[Federal Register Volume 75, Number 49 (Monday, March 15, 2010)]
[Proposed Rules]
[Pages 12144-12148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5564]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 75, No. 49 / Monday, March 15, 2010 /
Proposed Rules
[[Page 12144]]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket No. EE-2009-BT-STD-0022]
RIN 1904-AC06
Energy Conservation Program for Consumer Products: Energy
Conservation Standards for Residential Furnaces
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of public meeting and availability of a rulemaking
analysis plan.
-----------------------------------------------------------------------
SUMMARY: The U.S. Department of Energy (DOE) will hold a 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 furnaces, and the analytical approach, models, and
tools that DOE is using to evaluate amended standards for these
products. DOE also encourages written comments on these subjects. A
detailed discussion of these topics can be found in the rulemaking
analysis plan (RAP) for residential furnaces, which is available at:
http://www.eere.energy.gov/buildings/appliance_standards/residential/furnaces_boilers.html.
DATES: DOE will hold a public meeting on Wednesday, March 31, 2010,
from 9 a.m. to 5 p.m. in Washington, DC. Any person requesting to speak
at the public meeting should submit such a request, along with an
electronic copy of the statement to be given at the public meeting,
before 4 p.m., Wednesday, March 24, 2010. Written comments are welcome,
especially following the public meeting and should be submitted by
April 14, 2010.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121. Please note that foreign nationals visiting
DOE Headquarters are subject to advance security screening procedures.
If a foreign national wishes to participate in the meeting, please
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 the
notice title, the NOPM for Energy Conservation Standards for
Residential Furnaces, and provide the docket number EE-2009-BT-STD-0022
and/or regulatory identifier number (RIN) 1904-AC06. Comments may be
submitted using any of the following methods:
1. Federal eRulemaking Portal: http://www.regulations.gov. Follow
the instructions for submitting comments.
2. E-mail: [email protected]. Include docket
number EE-2009-BT-STD-0022 and/or RIN, 1904-AC06 in the subject line of
the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, NOPM for Energy Conservation
Standards for Residential Furnaces, 1000 Independence Avenue, SW.,
Washington, DC, 20585-0121. Please submit one signed paper original.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, 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 or
comments received, visit the U.S. Department of Energy, Resource Room
of the Building Technologies Program, 950 L'Enfant Plaza, SW., Suite
600, Washington, DC, (202) 586-2945, between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays. Please call Ms. Brenda Edwards
at the above telephone number for additional information regarding
visiting the Resource Room.
FOR FURTHER INFORMATION CONTACT: Mr. Mohammed Khan, U.S. Department of
Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies Program, EE-2J, 1000 Independence Avenue, SW., Washington,
DC, 20585-0121. Telephone: (202) 586-7892. E-mail:
[email protected].
Mr. Eric Stas, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC, 20585-
0121. Telephone: (202) 586-5827. E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
A. Statutory Authority
1. General
Title III of the Energy Policy and Conservation Act (EPCA) sets
forth a variety of provisions designed to improve energy efficiency.
Part A \1\ of Title III (42 U.S.C. 6291-6309) establishes the Energy
Conservation Program for Consumer Products Other Than Automobiles. The
program covers consumer products and certain commercial equipment
(referred to hereafter as ``covered products''), including the
residential furnaces that are subject to this rulemaking. (42 U.S.C.
6292(a)(5)) EPCA prescribed the initial energy conservation standards
for residential furnaces. (42 U.S.C. 6295(f)(1)-(2)) The statute
further provides DOE with the authority to conduct rulemakings to
determine whether to amend these standards. (42 U.S.C. 6295(f)(4)).
---------------------------------------------------------------------------
\1\ This part was originally titled Part B. It was redesignated
Part A in the United States Code for editorial reasons.
---------------------------------------------------------------------------
EPCA provides criteria for prescribing new or amended standards for
covered products. Any new or amended standard for a covered product
must be designed to achieve the maximum improvement in energy
efficiency that is technologically feasible and economically justified.
(42 U.S.C. 6295(o)(2)(A)) Furthermore, EPCA precludes DOE from adopting
any standard that would not result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that, in deciding
whether a standard is economically justified, DOE must determine
whether the benefits of the standard exceed its burdens. (42 U.S.C.
6295(o)(2)(B)(i)) DOE must do so after receiving comments on the
proposed standard and by considering, to the greatest extent
practicable, the following seven factors:
[[Page 12145]]
1. The economic impact of the standard on manufacturers and
consumers of the 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 that 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 considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Prior to proposing a standard, DOE typically seeks public input on
the analytical framework, models, and tools that will be used to
evaluate standards. DOE is publishing this notice of public meeting
(NOPM) to announce the availability of the rulemaking analysis plan
(RAP), which details the plans for the rulemaking approach, key data
sources DOE plans to use in its analyses, and a list of key issues DOE
would like comment upon. In addition, DOE is announcing a public
meeting to solicit feedback from interested parties on the RAP, models,
and data sources.
2. Regional Standards
a. General
Section 306(a) of the Energy Independence and Security Act of 2007
(EISA 2007; Pub. L. 110-140) amended EPCA to allow DOE to consider the
establishment of separate regional standards for furnaces. (42 U.S.C.
6295(o)(6)(A)) Specifically, EPCA allows for the establishment of a
single more-restrictive regional standard in addition to the base
national standard. (42 U.S.C. 6295(o)(6)(B)) EPCA stipulates that the
regions must include only contiguous states (with the exception of
Alaska and Hawaii, which can be included in regions that they are not
contiguous with), and that each state may be placed in only one region
(i.e., a state cannot be divided among two regions). (42 U.S.C.
6295(o)(6)(C))
EPCA mandates that a regional standard must produce significant
energy savings in comparison to a single national standard. Further,
EPCA provides that DOE must determine that the additional standards are
economically justified and consider the impact of the additional
regional standards on consumers, manufacturers, and other market
participants, including product distributors, dealers, contractors, and
installers. (42 U.S.C. 6295(o)(6)(C)-(D)) For this rulemaking, DOE will
consider the impacts of regional standards in addition to national
standards. The RAP gives an overview of DOE's proposed methodology for
analyzing impacts of a regional standard for furnaces, and additional
detail about DOE's proposed approach is provided throughout the RAP in
the applicable sections and subsections.
B. History of the Standards Rulemaking for Residential Furnaces
1. Background
Energy conservation standards for residential furnaces were
initially specified by EPCA in terms of annual fuel utilization
efficiency (AFUE). EPCA set minimum standards for all furnaces except
for mobile home furnaces and ``small'' furnaces (i.e., those units with
an input capacity less than 45,000 British thermal units per hour (Btu/
h)) at 78-percent AFUE, with a compliance date of January 1, 1992. EPCA
specified a separate 75-percent AFUE standard for mobile home furnaces
with a compliance date of September 1, 1990. (42 U.S.C. 6295(f)(1)-(2))
For furnaces with an input capacity less than 45,000 Btu/h, DOE
published a final rule on November 17, 1989 that set the minimum
standard for those products at 78-percent AFUE, with a compliance date
of January 1, 1992. 54 FR 47916.
On November 19, 2007, DOE published a final rule (hereafter
referred to as the ``November 2007 final rule'') amending the minimum
energy conservation standards for four product classes of residential
furnaces (i.e., non-weatherized gas, weatherized gas, mobile home gas,
and non-weatherized oil). 72 FR 65136. This rulemaking set standards
that would apply to any covered products manufactured for sale in the
United States, or imported into the United States, on or after November
19, 2015.
In response to the November 2007 final rule, the state of New York,
city of New York, state of Connecticut, commonwealth of Massachusetts,
and Natural Resources Defense Council filed a joint lawsuit against DOE
in the United States Court of Appeals for the Second Circuit. The
petitioners asserted that the standards for residential furnaces
promulgated by the November 2007 final rule did not reflect the
``maximum improvement in energy efficiency'' that ``is technologically
feasible and economically justified,'' as required by section
325(o)(2)(A) of EPCA. On April 16, 2009, DOE and the petitioners agreed
to a voluntary remand that would require DOE to revisit its initial
conclusions outlined in the November 2007 final rule. As part of the
remand agreement, DOE has until May 1, 2011 to issue a final rule
amending the energy conservation standards for residential furnaces.
In addition, section 310(3) of the Energy Independence and Security
Act of 2007 (EISA 2007) amended EPCA to require that energy
conservation standards address standby mode and off mode energy use for
a certain subset of products. (42 U.S.C. 6295(gg)) Specifically, when
DOE adopts new or amended standards for certain covered products after
July 1, 2010, the final rule must, if justified by the criteria for
adoption of standards in section 325(o) of EPCA, incorporate standby
mode and off mode energy use into a single standard if feasible, or
otherwise adopt a separate standard for such energy use for that
product. (42 U.S.C. 6295(gg)(3)) Because this rulemaking is scheduled
for issuance after July 1, 2010, DOE plans to address the standby mode
and off mode energy use in this rulemaking. Additional discussions of
the standby mode and off mode energy use for residential furnaces can
be found in the RAP.
2. Current Rulemaking for Energy Conservation Standards for Residential
Furnaces
Section 307 of EISA 2007 amended EPCA by removing the requirement
for DOE to publish an advanced notice of proposed rulemaking (ANOPR)
when amending standards for consumer products. DOE believes, however,
that early opportunities for DOE to vet its assumptions and analyses
and for interested parties to provide comments and data can be valuable
in developing energy conservation standards. For this rulemaking, DOE
developed an alternative rulemaking pathway, consisting of a NOPM and
RAP. These documents represent the first step in the process of
revising the energy conservation standards set forth in the November
2007 final rule for residential furnaces. DOE is issuing this NOPM to
receive feedback on the methodologies, data, and key assumptions that
will be used for the analyses before performing the notice of proposed
rulemaking (NOPR) analyses. The analyses and proposed methodologies
that will be used for the NOPR phase of this rulemaking are described
in detail in the RAP, available at the Web link provided in the SUMMARY
section of this notice.
[[Page 12146]]
Subsequently, DOE intends to issue the NOPR for public comment.
C. Specific Issues for Which DOE Is Seeking Comment
DOE is specifically presenting two issues regarding the energy
conservation standards rulemaking for residential furnaces in today's
notice. DOE presents additional issues throughout the RAP for which DOE
also seeks comment. The issues for which DOE seeks comment are
presented throughout the RAP and summarized at the end.
1. Consensus Agreement
On January 26, 2010, the Air-Conditioning, Heating and
Refrigeration Institute (AHRI), American Council for an Energy
Efficient Economy (ACEEE), Alliance to Save Energy (ASE), Appliance
Standards Awareness Project (ASAP), Natural Resources Defense Council
(NRDC), and Northeast Energy Efficiency Partnerships (NEEP) submitted a
joint comment (hereafter referred to as the Join Comment) to DOE
recommending minimum energy conservation standards for residential
central air conditioners, heat pumps, and furnaces. (AHRI, ACEEE, ASE,
ASAP, NRDC, and NEEP, the Joint Comment, No. 1 at pp. 1-33) The Joint
Comment stated the original consensus agreement was completed on
October 13, 2009 and had 15 signatories, including AHRI, ACEEE, ASE,
NRDC, ASAP, NEEP, Northwest Power and Conservation Council (NPCC),
California Energy Commission (CEC), Bard Manufacturing Company Inc.,
Carrier Residential and Light Commercial Systems, Goodman Global Inc.,
Lennox Residential, Mitsubishi Electric & Electronics USA, National
Comfort Products, and Trane Residential.
The Joint Comment recommends standards that divide the nation into
three regions for residential central air conditioners and two regions
for residential furnaces based on the population-weighted number of
heating degree days (HDD) of each state. States with 5000 HDD or more
are considered as part of the northern region, while states with less
than 5000 HDD are considered part of the southern region. For
residential central air conditioners, the Joint Comment establishes a
third region--the ``southwest'' region--which is comprised of
California, Arizona, New Mexico, and Nevada. For furnaces, the
southwest region states are included in the southern region. The
compliance date specified in the agreement is May 1, 2013 for non-
weatherized furnaces and January 1, 2015 for weatherized furnaces.
In addition to the RAP, DOE is making available on its Web site the
Joint comment, which can be found: http://www1.eere.energy.gov/buildings/appliance_standards/residential/furnaces_boilers.html. DOE
specifically invites comment from interested parties on the Joint
Comment. In particular, DOE is interested in comments relating to the
proposed AFUE requirements, the proposed regional divisions, and the
proposed compliance dates for residential furnace standards.
2. Combined Rulemaking Approach
DOE is currently conducting or planning separate standards
rulemakings for three interrelated products: (1) Central air
conditioners and heat pumps; (2) gas furnaces; and (3) furnace fans.
DOE is required by a Court-ordered consent decree to publish a final
rule addressing the energy conservation standards for residential
central air conditioners and heat pumps by June 30, 2011. A final rule
published by DOE in November 2007 amending the minimum energy
conservation standards for gas furnaces was remanded by the Courts to
DOE under the mandate that DOE publish a new final rule by May 1, 2011.
EISA 2007 amended EPCA to require that DOE publish a final rule
establishing energy conservation standards for ``the electricity used
for purposes of circulating air through duct work'' (i.e., the
electrical energy consumed by furnace fans) by January 1, 2013. (42
U.S.C. 6295(f)(4)(D))
Rather than analyze each set of products separately, DOE is
considering combining the analyses to examine how the interaction
between the three products impacts the cost to consumers and the energy
savings resulting from potential amended standards. If DOE conducts
such an analysis and the results indicate that a combined approach
yields additional savings beyond what can be achieved by considering
each product separately, DOE may decide to pursue a combined standards
rulemaking that addresses all three products, or two of the three
products (i.e., central air conditioners and heat pumps and residential
furnaces), simultaneously. If such a combined rulemaking is pursued,
DOE would be required to publish the combined final rule by May 1, 2011
in order to comply with the conditions of the remand agreement for
residential furnaces. DOE is seeking comment from interested parties
relating to a combined rulemaking regarding energy conservation
standards for residential central air conditioners and heat pumps,
residential furnaces, and furnace fans.
D. Summary of the Analyses To Be Performed by DOE
For residential furnaces, DOE is planning to conduct in-depth
technical analyses for the NOPR in the following areas: (1)
Engineering, (2) markups to determine product price, (3) energy-use
characterization, (4) life-cycle cost (LCC) and payback period (PBP),
(5) national impacts, (6) manufacturer impacts, (7) utility impacts,
(8) environmental impacts, (9) employment impacts, and (10) regulatory
impacts.
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 will identify 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.
2. Markups To Determine Product Price
DOE uses markups to convert the manufacturer costs estimated in the
engineering analysis to consumer prices, which then are used in the
life-cycle cost (LCC) and payback period (PBP) and manufacturer impact
analyses. DOE calculates markups for baseline products (baseline
markups) and for more efficient products (incremental markups). The
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. To develop markups,
DOE identifies how the products are distributed from the manufacturer
to the customer. After establishing appropriate distribution channels,
DOE relies on economic data from the U.S. Census Bureau and other
sources to define how prices are marked up as the products pass from
the manufacturer to the customer.
3. Energy Use Characterization
The purpose of the energy use analysis is to determine the annual
energy consumption of residential
[[Page 12147]]
furnaces in representative U.S. homes and to assess the energy-savings
potential of increased product efficiencies. DOE will estimate the
annual energy consumption of residential furnaces at specified energy
efficiency levels across a range of climate zones. The annual energy
consumption includes use of natural gas or oil for heat production as
well as use of electricity for the blower and auxiliary components. The
annual energy consumption of residential furnaces will be used in
subsequent analyses, including the LCC, PBP, and National Impact
Analyses.
4. Life-Cycle Cost and Payback Period Analyses
The LCC and PBP analyses evaluate 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
will compare the LCC of products designed to meet possible energy
conservation standards with the LCC of products likely to be installed
in the absence of standards. DOE will determine 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 repair and maintenance); (3) product lifetime; and (4) a
discount rate that 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.
5. National Impacts 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. DOE calculates
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 determines national annual energy consumption by
multiplying the number of units in use (by vintage) 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 in
response to changes in product costs due to standards.
6. Manufacturer Impact Analysis
The purpose of the manufacturer impact analysis (MIA) is to
identify and quantify the likely impacts of amended energy conservation
standards on manufacturers of residential furnaces. Using industry
research, public comments, and interviews with manufacturers and other
interested parties, DOE will analyze and consider a wide range of
quantitative and qualitative industry impacts that may occur due to
amended energy conservation standards. Based on the information
gathered during interviews and other research, DOE will assess impacts
on competition, manufacturing capacity, employment, and regulatory
burden.
7. Utility Impact Analysis
The utility impact analysis examines the effects of amended energy
conservation standards on the installed generation capacity of
electric, gas, and oil utilities. The utility impact analysis reports
the changes in installed capacity and generation between the base case
and the standards cases that result from each standard level by plant
type.
8. Environmental Impact Analysis
The purpose of the environmental impact analysis is to quantify and
consider the environmental effects of amended energy conservation
standards for furnaces. The environmental analysis will assess impacts
of amended energy conservation standards on the following types of
energy-related emissions--carbon dioxide (CO2), oxides of
nitrogen (NOX), sulfur dioxide (SO2), and mercury
(Hg). As part of the environmental impacts analysis, DOE plans to
monetize the benefits associated with emissions reductions using a
range of values.
9. Employment Analysis
The employment analysis will estimate indirect national job
creation or elimination resulting from possible standards. Indirect
employment impacts may result from expenditures shifting between goods
(the substitution effect) and changes in income and overall expenditure
levels (the income effect) that occur due to the standards. DOE defines
indirect employment impacts from standards as net jobs eliminated or
created in the general economy as a result of increased spending driven
by increased equipment prices and reduced spending on energy.
10. Regulatory Impact Analysis
The regulatory impact analysis addresses the potential for non-
regulatory approaches to supplant or augment energy conservation
standards in order to improve the energy efficiency or reduce the
energy consumption of the products covered under this rulemaking. DOE
will base its assessment on the actual impacts of any such initiatives
to date, but will also consider information presented regarding the
impacts that any existing initiative might have in the future.
11. Additional Supporting Analyses
DOE will also conduct several analyses that support the analyses
listed above, including the market and technology assessment and the
screening analysis, which contribute to the engineering analysis, and
the shipments analysis, which contributes to the NIA. DOE also conducts
an LCC subgroup analysis, which evaluates economic impacts on selected
groups of consumers who might be adversely affected by a change in the
national energy conservation standards for the considered products.
DOE further describes each analysis, including the methodologies,
key data sources, and issues for which DOE seeks public comment in the
RAP. The RAP is available at the Web address given in the SUMMARY
section of this notice.
DOE considers public participation to be a very important part of
the process for setting energy conservation standards. DOE actively
encourages the participation and interaction of the public during the
comment period in each stage of the rulemaking process. Beginning with
the NOPM, and during each subsequent public meeting and comment period,
interactions with and between members of the public provide a balanced
discussion of the issues to assist DOE in the standards rulemaking
process.
Accordingly, DOE encourages those who wish to participate in the
public meeting to obtain the RAP from DOE's Web site and to be prepared
to discuss its contents. A copy of the RAP 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 RAP. DOE is also interested in receiving views
concerning other relevant issues that participants believe would affect
energy
[[Page 12148]]
conservation standards for residential furnaces or that DOE should
address in the NOPR.
Furthermore, DOE welcomes all interested parties, regardless of
whether they participate in the public meeting, to submit in writing by
April 14, 2010, comments and information on matters addressed in the
RAP and on other matters relevant to consideration of standards for
residential furnaces.
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 the 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 February 22, 2010.
Cathy Zoi,
Assistant Secretary, Energy Efficiency and Renewable Energy.
[FR Doc. 2010-5564 Filed 3-12-10; 8:45 am]
BILLING CODE 6450-01-P