savings developed in the LCC and PBP
analyses (see Chapter 8 of the TSD) and the forecast of shipments
developed for the NIA (see Chapter 9 of the TSD). For more information
on the utility impact analysis, refer to Chapter 13 of the TSD.
---------------------------------------------------------------------------
\57\ The ``load shape'' defines how the product uses energy on
an hourly basis over the course of the day.
---------------------------------------------------------------------------
EEI commented that an accurate assessment of electric utility
impacts requires an evaluation of the type of load of the appliance
(i.e., whether the load is primarily during system peak demand or off-
peak). (Public Meeting Transcript, No. 5 at p. 264) In response, we
note that in 2001, EIA conducted a review of its end-use load shapes
and updated them to better reflect actual end use behavior.\58\ As a
result, DOE has
[[Page 64508]]
confidence that the NEMS-BT provides a good representation of the type
of loads exhibited by its end uses.
---------------------------------------------------------------------------
\58\ Alternative Sectoral Load Shapes for NEMS, Department of
Energy--Energy Information Administration, Washington, DC, August
2001. Available online at: http://www.onlocationinc.com/LoadShapesAlternative2001.pdf.
---------------------------------------------------------------------------
With regard to gas utility impacts, the AGA commented that NEMS-BT
does not address these impacts in a meaningful way. AGA suggested that
DOE should conduct a workshop on proposed modeling approaches to
analyzing gas utility impacts. (AGA, No. 12 at p. 3) As noted above,
NEMS-BT allows for the determination of changes in gas sales due to
efficiency standards. Therefore, DOE's gas utility impact analysis goes
no further than assessing the impact on gas sales.
Since the AEO 2007 version of NEMS forecasts only to the year 2030,
DOE would be required to extrapolate results for such forecasts to
2042. DOE conducts an extrapolation to 2042 to be consistent with the
analysis period being used by DOE in the NIA. However, DOE has
determined that it will not be feasible to extend the forecast period
of NEMS-BT for the purposes of this analysis, in part because EIA does
not have an approved method for extrapolation of many outputs beyond
2030. While it might seem reasonable in general to make simple linear
extrapolations of results, in practice this is not advisable because
outputs could be contradictory. For example, changes in the fuel mix
implied by extrapolations of those outputs could be inconsistent with
the extrapolation of marginal emissions factors. An analysis of various
trends is not necessary and would involve a great deal of uncertainty.
Therefore, for all extrapolations beyond 2030, DOE intends to use
simple replications of year 2030 results. While these may seem
unreasonable in some instances, in this way results are guaranteed to
be consistent. As with the AEO reference case in general, the implicit
premise is that the regulatory environment does not deviate from the
current known situation during the extrapolation period. Only changes
that have been announced with date-certain introduction are included in
NEMS-BT.
Both EEI and SPU stated that DOE should factor impacts to water and
wastewater utilities into the utility impact analysis. SPU claimed
that, in some areas of the country, water is becoming a limited
commodity and should be assessed in the context of a utility impact
analysis. (EEI, No. 7 at p. 6; Public Meeting Transcript, No. 5 at p.
263) Although NEMS-BT provides estimates of changes in electrical
utility infrastructure requirements as a function of end-use energy
savings, it does not currently have the capability of calculating
similar results for water and wastewater utilities. The water utility
sector is more complicated than either the electric utility or gas
utility sectors, with a high degree of geographic variability produced
by a large diversity of water resource availability, institutional
history, and regulatory context. DOE currently does not have access to
tools that analyze water utility impacts. There are activites being
conducted or initiated by the USGS, EPA, and DOE to study water and
wastewater issues. However, these activites have yet to provide the
necessary sources of data or tools to enable a water utility impact
analysis comparable to what can be done on electric and gas utilities
using NEMS. Therefore, conducting a credible water and wastewater
utility analysis is beyond DOE's existing analysis capabilities.
M. Employment Impact Analysis
The Process Rule includes employment impacts among the factors to
be considered in selecting a proposed standard, and it provides
guidance for consideration of the impact (both direct and indirect) of
candidate standard levels on employment. The Process Rule states a
general presumption against any candidate standard level that would
directly cause plant closures or significant loss of domestic
employment, unless specifically identified expected benefits of the
standard would outweigh the adverse effects. See the Process Rule, 10
CFR Part 430, Subpart C, Appendix A, sections 4(d)(7)(ii) and (vi), and
5(e)(3)(i)(B).
DOE estimates the impacts of standards on employment for equipment
manufacturers, relevant service industries, energy suppliers, and the
economy in general. Both indirect and direct employment impacts are
covered. Direct employment impacts would result if standards led to a
change in the number of employees at the factories that produce the
four appliance products and related supply and service firms. Direct
impact estimates are covered in the MIA.
Indirect employment impacts are impacts on the national economy
other than in the manufacturing sector being regulated. Indirect
impacts may result both from expenditures shifting among goods
(substitution effect) and changes in income that lead to a change in
overall expenditure levels (income effect). DOE defines indirect
employment impacts from standards as net jobs created or eliminated in
the general economy as a result of increased spending driven by the
increased equipment prices and reduced spending on energy.
DOE expects new standards for the four appliance products to
increase the total installed cost of equipment, which includes
manufacturer selling price, sales taxes, distribution chain markups,
and installation cost. DOE also expects the new standards to decrease
energy consumption, and thus expenditures on energy. Over time,
increased total installed cost is paid back through energy savings. The
savings in energy expenditures may be spent on new commercial
investment and other items.
Using an input/output model of the U.S. economy, this analysis
seeks to estimate the effects on different sectors and the net impact
on jobs. DOE will estimate national employment impacts for major
sectors of the U.S. economy in the NOPR, using public and commercially
available data sources and software. DOE will make all methods and
documentation available for review in the TSD for the NOPR.
In overview, DOE developed Impact of Sector Energy Technologies
(ImSET), a spreadsheet model of the U.S. economy that focuses on 188
sectors most relevant to industrial, commercial, and residential
building energy use.\59\ ImSET is a special-purpose version of the U.S.
Benchmark National Input-Output (I-O) model, which has been designed to
estimate the national employment and income effects of energy saving
technologies that are deployed by DOE's Office of Energy Efficiency and
Renewable Energy. In comparison with the previous versions of the model
used in earlier rulemakings, this version allows for more complete and
automated analysis of the essential features of energy efficiency
investments in buildings, industry, transportation, and the electric
power sectors. The ImSET software includes a computer-based I-O model
with structural coefficients to characterize economic flows among the
188 sectors. ImSET's national economic I-O structure is based on the
1997 Benchmark U.S. table (Lawson, et al. 2002),\60\ specially
aggregated to 188 sectors.
---------------------------------------------------------------------------
\59\ Roop, J.M., M.J. Scott, and R.W. Schultz. 2005. ImSET:
Impact of Sector Energy Technologies. PNNL-15273. Pacific Northwest
National Laboratory, Richland, WA.
\60\ Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and
Jiemin Guo. 2002. ``Benchmark Input-Output Accounts of the U. S.
Economy, 1997,'' Survey of Current Business, December, pp. 19-117.
---------------------------------------------------------------------------
Standards for the four appliance products may reduce energy
[[Page 64509]]
expenditures and increase equipment prices in the commercial sector.
These expenditure changes are likely to reduce commercial and energy
sector employment. At the same time, these equipment standards may
increase commercial sector investment, and increase employment in other
sectors of the economy. DOE designed the employment impact analysis to
estimate the year-to-year net employment effect of these different
expenditure flows.
Although DOE intends to use ImSET for its analysis of employment
impacts, it welcomes input on other tools and factors it might
consider. For more information on the employment impact analysis, refer
to Chapter 14 of the TSD.
N. Environmental Assessment
The primary environmental effect of energy conservation standards
for the four appliance products would be reduced power plant emissions
resulting from reduced consumption of electricity. DOE will assess
these environmental effects by using NEMS-BT to provide key inputs to
its analysis. The environmental assessment produces results in a manner
similar to those provided in the AEO. In addition to electrical power,
the operation of three of the four appliance products--CCWs,
dishwashers, and cooking products--also requires use of fossil fuels,
and results in emissions of carbon dioxide (CO2), nitrogen
oxides (NOX), and sulfur dioxide (SO2) at the
sites where the appliances are installed. Southern California Gas
Company (SoCal Gas) and PG&E questioned how DOE will evaluate the
emissions from gas-fired appliances. (Public Meeting Transcript, No. 5
at pp. 271-272) In response, we note that NEMS-BT provides no means for
estimating such site emissions. Therefore, DOE will calculate, and the
environmental assessment will include, separate estimates of the effect
of the proposed standard on site emissions of CO2,
NOX, and SO2, based on simple emissions factors
derived from the literature.\61\
---------------------------------------------------------------------------
\61\ U.S. Environmental Protection Agency. Compilation of Air
Pollutant Emission Factors, AP-42, Fifth Edition, Volume 1:
Stationary Point and Area Sources. 1998. Available online at: http:/
/www. epa.gov/ttn/chief/ap42.html.
---------------------------------------------------------------------------
The intent of the environmental assessment is to provide emissions
results estimates and to properly quantify and consider the
environmental effects of all new Federal rules. The portion of the
environmental assessment that will be produced by NEMS-BT considers
only three pollutants, SO2, NOX, and mercury, and
one other emission (carbon). The only form of carbon the NEMS-BT model
tracks is CO2. Therefore, the carbon discussed in this
analysis is only in the form of CO2. For each of the trial
standard levels, DOE will calculate total undiscounted and discounted
power plant emissions using NEMS-BT, and will use other methods to
calculate site emissions.
Although DOE plans to consider only SO2, NOX,
mercury, and CO2 in its environmental assessment, there are
other air pollutants which are of concern. Specifically, the Clean Air
Act requires EPA to set National Ambient Air Quality Standards for the
following six common air pollutants, also know as ``criteria
pollutants'': (1) Ozone, (2) particulate matter (PM), (3) carbon
monoxide (CO), (4) nitrogen dioxide, (5) SO2, and (6) lead.
\62\ EPA recently added mercury to this list. But none of the
``criteria pollutants'' not considered in the environmental assessment
(i.e., ozone, PM, CO, and lead) are driven significantly by either
electric utility power plants or fuel-fired appliances. Therefore, DOE
does not intend on addressing them in the environmental assessment. In
the case of ozone and PM, other pollutants are precursors to their
formation, and atmospheric conditions are the driver behind their
formation. Also, SO2 and NOX, are the primary
precursors to ozone and PM, respectively, and will already be addressed
by the environmental assessment. In the case of CO, electric utilities
and fuel-fired appliances are not significant sources. For electric
power plants, almost all carbon emissions come out in the form of CO2
as the combustion process is lean enough not to yield CO in significant
amounts. For fuel-fired appliances, proper appliance maintenance,
installation, and use can prevent dangerous levels of CO. A well-
designed and properly functioning heating or cooking appliance should
not produce toxic or lethal levels of CO, as, most often, CO poisoning
occurs in the home as a result of malfunctioning appliances. Finally,
with regard to lead, the ban on the use of leaded gasoline has resulted
in a dramatic decrease in lead emissions since the mid-1970s. Today,
industrial processes (not electric utilities), particularly primary and
secondary lead smelters and battery manufacturers, are responsible for
most of lead emissions and all violations of the lead air quality
standards.
---------------------------------------------------------------------------
\62\ U.S. Environmental Protection Agency. Six Common Air
Pollutants. Washington, DC. Available online at: http://www.epa.gov/air/urbanair/.
---------------------------------------------------------------------------
As to power plant emissions, DOE will conduct each environmental
assessment performed as part of this rulemaking as an incremental
policy impact (i.e., a standard for the product under evaluation) on
the AEO 2007 forecast, applying the same basic set of assumptions used
in AEO 2007. For example, the emissions characteristics of an
electricity generating plant will be exactly those used in AEO 2007.
Also, forecasts conducted with NEMS-BT consider the supply-side and
demand-side effects on the electric utility industry. Thus, DOE's
analysis will account for any factors affecting the type of electricity
generation and, in turn, the type and amount of airborne emissions
generated by the utility industry.
The NEMS-BT model tracks carbon emissions with a specialized carbon
emissions estimation subroutine, producing reasonably accurate results
due to the broad coverage of all sectors and inclusion of interactive
effects. Past experience with carbon results from NEMS suggests that
emissions estimates are somewhat lower than emissions based on simple
average factors. One of the reasons for this divergence is that NEMS
tends to predict that conservation displaces generating capacity in
future years. On the whole, NEMS-BT provides carbon emissions results
of reasonable accuracy, at a level consistent with other Federal
published results.
NEMS-BT also reports SO2, NOX, and mercury,
which DOE has reported in past analyses. The Clean Air Act Amendments
of 1990 set an SO2 emissions cap on all power
generation.\63\ The attainment of this aggregate limit, however, is
flexible among generators of emissions, due to the availability of
emissions allowances and tradable permits. Although NEMS includes a
module for SO2 allowance trading and delivers a forecast of
SO2 allowance prices, accurate simulation of SO2
trading implies that the effect of efficiency standards on physical
emissions will be zero because emissions will always be at or near the
ceiling. However, there may be an SO2 benefit from energy
conservation, in the form of a lower SO2 allowance price.
Since the impact of any one standard on the allowance price is likely
small and highly uncertain, DOE does not plan to monetize any potential
SO2 benefit.
---------------------------------------------------------------------------
\63\ See 40 CFR part 50. (See also U.S. Environmental Protection
Agency Web site at: http://www.epa.gov/air/caa/).
---------------------------------------------------------------------------
NEMS-BT also has an algorithm for estimating NOX
emissions from power generation. The impact of these emissions,
however, will be affected by the Clean Air Interstate Rule (CAIR),
which the EPA published on May 12, 2005. CAIR will permanently cap
[[Page 64510]]
emissions of NOX in 28 eastern States and the District of
Columbia. 70 FR 25162 (May 12, 2005). As with SO2 emissions,
a cap on NOX emissions means that equipment efficiency
standards may have no physical effect on these emissions. When
NOX emissions are subject to emissions caps, DOE's emissions
reduction estimate corresponds to incremental changes in the prices of
emissions allowances in cap-and-trade emissions markets rather than
physical emissions reductions. Therefore, while the emissions cap may
mean that physical emissions reductions will not result from standards,
standards could produce an economic benefit in the form of lower prices
for emissions allowance credits. However, as with SO2
allowance prices, DOE does not plan to monetize this benefit because
the impact on the NOX allowance price from any single energy
conservation standard is likely small and highly uncertain.
EEI stated that new rules pertaining to power plant SO2
and NOX emissions will limit the impact that standards can
have on reducing these emissions. (EEI, No. 7 at p. 4) As noted above,
NEMS-BT accounts for the most recent regulations pertaining to power
plant SO2 and NOX emissions and expects that
appliance efficiency standards will not have any physical effect on
these emissions.
With regard to mercury emissions, NEMS has an algorithm for
estimating these emissions from power generation. However, the impact
on mercury emissions will be affected by the Clean Air Mercury Rule
(CAMR), which the EPA published on May 18, 2005. 70 FR 28606. CAMR will
permanently cap emissions of mercury for new and existing coal-fired
plants in all States. As with SO2 and NOX
emissions, a cap on mercury emissions means that appliance efficiency
standards may have no physical effect on these emissions. When mercury
emissions are subject to emissions caps, DOE's emissions reduction
estimate corresponds to incremental changes in the prices of emissions
allowances in cap-and-trade emissions markets rather than physical
emissions reductions. Therefore, while the emissions cap may mean that
physical emissions reductions will not result from standards, standards
could produce an economic benefit in the form of lower prices for
emissions allowance credits. However, as with SO2 and
NOX allowance prices, DOE does not plan to monetize this
benefit because the impact on the mercury allowance price from any
single energy conservation standard is likely small and highly
uncertain.
The Joint Comment stated that DOE should evaluate mercury and
particulate emissions as part of the environmental assessment due to
their impact on public health. (Joint Comment, No. 9 at p. 3) In
response, as noted above, NEMS-BT accounts for the most recent
regulations pertaining to power plant mercury emissions and expects
that standards will not have any physical effect on the level of these
emissions. With regard to particulates, these emissions are a special
case because they arise not only from direct emissions, but also from
complex atmospheric chemical reactions that result from NOX
and SO2 emissions. Because of the highly complex and
uncertain relationship between particulate emissions and particulate
concentrations that impact air quality, DOE does not plan on reporting
particulate emissions.
Potomac and SPU urged DOE to evaluate wastewater discharge impacts
due to increased efficiency standards. (Public Meeting Transcript, No.
5 at p. 269) DOE plans to conduct a separate analysis of wastewater
discharge impacts as part of the environmental assessment. DOE intends
to derive a simple national aggregate estimate of wastewater discharge
impacts from proposed energy conservation standards, based on estimates
of consumer water savings. It will first provide a simple estimate of
the fraction of water savings that result in decreased wastewater
discharges. Then, by applying this discharge fraction to the water
savings estimate, DOE can provide an approximate wastewater discharge
savings estimate.
The results for the environmental assessment are similar to a
complete NEMS run as published in the AEO 2007. These results include
power sector emissions for SO2, NOX, and carbon
in five-year forecasted increments extrapolated to 2042. The outcome of
the analysis for each candidate standard level is reported as a
deviation from the AEO 2007 reference (base) case.
For more detail on the environmental assessment, refer to the
environmental assessment report in the TSD.
O. Regulatory Impact Analysis
DOE will prepare a draft regulatory impact analysis in compliance
with Executive Order 12866, ``Regulatory Planning and Review,'' which
will be subject to review by OMB's Office of Information and Regulatory
Affairs (OIRA). 58 FR 51735 (October 4, 1993).
As part of the regulatory impact analysis, and as discussed in
section II.K, ``Manufacturer Impact Analysis,'' DOE will identify and
seek to mitigate the overlapping effects on manufacturers of new or
revised DOE standards and other regulatory actions affecting the same
products. Through manufacturer interviews and literature searches, DOE
will compile information on burdens from existing and impending
regulations affecting the four appliance products covered under this
rulemaking. DOE also seeks input from stakeholders about relevant
regulations whose impacts it should consider.
The regulatory impact analysis also will address the potential for
non-regulatory approaches to supplant or augment energy conservation
standards to improve the efficiency of the four appliance products. One
such potential non-regulatory program is tax credits. In assessing the
potential impacts from tax credits, EEI suggested that DOE should
evaluate the long-term effects on market transformation to more-
efficient products from short-term (e.g., two-year) tax credits.
(Public Meeting Transcript, No. 5 at p. 278) AHAM stated that recent
Federal tax credits for dishwashers will have an effect on improving
overall product efficiency and that DOE should consider such effect as
part of analyzing the impact of tax credits. (Public Meeting
Transcript, No. 5 at p. 277) In response, we noted that the NOPR will
include a complete quantitative analysis of alternatives to the
proposed energy conservation standards (including tax credits), and DOE
will use the most recent information available to make its assessments.
DOE will use the NES spreadsheet model (as discussed in section II.I,
``National Impact Analysis'') to calculate the NES and NPV for the
alternatives to the proposed conservation standards. For more
information on the regulatory impact analysis, refer to the regulatory
impact analysis report in the TSD.
III. Candidate Energy Conservation Standard Levels
The Process Rule states that DOE will specify candidate standard
levels in the ANOPR, but will not propose a particular standard. 10 CFR
Part 430, Subpart C, Appendix A, section 4(c)(1)(i). Section II.I.4,
``National Impact Analysis Results'' identifies the candidate standard
levels for each of the four appliance products. Tables III.1 through
III.4 repeat the candidate standard levels for each of the four
appliance products.
[[Page 64511]]
Table III.1.--Standard Dishwashers: Candidate Standard Levels
------------------------------------------------------------------------
Candidate standard level Energy factor
------------------------------------------------------------------------
1....................................................... 0.46
2....................................................... 0.58
3....................................................... 0.62
4....................................................... 0.65
5....................................................... 0.72
6....................................................... 0.80
7....................................................... 1.11
------------------------------------------------------------------------
table III.2.--Dehumidifiers: Candidate Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25.00 25.01-35.00 35.01-45.00 45.01-54.00 54.01-74.99 >=75.00
Candidate standard level -----------------------------------------------------------------------------------------------
EF EF EF EF EF EF
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 1.10 1.25 1.35 1.45 1.55 2.38
2....................................................... 1.20 1.30 1.40 1.50 1.60 2.50
3....................................................... 1.25 1.35 1.45 1.55 1.65 2.55
4....................................................... 1.30 1.40 1.50 1.60 1.70 2.60
5....................................................... 1.38 1.45 1.74 2.02 1.80 2.75
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table III.3.--Cooking Products: Candidate Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cooktops Ovens Microwave
------------------------------------------------------------------------------------------- ovens
Elec coil Elec smooth Gas Elec Elec self- Gas Gas self- ------------
Candidate standard level --------------------------------------- standard clean standard clean
---------------------------------------------------- EF
EF EF EF EF EF EF EF
--------------------------------------------------------------------------------------------------------------------------------------------------------
1\*\............................................ 0.769 0.752 0.399 0.1113 0.1102 0.0536 0.0625 0.586
2............................................... ........... ........... 0.420 0.1163 0.1123 0.0566 0.0627 0.588
3............................................... ........... ........... ........... 0.1181 ........... 0.0572 0.0632 0.597
4............................................... ........... ........... ........... 0.1206 ........... 0.0593 ........... 0.602
5............................................... ........... ........... ........... 0.1209 ........... 0.0596 ........... ...........
6............................................... ........... ........... ........... ........... ........... 0.0600 ........... ...........
1a\*\........................................... ........... ........... ........... ........... ........... 0.0583 ........... ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\*\ For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
standing pilot-but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
through 6 are derived from candidate standard level 1.
Table III.4.--Commercial Clothes Washers: Candidate Standard Levels
------------------------------------------------------------------------
Modified
Candidate standard level energy factor/
water factor
------------------------------------------------------------------------
1....................................................... 1.42/9.50
2....................................................... 1.60/8.50
3....................................................... 1.72/8.00
4....................................................... 1.80/7.50
5....................................................... 2.00/5.50
6....................................................... 2.20/5.10
------------------------------------------------------------------------
DOE will review the public input it receives in response to this
ANOPR and will update the analyses appropriately for each product class
before issuing the NOPR. In addition, DOE will consider any comments it
receives on the candidate standard levels set forth above for the four
appliance products, and on whether alternative levels would satisfy
EPCA criteria for DOE adoption of standards, for example:
A moderate increase in the efficiency level at an earlier
effective date (e.g., an effective date two years after the publication
of the final rule); or
A larger increase in the efficiency level at a later
effective date.
For the NOPR, DOE will develop trial standard levels (TSL) from the
above candidate standard levels for each of the four appliance
products. DOE will consider several criteria in developing the TSLs,
including, but not limited to, which candidate standard level has the
minimum LCC, maximum NPV, and maximum technologically feasible
efficiency. From the list of TSLs developed, DOE will select one as its
proposed standard for the NOPR, while explaining the other TSLs
considered and the reasons for their elimination in deciding upon the
level ultimately proposed.
For a given product consisting of several product classes (e.g.,
dehumidifiers and cooking products), DOE will develop each TSL so that
it is comprised of candidate standard levels from each class that
exhibit similar characteristics. For example, in the case of
dehumidifiers, one of the TSLs will likely consist of the candidate
standard level from each of the six classes that has the minimum LCC.
DOE will also attempt to limit the number of TSLs considered for
the NOPR by dropping from consideration candidate standard levels that
do not exhibit significantly different economic and/or engineering
characteristics from candidate standard levels already selected as a
TSL. For example, in the case of dishwashers, the candidate standard
level with the minimum LCC is candidate standard level 3 with an EF of
0.65. If the sole consideration for selecting TSLs was LCC, DOE would
likely drop candidate standard level 4 with an EF of 0.68 as its LCC
savings are lower and not significantly different than the value for
candidate standard level 3.
DOE specifically seeks feedback on the criteria it should use for
basing the selection of TSLs. This is identified as Issue 16 under
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
[[Page 64512]]
IV. Public Participation
A. Attendance at Public Meeting
The time, date, and location of the public meeting are set forth in
the DATES and ADDRESSES sections at the beginning of this document.
Anyone who wishes to attend the public meeting must notify Ms. Brenda
Edwards-Jones at (202) 586-2945.
B. Procedure for Submitting Requests to Speak
Any person who has an interest in today's notice, or who is a
representative of a group or class of persons that has an interest in
these issues, may request an opportunity to make an oral presentation
at the public meeting. Please hand-deliver requests to speak to the
address shown under the heading ``Hand Delivery/Courier'' in the
ADDRESSES section of this notice, between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays. Requests also may be sent by
mail, to the address shown under the heading ``Postal Mail'' in the
ADDRESSES section of this notice, or by e-mail to [email protected].
Persons requesting to speak should briefly describe the nature of
their interest in this rulemaking and provide a telephone number for
contact. DOE asks each person selected to be heard to submit a copy of
his or her statement at least two weeks before the public meeting,
either by hand delivery, mail, or e-mail as described in the preceding
paragraph. Please include an electronic copy of your statement, on a
computer diskette or CD when delivery is by mail or hand delivery.
Electronic copies must be in WordPerfect, Microsoft Word, Portable
Document Format (PDF), or text in American Standard Code for
Information Interchange (ASCII) file format. At its discretion, DOE may
permit any person who cannot supply an advance copy of his or her
statement to participate, if that person has made alternative
arrangements with the Building Technologies Program. In such
situations, the request to give an oral presentation should ask for
alternative arrangements.
C. Conduct of Public Meeting
DOE will designate a DOE official to preside at the public meeting
and may also use a professional facilitator to aid discussion. The
meeting will not be a judicial or evidentiary-type public hearing, but
DOE will conduct it in accordance with 5 U.S.C. 553 and section 336 of
EPCA. (42 U.S.C. 6306) A court reporter will be present to record the
transcript of the proceedings. DOE reserves the right to schedule the
order of presentations and to establish the procedures governing the
conduct of the public meeting. After the public meeting, interested
parties may submit further comments on the proceedings and any other
aspect of the rulemaking until the end of the comment period.
The public meeting will be conducted in an informal, conference
style. DOE will present summaries of comments received before the
public meeting, allow time for presentations by participants, and
encourage all interested parties to share their views on issues
affecting this rulemaking. Each participant will be allowed to make a
prepared general statement (within time limits determined by DOE)
before the discussion of specific topics. DOE will permit other
participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly and comment on
statements made by others. Participants should be prepared to answer
questions by DOE and by other participants concerning these issues. DOE
representatives may also ask questions of participants concerning other
matters relevant to the public meeting. The official conducting the
public meeting will accept additional comments or questions from those
attending, as time permits. The presiding official will announce any
further procedural rules or modification of the above procedures that
may be needed for proper conduct of the public meeting.
DOE will make the entire record of this proposed rulemaking,
including the transcript from the public meeting, available for
inspection at the U.S. Department of Energy, Forrestal Building, Room
1J-018 (Resource Room of the Building Technologies Program), 1000
Independence Avenue, SW, Washington, DC, (202) 586-9127, between 9 a.m.
and 4 p.m., Monday through Friday, except Federal holidays. Any person
may buy a copy of the transcript from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding all
aspects of this ANOPR before or after the public meeting, but no later
than January 29, 2008. Please submit comments, data, and information
electronically to the following e-mail address: [email protected]. Submit electronic comments in
WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid
the use of special characters or any form of encryption. Comments in
electronic format should be identified by the docket number EE-2006-
STD-0127 and/or RIN 1904-AB49, and whenever possible carry the
electronic signature of the author. Absent an electronic signature,
comments submitted electronically must be followed and authenticated by
submitting the signed original paper document. DOE will not accept any
telefacsimiles (faxes).
Under 10 CFR 1004.11, any person submitting information that he or
she believes to be confidential and exempt by law from public
disclosure should submit two copies. One copy of the document shall
include all the information believed to be confidential, and the other
copy of the document shall have the information believed to be
confidential deleted. DOE will make its own determination about the
confidential status of the information and treat it according to its
determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by, or available from, other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the passage of time; and (7) why
disclosure of the information would be contrary to the public interest.
E. Issues on Which the Department of Energy Seeks Comment
DOE is interested in receiving comments on all aspects of this
ANOPR. DOE especially invites comments or data to improve DOE's
analysis, including data or information that will respond to the
following questions or concerns addressed in this ANOPR:
1. Microwave Oven Standby Power
For the NOPR, DOE is considering purchasing, testing, and analyzing
microwave ovens to better understand the utility, cost, and cost
implications of reducing standby power consumption. Addition of a
standby power test to the existing test procedure would be necessary
before standby power could be included in an efficiency standard. DOE
is considering this approach for microwave ovens because data provided
by AHAM suggests that there is an opportunity for significant energy
[[Page 64513]]
savings via the reduction of standby power levels. Therefore, DOE
requests data and stakeholder feedback on how to conduct an analysis of
standby power for microwave ovens. (See section I.D.4.b of this ANOPR
for further details.)
2. Product Classes
In accordance with EPCA section 325(p)(1)(A), DOE identified the
equipment classes covered under this rulemaking. (42 U.S.C.
6295(p)(1)(A)) Pursuant to EPCA section 325(p)(1)(B), DOE requests
comments on these equipment classes and invites interested persons to
submit written presentations of data, views, and arguments. (42 U.S.C.
6295(p)(1)(B)) (See section II.A.1 of this ANOPR for further details.)
3. Commercial Clothes Washer Horizontal-Axis Designs
The information available for CCWs suggests that an efficiency of
1.6 MEF and 8.5 WF will be based on horizontal-axis technology. As
such, it appears that the incremental costs between 1.60 MEF/8.5 WF and
2.2 MEF/5.1 WF will be constant at the same value as those provided by
AHAM for the level 2.0 MEF/5.5 WF. DOE particularly seeks comment on
the validity of such an approach. DOE also seeks information about
lower-cost alternatives to horizontal-axis designs for levels greater
than 1.42 MEF/9.5 WF and lower than 2.0 MEF/5.5 WF. Additionally, DOE
seeks information that would allow it to change the energy and water
features of the 2.0 MEF/5.5 WF level to allow for manufacturer cost
differentiation at the lower (and the higher) levels. Furthermore, DOE
seeks comment on how to evaluate potential shifts from vertical-axis
technologies to horizontal-axis. (See section II.C.4.d of this ANOPR
for further details.)
4. Compact Dishwashers
DOE was unable to obtain incremental manufacturing cost information
for compact dishwashers. Therefore, DOE did not analyze compact
dishwashers for this ANOPR but expects to set standards for them. DOE
requests feedback on how it can extend the results of the analysis for
the standard class to compact dishwashers. (See section II.C.4 of this
ANOPR for further details.)
5. Microwave Oven Design Options
For microwave ovens, the design options and efficiency levels that
DOE analyzed are those identified in the previous rulemaking's
analysis, with incremental manufacturing costs scaled by the PPI. DOE
requests stakeholder feedback on the approach of analyzing additional
design options that would result in a lowering of the energy
consumption of non-cooking features (e.g., standby power), even though
the existing test procedure currently does not account for such usage
in EF. (See section II.C.3 of this ANOPR for further details.)
6. Technologies Unable to be Analyzed and Exempted Product Classes
There are a number of technologies which DOE was unable to analyze
for this ANOPR. Design options associated with these technologies for
dehumidifiers, cooking products, and CCWs, while passing the screening
analysis, were eliminated from further consideration prior to the ANOPR
engineering analysis. In addition, certain product classes were
exempted on a similar lack of efficiency data. DOE requests stakeholder
input on (1) energy efficiency data for technologies and product
classes for which such data does not exist; and (2) potential
limitations of existing test procedures. The latter may include such
issues as representative usage patterns, ambient conditions, and test
equipment. (See sections II.A.1 and II.C.2 of this ANOPR for further
details.)
7. Dishwasher Efficiency and its Impact on Cleaning Performance
DOE was not able to identify sources of data showing whether the
amount of pre-washing is impacted by dishwasher efficiency. Therefore,
DOE believes that, to date, hand-washing or pre-washing habits have not
been affected by product efficiency. Because increased diswasher energy
efficiency may require future designs to utlize less water, DOE
recognizes the possibility that more efficient dishwashers may degrade
wash performance. Therefore, DOE seeks feedback on whether more
efficient dishwasher designs will affect cleaning performance, leading
to increased hand-washing or pre-washing and, if so, what increase in
energy and water use can be expected. (See section II.D.1 of this ANOPR
for further details.)
8. Dehumidifier Use
DOE identified several sources of data for estimating the annual
use of dehumidifiers. However, DOE gave more weight to data that AHAM
provided because they were developed based on the experience of
manufacturers. It appears that AHAM's average estimate of 1,095
operating hours per year is the most representative of actual use. DOE
requests feedback on whether 1,095 hours per year best represents the
use of dehumidifiers. (See section II.D.2 of this ANOPR for further
details.)
9. Commercial Clothes Washer Per-Cycle Energy Consumption
DOE determined the per-cycle clothes drying energy use and the per-
cycle machine energy use for CCWs from data in its 2000 TSD for
residential clothes washers. DOE requests feedback on whether these
per-cycle energy use characteristics for residential clothes washers
are also representative of CCW energy use. (See section II.D.4 of this
ANOPR for further details.)
10. Commercial Clothes Washer Consumer Prices
DOE identified two distribution channels for CCWs to establish
their price to consumers. One channel involved distributors that
typically sell to Laundromats, and the other channel involved route
operators that typically sell or lease to multi-family building
property owners. For purposes of developing the markups and consumer
equipment prices for CCWs, DOE based its calculations solely on a
distribution channel that involves distributors. DOE believed that the
markups and the resulting consumer equipment prices determined for this
distribution channel also would be representative of the prices paid by
consumers acquiring their equipment from route operators. DOE requests
feedback on its views regarding its development of consumer prices for
CCWs. (See section II.E.1 of this ANOPR for further details.)
11. Repair and Maintenance Costs
Primarily because it did not receive any specific data on the
impacts that standards might have on repair and maintenance costs, DOE
did not include any changes in repair and maintenance costs due to
standards for any of the four appliance products. DOE requests feedback
on its understanding of repair and maintenance costs. (See section
II.G.2.b of this ANOPR for further details.)
12. Efficiency Distributions in the Base Case
To accurately estimate the percentage of consumers that would be
affected by a particular energy conservation standard level, DOE took
into account the distribution of product efficiencies currently in the
marketplace. In other words, DOE conducted its LCC and PBP analyses by
considering the full breadth of product efficiencies that consumers
purchase under the base case (i.e., the case without new energy
efficiency standards) to account for those consumers who already
purchase more
[[Page 64514]]
efficient products. DOE developed base case efficiency distributions
for each of the four appliance products based on a combination of data
sources and estimates. DOE requests feedback on the data sources and
estimates it used for developing its base case product efficiency
distributions. (See section II.G.2.d of this ANOPR for further
details.)
13. Commercial Clothes Washer Shipments Forecasts
Based on historical data, CCW shipments dropped significantly
between 1998 and 2005. Because DOE tied forecasted shipments to the
growth in new multi-family construction, DOE forecasted a continued
increase in clothes washer shipments over the analysis period (i.e.,
2012-2042). However, due to the dramatic drop in shipments seen in the
historical data, DOE is uncertain as to whether shipments will continue
to increase and requests feedback on the bases for its shipments
forecasts for CCWs. (See section II.H.1 of this ANOPR for further
details.)
14. Base-Case and Standards-Case Forecasted Efficiencies
Because key inputs to the calculation of the NES and NPV are
dependent on the estimated efficiencies under the base case (without
standards) and the standards case (with standards), forecasted
efficiencies are of great importance to the analysis. DOE forecasted
base-case and standards-case efficiencies, believing they remained
frozen throughout the analysis period (i.e., 2012-2042). DOE used a
``roll-up'' scenario to establish the shipment-weighted efficiency for
the year that standards are estimated to become effective (i.e., 2012).
Under a roll-up scenario, DOE believed that product efficiencies in the
base case that did not meet the standard level under consideration
would roll up to meet the new standard level. DOE requests feedback on
its methodologies for both forecasting efficiencies and estimating the
impact that standards have on product efficiencies. (See section II.I.2
of this ANOPR for further details.)
15. Dehumidifier Cost and Efficiency Relationships
DOE defined total installed cost and efficiency relationships for a
subset of the six dehumidifier product classes, For purposes of
conducting its NIA, DOE applied the cost-efficiency data that were
developed for these product classes to those classes for which DOE was
unable to develop cost-efficiency relationships due to lack of data.
Specifically, DOE applied the costs developed for the combined 0-35.00
pints/day class to the two individual classes that comprised the
combined class--25.00 pints/day and less and 25.01-35.00 pints/day.
Further, DOE applied the costs developed for the 35.01-45.00 pints/day
and 54.01-74.99 pints/day product classes to the 45.01-54.00 pints/day
and 75.00 pints/day and greater product classes, respectively. In its
application of total installed costs to those product classes where no
cost data were developed, DOE did not interpolate or extrapolate the
cost data to account for product efficiency differences between the
classes. For example, DOE utilized the exact same total installed costs
that were developed for the baseline and standard levels for the 35.01-
45.00 pints/day product class to characterize the baseline and standard
level total installed costs for the 45.01-54.00 pints/day product
class. DOE requests feedback on its approach for characterizing the
total installed costs for those dehumidifier product classes in which
it was not able to develop cost-efficiency relationships. (See section
II.I.3 of this ANOPR for further details.)
16. Trial Standard Levels
For the NOPR, DOE will develop trial standard levels (TSL) from the
candidate standard levels for each of the four appliance products. DOE
will consider several criteria in developing the TSLs, including, but
not limited to, which candidate standard level has the minimum LCC,
maximum NPV, and maximum technologically feasible efficiency. From the
list of TSLs developed, DOE will select one as its proposed standard
for the NOPR. DOE requests feedback on the criteria it should use for
basing the selection of TSLs. (See section III of this ANOPR for
further details.)
V. Regulatory Review and Procedural Requirements
DOE submitted this ANOPR for review to OMB under Executive Order
12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4,
1993). If DOE later proposes energy conservation standards for any of
the four appliance products, and if the proposed rule constitutes a
significant regulatory action, DOE would prepare and submit to OMB for
review the assessment of costs and benefits required by section 6(a)(3)
of the Executive Order. The Executive Order requires agencies to
identify the specific market failure or other specific problem that it
intends to address that warrants new agency action, as well as assess
the significance of that problem, to enable assessment of whether any
new regulation is warranted. (Executive Order 12866, section 1(b)(1)).
DOE presumes that a perfectly functioning market would result in
efficiency levels that maximize benefits to all affected persons.
Consequently, without a market failure or other specific problem, a
regulation would not be expected to result in net benefits to consumers
and the nation. However, DOE also notes that whether it establishes
standards for these products is determined by the statutory criteria
expressed in EPCA. Even in the absence of a market failure or other
specific problem, DOE nonetheless may be required to establish
standards under existing law.
DOE's preliminary analysis for dishwashers, dehumidifiers, some gas
cooking products, and commercial clothes washers explicitly accounts
for the percentage of consumers that already purchase more efficient
equipment and takes these consumers into account when determining the
national energy savings associated with various candidate standard
levels. The preliminary analysis suggests that accounting for the
market value of energy savings alone (i.e., excluding any possible
``externality'' benefits such as those noted below) would produce
enough benefits to yield net benefits across a wide array of products
and circumstances. With the exception of electric and some gas cooking
products, these results quantify the percentage of consumers that do
purchase more efficient products. DOE requests additional data
(including the percentage of consumers purchasing more efficient
cooking products and the extent to which consumers of all product types
will continue to purchase more efficient equipment), for testing the
existence and extent of these consumer actions.
DOE believes that there is a lack of consumer information and/or
information processing capability about energy efficiency opportunities
in the home appliance market. If this is in fact the case, DOE would
expect the energy efficiency for home appliances to be randomly
distributed across key variables such as energy prices and usage
levels. Although, with the exception of cooking products, DOE has
already identified the percentage of consumers that already purchase
more efficient products, DOE does not correlate the consumer's usage
pattern and energy price with the efficiency of the purchased product.
Therefore, DOE seeks data on the efficiency levels of existing home
appliances in use by how often it is utilized (e.g., how many times
[[Page 64515]]
or hours the product is used) and its associated energy price (and/or
geographic region of the country). DOE plans to use these data to test
the extent to which purchasers of this equipment behave as if they are
unaware of the costs associated with their energy consumption. Also,
DOE seeks comment on additional knowledge of the Federal Energy Star
program, and the program's potential as a resource for increasing
knowledge of the availability and benefits of energy efficient
appliances in the home appliance consumer market.
A related issue is the problem of asymmetric information (one party
to a transaction has more and better information than the other) and/or
high transactions costs (costs of gathering information and effecting
exchanges of goods and services). In the case of appliances, in many
instances the party responsible for the appliance purchase may not be
the one who pays the cost to operate it. For example, home builders in
large-scale developments often make decisions about appliances without
input from home buyers, nor do they offer options to upgrade them.
Also, apartment owners normally make decisions about appliances, but it
may be the renters who pay the utility bills. If there were no
transactions costs, it would be in the home builders' and apartment
owners' interest to install appliances the buyers and renters would
choose on their own. For example, a renter who knowingly faces higher
utility bills from low-efficiency appliances would be willing to pay
less in rent, and the apartment owner would indirectly bear the higher
utility cost. However, this information is not costless, and it may not
be in the interest of the renter to take the time to develop it, or, in
the case of the landlord who installs a high-efficiency appliance, to
convey that information to the renter.
To the extent that asymmetric information and/or high transactions
costs are problems, one would expect to find certain outcomes with
respect to appliance energy efficiency. For example, other things
equal, one would not expect to see higher rents for apartments with
high-efficiency appliances. Conversely, if there were symmetric
information, one would expect appliances with higher energy efficiency
in rental units where the rent includes utilities compared to those
where the renter pays the utility bills separately. Similarly, for
single-family homes, one would expect higher energy efficiency levels
for replacement units than appliances installed in new construction.
Within the new construction market, one would expect to see appliances
with higher energy efficiency levels in custom-built homes (where the
buyer has more say in appliance choices) than in comparable homes built
in large-scale developments.
Of course, there are likely to be certain ``external'' benefits
resulting from the improved efficiency of units that are not captured
by the users of such equipment. These include both environmental and
energy security-related externalities that are not already reflected in
energy prices, such as reduced emissions of greenhouse gases and
reduced use of natural gas and oil for electricity generation. DOE
invites comments on the weight that should be given to these factors in
DOE's determination of the maximum efficiency level at which the total
benefits are likely to exceed the total costs resulting from a DOE
standard.
As previously stated, DOE generally seeks data that might enable it
to conduct tests of market failure for products under consideration for
standard-setting. For example, given adequate data, there are ways to
test for the extent of market failure for commercial clothes washers.
One would expect the owners of commercial clothes washers who also pay
for their energy and water consumption to purchase machines that
exhibit higher energy efficiency and lower water usage compared to
machines whose owners do not pay for the energy and water usage, other
things equal. To test for this form of market failure, DOE needs data
on energy efficiency and water consumption of such units and whether
the owner of the equipment is also the operator. DOE is also interested
in other potential tests of market failure and data that would enable
such tests.
In addition, various other analyses and procedures may apply to
such future rulemaking action, including those required by the National
Environmental Policy Act (Pub. L. 91-190, 42 U.S.C. 4321 et seq.); the
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4); the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.); the Regulatory Flexibility Act
(5 U.S.C. 601 et seq.); and certain Executive Orders.
The draft of today's action and any other documents submitted to
OMB for review are part of the rulemaking record and are available for
public review at the U.S. Department of Energy, Forrestal Building,
Room 1J-018, (Resource Room of the Building Technologies Program), 1000
Independence Avenue, SW., Washington, DC, (202) 586-9127, between 9
a.m. and 4 p.m., Monday through Friday, except Federal holidays.
VI. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's ANOPR.
Issued in Washington, DC, on September 17, 2007.
Alexander A. Karsner,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E7-22040 Filed 11-14-07; 8:45 am]
BILLING CODE 6450-01-P