[Federal Register Volume 74, Number 8 (Tuesday, January 13, 2009)]
[Proposed Rules]
[Pages 1643-1646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-476]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket No. EERE-2006-BT-STD-0129]
RIN 1904-AA90
Energy Conservation Standards for Residential Water Heaters,
Direct Heating Equipment, and Pool Heaters: Public Meeting and
Availability of the Preliminary Technical Support Document
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of public meeting and availability of preliminary
technical support document.
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SUMMARY: The Department of Energy (DOE) will hold an informal public
meeting to discuss and receive comments on the product classes that DOE
plans to analyze for purposes of amending energy conservation standards
for certain residential heating products; the analytical framework,
models, and tools that DOE is using to evaluate standards for these
products; the results of preliminary analyses performed by DOE for
these products; and potential energy conservation standard levels
derived from these analyses that DOE could consider for these products.
DOE also encourages written comments on these subjects. To inform
stakeholders and facilitate this process, DOE has prepared an agenda, a
preliminary Technical Support Document (preliminary-TSD), and briefing
materials, all of which are available at: http://www.eere.energy.gov/buildings/appliance_standards/residential/heating products.html.
DATES: DOE will hold a public meeting on Monday, February 9, 2009, from
9 a.m. to 5 p.m. in Washington, DC. Any person requesting to speak at
the public meeting should submit such request, along with an electronic
copy of the statement to be given at the public meeting, before 4 p.m.,
Monday, January 26, 2009. Written comments are welcome, especially
following the public meeting, and should be submitted by March 16,
2009.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 1E-245, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121. Please note that foreign nationals
participating in the public meeting are subject to advance security
screening procedures. If a foreign national wishes to participate in
the public meeting, please
[[Page 1644]]
inform DOE of this fact as soon as possible by contacting Ms. Brenda
Edwards at (202) 586-2945 so that the necessary procedures can be
completed.
Interested persons may submit comments, identified by docket number
EERE-2006-BT-STD-0129, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected]. Include EERE-
2006-BT-STD-0129 in the subject line of the message.
Mail: Ms. Brenda Edwards, U.S. Department of Energy,
Building Technologies Program, Mailstop EE-2J, Public Meeting for
Residential Water Heaters, Direct Heating Equipment, and Pool Heaters,
EERE-2006-BT-STD-0129, 1000 Independence Avenue, SW., Washington, DC
20585-0121. Telephone (202) 586-2945. Please submit one signed paper
original.
Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department
of Energy, Building Technologies Program, 6th Floor, 950 L'Enfant
Plaza, SW., Washington, DC 20024. Telephone (202) 586-2945. Please
submit one signed paper original.
Instructions: All submissions received must include the agency name
and docket number.
Docket: For access to the docket to read background documents, a
copy of the transcript of the public meeting, or comments received, go
to the U.S. Department of Energy, 6th Floor, 950 L'Enfant Plaza, SW.,
Washington, DC 20024, (202) 586-2945, between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays. Please call Ms. Brenda Edwards
at (202) 586-2945 for additional information regarding visiting the
Resource Room. Please note that DOE's Freedom of Information Reading
Room (formerly Room 1E-190 at the Forrestal Building) is no longer
housing rulemaking materials.
FOR FURTHER INFORMATION CONTACT: Mohammed Khan, 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) 586-7892. E-mail: [email protected]. Michael
Kido, U.S. Department of Energy, Office of General Counsel, GC-72, 1000
Independence Avenue, SW., Washington, DC 20585-0121, (202) 586-8145. E-
mail: [email protected].
SUPPLEMENTARY INFORMATION:
A. Statutory Authority
Title III of the Energy Policy and Conservation Act (42 U.S.C.
6291, et seq.) (EPCA) established the Energy Conservation Program for
Consumer Products Other than Automobiles, covering major household
appliances including water heaters and home heating equipment.
Subsequent amendments expanded Title III of EPCA to include additional
consumer products and certain commercial and industrial equipment,
including residential pool heaters. (42 U.S.C. 6291, et seq.)
Furthermore, the National Appliance Energy Conservation Act of 1987
(NAECA) amended EPCA by establishing energy conservation standards for
residential water heaters, ``direct heating equipment'' (replacing the
term ``home heating equipment'' previously used in EPCA), and pool
heaters, as well as requirements for determining whether these
standards should be amended. (42 U.S.C. 6295(e)(1) through (4))
Before DOE prescribes an amended standard for any of these
products, however, it must first solicit comments on a proposed
standard. Moreover, DOE must design each new or amended standard for
these products to (1) achieve the maximum improvement in energy
efficiency that is technologically feasible and economically justified,
and (2) result in significant conservation of energy. (42 U.S.C.
6295(o)(2)(A)) and (3) 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 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 conservation; and
7. Other factors the Secretary considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i).)
Prior to proposing a standard, DOE typically seeks public input on
the analytical framework, models, and tools that DOE will use to
evaluate standards for the product at issue; the results of preliminary
analyses performed by DOE for the product; and potential energy
conservation standard levels derived from these analyses that DOE could
consider. DOE is publishing this document to announce the availability
of the preliminary TSD, which details the preliminary analyses,
discusses the comments on the Framework document, and summarizes the
preliminary results. In addition, DOE is announcing a public meeting to
solicit feedback from interested parties on its analytical framework,
models, and preliminary results.
B. History of Standards Rulemaking for Residential Heating Products
1. Background
As indicated above, NAECA amended EPCA to establish energy
conservation standards for each of the three heating products,
applicable to units manufactured on or after January 1, 1990. For water
heaters, EPCA prescribed minimum efficiency levels that vary depending
on the storage volume of the product and the type of energy it uses
(i.e., gas, oil, or electricity). (42 U.S.C. 6295(e)(1)) For gas-fired
direct heating equipment, EPCA prescribed a range of minimum annual
fuel utilization efficiency (AFUE) levels, each of which applies to
units of a particular type and heating capacity range. (42 U.S.C.
6295(e)(3)) In addition, for gas-fired pool heaters, EPCA prescribed a
minimum thermal efficiency of 78 percent for all units. (42 U.S.C.
6295(e)(2)) For all three of the products, EPCA further requires that
DOE conduct two cycles of rulemakings to determine whether the
standards should be amended. (42 U.S.C. 6295(e)(4)).
On January 17, 2001, DOE published a final rule (the January 2001
final rule), effective on January 20, 2004, amending the energy
conservation standards for residential water heaters. 66 FR 4474. DOE
has not amended the energy conservation standards for direct heating
equipment or pool heaters.
As to direct heating equipment, before the enactment of NAECA, EPCA
included ``home heating equipment'' in
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DOE's appliance standards program. DOE construed this term as covering
unvented as well as vented products, and prescribed a separate test
procedure for each. 43 FR 20128, 20132 (May 2, 1978). Each of these
test procedures has since been amended and both are codified in 10 CFR
part 430, Subpart B, Appendix G (``Uniform Test Method for Measuring
the Energy Consumption of Unvented Home Heating Equipment'') and
Appendix O (``Uniform Test Method for Measuring the Energy Consumption
of Vented Home Heating Equipment''). However, when NAECA replaced the
term ``home heating equipment'' with ``direct heating equipment'' in
NAECA's amendments to EPCA in 1987 (42 U.S.C. 6295(e)(3)), the new
energy conservation standards for this equipment only affected gas
products and the statutorily-prescribed standards used the AFUE
descriptor, which applies to vented, but not unvented, equipment.
Because of the limitation imposed by the statute's use of the AFUE
descriptor, subsequent DOE actions concerning direct heating equipment
have focused solely on vented products.\1\
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\1\ See 59 FR 10464, (March 4, 1994) (NOPR proposing standards
for eight separate products) and 62 FR 26140 (May 12, 1997) (final
rule prescribing test procedure amendments affecting direct heating
equipment).
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The current test procedure for unvented equipment also does not
include a method for measuring energy efficiency. Despite this fact,
because of the manner in which unvented heating products operate, which
is to dissipate any heat losses directly into the conditioned space,
the amount of energy efficiency losses from these products is minimal.
In view of this belief, at this time, DOE is unaware of how the
addition of a procedure to measure the energy efficiency of these
particular products would yield significant energy efficiency benefits
or would otherwise be practical.
DOE also notes that while the NAECA amendments authorized DOE to
regulate unvented direct heating equipment, the rulemaking DOE is
currently considering would address standards only for vented direct
heating equipment since there is currently no energy efficiency
descriptor or test procedure that DOE could apply as the basis for an
amended standard for unvented heating products.
2. Current Rulemaking Process
To initiate the process to develop standards, on September 27,
2006, DOE published on its Web site the Rulemaking Framework for
Residential Water Heaters, Direct Heating Equipment, and Pool Heaters
(the framework document), which describes the procedural and analytic
approaches it anticipated 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/residential/pdfs/heating_equipment_framework_092706.pdf. DOE also
published a notice announcing the availability of the framework
document and a public meeting to discuss the proposed analytical
framework, and inviting written comments concerning the development of
standards for the three heating products. 71 FR 67825 (November 24,
2006).
The focus of the public meeting, which was held on January 16,
2007, was to discuss the analyses and issues identified in various
sections of the framework document. At the meeting, DOE described the
different analyses it would conduct, the methods proposed for
conducting them, and the relationships among the various analyses.
Manufacturers, trade associations, environmental advocates, regulators,
and other interested parties attended. Information related to the
meeting is available at http://www.eere.energy.gov/buildings/appliance_standards/residential/heating_equipment_mtg.html.
In response to the requests of interested parties at the public
meeting, DOE subsequently published in the Federal Register a notice
that extended the comment period by two weeks. 72 FR 4219 (January 30,
2007). Written comments submitted during the comment period elaborated
on the issues raised at the meeting and addressed other major issues,
including
Scope of coverage;
Product classes;
Efficiency levels analyzed for the engineering analysis;
Installation, repair, and maintenance costs; and
Product and fuel switching.
Comments received since publication of the framework document have
helped identify issues DOE needs to address in developing a proposed
standard and provided information contributing to DOE's proposed
resolution of these issues.
C. Summary of the Analyses Performed by DOE
For each of the three heating products currently under
consideration, DOE conducted in-depth technical analyses in the
following areas: (1) Engineering, (2) energy-use characterization, (3)
markups to determine product price, (4) life-cycle cost (LCC) and
payback period (PBP) analyses, and (5) national impact analysis (NIA).
These analyses resulted in a preliminary TSD that presents the
methodology and results of each of these analyses. The preliminary TSD
is available at the Web address given in the SUMMARY section of this
notice. The analyses are described in more detail below.
DOE also conducted several other analyses that either support the
five major analyses or are preliminary analyses that will be expanded
upon during the notice of proposed rulemaking (NOPR).\2\ These analyses
include the market and technology assessment, the screening analysis,
which contributes to the engineering analysis, and the shipments
analysis, which contributes to the NIA. In addition to these analyses,
DOE has begun some preliminary work on the manufacturer impact analysis
(MIA) and identified the methods to be used for the LCC subgroup
analysis, the environmental assessment, the employment analysis, the
regulatory impact analysis, and the utility impact analysis. DOE will
expand on these analyses in the NOPR.
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\2\ For past rulemakings, DOE was required to issue an Advanced
Notice of Proposed Rulemaking (ANOPR) following publication of the
framework document. The Energy Independence and Security Act of 2007
(EISA) eliminated the requirement that DOE issue an ANOPR as part of
the standards rulemaking process; see EISA, at sec. 307. Instead,
DOE is using this alternative process to provide the same
information and ability for public comment as the ANOPR, but without
publication of analyses in the Federal Register.
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1. Engineering Analysis
The engineering analysis establishes the relationship between the
cost and efficiency of a product DOE is evaluating for amended energy
conservation standards. This relationship serves as the basis for cost-
benefit calculations for individual consumers, manufacturers, and the
Nation. The engineering analysis identifies representative baseline
products, which is the starting point for analyzing technologies that
provide energy efficiency improvements. Baseline product refers to a
model or models having features and technologies typically found in
products 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 estimated manufacturer selling prices through an
analysis of (1) manufacturer costs, and (2) markups,
[[Page 1646]]
which are the multipliers used to determine the manufacturer selling
prices based on manufacturing cost. Chapter 5 of the preliminary TSD
discusses the engineering analysis.
2. Energy Use Characterization
The energy use characterization provides estimates of annual energy
consumption for the three heating products, which DOE uses in the LCC
and PBP analyses and the NIA. DOE developed energy consumption
estimates for all of the product classes analyzed in the engineering
analysis as the basis for its energy use estimates. Chapter 7 of the
preliminary TSD discusses the energy use characterization.
3. Markups To Determine Product Prices
DOE derives consumer prices for products based on manufacturer
markups, retailer markups, distributor markups, contractor markups,
builder markups, 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
products (baseline markups) and for more-efficient products
(incremental markups). DOE calculates both overall baseline and overall
incremental markups based on the product markups at each step in the
distribution channel. 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. Chapter 6 of the preliminary TSD discusses the estimation
of markups.
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
conservation 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 selling price, sales taxes, distribution chain markups,
and installation cost); (2) the operating expenses of the products
(energy use and maintenance); (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 installation cost)
of more efficient products 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. Chapter 8 of the preliminary TSD discusses the
LCC and PBP analyses.
5. National Impact Analysis
The NIA estimates the national energy savings (NES) and the net
present value (NPV) of total consumer costs and savings expected to
result from new standards at specific efficiency levels (referred to as
candidate standard levels). Examining the three heating products, DOE
calculated NES and NPV for each efficiency level 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,
which is expressed in years) by the average unit energy consumption
(also by vintage). Cumulative energy savings are the sum of the annual
NES determined over a specified time period. 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
lifetimes), and estimates of changes in shipments and retirement rates
in response to changes in product costs due to standards. Chapter 10 of
the preliminary TSD discusses the NIA.
DOE consulted with stakeholders and other interested persons as
part of its process for conducting all of the analyses and invites
further input from the public on these topics. The preliminary
analytical results are subject to revision following review and input
from the public. A complete and revised TSD will be made available upon
issuance of a NOPR. The final rule will contain the final analysis
results and be accompanied by a final rule TSD.
DOE encourages those who wish to participate in the public meeting
to obtain the preliminary TSD and to be prepared to discuss its
contents. A copy of the preliminary TSD is available at the Web address
given in the SUMMARY section of this notice. However, public meeting
participants need not limit their comments to the topics identified in
the preliminary TSD. DOE is also interested in receiving views
concerning other relevant issues that participants believe would affect
energy conservation standards for these products or that DOE should
address in the NOPR.
Furthermore, DOE welcomes all interested parties, whether or not
they participate in the public meeting, to submit in writing by March
16, 2009, comments and information on matters addressed in the
preliminary TSD and on other matters relevant to consideration of
standards for residential water heaters, direct heating equipment, and
pool heaters.
The public meeting will be conducted in an informal, conference
style. A court reporter will be present to record the minutes of the
meeting. There shall be no discussion of proprietary information, costs
or prices, market shares, or other commercial matters regulated by
United States antitrust laws.
After the public meeting and the expiration of the period for
submitting written statements, DOE will consider all comments and
additional information that is obtained from interested parties or
through further analyses, and it will prepare a NOPR. The NOPR will
include proposed energy conservation standards for the products covered
by this rulemaking, and members of the public will be given an
opportunity to submit written and oral comments on the proposed
standards.
Issued in Washington, DC, on January 5, 2009.
John F. Mizroch,
Acting Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. E9-476 Filed 1-12-09; 8:45 am]
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