[Federal Register Volume 76, Number 77 (Thursday, April 21, 2011)]
[Rules and Regulations]
[Pages 22454-22564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9040]
[[Page 22453]]
Vol. 76
Thursday,
No. 77
April 21, 2011
Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Residential Clothes Dryers and Room Air Conditioners; Final Rule
Federal Register / Vol. 76 , No. 77 / Thursday, April 21, 2011 /
Rules and Regulations
[[Page 22454]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EERE-2007-BT-STD-0010]
RIN 1904-AA89
Energy Conservation Program: Energy Conservation Standards for
Residential Clothes Dryers and Room Air Conditioners
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Direct final rule.
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SUMMARY: The Energy Policy and Conservation Act (EPCA) prescribes
energy conservation standards for various consumer products and
commercial and industrial equipment, including residential clothes
dryers and room air conditioners. EPCA also requires the U.S.
Department of Energy (DOE) to determine if amended standards for these
products are technologically feasible and economically justified, and
would save a significant amount of energy. In this direct final rule,
DOE adopts amended energy conservation standards for residential
clothes dryers and room air conditioners. A notice of proposed
rulemaking that proposes identical energy efficiency standards is
published elsewhere in today's Federal Register. If DOE receives
adverse comment and determines that such comment may provide a
reasonable basis for withdrawing the direct final rule, this final rule
will be withdrawn and DOE will proceed with the proposed rule.
DATES: The final rule is effective on August 19, 2011 unless adverse
comment is received by August 9, 2011. If adverse comments are received
that DOE determines may provide a reasonable basis for withdrawal of
the final rule, a timely withdrawal of this rule will be published in
the Federal Register. If no such adverse comments are received,
compliance with the standards in this final rule will be required on
April 21, 2014.
ADDRESSES: Any comments submitted must identify the direct final rule
for Energy Conservation Standards for Residential Clothes Dryers and
Room Air Conditioners, and provide docket number EERE-2007-BT-STD-0010
and/or regulatory information number (RIN) number 1904-AA89. 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 the
docket number and/or RIN in the subject line of the message.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue, SW.,
Washington, DC 20585-0121. If possible, please submit all items on a
CD. It is not necessary to include printed copies.
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. If possible,
please submit all items on a CD. It is not necessary to include printed
copies.
For detailed instructions on submitting comments and additional
information on the rulemaking process, see section VII of this document
(Public Participation).
Docket: The docket is available for review at regulations.gov,
including Federal Register notices, framework documents, public meeting
attendee lists and transcripts, comments, and other supporting
documents/materials. All documents in the docket are listed in the
regulations.gov index. Not all documents listed in the index may be
publicly available, such as information that is exempt from public
disclosure. A link to the docket web page can be found at http://www.regulations.gov.
For further information on how to submit or review public comments
or view hard copies of the docket in the Resource Room, contact Ms.
Brenda Edwards at (202) 586-2945 or e-mail: [email protected].
FOR FURTHER INFORMATION CONTACT:
Stephen L. Witkowski, 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, (202) 586-
7463, e-mail: [email protected].
Ms. Elizabeth Kohl, U.S. Department of Energy, Office of General
Counsel, GC-71, 1000 Independence Avenue, SW., Washington, DC 20585-
0121, (202) 586-7796, e-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Direct Final Rule
A. The Energy Conservation Standard Levels
B. Benefits and Costs to Consumerss
C. Impact on Manufacturers
D. National Benefits
E. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Residential Clothes
Dryers and Room Air Conditioners
3. Consensus Agreement for Residential Clothes Dryers and Room
Air Conditioners
III. General Discussion
A. Test Procedures
1. Clothes Dryer Test Procedure
a. Standby Mode and Off Mode
b. Automatic Cycle Termination
c. Ventless Clothes Dryers
d. Consumer Usage Habits
e. Drum Capacity Measurement
f. HVAC Effects
g. Efficiency Metric
2. Room Air Conditioner Test Procedure
a. Standby Mode and Off Mode
b. Active Mode Referenced Standards
c. Annual Active Mode Hours
d. Part-Load Operation
e. Distribution of Air
3. Effects of Test Procedure Revisions on the Measured
Efficiency
a. Clothes Dryers
b. Room Air Conditioners
B. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
a. Clothes Dryers
b. Room Air Conditioners
c. Available Max-Tech Products With Higher EER Ratings
d. Consideration of Conversion to R-410A Refrigerant in Max-Tech
Selections
C. Energy Savings
1. Determination of Savings
2. Significance of Savings
D. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Life-Cycle Costs
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion
A. Market and Technology Assessment
1. General
2. Products Included in This Rulemaking
a. Clothes Dryers
b. Room Air Conditioners
3. Product Classes
a. Clothes Dryers
b. Room Air Conditioners
4. Non-Regulatory Programs
5. Technology Options
a. Clothes Dryers
b. Room Air Conditioners
B. Screening Analysis
1. Clothes Dryers
2. Room Air Conditioners
C. Engineering Analysis
1. Technologies Not Analyzed
a. Clothes Dryers
b. Room Air Conditioners
2. Efficiency Levels and Cost-Efficiency Results
[[Page 22455]]
a. Clothes Dryers
b. Room Air Conditioners
D. Markups Analysis
E. Energy Use Analysis
1. Clothes Dryers
2. Room Air Conditioners
F. Life-Cycle Cost and Payback Period Analyses
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Energy Price Projections
6. Maintenance and Repair Costs
7. Product Lifetime
8. Discount Rates
a. Residential Discount Rates
b. Commercial Discount Rates
9. Compliance Date of Amended Standards
10. Base Case Efficiency Distribution
11. Inputs to Payback Period Analysis
12. Rebuttable-Presumption Payback Period
G. National Impact Analysis--National Energy Savings and Net
Present Value Analysis
1. Shipments
2. Forecasted Efficiency in the Base Case and Standards Cases
3. National Energy Savings
4. Net Present Value of Consumer Benefit
5. Benefits From Effects of Standards on Energy Prices
H. Consumer Subgroup Analysis
I. Manufacturer Impact Analysis
1. Overview
a. Phase 1, Industry Profile
b. Phase 2, Industry Cash Flow Analysis
c. Phase 3, Sub-Group Impact Analysis
2. GRIM Analysis
a. GRIM Key Inputs
b. GRIM Scenarios
3. Discussion of Comments
a. Small Businesses
b. Cumulative Regulatory Burden
c. Employment Impacts
4. Manufacturer Interviews
a. Clothes Dryer Key Issues
b. Room Air Conditioner Key Issues
J. Employment Impact Analysis
K. Utility Impact Analysis
L. Environmental Assessment
M. Monetizing Carbon Dioxide and Other Emissions Impacts
1. Social Cost of Carbon
a. Monetizing Carbon Dioxide Emissions
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
c. Current Approach and Key Assumptions
2. Valuation of Other Emissions Reductions
V. Analytical Results
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Sub-Group Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Sub-Groups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
C. Proposed Standards
1. Benefits and Burdens of TSLs Considered for Clothes Dryers
2. Benefits and Burdens of TSLs Considered for Room Air
Conditioners
3. Summary of Benefits and Costs (Annualized) of the Standards
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Residential Clothes Dryer Industry
2. Room Air Conditioner Industry
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act
E. Review under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
M. Congressional Notification
VII. Public Participation
A. Submission of Comments
VIII. Approval of the Office of the Secretary
I. Summary of the Direct Final Rule
A. The Energy Conservation Standard Levels
The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.;
EPCA or the Act), as amended, provides that any amended energy
conservation standard DOE prescribes for covered products, such as
residential clothes dryers (clothes dryers) and room air conditioners,
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, the amended standard must result
in a significant conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In
accordance with these and other statutory provisions discussed in this
notice, DOE adopts amended energy conservation standards for clothes
dryers and room air conditioners as shown in Table I-1. The standards
apply to all products listed in Table I-1 and manufactured in, or
imported into, the United States on or after April 21, 2014.
Table I-1--Amended Energy Conservation Standards for Residential Clothes
Dryers and Room Air Conditioners
------------------------------------------------------------------------
Minimum CEF
Product class levels* lb/
kWh
------------------------------------------------------------------------
Residential Clothes Dryers
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1. Vented Electric, Standard (4.4 ft\3\ or greater 3.73
capacity)..............................................
2. Vented Electric, Compact (120 V) (less than 4.4 ft\3\ 3.61
capacity)..............................................
3. Vented Electric, Compact (240 V) (less than 4.4 ft\3\ 3.27
capacity)..............................................
4. Vented Gas........................................... 3.30
5. Ventless Electric, Compact (240 V) (less than 4.4 2.55
ft\3\ capacity)........................................
6. Ventless Electric Combination Washer/Dryer........... 2.08
------------------------------------------------------------------------
Minimum CEER
Product class levels** Btu/
Wh
------------------------------------------------------------------------
Room Air Conditioners
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and less 11.0
than 6,000 Btu/h.......................................
[[Page 22456]]
2. Without reverse cycle, with louvered sides, and 6,000 11.0
to 7,999 Btu/h.........................................
3. Without reverse cycle, with louvered sides, and 8,000 10.9
to 13,999 Btu/h........................................
4. Without reverse cycle, with louvered sides, and 10.7
14,000 to 19,999 Btu/h.................................
5a. Without reverse cycle, with louvered sides, and 9.4
20,000 to 24,999 Btu/h.................................
5b. Without reverse cycle, with louvered sides, and 9.0
25,000 Btu/h or more...................................
6. Without reverse cycle, without louvered sides, and 10.0
less than 6,000 Btu/h..................................
7. Without reverse cycle, without louvered sides, and 10.0
6,000 to 7,999 Btu/h...................................
8a. Without reverse cycle, without louvered sides, and 9.6
8,000 to 10,999 Btu/h..................................
8b. Without reverse cycle, without louvered sides, and 9.5
11,000 to 13,999 Btu/h.................................
9. Without reverse cycle, without louvered sides, and 9.3
14,000 to 19,999 Btu/h.................................
10. Without reverse cycle, without louvered sides, and 9.4
20,000 Btu/h or more...................................
11. With reverse cycle, with louvered sides, and less 9.8
than 20,000 Btu/h......................................
12. With reverse cycle, without louvered sides, and less 9.3
than 14,000 Btu/h......................................
13. With reverse cycle, with louvered sides, and 20,000 9.3
Btu/h or more..........................................
14. With reverse cycle, without louvered sides, and 8.7
14,000 Btu/h or more...................................
15. Casement-only....................................... 9.5
16. Casement-slider..................................... 10.4
------------------------------------------------------------------------
* CEF (Combined Energy Factor) is calculated as the clothes dryer test
load weight in pounds divided by the sum of ``active mode'' per-cycle
energy use and ``inactive mode'' per-cycle energy use in kWh.
* * CEER (Combined Energy Efficiency Ratio) is calculated as capacity
times active mode hours (equal to 750) divided by the sum of active
mode annual energy use and inactive mode.
B. Benefits and Costs to Consumers
Table I-2 presents DOE's evaluation of the economic impacts of
today's standards on consumers of clothes dryers and room air
conditioners, as measured by the average life-cycle cost (LCC) savings
and the median payback period. The average LCC savings are positive for
all product classes of clothes dryers and room air conditioners for
which consumers would be impacted by the standards.
Table I-2--Impacts of Today's Standards on Consumers of Clothes Dryers
and Room Air Conditioners
------------------------------------------------------------------------
Median
Average LCC payback
Product class savings period
(2009$) (years)
------------------------------------------------------------------------
Clothes Dryers
------------------------------------------------------------------------
Electric Standard....................... $14 5.3
Compact 120V............................ 14 0.9
Compact 240V............................ 8 0.9
Gas..................................... 2 11.7
Ventless 240V........................... * 0 * n/a
Ventless Combination Washer/Dryer....... * 0 * n/a
------------------------------------------------------------------------
Room Air Conditioners
------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers............. 7 8.6
8,000-13,999 Btu/h, with Louvers........ 22 2.8
20,000-24,999 Btu/h, with Louvers....... 6 4.3
> 25,000 Btu/h, with Louvers............ 1 10.1
8,000-10,999 Btu/h, without Louvers..... 13 2.1
> 11,000 Btu/h, without Louvers......... 11 3.7
------------------------------------------------------------------------
* Because the standard level is the same as the baseline efficiency
level, no consumers are impacted and therefore calculation of a
payback period is not applicable.
C. Impact on Manufacturers
The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2011 to 2043). Using a real discount rate of 7.2
percent, DOE estimates that the industry net present value (INPV) for
manufacturers of clothes dryers is $1,003.6 million in 2009$. Under
today's standards, DOE expects that manufacturers may lose 6.4 to 8.0
percent of their INPV, which is $64.5 to -$80.6 million. Additionally,
based on DOE's interviews with the manufacturers of clothes dryers, DOE
does not expect any plant closings or significant loss of employment.
For room air conditioners, DOE estimates that the INPV for
manufacturers of room air conditioners is $956 million in 2009$ using a
real discount rate of 7.2 percent. Under today's standards, DOE expects
that manufacturers may lose 11.6 to 18.6 percent of their INPV, which
is $111.3 to $177.6 million. Additionally, based on DOE's interviews
with the manufacturers of room air conditioners, DOE does not expect
any plant closings or significant loss of employment.
D. National Benefits
DOE's analyses indicate that today's standards would save a
significant amount of energy over 30 years (2014-
[[Page 22457]]
2043)--an estimated 0.39 quads of cumulative energy for clothes dryers
and 0.31 quads of cumulative energy for room air conditioners. The
combined total, 0.70 quads, is equivalent to three-fourths of the
estimated amount of energy used in 2008 to dry clothes in all U.S.
homes. In addition, DOE expects the energy savings from today's
standards to eliminate the need for approximately 0.98 gigawatts (GW)
of generating capacity by 2043.
The cumulative national net present value (NPV) of total consumer
costs and savings of today's standards in 2009$ ranges from $1.08
billion (at a 7-percent discount rate) to $3.01 billion (at a 3-percent
discount rate) for clothes dryers, and from $0.57 billion (at a 7-
percent discount rate) to $1.47 billion (at a 3-percent discount rate)
for room air conditioners. This NPV expresses the estimated total value
of future operating-cost savings minus the estimated increased product
costs for products purchased in 2014-2043, discounted to 2011.
In addition, today's standards would have significant environmental
benefits. The energy savings would result in cumulative greenhouse gas
emission reductions of approximately 36.1 million metric tons (Mt) of
carbon dioxide (CO2) from 2014 to 2043. During this period,
the standards would also result in emissions reductions \1\ of
approximately 29.3 thousand tons of nitrogen oxides (NOX)
and 0.073 ton of mercury (Hg).\2\ DOE estimates that the net present
monetary value of the CO2 emissions reductions is between
$170 and $2,654 million, expressed in 2009$ and discounted to 2011. DOE
also estimates that the net present monetary value of the
NOX emissions reductions, expressed in 2009$ and discounted
to 2011, is $4.3 to $43.8 million at a 7-percent discount rate, and
$8.9 to $91.7 million at a 3-percent discount rate.\3\
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\1\ DOE calculates emissions reductions relative to the most
recent version of the Annual Energy Outlook (AEO) Reference case
forecast. As noted in section 15.2.4 of TSD chapter 15, this
forecast accounts for regulatory emissions reductions through 2008,
including the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12,
2005)), but not the Clean Air Mercury Rule (CAMR, 70 FR 28606 (May
18, 2005)). Subsequent regulations, including the currently proposed
CAIR replacement rule, the Clean Air Transport Rule (75 FR 45210
(Aug. 2, 2010)), do not appear in the forecast.
\2\ Results for NOX and Hg are presented in short
tons. One short ton equals 2000 lbs.
\3\ DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential
economic benefits of reduced Hg emissions. DOE has decided to await
further guidance regarding consistent valuation and reporting of Hg
emissions before it once again monetizes Hg emissions reductions in
its rulemakings.
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The benefits and costs of today's standards can also be expressed
in terms of annualized values. The annualized monetary values are the
sum of (1) the annualized national economic value, expressed in 2009$,
of the benefits from operating the product (consisting primarily of
operating cost savings from using less energy, minus increases in
equipment purchase costs, which is another way of representing consumer
NPV, plus (2) the monetary value of the benefits of emission
reductions, including CO2 emission reductions.\4\ The value
of the CO2 reductions is otherwise known as the Social Cost
of Carbon (SCC), and is calculated using a range of values per metric
ton of CO2 developed by a recent interagency process. The
monetary benefits of emissions reductions are reported in 2009$ so that
they can be compared with the other costs and benefits in the same
dollar units. The derivation of the SCC values is discussed in section
IV.M.
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\4\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE
calculated a present value in 2011, the year used for discounting
the NPV of total consumer costs and savings, for the time-series of
costs and benefits using discount rates of three and seven percent
for all costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates, as
shown in Table I.3. From the present value, DOE then calculated the
fixed annual payment over a 30-year period, starting in 2011, that
yields the same present value. The fixed annual payment is the
annualized value. Although DOE calculated annualized values, this
does not imply that the time-series of cost and benefits from which
the annualized values were determined would be a steady stream of
payments.
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Although adding the value of consumer savings to the values of
emission reductions provides a valuable perspective, two issues should
be considered. First, the national operating cost savings are domestic
U.S. consumer monetary savings that occur as a result of market
transactions, while the value of CO2 reductions is based on
a global value. Second, the assessments of operating cost savings and
the SCC are performed with different methods that use quite different
timeframes for analysis. The national operating cost savings is
measured for the lifetime of products shipped in 2014-2043. The SCC
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one metric ton of carbon
dioxide in each year. These impacts continue well beyond 2100.
Table I-3 shows the annualized values for the clothes dryer
standards. Using a 7-percent discount rate and the SCC value of $22.1/
ton in 2010 (in 2009$), the cost of the standards for clothes dryers in
today's rule is $52.3 million per year in increased equipment costs,
while the annualized benefits are $139.1 million per year in reduced
equipment operating costs, $25.0 million in CO2 reductions,
and $0.9 million in reduced NOX emissions. In this case, the
net benefit amounts to $112.7 million per year. DOE has calculated that
the annualized increased equipment cost can range from $50.5 to $66.6
million per year depending on assumptions and modeling of equipment
price trends. The high end of this range corresponds to a constant real
equipment price trend. Using the central estimate of energy-related
benefits, DOE estimates that calculated net benefits can range from
$98.4 to $114.5 million per year.
Using a 3-percent discount rate and the SCC value of $22.1/ton in
2010 (in 2009$), the cost of the standards for clothes dryers in
today's rule is $55.4 million per year in increased equipment costs,
while the benefits are $209.1 million per year in reduced operating
costs, $25.0 million in CO2 reductions, and $1.4 million in
reduced NOX emissions. In this case, the net benefit amounts
to $180.1 million per year. DOE has calculated that the annualized
increased equipment cost can range from $53.1 to $73.5 million per year
depending on assumptions and modeling of equipment price trends. The
high end of this range corresponds to a constant real equipment price
trend. Using the central estimate of energy-related benefits, DOE
estimates that calculated net benefits can range from $162.0 to $182.4
million per year.
Table I-4 shows the annualized values for the room air conditioner
standards. Using a 7-percent discount rate and the SCC value of $22.1/
ton in 2010 (in 2009$), the cost of the standards for room air
conditioners in today's rule is $107.7 million per year in increased
equipment costs, while the annualized benefits are $153.7 million per
year in reduced equipment operating costs, $19.5 million in
CO2 reductions, and $0.999 million in reduced NOX
emissions. In this case, the net benefit amounts to $66.4 million per
year.
DOE has calculated that the annualized increased equipment cost can
range from $105.7 to $136.6 million per year depending on assumptions
and modeling of equipment price trends. The high end of this range
corresponds to a constant real equipment price trend. Using the central
estimate of energy-related benefits, DOE estimates that calculated net
benefits can range from $37.5 to $68.4 million per year.
Using a 3-percent discount rate and the SCC value of $22.1/ton in
2010 (in
[[Page 22458]]
2009$), the cost of the standards for room air conditioners in today's
rule is $111.0 million per year in increased equipment costs, while the
benefits are $186.2 million per year in reduced operating costs, $19.5
million in CO2 reductions, and $1.20 million in reduced
NOX emissions. In this case, the net benefit amounts to
$95.9 million per year DOE has calculated that the range in the
annualized increased equipment cost can range from $108.0 to $146.0
million per year depending on assumptions and modeling of equipment
price trends. The high end of this range corresponds to a constant real
equipment price trend. Using the central estimate of energy-related
benefits, DOE estimates that calculated net benefits can range from
$60.9 to $98.9 million per year.
Table I-3--Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized (million 2009$ year)
Discount rate -----------------------------------------------------------------------------
Primary estimate * Low estimate * High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......................... 7% 139.1 120.6 158.3
3% 209.1 177.4 241.3
CO2 Reduction at $4.9/t **...................... 5% 6.0 6.0 6.0
CO2 Reduction at $22.1/t **..................... 3% 25.0 25.0 25.0
CO2 Reduction at $36.3/t **..................... 2.5% 39.8 39.8 39.8
CO2 Reduction at $67.1/t **..................... 3% 76.0 76.0 76.0
NOX Reduction at $2,519/ton **.................. 7% 0.9 0.9 0.9
3% 1.4 1.4 1.4
Total[dagger]............................... 7% plus CO2 range 146.1 to 216.1 127.6 to 197.6 165.3 to 235.3
7% 165.0 146.5 184.3
3% 235.4 203.7 267.6
3% plus CO2 range 216.5 to 286.5 184.8 to 254.8 248.7 to 318.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs.............. 7% 52.3 66.6 50.5
3% 55.4 73.5 53.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total[dagger]............................... 7% plus CO2 range 93.7 to 163.7 61.0 to 131.0 114.8 to 184.8
7% 112.7 79.9 133.8
3% 180.1 130.2 214.5
3% plus CO2 range 161.1 to 231.1 111.3 to 181.3 195.6 to 265.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
$36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The
value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$)
is the average of the low and high values used in DOE's analysis.
[dagger] Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
$22.1/ton in 2010 (in 2007$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are
calculated using the labeled discount rate, and those values are added to the full range of CO2 values.
Table I-4--Annualized Benefits and Costs of Amended Standards (TSL 4) for Room Air Conditioners Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized (million 2009$/year)
Discount rate -----------------------------------------------------------------------------
Primary estimate * Low estimate * High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......................... 7% 153.7 145.1 161.9
3% 186.2 174.2 197.3
CO2 Reduction at $4.9/t **...................... 5% 5.0 5.0 5.0
CO2 Reduction at $22.1/t **..................... 3% 19.5 19.5 19.5
CO2 Reduction at $36.3/t **..................... 2.5% 30.7 30.7 30.7
CO2 Reduction at $67.1/t **..................... 3% 59.4 59.4 59.4
NOX Reduction at $2,519/ton **.................. 7% 0.999 0.999 0.999
3% 1.197 1.197 1.197
Total [dagger].............................. 7% plus CO2 range 159.6 to 214.0 151.1 to 205.5 167.9 to 222.3
7% 174.1 165.5 182.4
3% 206.8 194.9 218.0
3% plus CO2 range 192.3 to 246.7 180.4 to 234.8 203.5 to 257.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22459]]
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs....................... 7% 107.7 136.6 105.7
3% 111.0 146.0 108.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total[dagger]........................... 7% plus CO2 range 51.9 to 106.3 43.4 to 97.8 62.2 to 116.6
7% 66.4 28.9 76.7
3% 95.9 48.9 110.0
3% plus CO2 range 81.4 to 135.8 34.4 to 88.8 95.5 to 149.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The primary, low, and high estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
for equipment prices, while the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate
sensitivity for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
$36.3 per metric ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The
value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$)
is the average of the low and high values used in DOE's analysis.
[dagger] Total benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
$22.1/ton in 2010 (in 2009$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are
calculated using the labeled discount rate, and those values are added to the full range of CO2 values.
E. Conclusion
Based on the analyses culminating in this final rule, DOE found the
benefits to the nation of the standards (energy savings, consumer LCC
savings, national NPV increase, and emission reductions) outweigh the
burdens (loss of INPV and LCC increases for some users of these
products). DOE has concluded that the standards represent the maximum
improvement in energy efficiency that is technologically feasible and
economically justified, and would result in significant conservation of
energy. DOE further notes that clothes dryers and room air conditioners
achieving these standard levels are already commercially available.
II. Introduction
A. Authority
Title III of EPCA sets forth a variety of provisions designed to
improve energy efficiency. Part B of title III (42 U.S.C. 6291-6309)
provides for the Energy Conservation Program for Consumer Products
other than Automobiles.\5\ The program covers consumer products and
certain commercial equipment (referred to hereafter as ``covered
products''), including clothes dryers and room air conditioners (42
U.S.C. 6292(a)(2) and (8)), and the Act prescribes energy conservation
standards for certain clothes dryers (42 U.S.C. 6295(g)(3)) and for
room air conditioners (42 U.S.C. 6295(c)(1)). EPCA further directs DOE
to conduct two cycles of rulemakings to determine whether to amend
these standards. (42 U.S.C. 6295(c)(2) and (g)(4)) As explained in
further detail in section II.C, ``Background,'' this rulemaking
represents the second round of amendments to both the clothes dryer and
room air conditioner standards.
---------------------------------------------------------------------------
\5\ For editorial reasons, upon codification in the U.S. Code,
Part B was re-designated Part A.
---------------------------------------------------------------------------
DOE notes that this rulemaking is one of the required agency
actions in the consolidated Consent Decree in State of New York, et al.
v. Bodman et al., 05 Civ. 7807 (LAP), and Natural Resources Defense
Council, et al. v. Bodman, et al., 05 Civ. 7808 (LAP), DOE is required
to complete a final rule for amended energy conservation standards for
room air conditioners and clothes dryers that must be sent to the
Federal Register by June 30, 2011.
Under the Act, DOE's energy conservation program for covered
products consists essentially of four parts: (1) Testing, (2) labeling,
(3) Federal energy conservation standards, and (4) certification and
enforcement procedures. The Federal Trade Commission (FTC) is
responsible for labeling, and DOE implements the remainder of the
program. The Act authorizes DOE, subject to certain criteria and
conditions, to develop test procedures to measure the energy
efficiency, energy use, or estimated annual operating cost of each
covered product. (42 U.S.C. 6293) Manufacturers of covered products
must use the DOE test procedure as the basis for certifying to DOE that
their products comply with applicable energy conservation standards
adopted under EPCA and for representing the efficiency of those
products. (42 U.S.C. 6293(c) and 6295(s)) Similarly, DOE must use these
test procedures to determine whether the products comply with standards
adopted under EPCA. Id. The test procedures for clothes dryers and room
air conditioners appear at title 10 Code of Federal Regulations (CFR)
part 430, subpart B, appendices D and F, respectively.
EPCA provides criteria for prescribing amended standards for
covered products. As indicated above, any 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)) EPCA also provides that,
in determining 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:
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
[[Page 22460]]
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 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)(I)-(VII))
The Energy Independence and Security Act of 2007 (EISA 2007; Public
Law 110-140) amended EPCA, in relevant part, to grant DOE authority to
issue a final rule (hereinafter referred to as a ``direct final rule'')
establishing an energy conservation standard on receipt of a statement
submitted jointly by interested persons that are fairly representative
of relevant points of view (including representatives of manufacturers
of covered products, States, and efficiency advocates) as determined by
the Secretary, that contains recommendations with respect to an energy
conservation standard that are in accordance with the provisions of 42
U.S.C. 6295(o). A notice of proposed rulemaking (NOPR) that proposes an
identical energy efficiency standard must be published simultaneously
with the final rule, and DOE must provide a public comment period of at
least 110 days on this proposal. 42 U.S.C. 6295(p)(4). Not later than
120 days after issuance of the direct final rule, if one or more
adverse comments or an alternative joint recommendation are received
relating to the direct final rule, the Secretary must determine whether
the comments or alternative recommendation may provide a reasonable
basis for withdrawal under 42 U.S.C. 6295(o) or other applicable law.
If the Secretary makes such a determination, DOE must withdraw the
direct final rule and proceed with the simultaneously published notice
of proposed rulemaking. DOE must publish in the Federal Register the
reason why the direct final rule was withdrawn. Id.
The Consent Decree in State of New York, et al. v. Bodman et al.,
described above, defines a ``final rule'' to have the same meaning as
in 42 U.S.C. 6295(p)(4) and defines ``final action'' as a final
decision by DOE. As this direct final rule is issued under authority at
42 U.S.C. 6295(p)(4) and constitutes a final decision by DOE which
becomes legally effective 120 days after issuance, absent an adverse
comment that leads the Secretary to withdraw the direct final rule, DOE
asserts that issuance of this direct final rule on or before the date
required by the court constitutes compliance with the Consent Decree in
State of New York, et al. v. Bodman et al.
Furthermore, EPCA contains what is commonly known as an ``anti-
backsliding'' provision, which mandates that the Secretary not
prescribe any amended standard that either increases the maximum
allowable energy use or decreases the minimum required energy
efficiency of a covered product. (42 U.S.C. 6295(o)(1)) Also, the
Secretary may not prescribe a new standard if interested persons have
established by a preponderance of the evidence that the standard is
likely to result in the unavailability in the United States of any
covered product type (or class) with performance characteristics,
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
EPCA also establishes a rebuttable presumption that a standard is
economically justified if 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)
EPCA requires DOE to specify a different standard level than that
which applies generally to a type or class of products for any group of
covered products that have the same function or intended use if DOE
determines that products within such group (A) consume a different kind
of energy from that consumed by other covered products within such type
(or class); or (B) have a capacity or other performance-related feature
which other products within such type (or class) do not have and such
feature justifies a higher or lower standard. (42 U.S.C. 6295(q)(1)) In
determining whether a performance-related feature justifies such a
different standard for a group of products, DOE must consider such
factors as the utility to the consumer of the feature and other factors
DOE deems appropriate. Id. Any rule prescribing such a standard must
include an explanation of the basis on which such higher or lower level
was established. (42 U.S.C. 6295(q)(2))
Federal energy conservation requirements for covered products
generally supersede state laws or regulations concerning energy
conservation testing, labeling, and standards. (42 U.S.C. 6297 (a)-(c))
DOE can, however, grant waivers of Federal preemption for particular
state laws or regulations, in accordance with the procedures and other
provisions of section 327(d) of the Act. (42 U.S.C. 6297(d))
EPCA also requires that energy conservation standards address
standby mode and off mode energy use. Specifically, when DOE adopts a
standard for a covered product after July 1, 2010 it 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 the standard, if
feasible, or adopt a separate standard for such energy use for that
product. (42 U.S.C. 6295(gg)) As set forth below, the standards for
clothes dryers and room air conditioners at 10 CFR 430.32 (h) and (b)
are minimum energy factors (EF) and minimum energy efficiency ratios
(EER), respectively. Neither of these metrics incorporates standby or
off mode energy use, with the limited exception that the EF in appendix
D addresses the energy use of pilot lights in gas clothes dryers. (DOE
notes that standing pilot lights were prohibited by EPCA for products
manufactured after January 1, 1988. As a result, the final amended test
procedure, published on January 6, 2011, eliminates measurement of the
energy use of such pilot lights. Similarly, DOE does not incorporate
the energy use of pilot lights in the metric for gas clothes dryers
established in this final rule.) By contrast, the standard levels DOE
considered in this direct final rule are expressed in terms of the
``combined energy factor'' (CEF) for clothes dryers and the ``combined
energy efficiency ratio'' (CEER) for room air conditioners, and each of
these metrics incorporates energy use in all modes, including the
standby and off modes. DOE uses these metrics in the standards it
adopts in this direct final rule.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563
is supplemental to and explicitly reaffirms the principles, structures,
and definitions governing regulatory review established in Executive
Order 12866. To the extent permitted by law, agencies are required by
Executive Order 13563 to: (1) Propose or adopt a regulation
[[Page 22461]]
only upon a reasoned determination that its benefits justify its costs
(recognizing that some benefits and costs are difficult to quantify);
(2) tailor regulations to impose the least burden on society,
consistent with obtaining regulatory objectives, taking into account,
among other things, and to the extent practicable, the costs of
cumulative regulations; (3) select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity); (4) to the
extent feasible, specify performance objectives, rather than specifying
the behavior or manner of compliance that regulated entities must
adopt; and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public.
We emphasize as well that Executive Order 13563 requires agencies
``to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible.'' In its
guidance, the Office of Information and Regulatory Affairs has
emphasized that such techniques may include ``identifying changing
future compliance costs that might result from technological innovation
or anticipated behavioral changes.'' For the reasons stated in the
preamble, DOE believes that today's direct final rule is consistent
with these principles, including that, to the extent permitted by law,
agencies adopt a regulation only upon a reasoned determination that its
benefits justify its costs and select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits.
Consistent with EO 13563, and the range of impacts analyzed in this
rulemaking, the energy efficiency standard adopted herein by DOE
achieves maximum net benefits.
B. Background
1. Current Standards
In a final rule published on May 14, 1991, DOE prescribed the
current Federal energy conservation standards for clothes dryers
manufactured on or after May 14, 1994. 56 FR 22250. This rule completed
the first of the two rulemakings required under 42 U.S.C. 6295(g)(4) to
consider amending the standards for clothes dryers. The current
standards consist of four minimum EFs, expressed in pounds of clothing
load (lb) per kilowatt-hour (kWh), one for gas dryers and one each for
three different types of electric dryers. 10 CFR 430.32(h). These
standards are set forth in Table II.1 below.
Table II.1--Residential Clothes Dryer Current Energy Conservation
Standards
------------------------------------------------------------------------
Product class EF lb/kWh
------------------------------------------------------------------------
Electric, Standard (4.4 cubic feet (ft\3\) or greater 3.01
capacity).................................................
Electric, Compact (120 V) (less than 4.4 ft\3\ capacity)... 3.13
Electric, Compact (240 V) (less than 4.4 ft\3\ capacity)... 2.90
Gas........................................................ 2.67
------------------------------------------------------------------------
In a final rule published on September 24, 1997, DOE prescribed the
current Federal energy conservation standards for room air conditioners
manufactured on or after October 1, 2000. 62 FR 50122. This rule
completed the first of the two rulemakings required under 42 U.S.C.
6295(c)(2) to consider amending the standards for room air
conditioners. The current standards consist of minimum EERs, expressed
as cooling capacity in British thermal units (Btu) per hour (h) divided
by electrical input power in watts (W), that vary depending on the size
of the room air conditioner, whether it has louvered sides and a
heating cycle, and whether it is for casement installations. 10 CFR
430.32(b). These standards are set forth in Table II.2 below.
Table II.2--Room Air Conditioner Current Energy Conservation Standards
------------------------------------------------------------------------
Product class EER Btu/Wh
------------------------------------------------------------------------
Without reverse cycle, with louvered sides, and less than 9.7
6,000 Btu/h...............................................
Without reverse cycle, with louvered sides, and 6,000 to 9.7
7,999 Btu/h...............................................
Without reverse cycle, with louvered sides, and 8,000 to 9.8
13,999 Btu/h..............................................
Without reverse cycle, with louvered sides, and 14,000 to 9.7
19,999 Btu/h..............................................
Without reverse cycle, with louvered sides, and 20,000 Btu/ 8.5
h or more.................................................
Without reverse cycle, without louvered sides, and less 9.0
than 6,000 Btu/h..........................................
Without reverse cycle, without louvered sides, and 6,000 to 9.0
7,999 Btu/h...............................................
Without reverse cycle, without louvered sides, and 8,000 to 8.5
13,999 Btu/h..............................................
Without reverse cycle, without louvered sides, and 14,000 8.5
to 19,999 Btu/h...........................................
Without reverse cycle, without louvered sides, and 20,000 8.5
Btu/h or more.............................................
With reverse cycle, with louvered sides, and less than 9.0
20,000 Btu/h..............................................
With reverse cycle, without louvered sides, and less than 8.5
14,000 Btu/h..............................................
With reverse cycle, with louvered sides, and 20,000 Btu/h 8.5
or more...................................................
With reverse cycle, without louvered sides, and 14,000 Btu/ 8.0
h or more.................................................
Casement-Only.............................................. 8.7
Casement-Slider............................................ 9.5
------------------------------------------------------------------------
[[Page 22462]]
2. History of Standards Rulemaking for Residential Clothes Dryers and
Room Air Conditioners
EPCA prescribes energy conservation standards for clothes dryers
and for room air conditioners, consisting of a requirement that gas
clothes dryers manufactured after January 1, 1988 not be equipped with
constant burning pilots and performance standards (minimum EER levels)
for room air conditioners. (42 U.S.C. 6295(c)(1) and (g)(3)) These
amendments also required, for both products, that DOE conduct two
cycles of rulemakings to determine whether to amend these standards.
(42 U.S.C. 6295(c)(2) and (g)(4)) As indicated above, DOE completed the
first of these rulemaking cycles for clothes dryers in 1991, by
adopting performance standards for gas and electric products. DOE
completed the first of these rulemaking cycles for room air
conditioners in 1997 by adopting amended minimum EER levels.
DOE initiated this rulemaking on October 9, 2007 by publishing a
notice announcing the availability of the framework document, the
``Energy Conservation Standards Rulemaking Framework Document for
Residential Clothes Dryers and Room Air Conditioners.'' In this notice,
DOE also announced a public meeting and requested public comment on the
matters raised in the framework document. 72 FR 57254 (October 9,
2007). The framework document describes the procedural and analytical
approaches that DOE anticipated using to evaluate energy conservation
standards for clothes dryers and room air conditioners, and identified
various issues to be resolved in conducting this rulemaking. The
framework document is available at http://www1.eere.energy.gov/buildings/appliance_standards/.
DOE held the public meeting on October 24, 2007 to present the
contents of the framework document, describe the analyses it planned to
conduct during the rulemaking, seek comments from interested parties on
these subjects, and, in general, inform interested parties about, and
facilitate their involvement in, the rulemaking. Interested parties
discussed the following major issues at the public meeting: test
procedure revisions; product classes; technology options; approaches to
the engineering, life-cycle cost, payback period and national impact
analyses; efficiency levels analyzed in the engineering analysis; and
the approach for estimating typical energy consumption. At the meeting
and during the period for commenting on the framework document, DOE
received many comments that helped it identify and resolve issues
involved in this rulemaking.
DOE then gathered additional information and performed preliminary
analyses to help develop potential energy conservation standards for
clothes dryers and room air conditioners. This process culminated in
DOE's announcement of the availability of its preliminary technical
support document (preliminary TSD) and another public meeting to
discuss and receive comments on the following matters: the product
classes DOE planned to analyze; the analytical framework, models, and
tools that DOE was using to evaluate standards; the results of the
preliminary analyses performed by DOE; and potential standard levels
that DOE could consider. 75 FR 7987 (Feb. 23, 2010) (the February 2010
notice). DOE also invited written comments on the preliminary analysis.
Id. (The preliminary TSD is available at http://www1.eere.energy.gov/buildings/appliance_standards/residential/preliminary_analysis_tsd.html.) DOE also stated its interest in receiving views concerning
other relevant issues that participants believe would affect energy
conservation standards for clothes dryers or room air conditioners. Id.
at 7990.
The preliminary TSD provided an overview of the activities DOE
undertook in developing standards for clothes dryers and room air
conditioners, and discussed the comments DOE received in response to
the framework document. It also described the analytical framework that
DOE uses in this rulemaking, including a description of the
methodology, the analytical tools, and the relationships among the
various analyses that are part of the rulemaking. The preliminary TSD
presented and described in detail each analysis DOE performed,
including descriptions of inputs, sources, methodologies, and results.
These analyses were as follows:
A market and technology assessment addressed the scope of
this rulemaking, identified the potential classes for clothes dryers
and room air conditioners, characterized the markets for these
products, and reviewed techniques and approaches for improving their
efficiency.
A screening analysis reviewed technology options to
improve the efficiency of clothes dryers and room air conditioners, and
weighed these options against DOE's four prescribed screening criteria.
An engineering analysis estimated the manufacturer selling
prices (MSPs) associated with more energy-efficient clothes dryers and
room air conditioners.
An energy use analysis estimated the annual energy use of
clothes dryers and room air conditioners.
A markups analysis converted estimated MSPs derived from
the engineering analysis to consumer prices.
A life-cycle cost analysis calculated, for individual
consumers, the discounted savings in operating costs throughout the
estimated average life of each product, compared to any increase in
installed costs likely to result directly from the imposition of a
given standard.
A payback period (PBP) analysis estimated the amount of
time it takes individual consumers to recover the higher purchase
expense of more energy efficient products through lower operating
costs.
A shipments analysis estimated shipments of clothes dryers
and room air conditioners over the time period examined in the
analysis, and was used in performing the national impact analysis
(NIA).
A national impact analysis assessed the national energy
savings (NES), and the national net present value of total consumer
costs and savings, expected to result from specific, potential energy
conservation standards for clothes dryers and room air conditioners.
and
A preliminary manufacturer impact analysis (MIA) took the
initial steps in evaluating the effects on manufacturers of new amended
energy conservation standards.
The public meeting announced in the February 2010 notice took place
on March 16, 2010. At this meeting, DOE presented the methodologies and
results of the analyses set forth in the preliminary TSD. Major topics
discussed at the meeting included test procedure revisions; product
classes (including ventless clothes dryers); integrated efficiency
levels; the use of alternate refrigerants in room air conditioners;
engineering analysis tools; mark-ups; field energy consumption; life-
cycle cost inputs; efficiency distribution forecasts; national impact
analysis inputs; and trial standard level selection criteria. DOE also
discussed plans for conducting the NOPR analyses. The comments received
since publication of the February 2010 notice, including those received
at the March 2010 public meeting, have contributed to DOE's proposed
resolution of the issues in this rulemaking. This direct final rule
responds to the issues raised in the comments received.
[[Page 22463]]
3. Consensus Agreement for Residential Clothes Dryers and Room Air
Conditioners
In response to the preliminary analysis, DOE received the
``Agreement on Minimum Federal Efficiency Standards, Smart Appliances,
Federal Incentives and Related Matters for Specified Appliances'' (the
``Joint Petition''), a comment submitted by groups representing
manufacturers (the Association of Home Appliance Manufacturers (AHAM),
Whirlpool Corporation (Whirlpool), General Electric Company (GE),
Electrolux, LG Electronics, Inc. (LG), BSH Home Appliances (BSH),
Alliance Laundry Systems (ALS), Viking Range, Sub-Zero Wolf, Friedrich
A/C, U-Line, Samsung, Sharp Electronics, Miele, Heat Controller, AGA
Marvel, Brown Stove, Haier, Fagor America, Airwell Group, Arcelik,
Fisher & Paykel, Scotsman Ice, Indesit, Kuppersbusch, Kelon, and
DeLonghi); energy and environmental advocates (American Council for an
Energy Efficient Economy (ACEEE), Appliance Standards Awareness Project
(ASAP), Natural Resources Defense Council (NRDC), Alliance to Save
Energy (ASE), Alliance for Water Efficiency (AWE), Northwest Power and
Conservation Council (NPCC), and Northeast Energy Efficiency
Partnerships (NEEP)); and consumer groups (Consumer Federation of
America (CFA) and the National Consumer Law Center (NCLC))
(collectively, the ``Joint Petitioners''). This collective set of
comments, which DOE refers to in this notice as the ``Joint Petition''
1B \6\ or ``Consensus Agreement'' recommends specific energy
conservation standards for residential clothes dryers and room air
conditioners that, in the commenters' view, would satisfy the EPCA
requirements in 42 U.S.C. 6295(o). DOE has considered the recommended
energy conservation standards in today's final rule.
---------------------------------------------------------------------------
\6\ DOE Docket No. EERE-2007-BT-STD-0010, Comment 35. DOE
considered the Joint Petitioners comments to supersede earlier
comments by the listed parties regarding issues subsequently
discussed in the Joint Petition.
---------------------------------------------------------------------------
After careful consideration of the joint comment containing a
consensus recommendation for amended energy conservation standards for
clothes dryers and room air conditioners, the Secretary has determined
that this ``Consensus Agreement'' has been submitted by interested
persons who are fairly representative of relevant points of view on
this matter. Congress provided some guidance within the statute itself
by specifying that representatives of manufacturers of covered
products, States, and efficiency advocates are relevant parties to any
consensus recommendation. (42 U.S.C. 6295(p)(4)(A)) As delineated
above, the Consensus Agreement was signed and submitted by a broad
cross-section of the manufacturers who produce the subject products,
their trade associations, and environmental, energy-efficiency and
consumer advocacy organizations. Although States were not signatories
to the Consensus Agreement, they did not express any opposition to it.
Moreover, DOE does not read the statute as requiring absolute agreement
among all interested parties before the Department may proceed with
issuance of a direct final rule. By explicit language of the statute,
the Secretary has discretion to determine when a joint recommendation
for an energy or water conservation standard has met the requirement
for representativeness (i.e., ``as determined by the Secretary'').
Accordingly, DOE will consider each consensus recommendation on a case-
by-case basis to determine whether the submission has been made by
interested persons fairly representative of relevant points of view.
Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also determine
whether a jointly-submitted recommendation for an energy or water
conservation standard is in accordance with 42 U.S.C. 6295(o) or 42
U.S.C. 6313(a)(6)(B), as applicable. This determination is exactly the
type of analysis which DOE conducts whenever it considers potential
energy conservation standards pursuant to EPCA. DOE applies the same
principles to any consensus recommendations it may receive to satisfy
its statutory obligation to ensure that any energy conservation
standard that it adopts achieves the maximum improvement in energy
efficiency that is technologically feasible and economically justified
and will result in significant conservation of energy, Upon review, the
Secretary determined that the Consensus Agreement submitted in the
instant rulemaking comports with the standard-setting criteria set
forth under 42 U.S.C. 6295(o). Accordingly, the consensus agreement
levels were included as TSL 4 in today's rule for both clothes dryers
and room air conditioners, the details of which are discussed at
relevant places throughout this document.
In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have
been satisfied, the Secretary has determined that it is appropriate to
adopt amended energy conservation standards for clothes dryers and room
air conditioners through this direct final rule
As required by the same statutory provision, DOE is also
simultaneously publishing a NOPR which proposes the identical standard
levels contained in this direct final rule with a 110-day public
comment period. DOE will consider whether any comment received during
this comment period is sufficiently ``adverse'' as to provide a
reasonable basis for withdrawal of the direct final rule and
continuation of this rulemaking under the NOPR. Typical of other
rulemakings, it is the substance, rather than the quantity, of comments
that will ultimately determine whether a direct final rule will be
withdrawn. To this end, the substance of any adverse comment(s)
received will be weighed against the anticipated benefits of the
Consensus Agreement and the likelihood that further consideration of
the comment(s) would change the results of the rulemaking. DOE notes
that to the extent an adverse comment had been previously raised and
addressed in the rulemaking proceeding, such a submission will not
typically provide a basis for withdrawal of a direct final rule.
III. General Discussion
A. Test Procedures
As noted above, DOE's test procedures for clothes dryers and room
air conditioners appear at 10 CFR part 430, subpart B, appendices D and
F, respectively. Moreover, EPCA requires DOE to amend its test
procedures for all covered products, including those for clothes dryers
and room air conditioners, to include measurement of standby mode and
off mode energy consumption, except where current test procedures fully
address such energy consumption or such a procedure is technically
infeasible. (42 U.S.C. 6295(gg)(2)) Because the clothes dryer and room
air conditioner test procedures previously covered such energy use only
as to pilot lights in gas dryers (as noted above, the final test
procedure rule eliminates the measurement of this energy use given the
statutory prohibition), on December 1, 2008 DOE issued a NOPR in which
it proposed revisions of these test procedures to fully address standby
and off mode energy use and sought comment on those revisions. 73 FR
74639 (Dec. 9, 2008) (TP NOPR). DOE also held a public meeting on
December 17, 2008 to receive oral comments.
DOE subsequently issued a supplemental NOPR (SNOPR) in that
rulemaking, in which it (1) addressed comments received in response to
the TP NOPR; (2) proposed adoption of certain definitions and
calculation
[[Page 22464]]
methods for standby and off mode energy use; and (3) proposed several
amendments to the clothes dryer and room air conditioner test
procedures concerning the active modes of these products. 75 FR 37594
(June 29, 2010) (TP SNOPR). For air conditioners, these proposed
amendments would update references to industry test standards. Id. at
37598. For clothes dryers, DOE proposed to amend its test procedures
for the active mode by adopting methods that would allow the testing of
ventless products and would more accurately account for automatic cycle
termination. Id. at 35798, 35799. DOE also proposed amendments to
reflect the current usage and capabilities of products (for example,
clothes dryer use cycles per year, remaining moisture content (RMC) of
clothes dryer loads, and load sizes), and to update test cloth
preconditioning provisions, eliminate reference to an obsolete industry
test standard, and clarify the required gas supply pressure for testing
gas clothes dryers. Id. DOE sought and received written comments on the
TP SNOPR and also held a public meeting on July 14, 2010 to receive
oral comments.
On January 6, 2011, DOE published in the Federal Register a final
rule for the test procedure rulemaking (76 FR 972) (TP Final Rule), in
which it (1) adopted the provisions for the measurement of standby mode
and off mode power use for both products proposed in the TP NOPR, as
modified by the TP SNOPR, but required that products be installed and
set up for standby and off mode testing in accordance with
manufacturers' instructions (and if no instructions are given, then the
appliance shall be tested at the factory or ``default'' settings); and
(2) adopted several amendments to the clothes dryer and room air
conditioner test procedures concerning the active mode for these
products, as proposed in and informed by public comment on the TP
SNOPR. 76 FR 972 (January 6, 2011). Specifically for room air
conditioners, the amendments adopted in the TP Final Rule updated the
references to industry test standards. Specifically for clothes dryers,
DOE adopted the amendments to include provisions for the testing of
ventless products proposed in the TP SNOPR, along with additional
clarifications regarding the testing conditions for ventless clothes
dryers. 76 FR 976-7. The amendments also include the following changes
to reflect the current usage and capabilities of products: (1) Changing
the annual clothes dryer use cycles from 416 to 283 cycle per year, (2)
changing the initial RMC of clothes dryer loads from 70 percent 3.5 percent to 57.5 percent 3.5 percent, and (3)
changing the clothes dryer test load size from 7.00 pounds (lbs) .07 lbs to 8.45 .085 lbs for standard-size clothes
dryers. 76 FR 977. The TP Final Rule also amends the DOE clothes dryer
test procedure by updating test cloth preconditioning provisions;
revising the water temperature for test load preparation from 100
degrees Fahrenheit ([deg]F) 5 [deg]F to 60 [deg]F 5 [deg]F; updating references to industry test standards;
eliminating reference to an obsolete industry test standard; clarifying
the required gas supply conditions for testing gas clothes dryers;
clarifying the provisions for measuring the drum capacity; clarifying
the definition of ``automatic termination control'' for clothes dryers;
and adding the calculations of EF and CEF to 10 CFR part 430, subpart
B, appendix D1. 76 FR 978.
DOE did not adopt the amendments to more accurately measure
automatic cycle termination proposed in the TP SNOPR. As discussed in
the TP Final Rule, DOE conducted testing of representative clothes
dryers using the automatic cycle termination test procedure proposed in
the TP SNOPR. The results showed that all of the clothes dryers tested
significantly over-dried the DOE test load to near bone dry and, as a
result, the measured EF values were significantly lower than EF values
obtained using the existing DOE test procedure. The test data also
indicated that dryers equipped with automatic termination controls were
less efficient than timer dryers. 76 FR 977.
As noted in the TP Final Rule, DOE believes the test procedure
amendments for automatic cycle termination proposed in the TP SNOPR do
not adequately measure the energy consumption of clothes dryers
equipped with such systems using the test load specified in the DOE
test procedure. DOE believes that clothes dryers with automatic
termination sensing control systems, which infer the RMC of the load
from the properties of the exhaust air such as temperature and
humidity, may be designed to stop the cycle when the consumer load has
a higher RMC than the RMC obtained using the proposed automatic cycle
termination test procedure in conjunction with the existing test
load.\7\ Manufacturers have indicated, however, that test load types
and test cloth materials different than those specified in the DOE test
procedure do not produce results as repeatable as those obtained using
the test load as currenty specified. Id.
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\7\ To investigate this, DOE conducted additional testing using
a test load similar to that specified in AHAM Standard HLD-1-2009,
which consists of cotton bed sheets, towels, and pillow cases. For
tests using the same automatic cycle termination settings as were
used in the testing described earlier (that is, normal cycle setting
and highest temperature setting), the alternate test load was dried
to 1.7 to 2.2 percent final RMC, with an average RMC of 2.0 percent.
In comparison, the same clothes dryer under the same cycle settings
dried the DOE test load to 0.3 to 1.2 percent RMC, with an average
RMC of 0.7 percent. Thus, DOE concluded that the proposed automatic
cycle termination control test procedures may not stop at an
appropriate RMC when used with the current test load.
---------------------------------------------------------------------------
In addition, DOE presented data in the test procedure final rule
published on May 19, 1981 from a field use survey conducted by AHAM as
well as an analysis of field test data on automatic termination control
dryers conducted by the National Bureau of Standards (now known as the
National Institute of Standards and Technology (NIST)). Analysis of
this data showed that clothes dryers equipped with an automatic cycle
termination feature consume less energy than timer dryers by reducing
over-drying. 46 FR 27324 (May 19, 1981).
For these reasons, DOE stated in the TP Final Rule that the test
procedure amendments for automatic cycle termination proposed in the TP
SNOPR do not adequately measure the energy consumption of clothes
dryers equipped with such systems. As a result, DOE did not adopt the
amendments for automatic cycle termination proposed in the TP SNOPR. 76
FR 972, 977 (January 6, 2011).
The following sections discuss the comments received in response to
the preliminary analyses regarding the test procedures for clothes
dryers and room air conditioners.
1. Clothes Dryer Test Procedure
ACEEE and Earthjustice (EJ) both commented that the DOE test
procedure inadequately represents field energy use, seriously hindering
efforts to develop effective regulations and sound public policy, and
produces misleading information for consumers and other interested
parties. (ACEEE, No. 24 at p. 2; EJ, No. 28 at p. 1) \8\ ACEEE provided
suggested test procedure changes, which are outlined in its comments
and discussed in the sections below. ACEEE stated these suggested test
procedure changes would improve the understanding of the overall
contribution of clothes dryers to national energy consumption, the
[[Page 22465]]
relative performance of products currently on the market, and
opportunities to improve clothes dryer energy performance (including
the potential of the design options defined in DOE's analysis). ACEEE
stated that its suggested test procedure changes would provide DOE
better data for determining the appropriate level for standards that
yield the maximum cost-effective energy savings for consumers. (ACEEE,
No. 24 at p. 2) Earthjustice commented that DOE should correct errors
in the existing test procedure that, according to Earthjustice,
misstate the actual clothes dryer energy consumption, as identified in
the report by ECOS Consulting (ECOS) (prepared for the NRDC),\9\ and
recalculate the estimates of clothes dryer energy use. (EJ, No. 28 at
p. 1) As discussed above, DOE recently published the TP Final Rule
amending its clothes dryer test procedure to address many of the test
procedure issues identified by ACEEE and Earthjustice. DOE addresses
each of these issues individually in the sections below.
---------------------------------------------------------------------------
\8\ A notation in the form ``ACEEE, No. 24 at p. 2'' identifies
a written comment (1) made by the American Council for an Energy
Efficient Economy (ACEEE), (2) recorded in document number 24 that
is filed in the docket of this rulemaking, and (3) which appears on
page 2 of document number 24.
\9\ NRDC, No. 30 at pp. 1-40.
---------------------------------------------------------------------------
a. Standby Mode and Off Mode
Referenced Standards
EPCA directs DOE to amend its test procedures to include measures
of standby mode and off mode energy consumption. EPCA further directs
DOE to amend the test procedures to integrate such energy consumption
into a single energy descriptor for that product. If that is
technically infeasible, DOE must prescribe a separate standby mode and
off mode energy-use test procedure, if technically feasible. (42 U.S.C.
6295(gg)(2)(A)) Any such amendment must consider the most current
versions of the International Electrotechnical Commission (IEC)
Standard 62301 [``Household electrical appliances--Measurement of
standby power,'' First Edition 2005-06] and IEC Standard 62087
[``Methods of measurement for the power consumption of audio, video,
and related equipment,'' Second Edition 2008-09].\10\ Id.
---------------------------------------------------------------------------
\10\ DOE considered IEC Standard 62087 and determined that this
standard addresses the methods of measuring the power consumption of
audio, video, and related equipment and is therefore inapplicable to
the products covered in this rulemaking.
---------------------------------------------------------------------------
AHAM supported DOE's evaluation of the most current draft version
of IEC Standard 62301 Second Edition, which at the time of the
preliminary analysis for the standards rulemaking was designated as the
Committee Draft for Vote (IEC Standard 62301 CDV), for potential
revisions to address standby mode and off mode power in DOE's clothes
dryer test procedure. AHAM commented that DOE would thus harmonize with
international standards, including those used in Canada and Europe.
(AHAM, Public Meeting Transcript, No. 21.4 at p. 30).\11\
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\11\ A notation in the form ``AHAM, Public Meeting Transcript,
No. 21.4 at p. 30'' identifies an oral comment that DOE received
during the March 16, 2010 public meeting and which was recorded in
the public meeting transcript in the docket for this rulemaking
(Docket No. EE-2007-BT-STD-0010), maintained in the Resource Room of
the Building Technologies Program. This particular notation refers
to a comment (1) made by the Association of Home Appliance
Manufacturers (AHAM) during the public meeting, (2) recorded in
document number 21.4, which is the public meeting transcript that is
filed in the docket of this rulemaking, and (3) which appears on
page 30 of document number 21.4.
---------------------------------------------------------------------------
In the TP NOPR, DOE discussed that IEC Standard 62301 Second
Edition was expected at that time to be published in July 2009. For
this reason, DOE stated in the TP NOPR that IEC Standard 62301 First
Edition would be the ``current version'' at the time of publication of
the final rule, so consideration thereof would comply with EPCA. DOE
incorporated sections from IEC Standard 62301 First Edition in the
proposed amendments to the clothes dryer test procedure in the TP NOPR.
73 FR 74639, 74644 (Dec. 9, 2008). DOE did not receive any comments in
response to the TP NOPR objecting to the proposed testing methods and
procedures referenced in IEC Standard 62301 First Edition. Therefore,
the TP SNOPR did not affect DOE's proposal in the TP NOPR to
incorporate by reference clauses from IEC Standard 62301 First Edition.
75 FR 37594, 37602 (June 29, 2010). In the TP Final Rule, DOE noted
that the most recent draft of IEC Standard 62301 Second Edition,
designated as the Final Draft International Standard (IEC Standard
62301 FDIS) had yet to be made available on IEC's public Web site and
that IEC Standard 62301 Second Edition is now projected to be issued in
April 2011. For the reasons stated in the TP Final Rule, DOE amended
its test procedures for clothes dryers in the final rule to incorporate
by reference the clauses from IEC Standard 62301 First Edition proposed
in the TP SNOPR. DOE also adopted the definitions of ``active mode,''
``standby mode,'' and ``off mode'' based on the language presented in
IEC Standard 62301 CDV. 76 FR 972, 976-977 (January 6, 2011). DOE may
consider incorporating by reference clauses from IEC Standard 62301
Second Edition when that version has been published.
Testing Procedures
As discussed in the Referenced Standards section, EPCA directs DOE
to amend the test procedures to integrate such energy consumption into
a single energy descriptor for that product. If that is technically
infeasible, DOE must prescribe a separate standby mode and off mode
energy-use test procedure, if technically feasible. (42 U.S.C.
6295(gg)(2)(A)) In the TP NOPR, DOE determined that it is technically
feasible to incorporate measures of standby mode and off mode energy
use into the overall energy use metric. 73 FR 74639, 74650 (Dec. 9,
2008). In the TP NOPR, DOE proposed to adopt the 140 hours associated
with drying as the active mode hours and to associate the remaining
8,620 hours of the year with standby mode and off mode. 73 FR 74639,
74647 (Dec. 9, 2008). In the TP NOPR, DOE also proposed definitions and
testing methods for multiple standby modes, including ``inactive
mode,'' ``delay start mode,'' and ``cycle finished mode.'' \12\ 73 FR
74639, 74647-48 (Dec. 9, 2008). DOE proposed to calculate clothes dryer
energy use per cycle associated with standby mode and off mode by (1)
calculating the product of wattage and allocated hours for all possible
standby modes and off modes; (2) summing the results; (3) dividing the
sum by 1,000 to convert from watt-hours (Wh) to kWh; and (4) dividing
by the number of cycles per year. 73 FR 74639, 74648 (Dec. 9, 2008). In
the TP NOPR, DOE reported that the comparison of annual energy use of
different clothes dryer modes showed that delay start and cycle
finished modes represent a negligible percentage of total annual energy
consumption. The comparison also showed that the power levels in these
modes are similar to those for inactive mode and off mode. For these
two reasons, DOE presented an alternate approach that would be limited
to specifying the hours for only inactive mode and off mode when
calculating energy use associated with standby mode and off mode. Under
this alternate approach, all of the non-active mode hours (8,620) would
be allocated to inactive mode and off mode. 73 FR 74639, 74648 (Dec. 9,
2008).
---------------------------------------------------------------------------
\12\ ``Inactive mode'' is defined as ``a standby mode other than
delay start mode or cycle finished mode that facilitates the
activation of active mode by remote switch (including remote
control), internal sensor, or provides continuous status display.''
``Delay start mode'' is defined as ``a standby mode that facilitates
the activation of active mode by timer.'' ``Cycle finished mode'' is
defined as ``a standby mode that provides continuous status display
following operation in active mode.''
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[[Page 22466]]
In the TP NOPR, DOE proposed to establish the CEF \13\ for clothes
dryer to integrate energy use in the standby mode and off mode with the
energy use of the main functions of the product. The CEF would be
defined as the clothes dryer test load weight in pounds divided by the
sum of the per-cycle standby and off mode energy consumption and either
the total per-cycle electric dryer energy consumption or the total per-
cycle gas dryer energy consumption expressed in kWh. 73 FR 74639, 74650
(December 9, 2008).
---------------------------------------------------------------------------
\13\ DOE proposed to use the term ``Integrated Energy Factor''
(IEF) in the TP NOPR. 73 FR 74639, 74650 (Dec. 9, 2008). However, in
the TP SNOPR, DOE proposed to revise the name of the metric to
``Combined Energy Factor'' (CEF) to avoid confusion with an existing
industry standard. 75 FR 37594, 37612 (June 29, 2010). DOE adopted
CEF as the measure of clothes dryer energy efficiency in the TP
Final Rule. 76 FR 972, 992 (January 6, 2011).
---------------------------------------------------------------------------
As discussed in chapter 5 of the preliminary TSD, for the
preliminary analyses, DOE analyzed the cost-efficiency relationship for
CEF using the alternative approach for this metric in the TP NOPR. That
approach allocates all of the non-active mode hours into inactive mode
and off mode energy use, and then integrates inactive mode and off mode
energy use with active mode energy use.
BSH commented that, in the formula to calculate the CEF in the
clothes dryer test procedure, ``8620'' inactive/off mode hours should
be replaced by (8720--per cycle duration (hours) x 416 clothes dryer
annual cycles), where 8720 = 365 days x 24 hours per day. According to
BSH, the standby mode is not valid during the active mode and,
therefore, the duration of the active mode should be subtracted from
the hours per year when calculating the standby energy consumption.
(BSH, No. 23 at p. 5) DOE notes that the estimate for active mode hours
presented in the TP NOPR was fixed based on the number of such hours
specified in the existing test procedure (140 hours). 73 FR 74646-7
(Dec. 9, 2008). DOE acknowledges that its estimate of the number of
cycles per year has decreased. As discussed in the TP Final Rule, DOE
notes that changes to the initial RMC, test load size, and specified
water temperature for test load preparation may also affect cycle time
and the number of active mode hours per year. DOE is not aware,
however, of any data indicating that the number of active mode hours
has changed and, if so, what a more accurate number might be.
Therefore, DOE did not adopt amendments to the number of active mode
hours in the TP Final Rule. 76 FR 972, 988 (January 6, 2011). For these
reasons, DOE believes that using the 140 annual active mode hours, as
specified in the existing test procedure, to determine the number of
annual inactive mode and off mode hour of 8,620, as adopted in the TP
Final Rule (76 FR 990), provides a more representative estimate of
consumer use than the method suggested by BSH.
b. Automatic Cycle Termination
In the framework document, DOE stated the clothes dryer test
procedure may not adequately measure the benefits of automatic cycle
termination, in which a sensor monitors either the exhaust air
temperature or moisture in the drum to determine the length of the
drying cycle. Currently, the test procedure provides a single field use
factor for the enhanced performance of clothes dryers equipped with
automatic termination. This single field use factor does not
distinguish between the type of sensing control system (for example,
temperature-sensing or moisture-sensing controls) and the accuracy of
the control system. In chapter 2 of the preliminary TSD, DOE stated
that it agrees that the effects of automatic cycle termination should
be more accurately measured in its clothes dryer test procedure, and
that this effect should properly account for any over- or under-drying.
Thus, DOE noted it was considering clothes dryer test procedure
amendments to address automatic cycle termination in the active mode
test procedure rulemaking. In response, interested parties commented on
the following topics relating to automatic cycle termination.
Definition of Automatic Termination Control
The Joint Petitioners commented that DOE should revise section 1.11
of 10 CFR 430 subpart B, appendix D to more clearly account for
electronic controls by specifying that a preferred automatic
termination control setting can also be indicated by a visual indicator
(in addition to the mark or detent). The clarification would read ``* *
* mark, visual indicator or detent which indicates a preferred * * *''
(Joint Petitioners, No. 33 at p. 25) As discussed in the TP Final Rule,
DOE agreed that a clarification should be added to the definition of
``automatic termination control.'' The clarification would be that a
mark, detent, or other visual indicator which indicates a preferred
automatic termination control setting must be present if the dryer is
to be classified as having an automatic termination control. DOE so
revised the definition in the TP Final Rule. 76 FR 972, 978 (January 6,
2011).
Testing Procedures
AHAM commented in response to the preliminary analyses that it
continues to support the use of the automatic termination field use
factor as currently specified by the DOE clothes dryer test procedure.
AHAM stated that clothes dryers utilize different algorithms to
determine when the drying cycle should end, and any evaluation of a
different approach will need to be thoroughly investigated and should
not be based on DOE test results from four sample units. AHAM proposed
that DOE conduct a study that evaluates: (1) The accuracy of the DOE
field use factor for today's products; and (2) the repeatability and
reproducibility of a procedure where cycle end is determined by a
moisture or temperature sensor. (AHAM, No. 25 at p. 13)
Whirlpool commented that its testing showed significant improvement
in the performance of sensors and automatic termination cycles when
using systems that incorporate sensors that directly measure the
moisture level of the clothes. Based on these test results, Whirlpool
recommended that an additional automatic termination factor be included
that would be equal to 1.01 to provide an appropriate field use factor
for clothes dryers that utilize improved moisture sensor systems.
(Whirlpool, No. 22 at p. 5)
After the publication of the preliminary analyses, the Joint
Petitioners submitted the Joint Petition, in which they commented that
DOE should modify the clothes dryer test procedure to address the
effectiveness of automatic termination controls (for example, moisture
sensor and temperature sensor controls). (Joint Petitioners, No. 33 at
p. 25) Pacific Gas & Electric (PG&E), Southern California Gas Company
(SCGC), San Diego Gas and Electric Company (SDGE), and Southern
California Edison (SCE) jointly (hereafter the ``California
Utilities''). NRDC, and NEEP commented that the current DOE test
procedure does not test the effectiveness of control sensors, which was
found to vary significantly. (California Utilities, No. 31 at p. 3;
NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at p. 29; NEEP, No. 27 at p. 3)
NRDC, NEEP, and the California Utilities stated that the DOE test
procedure is unrealistic and tests only the bulk-drying stage. In
addition, by not testing the high-heat stage (which contributes very
little to drying clothes) and instead applying a field use factor, the
current test methods overestimate the efficiency of the clothes dryer.
The current test methods also do not appropriately measure the energy
use of clothes dryers
[[Page 22467]]
that use more effective controls to limit the energy consumption of the
high-heat stage. (NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at p. 29;
NEEP, No. 27 at p. 3; California Utilities, No. 31 at p. 3) NRDC added
that the ECOS report stated that there is not much variation in
efficiency of the bulk drying stage among different clothes dryers.
However, there are considerable differences in the energy consumption
of the high-heat stage, which is not measured by the DOE test
procedure. (NRDC, No. 30 at p. 23) The ECOS report found that the
difference between a standard clothes dryer and one that is effective
at turning itself off when clothes are actually dry is about 0.76 kWh
per load (5,000 kWh over typical lifetime). (NRDC, No. 26 at pp. 1, 2)
The California Utilities also added that according to the ECOS report,
clothes dryers, even with the same sensors, can use very different
control algorithms that result in substantial variations between
clothes dryers in the length of, and the amount of energy consumed
during, the high-heat stage. (California Utilities, No. 31 at p. 3)
NRDC commented that DOE should change its test procedure to measure
at dryness levels less than 5-percent RMC with logging equipment that
provides data enabling the lab to calculate when 5-percent RMC is
reached and how long the clothes dryer continues to run thereafter.
(NRDC, No. 26 at pp. 1, 2; NRDC, No. 30 at pp. 29-30) The California
Utilities, ACEEE, and NPCC also commented that the test procedure
should let the clothes dryer run until automatic shutoff, allowing the
clothes dryer's sensors and termination controls to operate as
intended, which would: (1) Be more representative of actual consumer
behavior and give a better measure of expected energy use for
consumers; (2) avoid the need for a field use factor to account for
high-heat stage energy use and instead measure energy use directly; (3)
appropriately measure the energy use of clothes dryers with better
termination controls and encourage innovation in these controls; and
(4) make the test procedure easier because the technician does not need
to keep weighing the clothes. (California Utilities, No. 31 at pp. 3-4,
12; ACEEE, No. 24 at pp. 1-2; NPCC, No. 32 at pp. 1-2)
The California Utilities recommended the following amendments to
section 3.3, ``Test cycle'' of the clothes dryer test procedure:
Set the clothes dryer for its ``Normal'' or ``Cotton''
cycle. If this in turn sets a temperature or dryness control, leave
those controls at the default setting. If a temperature control must
also be set, set it for ``High heat'' or ``Cotton.'' If a dryness
control must also be set, set it for ``Normal dry'' or midway between
``More dry'' and ``Less dry.''
Allow the clothes dryer to run until its cycle is
complete. Promptly remove and weigh the test load. If it contains 5-
percent or less RMC, the test cycle is complete.
If the test load contains more than 5-percent RMC, return
the load to the clothes dryer and reset the controls. In this case, the
dryness control would then be set for ``Maximum dry'' and the cycle
would be run to completion again and the test load weighed. Repeat if
necessary until the RMC is 5 percent or less.
Total the amount of electricity (and gas if applicable)
used during the initial default cycle and any subsequent cycles.
(California Utilities, No. 31 at p. 4)
The California Utilities also stated that section 4 of the DOE test
procedure would be modified to remove all references to the field use
factor. That factor is no longer needed because the test cycle now
represents a typical consumer use cycle (including both the bulk-drying
and high-heat stages), and would be omitted from all calculations.
(California Utilities, No. 31 at p. 4) The California Utilities stated
that the clothes dryers tested for the ECOS report using the default
settings of the ``Normal'' or ``Cotton'' cycles all resulted in RMCs
between 0 and 3 percent at the completion of the clothes dryer cycle.
Therefore, it may be reasonable to assume that the additional cycles
will rarely be used. The California Utilities stated that the
additional cycles are included in their proposal to prevent a
manufacturer from creating a default cycle that saves energy by not
actually getting the clothes adequately dry. The California Utilities
also stated that their proposed procedure represents the most likely
consumer response to clothes that did not get dry the first time.
(California Utilities, No. 31 at p. 4)
The California Utilities also commented that, under their
recommended test procedure changes for automatic cycle termination,
there is a noticeable difference in energy consumption between the best
and worst clothes dryers. For clothes dryers that respond effectively
when the clothes have reached 5-percent RMC by discontinuing the
application of heat and allowing the residual heat in the clothes to
evaporate the remaining moisture, the energy measured under the new
test cycle will be very similar to the energy measured under the
current DOE test procedure, as the shutoff point will occur near 5-
percent RMC under either test. The California Utilities stated that its
proposed test procedure would more accurately measure the real
contribution of automatic termination controls and mimic consumer
behavior. As a result there would be no need to use a field use factor
for clothes dryers with automatic termination controls. (California
Utilities, No. 31 at p. 4)
BSH commented that DOE should test clothes dryers using the
automatically controlled programs including the cool-down phase.
According to BSH, timer dryers waste energy because consumers will set
a longer drying time than required to ensure the desired drying
results, resulting in over-drying. BSH commented that a change in the
test procedure to measure the real final moisture content for
automatically controlled dryers will show the differences between
competitive clothes dryers. BSH also commented that the cool-down phase
is, in automatically controlled dryers, an essential part of the
process to use the energy in the most efficient way, and that the heat
accumulated in the appliance and the laundry may be used to finish
drying the laundry and increase the efficiency of the clothes dryer.
(BSH, No. 23 at pp. 4-5)
NRDC commented that the ECOS report states that newer clothes
dryers are capable of moisture-sensing drying, but that feature can be
(and likely routinely is being) overridden by consumers who continue to
operate clothes dryers on a time basis as they always have. NRDC added
that the ECOS report states that DOE should require manufacturers to
incorporate moisture sensing into the timed cycle to ensure that the
heating element shuts off and that airflow is greatly reduced once the
clothes are dry. (NRDC, No. 30 at p. 29)
As discussed above in this section, DOE proposed amendments to its
clothes dryer test procedure in the TP SNOPR to more accurately account
for automatic cycle termination. However, as discussed in the TP Final
Rule, DOE conducted testing on a sample of representative clothes
dryers according to the amendments to the test procedure for automatic
cycle termination proposed in the TP SNOPR. The tests consisted of
running the clothes dryer on a ``normal'' automatic termination setting
and stopping the clothes dryer when the heater switches off for the
final time (immediately before the cool-down period begins). Three
identical tests were conducted for each clothes dryer unit, and the
results were averaged. DOE first noted that not all of the clothes
dryers offered a ``normal'' cycle setting. For those clothes dryers,
[[Page 22468]]
DOE chose the cycle that would most closely match a ``normal'' cycle.
The results of this testing, presented below in Table III.1, showed
that the tested clothes dryers had a measured EF of between 12.4
percent and 38.8 percent lower than the EF measured according to the
current DOE clothes dryer test procedure. DOE also noted that all of
tested units dried the test load to final RMCs well below the target
RMC of 5 percent, ranging from 0.4 percent to 1.4 percent RMC, with an
average of 0.8 percent. DOE also noted that even if the field use
factor for a timer dryer is applied to the measured EF for a clothes
dryer equipped with automatic cycle termination, using the current DOE
clothes dryer test procedure (to add the fixed estimate of over-drying
energy consumption associated with time termination control dryers),
this EF would still be less than the EF measured under the automatic
cycle termination test procedure amendments proposed in the TP SNOPR.
76 FR 972, 999 (January 6, 2011).
Table III.1--DOE Clothes Dryer Automatic Cycle Termination Tests
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current DOE Proposed automatic cycle termination test procedure
test procedure -----------------------------------------------------
Current DOE test w/modified
Test unit procedure EF lb/ field use
kWh factor * EF lb/ EF lb/kWh % Change Final RMC %
kWh
--------------------------------------------------------------------------------------------------------------------------------------------------------
Vented Electric Standard:
Unit 3.................................................... 3.20 2.82 2.59 -19.1 1.0
Unit 4.................................................... 3.28 2.89 2.59 -21.2 0.6
Vented Gas:
Unit 8.................................................... 2.83 2.50 2.42 -14.5 0.4
Unit 9.................................................... 2.85 2.51 2.38 -16.3 0.9
Unit 11................................................... 2.98 2.63 2.40 -19.5 0.9
Vented Electric Compact 240V:
Unit 12................................................... 3.19 2.81 2.64 -17.3 0.5
Unit 13................................................... 2.93 2.59 2.27 -22.7 1.4
Vented Electric Compact 120V:
Unit 14................................................... 3.23 2.85 1.98 -38.8 0.7
Ventless Electric Compact 240V:
Unit 15................................................... 2.37 2.09 2.07 -12.4 1.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Field use factor changed from 1.04 for clothes dryers with automatic termination to 1.18 for timer dryers.
In the TP Final Rule, DOE stated that these test results showed
significantly higher measured energy use for clothes dryers tested
under the DOE test procedure with the proposed automatic cycle
termination amendments. DOE evaluated possible reasons for this
difference. DOE concluded that given the test load specified in the
test procedure,\14\ the proposed automatic cycle termination control
procedures may not adequately measure clothes dryer performance. As
discussed in the previous paragraph, DOE believes that, although
automatic termination control dryers may be measured as having a lower
efficiency than a comparable dryer with only time termination control
if tested according to the proposed test procedure, automatic
termination control dryers may in fact be drying the clothing to
approximately 5-percent RMC in real world use. DOE believes that
automatic termination control dryers reduce energy consumption (by
reducing over-drying) compared to timer dryers based on analysis of the
AHAM field use survey and analysis of field test data conducted by
NIST. 46 FR 27324 (May 19, 1981).
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\14\ The DOE clothes dryer test load is comprised of 22 in x 34
in pieces of 50/50 cotton/polyester-blend cloth.
---------------------------------------------------------------------------
For these reasons, DOE stated in the TP Final Rule that it believes
that the test procedure amendments for automatic cycle termination
proposed in the TP SNOPR do not adequately measure the energy
consumption of clothes dryers equipped with such systems. As a result,
DOE did not adopt the amendments for automatic cycle termination
proposed in the TP SNOPR. 76 FR 972, 1000 (January 6, 2011). DOE noted
that if data is made available to develop a test procedure that
accurately measures the energy consumption of clothes dryers equipped
with automatic termination controls, DOE may consider revised
amendments in a future rulemaking.
With regard to NRDC's comment that DOE should require manufacturers
to incorporate moisture sensing into the timed cycle, DOE notes that
EPCA defines an energy conservation standard as either a performance
standard or, for certain products including clothes dryers, a design
requirement. (42 U.S.C. 6291(6)) EPCA also specifies that DOE may set
more than one energy conservation standard for products that serve more
than one major function by setting one energy conservation standard for
each major function. (42 U.S.C. 6295(o)(5)) DOE notes the energy
conservation standards for clothes dryers set forth in this final rule
are based on drying performance and that an additional precriptive
standard to require manufacturers to incorporate moisture sensing into
the timed dry cycle would address the same major function of the drying
performance. For these reasons, DOE is not adopting an additional
prescriptive requirement for clothes dryers.
DOE believes that the alternate test procedure for automatic cycle
termination recommended by the California Utilities is similar to the
test cycle proposed by DOE in the TP SNOPR. DOE notes that the
California Utilities' recommendations would clarify the settings to be
used in cases where a ``Normal'' cycle or ``High heat'' temperature
setting was not clearly specified. DOE does not believe that this added
clarification would resolve the issues with the proposed automatic
cycle termination test procedure identified in this section because the
setting used during DOE testing would be the same under the California
Utilities' recommendation. In addition, DOE notes that the California
Utilties' recommendation to specify the ``Normal dry'' setting is
generally the default setting under the ``Normal'' cycle. DOE also
notes that the ``Normal dry'' setting was used during its testing, and
as a result this clarification would not resolve the issues associated
with the
[[Page 22469]]
automatic cycle termination test procedure identified above. Finally,
DOE notes the California Utilities' recommendation that if the test
load contains more than 5-percent RMC, the test load would be placed
back in the clothes dryer and the cycle would be run again using the
``Maximum dry'' setting is similar to the proposed amendments in the TP
SNOPR. However, the proposed amendments in the TP SNOPR would require
the test be re-run from the start using the specified initial RMC and
the ``Maximum dry'' setting. The California Utilities' recommendations
would require that the test load with the RMC at the end of the first
test cycle be re-run on a cycle with the ``Maximum dry'' setting and
the energy would then be accumulated. DOE believes that this
recommendation would not resolve the issue of the significant over-
drying observed during testing because it addresses cases only in which
the test load under-dries. For these reasons, DOE is not adopting the
alternate test procedure for automatic cycle termination recommended by
the California Utilities. If DOE considers adopting test procedure
amendments for automatic cycle termination in a future rulemaking, it
may consider these recommendations.
Cycle Settings
NRDC commented that the testing described in the ECOS report showed
that automatic termination cycles using lower heat settings or lower
dryness level reduce energy consumption and increase efficiency because
less energy is spent heating air, cloth, and metal. NRDC commented that
the ECOS report summarized testing results for one clothes dryer that
showed that the difference in energy consumption between the highest
and lowest heat settings was 13 percent and that the drying time
increased (from 35 to 49 minutes), but very similar final RMCs were
achieved. (NRDC, No. 30 at p. 22) NRDC commented that the ECOS report
found that a ``normal dry'' setting removed practically all of the
water (producing a final RMC of less than 1 percent), making the ``more
dry'' setting appear to be unnecessary. The ECOS report stated that the
``normal dry'' used about 12 percent less energy than the ``more dry''
setting, and the ``less dry'' setting saved another 18 percent, but did
leave residual moisture in the clothes. NRDC commented that the ECOS
report added that in all but the highest humidity climates, the ``less
dry'' setting may be fully adequate and would give considerable energy
savings. Id. NRDC commented that DOE should measure the efficiency of
different clothes dryer settings, in particular the ``more dry''
setting, which the ECOS report stated may not be warranted because the
``normal dry'' settings remove effectively all of the moisture. (NRDC,
No. 26 at pp. 1, 3)
As discussed in the previous section, DOE did not adopt amendments
to more accurately account for automatic cycle termination in the TP
Final Rule. Therefore DOE did not consider amendments to the clothes
dryer test procedure to measure the efficiency of different clothes
dryer automatic cycle termination temperature and dryness level
settings.
Effect of Automatic Cycle Termination Test Procedure on Measured Energy
Factor
The California Utilities stated that under their proposed test
procedure, the 4 percent field use factor would not be necessary;
therefore removing it would reduce apparent (reported) energy use by 4
percent. Instead of EFs from 3.01 to 3.4, these clothes dryers would be
rated at EF from 3.13 to 3.54. According to the California Utilities,
these higher ratings are appropriate because these clothes dryers stop
quickly and save the consumer energy under real world operating
conditions. (California Utilities, No. 31 at pp. 4-5) NRDC commented
that the ECOS report summarized testing results that showed that some
electronically controlled dryers could detect the clothes were already
dry and shut down after 5 to 15 minutes, while electromechanically
controlled dryers needed up to 50 minutes before shutting down. (NRDC,
No. 30 at pp. 29-30) The California Utilities also noted that one
clothes dryer tested in the ECOS report ran for an additional 30
minutes after reaching 5 percent RMC because of an inefficient control
algorithm and would test with an EF of about 2.51 under their proposed
test procedure. According to the California Utilities, this lower
rating would be appropriate, because in real practice this dryer would
significantly increase clothes dryer energy use. (California Utilities,
No. 31 at p. 5) The California Utilities commented that a real savings
opportunity exists simply through an improved test procedure (as they
proposed), which will better characterize the real-world energy
performance of dryers. The California Utilities added that dryers that
meet the baseline EF under the current test procedure but have poor
automatic termination controls will not meet the same EF under a
revised test. Thus, those dryers will have to improve to meet the
baseline EF of 3.01. The California Utilities added that, if tested
using their proposed test procedure, the least efficient clothes dryers
in the sample of clothes dryers in the ECOS report will need to
increase their efficiency by 20 percent or more to meet the current
energy conservation standard. (California Utilities, No. 31 at p. 5)
As discussed in the Test Procedures section, DOE did not adopt the
amendments to the clothes dryer test procedure to better account for
automatic cycle termination that were proposed in the TP SNOPR. As a
result, DOE is not considering any revisions to the energy conservation
standards based on the proposed amendments for automatic cycle
termination in the TP SNOPR. If DOE considers potential amendments for
automatic cycle termination in a future rulemaking, it would also
consider any necessary revisions to the energy conservation standards.
In addition, as discussed above, DOE noted that the alternate test
procedure for automatic cycle termination recommended by the California
Utilities is similar to the test cycle proposed by DOE in the TP SNOPR.
As a result, DOE does not believe the measured EF would be different
between the proposed amendments in the TP SNOPR and the California
Utilities' recommendations except for cases in which the test load is
not dried to below 5-percent RMC. In this case the California
Utilities' recommendations would require that the measured energy
consumption from any additional test cycles using the ``Maximum dry''
setting be added to the energy consumption from the first test cycle,
whereas the measured efficiency under the proposed amendments in the TP
SNOPR would be based on only the re-run test cycle using the ``Maximum
dry'' setting. However, for the reasons discussed above, DOE believes
that the California Utilities' recommendations would not resolve the
issue of the significant over-drying observed during DOE testing. As a
result, DOE is not adopting the alternate test procedure for automatic
cycle termination recommended by the California Utilities and therefore
is not considering any revisions to the energy conservation standards
based on these recommendations.
c. Ventless Clothes Dryers
For the reasons discussed in section IV.A.3.a of this direct final
rule, DOE defines two new product classes in this rulemaking for
ventless clothes dryers. The clothes dryer test procedure at 10 CFR
part 430, subpart B, appendix D is unable to test ventless clothes
dryers, which include condensing clothes
[[Page 22470]]
dryers as well as combination washer/dryers. Ventless clothes dryers do
not vent exhaust air to the outside as a conventional, vented dryer
does. Instead, they typically use ambient air in a heat exchanger to
cool the hot, humid air inside the appliance, thereby condensing out
the moisture. Alternatively, cold water can be used in the heat
exchanger to condense the moisture from the air in the drum. In either
case, the dry air exiting the drum is reheated and recirculated in a
closed loop. Thus, rather than venting moisture-laden exhaust air
outside, ventless clothes dryers produce a wastewater stream that can
be either collected in an included water container or discharged down
the household drain. The process of condensing out the moisture in the
recirculated air results in higher energy consumption than a
conventional dryer, and it can significantly increase the ambient room
temperature.
To address the potential limitation of the clothes dryer test
procedure for ventless dryers, DOE proposed an alternate test procedure
for ventless dryers in the TP SNOPR and adopted this procedure in the
TP Final Rule. [75 FR 37594, 37620 (June 29, 2010); 76 FR 972, 976-977
(January 6, 2011)] The alternate test procedure consists of adding
separate definitions for a ``conventional clothes dryer'' (vented) and
a ``ventless clothes dryer.'' Further, the alternate test procedure
qualifies the requirement for an exhaust simulator so that it would
only apply to conventional clothes dryers. DOE also adopted provisions
to clarify the testing procedures for ventless clothes dryers,
including requirements for clothes dryers equipped with a condensation
box, requirements for the condenser heat exchanger, and specifications
for ventless clothes dryer preconditioning. DOE also adopted
clarifications in the TP Final Rule to provide explicit instructions as
to the procedure for re-running the test cycle when the condensation
box is full. DOE also revised the requirement for ventless clothes
dryer preconditioning to remove the maximum time limit for achieving a
steady-state temperature. DOE also included additional editorial
clarifications to the testing procedures for ventless clothes dryers.
76 FR 972, 976-977 (January 6, 2011).
In chapter 2 of the preliminary TSD, prior to adoption of the TP
Final Rule, DOE stated that it was considering amendments to its
clothes dryer test procedure to allow for the measurement of the energy
efficiency of ventless clothes dryers in its active mode test procedure
rulemaking.
The Joint Petitioners commented that DOE should create a ventless
clothes dryer (including ventless combination washer/dryer) test
procedure to inform a baseline energy consumption level for this new
product category. (Joint Petitioners, No. 33 at p. 25)
AHAM suggested that DOE incorporate language from the alternate
test procedure presented in the LG's Petition for Waiver and Denial of
the Application for Interim Waiver (71 FR 49437, 49439 (Aug. 23,
2006)), with the additional changes that the term ``condensing clothes
dryer'' be changed to ``ventless clothes dryer'' and ``HLD-1'' be
changed to ``AHAM HLD-1.'' AHAM stated that DOE should validate the
proposed test procedure approach and the resultant energy consumption
values through a viable statistical method. AHAM stated that it is not
in a position to provide data on ventless products due to the small
number of products in the proposed ``compact ventless'' product class.
According to AHAM, ventless clothes dryers, when tested using the
dryer-centric approach presented by DOE in the LG Petition for Waiver,
will appear to have higher energy consumption (kWh per year) than
conventional vented clothes dryers. (AHAM, No. 25 at p. 4)
Whirlpool commented that its proposal, which provides amendments to
the DOE test procedure to include methods for testing of ventless
clothes dryers, improves upon the DOE proposal for the ventless clothes
dryer test procedure because it takes into account technical
differences between vented and ventless clothes dryers.\15\ (Whirlpool,
No. 13 at pp. 1-22) Whirlpool indicated that their proposal was a draft
only and they would be willing to work with DOE to make revisions or
enhancements to this proposal. (Whirlpool, No. 22 at p. 1)
---------------------------------------------------------------------------
\15\ Whirlpool's proposed amendments for ventless clothes dryers
included: (1) Definitions of ``conventional'' and ``condensing''
clothes dryers; (2) installation conditions; (3) requirements for
clothes dryer preconditioning; (4) requirements for condensation
boxes and condenser units; and (5) requirements for test cycle
measurements.
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In the TP Final Rule, DOE adopted testing methods for the testing
of ventless clothes dryers based on the alternate test procedure
proposed in the TP SNOPR; the amendments suggested by Whirlpool; and
additional language from the internationally accepted test standards
Australia/New Zealand (AS/NZS) Standard 2442, ``Performance of
household electrical appliances--Rotary clothes dryers'' and European
Standard EN 61121, ``Tumble dryers for household use--Methods for
measuring the performance,'' Edition 3 2005 (EN Standard 61121). 76 FR
972, 976 (January 6, 2011). Also noted in the TP Final Rule, DOE used
the term ``ventless'' instead of ``condensing,'' as suggested by AHAM,
to reflect the actual consumer utility (that is, no external vent
required) because it is possible that vented dryers that also condense
may become available on the market. Id. DOE also conducted testing for
the TP Final Rule to evaluate the repeatability of the amended test
procedure for ventless dryers. As detailed in the TP Final Rule,
ventless electric compact 240V dryers and ventless electric combination
washer/dryers showed less than 1 percent variation and less than 3.5
percent variation in EF from test to test, respectively. DOE stated in
the TP Final Rule that it believes that the amendments for ventless
clothes dryers produce repeatable measurements of EF. 76 FR 972, 1009
(January 6, 2011). DOE also notes that the measured EF values for
ventless electric compact (240V) dryers and ventless electric
combination washer/dryers tested according to the DOE test procedure at
appendix D, using only the amendments for ventless clothes dryers (2.37
and 2.02, respectively), are in close agreement with the baseline
values proposed in the preliminary analyses shown below in Table IV.15
and Table IV.16. Therefore, DOE did not revise the baseline EF levels
for the ventless clothes dryer product classes.
In response to AHAM's comment that ``HLD-1'' should be changed to
``AHAM HLD-1,'' DOE has adopted this editorial change in the TP Final
Rule. 76 FR 972, 1032 (January 6, 2011).
BSH commented that DOE should consider the condensation rate for
ventless clothes dryers. BSH added that the condensation rate
efficiency is an important indicator to measure. (BSH, No. 23 at p. 4)
DOE notes that EN Standard 61121 provides for a measurement of the
condensation rate efficiency. However, this measurement is not used in
the calculation of energy use, which considers only the energy required
to dry the load to a specified final RMC. However, DOE also notes that
the ability of a ventless clothes dryer to condense moisture directly
affects the energy use per-cycle. For example, if a ventless clothes
dryer has a lower condensation efficiency, the air recirculated into
the drum would contain more moisture and thus would be able to remove
less moisture from the test load. As a result, the energy use of such a
ventless clothes dryer would be greater than a ventless clothes dryer
with a higher condensation efficiency because it would need to run for
a
[[Page 22471]]
longer time to condense the same amount of moisture from the test load.
Therefore, DOE believes that the condensation efficiency of a ventless
clothes dryer is sufficiently accounted for in the measurement of the
per-cycle energy consumption. For these reasons, DOE is not providing
for a measurement of condensation efficiency of a clothes dryer.
NRDC questioned whether ventless electric combination washer/dryers
are going to be tested in drying mode only or as a unit with washing
and drying capability. NRDC stated that, according to the ECOS report,
there is a potential for energy savings if manufacturers are allowed to
test units together that work together, because it is more efficient to
manually remove the water than to dry it. NRDC supported the ECOS
report suggestion that DOE consider a testing and labeling program
based on the total energy use, cost, and CO2 emissions for
washing and drying a standard load of clothes. According to the ECOS
report submitted by NRDC, highly efficient clothes washers greatly
decrease the amount of work that a clothes dryer needs to do, but that
a clothes dryer is less efficient when drying loads with lower initial
RMCs. (NRDC, Public Meeting Transcript, No. 21.4 at p. 22; NRDC, No. 30
at pp. 31-32) Whirlpool commented that the development of a test
procedure for ventless electric combination washer/dryers is not worth
the time and resources necessary to develop it and suggested that DOE
not proceed with such an effort. (Whirlpool, No. 22 at p. 1) DOE is not
aware of repeatable and representative test methodologies to accurately
measure the efficiency of a combined wash-dry cycle. DOE notes that the
clothes washer test procedure requires the measurement of multiple load
sizes (minimum, maximum, and average values) as well as multiple cycle
settings and water temperatures, but the clothes dryer test procedure
requires only a single test load size with a single timed dry cycle
with the highest temperature setting. DOE is not aware of how the test
load sizes and cycle settings would be aligned to produce accurate and
representative test results. DOE also notes that the maximum load size
for the washing portion of the cycle (sized according to the capacity
of the drum), may be larger than the load size recommended by
manufacturers for the drying portion of the cycle, and thus it is not
clear what size test load should be specified for a combined cycle. For
these reasons, DOE is not adopting a test procedure to measure a full
combined wash-dry cycle. DOE also notes that the efficiency of the
washer portion of a combination washer/dryer is covered under the
minimum energy conservation standards for clothes washers, and that the
TP Final Rule amended the clothes dryer test procedure to include
methods for measuring the energy use of the drying portion of a
combination washer/dryer.
d. Consumer Usage Habits
Annual Cycles
DOE published a final rule on August 27, 1997, amending the DOE
clothes washer test procedure to lower the annual clothes washer use
cycle value from 416 to 392 cycles per year, a value DOE determined to
be more representative of current usage patterns. 62 FR 45484. Further,
the revised DOE clothes washer test procedure assumes that 84 percent
of all clothes washer loads are dried in clothes dryers. Thus, the
annual usage pattern for clothes dryers would be 329 cycles per year.
In addition, in the recently proposed amendments to the clothes washer
test procedure, DOE proposed to amend the number of cycles per year to
295. 75 FR 57556, 57564 (Sept. 21, 2010). In contrast, the current DOE
residential clothes dryer test procedure in appendix D assumes an
average annual clothes dryer use of 416 cycles per year. (10 CFR
430.23(d)(1))
DOE stated in chapter 2 of the preliminary TSD that it was
reviewing available data on the number of annual clothes dryer cycles,
and would consider amendments to its test procedure to accurately
reflect the number of annual clothes dryer cycles for the clothes dryer
tests.
The Joint Petitioners and ACEEE commented that DOE should update
the number of clothes dryer cycles per year based on the best available
data (ideally based on a nationally representative sample). (Joint
Petitioners, No. 33 at p. 25; ACEEE, No. 24 at p. 1) The California
Utilities supported reducing the clothes dryer cycles per year from 416
to 329 to reflect new Energy Information Administration (EIA)'s
``Residential Energy Consumption Survey'' (RECS) survey data on
household use. (California Utilities, No. 31 at pp. 2-3, 12) According
to AHAM, a recent Proctor & Gamble (P&G) consumer survey showed that
the average consumer dries 5.35 loads per week, or 278 load per year,
which is essentially identical to the value estimated by RECS (279
cycles per year), providing good verification for the RECS approach.
AHAM commented that DOE should ensure that any value used in the
economic portion of the rulemaking analysis (that is, cycles per year)
be used in the engineering analysis, and that the test procedure be
modified to reflect this value. (AHAM, No. 25 at p. 9)
As discussed in the TP Final Rule, DOE amended its clothes dryer
test procedure to change the number of clothes dryer cycles per year
from 416 to 283 based on data from the 2005 RECS. 76 FR 972, 977
(January 6, 2011). DOE notes that this value is in close agreement with
the estimates provided in the P&G data (278 cycles per year). DOE also
noted in the TP SNOPR that data from the 2004 California Statewide
Residential Appliance Saturation Study (RASS), which surveyed appliance
product usage patterns, including clothes dryers, indicated an average
of 4.69 loads per week, or approximately 244 loads per year, which is
in agreement with the downward trend of the number of clothes dryer
cycles per year. Because the 2004 California Statewide RASS provides
only a limited dataset, however, DOE stated in the TP SNOPR that it did
not intend to rely only on this data to determine an appropriate number
of annual use cycles for the clothes dryer test procedure. 75 FR 37594,
37625 (June 29, 2010). DOE believes that these data sources provide
sufficient justification for the revised value of 283 cycles per year
using the RECS-based approach.
Cycle Time
Edison Electric Institute (EEI) commented that DOE's assumption of
8,620 standby hours leaves 140 active mode hours which would correspond
to 20 minutes per drying cycle (if the assumption is that there are 416
dryer cycles per year). EEI questioned whether this was accurate and
stated that DOE should review those numbers. (EEI, Public Meeting
Transcript, No. 21.4, at p. 49) DOE notes that the TP Final Rule amends
the DOE clothes dryer test procedure to lower the initial RMC of the
clothes load from 70 percent to 57.5 percent which will result in a
decreased cycle time. DOE also notes that the amendments in the TP
Final Rule to increase the test load size for standard size dryers from
7 lb. to 8.45 lb. as well as changing the water temperature for test
load preparation from 100 [deg]F to 60 [deg]F will result in an
increased cycle time. 76 FR 972, 988 (January 6, 2011). The TP Final
Rule also amended the clothes dryer test procedure to change the number
of cycles per year from 416 to 283. 76 FR 977. Based on the amendment
to the number of annual use cycles, DOE notes that the cycle length
would be approximately 30 minutes (140 annual active mode hours/283
active mode cycles per year). DOE is
[[Page 22472]]
unaware, however, of consumer usage data indicating that the number of
active mode hours per year has changed. For these reasons, DOE did not
change the number of clothes dryer active mode hours in the TP Final
Rule.
Initial RMC
The DOE clothes dryer test procedure in appendix D specifies that
the clothes load have an initial RMC of 70 3.5 percent.
DOE stated in the preliminary TSD that a review of residential clothes
washer models in the California Energy Commission (CEC) product
database suggests that the average RMC is less than the nominal 70
percent that is currently provided for in the DOE clothes dryer test
procedure. Therefore, DOE stated it was considering amendments to the
clothes dryer test procedure to address RMC.
The Joint Petitioners and ACEEE commented that DOE should update
the initial RMC based on the best available data (ideally based on a
nationally representative sample). (Joint Petitioners, No. 33 at p. 25;
ACEEE, No. 24 at p. 1) NRDC commented that DOE's initial RMC
assumptions do not reflect today's washing machines and should be
revised to better reflect current washer technology. (NRDC, No. 26 at
pp. 2, 4) NRDC commented that the ECOS report summarized test results
for a single clothes washer which showed that the RMCs after the wash
cycle is finished are 70-percent RMC for cotton bath towels and 40-
percent RMC for the DOE 50/50 cotton/polyester test cloths. (NRDC, No.
30 at pp. 30-31) NRDC also stated that the energy consumption of a
clothes dryer decreases when the initial RMC is lower, but not in
direct proportion to the lowered water content because energy is still
used to heat and move the air, cloth and metal. (NRDC, No. 26 at pp. 2,
4) The California Utilities and the NPCC both supported reducing the
initial RMC from the current 70 percent to a value nearer to 56
percent, based on data submitted by AHAM, recognizing that today's
washers have faster spin speeds and typically leave less water in the
clothes. (California Utilities, No. 31 at pp. 2, 12; NPCC, No. 32 at p.
2) However, NPCC also commented that even an initial RMC of 56 percent
may not reflect the RMC produced by higher efficiency clothes washers
that may be required as a result of the current DOE rulemaking for
those products. NPCC commented that the average RMC for clothes washers
in the July 2008 CEC appliance product directory was only 46 percent
(as presented by DOE), which is well below its proposed revised value.
(NPCC, No. 32 at p. 2)
AHAM and Whirlpool supported using the industry shipment-weighted
average residential clothes washer RMC of 47 percent derived from data
provided by AHAM. They commented that DOE should use the 47-percent RMC
in both the engineering and economic analyses; modify the test
procedure by changing the RMC from 70 percent to 47 percent; and modify
the baseline energy factor to reflect the change in the test procedure.
Whirlpool added that failure to do so will result in overstating
clothes dryer energy use, thus rendering all payback and LCC
calculations erroneous. (AHAM, No. 25 at p. 10; Whirlpool, No. 22 at
pp. 2-3) AHAM also stated that data collected by industry showed a 22-
percent increase in EF when the initial RMC is changed to 56 percent.
AHAM commented that they expect EF will increase further as RMC is
reduced to 47 percent, but that the relationship is not expected to be
linear. (AHAM No. 25 at p. 10)
BSH also commented that it supports reducing the initial RMC for
testing purposes, and added that the DOE test procedure should be
defined before any energy conservation standard levels are established.
(BSH, No. 23 at p. 6) BSH also commented that it should be clarified
which energy consumption results from each change in the test procedure
before a suitable classification can be done and added that a round
robin test may be helpful to estimate the energy levels. (BSH, No. 23
at p. 6)
In the TP SNOPR, DOE proposed to change the initial RMC from 70
percent to 47 percent based on shipment-weighted clothes washer RMC
data provided by AHAM. 75 FR 37594, 37626-31 (June 29, 2010). As
discussed in the TP Final Rule, DOE received comments in response to
the TP SNOPR that the shipment-weighted average RMC value in the AHAM
data was based on the clothes washer RMC, which uses an RMC correction
factor to normalize testing results from different lots of test cloth,
but the DOE clothes dryer test procedure should instead use the
uncorrected RMC value. DOE determined that an initial clothes dryer RMC
of 57.5 percent more accurately represents the moisture content of
current laundry loads after a wash cycle for the purposes of clothes
dryer testing, derived from the 47-percent shipment-weighted RMC for
clothes washers (that was based on analysis of data provided by AHAM)
without the application of the RMC correction factor specified in the
DOE clothes washer test procedure, as discussed above in this
paragraph. DOE validated this estimate using clothes washer uncorrected
RMC data from testing of a limited sample of representative clothes
washers for the DOE clothes washer energy conservation standards
rulemaking. As a result, the TP Final Rule amended the DOE clothes
dryer test procedure to adopt this value for the initial RMC. 76 FR
972, 977 (January 6, 2011). As discussed in section IV.C.2.a, DOE
conducted testing for the TP Final Rule in order to analyze how the
amendments to the test procedure, including the change to the initial
RMC, would affect the measured efficiency of clothes dryers.
Load Size
Currently the DOE test procedure for clothes dryers requires a 7.00
lb. .07 lb. test load for standard-size dryers and a 3.00
lb. .03 lb. test load for compact-size dryers. (10 CFR
part 430, subpart B, appendix D, section 2.7) DOE stated in chapter 2
of the preliminary TSD that it was reviewing available data to
determine the current representative clothes dryer load size, and would
consider amendments to its test procedure to accurately reflect the
current clothes dryer test load size for the clothes dryer tests.
The Joint Petitioners and ACEEE commented that DOE should update
the size of the clothes dryer test load based on the best available
data (ideally based on a nationally representative sample). (Joint
Petitioners, No. 33 at p. 25; ACEEE, No. 24 at p. 1) The California
Utilities and NPCC both supported increasing the test load size from 7
lb. to 8.3 lb., or another appropriate value, commenting that 8.3 lb.
is more typical of the size of loads in today's larger clothes dryers,
as based on DOE's distribution of tub sizes from models in the CEC
database. (California Utilities, No. 31 at p. 2; NPCC, No. 32 at p. 2)
NRDC also commented that DOE should consider modifying the clothes
dryer size criteria, stating that test load sizes for clothes dryers do
not correlate to the test load sizes for washers and likely do not
reflect real life load size. According to NRDC, current clothes dryer
size classes are likely inaccurate given that today's clothes dryers
can comfortably hold loads of 10 to 17 lb., with more 7 to 8 cubic foot
(ft\3\) models now on the market than models smaller than 7 ft\3\. NRDC
commented that DOE should reevaluate its clothes dryer size criteria
and test load size to better reflect the clothes dryers available on
the market today. (NRDC, No. 26 at pp. 2, 4; NRDC, No. 30 at p. 30)
AHAM commented that it prefers that DOE utilize industry values for
data such as clothes dryer load size. AHAM stated that the shipment-
weighted
[[Page 22473]]
residential clothes washer drum volume for standard-size products in
2008 was 3.24 ft\3\, which corresponds to an average clothes washer
load size of 8.15 lb. AHAM also stated that for compact clothes
washers, the shipment-weighted average drum volume was 1.5 ft\3\, which
corresponds to an average load size of 4.70 lb. AHAM added that because
compact products are a separate product class, they should be treated
as such in the analysis. AHAM commented that it supports the use of two
separate load sizes (8.15 lb. for standard-size and 4.70 lb. for
compact-size products), if the modified load size is used in both the
engineering and economic analyses, and if the test procedure is
modified to be consistent with this analysis and the baseline EF is
modified to reflect the change in load size. (AHAM, No. 25 at pp. 10-
11)
In the TP Final Rule, DOE amended the clothes dryer test procedure
to change the load size from 7.00 lb .07 lb to 8.45 lb
.085 lb based on the historical trends of the shipment-
weighted average tub volume for residential clothes washers from 1981
to 2008 and the corresponding percentage increase in clothes washer
load sizes (as specified in the load size table 5.1 in the DOE clothes
washer test procedure at 10 CFR part 430, subpart B, appendix J1),
which is assumed to proportionally impact clothes dryer load size. 76
FR 972, 977 (January 6, 2011). DOE believes that this estimate using
the percentage increase in load size based on trends in clothes washer
tub volumes would produce a more representative value than simply using
the nominal load size value in the clothes washer test procedure, as
suggested by AHAM. DOE does not have any consumer usage data indicating
that consumers always machine dry the same size load from the wash
cycle such that the average clothes washer load size can be directly
applied to the clothes dryer test procedure, as suggested by AHAM. As
discussed in section IV.C.2.a, DOE conducted testing for the TP Final
Rule in order to analyze how the amendments to the test procedure,
including the change to the load size, would affect the measured
efficiency.
DOE stated in the TP Final Rule that it believes that most compact
clothes dryers are used in conjunction with compact-size clothes
washers, and DOE is not aware of data on the trends of compact clothes
washer tub volumes that would suggest that the tub volume for such
clothes washers has changed significantly. 76 FR 972, 1014 (January 6,
2011). DOE did not receive any such data in response to its requests in
the TP SNOPR. In addition, as discussed above, DOE does not have any
consumer usage data indicating that consumers always machine dry the
same size load from the wash cycle such that the average clothes washer
load size can be directly applied to the clothes dryer test procedure,
as suggested by AHAM. For these reasons, DOE did not revise the test
load size for compact clothes dryers in the TP Final Rule. Id.
NRDC also commented that the ECOS report states that if DOE were to
test each model across a wide range of load sizes and report multiple
values, it would help consumers choose the appropriate sized clothes
dryer and to fill it with the recommended amount of clothing to dry as
efficiently as possible. (NRDC, No. 30 at p. 30) DOE is not aware of
any data indicating what load sizes typical consumers use or data on
the percentage of clothes dryer cycles at different load sizes to
determine how such results would be used to calculate an energy use or
energy efficiency metric. DOE is also unaware of data showing how such
a change would affect the measured EF compared to the existing test
procedure, as required by EPCA. (42 U.S.C. 6293(e)(1)) DOE notes that
requiring additional test cycles for different size loads would add
significant testing burden on manufacturers. For these reasons, DOE did
not amend the clothes dryer test procedure to require the testing of
multiple test load sizes in the TP Final Rule.
BSH proposed that tumble clothes dryers be tested with a load size
relative to the drum volume, and that this relationship be linear. BSH
commented that the load size that the consumer uses generally matches
the drum size of the clothes dryer (the larger the drum the higher the
average load size dried). According to BSH, using only two load sizes
for a wide range of drum volumes will cause unfairness in comparison of
different clothes dryers. For example, a standard clothes dryer with a
125-liter drum volume but 60 centimeter (cm) housing (which is right
above the limit to be ``compact'') has an unfair advantage when its
energy efficiency is measured due to the fact that the load fills the
drum much better than in a larger appliance. (BSH, No. 23 at p. 4) DOE
is not aware of any consumer usage data indicating how load size varies
with clothes dryer drum capacity. In addition, DOE is not aware of any
data indicating how such a change would affect the measured efficiency.
For these reasons, DOE did not amend the clothes dryer test procedure
to require that the load size vary with drum capacity.
Water Temperature for Test Load Preparation
The current clothes dryer test procedure specifies a water
temperature of 100 [deg]F 5 [deg]F for the test load
preparation. (10 CFR part 430, subpart B, appendix D, section 2.7) The
California Utilities, ACEEE, and NPCC stated that this initial clothes
load temperature may have been common when most clothes washers used a
hot water rinse. However, today almost all clothes washers now default
to a cold water final rinse to save water heating energy. (California
Utilities, No. 31 at pp. 3, 12; ACEEE, No. 24 at p. 2; NPCC, No. 32 at
p. 2) According to ACEEE, today's clothes washers typically have a cold
rinse default and consumers increasingly select cold water wash and
rinse in response to public information campaigns and the introduction
of special ``cold water wash'' detergents. (ACEEE, No. 24 at p. 2) The
California Utilities, ACEEE, and NPCC recommended that DOE align the
clothes dryer test method with the clothes washer test method by
reducing the water temperature for clothes dryer test load preparation
to 60 [deg]F 5 [deg]F. (ACEEE, No. 24 at p. 2)
As discussed in the TP Final Rule, DOE analyzed 2005 RECS data on
the rinse water temperatures selected by consumers for clothes washer
cycles, which indicates that for consumers that use a clothes washer in
the home, approximately 80 percent of wash cycles per year use a cold
rinse. 76 FR 972, 996 (January 6, 2011). In addition, DOE also noted
that the clothes washer test procedure specifies a warm rinse
temperature use factor of 27 percent, suggesting that for the majority
of clothes washer cycles, consumers use the cold rinse. (10 CFR part
430, subpart B, appendix J1) DOE also sought comment on the warm rinse
temperature use factor in the recent proposal to amend the test
procedure for residential clothes washers because it received consumer
usage survey data from a manufacturer indicating that, for one clothes
washer model with no cold rinse option on the cycle recommended for
cotton clothes and a default cold rinse on all other cycles, users
participating in the survey reported using warm rinse for 1.6 percent
of all cycles. 75 FR 57556, 57571 (Sept. 21, 2010) For these reasons,
DOE amended the clothes dryer test procedure to change the water
temperature for clothes dryer test load preparation from 100 [deg]F
5 [deg]F to 60 [deg]F 5 [deg]F to be more
representative of the clothes load after a cold rinse cycle at the end
of the wash cycle. 76 FR 972, 996 (January 6, 2011).
[[Page 22474]]
Test Cloth
The current clothes dryer test procedure specifies the use of
energy test cloth consisting of a pure finished bleach cloth, made with
a momie or granite weave, which is a blended fabric of 50-percent
cotton and 50-percent polyester. Each energy test cloth measures 24
inches by 36 inches. Additional specifications are provided in the test
procedure for the weight, thread count, and allowable shrinkage. (10
CFR part 430, subpart B, appendix D, section 2.7)
The ECOS report stated that DOE should test a mix of cotton and
synthetics of various sizes, including large sheets, towels, and jeans,
rather than only testing small, uniform synthetic[hyphen]blend test
cloths to more closely approximate real-world performance. The ECOS
report also stated that this would deal more fairly with the real-world
situation in which some fabrics have finished drying before others,
causing the load to either finish before everything is dry or after
some of the fabrics have been over-dried. NRDC also commented that the
ECOS report presented test results using different mixes of test loads
which showed that clothes dryers often stopped with the synthetic quite
dry (less than 2-percent final RMC) but the cotton still damp (greater
than 6-percent RMC). According to NRDC, if DOE were to test each model
across a wide range of load types and report multiple values, it would
help consumers choose an appropriately sized clothes dryer and to fill
it with the recommended amount of clothing so that it would dry as
efficiently as possible. (NRDC, No. 30 at pp. 22, 30) NRDC added that
in this real-world scenario, clothes dryers may be less effective due
to clothing balling up or the clothes dryer shutting off early due to a
variety in cloth blends. NRDC added that certain techniques such as
agitating the drum or reversing the cycle may help mitigate these
problems and potentially increase efficiency in a real world scenario.
NRDC also added that the standard DOE test cloths do not constitute a
typical load and therefore do not accurately test clothes dryers'
effectiveness at drying loads that have a variety of fabric types or
are more likely to clump. NRDC suggested a mix of 100-percent cotton
and 50:50 cotton/polyester as an alternative test load. (NRDC, No. 26
at pp. 1, 3; NRDC, Public Meeting Transcript, No. 21.4 at p. 43)
DOE is unaware of data to determine the composition of clothing
types and materials that would be more representative of typical
consumer clothing loads than the existing DOE test cloth and still
produce accurate and repeatable results. Similarly, DOE is unaware of
data showing the test-to-test repeatability of different test loads.
Based on discussions with manufacturers, DOE understands the test
material specified in the existing DOE clothes dryer test procedure
produces the most repeatable results, and other tests loads are less
repeatable. In addition, DOE also notes that requiring additional test
cycles for loads with different clothes types and materials would add
significant testing burden on manufacturers. For these reasons, DOE did
not amend the clothes dryer test procedure in the TP Final Rule to
change the DOE test load or to require the testing of multiple test
loads composed of different clothes types and materials.
e. Drum Capacity Measurement
The Joint Petitioners commented that DOE should clarify section 3.1
of the clothes dryer test procedure regarding the measurement of drum
capacity to specify that the clothes dryer's rear drum surface be
supported on a platform scale to ``prevent deflection of the drum
surface * * *'' instead of ``prevent deflection of the dryer.'' (Joint
Petitioners, No. 33 at p. 25) As discussed in the TP Final Rule, DOE
agrees with the comments that the reference to deflection of the
``dryer'' is unclear and should be clarified to specify that the
clothes dryer's rear drum surface should be supported on a platform
scale to prevent deflection of the drum surface. For this reason, DOE
amended the clothes dryer test procedure in TP Final Rule to reflect
this change. 76 FR 972, 1019 (January 6, 2011).
f. HVAC Effects
According to EPCA, any prescribed or amended test procedures shall
be reasonably designed to produce test results which measure energy
efficiency, energy use, water use, or estimated annual operating cost
of a covered product during a representative average use cycle or
period of use. (42 U.S.C. 6293(b)(3))
NRDC and NPCC commented that DOE should analyze the effects of
clothes dryers on a home's heating and cooling energy use. (NRDC, No.
26 at pp. 1, 4; NPCC, No. 32 at p. 2) NRDC also commented that the
current test procedure does not analyze the clothes dryer's effect on
the heating and cooling of the surrounding room, in particular, whether
the clothes dryer warms the room, cools it, or leaves it unchanged.
NRDC stated that the test procedure does not distinguish between
clothes dryers that vent their exhaust air outside (and require makeup
air to be conditioned), and those that are unvented. (NRDC, No. 26 at
pp. 1, 4; NRDC, No. 30 at p. 31) NPCC also commented that DOE's
analysis of the economics of heat recovery clothes dryers should
incorporate the reduced impact on space conditioning of this technology
option. (NPCC, No. 32 at p. 2) The California Utilities recommended
that the DOE clothes dryer test procedure be amended to measure the
total airflow volume during the test cycle in order to gather data on
heating, ventilation, and air conditioning (HVAC) loading. (California
Utilities, No. 31 at pp. 9, 12)
As discussed above, EPCA requires that any prescribed or amended
test procedures be reasonably designed to produce test results which
measure energy efficiency, energy use, water use, or estimated annual
operating cost of a covered product during a representative average use
cycle or period of use. (42 U.S.C. 6293(b)(3)) DOE believes that
accounting for the effects of clothes dryers on HVAC energy use is
inconsistent with the EPCA requirement that a test procedure measure
the energy efficiency, energy use, or estimated annual operating cost
of a covered product. As a result, DOE did not revise the clothes dryer
test procedure to account for HVAC energy use in the TP Final Rule and
does not account for HVAC energy use in these standards.
g. Efficiency Metric
The energy efficiency metric currently used for clothes dryer
energy conservation standards, EF, is defined on the basis of a per-
cycle measure of the lb. of clothes dried per kWh. (10 CFR 430.23)
BSH commented that DOE should calculate yearly energy consumption
for clothes dryers by considering a defined amount of laundry dried
within a year. BSH stated that the energy consumption for the yearly
load dried in small clothes dryer should be correlated to the energy
consumption when the same yearly load is dried in a larger clothes
dryer. BSH added that if only the number of loads is used then for a
larger clothes dryer, the energy labeled would refer to a much larger
amount of clothing than for a smaller clothes dryer. According to BSH,
the values would not be comparable and it would appear to the consumer
that the larger clothes dryer uses more energy per cycle than the
smaller. In reality, when using a compact size clothes dryer consumers
would run more cycles per year to dry their yearly amount of laundry.
(BSH, No. 23 at p. 5) DOE is not aware of
[[Page 22475]]
consumer usage data showing the relationship between clothes dryer drum
capacity and the amount of laundry dried by the consumer per year that
would suggest that consumers typically dry the same amount of clothing
per year, regardless of the drum capacity. For these reasons, DOE did
not amend the clothes dryer test procedure in the TP Final Rule to
specify a single value for the amount of laundry dried per year.
2. Room Air Conditioner Test Procedure
a. Standby Mode and Off Mode
Referenced Standards
As noted above, EPCA directs DOE to amend its test procedures to
include measures of standby mode and off mode energy consumption,
taking into consideration the most current versions of IEC Standard
62301 and IEC Standard 62087. (42 U.S.C. 6295(gg)(2)(A)) For the
reasons discussed for the clothes dryer test procedure, DOE determined
that only IEC Standard 62301 is relevant to the room air conditioner
test procedure.
AHAM supported DOE's evaluation of IEC Standard 62301 CDV for
potential revisions to address standby mode and off mode power in the
room air conditioner test procedure. AHAM commented that DOE would thus
harmonize with international standards, including those developed in
Canada and Europe. (AHAM, Public Meeting Transcript, No. 21.4 at p. 30)
As discussed for clothes dryers in section III.A.1.a, DOE considered
the current version, IEC Standard 62301 First Edition, as required by
EPCA. For the reasons stated in the TP Final Rule, DOE amended its test
procedures for room air conditioners in the final rule to incorporate
by reference the clauses from IEC Standard 62301 First Edition proposed
in the TP SNOPR, as well as the provisions of IEC Standard 62301 CDV
for the mode definitions. 76 FR 972, 975-6 (January 6, 2011). DOE may
consider incorporating by reference clauses from IEC Standard 62301
Second Edition when that version has been published.
Testing Procedures
EEI commented that the total number of standby hours would be 8,010
if a product is plugged in all year (8,760 total hours in a year less
the 750 cooling mode operating hours), and closer to 2,000 if
unplugged. EEI requested clarification on the source of the 5,115
standby hours. (EEI, Public Meeting Transcript, No. 21.4 at p. 37) DOE
notes that the estimate of 5,115 total standby and off mode hours,
explained in greater detail in the TP SNOPR (75 FR 37594, 37610 (June
29, 2010), assumes (1) the cooling season length is 90 days or 2,160
hours; (2) half of the products in the field would be unplugged outside
of the cooling season, while the others would be in standby and/or off
mode; and (3) that the cooling season hours not associated with active
mode cooling are evenly split between off-cycle mode and standby mode
or off mode. Off-cycle mode involves operation of the fan but not the
compressor. DOE noted in the TP NOPR that it is not aware of any
reliable data for hours spent in different standby and off modes for
room air conditioners. 73 FR 7439, 74648-49 (Dec. 9, 2008). In the
absence of data suggesting a different allocation of annual hours, DOE
adopted the estimate of 5,115 annual hours standby and off mode hours
in the TP Final Rule. 76 FR 972, 991 (January 6, 2011).
b. Active Mode Referenced Standards
The current DOE room air conditioner test procedure incorporates by
reference two industry test standards: (1) American National Standard
(ANS) (since renamed American National Standards Institute (ANSI))
Z234.1-1972, ``Room Air Conditioners;'' \16\ and (2) American Society
of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE)
Standard 16-69, ``Method of Testing for Rating Room Air Conditioners.''
\17\ (10 CFR part 430, subpart B, appendix F, section 1)
---------------------------------------------------------------------------
\16\ ANSI standards are available at http://www.ansi.org.
\17\ ASHRAE standards are available at http://www.ashrae.org.
---------------------------------------------------------------------------
AHAM commented that its current room air conditioner standard is
American National Standards Institute (ANSI)/AHAM RAC-1-2008. (AHAM,
Public Meeting Transcript, No. 21.4 at p. 35; AHAM, No. 25 at p. 13) As
discussed in the TP Final Rule, DOE adopted the amendments to reference
the relevant sections of the current industry test standards for room
air conditioners, which are designated as: (1) ANSI/AHAM RAC-1-R2008,
``Room Air Conditioners;'' and (2) ANSI/American Society of Heating,
Refrigerating, and Air-Conditioning Engineers (ASHRAE) Standard 16-1983
(RA 2009), ``Method of Testing for Rating Room Air Conditioners and
Packaged Terminal Air Conditioners'' (ANSI/ASHRAE Standard 16-1983 (RA
2009)). 76 FR 972, 978 (January 6, 2011)
c. Annual Active Mode Hours
The current DOE room air conditioner test procedure assumes that
room air conditioners have an average annual use of 750 hours. (10 CFR
part 430.23(f)) DOE noted in chapter 3 of the preliminary TSD that
DOE's TSD from September 1997, issued in support of the 1997 room air
conditioner rulemaking, provides estimates for average annual operating
hours closer to 500.\18\ DOE noted in the preliminary TSD developed in
support of today's final rule, however, that a similar assessment of
room air conditioner hours of operation developed in support of the
June 2010 TP SNOPR suggests that the annual hours of operation have
since increased and are now in fact close to 750. 75 FR 37594, 37633
(June 29, 2010).
---------------------------------------------------------------------------
\18\ U.S. Department of Energy--Office of Energy Efficiency and
Renewable Energy, Technical Support Document for Energy Conservation
Standards for Room Air Conditioners. September 1997. Chapter 1,
section 1.5. Washington, DC, available at http://www.eere.energy.gov/buildings/appliance_standards/residential/room_ac.html
---------------------------------------------------------------------------
EEI commented that the active mode hours for room air conditioners
may be more than the 750 hours currently specified in the DOE room air
conditioner test procedure and questioned whether the 750 hours reflect
both residential and commercial applications. (EEI, Public Meeting
Transcript, No. 21.4 at p. 36) As discussed in the TP Final Rule, DOE
noted that estimates using data from the EIA's 2005 RECS \19\ support
maintaining the 750 annual operating hours specification. As a result,
DOE did not amend the room air conditioner test procedure to change the
number of annual operating hours. 76 FR 972, 978 (January 6, 2011).
---------------------------------------------------------------------------
\19\ U.S. Department of Energy-Energy Information
Administration. ``Residential Energy Consumption Survey,'' 2005
Public Use Data Files, 2005. Washington, DC. Available online at:
http://www.eia.doe.gov/emeu/recs/.
---------------------------------------------------------------------------
d. Part-Load Operation
DOE noted in the preliminary TSD (chapter 5, ``Engineering
Analysis'') that the DOE room air conditioner test procedure at
appendix F measures full-load performance but is not able to assess
energy savings associated with technologies which improve part-load
performance.
DOE considered amendments to its room air conditioner test
procedure to measure part-load performance, but did not propose such
changes, as explained in the June 2010 TP SNOPR and the TP final rule.
75 FR 37594, 37634 (June 29, 2010); 76 FR 972, 1016 (January 6, 2011).
DOE concluded that developing an additional test for part load, or
switching to a seasonal metric to integrate part-load performance is
not warranted. DOE noted that (1) sufficient information is not
available at this time regarding use of room air conditioner
[[Page 22476]]
features that prevent over-cooling; (2) widespread use of part-load
technology in room air conditioners is not likely to be stimulated by
the development of a part-load or seasonal metric at this time, and
therefore, the significant effort required to develop an accurate part-
load metric is not likely to be justified by the expected minimal
energy savings; and (3) key design changes that improve full-load
efficiency also improve part-load efficiency, so the existing EER
metric is already a strong indication of product efficiency over a wide
range of conditions.
DOE stated in the preliminary TSD that it did not consider
technologies such as variable speed compressors and thermostatic
expansion valves as design options during the engineering analysis
because these design options save energy only during part-load
operation. DOE expects, based on available data and the considerations
discussed in the test procedure SNOPR and reiterated above, that such
technologies will not save enough energy to be cost effective.
DOE requested comments regarding additional design options that it
should consider in the engineering analysis. (See the preliminary TSD
Executive Summary, section ES.4).
NRDC commented that DOE should further analyze the efficiency of
part-load operation. NRDC stated that DOE assumed that room air
conditioners are generally undersized and run at full capacity and,
therefore, did not take into consideration the potential to improve
part-load efficiency. NRDC recommended that DOE further investigate the
underlying assumption that room air conditioners are almost always run
at full capacity and analyze the potential to improve part-load
operation efficiency. (NRDC, No. 26 at p. 5) The comment does not
provide any new information regarding room air conditioner operation
that would allow development of an appropriate seasonal efficiency
metric. As discussed in the TP Final Rule, development of such a metric
that would take part load operation into account would require
knowledge of the distribution of hours spent by room air conditioners
at different load levels and at different outdoor and indoor
temperature and humidity conditions. 76 FR 972, 1016 (January 6, 2011).
Because such data is not available, DOE cannot establish an appropriate
efficiency metric and cannot properly evaluate part-load technologies.
DOE may amend the test procedure to account for part-load performance
in a future rulemaking if sufficient information becomes available.
DOE also notes that the existing EER metric, which represents most
of the CEER metric that is the basis of the energy standard prescribed
in today's rule, is already a strong indicator of product efficiency
over a wide range of conditions. Most of the design options that
improve efficiency measured using EER would also improve efficiency
measured using a part-load metric. For these reasons, DOE did not amend
its room air conditioner test procedure to measure part-load
performance. 76 FR 972, 1016 (January 6, 2011).
e. Distribution of Air
NRDC commented that DOE should consider how effectively room air
conditioners distribute air throughout the room, adding that if all the
cooling is provided by convection into the space, the effectiveness of
delivering that cooling by the fan and integral diffuser may have a
significant impact on energy use. NRDC stated that the DOE test
procedure should take into account how far into the room the airflow
travels and whether the unit allows for adjustments to the airflow
pattern. NRDC also commented that many units will be placed at sill
height, but buildings with wall sleeves will likely have units that are
installed below the sill, which could pose different concerns with room
air distribution to provide adequate mixing to avoid drafts. (NRDC, No.
26 at p. 6)
DOE notes that the DOE test procedure measures the cooling
delivered by the room air conditioner regardless of the distribution of
the cooling air within the test chamber. Thus, design options that
optimize distribution of the cooling air would not improve the
measurement.
DOE agrees with the comment's premise that the energy use of a room
air conditioner used by a consumer may be affected by the air
circulation patterns it establishes in a room. For example, a consumer
located in a room far from the unit and not in line with the product's
discharge air outlet may keep the unit operating longer to achieve
comfortable local room conditions. This influence has as much to do
with installation and use as it does with product characteristics. The
relationship between room air circulation and room air conditioner
energy use is not sufficiently well understood to allow any
consideration of integration of such factors into the energy use
metric. DOE is not aware of data evaluating the impact a product's air
distribution patterns have on product energy use by consumers. As a
result, this issue is not addressed by today's rule.
3. Effects of Test Procedure Revisions on the Measured Efficiency
In any rulemaking to amend a test procedure, DOE must determine to
what extent, if any, the proposed test procedure would alter the
measured energy efficiency of any covered product as determined under
the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines
that the amended test procedure would alter the measured efficiency of
a covered product, DOE must amend the applicable energy conservation
standard accordingly. In determining the amended energy conservation
standard, the DOE must measure, pursuant to the amended test procedure,
the energy efficiency, energy use, or water use of a representative
sample of covered products that minimally comply with the existing
standard. The average of such energy efficiency, energy use, or water
use levels determined under the amended test procedure shall constitute
the amended energy conservation standard for the applicable covered
products. (42 U.S.C. 6293(e)(2)) EPCA also states that models of
covered products in use before the date on which the amended energy
conservation standard becomes effective (or revisions of such models
that come into use after such date and have the same energy efficiency,
energy use, or water use characteristics) that comply with the energy
conservation standard applicable to such covered products on the day
before such date shall be deemed to comply with the amended energy
conservation standard. (42 U.S.C. 6293(e)(3))
EPCA also provides that amendments to the test procedures to
include standby mode and off mode energy consumption will not determine
compliance with previously established standards. (U.S.C.
6295(gg)(2)(C)) Because the amended test procedures for standby mode
and off mode energy consumption would not alter existing measures of
energy consumption or efficiency, these amendments would not affect a
manufacturer's ability to demonstrate compliance with previously
established standards.
For the TP Final Rule, DOE investigated how the amended test
procedures would affect the measured efficiency as compared to the
existing DOE test procedures. The following sections discuss these
effects for each product.
a. Clothes Dryers
The Joint Petitioners proposed that the final rule amending the
clothes dryer test procedure also amend the
[[Page 22477]]
standards in the Joint Petition according to the procedures in section
323(e)(2) of EPCA, except that for the purposes of establishing a
representative sample of products, DOE should choose a sample of
minimally compliant dryers which automatically terminate the drying
cycle at no less than 4-percent RMC. (Joint Petitioners, No. 33 at p.
17)
As discussed above, DOE did not adopt amendments to the clothes
dryer test procedure to better account for automatic cycle termination.
As a result, DOE did not consider any revisions to the energy
conservation standards based on amendments for automatic cycle
termination. However, DOE notes that EPCA does not include any
exceptions that would allow for the measurement of only dryers that
automatically terminate the drying cycle at no less than 4-percent RMC.
(42 U.S.C. 6293(b)(1)-(3))
As part of the TP Final Rule, DOE conducted testing on a sample of
17 representative clothes dryers to evaluate the effects of the
amendments to the clothes dryer test procedure on the measured EF. 76
FR 972, 1026-27 (January 6, 2011). DOE tested these units according to
the amended clothes dryer test procedure in the TP Final Rule,
conducting up to three tests for each test unit and averaging the
results. The results from this testing are shown below in Table III.2.
DOE noted in its testing that the amendments to the initial RMC, water
temperature for test load preparation, and load size had an effect on
the measured EF as compared to the existing test procedure. For vented
electric-standard size clothes dryers tested using the amended test
procedure, the measured EF increases by an average of about 20.1
percent. For vented gas clothes dryers, the measured EF increased by an
average of about 19.8 percent. For vented electric compact 120V and
240V clothes dryers, the measured EF increased by an average of about
15.6 and 12.8 percent, respectively. For ventless electric compact 240V
clothes dryers and ventless electric combination washer/dryers, the
measured EF increased by an average of about 13.6 and 11.4 percent,
respectively, as compared to the measured EF using the existing test
procedure with only the amendments for ventless clothes dryers. (That
is, without the changes to the initial RMC, water temperature for test
load preparation, or other changes) DOE noted that the increase in
measured EF is greater for the standard-size products (that is, vented
electric standard and vented gas clothes dryers) than for compact-size
products due to the additional amendments to increase the test load
size for standard-size products. 76 FR 972, 1027 (January 6, 2011). As
discussed in section IV.C.2.a, DOE applied these percentage increases
in the measured EF based on the test procedure amendments for each
product class to the efficiency levels proposed in the preliminary
analysis.
Table III.2--DOE Test Results To Evaluate the Effects of the Clothes Dryer Test Procedure Amendments on Measured
EF
----------------------------------------------------------------------------------------------------------------
Average EF lb/kWh
-------------------------------- Change
Test unit Current test Amended test (percent)
procedure procedure
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard:
Unit 1...................................................... 3.07 3.69 20.4
Unit 2...................................................... 3.14 3.77 19.5
Unit 3...................................................... 3.20 3.83 19.6
Unit 4...................................................... 3.28 3.92 19.4
Unit 5...................................................... 3.24 3.96 22.5
Unit 6...................................................... 3.12 3.72 19.1
Vented Gas:
Unit 7...................................................... 2.78 3.36 20.6
Unit 8...................................................... 2.83 3.40 19.9
Unit 9...................................................... 2.85 3.42 20.2
Unit 10..................................................... 2.80 3.37 20.5
Unit 11..................................................... 2.98 3.50 17.6
Vented Electric Compact (240V):
Unit 12..................................................... 3.19 3.56 11.4
Unit 13..................................................... 2.93 3.35 14.2
Vented Electric Compact (120V):
Unit 14..................................................... 3.23 3.74 15.6
Ventless Electric Compact (240V):
Unit 15..................................................... 2.37 2.69 13.6
Ventless Electric Combo Washer/Dryer:
Unit 16..................................................... 2.01 2.27 12.5
Unit 17..................................................... 2.50 2.76 10.3
----------------------------------------------------------------------------------------------------------------
Table III.3 shows how the current energy conservation standards are
affected by the amendments to the DOE clothes dryer test procedure.
Table III.3--Energy Factor of a Minimally Compliant Clothes Dryer With
the Current and Amended Test Procedure
------------------------------------------------------------------------
EF lb/kWh
-------------------------------
Product class Existing test Amended test
procedure procedure
------------------------------------------------------------------------
1. Electric, Standard (4.4 ft\3\ or 3.01 3.62
greater capacity)......................
[[Page 22478]]
2. Electric, Compact (120 v) (less than 3.13 3.62
4.4 ft\3\ capacity)....................
3. Electric, Compact (240 v) (less than 2.90 3.27
4.4 ft\3\ capacity)....................
4. Gas.................................. 2.67 3.20
------------------------------------------------------------------------
b. Room Air Conditioners
The Joint Petitioners proposed that the final rule amending the
room air conditioner test procedure amend the standards in the
consensus agreement according to the procedures in section 323(e)(2) of
EPCA. (Joint Petitioners, No. 33 at p. 18) These are the provisions
that require DOE to adjust the efficiency standard if DOE determines
that changes in the energy test procedure alter the measured energy use
of covered products. While the measured efficiency of room air
conditioners is altered by the incorporation of standby and off mode
energy use in the new efficiency metric. However, DOE determined in the
TP Final Rule that the amendments to the room air conditioner test
procedure do not impact the measurement of EER while providing more
accurate and repeatable measurements of capacity and greater
flexibility to manufacturers in selecting equipment and facilities. 76
FR 972, 1028 (January 6, 2011). For this reason, DOE believes that
revisions to the energy conservation standards for room air
conditioners because of the amendments to the test procedure would not
be warranted.
B. Technological Feasibility
1. General
In each standards rulemaking, DOE conducts a screening analysis
based on information it has gathered on all current technology options
and prototype designs that could improve the efficiency of the products
or equipment that are the subject of the rulemaking. As the first step
in such analysis, DOE develops a list of technology options for
consideration in consultation with manufacturers, design engineers, and
other interested parties. DOE then determines which of these means for
improving efficiency are technologically feasible. DOE considers a
technology option to be technologically feasible if it is incorporated
into commercially available products or working prototypes. 10 CFR part
430, subpart C, appendix A, section 4(a)(4)(i).
Once DOE has determined that particular technology options are
technologically feasible, it further evaluates each of these technology
options in light of the following additional screening criteria: (1)
Practicability to manufacture, install, or service; (2) adverse impacts
on product utility or availability; and (3) adverse impacts on health
or safety. Section IV.B of this notice discusses the results of the
screening analysis for clothes dryers and room air conditioners,
particularly the designs DOE considered, those it screened out, and
those that are the basis for the trial standard levels (TSLs) in this
rulemaking. For further details on the screening analysis for this
rulemaking, see chapter 4 of the technical support document
accompanying today's direct final rule (direct final rule TSD).
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must ``determine the maximum improvement in
energy efficiency or maximum reduction in energy use that is
technologically feasible'' for such product. (42 U.S.C. 6295(p)(1))
Accordingly, DOE determined the maximum technologically feasible
(``max-tech'') improvements in energy efficiency for clothes dryers and
room air conditioners in the engineering analysis, using the design
options used in the most efficient products available on the market or
in working prototypes. (See chapter 5 of the direct final rule TSD.)
Table III.4 lists the max-tech levels that DOE determined for this
rulemaking.
Table III.4--Maximum Technologically Feasible Efficiency Levels for
Residential Clothes Dryers and Room Air Conditioners
------------------------------------------------------------------------
Residential clothes dryers
-------------------------------------------------------------------------
Max-tech
Product class CEF lb/kWh
------------------------------------------------------------------------
1. Vented Electric, Standard (4.4 ft\3\ or greater 5.42
capacity).................................................
2. Vented Electric, Compact (120 V) (less than 4.4 ft3 5.41
capacity).................................................
3. Vented Electric, Compact (240 V) (less than 4.4 ft\3\ 4.89
capacity).................................................
4. Vented Gas.............................................. 3.61
5. Ventless Electric, Compact (240 V) (less than 4.4 ft\3\ 4.03
capacity).................................................
6. Ventless Electric Combination Washer/Dryer.............. 3.69
------------------------------------------------------------------------
Room air conditioners
-------------------------------------------------------------------------
Max-tech
Product class CEER Btu/Wh
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and less 11.67
than 6,000 Btu/h..........................................
2. Without reverse cycle, with louvered sides, and 6,000 to 11.96
7,999 Btu/h...............................................
3. Without reverse cycle, with louvered sides, and 8,000 to 11.96
13,999 Btu/h..............................................
[[Page 22479]]
4. Without reverse cycle, with louvered sides, and 14,000 11.96
to 19,999 Btu/h...........................................
5A. Without reverse cycle, with louvered sides, and 20,000 10.15
to 27,999 Btu/h...........................................
5B. Without reverse cycle, with louvered sides, and 28,000 9.80
Btu/h or more.............................................
6. Without reverse cycle, without louvered sides, and less 10.35
than 6,000 Btu/h..........................................
7. Without reverse cycle, without louvered sides, and 6,000 10.35
to 7,999 Btu/h............................................
8A. Without reverse cycle, without louvered sides, and 10.35
8,000 to 10,999 Btu/h.....................................
8B. Without reverse cycle, without louvered sides, and 10.02
11,000 to 13,999 Btu/h....................................
9. Without reverse cycle, without louvered sides, and 10.02
14,000 to 19,999 Btu/h....................................
10. Without reverse cycle, without louvered sides, and 9.80
20,000 Btu/h or more......................................
11. With reverse cycle, with louvered sides, and less than 11.96
20,000 Btu/h..............................................
12. With reverse cycle, without louvered sides, and less 10.15
than 14,000 Btu/h.........................................
13. With reverse cycle, with louvered sides, and 20,000 Btu/ 10.35
h or more.................................................
14. With reverse cycle, without louvered sides, and 14,000 10.02
Btu/h or more.............................................
15. Casement-Only.......................................... 10.35
16. Casement-Slider........................................ 10.35
------------------------------------------------------------------------
a. Clothes Dryers
For electric vented and vent-less clothes dryers, the max-tech
level corresponds to the efficiency improvement associated with
incorporating heat pump technology, according to information from
manufacturer interviews and available research on heat pump dryers. For
vented gas clothes dryers, the max-tech level is the value proposed in
the framework document was based on data contained in the CEC product
database. AHAM submitted aggregated incremental manufacturing cost data
in support of this max-tech efficiency level for vented gas clothes
dryers. As discussed in chapter 5 of the preliminary TSD, multiple
manufacturers stated during interviews that the current maximum
efficiency listed for vented gas clothes dryers in a more recent
version of the CEC product database is not achievable. Also, as
discussed in chapter 5 of the preliminary TSD, DOE testing of the
``maximum-available'' vented gas clothes dryer in this more recent
version of the CEC product database determined that this unit did not
achieve the rated efficiency. For these reasons, DOE considered the
vented gas clothes dryer max-tech value for which AHAM submitted
aggregated incremental manufacturing costs. This max-tech level was
supported by multiple manufacturers during interviews.
b. Room Air Conditioners
As described in the direct final rule TSD (chapter 5, ``Engineering
Analysis''), DOE conducted a full engineering analysis for seven room
air conditioner product classes, which comprise a large percentage of
identified products on the market. DOE's approach for extending the
analysis of the proposed standard levels to the non-analyzed product
classes is described in chapter 5, ``Engineering Analysis'', of the
direct final rule TSD. This section of this notice reports specifically
on the max-tech efficiency levels for the product classes directly
analyzed in the engineering analysis.
DOE used the full set of design options considered applicable to
these product classes to determine the max-tech efficiency levels. (See
chapter 5 of the direct final rule TSD.) Table III.5, below, lists the
max-tech levels that DOE determined for this rulemaking--the table
shows the levels for the directly analyzed product classes (see section
IV.C regarding discussion of the product classes that were directly
analyzed). The max-tech levels that DOE determined for this rulemaking
are based on design options that are used in commercially-available
products.
Table III.5--Max-Tech EERs for the Room Air Conditioner Products
Rulemaking
------------------------------------------------------------------------
Combined
energy
efficiency
ratio (EER)
Analyzed product class Description level
---------------
DOE final rule
max-tech
------------------------------------------------------------------------
1.............................. Less than 6,000 Btu/h, 11.7
without reverse cycle
and with louvered
sides.
2.............................. 6,000 to 7,999 Btu/h, *N/A
without reverse cycle
and with louvered
sides.
3.............................. 8,000 to 13,999 Btu/h, 12.0
without reverse cycle
and with louvered
sides.
4.............................. 14,000 to 19,999 Btu/h, *N/A
without reverse cycle
and with louvered
sides.
5A............................. 20,000 Btu/h to 27,999 10.2
Btu/h, without reverse
cycle and with
louvered sides.
5B............................. 28,000 Btu/h or more, 9.8
without reverse cycle
and with louvered
sides.
8A............................. 8,000 to 10,999 Btu/h, 10.4
without reverse cycle
and without louvered
sides.
8B............................. 11,000 to 13,999 Btu/h, 10.0
without reverse cycle
and without louvered
sides.
------------------------------------------------------------------------
The DOE max-tech levels differ from those presented in the
preliminary TSD. They are higher for three of the analyzed product
classes, and lower for three (one product class was not analyzed during
the preliminary analysis). The engineering analysis revisions are
discussed in section IV.C.2.b below.
DOE determined that max-tech levels for most room air conditioner
product classes higher than the commercially available max-tech were
technologically
[[Page 22480]]
feasible. Although the commercially available products generally do not
use all the energy efficient design options considered in the DOE max-
tech analyses, the design options are all used in commercially
available products, some of which combine nearly all of the design
options used in the DOE max-tech configurations.
DOE determined the max-tech levels of each analyzed product class
as part of its engineering analysis. The max-tech levels represent the
most efficient design option combinations applicable for the analyzed
products. Details of this analysis are described in the direct final
rule TSD in chapter 5. DOE used different design option groups for each
analyzed product class's max-tech design, as indicated in Table III.6.
[GRAPHIC] [TIFF OMITTED] TR21AP11.000
Stakeholder comments and questions regarding the preliminary
analysis max-tech levels primarily addressed the max-tech levels that
DOE selected for the analyses. Some stakeholders argued that max
available products exist at higher levels, while others argued that the
conversion to R-410A refrigerant requires a re-examination of max-tech
levels.
c. Available Max-Tech Products With Higher EER Ratings
Numerous stakeholders commented that DOE should update its analysis
to include all current ENERGY STAR[supreg] and max-tech units on the
market. The California Utilities suggested that DOE consider the
current best R-410A products on the ENERGY STAR list (California
Utilities, No. 31 at pp. 16-17). The California Utilities also pointed
out that the ENERGY STAR Database listed products with a 13.5 EER, and
that the CEC Database listed four products with a 13.8 EER (California
Utilities, No. 31 at p. 13). The Northwest Power and Conservation
Council (NPCC) and ACEEE also commented that there were higher
efficiency products available than had been assumed by DOE (NPCC, No.
32 at p. 4; ACEEE, No. 24 at p. 4).
DOE is aware that the ENERGY-STAR and CEC databases list products
that exceed the max-tech EER of 12.0 that DOE identified in the
preliminary analysis. Table III.7 lists products listed at 12.0 EER or
higher in one or both of these databases.
Table III.7--Room Air Conditioner Models of Interest for Max-Tech Analysis, as Listed in the ENERGY STAR and CEC
Databases
----------------------------------------------------------------------------------------------------------------
Source
Listed -----------------------
Brand Model EER ENERGY
CEC STAR
----------------------------------------------------------------------------------------------------------------
Climette.................................... CH1826A........................ 13.8 [bcheck] ..........
Comfort-Aire................................ REC-183........................ 13.8 [bcheck] ..........
Fedders..................................... AED18E7DG...................... 13.8 [bcheck] ..........
Maytag...................................... MED18E7A....................... 13.8 [bcheck] ..........
Fedders..................................... A7Q06F2A....................... 13.4 [bcheck] ..........
Turbo Air................................... TAS-09EH....................... 13.5 .......... [bcheck]
Turbo Air................................... TAS-12EH....................... 13.0 .......... [bcheck]
Turbo Air................................... TAS-18EH....................... 13.0 .......... [bcheck]
Friedrich................................... SS10M10........................ 12.0 [bcheck] [bcheck]
Friedrich................................... YS09L10........................ 12.0 [bcheck] [bcheck]
Friedrich................................... SS10L10........................ 12.0 [bcheck] [bcheck]
Friedrich................................... XQ06M10........................ 12.0 [bcheck] [bcheck]
Friedrich................................... SS12M10........................ 12.0 [bcheck] ..........
Haier....................................... ESAD4066....................... 12.0 .......... [bcheck]
----------------------------------------------------------------------------------------------------------------
[[Page 22481]]
DOE searched product databases and manufacturer Web sites to gather
information about these products and to determine whether these
products represented valid room air conditioner ratings. DOE's
investigation indicates that none of the products listed with EER
higher than 12.0 represent valid room air conditioner ratings, and that
some of the products rated at an EER of 12.0 are also invalid
representations. The first five products in the table are listed with
much lower EER ratings in Natural Resources Canada (NRCan)
database.\20\ The three Turbo-Air products are ductless mini-split
products (as identified by the manufacturer's Web site \21\), not room
air conditioners. The Friedrich SS12M10 has been re-rated at lower than
12.0 EER \22\, and the validity of the 12.0 rating of the Haier
ESAD4066 is likely also incorrect, as discussed in greater detail
below. Consequently, DOE concludes that its identification of a max-
tech available level no higher than 12.0 EER is valid.
---------------------------------------------------------------------------
\20\ (1) Natural Resources Canada, Office of Energy Efficiency.
EnerGuide for Equipment--EnerGuide Room Air Conditioner Directory
2002. 2002; (2) Room Air Conditioner Model Listing. ``EnerGuide Room
Air Conditioner Directory 2004'' http://oee.nrcan.gc.ca/.
\21\ Product Specifications and Descriptions for Turbo Air
Products TAS-09EH, TAS-12EH, TAS-18EH. http://www.turboairinc.net/productspecs/productspecs.html.
\22\ Friedrich product specifications. Specifications for
SS12M10. http://kuhl.friedrich.com/model-specifications/.
---------------------------------------------------------------------------
The California Utilities stated that the analysis for room air
conditioners was quite favorable in terms of cost-effectiveness, and
that many of the analyzed efficiency levels had LCC savings relative to
the baseline levels. They indicated that, if DOE's selected efficiency
levels are as cost-effective as the analysis suggests, that there may
be additional design options or higher efficiency levels that also
merit DOE's analysis. (California Utilities, No. 31 at p. 13) PG&E
asked whether DOE would consider higher max-tech levels that might
result in more stringent standards (Public Meeting Transcript, No. 21.4
at p. 130).
DOE is required to establish energy conservation standards that
achieve the maximum improvement in energy efficiency that is
technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)). DOE developed max-tech levels in the preliminary analysis
and made adjustments in the engineering analysis based on new
information, as mentioned above, particularly regarding compressors
designed for R-410A refrigerant. The engineering analysis adjustments
are discussed in more detail in section IV.C.2.b below. DOE determined
that the products cited by the commenters that appeared to have higher
efficiencies than the max-tech levels either were not room air
conditioners or did not have valid ratings. The max-tech levels
incorporate all applicable design options for each of the product
classes, and based on DOE's research and engineering analysis, DOE does
not believe that products with higher efficiency than DOE's max-tech
are technologically feasible.
d. Consideration of Conversion to R-410A Refrigerant in Max-Tech
Selections
As detailed in the direct final rule TSD (chapter 5), the use of
HCFC-22 refrigerant in room air conditioners was phased out starting
January 1, 2010. The industry has switched to R-410A refrigerant, which
has required significant design modification. Although DOE based its
preliminary analyses on use of R-410A refrigerant because HCFC-22 can
no longer be used, few R-410A products were available for reverse
engineering when DOE conducted the preliminary analyses. Also, there
was limited information regarding compressors designed for the new
refrigerant, or regarding manufacturers' experiences developing product
designs for the new refrigerant.
GE Consumer & Industrial (GE) asked during the March 2010 public
meeting whether any of the models considered for the engineering
analysis (specifically the max-tech levels) were R-410A products (GE,
Public Meeting Transcript, No. 21.4 at pp. 72-73). DOE responded that
it based the max-tech analysis of product class 1 on a 12 EER R-410A
product that was available at the time of the analysis. GE commented
that Consumer Reports published an article in October 2008 \23\ in
which it reported on test results indicating that this product's
efficiency was not 12 EER (Public Meeting Transcript, No. 21.4 at 72-
73). GE indicated that DOE should not consider this model to be
representative of the technologies or costs required to achieve 12 EER.
GE recommended that DOE instead use an alternative model to represent
this efficiency level: the Friedrich model XQ06M10,\24\ which has a
6,000 Btu/h capacity and 12.0 EER, with a retail price of over $600 and
a weight of 72 lbs.
---------------------------------------------------------------------------
\23\ ``Energy Star has lost some luster.'' Consumer Reports.
October 2008. Pg. 24 Vol. 73 No. 10. Copyright 2008 Consumers Union
of U.S., Inc.
\24\ The GE comment identified Friedrich model AQ06M10, but the
listing on the Friedrich Web site is XQ06M10 for a product matching
the GE description (same capacity, EER, weight, and other relevant
attributes).
---------------------------------------------------------------------------
The California Utilities requested clarification on DOE's decision
to not pursue a full teardown of the single R-410A unit identified in
the preliminary analysis (California Utilities, No. 31 at p. 17). In
response, DOE notes that it had obtained sufficient information about
this unit to allow development of both an energy model and
manufacturing cost model through close examination of heat exchanger
details, identification of the compressor and fan motor model number,
and measurement of fan power input.
DOE considered the Consumer Reports article regarding the product
identified in the preliminary analysis, which was initially considered
to represent 12.0 EER using R-410A. Matching this performance level
with the energy model required making some input assumptions that DOE
considers unlikely, particularly for the condenser air flow rate. Given
the information available, DOE agrees with GE's suggestion to instead
use the Friedrich 12.0 EER product as a representation of this
performance level. The revised analysis for product class 1 is based on
calibration of the energy model to match the performance of the
Friedrich product. DOE conducted a teardown of this product to verify
its design details.
The analysis shows that the product class 1 max-tech level is 11.8,
slightly lower than 12. This reflects (1) reduction of the capacity
from the 6,000 Btu/h of the Friedrich unit to the 5,000 Btu/h
considered representative for the product class, and (2) adopting a 50
lb. product weight limit, as suggested by AHAM (AHAM, No. 25 at p. 6)
AHAM commented that OSHA recommends that articles heavier than 50 lbs.
should be lifted by two rather than one person. Id. DOE considers this
limit to be an appropriate demarcation for product class 1, since most
of these products currently weigh less than 50 lb. Increase in weight
beyond 50 lbs., requiring additional personnel for installation,
represents a distinct reduction in consumer utility (specifically, the
ability to remove the unit from the window during the off-season,
relocate it to other windows without calling an installer, or both).
Size limits for room air conditioners are discussed in greater detail
in section IV.C.2.b, below.
During the final rule analysis, DOE also considered new products of
other product classes that use R-410A refrigerant and adjusted its
analysis accordingly based on new information regarding designs and
efficiency levels
[[Page 22482]]
of these products. Adjustments DOE made to the engineering analysis
during the final rule phase are detailed in section IV.C.2.b below, and
in chapter 5 of the TSD.
C. Energy Savings
1. Determination of Savings
DOE used its NIA spreadsheet model to estimate energy savings from
amended standards for the products that are the subject of this
rulemaking.\25\ For each TSL, DOE forecasted energy savings beginning
in 2014, the year that manufacturers would be required to comply with
amended standards, and ending in 2043. DOE quantified the energy
savings attributable to each TSL as the difference in energy
consumption between the standards case and the base case. The base case
represents the forecast of energy consumption in the absence of amended
mandatory efficiency standards, and considers market demand for more-
efficient products.
---------------------------------------------------------------------------
\25\ The NIA spreadsheet model is described in section IV.G of
this notice.
---------------------------------------------------------------------------
The NIA spreadsheet model calculates the electricity savings in
``site energy'' expressed in kWh. Site energy is the energy directly
consumed by appliances at the locations where they are used. DOE
reports national energy savings on an annual basis in terms of the
aggregated source (primary) energy savings, the savings in the energy
used to generate and transmit the site energy. (See direct final rule
TSD chapter 10.) To convert site energy to source energy, DOE derived
annual conversion factors from the model used to prepare the EIA Annual
Energy Outlook 2010 (AEO2010).
2. Significance of Savings
As noted above, DOE cannot adopt a standard for a covered product
if such standard would not result in ``significant'' energy savings. 42
U.S.C. 6295(o)(3)(B) While the term ``significant'' is not defined in
the Act, the U.S. Court of Appeals, in Natural Resources Defense
Council v. Herrington, 768 F.2d 1355, 1373 (DC Cir. 1985), indicated
that Congress intended ``significant'' energy savings in this context
to be savings that were not ``genuinely trivial.'' The energy savings
for all of the TSLs considered in this rulemaking are nontrivial, and,
therefore, DOE considers them ``significant'' within the meaning of 42
U.S.C. 6295(o)(3)(B).
D. Economic Justification
1. Specific Criteria
As noted in section II.B, EPCA provides seven factors to be
evaluated in determining whether a potential energy conservation
standard is economically justified. (42 U.S.C. 6295(o)(2)(B)(i)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of an amended standard on manufacturers,
DOE first determines the quantitative impacts using an annual cash-flow
approach. This step includes both a short-term assessment--based on the
cost and capital requirements during the period between the issuance of
a regulation and when entities must comply with the regulation--and a
long-term assessment over a 30-year analysis period. The industry-wide
impacts analyzed include INPV (which values the industry on the basis
of expected future cash flows), cash flows by year, changes in revenue
and income, and other measures of impact, as appropriate. Second, DOE
analyzes and reports the impacts on different types of manufacturers,
including analysis of impacts on small manufacturers. Third, DOE
considers the impact of standards on domestic manufacturer employment
and manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. Finally, DOE
takes into account cumulative impacts of different DOE regulations and
other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and the PBP associated with new or amended standards.
The LCC, specified separately in EPCA as one of the seven factors to be
considered in determining the economic justification for a new or
amended standard, 42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the
following section. For consumers in the aggregate, DOE also calculates
the national net present value of the economic impacts on consumers
over the forecast period used in a particular rulemaking.
b. Life-Cycle Costs
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy and
maintenance and repair expenditures) discounted over the lifetime of
the product. The LCC savings for the considered efficiency levels are
calculated relative to a base case that reflects likely trends in the
absence of amended standards. The LCC analysis requires a variety of
inputs, such as product prices, product energy consumption, energy
prices, maintenance and repair costs, product lifetime, and consumer
discount rates. DOE assumed in its analysis that consumers will
purchase the considered products in 2014.
To account for uncertainty and variability in specific inputs, such
as product lifetime and discount rate, DOE uses a distribution of
values with probabilities attached to each value. A distinct advantage
of this approach is that DOE can identify the percentage of consumers
estimated to receive LCC savings or experience an LCC increase, in
addition to the average LCC savings associated with a particular
standard level. In addition to identifying ranges of impacts, DOE
evaluates the LCC impacts of potential standards on identifiable
subgroups of consumers that may be disproportionately affected by a
national standard.
c. Energy Savings
While significant conservation of energy is a separate statutory
requirement for imposing an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings expected to result directly
from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) DOE uses the NIA
spreadsheet results in its consideration of total projected energy
savings.
d. Lessening of Utility or Performance of Products
In establishing classes of products, and in evaluating design
options and the impact of potential standard levels, DOE sought to
develop standards for clothes dryers and room air conditioners that
would not lessen the utility or performance of these products. (42
U.S.C. 6295(o)(2)(B)(i)(IV)) None of the TSLs considered in this notice
would reduce the utility or performance of the clothes dryers under
consideration in this rulemaking. DOE considered the possibility that
room air conditioners size increases (and related weight increases) may
reduce utility. DOE requested comments from stakeholders during the
preliminary analysis phase addressing this issue. In response, DOE
received comments from AHAM recommending limits to product weights and
from NRDC recommending limits to product dimensions. These comments and
DOE's response to them are discussed in section IV.C.2.b. DOE adjusted
its analysis so that analyzed
[[Page 22483]]
TSLs are within the weigh and dimension limits suggested by
stakeholders. These adjustments included: (1) Use of a 50 lbs. limit
for the product class 1 analysis, and (2) use of maximum height and
width dimensions (for all product classes with louvered sides)
consistent with max-tech available products. DOE made these adjustments
to its analysis specifically to avoid the possible reduction in
consumer utility that could result from increases in size and weight.
Further discussion of this analysis can be found in the direct final
rule TSD in chapter 5. Furthermore, the energy conservation standards
are performance standards rather than design standards, so they do not
specify the design options that manufacturers must use to achieve the
required efficiency levels. Manufacturers may use design options other
than those selected by DOE in its analyses to achieve the required
levels. Consequently, DOE believes that the TSLs considered and the
TSLs adopted for the energy conservation standard do not represent any
such consumer utility reductions, notwithstanding increases in size and
weight that DOE considered in the analyses for some of the product
classes.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider any lessening of competition that is
likely to result from standards. It also directs the Attorney General
of the United States (Attorney General) to determine the impact, if
any, of any lessening of competition likely to result from a proposed
standard and to transmit such determination to the Secretary within 60
days of the publication of a proposed rule, together with an analysis
of the nature and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V)
and (B)(ii)) DOE published a NOPR containing energy conservation
standards identical to those set forth in today's direct final rule and
transmitted a copy of today's direct final rule and the accompanying
TSD to the Attorney General, requesting that the Department of Justice
(DOJ) provide its determination on this issue. DOE will consider DOJ's
comments on the rule in determining whether to proceed with the direct
final rule. DOE will also publish and respond to DOJ's comments in the
Federal Register in a separate notice.
f. Need for National Energy Conservation
The energy savings from new or amended standards are likely to
improve the security and reliability of the nation's energy system.
Reduced demand for electricity may also result in reduced costs for
maintaining the reliability of the nation's electricity system. DOE
conducts a utility impact analysis to estimate how standards may affect
the nation's needed power generation capacity.
Energy savings from the proposed standards are also likely to
result in environmental benefits in the form of reduced emissions of
air pollutants and greenhouse gases associated with energy production.
DOE reports the environmental effects from the proposed standards, and
from each TSL it considered, in the environmental assessment contained
in chapter 15 in the direct final rule TSD. DOE also reports estimates
of the economic value of emissions reductions resulting from the
considered TSLs.
g. Other Factors
EPCA allows the Secretary of Energy, in determining whether a
standard is economically justified, to consider any other factors that
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII))
In developing the direct final rule, DOE has also considered the
submission of the Joint Petition, which DOE believes sets forth a
statement by interested persons that are fairly representative of
relevant points of view (including representatives of manufacturers of
covered products, States, and efficiency advocates) and contains
recommendations with respect to an energy conservation standard that
are in accordance with 42 U.S.C. 6295(o). DOE has encouraged the
submission of consensus agreements as a way to bring diverse
stakeholders together, to develop an independent and probative analysis
useful in DOE standard setting, and to expedite the rulemaking process.
DOE also believes that standard levels recommended in the consensus
agreement may increase the likelihood for regulatory compliance, while
decreasing the risk of litigation.
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first-year of energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the payback period for
consumers of potential amended energy conservation standards. These
analyses include, but are not limited to, the 3-year payback period
contemplated under the rebuttable presumption test. DOE routinely
conducts, however, an economic analysis that considers the full range
of impacts to the consumer, manufacturer, nation, and environment, as
required under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis
serve as the basis for DOE to definitively evaluate the economic
justification for a potential standard level (thereby supporting or
rebutting the results of any preliminary determination of economic
justification). The rebuttable presumption payback calculation is
discussed in section IV.F.12 of this direct final rule and chapter 8 of
the direct final rule TSD.
IV. Methodology and Discussion
DOE used two spreadsheet tools to estimate the impact of today's
proposed standards. The first spreadsheet calculates LCCs and payback
periods of potential new energy conservation standards. The second
provides shipments forecasts and then calculates national energy
savings and net present value impacts of potential energy conservation
standards. The two spreadsheets are available online at http://www1.eere.energy.gov/buildings/appliance_standards/.
The Department also assessed manufacturer impacts, largely through
use of the Government Regulatory Impact Model (GRIM).
Additionally, DOE estimated the impacts on utilities and the
environment of energy efficiency standards for clothes dryers and room
air conditioners. DOE used a version of EIA's National Energy Modeling
System (NEMS) for the utility and environmental analyses. The NEMS
model simulates the energy sector of the U.S. economy. EIA uses NEMS to
prepare its Annual Energy Outlook (AEO), a widely known baseline energy
forecast for the United States. For more information on NEMS, refer to
``The National Energy Modeling System: An Overview,'' DOE/EIA-0581 (98)
(Feb. 1998), available at: http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf.
The version of NEMS used for appliance standards analysis is called
NEMS-BT, and is based on the AEO version with minor modifications.\26\
[[Page 22484]]
NEMS-BT offers a sophisticated picture of the effect of standards,
because it accounts for the interactions between the various energy
supply and demand sectors and the economy as a whole.
---------------------------------------------------------------------------
\26\ EIA approves the use of the name ``NEMS'' to describe only
an AEO version of the model without any modification to code or
data. Because the present analysis entails some minor code
modifications and runs the model under various policy scenarios that
deviate from AEO assumptions, the name ``NEMS-BT'' refers to the
model as used here. (BT stands for DOE's Building Technologies
Program.)
---------------------------------------------------------------------------
A. Market and Technology Assessment
1. General
When beginning an energy conservation standards rulemaking, DOE
develops information that provides an overall picture of the market for
the products concerned, including the purpose of the products, the
industry structure, and market characteristics.
This activity includes both quantitative and qualitative
assessments based on publicly available information. The subjects
addressed in the market and technology assessment for this rulemaking
include quantities and types of products sold and offered for sale;
retail market trends; products covered by the rulemaking; product
classes and manufacturers; regulatory and non-regulatory programs; and
technology options that could improve the energy efficiency of the
product(s) under examination. See chapter 3 of the direct final rule
TSD for further discussion of the market and technology assessment.
2. Products Included in This Rulemaking
This subsection addresses the scope of coverage for today's direct
final rule, discussing whether certain products are subject to the
amended standards and whether certain technologies provide a viable
means of improving energy efficiency. In the sections that follow, DOE
discusses the comments received on the scope of coverage set forth in
the preliminary analysis.
a. Clothes Dryers
Hydromatic Technologies Corporation (HTC) suggested that DOE
consider ``solar'' clothes dryers in this rulemaking. (HTC, No. FDMS
DRAFT 0068 at p. 3) Under EPCA, any standard for clothes dryers must
establish either a maximum amount of energy use or a minimum level of
efficiency based on energy use. (42 U.S.C. 6291(5)-(6)) EPCA defines
``energy use,'' in part, as ``the quantity of energy'' that the product
consumes. (42 U.S.C. 6291(4)) EPCA defines ``energy'' as meaning
``electricity, or fossil fuels,'' or other fuels that DOE adds to the
definition, by rule, upon determining ``that such inclusion is
necessary or appropriate to carry out the purposes'' of EPCA. (42
U.S.C. 6291(3)) DOE has not added solar energy (or any other type of
fuel) to EPCA's definition of ``energy.'' Thus, DOE currently lacks
authority to prescribe standards for clothes dryers when they use the
sun's energy instead of fossil fuels or electricity. DOE also notes
that it is unaware of any existing clothes dryers that are solar-
powered.
DOE has also considered in this rulemaking standards based on
microwave or heat pump technology. EPCA does not define ``clothes
dryer,'' but DOE's regulations under EPCA provide separate definitions
for electric and gas products. Because the types of clothes dryers just
mentioned are or would be electric products, DOE's definition of
``electric clothes dryer'' is relevant in considering them. DOE defines
electric clothes dryer as a cabinet-like appliance designed to dry
fabrics in a tumble-type drum with forced air circulation. The heat
source is electricity and the drum and blower(s) are driven by an
electric motor(s). 10 CFR 430.2.
As to microwave technology, in this rulemaking DOE has considered
whether microwave drying would be a viable option for improving clothes
dryer efficiency. DOE determined, however, that this technology did not
merit further consideration for reasons discussed in section IV.B.1. In
addition, DOE is unaware of any microwave dryers that are currently
commercially available for sale in the United States or elsewhere.
Therefore, in this rulemaking DOE did not consider clothes dryer
standards based on microwave technology.
DOE also identified heat pump technology as a possible option for
improving the energy efficiency of electric clothes dryers. Unlike
microwave technology, DOE did not screen out this technology from
further consideration in this rulemaking. Furthermore, DOE determined
that heat pump clothes dryers are commercially available in Europe and
Japan. Accordingly, DOE has fully evaluated in this rulemaking whether
standards based on heat pump technology are warranted for clothes
dryers.
DOE also considered non-tumbling (that is, cabinet) clothes dryers.
DOE notes that, because they do not use a tumbling-type drum, they are
not currently within DOE's definition of ``electric clothes dryer.'' 10
CFR 430.2. In analyzing non-tumbling dryers, DOE determined that
although these clothes dryers are currently on the market in the United
States, DOE understands that they have a very limited market share.
Based on a survey of cabinet clothes dryer models available on the U.S.
market, DOE is aware of only three cabinet clothes dryer models from
two clothes dryer manufacturers that have very low market share (i.e.,
less than 1 percent) in the conventional tumbling-type clothes dryer
market. For these reasons, DOE is not considering standards for these
clothes dryers in this rulemaking.
DOE also considered centrifugal spinners. DOE notes that, although
centrifugal spinners remove a certain quantity of moisture from a
clothes load, they are not within DOE's definition of ``electric
clothes dryer'' as a product designed to dry fabrics in a tumble-type
drum with forced air circulation, where the heat source is electricity
and the drum and blower(s) are driven by an electric motor(s). 10 CFR
430.2. Such products extract moisture from a clothes load by means of
centrifugal force at high spin speeds, without the application of
additional heat. The ECOS report submitted to DOE by NRDC states that
centrifugal spinners remove 5-14 lbs. of water per kWh of electricity,
depending on the size and type of load, making them at least two to
seven times as efficient as a typical electric dryer. The ECOS report
further cites multiple sources suggesting that mechanical extraction of
water is 19-70 times more efficient than evaporating it in a typical
drying process. According to the ECOS report, a centrifugal spinner can
reduce initial RMC in a clothes load to be dried in a conventional
clothes dryer from 60-70 percent down to 45 percent. Sources cited in
the ECOS report variously ascribe to this decrease in initial RMC a 25-
percent reduction in clothes dryer electricity use, or 209 kWh annual
energy savings for a typical clothes dryer. (NRDC, No. 30 at pp. 10-11)
Although such centrifugal spinners are currently on the market in the
United States, DOE understands that they have a very limited market
share. DOE also notes that it is not aware of any centrifugal spinners
that can remove moisture from the test load down to 2.5-5 percent RMC,
as required by the DOE clothes dryer test procedure. In addition, DOE
is not aware of any clothes dryers currently available on the market or
prototype designs that incorporate centrifugal spinning and are capable
of drying the test load to 2.5-5 percent RMC. For these reasons, DOE is
not considering standards for these clothes dryers in this rulemaking
b. Room Air Conditioners
DOE defines ``room air conditioner'' under EPCA, in part, as a
``consumer product * * * which is an encased assembly designed as a
unit for mounting in a window or through the wall for the purpose of
providing
[[Page 22485]]
delivery of conditioned air to an enclosed space. It includes a prime
source of refrigeration and may include a means for ventilating and
heating.'' 10 CFR 430.2. A product known as a ``portable air
conditioner'' has most of these characteristics. However, it rests on
the floor, often on wheels, with a short ducted connection to a window
or other access to the outside to vent warm condenser air and, for some
of these products, to provide condenser cooling air from the outside.
DOE notes that portable air conditioners are not within the current DOE
definition of ``room air conditioner'' because they are not designed
``for mounting in a window or through the wall.'' 10 CFR 430.2
DOE notes that EPCA authorizes the prescription of standards for
room air conditioners (42 U.S.C. 6292(2)), and that portable air
conditioners do not fall within DOE's regulatory definition of room air
conditioner at 10 CFR 430.2, as stated above, or the definitions found
in the current industry standards ANSI/AHAM RAC-1-2008 and ANSI/ASHRAE
Standard 16-1983 (RA 2009).\27\ DOE also notes that portable air
conditioners cannot be tested in the window configuration used in the
referenced standard ANSI/ASHRAE Standard 16-1983 (RA 2009), in the
amended test procedure. 76 FR 972, 978 (January 6, 2011). DOE believes
that a separate test procedure analysis would need to be considered for
these products; as an example, DOE notes that the ANSI/ASHRAE test
procedure standard for portable air conditioners (ANSI/ASHRAE Standard
128-2001, ``Method of Rating Unitary Spot Air Conditioners'')
references the ANSI/ASHRAE Standard 37-2005 ``Methods of Testing for
Rating Unitary Air-Conditioning and Heat Pump Equipment'' for testing,
and excludes equipment covered by ANSI/AHAM RAC-1 2008. Thus, DOE is
not considering standards for portable air conditioners in this
rulemaking. DOE may, however, consider standard for portable air
conditioners in a future rulemaking.
---------------------------------------------------------------------------
\27\ EPCA also authorizes the classification of additional
consumer products as covered products pursuant to 42 U.S.C. 6292(b)
provided that certain criteria are met.
---------------------------------------------------------------------------
3. Product Classes
In evaluating and establishing energy conservation standards, DOE
divides covered products into classes by the type of energy used, or by
capacity or other performance-related feature that justifies a
different standard for products having such feature. (See 42 U.S.C.
6295(q)) In determining whether a feature justifies a different
standard, DOE must consider factors such as the utility of the feature
to users. Id. DOE is required to establish different energy
conservation standards for different product classes based on these
criteria.
a. Clothes Dryers
In the preliminary analysis, DOE proposed to analyze six product
classes for residential clothes dryers (for details on these product
classes, see chapter 3 of the preliminary TSD). In particular, DOE
considered four product classes for vented clothes dryers and two
product classes for ventless clothes dryers, ventless electric compact
(240 V) and combination washer/dryers, recognizing the unique utility
that ventless clothes dryers offer to consumers.\28\
---------------------------------------------------------------------------
\28\ Previously, DOE has described ventless dryers as condensing
dryers. The new designation reflects the actual consumer utility
(that is, no external vent required) and the market availability of
vented dryers that also condense.
---------------------------------------------------------------------------
AHAM, BSH, and Whirlpool suggested that DOE consider an additional
product class for electric standard-size ventless clothes dryers, even
though such products are not currently on the market in the United
States, to prepare for likely market entry. AHAM stated that a
standard-size ventless product class would decrease the request for
waivers that DOE may receive in the near future. AHAM further commented
that the analysis for a standard-size ventless product class could be
extrapolated from the analysis for compact-size ventless clothes
dryers. (AHAM, Public Meeting Transcript, No. 21.4 at pp. 19-20; AHAM,
No. 25 at pp. 4-5; BSH, No. 23 at p. 3; Whirlpool, No. 22 at p. 1)
Because DOE is unaware of any standard-size ventless clothes dryers
currently on the market, as discussed in section IV.A.2.a, and because
DOE does not have information on the performance of standard-size
ventless clothes dryers that would warrant the definition of a separate
product class, DOE is not establishing a product class for standard-
size ventless clothes dryers in today's direct final rule.
According to BSH, clothes dryers should be classified as vented,
ventless, and gas product classes, without differentiation by drum
size. (BSH, No. 23 at p. 4) EPCA requires DOE to specify a level of
energy use or efficiency different from that which applies to the type
of covered product for any group of such products that have a capacity
or other performance-related feature that justifies a different
standard. DOE has previously determined, and has verified in recent
testing, that compact-size clothes dryers have inherently different
energy consumption than standard-size clothes dryers. DOE also notes
that compact-size clothes dryers provide utility to consumers by
allowing for installation in space-constrained environments. Therefore,
DOE has determined that the capacity and utility of compact clothes
dryers justifies a different standard and establishes separate product
classes for compact clothes washers under EPCA. (42 U.S.C. 6295(q))
b. Room Air Conditioners
The 1997 final rule for room air conditioners established standards
for 16 product classes based on the following characteristics:
Capacity, presence or absence of louvered-sides (louvered-side products
are intended for installation in windows, while products without
louvered sides are for through-the-wall installation), type of cabinet
(casement-only, casement-slider, and other), and presence or absence of
heat pump mode for heating. 72 FR 50122 (Sept. 24, 1997).
In its preliminary analysis, DOE proposed no changes to the
existing product class structure. DOE received two comments addressing
product classes, as discussed below.
AHAM recommended that DOE consider splitting the following two
product classes: Product class 5 (room air conditioners without reverse
cycle, with louvered sides, and capacity 20,000 Btu/h or more) and
product class 8 (room air conditioners without reverse cycle, without
louvered sides, and capacity 8,000 to 13,999 Btu/h) (AHAM, No. 25 at p.
6). AHAM recommended that product class 5 be split into two product
classes, (1) from 20,000 Btu/h to 24,999 Btu/h, and (2) greater than
25,000 Btu/h. AHAM also recommended that product class 8 be split into
two product classes, (1) 8,000 Btu/h to 10,999 Btu/h, and (2) 11,000
Btu/h to 13,999 Btu/h. AHAM stated that manufacturers are reaching the
limit of achievable efficiency levels for higher-capacity room air
conditioners. Id.
The Joint Comment also proposed splitting both product classes 5
and 8, but recommended a different capacity at which to split product
class 5. The Joint Comment proposed that the new product classes
derived from the current product class 5 be (1) from 20,000 Btu/h to
27,999 Btu/h, and (2) 28,000 Btu/h and greater. The Joint Comment
proposed the same two separated product classes for product class 8
that AHAM proposed. (Joint Comment, No. 31 at pp. 7-8)
DOE agrees with the recommendations of AHAM and the
[[Page 22486]]
Joint Comment that the new product classes are needed to ensure
establishment of meaningful efficiency levels over the full range of
capacities. This is discussed in detail in the following sections which
separately address each of the product class splits.
Splitting of Product Class 5
DOE splits current product class 5 (room air conditioners without
reverse cycle, with louvered sides, and capacity 20,000 Btu/h or more)
into two new product classes: 5A (room air conditioners without reverse
cycle, with louvered sides, and capacity from 20,000 Btu/h to 27,999
Btu/h) and 5B (room air conditioners without reverse cycle, with
louvered sides, and capacity 28,000 Btu/h or more). This step is
consistent with the recommendations of AHAM and the Joint Comment
recommendations to split the product class, but uses the split
recommended by the Joint Comment.
DOE made this decision based on the following input:
Discussions with individual manufacturers of the
efficiency options available to large room air conditioners.
Research on available product sizes and available product
efficiencies.
Reverse engineering of two product class 5 units,
including a 28,500 Btu/h unit.
Engineering analysis of R-410A product class 5 baseline
products at two capacity levels (24,000 Btu/h and 28,000 Btu/h).
Max-tech available EER for product classes 1 through 5 (room air
conditioners without reverse cycle, with louvered sides, covering the
full capacity range of available products) for products using R-410A
refrigerant are shown in Table IV.1 below. The max-tech EER drops
gradually as capacity increases above 6,000 Btu/h, but drops
significantly above 28,000 Btu/h.
Table IV.1--Max-Tech Louvered R-410A Room Air Conditioners
------------------------------------------------------------------------
Room air conditioner R-410A louvered products (market max available
levels)
-------------------------------------------------------------------------
Max
Product class Capacity available
EER
------------------------------------------------------------------------
1............................................. 5,200 11.0
1............................................. 5,500 11.2
2............................................. 6,000 12.0
2............................................. 7,900 11.7
3............................................. 11,700 11.4
4............................................. 18,000 10.7
5............................................. 20,800 10.0
5............................................. 27,800 9.7
5............................................. 36,000 8.5
------------------------------------------------------------------------
DOE produced cost-efficiency curves for product class 5 products at
both 24,000 Btu/h and 28,000 Btu/h capacity levels. Table IV.2 shows
the results of these analyses, which clearly show (1) much steeper
increase in cost as the CEER increases and (2) significantly lower max-
tech for the larger capacity products. This analysis demonstrates the
much greater potential for efficiency improvement for the lower-
capacity products.
Table IV.2--Comparison of 24,000 Btu/h and 28,000 Btu/h Room Air Conditioner Incremental Costs
----------------------------------------------------------------------------------------------------------------
PC5A--24,000 Btu/h PC5B--28,000 Btu/h
---------------------------------------------------------------
Efficiency level Incremental Incremental
CEER cost CEER cost
----------------------------------------------------------------------------------------------------------------
1............................................... 8.47 $0.00 8.48 $0.00
2............................................... 9.0 8.85 9.0 23.52
3............................................... 9.4 19.04 9.4 50.27
4............................................... 9.8 50.66 9.8 229.01
5............................................... 10.15 204.62 .............. ..............
----------------------------------------------------------------------------------------------------------------
The cost-efficiency analysis and the market analysis demonstrate
that limitations in the max-tech levels for product class 5 units occur
at the 28,000 Btu/h capacity, rather than the 24,000 Btu/h capacity.
DOE used these analyses to determine that the 28,000 Btu/h capacity
split was more appropriate than the 24,000 Btu/h split.
DOE's decision to establish the new product classes 5A and 5B that
take the place of the current product class 5, and split the product
class at the 28,000 Btu/h capacity level, is based on the stakeholder
comments and DOE's analysis. Additional details of the analysis can be
found in chapter 3 of the direct final rule TSD.
Splitting of Product Class 8
DOE splits product class 8 (room air conditioners without reverse
cycle, without louvered sides, and capacity 8,000 to 13,999 Btu/h) to
establish two new product classes: 8A (room air conditioners without
reverse cycle, without louvered sides, and capacity 8,000 to 10,999
Btu/h) and 8B (room air conditioners without reverse cycle, without
louvered sides, and capacity 11,000 to 13,999 Btu/h).
DOE based this split on information similar to that of the decision
to split product class 5, as discussed above. DOE focused its reverse
engineering and engineering for these product classes on capacities of
8,000 Btu/h and 12,000 Btu/h.
The max-tech EERs of available room air conditioners without
louvered sides using R-410A refrigerant are dependent on capacity
range. These products are designed to fit in sleeves installed in the
building wall. Due to the dependence of this market on replacement
sales, as reported by manufacturers during interviews for the final
rule analysis, there is little opportunity to adjust the physical size
of the product. (This is in contrast to products with louvered sides,
designed to fit in windows, which allows more flexibility for size
increase to improve efficiency.) Non-louvered products with capacity
greater than 12,600 Btu/h are unable to meet the current ENERGY STAR
EER level. DOE further notes that non-louvered ENERGY STAR products in
the capacity range 11,500 to 12,800 Btu/h require oversized sleeves. At
a slightly higher capacity level, these products cannot be designed to
meet the DOE energy standard--the available data show that there are
currently no available non-louvered products having greater than 13,999
Btu/h capacity.
DOE produced cost-efficiency curves for non-louvered R-410A room
air conditioners at 8,000 Btu/h and 12,000 Btu/h capacities, shown in
Table IV.3 below. As for the product class 5 analyses, the results show
the significantly steeper increase in cost as efficiency level is
raised above the
[[Page 22487]]
baseline and the reduced max-tech level for the higher-capacity
product.
Table IV.3--Comparison of 8,000 Btu/h and 12,000 Btu/h Room Air Conditioner Incremental Costs
----------------------------------------------------------------------------------------------------------------
PC8A--8,000 Btu/h PC8B--12,000 Btu/h
---------------------------------------------------------------
Efficiency level Incremental Incremental
CEER cost CEER cost
----------------------------------------------------------------------------------------------------------------
1............................................... 8.41 $0.00 8.44 $0.00
2............................................... 9.3 4.61 9.3 11.72
3............................................... 9.6 6.68 9.5 15.39
4............................................... 10.0 16.63 9.8 26.06
5............................................... 10.4 88.45 10.0 93.36
----------------------------------------------------------------------------------------------------------------
DOE's decision to establish the new product classes 8A and 8B that
take the place of the current product class 8 is based on the
stakeholder comments and DOE's analysis. DOE has decided to split the
product class at the 11,000 Btu/h capacity level recommended by both
AHAM and the Joint Comment. Additional details of the analysis can be
found in chapter 3 of the direct final rule TSD.
Product Class Summary
Table IV.4 below presents the product classes established in this
rulemaking, including both current and classes established in this
rulemaking.
Table IV.4--Proposed Room Air Conditioner Product Classes
------------------------------------------------------------------------
Number Product class
------------------------------------------------------------------------
Classes Listed in the CFR
------------------------------------------------------------------------
1...................................... Without reverse cycle, with
louvered sides, and less than
6,000 Btu/h.
2...................................... Without reverse cycle, with
louvered sides, and 6,000 to
7,999 Btu/h.
3...................................... Without reverse cycle, with
louvered sides, and 8,000 to
13,999 Btu/h.
4...................................... Without reverse cycle, with
louvered sides, and 14,000 to
19,999 Btu/h.
6...................................... Without reverse cycle, without
louvered sides, and less than
6,000 Btu/h.
7...................................... Without reverse cycle, without
louvered sides, and 6,000 to
7,999 Btu/h.
9...................................... Without reverse cycle, without
louvered sides, and 14,000 to
19,999 Btu/h.
10..................................... Without reverse cycle, without
louvered sides, and 20,000 Btu/
h or more.
11..................................... With reverse cycle, with
louvered sides, and less than
20,000 Btu/h.
12..................................... With reverse cycle, without
louvered sides, and less than
14,000 Btu/h.
13..................................... With reverse cycle, with
louvered sides, and 20,000 Btu/
h or more.
14..................................... With reverse cycle, without
louvered sides, and 14,000 Btu/
h or more.
15..................................... Casement-Only.
16..................................... Casement-Slider.
------------------------------------------------------------------------
Product Classes Established in This Rulemaking
------------------------------------------------------------------------
5A..................................... Without reverse cycle, with
louvered sides, and 20,000 Btu/
h to 27,999 Btu/h.
5B..................................... Without reverse cycle, with
louvered sides, and 28,000 Btu/
h or more.
8A..................................... Without reverse cycle, without
louvered sides, and 8,000 to
10,999 Btu/h.
8B..................................... Without reverse cycle, without
louvered sides, and 11,000 to
13,999 Btu/h.
------------------------------------------------------------------------
EPCA requires that the establishment of separate product classes be
based on either (A) consumption of a different kind of energy from that
consumed by other covered products within such type (or class); or (B)
a capacity or other performance-related feature which other products
within such type (or class) do not have, where such feature justifies a
higher or lower standard from that which applies to other products
within such type (or class). (42 U.S.C. 6295(q)). The second of these
criteria is applicable to the new product classes proposed in this
rulemaking, because the new product classes are based on product
capacity. The justification of different standards for the new product
classes of different capacities is discussed above in this section.
4. Non-Regulatory Programs
DOE's market assessment provides a profile of the residential
clothes dryer and room air conditioner industries in the United States.
As part of the market and technology assessment, DOE reviews non-
regulatory programs promoting energy-efficient residential appliances
in the United States. Non-regulatory programs that DOE considers in its
market and technology assessment include ENERGY STAR, a voluntary
labeling program jointly administered by the U.S. Environmental
Protection Agency (EPA) and DOE. ENERGY STAR identifies energy
efficient products through a qualification process.\29\ To qualify, a
product must exceed Federal minimum standards by a specified amount, or
if no Federal standard exists, exhibit select energy-saving features.
ENERGY STAR specifications currently exist for room air conditioners,
but not for residential clothes dryers.
---------------------------------------------------------------------------
\29\ For more information, please visit http://www.energystar.gov.
---------------------------------------------------------------------------
BSH commented that it would support ENERGY STAR qualification for
clothes dryers, as well as an energy label system that would help
consumers purchase the most efficient models on the market. According
to BSH, the European labeling system for clothes dryers has resulted in
benefits to
[[Page 22488]]
consumers, manufacturers, and the environment. (BSH, No. 23 at pp. 2,
6) The California Utilities commented that a revised test procedure
could better differentiate clothes dryer models in terms of energy
performance, facilitating an ENERGY STAR program. According to the
California Utilities, there is currently no ENERGY STAR program because
clothes dryers do not differ in apparent energy use as measured by the
existing clothes dryer test procedure. (California Utilities, No. 31 at
p. 6).
DOE notes that, according to the joint program between the EPA and
DOE, the EPA determines whether to add qualification specifications for
newly covered products within ENERGY STAR. DOE encourages the
implementation of ENERGY STAR specifications and labeling as a means to
achieve national energy savings, and would assist the EPA in applying
the DOE clothes dryer test procedure to evaluate qualifying products in
any future ENERGY STAR ratings for clothes dryers.
Energy labeling for clothes dryers under the EnergyGuide program is
regulated by the FTC. (10 CFR 305) Although DOE does not have the
authority under EPCA to revise the regulations for energy labeling to
include clothes dryers, DOE would provide technical information to the
FTC to support any new EnergyGuide labeling requirement for these
products.
5. Technology Options
As part of the market and technology assessment, DOE develops a
list of technologies for consideration for improving the efficiency of
clothes dryers and room air conditioners. Initially, these technologies
encompass all those DOE believes are technologically feasible (the
first of the four criteria in the screening analysis). Chapter 3 of the
preliminary TSD includes the detailed list of all technology options
identified for clothes dryers and room air conditioners. DOE received
several comments in response to the technologies proposed in the
preliminary analysis to be analyzed for clothes dryers and room air
conditioners.
a. Clothes Dryers
Heat Pump Clothes Dryers
DOE notes that heat pump clothes dryers function by recirculating
the exhaust air back to the dryer while moisture is removed by a
refrigeration-dehumidification system. The warm and damp exhaust air of
the dryer enters the evaporation coil of the dehumidifier where it
cools down below the dew point, and sensible and latent heat are
extracted. The heat is transferred to the condenser coil by the
refrigerant and reabsorbed by the air, which is moving in a closed air
cycle. DOE notes that there are no heat pump dryers currently available
on the U.S. market, but that heat pump clothes dryers are available on
the market in Europe.
BSH commented that it foresees the heat pump clothes dryer as an
innovative technology breakthrough for improved efficiency in the next
few years in North America. BSH noted that in Europe in the last 2
years the market share for heat pump clothes dryers has increased from
3 to 11 percent, and that this success is based on four key factors:
(1) European energy consumption values are comparable for all sizes of
clothes dryers because they are independent of drum size; (2) the
percent range between energy classes in Europe (A = best, B, C * * *)
\30\ remains constant, so one energy classification is not
proportionally larger than another; (3) realistic load quantities are
used for testing; and (4) automatic termination control dryers are
standard and are given preferential treatment over timer dryers (which
tend to over dry and use more energy). (BSH, No. 23 at p. 2)
---------------------------------------------------------------------------
\30\ The European energy label system uses a letter scale from
``A'' to ``G'' to rate the efficiency and performance of certain
appliance products. A rating of ``A'' denotes the highest efficiency
unit, whereas a rating of ``G'' denotes the lowest efficiency unit.
---------------------------------------------------------------------------
In the context of the energy conservation standards rulemaking, DOE
conducts its analysis to determine an economically justified minimum
efficiency standard. DOE notes that the efficiency levels proposed in
the preliminary analyses are not used for product marketing
classification as they are in the European energy label system. As a
result, DOE does not intend to create an energy class system as part of
the energy conservation standard rulemaking. As discussed in section
III.A.1.d, DOE also notes that its clothes dryer test procedure
specifies a single test load size for standard-size clothes dryers and
a single test load size for compact-size clothes dryers. In response to
BSH's comments regarding realistic load quantities, DOE also notes that
it amended the clothes dryer test procedure to revise the test load
size for standard-size clothes dryers to be more representative of
current consumer usage habits, as discussed in the TP Final Rule. 76 FR
972, 977 (January 6, 2011). Also, as discussed above in section
III.A.1.b, DOE did not amend the test procedure in the TP Final Rule to
better account for automatic cycle termination. DOE notes that the
clothes dryer test procedure provides a field use factor for automatic
termination control dryers and a different field use factor for timer
dryers. As discussed above, DOE notes that heat pump clothes dryers are
available on the market in Europe. DOE also notes that multiple clothes
dryer manufacturers that manufacture heat pump clothes dryers for the
international markets also manufacture clothes dryers for the United
States. For these reasons, DOE believes that heat pump technology is
technologically feasible and therefore considered heat pump clothes
dryers for the engineering analysis.
Heat Recovery
For this technology option, a heat exchanger is used to recover
exhaust heat energy and to preheat inlet air. Based on research of this
technology and discussions with manufacturers, this system is feasible
for both gas and electric dryers because none of the exhaust air re-
enters the dryer. Energy savings are achieved either by using the
additional recovered heat to increase the temperature of the air
entering the drum and thus reduce the drying time or by using the
additional recovered heat to reduce the required heater input power,
depending on how the system is implemented. As reported in chapter 3 of
the preliminary TSD, estimated energy savings from several researchers
range from 2 to 6 percent in non-condensing mode.
The California Utilities and NRDC commented that the energy savings
associated with heat recovery would be significantly higher. According
to the California Utilities, 80-percent efficient counter-flow heat
exchangers are widely available, while 90-percent efficient heat
exchangers are technically feasible. The California Utilities estimate
energy savings for heat recovery to be about 30 percent for electric
clothes dryers and 20 percent for gas clothes dryers. The California
Utilities noted that ventless dryers are available in the United States
and are common in Europe, suggesting that heat recovery is both
technically feasible and practical to manufacture (California
Utilities, No. 31 at pp. 6-7, 12, 21) The California Utilities stated
that the technologies behind heat recovery and ventless clothes dryers
differ only in where the air from the heat exchanger is routed. In
ventless clothes dryers, cooled exhaust air is channeled to the heater
to be reused and the warmed room air is vented back to the room. For
heat recovery, these are reversed, such that cooled exhaust air is
vented (usually outside) and the warmed room air is channeled into the
heater. (California Utilities, No. 31 at p. 6) The California Utilities
provided a
[[Page 22489]]
specific example of a dryer with an EF of 3.10, or 2.26 kWh per cycle,
which is stopped at the end of the bulk drying stage. The clothes dryer
in this example is assumed to have an average exhaust temperature of
110 [deg]F, or 40 [deg]F above ambient temperature. According to the
California Utilities, a 90-percent efficient counter-flow heat
exchanger would preheat the incoming air by 36 [deg]F, which would
result in 0.684 kWh directly replacing heat that would otherwise be
supplied by the electric resistance heater. The replaced heat would
correspond to 1.58 kWh per cycle to dry the 7-lb. test load and an EF
of 4.43. This would result in a 30-percent energy savings due to heat
recovery. Id. According to NRDC, as stated in the ECOS report, 40-
percent energy savings (1.348 kWh of heater energy savings per cycle)
can be achieved for a load of cotton towels with a 90-percent efficient
air-to-air cross-flow heat exchanger between the exhaust and intake of
the clothes dryer. (NRDC, No. 30 at p. 27)
DOE is not aware of any data indicating that a cross-flow heat
exchanger may be used in a clothes dryer application and achieve 80-
percent or 90-percent efficiency. DOE notes that an air-to-air heat
exchanger used in a clothes dryer must have sufficient fin spacing to
prevent lint fouling of the heat exchanger. DOE also notes that the
ECOS report does not provide details of how the potential energy
savings associated with heat recovery were calculated (that is, data
for airflow, temperature, specific heat, and similar items). DOE notes
that the California Utilities comment stated that, for an exhaust
temperature of 110 [deg]F and a 90-percent efficient cross-flow heat
exchanger, the energy savings would be approximately 0.684 kWh per
cycle. However, the ECOS report estimated that the energy savings would
be 1.348 kWh for what appear to be the same conditions. Because the
details of how these estimates were calculated were not provided, DOE
is unable to verify the energy savings suggested by the commenters
would occur.
DOE also notes that it is unclear whether the estimates provided by
the California Utilities and the ECOS report for heat recovery
considered condensation in the exhaust air stream. Manufacturers
indicated that such heat recovery systems must be designed to prevent
condensation in the exhaust ducting, and as a result, there is a limit
to the amount of heat that can be recovered.
DOE notes that it has revised the cost-efficiency analysis from the
preliminary analyses based on its analysis and discussions with
manufacturers. As discussed in section IV.C.2, inlet air preheating
(that is, heat recovery) is considered applicable to the maximum-
available efficiency levels for vented clothes dryer product classes,
and DOE estimates this technology option would provide roughly a 6-7
percent improvement in efficiency. Manufacturers confirmed during
interviews with DOE that this efficiency improvement accurately
estimates the energy savings potential associated with inlet-air
preheating in real-world applications, considering such factors as
condensation in the exhaust airstream and lint accumulation in the heat
exchanger.
Hydronic Heating
HTC requested that DOE consider its ``hydronically heated'' clothes
dryer, which uses a self-contained hydronic heating system, as a
technology option. According to HTC, this technology currently exists,
but products incorporating such a design are not yet being sold pending
HTC's resolution of licensing and private labeling considerations.
(HTC, No. FDMS DRAFT 0068 at p. 3) DOE is also aware of HTC's stand-
alone hydronic heater that could be implemented as a clothes dryer heat
source, utilizing water or other heat transfer fluids and an immersion
element similar to a water heater. The heated fluid would then pass
through a heat exchanger, where the heat would be transferred to the
air entering the drum and then pumped back to the hydronic heater.
Because DOE has not been able to identify any clothes dryers with such
hydronic heating systems currently on the market, however, DOE is
unable to evaluate the energy consumption associated with a clothes
dryer equipped with a stand-alone hydronic heating device and thus has
not included it as a design option in today's direct final rule.
Improved Cycle Termination
According to NRDC, the test results in the ECOS report show that a
clothes dryer equipped with improved automatic cycle termination saves
0.76 kWh per load compared to a clothes dryer with electromechanical
controls. (NRDC, Public Meeting Transcript, No. 21.4 at p. 42) The
California Utilities noted that ``high performance'' automatic cycle
termination controls are already available in dryers on the market that
produce energy savings on the order of 10-percent or more above current
energy use, although DOE's clothes dryer test procedure must be amended
to measure this improvement. The California Utilities strongly urged
DOE to analyze this technology option.
For the reasons described in section III.A.1.b, DOE did not adopt
in the TP Final Rule the amendments for measuring automatic cycle
termination proposed in the TP SNOPR. Therefore, DOE did not analyze
this technology option further.
Modulating Heat
The NRDC/ECOS report stated that if a conventional gas clothes
dryer is improved with modulating burner technology, the performance of
the clothes dryer would be roughly equivalent to or superior to many
heat pump clothes dryers in terms of CO2 emissions, source
energy use, and energy cost. This performance would be achieved while
also offering faster drying times and lower initial purchase price.
(NRDC, No. 30 at pp. 37-38) DOE notes that heat pump technology is
applicable only to electric clothes dryers, for which DOE maintains a
product class distinction from gas clothes dryers. DOE analyzed
technologies currently available on the market and concluded that two-
stage gas burner modulation is necessary to achieve max-tech
performance. Because DOE is not aware of any gas clothes dryers with
fully modulating burner systems currently on the market, DOE did not
consider this technology further in developing the standards set forth
in today's direct final rule. DOE does include this technology as a
longer-term means to achieve energy efficiency improvements in a
sensitivity analysis described in chapter 16 of the direct final rule
TSD.
Outdoor Intake Air
The California Utilities and NRDC suggested that DOE consider as a
technology option those technologies that draw intake air for the
clothes dryer from outside the residence, thereby reducing space
conditioning loads in the home. (California Utilities, No. 31 at p. 8;
NRDC, Public Meeting Transcript, No. 21.4 at p. 44) The California
Utilities further suggest that such a technology option may be
necessitated by the trend in residential new construction towards
tighter building envelopes. Tighter envelopes result in reduced exhaust
airflow from the clothes dryer and greater depressurization impacts,
which can potentially result in indoor air quality problems. According
to the California Utilities, the HVAC load is proportional to the
amount of air vented from the clothes dryer, but this load can be
reduced or eliminated by reducing the total air drawn through the dryer
or by having a separate outside air intake and vent. The California
Utilities estimate
[[Page 22490]]
energy savings due to reductions in HVAC load on the order of 10
percent or more. (California Utilities, No. 31 at pp. 2, 8-9) The NRDC/
ECOS report states that outdoor intake air could save about 1 kWh per
load, but that without heat recovery this technology option would only
be advantageous in the summer. The NRDC/ECOS report adds that with heat
recovery outdoor intake air is advantageous year-round. (NRDC, No. 30
at pp. 27-28).
As discussed in section III.A.1.f, EPCA requires that any test
procedures prescribed or amended under this section shall be reasonably
designed to produce test results which measure energy efficiency,
energy use, water use, or estimated annual operating cost of a covered
product during a representative average use cycle or period of use. (42
U.S.C. 6293(b)(3)) DOE believes that accounting for the effects of
clothes dryers on HVAC energy use is inconsistent with this
requirement. Therefore, DOE did not revise the clothes dryer test
procedure to account for HVAC energy use in the TP Final Rule, and does
not consider outdoor intake air as an additional technology option.
Reverse Tumble
NRDC commented that the use of synthetic mixed fabric in the DOE
clothes dryer test procedure may be underestimating the efficiency
improvement associated with reverse tumble. NRDC stated that cotton and
other natural fabrics tend to ball up when rotated continuously in one
direction, and therefore the test procedure is underestimating the
potential benefit of reverse tumble. (NRDC, Public Meeting Transcript,
No. 21.4 at pp. 42-43) As discussed in section III.A.1.d, DOE is
unaware of data to determine the composition of clothing types and
materials that would produce results as repeatable as those resulting
from use of the current test cloth. Therefore, DOE did not amend the
clothes dryer test procedure in the TP Final Rule to change the test
load composition. In the absence of comments providing information on
the efficacy of reverse tumble for the existing DOE test cloth, DOE
continues to believe that no measurable energy savings are associated
with this technology option.
Switch Mode Power Supply
ACEEE stated that the technology to reduce standby power
consumption to less than 1 W, via switch mode power supply controllers,
is widely available at low cost. (ACEEE, No. 24 at p. 2) NRDC stated
that the ECOS report found standby power levels in the range of 0.03 to
0.05 W with switch mode power supply controllers, corresponding to
energy consumption of 4-6 kWh over the lifetime of the clothes dryer.
(NRDC, No. 26 at p. 3; NRDC, No. 30 at p. 5) DOE has observed that
switching power supplies offer the highest conversion efficiencies (up
to 75 percent) and lowest no-load standby losses (0.2 W or less),
though at a higher cost, higher part count, and greater complexity than
conventional linear power supplies. DOE noted, however, that switch
mode power supplies are incorporated in many clothes dryers currently
on the market, and thus has included switch mode power supplies in its
analysis for today's direct final rule.
Vent Selector Switch
The NRDC/ECOS report suggested as an additional technology option
the incorporation of a ``summer/winter'' selector so that the waste
heat would be delivered to the building during the winter instead of
being vented outside. According to the ECOS report, 60 percent of the
energy used by the clothes dryer evaporates water from the clothes load
and the other 40 percent is available as waste heat to the room. (NRDC,
No. 30 at p. 28) For the reasons discussed in section III.A.1.f, DOE
did not consider the energy impacts on the space conditioning
requirements in amending its clothes dryer test procedure, and thus did
not evaluate this technology further.
b. Room Air Conditioners
DOE received comments from several interested parties recommending
that DOE also consider the following technologies: Alternative
refrigerants, suction line heat exchangers (SLHX), flooded evaporator
coils, and automatic timers.
AHAM commented that it had no additional design option suggestions
for room air conditioners, and that many of the design options proposed
and initially evaluated by DOE are already employed by a number of
manufacturers to increase the efficiency of today's products (AHAM, No.
25 at p. 4).
Alternative Refrigerants
DOE notes that HCFC-22 was traditionally the refrigerant used in
room air conditioners. On December 15, 2009, the EPA issued a final
rule banning the sale and distribution of air-conditioning and
refrigeration appliances containing HCFC-22, applying to appliances and
components manufactured on or after January 1, 2010. 74 FR 66412,
66418.
During individual manufacturer interviews conducted for the
preliminary analysis, manufacturers revealed that the room air
conditioning industry was transitioning to using R-410A refrigerant.
DOE also discussed the transition with compressor manufacturers, who
were developing and manufacturing R-410A rotary compressors for use in
room air conditioners.
Because of the phaseout of HCFC-22 and the transition to R-410A,
DOE conducted the analysis for today's direct final rule based on use
of R-410A refrigerant. DOE's analysis of R-410A room air conditioners
is presented in chapter 5 of the direct final rule TSD.
A number of commenters urged DOE to consider alternative
refrigerants as a technology option in the screening process. Both
ACEEE and the California Utilities suggested that DOE consider
hydrocarbon refrigerants possible alternatives to R-410A. (ACEEE, No.
24 at p. 4; California Utilities, No. 31 at p. 16) The California
Utilities also suggested that DOE consider R-407C. (California
Utilities, No. 31 at p. 16) NPCC supported consideration of alternative
refrigerants as well. (NPCC, No. 32 at p. 4)
DOE notes that no hydrocarbon refrigerants are currently included
as acceptable for use in air-conditioning applications by the EPA
Significant New Alternatives Policy (SNAP) Program list. This program
was established to identify acceptable alternatives to ozone-depleting
substances used in a variety of applications.\31\ The list identifies
allowed applications for use of the alternative substances. Since there
have been no hydrocarbons included on the SNAP list as acceptable for
use in air conditioning appliances, DOE did not consider these
alternative refrigerants in its analysis.
---------------------------------------------------------------------------
\31\ See the SNAP program Web site at http://www.epa.gov/ozone/snap/.
---------------------------------------------------------------------------
R-407C, on the other hand, is approved as an acceptable substitute
for use in air-conditioning equipment, which includes room air
conditioners. DOE analyzed R-407C to determine whether it offers
efficiency improvement over R-410A, using the energy model developed
and used throughout the engineering analysis. The results indicate that
the efficiency of R-407C is less than that of R-410A for room air
conditioners operating at rating conditions. As a result, DOE
determined that use of R-407C refrigerant is not a viable design
option. Additional details of this analysis are
[[Page 22491]]
presented in chapter 3 of the direct final rule TSD.
DOE also performed research to identify other potential alternative
refrigerants during the preliminary analysis, but was unable to
identify viable alternative refrigerants to R-410A. The research
included a review of air-conditioning products, academic articles,
industry publications, and interviews with component vendors. DOE
sought to include refrigerants that were approved by the EPA for use in
room air conditioners. For more detail, see chapter 3 of the direct
final rule TSD.
Suction Line Heat Exchangers
An SLHX transfers heat between the high-temperature liquid
refrigerant leaving the condenser and the low-temperature vaporized
refrigerant leaving the evaporator. The heat exchanger lowers the
outgoing temperature of the liquid refrigerant and raises the
temperature of the outgoing vapor refrigerant. This heat transfer
allows for the liquid refrigerant to be subcooled before entering the
expansion device and offers the potential to increase the vapor-
compression cycle's cooling capacity.
The California Utilities and NPCC argued that DOE should consider
SLHXs based on possible performance improvements (California Utilities,
No. 31 at pp. 14-15; NPCC, No. 32 at p. 4). The California Utilities
comment cited the 1997 room air conditioner rulemaking, which cited a
study by Allied-Signal demonstrating a 4 percent increase in system
performance with the addition of a SLHX in a 2.5 ton split system AC
application, and simulations by NIST for split-system air conditioning
applications showing EER improvement of 3.5 percent \32\ for R-410A
systems using SLHX. (California Utilities, No. 31 at pp. 14-15).
---------------------------------------------------------------------------
\32\ This efficiency increase was described in the source as
reduction of an EER loss of 6.5 percent (when comparing R-410A
performance to HCFC-22, at 131 [deg]F outdoor temperature) to 3.2
percent.
---------------------------------------------------------------------------
DOE reviewed the room air conditioner rulemaking cited by the
California Utilities and noted that the improvement was based on a
comparison to a non-optimized system. DOE also considered the NIST
simulation study referenced by the California Utilities.\33\ In this
study, the EER improvement of 3.5 percent occurred for an outdoor
temperature of 131 [deg]F. The paper includes performance data for an
outdoor temperature condition of 95 [deg]F (which is used in the DOE
Test Procedure), for which the EER improvement was 1.0 percent \34\
using a SLHX. These results were simulated for systems using
reciprocating-type compressors, and the analyzed systems were not
optimized to maximize performance of individual fluids. There is no
indication in the paper that the simulations address room air
conditioners because it does not mention outdoor air moisture content,
which would be an important parameter affecting performance of room air
conditioners. While the simulations show a potential for slight
performance improvement, it is not clear that the simulations are
applicable for room air conditioners, and the results were not
validated experimentally. DOE therefore concludes that the cited
studies do not support the conclusion that SLHXs will significantly
improve room air conditioner efficiency.
---------------------------------------------------------------------------
\33\ National Institute of Standards and Technology. Performance
of R-22 and its Alternatives Working at High Outdoor Temperatures.
In Eighth International Refrigeration Conference at Purdue
University, 2000. West Lafayette, IN--July 25-28, 2000, pp. 47-54.
\34\ Again, expressed as reduction of an EER loss of 2.5 percent
(when comparing R-410A performance to HCFC-22, at a 95 [deg]F
outdoor temperature) to 1.5 percent.
---------------------------------------------------------------------------
During interviews conducted during the preliminary and final rule
analysis, manufacturers did not indicate that SLHX could be used to
improve system performance. Furthermore, use of SLHX's may be
inconsistent with the operating temperature limits for compressors. The
technology significantly raises the temperature of the suction gas
entering the compressor. Because hermetic compressors are cooled by the
suction gas, the compressor will overheat if the suction gas
temperature exceeds limits specified by the compressor manufacturer.
DOE notes that 65 [deg]F is typically the highest allowable suction
temperature for R-410A rotary compressors. DOE noted that a SLHX
operating at close to 50% effectiveness (as analyzed in the NIST study)
would raise suction temperature roughly 20 [deg]F, thus significantly
exceeding the specified limit. For additional details of this analysis,
see chapter 3 of the TSD. Use of this technology would adversely affect
the reliability of the compressor, and consequently, DOE cannot
consider SLHX as a design option.
Flooded Evaporator Coils
Flooded evaporator coils are evaporators for which refrigerant flow
is higher than the amount that can be evaporated. As a result, a
portion of the refrigerant leaves such an evaporator unevaporated (that
is, still in the liquid phase). Such a design assures that liquid is
available for boiling heat transfer throughout the evaporator. Because
boiling heat transfer is much more effective than vapor phase heat
transfer, the evaporator's heat transfer characteristics can be
improved. However, the liquid refrigerant leaving the evaporator cannot
be routed to the compressor, because (1) compressors cannot tolerate
significant amounts of liquid without damage; and (2) this would
represent lost cooling and lost efficiency. The liquid refrigerant
returns to a reservoir from which it can be redirected to the
evaporator. The reservoir inventory is controlled to allow low pressure
vapor to exit to the compressor, while ``fresh'' refrigerant from the
condenser enters through an expansion valve that may vary flow based on
the reservoir liquid level.
The California Utilities stated that DOE should consider flooded
evaporator coils as a design option, as this technology is used in some
refrigerant systems (California Utilities, No. 31 at p. 14). Oak Ridge
National Laboratories (ORNL) tests on window air conditioners found
that a flooded evaporator coil setup using R-22 increased cooling
capacity by 8 percent.\35\
---------------------------------------------------------------------------
\35\ V.C. Mei and F.C. Chen, et al. Experimental Analysis of a
Window Air Conditioner with R-22 and Zeotropic Mixture of R-32/125/
134a. Energy Renewable and Research Section, Energy Division, Oak
Ridge National Laboratory: Oak Ridge, TN. August 1995.
---------------------------------------------------------------------------
DOE considered the ORNL study referenced by the California
Utilities. The article describes work in which a room air conditioner
was tested, modified to have a flooded evaporator, and then retested.
Data provided in the article shows that the evaporator of the
unmodified unit was very poorly controlled. A plot graph of heat
exchanger tube temperature versus evaporator length shows the tube
temperature rising after the refrigerant liquid had traveled 60 percent
of the heat exchanger tube length, indicating that the refrigerant
liquid has evaporated. Air conditioner designs that incorporate flooded
evaporator coils are not optimized, and the performance of such designs
could have improved significantly with much less costly changes than
converting to a flooded evaporator. As a result, DOE does not believe
that the cited ORNL study supports analyzing flooded evaporator coils
as a technology option in the room air conditioner engineering
analysis.
Automatic Timers
The California Utilities stated that DOE should consider automatic
timers as a design option in its analysis,
[[Page 22492]]
arguing that many room air conditioner models currently feature an
automatic timer that shuts off operation after a pre-determined amount
of time, thus avoiding unnecessary cooling (California Utilities, No.
31 at p. 14). The California Utilities argued that this is a simple and
inexpensive option that can be implemented to improve consumer utility
and provide potential energy savings.
DOE notes that automatic timers may save energy by preventing
cooling of the space when occupants have left. However, the benefits of
automatic timers would not be measured by the current or amended test
procedures, unless the test procedure allocation of hours to full-load
and standby or off mode were adjusted based on presence of the
automatic timer. Information to allow proper allocation of the hours in
this fashion is not available, thus the test procedure rulemaking did
not establish adjustment of hours to address this technology. DOE
acknowledges the importance of conducting appropriate test programs to
provide a basis for crediting technologies such as automatic timers.
DOE will consider supporting such work to assist in a future test
procedure rulemaking. At this time, however, DOE cannot consider
automatic timers in the engineering analysis.
B. Screening Analysis
DOE uses the following four screening criteria to determine which
technology options are suitable for further consideration in a
standards rulemaking:
1. Technological feasibility. DOE will consider technologies
incorporated in commercial products or in working prototypes to be
technologically feasible. (The technological feasibility of options was
discussed in the preceding section as part of the market and technology
assessment.)
2. Practicability to manufacture, install, and service. If mass
production and reliable installation and servicing of a technology in
commercial products could be achieved on the scale necessary to serve
the relevant market at the time the standard comes into effect, then
DOE will consider that technology practicable to manufacture, install,
and service.
3. Adverse impacts on product utility or product availability. If
DOE determines a technology would have significant adverse impact on
the utility of the product to significant subgroups of consumers, or
would 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 United States at the time, it will not
consider this technology further.
4. 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.
10 CFR part 430, subpart C, appendix A, (4)(a)(4) and (5)(b).
Technologies that pass through the screening analysis are referred
to as ``design options'' in the engineering analysis. Details of the
screening analysis are in chapter 4 of the direct final rule TSD.
1. Clothes Dryers
In the preliminary analysis, DOE identified the following
technology options that could improve the efficiency of clothes dryers,
as shown in Table IV.5.
Table IV.5--Technology Options for Residential Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination.
Increased insulation.
Modified operating conditions.
Improved air circulation.
Reverse tumble.
Improved drum design.
Methods of Exhaust Heat Recovery (vented models only):
Recycle exhaust heat.
Inlet air preheat.
Inlet air preheat, condensing mode.
Heat Generation Options:
Heat pump, electric only.
Microwave, electric only.
Modulating, gas only.
Water-cooling, ventless electric only.
Indirect heating.
Component Improvements:
Improved motor efficiency.
Improved fan efficiency.
Standby Power Improvements:
Switching power supply.
Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------
For the preliminary analysis, DOE considered eliminating the
following clothes dryer technology options from consideration:
Microwave, Electric Only
DOE's research suggested that significant technical and safety
issues would be introduced with microwave drying by the potential
arcing from metallic objects in the fabric load, including zippers,
buttons, or ``stray'' items such as coins. While DOE noted that efforts
have been made to mitigate the conditions that are favorable to arcing,
or to detect incipient arcing and terminate the cycle, the possibility
of fabric damage could not be completely eliminated. Thus, for these
reasons of consumer utility and adverse impacts on safety, microwave
drying was not considered further for analysis.
Water-Cooling, Ventless Electric Only
DOE noted that water-cooling for ventless electric clothes dryers,
which uses water as a cooling fluid to condense the moisture in the air
exiting the drum, would require significant plumbing to circulate water
through a heat exchanger in the dryer and add to the complexity of
maintenance. Such home renovations would require installing a water
hook-up and drain in the laundry area, which is not typically done for
clothes dryers. Therefore, DOE determined in the preliminary analysis
that the water-cooling for ventless electric dryers technology option
does not meet the criterion of practicability to install and service on
a scale necessary to serve the relevant market at the time of the
compliance date of a new standard and proposed screening it out of the
analysis. DOE did not receive any comments objecting to this
determination. For these reasons, DOE is continuing to screen out
water-cooling for ventless electric clothes dryers in today's final
rule.
Indirect Heating
DOE tentatively concluded in the preliminary analysis that indirect
heating would be viable only in residences which use a hydronic heating
system. An energy conservation standard that required indirect heating
would require homes without a hydronic heating system to have such a
system installed. DOE also notes that there would be added maintenance
requirements because the home's hydronic heating system because it
would be used more frequently (that is, year-round). Also, to derive
dryer heat energy from the home's heating system, significant plumbing
work would be required to circulate heated water through a heat
exchanger in the dryer. Therefore, DOE determined that this technology
option does not meet the criterion of practicability to install on a
scale necessary to serve the relevant market at the time of the
compliance date of a new standard and did not consider it further in
the preliminary analysis.
In response, ACEEE commented that DOE should reconsider its
decision to leave water-cooled clothes dryers unregulated because these
products are very water-intensive. ACEEE stated that, although water-
cooled clothes dryers are currently of very limited use in the
[[Page 22493]]
United States, this technology is used overseas and could find a larger
market niche in the United States if left unregulated. (ACEEE, No. 24
at pp. 2-3) DOE believes that the current unavailability of such
products in the Unites States, along with the reasons noted above,
confirms its initial conclusion regarding the failure of this
technology to meet the screening criteria of practicability to install
and service on the scale necessary to serve the relevant market at the
time of the effective date of a new standard. In addition, EPCA does
not authorize DOE to set water-efficiency standards for clothes dryers.
(42 U.S.C. 6291(6), 6295(g)) Therefore, DOE continues to screen out
this technology option.
No other comments were received objecting to the technology options
which were screened out in the preliminary analysis, or to the initial
determination that the remaining design options met all of the
screening criteria listed above. Therefore, DOE considered the same
design options in the final rule as those evaluated in the preliminary
analysis (see Table IV.6).
Table IV.6--Retained Design Options for Residential Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination.
Increased insulation.
Modified operating conditions.
Improved air circulation.
Reverse tumble.
Improved drum design.
Methods of Exhaust Heat Recovery (vented models only):
Recycle exhaust heat.
Inlet air preheat.
Inlet air preheat, condensing mode.
Heat Generation Options:
Heat pump, electric only.
Modulating, gas only.
Component Improvements:
Improved motor efficiency.
Improved fan efficiency.
Standby Power Improvements:
Switching power supply.
Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------
2. Room Air Conditioners
In the preliminary analysis, DOE identified the following
technology options that could improve the efficiency of room air
conditioners, as shown in Table IV.7.
Table IV.7--Technology Options for Room Air Conditioners
------------------------------------------------------------------------
-------------------------------------------------------------------------
Increased Heat Transfer Surface Area:
Increased frontal coil area.
Increased depth of coil (add tube rows).
Increased fin density.
Add subcooler to condenser coil.
Increased Heat Transfer Coefficients:
Improved fin design.
Improved tube design.
Hydrophilic film coating on fins.
Spray condensate onto condenser coil.
Microchannel heat exchangers.
Component Improvements:
Improved indoor blower and outdoor fan efficiency.
Improved blower/fan motor efficiency.
Improved compressor efficiency.
Part-Load Technology Improvements:
Two-speed, variable-speed, or modulating-capacity compressors.
Thermostatic or electronic expansion valves.
Thermostatic cyclic controls.
Standby Power Improvements:
Switching power supply.
------------------------------------------------------------------------
For the preliminary analysis, DOE tentatively concluded that all
room air conditioner technology options met the screening criteria
listed above and did not propose to eliminate any of these technology
options from consideration. DOE did not receive any comments objecting
to this list of technology options and, therefore, retained all of the
technologies in Table IV.7 as room air conditioner design options. As
described and explained below in section IV.C.1.b below, however, some
of the technologies were not considered in the engineering analysis.
C. Engineering Analysis
The engineering analysis develops cost-efficiency relationships to
show the manufacturing costs of achieving increased efficiency. DOE has
identified the following three methodologies to generate the
manufacturing costs needed for the engineering analysis: (1) The
design-option approach, which provides the incremental costs of adding
to a baseline model design options that will improve its efficiency;
(2) the efficiency-level approach, which provides the relative costs of
achieving increases in energy efficiency levels, without regard to the
particular design options used to achieve such increases; and (3) the
cost-assessment (or reverse engineering) approach, which provides
``bottom-up'' manufacturing cost assessments for achieving various
levels of increased efficiency, based on detailed data as to costs for
parts and material, labor, shipping/packaging, and investment for
models that operate at particular efficiency levels.
DOE conducted the engineering analyses for this rulemaking using
the efficiency-level approach for clothes dryers and room air
conditioners. For this analysis, DOE relied upon efficiency data
published in multiple databases, including those published by CEC, the
Consortium for Energy Efficiency (CEE), and ENERGY STAR, which were
supplemented with laboratory testing, data gained through engineering
analysis, and primary and secondary research. Details of the
engineering analysis are in chapter 5 of the direct final rule TSD.
1. Technologies Not Analyzed
In performing the engineering analysis, DOE did not consider for
analysis certain technologies that were not evaluated for one or more
of the following reasons: (1) Data are not available to evaluate the
energy efficiency characteristics of the technology; (2) available data
suggest that the efficiency benefits of the technology are negligible;
and (3) for the reasons stated in the TP Final Rule, DOE did not amend
the test procedure to measure the energy impact of these technologies.
In the preliminary analysis, DOE did not include the following
design options:
a. Clothes Dryers
Reverse Tumble
As discussed in section IV.A.5.a, NRDC commented that the DOE
clothes dryer test procedure may be underestimating the efficiency
improvement associated with reverse tumble due to the composition of
the test cloth. (NRDC, Public Meeting Transcript, No. 21.4 at pp. 42-
43) Because DOE did not amend the specifications for the test cloth
composition in the TP Final Rule (as discussed in section III.A.1.d),
and in the absence of comments providing information on the efficacy of
reverse tumble for the existing DOE test cloth, DOE continues to
conclude that no measurable energy savings are associated with this
design option. Thus, this design option was not considered further in
the analysis for today's final rule.
Improved Termination
For the reasons noted in section III.A.1.b, DOE did not adopt
amendments to its clothes dryer test procedure to better account for
automatic cycle termination. Therefore, energy savings due to improved
termination technologies cannot be measured according to the test
procedure, and this design option was not considered further in the
analysis for today's direct final rule.
[[Page 22494]]
b. Room Air Conditioners
DOE eliminated the following technologies from further
consideration due to the three criteria mentioned above.
1. Improved fin design
2. Improved tube design
3. Hydrophilic-film coating on fins
4. Spray condenser onto condenser coil
5. Improved indoor blower and outdoor fan efficiency
6. Variable speed compressors
7. Thermostatic or electronic expansion valves
8. Thermostatic cyclic controls
Of these technologies, numbers 1 through 4 are used in baseline
products. Information indicating efficiency improvement potential is
not available for number 5. Any potential energy savings of
technologies 6 through 8 cannot be measured with the established energy
use metric because those technologies are associated with part-load
performance. As discussed in Section III.A.2.d above, DOE did not amend
the test procedure to measure part-load performance of room air
conditioners. Chapter 5 of the direct final rule TSD discusses these
reasons in greater detail.
2. Efficiency Levels and Cost-Efficiency Results
a. Clothes Dryers
In the preliminary analysis, DOE analyzed active mode and standby
mode separately to develop integrated cost-efficiency results. For
vented clothes dryer product classes, DOE proposed the active mode
efficiency levels shown in Table IV.8, which were based on EF values
measured using the previous clothes dryer test procedure. For ventless
clothes dryer product classes, DOE proposed the active mode efficiency
levels shown in Table IV.9, which were based on EF values measured
using the previous clothes dryer test procedure without the requirement
to install an exhaust simulator. DOE proposed the standby power levels
shown in Table IV.10 for all clothes dryer product classes.
Table IV.8--Clothes Dryer Active Mode Efficiency Levels (EF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
Efficiency level (EF) lb/kWh
---------------------------------------------------
Level Efficiency level Electric Electric
description Electric compact compact Gas
standard (120V) (240V)
----------------------------------------------------------------------------------------------------------------
Baseline......................... DOE Standard............. 3.01 3.13 2.90 2.67
1................................ Gap Fill................. 3.10 3.22 2.98 2.75
2................................ Gap Fill................. 3.16 3.29 3.09 2.85
3................................ Gap Fill/Maximum 3.4 3.54 3.2 3.02
Available.
4................................ Max-Tech................. 4.51 4.70 4.35 ...........
----------------------------------------------------------------------------------------------------------------
Table IV.9--Clothes Dryer Active Mode Efficiency Levels (EF)--Ventless Product Classes
----------------------------------------------------------------------------------------------------------------
Efficiency level (EF)
lb/kWh
-------------------------
Level Efficiency level description Electric
Electric combination
compact washer/
(240V) dryer
----------------------------------------------------------------------------------------------------------------
Baseline...................................... DOE Test Data......................... 2.37 1.95
1............................................. Gap Fill.............................. 2.39 2.21
2............................................. Gap Fill.............................. 2.59 2.42
3............................................. Max-Tech.............................. 3.55 3.32
----------------------------------------------------------------------------------------------------------------
Table IV.10--Clothes Dryer Standby Power Levels
------------------------------------------------------------------------
Power Input
Level Standby power source W
------------------------------------------------------------------------
Baseline........................ DOE Test Data and 2.0
Analysis.
1............................... DOE Test Data........... 1.5
2............................... DOE Test Data (Max-Tech) 0.08
------------------------------------------------------------------------
In the preliminary analyses, DOE developed integrated efficiency
levels based on the integrated EF (IEF) metric proposed as an
alternative option in the TP NOPR. The IEF is calculated as the clothes
dryer test load weight in lb divided by the sum of active mode per-
cycle energy use and standby/off mode per-cycle energy use in kWh.
Table IV.11 through Table IV.13 show the integrated efficiency levels
proposed in the preliminary analyses.
[[Page 22495]]
Table IV.11--Clothes Dryer Integrated Efficiency Levels (IEF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
Integrated efficiency level (IEF) lb/kWh
---------------------------------------------------
Level Efficiency level Electric Electric
description Electric compact compact Gas
standard (120V) (240V)
----------------------------------------------------------------------------------------------------------------
Baseline......................... DOE Standard + 2.0 W 2.96 3.00 2.79 2.63
Standby.
1................................ Gap Fill + 2.0 W Standby. 3.04 3.08 2.86 2.71
2................................ Gap Fill + 2.0 W Standby. 3.10 3.15 2.96 2.80
3................................ Gap Fill/Maximum 3.33 3.37 3.06 2.97
Available + 2.0 W
Standby.
4................................ Maximum Available + 1.5 W 3.35 3.41 3.10 2.98
Standby.
5................................ Maximum Available + 0.08 3.40 3.53 3.19 3.02
W Standby.
6................................ Heat Pump (Max-Tech) + 4.52 4.69 4.34 ...........
0.08 W Standby.
----------------------------------------------------------------------------------------------------------------
Table IV.12--Clothes Dryer Integrated Efficiency Levels (IEF)--Ventless
Electric Compact (240V)
------------------------------------------------------------------------
Integrated
efficiency
level (IEF)
Efficiency level lb/kWh
Level description ---------------
Electric
compact (240
V)
------------------------------------------------------------------------
Baseline....................... Baseline + 2.0 W 2.29
Standby.
1.............................. Baseline + 1.5 W 2.31
Standby.
2.............................. Baseline + 0.08 W 2.37
Standby.
3.............................. Gap Fill + 0.08 W 2.39
Standby.
4.............................. Gap Fill + 0.08 W 2.59
Standby.
5.............................. Heat Pump (Max-Tech) + 3.54
0.08 W Standby.
------------------------------------------------------------------------
Table IV.13--Clothes Dryer Integrated Efficiency Levels (IEF)--Ventless
Electric Combination Washer/Dryers
------------------------------------------------------------------------
Integrated
efficiency level
(IEF) lb/kWh
Level Efficiency level ------------------
description Electric
combination
washer/dryer
------------------------------------------------------------------------
Baseline...................... Baseline + 2.0 W 1.90
Standby.
1............................. Gap Fill + 2.0 W 2.15
Standby.
2............................. Gap Fill + 2.0 W 2.34
Standby.
3............................. Gap Fill + 1.5 W 2.36
Standby.
4............................. Gap Fill + 0.08 W 2.42
Standby.
5............................. Heat Pump (Max-Tech) 3.31
+ 0.08 W Standby.
------------------------------------------------------------------------
DOE also noted that it was considering revisions to the clothes
dryer test procedure for active mode, standby mode, and off mode, and
that those potential amendments would affect the calculated IEF. (IEF
has since been renamed CEF for this direct final rule to avoid
confusion with an existing industry standard.) AHAM commented that, to
ensure a rigorous analysis and to mitigate confusion, DOE should modify
the baseline efficiency level to account for a revised initial RMC in
the clothes dryer test procedure. (AHAM, No. 25 at p. 10) The TP Final
Rule was published on January 6, 2011, and DOE has adjusted the
efficiency levels, including the baseline level, as discussed later in
this section to account for the impacts of all test procedure
revisions, including those pertaining to initial RMC.
Integrated Efficiency Metric
DOE received comments from interested parties on the adequacy of
IEF as the energy efficiency metric for clothes dryer energy
conservation standards. AHAM supported the incorporation of standby
mode and off mode power into the total energy use of clothes dryers,
and commented that the integrated metric is appropriate. (AHAM, No. 25
at p. 2)
Whirlpool commented that standby power technologies should not be
considered as separate design options associated with specific TSLs,
and that doing so would avoid the requirement that standby power be
incorporated into the total energy use of the clothes dryer. Whirlpool
also stated that standby levels should not vary by TSL. (Whirlpool, No.
22 at p. 5) DOE notes that the CEF metric at each TSL incorporates a
measure of standby power as a contributor to energy use along with
energy use in active mode, as required by EPCA. Because CEF does not
preferentially weigh the energy use contributions attributable to
either active or standby mode, improvements in CEF due to standby power
reductions are considered equally to those due to active mode design
options. For these reasons, DOE believes that technologies associated
with standby power reductions should be considered in the definition of
efficiency levels and thus TSLs. In today's direct final rule, DOE
[[Page 22496]]
analyzes some TSLs that would require standby power reductions only,
and some that would require reductions to both standby power and active
mode power, as shown later in this section.
The NRDC/ECOS report stated that the fact that natural gas clothes
dryers tend to have lower average energy factors than electric clothes
dryers could lead consumers to believe that electric dryers are
generally more efficient. NRDC/ECOS report stated that conventional gas
clothes dryers that have been available for 30 years have significantly
less source energy use and environmental impact than today's efficient
electric clothes dryers. The NRDC/ECOS report added that heat pump
clothes dryers that may reach the U.S. market in the future have only
slightly lower impacts than conventional gas clothes dryers. (NRDC, No.
30 at pp. 17-18) The NRDC/ECOS report further stated that the current
EF metric is not intuitive and fails to capture meaningful differences
between electric and natural gas models. According to the NRDC/ECOS
report, converting natural gas consumption into equivalent electrical
consumption on a site basis ignores all of the losses that occur in the
electrical generation and transmission process. The NRDC/ECOS report
stated that this draws attention from the substantial advantage of most
gas clothes dryers--that they convert their fuel directly into heat at
the site where it is needed, avoiding upstream losses. According to the
NRDC/ECOS report, there are three ways to compare gas and electric
clothes dryers more fairly: (1) Source Btu basis, (2) total
CO2 emissions basis, and (3) energy cost basis. The NRDC/
ECOS report presented test results which showed that the standard
natural gas clothes dryer uses less source energy, costs less, and
emits less CO2 per lb of water removed than any other option
except (in some cases) a heat pump clothes dryer. (NRDC, No. 30 at pp.
32-33) NRDC commented that DOE should consider reporting actual kWh and
Btu consumption rather than converting to site equivalent kWh. NRDC
stated that it would be more useful to consumers to have information on
actual kWh of electricity and Btu of gas consumed. According to NRDC,
organizations such as EnergyGuide, ENERGY STAR, and Top Ten could use
this information to more accurately inform prospective buyers on
CO2 emitted or operating costs of a given clothes dryer.
(NRDC, No. 26 at pp. 1, 3)
In response, DOE notes that EPCA defines ``energy conservation
standard'' in relevant part as either: (1) A performance standard which
prescribes a minimum level of energy efficiency or a maximum quantity
of energy use; or (2) for certain products, including clothes dryers
but not including room air conditioners, a design requirement; the term
also includes any other requirements that DOE may prescribe under 42
U.S.C. 6295(r). (42 U.S.C. 6291(6)) EPCA also provides definitions for
the terms ``energy use'' and ``energy efficiency''. Specifically,
``energy use'' refers to the quantity of energy directly consumed by a
consumer product at the point of use, and ``energy efficiency'' means
the ratio of the useful output of services from a consumer product to
the energy use of such product. (42 U.S.C. 6291(4)-(5)) Therefore, an
energy conservation standard metric based on source energy use,
emissions, or annual energy cost would be inconsistent with the
definitions set forth in EPCA. In addition, DOE promulgates test
procedures for all product classes of clothes dryers that calculate
energy use or energy efficiency on a consistent basis, regardless of
the type of energy used. The energy content of either the electricity
or fossil fuels used at the site of the clothes dryer may be equally
and interchangeably expressed in any unit of energy measurement,
including kWh and Btu. DOE notes that, for other covered products which
may consume gas as well as electricity, such as cooking products, DOE
defines an energy efficiency metric (EF) in which any contributory site
gas energy use is expressed in equivalent kWh. DOE continues to believe
that the measure of CEF in terms of lb of clothes load per kWh is
meaningful and representative of the performance for both electric and
gas clothes dryers, and thus is not adopting alternative measures of
energy use or energy efficiency.
NRDC and the California Utilities recommended that the metric be
based on the water removed in the clothes load per kWh. The NRDC/ECOS
report stated that the efficiency using this approach would be measured
by converting the lbs. of water removed into kWh with a conversion
factor of 0.308 (the kWh necessary to evaporate a 1 lb. of water,) then
dividing by the measured energy consumption. According to the NRDC/ECOS
report, this metric would be more meaningful because it would measure
the work actually being performed by the clothes dryer. The NRDC/ECOS
report provided as an example the case in which a clothes dryer removed
3 lbs. of water from either a heavily saturated small load of absorbent
fabrics such as cotton or a lightly saturated larger load of
synthetics. According to the NRDC/ECOS report, testing and reporting
the results for both situations would help consumers choose the most
efficient clothes dryers. The California Utilities stated that the
metric should be based on lbs. of water removed per kWh, and that this
metric would correct for small variations in actual test load or
moisture content. The California Utilities also stated that this
approach would eliminate the need for the 0.66 correction factor (in
sections 4.1-4.3 of the current clothes dryer test procedure), which
corrects for the RMC change during the test. (California Utilities, No.
31 at pp. 11-12; NRDC, Public Meeting Transcript, No. 21.4 at pp. 49-
50; NRDC, No. 26 at pp. 1-3; NRDC, No. 30 at pp. 8, 32)
As noted above, DOE did not amend the clothes dryer test procedure
to allow for testing materials other than the current 50-50 cotton-
polyester test cloth. In addition, test conditions that would allow the
test load size or initial RMC to vary would only be allowable if the
resulting measured energy efficiency metric was independent of such
variations, implying that the metric would need to be a linear function
of these test conditions. DOE testing indicates that the efficacy of
moisture removal becomes significantly non-linear as the RMC in the
clothes load approaches low values, particularly near the 5-percent
maximum allowable RMC for the conclusion of the test cycle according to
the clothes dryer test procedure. Therefore, test loads with different
initial RMC that are allowed to dry to a range of final RMCs, or
differences in test load size, would not produce repeatable and
consistent measures of energy efficiency performance due to this non-
linearity of efficiency through the drying process. In order for
testing results to be comparable, the test procedure would need to be
amended to specific an exact starting and ending RMC, which would
likely represent a significant testing burden. In addition, DOE does
not believe that a metric based on lbs. of water removed per kWh, as
commented by NRDC/ECOS, would be more meaningful to consumers, who may
not be aware of how much water is contained in their test load. For
these reasons, and because DOE has insufficient data to suggest that a
metric based on lbs. of water removed per kWh instead of lb of test
cloth per kWh is a more accurate or representative measure of clothes
dryer energy use, DOE is not amending the clothes dryer energy
conservation standards as suggested by NRDC and the California
Utilities.
The California Utilities recommended that DOE consider a
prescriptive design
[[Page 22497]]
requirement that all vented clothes dryers have a standard 4-inch round
port for air intake, which would be the same diameter as the exhaust
duct. According to the California Utilities, there would be negligible
cost associated with this design, and would allow consumers the option
to install outdoor intake air in the future. (California Utilities, No.
31 at pp. 8, 12) As noted in section IV.A.5.a, DOE concluded that
consideration of HVAC energy use associated with outdoor intake air was
inconsistent with EPCA's requirement that a test procedure measure the
energy use or energy efficiency of a covered product. As a result, DOE
did not consider this technology in its analysis and is not adopting a
prescriptive design standard addressing the potential implementation of
outdoor intake air.
PG&E inquired whether DOE would consider a performance metric that
would include the non-energy benefit of clothing life if such data were
available. (PG&E, Public Meeting Transcript, No. 21.4 at p. 129) DOE is
not aware of such data and notes that EPCA provides that any test
procedures prescribed or amended under this section shall be reasonably
designed to produce test results which measure energy efficiency,
energy use, water use, or estimated annual operating cost of a covered
product during a representative average use cycle or period of use. (42
U.S.C. 6293(b)(3)) DOE believes that a clothes dryer metric
incorporating the non-energy benefit of clothing life would be
inconsistent with this requirement. Therefore, DOE did not consider
such a metric in the TP Final Rule. DOE is required, however, to
consider any lessening of utility or performance in establishing energy
conservation standards. 42 U.S.C. 6295(o)(2)(B)(i)(IV).
The NRDC/ECOS report stated that, due to the complexity of the
current DOE clothes washer test procedure and energy use calculations,
it might be simpler for manufacturers to report total energy used to
wash and dry one load. (NRDC, No. 30 at p. 32) EPCA provides separate
standards for clothes dryers and clothes washers, and directs DOE to
consider amended energy conservation standards for each product
separately. (42 U.S.C. 6295(g)) Therefore, DOE is unable to adopt a
single standard based on overall energy use of the wash and dry cycles
in total.
Comments on Preliminary Analysis Integrated Efficiency Levels
DOE also received comments from interested parties on the
efficiency levels proposed in the preliminary analysis. The California
Utilities stated that, with the low or negative incremental costs of
the standby power design options, such design options should be
implemented at lower efficiency levels. According to the California
Utilities, this implementation would not affect clothes dryers with
electromechanical controls, which have zero standby and are thus
receiving a ``free'' benefit of 2.0 W. (California Utilities, No. 31 at
pp. 11-12) DOE agrees that the low cost of the standby power design
options should result in these technologies being included in the
initial efficiency levels above the baseline. Thus, the clothes dryer
efficiency levels analyzed in this direct final rule implement the
standby power design options at the efficiency levels where they are
most cost-effective. As noted by the California Utilities, these
changes would impact only those clothes dryers that consume standby
power, that is, those products with electronic controls.
Earthjustice commented that EPCA contains an
``anti[hyphen]backsliding provision'' that constrains DOE's authority
in revising energy efficiency standards. According to Earthjustice,
some of the clothes dryer efficiency levels that DOE is considering
would violate the anti-backsliding requirement. Earthjustice commented
that adding standby power consumption factors into the existing metrics
reduces the stringency of each metric. Earthjustice provided an example
for vented electric compact (120 V) clothes dryers in which the
addition of the 2 W of standby power lowers the EF rating of the
baseline efficiency level from 3.13 to 3.00. If DOE adopts efficiency
level 1, with an IEF of 3.08, such a standard would violate EPCA's
anti-backsliding provision. NRDC commented that if an existing vented
electric compact (120V) clothes dryer model with electromechanical
controls (which DOE has shown to consume no power in standby mode) has
an EF of 3.10, it would be barred from the U.S. market by the existing
standard. However, it would meet an IEF standard set at 3.08 (which DOE
proposed as efficiency level 1 in the preliminary TSD). Earthjustice
commented that implementing an IEF standard set at 3.08 would have the
effect of decreasing the minimum required energy efficiency as is
prohibited by the anti-backsliding provisions. (EJ, No. 28 at pp. 1-2;
EJ, Public Meeting Transcript, No. 21.4 at p. 58) Earthjustice also
commented that DOE's proposed approach to the integration of standby
and off mode energy consumption into the performance standards for
clothes dryers would require DOE to adopt standards that increase EF
sufficiently to avoid violating EPCA's anti-backsliding provision. (EJ,
No. 28 at p. 1)
EPCA contains what is commonly known as an ``anti-backsliding''
provision. This provision prohibits DOE from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product
or equipment. (42 U.S.C. 6295(o)(1)) Congress also directed DOE to
incorporate standby and off mode energy use in a single amended or new
standard, or to prescribe a separate standard if such incorporation is
not feasible, pursuant to 42 U.S.C. 6295(o). (42 U.S.C. 6295(gg)(3))
Today's final rule incorporates additional measures of energy
consumption in the energy conservation standards for clothes dryers
(that is, standby and off mode energy use). DOE notes that clothes
dryers and room air conditioners that consume energy in standby and off
modes have always used energy in these modes, and that today's final
rule now accounts for that energy as directed by 42 U.S.C. 6295(gg).
Given the Congressional directive to account for standby and off mode
energy use, DOE does not believe that accounting for energy use in
these modes could result in backsliding under 42 U.S.C. 6295(o)(1). In
addition, DOE evaluated the clothes dryer TSLs to ensure that no
product currently on the market could be determined compliant with the
new energy conservation standards while consuming more energy in active
mode than was allowable under the previous standards.
NPCC commented that the clothes dryer test procedure does not
measure the efficiency improvement associated with improved automatic
termination controls such as moisture sensing. NPCC stated that because
moisture sensing would require switching from electromechanical
controls to electronic controls, part of the incremental manufacturing
cost associated with electronic controls would be accounted for in the
improved automatic cycle termination design option. However, NPCC also
stated that all clothes dryers have some form of automatic cycle
termination for which the current test procedure uses a fixed field use
factor. NPCC commented that because moisture sensing requires
electronic controls and thus consumes standby power, the cost of the
implementing electronic controls is inappropriately accounted for only
in the standby power design options
[[Page 22498]]
because the test procedure does not measure the efficiency improvement
associated with moisture sensing. NPCC stated that part of the costs
for implementing electronic controls should be accounted for in the
costs associated with improved automatic cycle termination with
moisture sensing. (NPCC, Public Meeting Transcript, No. 21.4 at pp. 58-
60, 61-62) NPCC commented that if a product is receiving the 1.04 field
use factor for automatic cycle termination, then the cost of that type
of device (that is, the cost of electronic controls) needs to be in the
baseline cost analysis. (NPCC, Public Meeting Transcript, No. 21.4 at
p. 60)
DOE first notes that electronic controls are not required to
implement automatic cycle termination. Clothes dryers are currently
available on the market that use inputs from exhaust air temperature
sensors to control or modify the length of the drying cycle without the
use of electronic controls. For this reason, DOE did not include the
cost of electronic controls in the baseline cost, unless the baseline
product already incorporated electronic controls (such as, ventless
electronic compact (240V) and ventless electric combination washer/
dryers). As discussed below, DOE noted that baseline efficiency clothes
dryers implement both electromechanical controls and electronic
controls. As a result, DOE analyzed baseline efficiency products
available on the market, and weighted the contribution of the 2 W
baseline standby power as well as the efficiency improvement and
incremental manufacturing cost for standby power design changes based
on the percentage of baseline efficiency products that used electronic
controls.
BSH commented that DOE should analyze and implement evenly
distributed efficiency levels to help consumers make purchasing
decisions. BSH also commented that the implementation of the proposed
efficiency levels in the preliminary analyses would cause confusion to
consumers. According to BSH, with a relatively small improvement in
efficiency in the lower efficiency levels, a better rating can be
achieved, and at the high end of the efficiency levels, much more
effort must be taken to improve the rating. In addition, according to
BSH, consumers will not support the higher efficiency level because
they cannot see the advantage of paying a significantly higher price
for a small change in product efficiency. (BSH, No. 23 at pp. 3-4) BSH
also commented that DOE should use the same efficiency scale to analyze
ventless and vented clothes dryers. According to BSH, ventless clothes
dryers, especially those with heat pump technology, will be penalized
by keeping a lower number of efficiency levels. (BSH, No. 23 at p. 4)
DOE notes that the efficiency levels analyzed for the preliminary
analyses were derived from the distribution of efficiencies for
products available on the market from data provided in the CEC and
NRCan product databases. DOE also notes that the efficiency levels for
the ventless clothes dryer product classes were based on product
testing as well as scaling of the efficiency improvements associated
with vented clothes dryer product classes. The efficiency levels
analyzed are not being established for a product marketing
classification system for consumers to make purchasing decisions (as is
done in the European energy class system). As a result, DOE does not
intend to create an energy class system for product marketing based on
evenly distributed efficiency levels.
BSH commented that a separate classification of heat pump clothes
dryers will not be possible because the European market shows large
variation within this class of clothes dryers. According to BSH, heat
pump clothes dryers in Europe differ by up to 40 percent in energy
efficiency. (BSH, No. 23 at pp. 3-4) DOE notes that the efficiency
levels established by DOE for the max-tech heat pump design are based
on research and discussions with manufacturers. In addition, DOE does
not intend to create a marketing classification system that would
create a ``heat pump'' label from which consumers may perceive that all
heat pump clothes dryers have the same efficiency. For these reasons,
DOE continued to analyze the efficiency levels associated with heat
pump clothes dryers presented in the preliminary analyses for today's
direct final rule.
BSH commented that the gap between conventional and heat pump
dryers is not filled with intermediate levels to show consumers the
large improvement in efficiency they would be paying for when making
purchasing decisions. (BSH, No. 23 at p. 6) DOE is not aware of
products available on the market at efficiency levels between the
maximum-available (on the U.S. market) efficiency levels and the max-
tech heat pump efficiency level. In addition, DOE does not have any
information indicating that design options are available that may be
implemented to achieve efficiencies between the maximum-available and
max-tech heat pump efficiency levels. As discussed above, DOE is not
creating a marketing classification system for consumers to make
purchasing decisions. As a result, DOE did not analyze additional
intermediate efficiency levels between those associated with
conventional and heat pump dryers.
Integrated Efficiency Levels--Final Rule
As discussed in section III.A, DOE recently published the TP Final
Rule amending the clothes dryer test procedure. DOE conducted testing
on a sample of representative clothes dryers to evaluate the effects of
the amendments to the clothes dryer test procedure on the measured EF.
As discussed in section III.A.3.a, DOE test results showed that the
measured EF according to the amended test procedure resulted in an
average increase of about 20.1 percent for vented electric standard
clothes dryers. For vented gas clothes dryers, the measured EF
increased by an average of about 19.8 percent. For vented electric
compact-size 120V and 240V clothes dryers, the measured EF increased by
an average of about 15.6 and 12.8 percent, respectively. For the
ventless clothes dryer product classes, the preliminary analyses were
based on the DOE test procedure with only the proposed amendments to
for ventless clothes dryers. DOE also conducted testing according to
the final amended test procedure (that is, including changes to the
initial RMC, water temperature for test load preparation, etc.). Test
results showed that for ventless electric compact 240V clothes dryers
and ventless electric combination washer/dryers, the measured EF
increased by an average of about 13.6 and 11.4 percent, respectively.
DOE applied these results for each product class to adjust the active
mode efficiency levels to account for the amendments to the DOE clothes
dryer test procedure in the TP Final Rule. In addition, DOE revised the
active mode efficiency level 1 for vented electric standard clothes
dryers and vented gas clothes dryers from 3.10 EF to 3.11 EF and from
2.75 to 2.76 EF, respectively. The revisions were based on discussions
with manufacturers and the efficiency improvement associated with the
design options modeled by DOE. See chapter 5 of the direct final rule
TSD for more details. DOE subsequently integrated the standby power
efficiency levels to convert these EF values to CEF. For the
preliminary analyses, DOE only incorporated incremental standby power
levels into IEF efficiency levels above which electronic controls would
be required as part of the active mode design option changes. At that
point, DOE incorporated the incremental standby
[[Page 22499]]
power levels where it determined them to be most cost effective.
Chapter 5 of the direct final rule TSD provides details of the active
mode and standby mode efficiency levels for each product class. The
revised CEF efficiency levels for each product class are shown below in
Table IV.14 through Table IV.16.
Table IV.14--Clothes Dryer Integrated Efficiency Levels (CEF)--Vented Product Classes
----------------------------------------------------------------------------------------------------------------
Integrated efficiency level (CEF) lb/kWh
---------------------------------------------------
Level Efficiency level Electric Electric
description Electric compact compact Gas
standard (120V) (240V)
----------------------------------------------------------------------------------------------------------------
Baseline......................... DOE Standard + 2.0 W 3.55 3.43 3.12 3.14
Standby.
1................................ DOE Standard + 1.5 W 3.56 3.48 3.16 3.16
Standby.
2................................ DOE Standard + 0.08 W 3.61 3.61 3.27 3.20
Standby.
3................................ Gap Fill + 0.08 W Standby 3.73 3.72 3.36 3.30
4................................ Gap Fill + 0.08 W Standby 3.81 3.80 3.48 3.42
5................................ Gap Fill/Maximum 4.08 4.08 3.60 3.61
Available + 0.08 W
Standby.
6................................ Heat Pump (Max-Tech) + 5.42 5.41 4.89 ...........
0.08 W Standby.
----------------------------------------------------------------------------------------------------------------
Table IV.15--Clothes Dryer Integrated Efficiency Levels (CEF)--Ventless
Electric Compact (240V)
------------------------------------------------------------------------
Integrated
efficiency
level
(CEF) lb/
Level Efficiency level kWh
description ------------
Electric
compact
(240 V)
------------------------------------------------------------------------
Baseline......................... Baseline + 2.0 W Standby 2.55
1................................ Baseline + 1.5 W Standby 2.59
2................................ Baseline + 0.08 W 2.69
Standby.
3................................ Gap Fill + 0.08 W 2.71
Standby.
4................................ Gap Fill + 0.08 W 2.80
Standby.
5................................ Heat Pump (Max-Tech) + 4.03
0.08 W Standby.
------------------------------------------------------------------------
Table IV.16--Clothes Dryer Integrated Efficiency Levels (CEF)--Ventless
Electric Combination Washer/Dryers
------------------------------------------------------------------------
Integrated
efficiency
level
(CEF) lb/
Efficiency level kWh
Level description ------------
Electric
combination
washer/
dryer
------------------------------------------------------------------------
Baseline......................... Baseline + 2.0 W Standby 2.08
1................................ Gap Fill + 2.0 W Standby 2.35
2................................ Gap Fill + 1.5 W Standby 2.38
3................................ Gap Fill + 0.08 W 2.46
Standby.
4................................ Gap Fill + 0.08 W 2.56
Standby.
5................................ Heat Pump (Max-Tech) + 3.69
0.08 W Standby.
------------------------------------------------------------------------
Cost-Efficiency Results--Preliminary Analysis
For the preliminary analysis, DOE first analyzed design options
separately for active mode and standby mode and developed the cost-
efficiency relationships based on product teardowns and cost modeling.
Details of the active mode and standby mode cost-efficiency
relationships for each product class are presented in chapter 5 of the
preliminary TSD. DOE then developed overall cost-efficiency
relationships for the IEF efficiency levels presented in the
preliminary analyses. Table IV.17 through Table IV.22 shows DOE's
estimates of incremental manufacturing cost for improvement of clothes
dryer IEF above the baseline. Also shown below are the technologies DOE
analyzed for each efficiency level to develop incremental manufacturing
costs. Detailed descriptions of the design options associated with each
efficiency level are also presented in chapter 5 of the preliminary
TSD. DOE used an efficiency level approach, noting that different
manufacturers may implement different design changes to achieve certain
efficiency levels.
[[Page 22500]]
Table IV.17--Preliminary Analysis: Cost-Efficiency Relationship for
Vented Electric Standard Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.96)............... DOE Standard + 2.0 W $0
Standby.
1 (3.04)...................... DOE Standard + Change 11.89
in Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
2 (3.10)...................... IEL 2 + Inlet Air Pre- 63.56
Heating.
3 (3.33)...................... IEL 2 + Modulating 97.48
Heat.
4 (3.35)...................... IEL 3 + 1.5 W Standby. 98.78
5 (3.40)...................... IEL 3 + 0.08 W Standby 98.14
6 (4.52)...................... Heat Pump + 0.08 W 259.13
Standby.
------------------------------------------------------------------------
Table IV.18--Preliminary Analysis: Cost-Efficiency Relationship for
Vented Electric Compact (120V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (3.00)............... DOE Standard + 2.0 W $0
Standby.
1 (3.08)...................... DOE Standard + Change 10.95
in Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
2 (3.15)...................... IEL 2 + Inlet Air Pre- 63.37
Heating.
3 (3.37)...................... IEL 2 + Modulating 96.45
Heat.
4 (3.41)...................... IEL 3 + 1.5 W Standby. 97.75
5 (3.53)...................... IEL 3 + 0.08 W Standby 97.11
6 (4.69)...................... Heat Pump + 0.08 W 246.35
Standby.
------------------------------------------------------------------------
Table IV.19--Preliminary Analysis: Cost-Efficiency Relationship for
Vented Electric Compact (240V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.79)............... DOE Standard + 2.0 W $0
Standby.
1 (2.86)...................... DOE Standard + Change 10.95
in Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
2 (2.96)...................... IEL 2 + Inlet Air Pre- 63.37
Heating.
3 (3.06)...................... IEL 2 + Modulating 96.45
Heat.
4 (3.10)...................... IEL 3 + 1.5 W Standby. 97.75
5 (3.19)...................... IEL 3 + 0.08 W Standby 97.11
6 (4.34)...................... Heat Pump + 0.08 W 246.35
Standby.
------------------------------------------------------------------------
Table IV.20--Preliminary Analysis: Cost-Efficiency Relationship for
Vented Gas Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.63)............... DOE Standard + 2.0 W $0
Standby.
1 (2.71)...................... DOE Standard + Change 14.79
in Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
2 (2.80)...................... IEL 2 + Inlet Air Pre- 65.36
Heating.
3 (2.97)...................... IEL 2 + Modulating 156.01
Heat.
4 (2.98)...................... IEL 3 + 1.5 W Standby. 157.31
5 (3.02)...................... IEL 3 + 0.08 W Standby 156.67
------------------------------------------------------------------------
Table IV.21--Preliminary Analysis: Cost-Efficiency Relationship for
Ventless Electric Compact (240V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.29)............... Baseline + 2.0 W $0
Standby.
1 (2.31)...................... Baseline + 1.5 W 1.30
Standby.
2 (2.37)...................... Baseline + 0.08 W 0.66
Standby.
[[Page 22501]]
3 (2.39)...................... IEL 2 + Change in 13.01
Airflow Patterns,
Open-Cylinder Drum.
4 (2.59)...................... IEL 3 + Modulating 69.02
Heat.
5 (3.54)...................... Heat Pump + 0.08 W 216.37
Standby.
------------------------------------------------------------------------
Table IV.22--Preliminary Analysis: Cost-Efficiency Relationship for
Ventless Electric Combination Washer/Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(IEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (1.90)............... Baseline + 2.0 W $0
Standby.
1 (2.15)...................... Baseline + 2.0 W 0.81
Standby + Baseline
Automatic Termination.
2 (2.34)...................... IEL 1 + Modulating 54.04
Heat.
3 (2.36)...................... IEL 2 + 1.5 W Standby. 55.34
4 (2.42)...................... IEL 2 + 0.08 W Standby 54.70
5 (3.31)...................... Heat Pump + 0.08 W 230.83
Standby.
------------------------------------------------------------------------
DOE received comments from interested parties on the whether the
baseline clothes dryer manufacturing costs should be adjusted to
reflect the cost of complying with the Underwriters Laboratory (UL)
Standard 2158 ``Electric Clothes Dryers'' (UL 2158) fire containment
requirements. AHAM commented that it would need to look into and
understand how the fire containment regulation in UL 2158 would affect
the cost similar to the refrigerant change from R-22 to R-410a for room
air conditioners. (AHAM, Public Meeting Transcript, No. 21.4 at p. 153)
AHAM commented that when manufacturers submitted incremental clothes
dyer manufacturing cost estimates to DOE in late 2008, costs to comply
with UL 2158 were not included. According to AHAM, while the new UL
requirements may not directly impact energy efficiency, the
requirements place significant cumulative regulatory burden on clothes
dryer manufacturers. AHAM commented that DOE should evaluate an
additional step for clothes dryers, where the costs to implement the UL
fire containment requirements are incorporated into the baseline
analysis, similar to the approach used to evaluate the phase[hyphen]out
of R-22 to R-410A for room air conditioners. AHAM commented that DOE
should evaluate these costs through manufacturer interviews and
determine how this cost affects the incremental costs to reach higher
efficiency. (AHAM, No. 25 at p. 5) DOE notes that it attempted to
obtain data on the incremental manufacturing cost associated with
complying with the fire containment requirements in UL 2158 during
manufacturing interviews. While manufacturers noted that different
manufacturers will be required to make different changes to their
product design to meet the fire containment requirements, DOE did not
receive sufficient data to determine the incremental manufacturing
costs to baseline clothes dryers to comply with the fire containment
requirements of UL 2158. In addition, DOE did not receive sufficient
information to indicate that the cost associated with complying with UL
2158 would vary at efficiency levels above the baseline. As a result,
DOE did not include additional cost to comply with UL 2158 in the
baseline manufacturing production cost. As discussed below in section
IV.I.3.b, DOE has investigated the costs of complying with the fire
containment requirements in UL 2158 in the cumulative regulatory burden
for the MIA.
Cost-Efficiency Results--Final Rule
For today's final rule, DOE updated the cost-efficiency analysis
from the preliminary analyses by updating the costs of raw materials
and purchased components, as well as updating costs for manufacturing
equipment, labor, and depreciation.
In addition, based on discussions with clothes dryer manufacturers,
DOE revised the design options analyzed for each integrated efficiency
level in the preliminary analyses. Based on these discussions, DOE
believes that manufacturers would apply a two-stage modulating heater
design (which would also require moisture sensing and multi-speed
airflow) to achieve integrated efficiency level 4 for all clothes dryer
product classes. In addition, based on discussions with manufacturers,
DOE believes that inlet-air preheating (which would require better
airflow control and more advanced control systems), along with the
design options for the lower efficiency levels (that is, changes in
airflow patterns, open cylinder drum, dedicated heater duct, two-stage
modulating heat, and standby power changes), would be applied to
achieve integrated efficiency level 5 (maximum-available) for vented
clothes dryer product classes. As a result, the max-tech efficiency
level for vented gas clothes dryers would correspond to inlet air pre-
heating.
As discussed above, DOE also believes that the low cost of the
standby power design options should result in these technologies being
included in the initial efficiency levels above the baseline. As a
result, DOE revised the order of the design options and efficiency
levels presented in the preliminary analyses. As discussed above in
this section, DOE previously incorporated incremental standby power
levels into integrated efficiency levels above which electronic
controls would be required as part of the active mode design option
changes. At that point, DOE incorporated the incremental standby power
levels where it determined them to be most cost effective. For today's
final rule, DOE applied the standby power levels immediately above the
baseline level because they were determined to be the most cost-
effective design option. The revised order of design options are shown
below in Table IV.23 through
[[Page 22502]]
Table IV.28. DOE also noted that for the integrated efficiency levels
where electronic controls are not required for the design changes, the
standby power level changes would impact only those clothes dryers that
consume standby power, that is, those products with electronic
controls. As a result, DOE analyzed baseline efficiency products
available on the market, and weighted the efficiency improvement and
incremental manufacturing cost based on the percentage of baseline
efficiency products that have electronic controls.\36\ For the
integrated efficiency levels for which electronic controls would be
required as part of the active mode design changes, DOE assumed that
the standby power levels and incremental manufacturing costs affected
100 percent of clothes dryer models.
---------------------------------------------------------------------------
\36\ DOE's review of currently available models with baseline
efficiency showed that roughly 74 percent of models have electronic
controls.
---------------------------------------------------------------------------
Table IV.23 through Table IV.28 shows the cost-efficiency results,
along with the technologies DOE analyzed for each efficiency level to
develop incremental manufacturing costs. Details of the cost-efficiency
analysis and descriptions of the technologies associated with each
design change are presented in chapter 5 of the direct final rule TSD.
Table IV.23--Cost-Efficiency Relationship for Vented Electric Standard
Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (3.55)............... DOE Standard + 2.0 W $0
Standby.
1 (3.56)...................... DOE Standard + 1.5 W 0.68
Standby.
2 (3.61)...................... DOE Standard + 0.08 W 0.82
Standby.
3 (3.73)...................... IEL 2 + Change in 8.74
Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
4 (3.81)...................... IEL 3 + 2-Stage 50.67
Modulating Heat.
5 (4.08)...................... IEL 4 + Inlet Air Pre- 88.89
Heating.
6 (5.42)...................... Heat Pump + 0.08 W 280.54
Standby.
------------------------------------------------------------------------
Table IV.24--Cost-Efficiency Relationship for Vented Electric Compact
(120V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (3.43)............... DOE Standard + 2.0 W $0
Standby.
1 (3.48)...................... DOE Standard + 1.5 W 0.68
Standby.
2 (3.61)...................... DOE Standard + 0.08 W 0.82
Standby.
3 (3.72)...................... IEL 2 + Change in 21.46
Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
4 (3.80)...................... IEL 3 + 2-Stage 62.76
Modulating Heat.
5 (4.08)...................... IEL 4 + Inlet Air Pre- 109.31
Heating.
6 (5.41)...................... Heat Pump + 0.08 W 267.48
Standby.
------------------------------------------------------------------------
Table IV.25--Cost-Efficiency Relationship for Vented Electric Compact
(240V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (3.12)............... DOE Standard + 2.0 W $0
Standby.
1 (3.16)...................... DOE Standard + 1.5 W 0.68
Standby.
2 (3.27)...................... DOE Standard + 0.08 W 0.82
Standby.
3 (3.36)...................... IEL 2 + Change in 21.46
Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
4 (3.48)...................... IEL 3 + 2-Stage 62.76
Modulating Heat.
5 (3.60)...................... IEL 4 + Inlet Air Pre- 109.31
Heating.
6 (4.89)...................... Heat Pump + 0.08 W 267.48
Standby.
------------------------------------------------------------------------
Table IV.26--Cost-Efficiency Relationship for Vented Gas Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (3.14)............... DOE Standard + 2.0 W $0
Standby.
1 (3.16)...................... DOE Standard + 1.5 W 0.68
Standby.
2 (3.20)...................... DOE Standard + 0.08 W 0.82
Standby.
3 (3.30)...................... IEL 2 + Change in 9.12
Airflow Patterns,
Dedicated Heater
Duct, Open-Cylinder
Drum.
4 (3.42)...................... IEL 3 + 2-Stage 72.32
Modulating Heat.
5 (3.61)...................... IEL 4 + Inlet Air Pre- 109.98
Heating.
------------------------------------------------------------------------
[[Page 22503]]
Table IV.27--Cost-Efficiency Relationship for Ventless Electric Compact
(240V) Clothes Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.55)............... Baseline + 2.0 W $0
Standby.
1 (2.59)...................... Baseline + 1.5 W 0.93
Standby.
2 (2.69)...................... Baseline + 0.08 W 1.11
Standby.
3 (2.71)...................... IEL 2 + Change in 26.42
Airflow Patterns,
Open-Cylinder Drum.
4 (2.80)...................... IEL 3 + 2-Stage 57.80
Modulating Heat.
5 (4.03)...................... Heat Pump + 0.08 W 242.36
Standby.
------------------------------------------------------------------------
Table IV.28--Cost-Efficiency Relationship for Ventless Electric
Combination Washer/Dryers
------------------------------------------------------------------------
Incremental
Integrated efficiency level Technology manufacturing
(CEF), lb/kWh cost
------------------------------------------------------------------------
Baseline (2.08)............... Baseline + 2.0 W $0
Standby.
1 (2.35)...................... Baseline + 2.0 W 1.51
Standby + Baseline
Automatic Termination.
2 (2.38)...................... IEL 1 + 1.5 W Standby. 2.44
3 (2.46)...................... IEL 2 + 0.08 W Standby 2.62
4 (2.56)...................... IEL 3 + 2-Stage 31.69
Modulating Heat.
5 (3.69)...................... Heat Pump + 0.08 W 297.54
Standby.
------------------------------------------------------------------------
b. Room Air Conditioners
During the preliminary analysis, DOE performed the room air
conditioner engineering analysis as follows:
Reverse engineering and teardown for 21 room air
conditioners across 6 product classes.
Interviews with room air conditioner manufacturers to
obtain greater insight into design strategies and their associated
costs to improve efficiency, including designs incorporating R-410A
refrigerant.
Energy modeling for room air conditioner designs using R-
410A refrigerant.
DOE selected teardown products covering the range of available
efficiency levels at a group of selected capacities. The products
selected for teardown were designed for HCFC-22 refrigerant because DOE
conducted this work before the January 1, 2010 phaseout of this
refrigerant for new products was required. 74 FR 66450 (Dec. 19, 2009)
DOE modeled the 21 HCFC-22 teardown units to calibrate the model before
modeling the R-410A efficiency levels. DOE also identified one R-410A
room air conditioner during the preliminary analysis and analyzed it in
the reverse engineering analysis.
From these analyses, DOE produced R-410A cost-efficiency curves for
each of the analyzed product classes. Details of the engineering
analysis are provided in the direct final rule TSD chapter 5.
DOE received several comments from interested parties on its
approach to the engineering analysis, as described below. Stakeholders
commented on (1) the availability of R-410A products and data for
incorporation into the engineering analysis, and (2) limitations on the
maximum size of room air conditioners.
Conversion to R-410a
During the preliminary analysis public meeting, DOE requested
comments on the approach for the engineering analysis for room air
conditioners, specifically on the use of both energy modeling and
manufacturer cost modeling. DOE explained that this was the best
approach for the preliminary engineering analysis. An efficiency level
analysis based on only teardowns of specific products at different
efficiency levels would have been based on HCFC-22 and would not have
been representative of the R-410A products that would be available on
the compliance date for the rule.
ACEEE suggested that DOE's analysis should be updated due to the
transition from HCFC-22 refrigerant (ACEEE, No. 24 at p. 4). ACEEE and
the California Utilities recommended that DOE revise its analysis using
current R-410A models for product teardowns, as it would enable DOE to
more accurately determine the energy use of new room air conditioners
(ACEEE, No. 24 at p. 4; California Utilities, No. 31 at p. 17). In
addition, the California Utilities recommended that DOE conduct testing
of products that contain R-410A refrigerant. (California Utilities, No.
31 at p. 17)
During the preliminary analysis phase of this rulemaking, DOE
indicated that there was only one R-410A product available on the
market for analysis. Subsequently, however, DOE examined information
associated with commercialized R-410A products and made appropriate
adjustments based on the new information, as described below.
In the engineering analysis supporting today's final rule, DOE
purchased and conducted teardowns on four R-410A products to update and
validate the analysis performed during the preliminary analysis. Table
IV.29 lists the R-410A products used. DOE focused this effort on the
largest and most efficient units.
Table IV.29--R-410A Room Air Conditioners Selected for Teardown
------------------------------------------------------------------------
Capacity
Product class Btu/hr EER
------------------------------------------------------------------------
1................................................. 5000 9.7
2................................................. 6,000 12.0
3................................................. 12,000 10.8
5B................................................ 28,500 8.5
------------------------------------------------------------------------
The new information obtained from the four R-410A product
teardowns, and examination of product information of available R-410A
products, confirmed that the baseline product designs, design option
costs, and design pathways chosen during the preliminary analysis,
developed based on teardowns of HCFC-22 units, provided accurate
results for calculating the cost-efficiency curves for R-410A designs.
SCE noted that a study conducted by NIST for split systems
indicated that R-410A dropped in efficiency compared with R-22 only in
systems with condensing temperatures above 95 [deg]F.
[[Page 22504]]
(SCE, Public Meeting Transcript, No. 21.4 at p. 69)
DOE notes that its modeling of room air conditioners indicates that
they operate with condensing temperatures between 110 [deg]F and 130
[deg]F under DOE test conditions, depending on the sizes of the heat
exchangers. DOE's analysis confirms that the impact of the switch to R-
410A is more severe as condensing temperatures increase above 95
[deg]F, and that additional improvements in efficiency (larger heat
exchangers, more efficient components, and similar improvements) are
required to reach comparable efficiencies to HCFC-22. Energy modeling
of R-410A and HCFC-22 room air conditioners shows that a system modeled
with HCFC-22 experiences an efficiency reduction if a ``drop-in'' of R-
410A is considered (that is, switch refrigerant and make no other
system changes).
As discussed previously, DOE conducted the engineering analysis
based on use of R-410A refrigerant. DOE sought information on the
performance of R-410A rotary compressors of varying efficiency levels
for all of the products under analysis. In many cases, the range of
efficiency for which compressor vendors were able to provide
performance data was limited. Because conducting the analysis generally
required knowledge not just of design point capacity and EER, DOE
requested performance data for a representative range of evaporating
and condensing conditions. In some cases, the trends of compressor
performance as a function of operating conditions were extrapolated
from the trends exhibited by a compressor of the same refrigerant of
nearly the same capacity. During the preliminary analysis, DOE
considered the available performance data for R-410A rotary
compressors, noting that discussions with compressor vendors revealed
that many vendors were still developing their R-410A compressor lines
and could only provide preliminary data. The compressors for which
performance data was available varied significantly in EER, depending
on their capacity. DOE did not consider increases in compressor
efficiency as a design option, because no higher-efficiency compressor
data was available.
The California Utilities commented that concern over the cost and
availability of R-410A compressors may be mitigated as designs and
efficiency of these compressors improve, and as the market grows and
availability of compressors increases. (California Utilities, No. 31 at
p. 17) EEI asked whether DOE conducted testing on R-410A compressors
during its analysis. (EEI, Public Meeting Transcript, No. 21.4 at pp.
67-68)
DOE did not conduct tests on R-410A compressors during the
engineering analysis, but has no reason to believe that the
manufacturers' performance data is incorrect. During the final rule
analyses, however, DOE obtained additional data regarding R-410A
compressor performance and did consider EER improvement, as described
below.
During interviews conducted during the final rule phase of today's
final rule, individual manufacturers reported that vendor selections of
R-410A rotary compressors were still limited, and that compressor
vendors, where they had once offered up to three different efficiency
tiers of compressors, now only offered one or two tiers. One
manufacturer reported a need to source from many different vendors to
achieve performance goals. Individual manufacturers identified 10 EER
as the maximum available efficiency for R-410A compressors, but
reported testing of higher efficiency compressors.
DOE also reviewed R-410A compressor options available on compressor
vendors' Web sites, and also contacted compressor vendors to discuss
their current R-410A compressor options.
In the analysis for today's final rule, DOE added a design option
to its engineering analysis for increasing compressor efficiency to the
identified maximum compressor EER level.
During the preliminary analysis, DOE sought information on the
performance of R-410A rotary compressors of varying efficiency levels
for all of the products under analysis. In many cases, the range of
efficiency for which vendors provided performance data for R-410A
compressors was limited. In most cases, compressor vendors had
developed sufficiently for use in products compressors at only one
efficiency level at each of the relevant capacities that DOE examined.
These efficiency levels varied widely, depending on the available
compressors. Due to the lack of maturity of the R-410A rotary
compressor market at that time, DOE could not confidently project that
higher efficiency levels would be made available.
During the final rule analysis, DOE again reviewed the R-410A
compressor market and the available compressors and found that many
more R-410A rotary compressor options at varying efficiency levels had
been developed. The highest available nominal EER for R-410A rotary
compressors with capacities less than 18,000 Btu/h is 10 EER, while the
highest available EER for compressors with capacities greater than
18,000 Btu/h is 10.3 EER. Interviews with individual manufacturers
supported these observations.
Consequently, DOE has concluded that 10 EER is a reasonable maximum
available EER for rotary R-410A compressors in capacities suitable for
product classes 1 (room air conditioners without reverse cycle, with
louvered sides, and capacity less than 6,000 Btu/h); 3 (room air
conditioners without reverse cycle, with louvered sides, and capacities
8,000 to 13,999 Btu/h); 8A (room air conditioners without reverse
cycle, without louvered sides, and capacities 8,000 to 10,999 Btu/h);
and 8B (room air conditioners without reverse cycle, without louvered
sides, and capacities 11,000 to 13,999 Btu/h). Also, DOE concluded that
10.3 EER is a reasonable maximum available EER for rotary R-410A
compressors in capacities suitable for product classes 5A (room air
conditioners without reverse cycle, with louvered sides, and capacities
20,000 to 27,999 Btu/h) and 5B (room air conditioners without reverse
cycle, with louvered sides, and capacity 28,000 Btu/h or more).
Thereby, DOE selected 10.0 EER as the maximum EER compressor level for
the analysis of product classes 1, 3, 8A, and 8B; and 10.3 EER as the
maximum compressor level for the analysis of product classes 5A and 5B.
During the analysis for today's final rule, in cases where
compressor data was unavailable for the two maximum EER levels selected
by DOE (as discussed above), the trends of compressor performance as a
function of operating conditions were extrapolated. Compressor
performance was extrapolated from the trends exhibited by a compressor
currently offered on the market that used the same refrigerant of
nearly the same capacity. DOE extrapolated compressor data for 10 EER
compressors from similar compressors with ratings ranging from 9.4 EER
to 9.7 EER, and compressor data for 10.3 EER compressor from similar
compressor with 10 EER ratings. DOE noted the rapid pace of development
of R-410A compressors (over the course of this rulemaking);
manufacturer interviews suggested that this rapid development is on-
going and is likely to continue. Thus, the data suggests that
manufacturers will be able to incorporate R-410A rotary compressors of
capacities for which data was not available into air conditioners by
the new energy standard's compliance date in 2014. DOE notes that
compressors at the selected max-tech EER levels (for some capacity
levels analyzed) are already available on the market, and some
[[Page 22505]]
products may already use these compressors. DOE has determined that
such compressors are currently manufactured at many more capacity
levels than were observed during the preliminary analysis. Additional
details of this analysis are available in chapter 5 of the direct final
rule TSD.
The greater availability of rotary compressors also caused DOE to
eliminate consideration of scroll compressors. DOE had used scroll
compressors as a design option during the preliminary analysis.
However, the higher EER of high-capacity rotary compressors that are
now available shifts the economic attractiveness of scroll compressor
technology such that it is no longer cost effective.
Size Increases
In the preliminary analysis, DOE considered chassis size increases
to increase the efficiency of window units, which corresponded to
product classes 1, 3, and 5. DOE believes increases in coil frontal
area and package size are among the primary factors contributing to EER
improvements in the higher-efficiency teardown units for product
classes 1, 3, and 5.
DOE selected baseline, medium, and large chassis sizes based on the
range of sizes of available room air conditioners. DOE did not consider
chassis size increases beyond the range of available products, and
considered both the physical volume and the weight of the unit. DOE
performed cost modeling and energy modeling of these larger chassis
sizes to calculate cost and efficiency impacts due to chassis size
increases, based on product teardowns.
During the preliminary analysis public meeting, DOE requested
comment on the approach for determining appropriate maximum sizes for
different product classes and capacities. DOE received stakeholder
comments on both non-louvered room air conditioner sizes and louvered
room air conditioner sizes.
Non-Louvered Room Air Conditioner Sizes
PG&E commented that the size of through-the-wall room air
conditioners (products without louvers) would not necessarily be
constrained if allowed to project into the outdoor space. (PG&E, Public
Meeting Transcript, No. 21.4 at p. 77) In response, GE stated that
existing wall sleeves do not allow for additional growth in depth, and
through-the-wall units are typically slid into an existing wall sleeve.
(GE, Public Meeting Transcript, No. 21.4 at p. 77) To achieve
additional depth, the existing wall sleeve would need to be replaced.
AHAM also noted that while additional heat exchanger coils may increase
efficiency, placing these coils too deep within the unit will actually
decrease the heat transfer efficiency. (AHAM, No. 25 at p. 7)
DOE did not consider chassis size growths as a design option for
product class 8 (room air conditioners without reverse cycle, without
louvered sides, and capacities 8,000 to 13,999 Btu/h) in the
preliminary analysis. According to manufacturer interviews, the
majority of non-louvered products are replacement products that must
fit into existing building sleeves. Building sleeves are often built
into the existing structure and are fixed components. Replacing them
would require altering the size of the opening, which would generally
be cost-prohibitive. Due to these constraints, replacement products
must fit into existing sleeves, which clearly limit product height and
width. Increases in product depth can be limited by the design of the
sleeve, and consumers may be unwilling to accept products that extend
further into the interior. DOE also notes that any increases in product
depth would present very limited potential in improvement, because it
would not allow for the unit's heat exchangers to grow in width or
height.
For these reasons, DOE has chosen to retain the preliminary
analysis assumption for non-louvered products that size increase cannot
be used to increase efficiency.
Louvered Room Air Conditioner Sizes
DOE received the following comments from stakeholders on room air
conditioner sizes for louvered products. AHAM commented that there are
a range of product depths and weights, which may suggest that increased
depths and weights may be feasible. (AHAM, No. 25 at pp. 6-7) AHAM
noted, however, that UL requirements are an issue when considering
increases in room air conditioner depth, as the units require that
mounting brackets be designed to ensure that the room air conditioner
remains in the window. Ensuring that these brackets are used in each
installation can be a potential safety concern, in particular for
smaller units installed by consumers. Id. AHAM also noted that smaller
products (especially those in product classes 1 (room air conditioners
without reverse cycle, with louvered sides, and capacities less than
6,000 Btu/h) and 2 (room air conditioners without reverse cycle, with
louvered sides, and capacities 6,000 to 7,999 Btu/h)) would be most
negatively impacted by an increase in weight. AHAM indicated that the
Occupational Safety and Health Administration (OSHA) recommends an
additional person for lifting and installing products weighing over 50
lbs. AHAM stated that the 50-lb. limit is expected to influence
consumer acceptance of these products. Id.
NPCC recommended that DOE compare the maximum unit dimensions in
each analyzed product class to the dimensions of the highest efficiency
model available on the market. (NPCC, No. 32 at pp. 4-5) NPCC
recommended that, if these two product dimensions are similar, DOE
assume that all units can be equally as large. NPCC also recommended
that, if the market unit is smaller than the unit proposed by DOE, that
DOE determine whether a redesign of the proposed unit would eliminate
the size constraint. (Id.) DOE received no additional stakeholder
comments addressing maximum acceptable product sizes for louvered
products.
DOE has chosen to use the 50-lb. weight limitation for product
class 1 (room air conditioners without reverse cycle, without louvered
sides, and capacities less than 6,000 Btu/h). The National Institute
for Occupational Safety and Health (NIOSH) and OSHA guidance recommends
against handling loads greater than 50 lbs. for a single person. NIOSH
lists among its hazard evaluation checklist the handling of loads
exceeding 50 lbs. as a risk factor used to identify potential
problems.\37\ OSHA, in its ``Ergonomics eTool: Solutions for Electrical
Contractors,'' states that lifting loads heavier than 50 lbs will
increase the risk of injury, and recommends use of more than one person
to lift weights larger than 50 lbs.\38\ These guidelines calling for
additional personnel for product lifting represent distinct changes in
consumer utility for products that currently weigh less than 50 lbs.
This would not be true for products that already exceed this limit. DOE
notes that all but the smallest room air conditioners weigh more than
50 lbs. The baseline R-410A designs of the analyses were all determined
to have weights greater than this limit, except for product class 1
(room air conditioners without reverse cycle, with louvered sides, and
capacities less than 6,000 Btu/h). DOE adjusted the analysis for
product class 1 to limit its weight to 50 lbs., but did not make
similar adjustments for any of the other product classes. Additional
details regarding these adjustments for the product class
[[Page 22506]]
1 analysis is presented in chapter 5 of the direct final rule TSD.
---------------------------------------------------------------------------
\37\ http://www.cdc.gov/niosh/docs/2007-131/.
\38\ http://www.osha.gov/SLTC/etools/electricalcontractors/materials/heavy.html.
---------------------------------------------------------------------------
For the other product classes with louvered sides, the maximum
height and width considered is consistent with these dimensions for
max-tech available products. These are the dimensions that determine
that available size for heat exchangers; DOE's analysis of product
classes with louvered sides contains heat exchangers with the same
dimensions as max-tech available units. DOE observed that all max-tech
products for room air conditioners are produced primarily by one
manufacturer, and that the depth of these max-tech available products
was much greater in proportion to other dimensions than the depths
observed in other manufacturers' products. DOE's analysis indicated
that depths consistent with the proportions observed in these other
manufacturers' non-max-tech products are sufficient to provide max-tech
performance. In particular, DOE's analysis indicated that the smaller
depth was enough to achieve the requisite condenser airflow, enabling
appropriate heat transfer by the larger heat exchangers. Thus, DOE's
analyses did not use the larger product depths observed in the max-tech
available products. Instead, DOE used smaller product depths,
consistent with the proportions observed in other products. This
approach was adopted for product classes 3 (room air conditioners
without reverse cycle, with louvered sides, and capacities 8,000 to
13,999 Btu/h); 5A (room air conditioners without reverse cycle, with
louvered sides, and capacities 20,000 to 27,999 Btu/h); and 5B (room
air conditioners without reverse cycle, with louvered sides, and
capacities 28,000 Btu/h or more). Additional details of this analysis
are available in chapter 5 of the direct final rule TSD.
Engineering Analysis Adjustments
A summary table of the key adjustments made to the product class
structure and the engineering analysis during the final rule phase of
the rulemaking is presented in Table IV.30.
Table IV.30--Summary of Key Adjustments to the Engineering Analysis for
Room Air Conditioners
------------------------------------------------------------------------
Changes for the
Parameter Preliminary direct final rule
------------------------------------------------------------------------
Product Classes............. No changes Split of product
considered. classes 5 and 8
into two product
classes each (5A,
5B, 8A, 8B) based
on stakeholder
comments.
Compressor Efficiency....... Based on available Max-efficiency
compressor data increased to 10 EER
during preliminary for product classes
analysis. 1, 3, 8A, and 8B,
and 10.3 EER for
product classes 5A
and 5B.
50 lbs Limit................ Not considered...... Introduced a 50 lb
weight limit for
the analysis of
design options for
product class 1.
Chassis Sizes for Louvered Based on analysis of Adjusted based on
Products. HCFC-22 units. additional market
research and
teardowns of R-410A
units.
Scroll Compressors.......... Considered for Not considered,
product class 5 since they provide
analysis. no additional
improvement over
10.3 EER rotary
compressors, and
are much more
expensive. This
design option is
less cost-effective
than the design
options selected by
DOE for analysis,
so it was not
considered.
------------------------------------------------------------------------
D. Markups Analysis
The markups analysis develops appropriate markups in the
distribution chain to convert the estimates of manufacturer cost
derived in the engineering analysis to consumer prices. At each step in
the distribution channel, companies mark up the price of the product to
cover business costs and profit margin. DOE estimated the markups
associated with the main parties in the distribution channel. For
clothes dryers and room air conditioners, these are manufacturers and
retailers.
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
clothes dryers and room air conditioners.
For retailers, DOE developed separate markups for baseline products
(baseline markups) and for the incremental cost of more-efficient
products (incremental markups). Incremental markups are coefficients
that relate the change in the manufacturer sales price of higher-
efficiency models to the change in the retailer sales price.
Commenting on the preliminary TSD, AHAM filed comments that
criticized DOE's application of ``incremental'' markups to the
incremental manufacturer selling price of products more efficient than
the baseline products. (AHAM, No. 25 at p. 3) In Exhibit B accompanying
this comment, AHAM stated that (1) DOE provides no empirical evidence
to validate that retailers obtain only incremental markups on products
with greater features and costs; and (2) DOE is asserting a normative
approach without any support showing that its model reflects actual
retail practices. These comments criticized two of the key assumptions
in DOE's theoretical construct: (1) That the costs incurred by
appliance retailers can be divided into costs that vary in proportion
to the MSP (variable costs), and costs that do not vary with the MSP
(fixed costs); (2) that retailer prices vary in proportion to retailer
costs included in the balance sheets.
Regarding the first assumption, AHAM stated that DOE has offered no
evidence that the fixed/variable cost mix of a retailer has anything to
do in practice with the markups that will be earned by a retailer on
products that meet a new energy conservation standard. It added that
DOE uses an incorrect analogy to HVAC contractors as a basis for
considering the costs of a retailer, and that DOE did not analyze the
actual drivers of retail costs. The retail cost structure has
considerably different characteristics than those of an HVAC
contractor. AHAM stated that DOE has not presented any data or analysis
that would yield a fixed versus variable cost allocation applicable to
retailers. Regarding DOE's second assumption, AHAM stated that DOE's
approach depends on the presence of a relatively high level of
competition in the retail industry. AHAM presented data showing that
the four firm
[[Page 22507]]
concentration ratio (FFCR) of the sectors that sell major appliances
ranges from 42 to 65 percent, which does not support DOE's assumption
of a high level of competition in the retail industry.\39\
---------------------------------------------------------------------------
\39\ The FFCR represents the market share of the four largest
firms in the relevant sector. Generally, an FFCR of less than 40
percent indicates that a sector is not concentrated and an FFCR of
more than 70 percent indicates that a sector is highly concentrated.
---------------------------------------------------------------------------
In conclusion, AHAM viewed DOE's incremental markup approach as
lacking a credible theoretical underpinning and demonstrated
reliability and asserted that the data required for the approach are
not available. AHAM stated that DOE should return to its traditional
practice of using average markups for both the baseline products and
for the added costs of efficiency improvements. In AHAM's view, the
stability of markups in the retailing sectors leads to the reasonable
inference that such markups will continue and apply to higher-
efficiency products in the future when they become the bulk of sales
under amended standards. (AHAM, No. 34, Exhibit B, p. 12)
In response to the above comments, DOE extensively reviewed its
incremental markup approach. DOE assembled and analyzed relevant data
from other retail sectors and found that empirical evidence is lacking
with respect to appliance retailer markup practices when a product
increases in cost due to increased efficiency or other factors. DOE
understands that real-world retailer markup practices vary depending on
market conditions and on the magnitude of the change in cost of goods
sold (CGS) associated with an increase in appliance efficiency.
Given this uncertainty with respect to actual markup practices in
appliance retailing, DOE uses an approach that reflects two key
concepts. First, changes in the efficiency of the appliances sold are
not expected to increase retailers' economic profits. Thus, DOE
calculates markups/gross margins to allow cost recovery for retailers
(including changes in the cost of capital) without changes in company
profits. Second, efficiency improvements only impact some distribution
costs. DOE sets markups to cover only the variable costs expected to
change with efficiency.
Market competition is another reason why DOE believes that profit
margins would not change in a significant way. Regarding AHAM's
assertion that the degree of competition in appliance retailing is not
sufficient to support DOE's model, DOE believes that AHAM's measure of
competition is inaccurate. AHAM measured the FFCR of three retail
channels: Electronics and appliance stores, building material and
supplies dealers, and general merchandise stores. These values
represent competitiveness within each sector, but clothes dryers and
room air conditioners are sold across all three sectors, preventing
major retailers in each sector from exercising significant market
power. To properly measure the competitiveness within appliance
retailing, DOE believes that one should measure the FFCR for only the
appliance subsector within the above channels and accordingly estimated
the ``appliance sales'' FFCR as equal to the sector FFCR times the
percent of appliance sales within each sector. DOE estimated that these
sub-sector FFCRs are under the 40 percent threshold. Furthermore,
``Household Appliance Stores,'' a subsector of the electronics and
appliance stores sector that specifically represents appliance
retailers, rather than computer or other electronics stores, has an
FFCR of 17 percent, signifying an unconcentrated sector.
DOE's separation of operating expenses into fixed and variable
components to estimate an incremental markup follows from the above
concepts. In separating retailer costs, DOE did not directly use
information from the HVAC contractor industry. Instead, DOE defined
fixed expenses as including labor and occupancy expenses because these
costs are not likely to increase as a result of a rise in CGS due to
amended efficiency standards. All other expenses, as well as the net
profit, are assumed to vary in proportion to the change in CGS. DOE's
method results in an outcome in which retailers are assumed to cover
their costs while maintaining their profit margins when the CGS of
appliances changes. DOE seeks additional information from interested
parties to help refine its allocation approach.
Regarding AHAM's observation about the relative stability of
average markups for the major retail channels that sell home
appliances, DOE believes that the usefulness of this information for
estimating markups on specific product lines is limited. The markups
implied by gross margin at the level of major retail channels \40\ are
averaged over multiple product lines and many different store types.
The empirical data at this level do not provide useful guidance for
estimating what happens to the markup on specific products when their
costs change. Applying the same markup as CGS increases, as AHAM
recommends, would mean that the increase in CGS associated with higher-
efficiency products would translate into higher retail gross margins
for that product line. Because the majority of operating expenses would
not be affected by the increase in CGS, the result would be an increase
in net profit as a share of sales. While such an outcome could occur in
the short run, DOE believes that competitive forces in the market would
tend to decrease the profit margin over time.
---------------------------------------------------------------------------
\40\ The channels for which AHAM provided gross margin data for
1993-2007 are electronics and appliance stores, general merchandise
stores, and building material and supplies dealers. According to
AHAM, these channels accounted for 43 percent, 31 percent and 17
percent of major appliance sales in 2007, respectively.
---------------------------------------------------------------------------
Based on the above considerations, DOE has decided to continue to
apply an incremental markup to the incremental MSP of products with
higher efficiency than the baseline products. As part of its review,
DOE developed a new breakdown into fixed and variable components using
the latest expense data provided by the U.S. Census for Electronics and
Appliance Stores, which cover 2002. The newly-derived incremental
markup, which would be applied to an incremental change in CGS, is
1.17, which is slightly higher than the value of 1.15 that DOE used in
the preliminary analysis. Chapter 6 of the direct final rule TSD
provides a description of both the method and its current application
using the aforementioned data.
E. Energy Use Analysis
DOE's analysis of the energy use of clothes dryers and room air
conditioners estimated the energy use of these products in the field,
that is, as they are actually used by consumers. The energy use
analysis provided the basis for other analyses DOE performed,
particularly assessments of the energy savings and the savings in
consumer operating costs that could result from DOE's adoption of
amended standards. In contrast to the DOE test procedure, which
provides a measure of the energy use, energy efficiency or annual
operating cost of a covered product during a representative average use
cycle or period of use, the energy use analysis seeks to capture the
range of operating conditions for clothes dryers and room air
conditioners in U.S. homes.
To determine the field energy use of products that would meet
possible amended standard levels, DOE used data from the EIA's 2005
RECS, which was the most recent such survey
[[Page 22508]]
available at the time of DOE's analysis.\41\ 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. RECS provides sufficient information to establish the type
(product class) of clothes dryer or room air conditioner used in each
household. As a result, DOE was able to develop household samples for
each of the considered product classes. DOE developed a separate
building sample for commercial-sector use of room air conditioners and
accounted for the distinct features of room air conditioner utilization
in commercial buildings.
---------------------------------------------------------------------------
\41\ For information on RECS, see http://www.eia.doe.gov/emeu/recs/.
---------------------------------------------------------------------------
A more detailed description of DOE's energy use analysis for
clothes dryers and room air conditioners is contained in chapter 7 of
the direct final rule TSD.
1. Clothes Dryers
For clothes dryers with a specific efficiency, the annual energy
consumption depends on the annual number of cycles. In the preliminary
analysis, DOE used a distribution of values with an average of 283
cycles/year based on RECS data. Whirlpool stated that a range of 278-
300 annual dryer cycles is reasonable, based on P&G data which indicate
278 annual dryer cycles, and internal data which indicate 288 annual
dryer cycles. (Whirlpool, No. 22 at p. 3) AHAM stated that P&G data
indicate 278 annual dryer loads, which verifies the RECS data. (AHAM,
No. 25 at p. 9) DOE acknowledges the above comments and has retained
the approach used in the preliminary analysis, which resulted in an
average of 283 cycles/year, for its final rule analysis. This average
value matches the number of cycles/yr in the most current DOE clothes
dryers test procedure and is within the range of the values submitted
by the commenters.
In the preliminary analysis, DOE estimated that clothes dryers take
on average 60 minutes to complete a cycle. EEI stated that DOE should
consider manufacturer data, consumer reports, or data from other third
parties to determine typical cycle time for clothes dryers. (EEI,
Public Meeting Transcript, No. 21.4 at pp. 106-107) ALS stated that
cycle time should be derived based on RMC, assuming that a sensor will
be included in all future models. (ALS, Public Meeting Transcript, No.
21.4 at pp. 110-111) NRDC stated that there is a 20-minute variation in
cycle time, based on whether the sensors work accurately. (NRDC, Public
Meeting Transcript, No. 21.4 at p. 106) The NRDC/ECOS report stated
that a typical drying cycle is much different than the constant drying
cycle duration fixed at 60 minutes that is used in the LCC. (NRDC, No.
30 at p. 11)
DOE acknowledges that there is variation in cycle time and that it
is dependent on the RMC and the sensors' accuracy. In the final rule
analysis, DOE revised the cycle time to match the most current DOE test
procedure average value of 30 minutes. Overall, the cycle time has very
little impact on the calculation of energy use because it is only used
for the determination of standby energy use.
In the preliminary analysis, DOE assigned an RMC value to each
sample unit using a distribution of clothes washer RMC values from the
CEC directory \42\ ranging from 30 percent to 61 percent, with an
average of 46 percent. In response, AHAM suggested DOE use a RMC value
of 47 percent because it is representative of products likely to be
sold in the 2015 timeframe. (AHAM, No. 25 at pp. 9-10) Whirlpool stated
that they support the use of AHAM data, which indicate a shipment-
weighted average RMC of 47 percent. (Whirlpool, No. 22 at p. 4)
---------------------------------------------------------------------------
\42\ California Energy Commission. Appliance Efficiency
Database: Clothes Washers. July 2010. URL: http://www.appliances.energy.ca.gov/.
---------------------------------------------------------------------------
In its analysis for the final rule, DOE incorporated new
information about the RMC value developed during DOE's recent clothes
dryers test procedure rulemaking. In response to comments on the
clothes dryers test procedure NOPR, DOE issued an SNOPR in which it
proposed a revision of the average RMC value. FR 75 37594 (June 29,
2010). The revision addresses the fact that the RMC values listed in
the CEC directory are multiplied by a correction factor and therefore
do not represent the actual cloth moisture content at the end of the
clothes washer spin cycle. In keeping with this revision, for the final
rule analysis DOE used a distribution of clothes washer RMC values from
the CEC directory multiplied by a correction factor to match the
average RMC value of 57.5 percent assumed in the proposed test
procedure.
In the preliminary analysis, DOE assigned load weights to each
sample household by developing a distribution based on the CEC
directory. The average load weights for standard-size units ranged from
5.1 lbs. to 10 lbs., with a mean value of 8.1 lbs.
AHAM stated that the shipment-weighted residential clothes washer
drum volume for standard size products in 2008 was 3.24 ft\3\, which
corresponds to an average load size of 8.15 lbs., which is consistent
with the value proposed by DOE, using the alternative CEC approach.
AHAM also stated that the load size should be 4.70 lbs. for compact
clothes dryers, based on the shipment-weighted drum volume of 1.5
ft\3\. (AHAM, No. 25 at p. 10) BSH stated that load size should
increase linearly with drum size. (BSH, No. 23 at p. 5) The NRDC/ECOS
Report suggested that the values used in the preliminary analysis may
be too low. It stated that today's dryers can comfortably accommodate
loads between 10 and 17 lbs., and that there are more dryer models on
the market today between 7 and 8 ft\3\ than there are models smaller
than 7 ft\3\. (NRDC, No. 30 at p. 35)
In its analysis for the final rule, DOE used the average load size
value of 8.45 lbs. from the TP Final Rule. To represent a range of load
size values in the field, DOE used a distribution of load sizes ranging
from 3.80 to 13.7 lbs., with a mean value of 8.45 lbs. Chapter 7 of the
TSD presents the details of the DOE's load size analysis.
DOE received several comments recommending that it use the same
values for number of cycles, RMC, and load weights in both the
engineering analysis and the LCC and PBP analysis, and that it revise
the test procedure to reflect the values used in its analysis. (AHAM,
No. 25 at pp. 9-10; Whirlpool, No. 22 at pp. 3-4) The California
Utilities stated that DOE should consider all changes in the test
procedure in additional analysis of clothes dryer energy use.
(California Utilities, No. 31 at p. 13)
For its LCC and payback period analysis DOE developed distributions
of values for number of cycles, RMC, and load weights that reflect its
best estimate of the range of practices found in U.S. homes. In the
engineering analysis, DOE uses the test procedure to evaluate the
relative improvement in energy efficiency provided by different design
options. As discussed in section III.A, DOE has modified the clothes
dryer test procedure to reflect current field conditions, and these
changes are also incorporated in the analysis for the final rule.
In the preliminary analysis, DOE estimated an average energy use of
519 kWh per year for the baseline vented electric standard clothes
dryer. ACEEE stated that DOE should revisit the approach to determining
annual energy consumption, and it noted that the baseline average unit
energy consumption (UEC) of 519 kWh/year in DOE's analysis is much
lower than the values found in field studies and
[[Page 22509]]
metered evaluations of clothes dryer models. (ACEEE, No. 24 at p. 2)
The California Utilities stated that a Florida Solar Energy Center
survey found that field-average UEC for electric standard clothes
dryers was around 900 kWh/year, the 2001 RECS lists 1079 kWh/year, and
a 1999 Progress Energy Florida study shows 885 kWh/year. They noted
that these numbers are significantly higher than DOE's average UEC.
(California Utilities, No. 31 at p. 12)
As described above, DOE made several changes to its approach for
estimating clothes dryer energy use for the final rule (increased
initial RMC value and clothes dryer load size). As a result, the
average annual energy use for the baseline vented electric clothes
dryer derived for the final rule is 718 kWh. This value is lower than
those found in the surveys mentioned above primarily because it
reflects more recent clothes washer technology and clothes dryer
utilization than the surveys discussed in the comment. In particular,
this value reflects the lower initial RMC associated with newer clothes
washers and the lower number of clothes dryer cycles per year seen in
recent P&G data and 2005 RECS data. The value from 2001 RECS was
derived using conditional demand analysis that utilized assumptions
based on the previous clothes dryer test procedure. The Florida surveys
date from 1999, when initial RMC and annual number of dryer cycles were
higher significantly higher than the values used in the final rule
analysis. In addition, the sample size of these surveys is small and
not necessarily representative of the nation.
In the preliminary analysis, DOE considered the impact of clothes
dryer operation on home heating and cooling loads. A clothes dryer
releases heat to the surrounding environment. If the dryer is located
indoors, its use will tend to slightly reduce the heating load during
the heating season and slightly increase the cooling load during the
cooling season. DOE believed that the effect is the same for all of the
considered efficiency levels because the amount of air passing through
the clothes dryer does not vary, and thus it did not include this
factor in its preliminary analysis.
ACEEE, NRDC, NEEP and NPCC and the California Utilities stated that
DOE should consider the impact on space conditioning loads from clothes
dryer use. (ACEEE, No. 24 at p. 2; NRDC, No. 26 at p. 2; NEEP, No. 27
at p. 3; NPCC, No. 32 at p. 3; California Utilities, No. 31 at p. 9)
The California Utilities stated that the HVAC load created by dryers
can amount to as much as 3 kWh/cycle. (California Utilities, No. 31 at
p. 9)
As discussed in section III.A.1, DOE believes that accounting for
the effects of clothes dryers on HVAC energy use in a DOE test
procedure is inconsistent with the EPCA requirement that a test
procedure measure the energy efficiency, energy use, or estimated
annual operating cost of a covered product. As a result, DOE did not
consider the impact of standards on HVAC energy use, is permissible
under 42 U.S.C. 6295(o) in developing the energy conservation standards
established in today's direct final rule.
To calculate this impact, DOE first estimated whether the clothes
dryer in a RECS sample home is located in conditioned space (referred
to as indoors) or in unconditioned space (such as garages,
unconditioned basements, outdoor utility closets, or attics). Based on
the 2005 RECS and the 2009 American Housing Survey (AHS), DOE assumed
that 50 percent of vented standard electric and gas dryers are located
indoors, while 100 percent of compact and ventless clothes dryers are
located indoors. For these installations, DOE utilized the results from
a European Union study about the impacts of clothes dryers on home
heating and cooling loads to determine a the appropriate factor to
apply to the total clothes dryer energy use.\43\ This study reported
that for vented dryers there is a factor of negative 3 to 9 percent
(average 6 percent) and for ventless dryers there is a factor of
positive 7 to 15 percent (average 11 percent). For the reasons stated
earlier, DOE assumed that the effect is the same for all considered
efficiency levels.
---------------------------------------------------------------------------
\43\ R[uuml]denauer, Ina and Gensch, Carl-Otto. Energy demand of
tumble dryers with respect to differences in technology and ambient
conditions. Report commissioned by European Committee of Domestic
Equipment Manufacturers (CECED). January 13, 2004.
---------------------------------------------------------------------------
2. Room Air Conditioners
For room air conditioners with a specific size and EER, the annual
energy use depends on the annual hours of operation. In the preliminary
analysis, for units in the residential sector, DOE calculated the
number of operating hours for each room air conditioner in the
residential sample using the reported energy use for room air
conditioning in the 2005 RECS, along with estimates of the EER of the
room air conditioner(s) in each sample home. DOE based the latter on
the reported age of the unit and historical data on shipment-weighted
average EER.
For units used in the commercial sector, DOE calculated the number
of operating hours for each room air conditioner in the commercial
sample by establishing a relationship between cooling degree-days and
operating hours for a number of building types and building schedule
combinations. DOE assumed that a room air conditioner is operated when
the outdoor air conditions are above the comfort zone described by
ANSI/ASHRAE Standard 55-2004 Thermal Environmental Conditions for Human
Occupancy. For a given location, the number of annual hours above the
ASHRAE Standard 55 comfort zone varies by building operating schedule,
which refers to the time that a building is in operation.
AHAM stated that it opposes the use of RECS and CBECS data to
estimate energy consumption of room air conditioners in the LCC and
payback period calculations, and it requested confirmation that DOE's
estimates for both residential and commercial room air conditioner use
are realistic. (AHAM, No. 25 at pp. 8-9) AHAM questioned the validity
of DOE's analysis for residential use of room air conditioners. AHAM
stated that RECS data do not provide information on room air
conditioner capacity or a direct measurement of room air conditioner
energy use. (AHAM, No. 25 at p. 2) AHAM also questioned DOE's estimate
of the capacity of the unit (or units) based on the reported total
cooled area, as well as the approach DOE used to distribute the
capacity sizes among the various product classes evaluated. (AHAM, No.
25 at pp. 8-9)
Regarding the use of RECS data to estimate the capacity of the unit
(or units), DOE believes that the reported total cooled area is an
important indicator of the capacity of the unit (or units). The reason
is that for room air conditioners this is the primary sizing criteria
used by manufacturers, contractors, and programs such as ENERGY STAR.
Therefore, DOE continued to use reported total cooled area to estimate
the room air conditioner capacity. To improve the accuracy of the
estimate, for the final rule DOE also considered additional factors
that are likely to influence the capacity selection: The number of
occupants, local weather, and building characteristics such as envelope
insulation and shading. In addition, for the final rule analysis DOE
revised its criteria for assigning room air conditioner units for the
RECS household sample associated with each product class. DOE took into
consideration AHAM's suggestion and did not assign smaller-size units
in the sample for the largest product class.
In addition to the above changes, DOE applied an adjustment to the
values for annual operating hours derived from the
[[Page 22510]]
2005 RECS to account for the warmer-than-average weather in 2005. (DOE
used long-term national average cooling degree-day values as a basis
for the adjustment). DOE also adjusted the values to account for the
fact that the stock of homes in 2014 is likely to have slightly more
floor area and have better insulation than homes in 2005. DOE based the
adjustment on projections in AEO2010. These modifications are described
in chapter 7 of the direct final rule TSD.
Regarding DOE's use of CBECS for estimating the commercial use of
room air conditioners, AHAM stated that (1) DOE made substantial
assumptions regarding the number of room air conditioners per
commercial application and the room air conditioner capacities employed
at these locations; and (2) it appears that DOE, to obtain enough data
for statistical analysis, overlapped the units in each product class.
(That is, units calculated as having > 20,000 Btu/hr capacity have also
been included in the analysis of the < 6,000 Btu/hr and 8,000-13,999
Btu/hr product classes.) It stated that the latter approach is
misleading and unacceptable. (AHAM, No. 25 at p. 3)
DOE believes that the assumptions made in the preliminary analysis
are consistent with the CBECS and AHAM shipments data that are
available for evaluating commercial use of room air conditioners.
Therefore, DOE retained the approach used in the preliminary analysis
for the final rule analysis. Regarding the overlapping of units among
product classes, DOE believes that its approach is reasonable given
that there is no information available on the number of air conditioner
units in a building, so a building could have one or more units in any
of the considered product classes.
AHAM stated that DOE's approach for estimating room air conditioner
energy use is not consistent with the law, which requires that the test
procedure be used to determine energy use and energy savings. (AHAM,
No. 25 at p. 2) AHAM elaborated on this statement and made arguments
that can be summarized as follows (AHAM, No. 25 at pp. 7-8):
1. While use of RECS data has proven useful over the years to
provide general guidance to DOE on residential energy use, this is the
first time that DOE proposes to use it to estimate actual energy
consumption in the field and to justify a new energy efficiency
standard;
2. It is inconsistent for DOE to use RECS data and statistical
regression techniques to estimate energy use for determining the life
cycle cost and payback period used to justify an appliance standard,
while it uses the applicable test procedure as the sole source of
energy use data for purposes of determining compliance with the
standard.
3. Reliance on the test procedure for the energy data used in LCC
and payback period calculations to set new appliance standards is the
tried and true method that has a clear statutory basis.
4. The law on labeling prohibits manufacturers, distributors, and
retailers from making energy use representations about their products
based on anything other than the results of a test procedure, so it is
irrational if DOE's analysis makes energy claims that sellers cannot
make.
AHAM also stated that DOE should use 750 annual operating hours
(the value in the current test procedure) to maintain consistency while
additional surveys or testing are completed to determine a
representative number of annual operating hours. (AHAM, No. 25 at p. 9)
In response, DOE notes that EPCA specifies particular uses of the
applicable test procedure, such as when DOE ascertains whether the
consumer costs associated with the purchase of a product that complies
with the proposed standard level is less than three times the value of
the energy savings the consumer will receive during the first year of
ownership. (42 U.S.C. 6295(o)(2)(B)(iii)) This calculation is separate
from the payback periods calculated in the LCC and payback period
analysis. The latter analysis helps DOE to evaluate two of the factors
that EPCA directs DOE to consider in determining whether an energy
conservation standard for a particular covered product is economically
justified. The first of these is the economic impact of potential
standards on the manufacturers and the consumers of the covered
products. (42 U.S.C. 6295(o)(2)(B)(i)(I)) The second factor is the
savings in operating costs throughout the estimated average life of the
covered product in the type (or class) compared to any increase in the
price of, or in the initial charges for, or maintenance expenses of,
the covered products which are likely to result from the imposition of
the standard. (42 U.S.C. 6295(o)(2)(B)(i)(II))
To evaluate economic impacts on consumers and the savings in
operating costs as accurately as possible, DOE needs to determine the
energy savings that are likely to result from a given standard. Such a
determination requires knowledge of the range of actual use of covered
products by consumers. Because it is a recent nationally-representative
survey of U.S. households, RECS provides information that helps DOE to
determine such use. In addition, DOE uses RECS data because it is
consistent with the guidance contained in 10 CFR part 430, subpart C,
appendix A--``Procedures, Interpretations and Policies for
Consideration of New or Revised Energy Conservation Standards for
Consumer Products.'' Specifically, section 11 of appendix A lists
variation in consumer impacts as one of the principles for the analysis
of impacts on consumers. Because RECS provides considerable information
about each household in the sample, it allows DOE to evaluate factors
that contribute to variation in the energy use of covered products. In
turn, this allows DOE to estimate the fraction of consumers that will
benefit from standards at various efficiency levels.
Consistent with the EPCA and DOE's regulatory guidance, DOE has
used RECS data in a variety of ways over the past decade. In most
cases, DOE has used the relevant DOE test procedure or a similar
procedure as the basis for the energy use calculation, and used RECS
data to provide a range for key input variables concerning the
operation of covered products. Examples include the standards
rulemaking for water heaters concluded in 2001 (66 FR 4474 (Jan. 17,
2001)), and the recently-concluded rulemaking that amended standards
for water heaters. 75 FR 20112, 20112-20236 (Apr. 16, 2010). In both
rulemakings, DOE used data for each of the households in the RECS
sample to estimate the amount of household daily hot water use, and to
specify certain factors that affect water heater operating conditions.
Additionally, DOE's 2001 final rule for central air conditioners and
heat pumps relied on annual energy use based on the annual end-use
energy consumption values in RECS. 66 FR 7070, 7170-7200 (Jan. 22,
2001). DOE determined that basing the energy use on RECS household data
provided an accurate measure of the savings possible from more-
efficient equipment, and accounted for variability due to climatic
conditions and consumer behavior.
Regarding AHAM's suggestion that DOE should use the test procedure
only to estimate energy use for the purposes of its analysis of
standards, DOE notes that test procedures must be designed to produce
test results which measure energy efficiency, energy use or estimated
annual operating cost of a covered product during a representative
average use cycle or period of use. (42 U.S.C. 6293(b)(3)) For the
purposes of evaluating two of the factors that EPCA directs DOE to
consider in determining whether an energy conservation
[[Page 22511]]
standard for covered products is economically justified, determining
energy use based on only a representative average use cycle or period
of use does not provide an accurate measure of the range of possible
energy savings. Thus, doing so would not be consistent with EPCA and
the above-cited guidance of appendix A to subpart C of part 430.
In addition, EPCA requires that manufacturers and DOE use the DOE
test procedures prescribed pursuant to 42 U.S.C. 6293 in determining
compliance. Determining compliance requires a metric that provides
repeatable and consistent results for appliances in a given product
class, a purpose best served by the test procedure. Similarly, energy
labeling of appliances is designed to provide consumers with
information that allows comparison of the technical performance of
different products with respect to energy efficiency. Measurement of
such performance is best conducted with a standard metric such as the
applicable test procedure. The LCC and PBP analysis, in contrast, seeks
to estimate the impact of alternative standard levels on consumers.
This requires an evaluation of variation in energy use in the field,
which is provided by analysis of the RECS data.
DOE included a ``rebound effect'' in its analysis of room air
conditioner energy use. A rebound effect could occur when a piece of
equipment that is more efficient is used more intensively, so that the
expected energy savings from the efficiency improvement may not fully
materialize. A rebound effect of 10 percent implies that 90 percent of
the expected energy savings from more efficient equipment will actually
occur. Based on the data available,\44\ DOE incorporated a rebound
effect of 15 percent for room air conditioners in the analysis for the
final rule.
---------------------------------------------------------------------------
\44\ S. Sorrell, J. Dimitropoulos, and M. Sommerville Empirical
estimates of the direct rebound effect: A review Energy Policy, 2009
37, pp. 1356-71.
---------------------------------------------------------------------------
F. Life-Cycle Cost and Payback Period Analyses
DOE conducts LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
clothes dryers and room air conditioners. The LCC is the total consumer
expense over the life of a product, consisting of purchase and
installation costs plus operating costs (expenses for energy use,
maintenance, and repair). To compute the operating costs, DOE discounts
future operating costs to the time of purchase and sums them over the
lifetime of the product. The PBP is the estimated amount of time (in
years) it takes consumers to recover the increased purchase cost
(including installation) of a more efficient product through lower
operating costs. DOE calculates the PBP by dividing the change in
purchase cost (normally higher) due to a more stringent standard by the
change in average annual operating cost (normally lower) that results
from the standard.
For any given efficiency level, DOE measures the PBP and the change
in LCC relative to an estimate of the base-case appliance efficiency
levels. The base-case estimate reflects the market in the absence of
new or amended energy conservation standards, including the market for
products that exceed the current energy conservation standards.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. For the preliminary analysis and the analysis for
today's rule, DOE developed household samples from the 2005 RECS. For
each sample household, DOE determined the energy consumption for the
clothes dryer or room air conditioner and the appropriate electricity
or natural gas price. By developing a representative sample of
households, the analysis captured the variability in energy consumption
and energy prices associated with the use of residential clothes dryers
and room air conditioners. DOE developed a separate building sample for
commercial-sector use of room air conditioners and accounted for the
distinct features of room air conditioner utilization in commercial
buildings.
Inputs to the calculation of total installed cost include the cost
of the product--which includes manufacturer costs, manufacturer
markups, retailer and distributor markups, and sales taxes--and
installation costs. Inputs to the calculation of operating expenses
include annual energy consumption, energy prices and price projections,
repair and maintenance costs, product lifetimes, discount rates, and
the year that compliance with standards is required. DOE created
distributions of values for some inputs, with probabilities attached to
each value, to account for their uncertainty and variability. DOE used
probability distributions to characterize product lifetime, discount
rates, and sales taxes.
The computer model DOE uses to calculate the LCC and PBP, which
incorporates Crystal Ball (a commercially available software program)
relies on a Monte Carlo simulation to incorporate uncertainty and
variability into the analysis. The Monte Carlo simulations randomly
sample input values from the probability distributions and clothes
dryer and room air conditioner user samples. The model calculated the
LCC and PBP for products at each efficiency level for 10,000 housing
units per simulation run. Details of the spreadsheet model, and of all
the inputs to the LCC and PBP analyses, are contained in chapter 8 of
the direct final rule TSD and its appendices.
Table IV.31 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The table provides the data and
approach DOE used for the preliminary TSD, as well as the changes made
for today's direct final rule. The subsections that follow discuss the
initial inputs and methods and the changes DOE made for the final rule.
Table IV.31--Summary of Inputs and Methods in the LCC and PBP Analysis *
----------------------------------------------------------------------------------------------------------------
Inputs Preliminary TSD Changes for the final rule
----------------------------------------------------------------------------------------------------------------
Installed Costs
----------------------------------------------------------------------------------------------------------------
Product Cost.......................... Derived by multiplying manufacturer Used a product-specific price/cost
cost by manufacturer and retailer adjustment factor based on
markups and sales tax, as experience curves that forecasts
appropriate. changes in price relative to
inflation in the over-all economy.
[[Page 22512]]
Installation Costs.................... Based on RS Means, assumed no Based on RS Means; included
change with efficiency level. additional installation cost for
heat pump dryers and higher-
efficiency room air conditioners
due to their larger dimensions and
weight.
----------------------------------------------------------------------------------------------------------------
Operating Costs
----------------------------------------------------------------------------------------------------------------
Annual Energy Use..................... Clothes Dryers: Used DOE test Clothes Dryers: Same approach, but
procedure with data on cycles from RMC and load weight revised to
the 2005 RECS, market data on RMC, account for proposed changes in
and load weights from test DOE test procedure.
procedure.
Room Air Conditioners: Based on Room Air Conditioners: No change.
calculation of operating hours for
each 2005 RECS sample unit.
Energy Prices......................... Electricity (clothes dryers): Based Electricity (clothes dryers):
on EIA's Form 861 data for 2007. Updated using Form 861 data for
2008.
Electricity (room air Electricity (room air
conditioners): Used utility tariff conditioners): No change.
data to develop monthly marginal
electricity prices for each sample
household.
Natural gas: Based on EIA's Natural Natural gas: Updated using Natural
Gas Monthly data for 2007. Gas Monthly data for 2009.
Variability: Regional energy prices Variability: No change.
determined for 13 regions for ...................................
clothes dryers; tariffs determined ...................................
for sample households for room air
conditioners.
Energy Price Trends................... Forecasted using AEO2009 price Forecasts updated using AEO2010.
forecasts.
Repair and Maintenance Costs.......... Not included....................... Derived annualized maintenance and
repair frequencies and costs per
service call based on RS Means and
equipment cost.
----------------------------------------------------------------------------------------------------------------
Present Value of Operating Cost Savings
----------------------------------------------------------------------------------------------------------------
Product Lifetime...................... Estimated using survey results from No change.
RECS (1990, 1993, 1997, 2001,
2005) and the U.S. Census American
Housing Survey (2005, 2007), along
with historic data on appliance
shipments.
Variability: Characterized using ...................................
Weibull probability distributions.
Discount Rates........................ Identified all possible debt or No change.
asset classes that might be used
to purchase the considered
appliances, or might be affected
indirectly. Primary data source
was the Federal Reserve Board's
SCF ** for 1989, 1992, 1995, 1998,
2001, 2004 and 2007.
Compliance Date....................... 2014............................... No change.
----------------------------------------------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided in the sections following the table or in
chapter 8 of the direct final rule TSD.
** Survey of Consumer Finances.
As discussed in section IV.E, DOE takes into account the rebound
effect associated with more efficient room air conditioners. The take-
back in energy consumption associated with the rebound effect provides
consumers with increased value (for example, a cooler or warmer indoor
environment). The net impact on consumers is thus the sum of the change
in the cost of owning the room air conditioner (that is, life-cycle
cost) and the increased value for the more comfortable indoor
environment. The consumer effectively pays for the increased value of a
more comfortable environment in his or her utility bill. Because the
monetary cost of this added value is equivalent to the value of the
foregone energy savings, the economic impacts on consumers measured in
the LCC analysis are the same regardless of the rebound effect.
1. Product Cost
To calculate consumer product costs, DOE multiplied the
manufacturer selling prices developed in the engineering analysis by
the supply-chain markups described above (along with sales taxes). DOE
used different markups for baseline products and higher-efficiency
products because, as discussed previously, DOE applies an incremental
markup to the MSP increase associated with higher efficiency products.
On February 22, 2011, DOE published a Notice of Data Availability
(NODA, 76 FR 9696) stating that DOE may consider improving regulatory
analysis by addressing equipment price trends. Consistent with the
NODA, DOE examined historical producer price indices (PPI) for room air
conditioners and household laundry equipment and found a consistent,
long-term declining real price trend for both products. Consistent with
the method proposed in the NODA, DOE used experience curve fits to
forecast a price scaling index to forecast product costs into the
future for this rulemaking. DOE also considered the public comments
that were received in response to the NODA and refined
[[Page 22513]]
the evaluation of its experience curve trend forecasting estimates.
Many commenters were supportive of DOE moving from an assumption-based
equipment price trend forecasting method to a data-driven methodology
for forecasting price trends. Other commenters were skeptical that DOE
could accurately forecast price trends given the many variables and
factors that can complicate both the estimation and the interpretation
of the numerical price trend results and the relationship between price
and cost. DOE evaluated these concerns and determined that retaining
the assumption-based approach of a constant real price trend was not
consistent with the historical data for the products covered in this
rule though this scenario does represent a reasonable upper bound on
the future equipment price trend. DOE also performed an initial
evaluation of the possibility of other factors complicating the
estimation of the long-term price trend, and developed a range of
potential price trend values that were consistent with the available
data and justified by the amount of data available to DOE. DOE
recognizes that its price trend forecasting methods are likely to be
modified as more data and information becomes available to enhance the
statistical certainty of the trend estimate and the completeness of the
model. Additional data should enable an improved evaluation of the
potential impacts of more of the factors that can influence equipment
price trends over time.
To evaluate the impact of the uncertainty of the price trend
estimates, DOE performed price trend sensitivity calculations in the
national impact analysis to examine the dependence of the analysis
results--specifically annualized net national benefits--on different
analytical assumptions. DOE also included a zero real price trend
assumption as a sensitivity scenario representing an upper bound on the
forecast price trend DOE found that for the selected standard levels
the benefits outweighed the burdens under all scenarios.
A more detailed discussion of price trend modeling and calculations
is provided in Appendix 8-J of the TSD.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the equipment. For the
preliminary analysis, DOE derived baseline installation costs for
clothes dryers and room air conditioners from data in the RS Means
2008. DOE found no evidence that installation costs would be impacted
with increased efficiency levels. Commenting on DOE's assumption,
Whirlpool stated that heat pump dryers would be considerably heavier
than conventional dryers, leading to increased installation costs.
(Whirlpool, No. 22 at p. 4) AHAM made a similar comment. (AHAM, Public
Meeting Transcript, No. 21.4 at pp. 89-90)
For the final rule analysis, DOE included an additional
installation cost for heat pump dryers due to their larger dimensions
and weight. DOE added 0.5 hour of additional labor (or about $20) to
the installation cost. For room air conditioners, DOE also added
additional labor hours for higher efficiency equipment with significant
larger dimensions and/or weight based on RS Means labor hour estimates
for room air conditioners with different capacities.
3. Annual Energy Consumption
For each sampled household, DOE determined the energy consumption
for a clothes dryer or room air conditioner at different efficiency
levels using the approach described above in section IV.E.
4. Energy Prices
For clothes dryers, DOE derived average annual energy 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 excluding the data for the large
state.
DOE calculated average residential electricity prices for each of
the 13 geographic areas using data from EIA's Form EIA-861 Database
(based on ``Annual Electric Power Industry Report'').\45\ DOE
calculated an average annual regional residential price by: (1)
Estimating an average residential price for each utility (by dividing
the residential revenues by residential sales); and (2) weighting each
utility by the number of residential consumers it served in that
region. For the preliminary TSD, DOE used the data for 2007. The final
rule analysis updated the data for 2008, the most recent data
available.
---------------------------------------------------------------------------
\45\ Available at: http://www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------
DOE calculated average residential natural gas prices for each of
the 13 geographic areas using data from EIA's ``Natural Gas Monthly.''
\46\ DOE calculated average annual regional residential prices by: (1)
Estimating an average residential price for each state; and (2)
weighting each state by the number of residential consumers. For the
preliminary TSD, DOE used EIA data for 2007. The final rule analysis
updated the data for 2009, the most recent data available.
---------------------------------------------------------------------------
\46\ Available at: http://www.eia.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.html.
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For the preliminary analysis, for room air conditioners DOE used
utility tariff data to develop monthly marginal electricity prices for
each sample household used in the LCC analysis. The marginal prices
were calculated by taking account of the difference between the
household's electricity expenditures for the base case electricity use
and for a candidate standard level, in combination with the associated
change in energy use expected as a result of a particular standard
level. The price used was based on the default (non-TOU) tariffs,
because TOU tariffs are optional and very few customers opt for such
rates. DOE then applied the monthly prices to the estimated electricity
use by the room air conditioner in each corresponding month. This
approach applies summer rates to the estimated consumption in summer
months. DOE also used tariff data to develop marginal electricity
prices for each commercial building in the LCC sample. DOE used the
same approach for today's final rule.
5. Energy Price Projections
To estimate energy prices in future years for the preliminary TSD,
DOE multiplied the above average regional energy prices by the forecast
of annual average residential energy price changes in the Reference
Case from AEO2009.\47\ AEO2009 forecasted prices through 2030. For
today's proposed rule, DOE updated its energy price forecasts using
AEO2010, which has an end year of 2035.\48\ To estimate the price
trends after 2035, DOE used the average annual rate of change in prices
from 2020 to 2035.
---------------------------------------------------------------------------
\47\ The spreadsheet tool that DOE used to conduct the LCC and
PBP analyses allows users to select price forecasts from either
AEO's High Economic Growth or Low Economic Growth Cases. Users can
thereby estimate the sensitivity of the LCC and PBP results to
different energy price forecasts.
\48\ U.S. Energy Information Administration. Annual Energy
Outlook 2010. Washington, DC. April 2010.
---------------------------------------------------------------------------
6. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing components
that have failed in the appliance, whereas maintenance costs are
associated with maintaining the operation of the equipment. In its
preliminary analysis, DOE did not have information suggesting that
these costs would change with higher efficiency levels.
[[Page 22514]]
Commenting on DOE's approach, AHAM stated that repair costs are
typically estimated using a 1:1 ratio with part costs, so if component
costs increase by 10 percent, repair costs are expected to also
increase by 10 percent. AHAM stated that DOE should incorporate these
higher repair costs into its analysis of clothes dryers and room air
conditioners to provide a more representative evaluation of total
consumer cost for higher efficiency products. (AHAM, No. 25 at p. 12)
For clothes dryers, Whirlpool stated that the repair and
maintenance costs generally do not vary by efficiency, but for heat
pump dryers, this assumption is not valid. Whirlpool stated that new
technologies such as these would cost two to three times more to repair
than conventional dryers due to their complex nature and the cost of
disconnecting and reconnecting water sources. (Whirlpool, No. 22 at p.
4) AHAM stated that maintenance costs generally will not vary by
efficiency level, but a heat pump clothes dryer is expected to have
higher maintenance costs because of the heat pump and the addition of
refrigerant. AHAM stated that maintenance for these units would be
similar to that for standard air conditioning equipment or heat pump
water heaters. (AHAM, No. 25 at p. 11)
For the final rule analysis, DOE modified the maintenance and
repair costs for both clothes dryers and room air conditioners. For
clothes dryers, DOE derived annualized maintenance and repair
frequencies based on Consumer Reports data on repair and maintenance
issues for clothes dryers during the first 4 years of ownership. DOE
estimated that on average 1.5 percent of electric and 1.75 percent of
gas clothes dryers are maintained or repaired each year. Based on RS
Means Facilities Maintenance & Repair 2010 Cost Data,\49\ DOE also
estimated that an average service call and any necessary repair or
maintenance takes about 2.5 hours. DOE further estimated that the
average material cost is equal to one-half of the equipment cost. The
values for cost per service call were then annualized by multiplying by
the frequencies and dividing by the average equipment lifetime of 16
years.
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\49\ Available at: http://rsmeans.reedconstructiondata.com/60300.aspx.
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For room air conditioners, based on data on repair frequencies for
central air conditioners, DOE assumed that repair frequencies are low
and increase for the higher-capacity units due to their more expensive
equipment cost. DOE assumed that 1 percent of small sized units (below
6,000 Btu/hr), 2.5 percent of medium sized units (8,000 to 14,000 Btu/
hr), and 5 percent of large sized units (above 20,000 Btu/hr) are
maintained or repaired each year. Based on the above-cited RS Means
data, DOE also estimated that an average service call and any necessary
repair or maintenance takes about 1 hour for small and medium-sized
units and 2 hours for large units. DOE further estimated that the
average material cost is equal to one-half of the incremental equipment
cost. The values for cost per service call were then annualized by
multiplying by the frequencies and dividing by the average equipment
lifetime of 10.5 years.
7. Product Lifetime
Because the lifetime of appliances varies depending on utilization
and other factors, DOE develops a distribution of lifetimes from which
specific values are assigned to the appliances in the samples. In the
preliminary analysis, DOE conducted an analysis of actual lifetime in
the field using a combination of shipments data, the stock of the
considered appliances, and responses in RECS on the age of the
appliances in the homes. The data allowed DOE to estimate a survival
function, which provides a distribution of lifetimes. This analysis
yielded an average lifetime of approximately 16 years for clothes
dryers and approximately 10.5 years for room air conditioners.
For clothes dryers, the ECOS report (prepared for NRDC) stated that
the typical lifetime of a clothes dryer is about 12 years. (NRDC, No.
30 at p. 8) AHAM stated that DOE should modify average clothes dryer
lifetime to 13 years because both Appliance Magazine and confidential
industry data support that value. (AHAM, No. 25 at p. 11) Whirlpool
stated that Appliance Magazine shows 12 years as the expected lifetime
for clothes dryers, which is largely consistent with their internal
estimates. (Whirlpool, No. 22 at p. 5)
For the final rule analysis, DOE retained the approach used to
estimate clothes dryer lifetime in the preliminary analysis because it
relies on field data, and because the sources used by Appliance
Magazine and the confidential industry data were unavailable for
analysis by DOE.
For room air conditioners, AHAM stated that the average lifetime of
10.5 years from the preliminary analysis appears reasonable, and is
consistent with the value of 10 years reported by Appliance Magazine.
(AHAM, No. 25 at p. 11) AHAM stated, however, that there could be a
very large difference in room air conditioner lifetime between product
classes. (AHAM, Public Meeting Transcript, No. 21.4 at p. 126) While
DOE acknowledges that there may be differences in room air conditioner
lifetime among the product classes, DOE continued to use the same
lifetime distribution for all room air conditioner product classes
because it is not aware of any data that would provide a basis for
using different lifetimes.
See chapter 8 of the direct final rule TSD for further details on
the method and sources DOE used to develop product lifetimes.
8. Discount Rates
In the calculation of LCC, DOE applies discount rates to estimate
the present value of future operating costs. DOE estimated a
distribution of residential discount rates for clothes dryers and room
air conditioners, and also estimated a distribution of commercial
discount rates for commercial users of room air conditioners. See
chapter 8 in the direct final rule TSD for further details on the
development of consumer discount rates.
a. Residential Discount Rates
In its preliminary analysis, to establish residential discount
rates for the LCC analysis, DOE identified all debt or asset classes
that might be used to purchase refrigeration products, including
household assets that might be affected indirectly. It estimated the
average percentage shares of the various debt or asset classes for the
average U.S. household using data from the Federal Reserve Board's
``Survey of Consumer Finances'' (SCF) for 1989, 1992, 1995, 1998, 2001,
2004, and 2007. Using the SCF and other sources, DOE then developed a
distribution of rates for each type of debt and asset to represent the
rates that may apply in the year in which amended standards would take
effect. DOE assigned each sample household a specific discount rate
drawn from one of the distributions. The average rate across all types
of household debt and equity, weighted by the shares of each class, is
5.1 percent. DOE used the same approach for today's final rule.
b. Commercial Discount Rates
In its preliminary analysis, DOE derived discount rates for
commercial-sector customers from the cost of capital of publicly-traded
firms in the sectors that purchase room air conditioners. The firms
typically finance equipment purchases through debt, equity capital, or
both. DOE estimated the cost of the firms' capital as the weighted
average of
[[Page 22515]]
the cost of equity financing and the cost of debt financing for recent
years for which data were available (2001 through 2008). The estimated
average discount rate for companies that purchase room air conditioners
is 5.7 percent. DOE used the same approach for today's final rule.
9. Compliance Date of Amended Standards
DOE is required by consent decree to publish a final rule
establishing any amended energy conservation standards by June 30,
2011. In the absence of any adverse comment on today's direct final
rule that may provide a reasonable basis for withdrawing the rule,
compliance with amended standards for clothes dryers and room air
conditioners will be required on April 21, 2014. DOE calculated the LCC
and PBP for clothes dryers and room air conditioners as if consumers
would purchase new products in the year compliance with the standard is
required. If adverse comment that may provide a reasonable basis for
withdrawing the rule is received, DOE will proceed with the NOPR
published elsewhere in today's Federal Register, and compliance with
any amended standards would be required 3 years after the date of
publication of any final standards. As noted above, DOE is required by
consent decree to publish a final rule establishing any amended
standards by June 30, 2011.
10. Base Case Efficiency Distribution
To accurately estimate the share of consumers that would be
affected by a standard at a particular efficiency level, DOE's LCC
analysis considered the projected distribution of product efficiencies
that consumers purchase under the base case (that is, the case without
new energy efficiency standards). DOE refers to this distribution of
product of efficiencies as a base-case efficiency distribution.
In the preliminary analysis, DOE primarily relied on data submitted
by AHAM to estimate the efficiency distributions in recent years for
each of the product classes that were analyzed in the LCC and PBP
analysis. DOE assumed that these market shares would remain constant
through 2014. Whirlpool supported DOE's approach to forecast base-case
market shares. (Whirlpool, No. 22 at p. 5)
For the final rule analysis, DOE retained the approach used in the
preliminary analysis for clothes dryers. For room air conditioners,
however, DOE modified its approach for estimating base-case efficiency
distributions for the final rule analysis based on historical trends of
penetration of ENERGY STAR models. DOE believes that this data support
a constant growth rate of energy efficiency of 0.25 percent per year.
For further information on DOE's estimate of base-case efficiency
distributions, see chapter 8 of the direct final rule TSD.
11. Inputs To Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more efficient products,
compared to baseline products, through energy cost savings. The simple
payback period does not account for changes in operating expense over
time or the time value of money. Payback periods are expressed in
years. Payback periods that exceed the life of the product mean that
the increased total installed cost is not recovered in reduced
operating expenses.
The inputs to the PBP calculation are the total installed cost of
the equipment to the customer for each efficiency level and the average
annual operating expenditures for each efficiency level. The PBP
calculation uses the same inputs as the LCC analysis, except that
discount rates are not used.
12. Rebuttable-Presumption Payback Period
As noted above, EPCA, as amended, establishes a rebuttable
presumption that a standard is economically justified if 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 (and, as applicable, water) savings
during the first year that the consumer will receive as a result of the
standard, as calculated under the test procedure in place for that
standard. (42 U.S.C. 6295(o)(2)(B)(iii)) For each considered efficiency
level, DOE determined the value of the first year's energy savings by
calculating the quantity of those savings in accordance with the
applicable DOE test procedure, and multiplying that amount by the
average energy price forecast for the year in which compliance with the
amended standard would be required. The results of the rebuttable
payback period analysis are summarized in section V.B.1.c of this
notice.
G. National Impact Analysis--National Energy Savings and Net Present
Value Analysis
The NIA assesses the national energy savings (NES) and the NPV of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels. (``Consumer''
in this context refers to consumers of the product being regulated.)
DOE calculates the NES and NPV based on projections of annual appliance
shipments, along with the annual energy consumption and total installed
cost data from the energy use and LCC analyses. For the final rule
analysis, DOE forecasted the energy savings, operating cost savings,
product costs, and NPV of consumer benefits for products sold from 2014
through 2043.
DOE evaluates the impacts of new and amended standards by comparing
base-case projections with standards-case projections. The base-case
projections characterize energy use and consumer costs for each product
class in the absence of new or amended energy conservation standards.
DOE compares these projections with projections characterizing the
market for each product class if DOE adopted new or amended standards
at specific energy efficiency levels (that is, the TSLs or standards
cases) for that class. For the base case forecast, DOE considers
historical trends in efficiency and various forces that are likely to
affect the mix of efficiencies over time. For the standards cases, DOE
also considers how a given standard would likely affect the market
shares of efficiencies greater than the standard.
DOE uses an MS Excel spreadsheet model to calculate the energy
savings and the national consumer costs and savings from each TSL. The
direct final rule TSD and other documentation that DOE provides during
the rulemaking help explain the models and how to use them, and
interested parties can review DOE's analyses by changing various input
quantities within the spreadsheet. The NIA spreadsheet model uses
typical values as inputs (as opposed to probability distributions).
For the current analysis, the NIA used projections of energy prices
and housing starts from the AEO2010 Reference case. In addition, DOE
analyzed scenarios that used inputs from the AEO2010 Low Economic
Growth and High Economic Growth cases. These cases have higher and
lower energy price trends compared to the Reference case, as well as
higher and lower housing starts, which result in higher and lower
appliance shipments to new homes. NIA results based on these cases are
presented in appendix 10-A of the direct final rule TSD.
Table IV-32 summarizes the inputs and key assumptions DOE used for
the NIA analysis for the preliminary analysis and the changes to the
analyses for the direct final rule. Discussion of these inputs and
changes follows the
[[Page 22516]]
table. See chapter 10 of the direct final rule TSD for further details.
Table IV.32--Summary of Inputs and Key Assumptions for the National
Impact Analysis
------------------------------------------------------------------------
Changes for the
Inputs Preliminary TSD proposed rule
------------------------------------------------------------------------
Shipments................... Annual shipments No change in
from shipments approach.
model.
Compliance Date of Standard. 2014................ No change.
Base-Case Forecasted For clothes dryers For clothes dryers,
Efficiencies. and room air no change in basic
conditioners, approach; modified
efficiency efficiency
distributions are distributions based
maintained on new information.
unchanged during For room air
the forecast period. conditioners, used
an efficiency trend
based on historical
market data.
Standards-Case Forecasted For clothes dryers For clothes dryers,
Efficiencies. and air no change in basic
conditioners, used approach; modified
a ``roll-up'' efficiency
scenario. distributions based
on new information.
For room air
conditioners, used
a ``roll-up +
shift'' scenario to
establish the
distribution of
efficiencies.
Annual Energy Consumption Annual weighted- No change.
per Unit. average values as a
function of CEF *
(clothes dryers)
and SWCEER * *
(room air
conditioners).
Total Installed Cost per Annual weighted- No change.
Unit. average values as a
function of CEF *
(clothes dryers)
and SWCEER * *
(room air
conditioners).
Annual Energy Cost per Unit. Annual weighted- No change.
average values as a
function of the
annual energy
consumption per
unit and energy
prices.
Repair and Maintenance Cost Annual values as a No change.
per Unit. function of
efficiency level.
Energy Prices............... AEO2009 forecasts Updated using
(to 2035) and AEO2010 forecasts.
extrapolation
through 2043.
Energy Site-to-Source Varies yearly and is No change.
Conversion Factor. generated by NEMS-
BT.
Discount Rate............... Three and seven No change.
percent real.
Present Year................ Future expenses No change.
discounted to 2011,
when the final rule
is published.
------------------------------------------------------------------------
* Combined Energy Factor
* * Shipments-Weighted (stand by) Combined Energy Efficiency Ratio.
1. Shipments
Forecasts of product shipments are needed to calculate the national
impacts of standards on energy use, NPV, and future manufacturer cash
flows. DOE develops shipment forecasts based on an analysis of key
market drivers for each considered product. In DOE's shipments model,
shipments of products are driven by new construction, stock
replacements, and other types of purchases. The shipments models take
an accounting approach, tracking market shares of each product class
and the vintage of units in the existing stock. Stock accounting uses
product shipments as inputs to estimate the age distribution of in-
service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES
and NPV, because operating costs for any year depend on the age
distribution of the stock. DOE also considers the impacts on shipments
from changes in product purchase price and operating cost associated
with higher energy efficiency levels.
Commenting on the preliminary analysis, Whirlpool stated that
clothes dryer base case shipments will not grow linearly as DOE
assumes. Clothes dryers are a highly saturated product today, and homes
without dryers are generally multi-family units that lack sufficient
space for these products. Whirlpool stated that saturation of clothes
dryers will not change. Hence, growth in this product category cannot
exceed the growth of the housing stock. (Whirlpool, No. 22 at p. 7)
For the final rule analysis, DOE reviewed its approach for
forecasting dryer purchases for first-time owners, which include
consumers that currently do not have a dryer and consumers in new homes
who purchase a dryer. To better account for constraints on purchase,
such as those mentioned by Whirlpool, DOE reduced its estimate of the
number of purchases by first-time owners. As a result, its forecast for
the final rule analysis shows shipments growing more slowly over the
forecast period (an average of 0.8 percent per year) than in the
forecast in the preliminary analysis. The average growth rate of 0.8
percent is slightly less than the average annual growth rate in the
number of households projected in AEO2010 (1.0 percent in 2008-2035).
To estimate the effects on product shipments from increases in
product price projected to accompany amended standards at higher
efficiency levels, DOE applied a price elasticity parameter. It
estimated this parameter with a regression analysis that used purchase
price and efficiency data specific to residential refrigerators,
clothes washers, and dishwashers over the period 1980-2002. The
estimated ``relative price elasticity'' incorporates the impacts from
purchase price, operating cost, and household income, and it also
declines over time. DOE estimated shipments in each standards case
using the relative price elasticity along with the change in the
relative price between a standards case and the base case.
For details on the shipments analysis, see chapter 9 of the direct
final rule TSD.
2. Forecasted Efficiency in the Base Case and Standards Cases
A key component of the NIA is the trend in energy efficiency
forecasted for the base case (without new or amended standards) and
each of the standards cases. Section IV.F.10 described how DOE
developed a base-case energy efficiency distribution (which yields a
shipment-weighted average efficiency)
[[Page 22517]]
for each of the considered product classes for the first year of the
forecast period. To project the trend in efficiency over the entire
forecast period, DOE considered recent trends and programs such as
ENERGY STAR. For clothes dryers, DOE assumed no improvement of energy
efficiency in the base case and held the base-case energy efficiency
distribution constant throughout the forecast period. For room air
conditioners, DOE applied a constant growth rate of energy efficiency
of 0.25 percent per year, based on historical trends of penetration of
ENERGY STAR products.
To estimate efficiency trends in the standards cases, DOE has used
``roll-up'' and/or ``shift'' scenarios in its standards rulemakings.
Under the roll-up scenario, DOE assumes: (1) Product efficiencies in
the base case that do not meet the standard level under consideration
would roll-up to meet the new standard level; and (2) product
efficiencies above the standard level under consideration would not be
affected. Under the shift scenario, DOE re-orients the distribution
above the new minimum energy conservation standard.
In the preliminary analysis, DOE used a roll-up scenario in
developing its forecasts of efficiency trends in the standards cases.
The California Utilities stated that DOE should consider a ``roll-up
and market shift'' scenario for room air conditioners in standards
cases because, if the ENERGY STAR level is revised above the new
standard, it may create a market incentive that increases the share of
higher efficiency products. (California Utilities, No. 31 at p. 19)
DOE agrees that amended standards for room air conditioners would
likely result in changes to ENERGY STAR levels that would increase the
share of products with energy efficiency above the standard based on
the historical data reviewed for room air conditioners. Therefore, for
the final rule analysis, DOE applied a ``roll-up and shift'' scenario
that accounts for such increase in share. For clothes dryers, DOE
retained the approach used in the preliminary analysis for the final
rule. For further details about the forecasted efficiency
distributions, see chapter 10 of the direct final rule TSD.
3. National Energy Savings
For each year in the forecast period, DOE calculates the NES for
each standard level by multiplying the stock of equipment affected by
the energy conservation standards by the per-unit annual energy
savings. As discussed in section IV.E, DOE incorporated the rebound
effect utilized in the energy use analysis into its calculation of
national energy savings for room air conditioners.
To estimate the national energy savings expected from appliance
standards, DOE uses a multiplicative factor to convert site energy
consumption (at the home or commercial building) into primary or source
energy consumption (the energy required to convert and deliver the site
energy). These conversion factors account for the energy used at power
plants to generate electricity and losses in transmission and
distribution, as well as for natural gas losses from pipeline leakage
and energy used for pumping. For electricity, the conversion factors
vary over time due to projected changes in generation sources (that is,
the power plant types projected to provide electricity to the country).
The factors that DOE developed are marginal values, which represent the
response of the system to an incremental decrease in consumption
associated with appliance standards.
In the preliminary analysis, DOE used annual site-to-source
conversion factors based on the version of NEMS that corresponds to
AEO2009. For today's rule, DOE updated its conversion factors based on
the NEMS that corresponds to AEO2010, which provides energy forecasts
through 2035. For 2036-2043, DOE used conversion factors that remain
constant at the 2035 values.
Section 1802 of the Energy Policy Act of 2005 (EPACT 2005) directed
DOE to contract a study with the National Academy of Science (NAS) to
examine whether the goals of energy efficiency standards are best
served by measurement of energy consumed, and efficiency improvements,
at the actual point-of-use or through the use of the full-fuel-cycle,
beginning at the source of energy production. (Pub. L. 109-58 (August
8, 2005)). NAS appointed a committee on ``Point-of-Use and Full-Fuel-
Cycle Measurement Approaches to Energy Efficiency Standards'' to
conduct the study, which was completed in May 2009. The NAS committee
defined full-fuel-cycle energy consumption as including, in addition to
site energy use, the following: energy consumed in the extraction,
processing, and transport of primary fuels such as coal, oil, and
natural gas; energy losses in thermal combustion in power generation
plants; and energy losses in transmission and distribution to homes and
commercial buildings.\50\
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\50\ The National Academies, Board on Energy and Environmental
Systems, Letter to Dr. John Mizroch, Acting Assistant Secretary,
U.S. DOE, Office of EERE from James W. Dally, Chair, Committee on
Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards, May 15, 2009.
---------------------------------------------------------------------------
In evaluating the merits of using point-of-use and full-fuel-cycle
measures, the NAS committee noted that DOE uses what the committee
referred to as ``extended site'' energy consumption to assess the
impact of energy use on the economy, energy security, and environmental
quality. The extended site measure of energy consumption includes the
energy consumed during the generation, transmission, and distribution
of electricity but, unlike the full-fuel-cycle measure, does not
include the energy consumed in extracting, processing, and transporting
primary fuels. A majority of the NAS committee concluded that extended
site energy consumption understates the total energy consumed to make
an appliance operational at the site. As a result, the NAS committee
recommended that DOE consider shifting its analytical approach over
time to use a full-fuel-cycle measure of energy consumption when
assessing national and environmental impacts, especially with respect
to the calculation of greenhouse gas emissions. The NAS committee also
recommended that DOE provide more comprehensive information to the
public through labels and other means, such as an enhanced Web site.
For those appliances that use multiple fuels (such as water heaters),
the NAS committee indicated that measuring full-fuel-cycle energy
consumption would provide a more complete picture of energy consumed
and permit comparisons across many different appliances, as well as an
improved assessment of impacts.
In response to the NAS committee recommendations, DOE issued, on
August 20, 2010 a Notice of Proposed Policy proposing to incorporate a
full-fuel cycle analysis into the methods it uses to estimate the
likely impacts of energy conservation standards on energy use and
emissions. FR 75 51423. Specifically, DOE proposed to use full-fuel-
cycle (FFC) measures of energy and greenhouse gas (GHG) emissions,
rather than the primary (extended site) energy measures it currently
uses. Additionally, DOE proposed to work collaboratively with the
Federal Trade Commission (FTC) to make FFC energy and GHG emissions
data available to the public to enable consumers to make cross-class
comparisons. On October 7th, DOE held an informal public meeting to
discuss and receive comments on its planned approach. The Notice, a
transcript of the public meeting and all public comments received by
DOE are available at:
[[Page 22518]]
http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EERE-2010-BT-NOA-0028. DOE intends to develop a final policy statement on
these subjects and then take steps to begin implementing that policy in
future rulemakings and other activities.
4. Net Present Value of Consumer Benefit
The inputs for determining the NPV of the total costs and benefits
experienced by consumers of the considered appliances are: (1) Total
annual installed cost, (2) total annual savings in operating costs, and
(3) a discount factor. DOE calculates net savings each year as the
difference between the base case and each standards case in total
savings in operating costs and total increases in installed costs. DOE
calculates operating cost savings over the life of each product shipped
in the forecast period.
DOE multiplies the net savings in future years by a discount factor
to determine their present value. For the preliminary analysis and
today's final rule, DOE estimated the NPV of appliance consumer
benefits using both a 3-percent and a 7-percent real discount rate. 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.\51\ The 7-percent real value is an
estimate of the average before-tax rate of return to private capital in
the U.S. economy. The 3-percent real value represents the ``societal
rate of time preference,'' which is the rate at which society discounts
future consumption flows to their present value.
---------------------------------------------------------------------------
\51\ OMB Circular A-4 (Sept. 17, 2003), section E, ``Identifying
and Measuring Benefits and Costs. Available at: http://www.whitehouse.gov/omb/memoranda/m03-21.html.
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As noted above, DOE is accounting for the rebound effect associated
with more efficient room air conditioners in its determination of
national energy savings. The take-back in energy consumption associated
with the rebound effect provides consumers with increased value (that
is, a cooler or warmer indoor environment). The net impact on consumers
is thus the sum of the change in the cost of owning the room air
conditioner (that is, life-cycle cost) and the increased value for the
more comfortable indoor environment. The consumer effectively pays for
the increased value of a more comfortable environment in his or her
utility bill. Because the monetary cost of this added value is
equivalent to the value of the foregone energy savings, the economic
impacts on consumers, as measured in the NPV are the same regardless of
the rebound effect.
5. Benefits From Effects of Standards on Energy Prices
Reduction in electricity consumption associated with amended
standards for clothes dryers and room air conditioners could reduce the
electricity prices charged to consumers in all sectors of the economy
and thereby reduce their electricity expenditures. In chapter 2 of the
preliminary TSD, DOE explained that, because the power industry is a
complex mix of fuel and equipment suppliers, electricity producers and
distributors, it did not plan to estimate the value of potentially
reduced electricity costs for all consumers associated with amended
standards for refrigeration products. In response, NEEP urged DOE to
quantify electricity demand reductions achieved by these updated
standards in financial terms. (NEEP, No. 27 at p. 1)
For this rule, DOE used NEMS-BT to assess the impacts of the
reduced need for new electric power plants and infrastructure projected
to result from standards. In NEMS-BT, changes in power generation
infrastructure affect utility revenue requirements, which in turn
affect electricity prices. DOE estimated the impact on electricity
prices associated with each considered TSL. Although the aggregate
benefits for electricity users are potentially large, there may be
negative effects on some of the actors involved in electricity supply,
particularly power plant providers and fuel suppliers. Because there is
uncertainty about the extent to which the benefits for electricity
users from reduced electricity prices would be a transfer from actors
involved in electricity supply to electricity consumers, DOE has
concluded that, at present, it should not give a heavy weight to this
factor in its consideration of the economic justification of new or
amended standards. DOE is continuing to investigate the extent to which
electricity price changes projected to result from standards represent
a net gain to society.
H. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended standards on
consumers, DOE evaluates the impact on identifiable subgroups of
consumers (such as low-income households) that may be
disproportionately affected by a national standard. DOE evaluates
impacts on particular subgroups of consumers primarily by analyzing the
LCC impacts and PBP for those particular consumers from alternative
standard levels. For this rule, DOE analyzed the impacts of the
considered standard levels on low-income consumers and senior citizens.
Section V.B.1.b summarizes the results of the consumer subgroup
analysis, and chapter 11 in the direct final rule TSD describes the
analysis method.
I. Manufacturer Impact Analysis
The following sections address the various steps taken to analyze
the impacts of the amended standards on manufacturers. These steps
include conducting a series of analyses, interviewing manufacturers,
and evaluating the comments received from interested parties during
this rulemaking.
1. Overview
In determining whether an amended energy conservation standard for
residential clothes dryers and room air conditioners subject to this
rulemaking is economically justified, DOE is required to consider ``the
economic impact of the standard on the manufacturers and on the
consumers of the products subject to such standard.'' (42 U.S.C.
6295(o)(2)(B)(i)(I)) The statute also calls for an assessment of the
impact of any lessening of competition as determined by the Attorney
General that is likely to result from the adoption of a standard. (42
U.S.C. 6295(o)(2)(B)(i)(V)) DOE conducted the MIA to estimate the
financial impact of amended energy conservation standards on
manufacturers of clothes dryers and room air conditioners, and to
assess the impacts of such standards on employment and manufacturing
capacity.
The MIA is both a quantitative and qualitative analysis. The
quantitative part of the MIA relies on the Government Regulatory Impact
Model (GRIM), an industry cash-flow model customized for the clothes
dryer and room air conditioners covered in this rulemaking. See section
IV.I.2 below, for details on the GRIM analysis. The qualitative part of
the MIA addresses factors such as product characteristics,
characteristics of particular firms, and market trends. The qualitative
discussion also includes an assessment of the impacts of standards on
manufacturer subgroups. The complete MIA is discussed in chapter 12 of
the direct final rule TSD. DOE conducted the MIA in the three phases
described below.
a. Phase 1, Industry Profile
In Phase 1 of the MIA, DOE prepared a profile of the clothes dryers
and room air conditioner industries based on the
[[Page 22519]]
market and technology assessment prepared for this rulemaking. Before
initiating the detailed impact studies, DOE collected information on
the present and past structure and market characteristics of each
industry. This information included market share data, product
shipments, manufacturer markups, and the cost structure for various
manufacturers. The industry profile includes: (1) Further detail on the
overall market and product characteristics; (2) estimated manufacturer
market shares; (3) financial parameters such as net plant, property,
and equipment; selling, general and administrative (SG&A) expenses;
cost of goods sold, and other similar information; and (4) trends in
the number of firms, market, and product characteristics. The industry
profile included a top-down cost analysis of manufacturers in each
industry that DOE used to derive preliminary financial inputs for the
GRIM (such as revenues, depreciation, SG&A, and research and
development (R&D) expenses). DOE also used public sources of
information to further calibrate its initial characterization of each
industry, including Security and Exchange Commission 10-K filings,\52\
Standard & Poor's stock reports,\53\ and corporate annual reports. DOE
supplemented this public information with data released by privately
held companies.
---------------------------------------------------------------------------
\52\ Available online at http://www.sec.gov.
\53\ Available online at http://www2.standardandpoors.com.
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b. Phase 2, Industry Cash Flow Analysis
Phase 2 focused on the financial impacts of potential amended
energy conservation standards on each industry as a whole. Amended
energy conservation standards can affect manufacturer cash flows in
three distinct ways: (1) By creating a need for increased investment,
(2) by raising production costs per unit, and (3) by altering revenue
due to higher per-unit prices and/or possible changes in sales volumes.
DOE used the GRIMs to perform two cash-flow analyses: One for the
clothes dryers industry and one for room air conditioners. In
performing these analyses, DOE used the financial values derived during
Phase 1 and the shipment assumptions from the NIA.
c. Phase 3, Sub-Group Impact Analysis
Using average cost assumptions to develop an industry-cash-flow
estimate may not adequately assess differential impacts of amended
energy conservation standards among manufacturer subgroups. For
example, small manufacturers, niche players, or manufacturers
exhibiting a cost structure that differs significantly from the
industry average could be more negatively affected. To address this
possible impact, DOE used the results of the industry characterization
analysis in Phase 1 to group manufacturers that exhibit similar
production and cost structure characteristics. During the manufacturer
interviews, DOE discussed financial topics specific to each
manufacturer and obtained each manufacturer's view of the industry as a
whole.
DOE reports the MIA impacts of amended energy conservation
standards by grouping together the impacts on manufacturers of certain
product classes. While DOE did not identify any other subgroup of
manufacturers of clothes dryers or room air conditioners that would
warrant a separate analysis, DOE specifically investigated impacts on
small business manufacturers. See section VI.B for more information.
2. GRIM Analysis
DOE uses the GRIM to quantify the changes in cash flow that result
in a higher or lower industry value. The GRIM analysis is a standard,
annual cash-flow analysis that incorporates manufacturer costs,
manufacturer selling prices, shipments, and industry financial
information as inputs, and models changes in costs, distribution of
shipments, investments, and manufacturer margins that would result from
amended energy conservation standards. The GRIM spreadsheet uses the
inputs to arrive at a series of annual cash flows, beginning with the
base year of the analysis, 2011 (which accounts for the investments
needed to bring products into compliance by 2014), and continuing to
2043. DOE calculated INPVs by summing the stream of annual discounted
cash flows during this period. For clothes dryers and room air
conditioners, DOE uses a real discount rate of 7.2 percent for all
products.
DOE used the GRIM to calculate cash flows using standard accounting
principles and to compare changes in INPV between a base case and
various TSLs (the standards cases). The difference in INPV between the
base and standards cases represents the financial impact of the amended
standard on manufacturers. DOE collected this information from a number
of sources, including publicly available data and interviews with a
number of manufacturers (described in the next section). Additional
details about the GRIM can be found in chapter 12 of the direct final
rule TSD.
a. GRIM Key Inputs
Manufacturer Production Costs
DOE used the manufacturer production costs (MPCs) calculated in the
engineering analysis for each efficiency level for the year 2009, as
described in section IV.C above, and further detailed in chapter 5 of
the direct final rule TSD. For both clothes dryers and room air
conditioners, DOE calculated the 2009 MPCs using cost models based on
product tear downs. The cost models also provide a breakdown of MPCs
into material, labor, overhead, and depreciation. Manufacturing a
higher-efficiency product is typically more expensive than
manufacturing a baseline product due to the use of more complex
components and higher-cost raw materials. The changes in the MPCs of
the analyzed products can affect revenues, gross margins, and cash flow
of the industry, making these product cost data key GRIM inputs for
DOE's analysis.
Base-Case Shipments Forecast
The GRIM estimates manufacturer revenues based on total unit
shipment forecasts and the distribution of these values by efficiency
level. Changes in the efficiency mix at each standard level affect
manufacturer finances. For this analysis, the GRIM uses the NIA
shipments forecasts from 2011 to 2043, the end of the analysis period.
In the shipments analysis, DOE also estimated the distribution of
efficiencies in the base case for all product classes. For clothes
dryers, DOE held the base-case energy efficiency distribution constant
throughout the forecast period. For the room air conditioner industry,
DOE assumed a migration of the market toward higher efficiency over
time. See section IV.G.1, above, for additional details.
Product and Capital Conversion Costs
Amended energy conservation standards will cause manufacturers to
incur conversion costs to bring their production facilities and product
designs into compliance. For the MIA, DOE classified these costs into
two major groups: (1) Product conversion costs and (2) capital
conversion costs. Product conversion costs are investments in research,
development, testing, marketing, and other non-capitalized costs
focused on making product designs comply with the amended energy
conservation standard. Capital conversion costs are investments in
property, plant, and equipment to adapt or change existing production
[[Page 22520]]
facilities so that new product designs can be fabricated and assembled.
For both clothes dryers and room air conditioners, DOE based its
conversion cost estimates that would be required to meet each TSL on
information obtained from manufacturer interviews, the design pathways
analyzed in the engineering analysis, and market information about the
number of products that would require modification at each efficiency
level. Because no energy label is currently prescribed for clothes
dryers, and because clothes dryers are not part of the ENERGY STAR
program, the best source of clothes dryer efficiency information is the
CEC product database. DOE segmented each product on the CEC Web site
into its appropriate product class using energy source, drum capacity,
voltage, and combination unit information. DOE then searched
manufacturer Web sites and numerous retail Web sites to determine which
clothes dryers were current products. DOE assigned each product
currently produced into efficiency levels using the reported energy
factor. Finally, DOE assigned each of these products into product
lines, classifying each group of products made by same manufacturer
with identical drum capacities and energy factors into the same product
line.
DOE calculated the product and capital conversion costs at each
efficiency level for every product class by multiplying the total
number of product lines that fell below the required efficiency by an
estimate of the conversion costs to reach that efficiency level. DOE
calculated the total product development required at each efficiency
level by estimating the necessary engineering resources required to
implement the design options in the engineering analysis at the
efficiency level across a product line. DOE calculated the total
capital conversion costs required at each efficiency level by
estimating the additional equipment and changes to existing equipment
that would be required to implement the design option in the
engineering analysis at that efficiency level across a product line.
While DOE's calculation of conversion costs for room air
conditioners was similar to the calculation of conversion costs for
clothes dryers, DOE used a slightly different approach to determine the
number of product lines at each efficiency level. DOE used the CEC
appliance database to determine what models currently exist on the
market for room air conditioners and verified these current products
through manufacturer and retail Web sites. DOE eliminated products in
the database that were discontinued due to the recent refrigerant
switch to R-410A. DOE segmented each product from the CEC database into
its appropriate product class using cooling capacity, the existence of
louvers, and type of room air conditioner. DOE assigned each product
currently produced into efficiency levels using the reported EER.
Finally, DOE determined a representative distribution of the industry
by extrapolating the information for manufacturers for which it had
complete efficiency information to account for the product lines of all
manufacturers.
Like its method for clothes dryers, DOE calculated the industry
wide conversion costs by multiplying the number of product lines in
each product class that fell below the required efficiency by its
estimate of the product and capital conversion costs. DOE's estimate
was based on the design options at each efficiency level in the
engineering analysis. DOE's per line product conversion costs were
calculated by estimating the product development time required to make
the design change across a product family. For component switch outs,
DOE assumed that design changes for components that interacted with
other parts of the room air conditioner would be more costly than one-
for-one switch outs because these components would require greater
engineering effort to be adapted into new product designs. For capital
conversion costs, DOE assumed based on manufacturer feedback that the
only design changes that would require changes to existing equipment
were larger chassis volumes, evaporator changes, and condenser changes.
DOE's estimates of the total capital conversion and production
conversion costs for clothes dryer and room air conditioners by TSL can
be found in section V.B.2 of today's direct final rule. The estimates
of the total capital conversion and product conversion costs by product
class and efficiency level can be found in chapter 12 of the direct
final rule TSD.
b. GRIM Scenarios
Clothes Dryer Standards-Case Shipment Forecasts
The GRIM used the shipments developed in the NIA for clothes
dryers. To determine efficiency distributions for the standards case,
DOE used a roll-up scenario. In this scenario, products that fall below
the amended energy conservation standard are assumed to ``roll-up'' to
the new standard in 2014. DOE also assumed there was a relative price
elasticity in the clothes dryers market, meaning amended energy
conservation standards that increase the first cost of clothes dryers
would result in lower total shipments. See section IV.G.1 of this
direct final rule, and chapter 10 of the direct final rule TSD for more
information on the clothes dryer standards-case shipment scenarios.
Room Air Conditioner Standards-Case Shipment Forecasts
The GRIM used the shipments developed in the NIA for room air
conditioners. As stated in IV.I.2.a, the base case shipments assume
that there is a migration over time to more efficient products based on
historical trends of penetration of ENERGY STAR products. In the
standards case, DOE used a ``roll-up + shift'' scenario. In this
scenario, DOE assumed that amended standards for room air conditioners
would likely result in changes to ENERGY STAR levels that would
increase the share of products with energy efficiency above the
standard. DOE also assumed there was a relative price elasticity in the
room air conditioner market, meaning that amended energy conservation
standards that increase the first cost of room air conditioners would
result in lower total shipments. See section IV.G.1 of this direct
final rule and chapter 10 of the direct final rule TSD for more
information on the room air conditioner standards-case shipment
scenarios.
Markup Scenarios
In the GRIM, DOE used the MSPs calculated in the engineering
analysis for each product class and efficiency level. MSPs include
direct manufacturing production costs (that is, labor, material, and
overhead estimated in DOE's MPCs) and all non-production costs (that
is, SG&A, R&D, and interest), along with profit. For clothes dryers,
DOE did not separate shipping costs from the manufacturer markup
because shipping costs are not a function of the design options
analyzed. The MSP for clothes dryers is equal to the MPC times the
manufacturer markup. For room air conditioners, DOE separated the
shipping costs from the markup multiplier for the analysis to
explicitly account for the design options that would result in higher
shipping costs due to weight increases. DOE calculated the MSP for room
air conditioners by multiplying the MPC by the manufacturer markup and
adding shipping costs.
For the MIA, DOE modeled two standards-case markup scenarios to
[[Page 22521]]
represent the uncertainty regarding the potential impacts on prices and
profitability for manufacturers following the implementation of amended
energy conservation standards: (1) A flat markup scenario, and (2) a
preservation of operation profit scenario. Modifying these markups from
the base case to the standards cases yields different sets of impacts
on manufacturers' changing industry revenue and cash flow.
The flat markup scenario assumes that the cost of goods sold for
each product is marked up by a flat percentage to cover standard SG&A
expenses, R&D expenses, and profit. The flat markup scenario uses the
baseline manufacturer markup (discussed in chapter 6 of the direct
final rule TSD) for all products in both the base case and the
standards case. To derive this percentage, DOE evaluated publicly
available financial information for manufacturers of major household
appliances whose product offerings include clothes dryers and room air
conditioners. DOE also requested feedback on this value during
manufacturer interviews. This scenario represents the upper bound of
industry profitability in the standards case because under this
scenario, manufacturers are able to fully pass through additional costs
due to standards to their customers.
DOE also modeled a lower bound profitability scenario. In this
scenario, the manufacturer markups are lowered such that, in the
standards case, manufacturers are able to maintain only the base-case
total operating profit in absolute dollars, despite higher product
costs and investment. DOE implemented this scenario in GRIM by lowering
the manufacturer markups at each TSL to yield approximately the same
earnings before interest and taxes in the standards case in the year
after the compliance date of the amended standards as in the base case.
For clothes dryers in the preservation of operating profit scenario,
DOE assumed that the industry wide impacts would occur under the new
minimum efficiency levels. DOE altered the markups only for the
minimally compliant products in this scenario, with margin impacts not
occurring for products that already exceed the amended energy
conservation standard. For room air conditioners, DOE assumed that the
margin impacts would affect the minimally compliant products at the
amended energy conservation standards and the next highest efficiency
level. The NIA analyzed an efficiency migration in both the base case
and the standards case due to the assumption that manufacturers will
produce increasingly more efficient room air conditioners as ENERGY
STAR levels for these products change over time. Therefore, under
amended energy conservation standards the shipment weighted average
efficiency increases from the new minimum standard to higher efficiency
levels. DOE assumed this market shift caused by standards would impact
margins on products that also become the de facto minimally efficient
product over time. For both clothes dryers and room air conditioners,
the preservation of operating profit represents the lower bound of
industry profitability following amended energy conservation standards
because under this scenario, higher production costs and the
investments required to comply with the amended energy conservation
standard do not yield additional operating profit.
While DOE used the same markup scenarios for clothes dryers and
room air conditioners, DOE captured different concerns for each
industry by modeling the preservation of operating profit scenario. For
clothes dryers, manufacturers were particularly concerned about the
inability to markup the full cost of production. Because there is
currently no energy label requirement or ENERGY STAR program for
clothes dryers, the lack of consumer information makes it more
difficult for customers to calculate individual payback and energy
savings. Consequently, the manufacturing cost for more efficient
clothes dryers could not be fully marked up because energy efficiency,
unlike price and other features, is not a factor in the purchasing
decision of most consumers. Manufacturers also cited the highly
competitive market, the concentrated retail market that represents the
majority of sales, and price points that are fixed partly by paired
washing machines as other reasons that additional production costs
would not yield higher profits in the standards case. For room air
conditioners, manufacturers stated that higher production costs could
severely harm profitability. Manufacturers already earn very little
profit on the small, high-volume window units due to the enormous price
pressure retailers exert because of their purchasing power, and due to
fierce competition within the room air conditioner industry.
Manufacturers accept lower absolute profit on these units with the
expectation of making a larger per unit profit on other more costly
products. They also do so because maintaining high production volumes
of these units allows manufacturers to keep factories utilized and to
achieve purchasing economies. In addition, because many purchases are
impulse buys during periods of atypically warm weather for products
that are used sparingly, any increase in first cost could impact these
types of sales. Therefore, manufacturers were skeptical that customers
would accept the full additional cost of production.
3. Discussion of Comments
During the March 2010 public meeting, interested parties commented
on the assumptions and results of the manufacturer impacts presented in
the preliminary analysis. Oral and written comments discussed several
topics, including the classification of small business manufacturers,
the cumulative regulatory burden on manufacturers, the impact of R-410A
conversion, and direct employment impacts. DOE addresses these comments
below.
a. Small Businesses
In the preliminary analysis, DOE stated it did not identify any
small business manufacturers of residential clothes dryers but that it
did identify at least one room air conditioner manufacturer that was
designated as a small business by the U.S. Small Business
Administration criteria. DOE requested comment on this assertion. AHAM
stated that it agreed with DOE's assessment regarding the number of
small businesses for room air conditioners and clothes dryers. (AHAM,
No. 25 at p. 12) Whirlpool similarly stated that it did not know of any
qualifying small businesses for residential clothes dryers. (Whirlpool,
No. 22 at p. 4) HTC, however, stated that it is a small business
registered under the Central Contracting Registration and the
appropriate NAICS code for the residential clothes dryers covered by
this rulemaking (335224--household laundry equipment manufacturers).
HTC requested consideration by DOE as a small business and asserted
that it would be negatively impacted if DOE decided not to include its
technologies in the standards for residential clothes dryers (HTC, No.
FDMS DRAFT 0068 at pp. 6, 10)
For clothes dryers, DOE notes that it could not locate HTC as a
small business on the SBA Web site (http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm) or under the Central Contracting Registration (https://www.bpn.gov/CCRSearch/Search.aspx). DOE does not question HTC's
assertion that it is a small business, but DOE does not believe that
HTC would be directly impacted by this rule. HTC has developed a
technology that can be
[[Page 22522]]
incorporated into clothes dryers. DOE acknowledges in section IV.A.5.a
that HTC's technology is a potential design option but also notes this
technology is not commercially available. DOE does not believe this
rulemaking would affect HTC's ability to commercialize or sell its
technology. Therefore, DOE does not believe HTC will be impacted by
this rulemaking.
For room air conditioners, DOE amends its conclusion of the number
of small manufacturers in today's direct final rule. The one
manufacturer previously identified by DOE as a small business was since
acquired by a company and exceeds the 750-employee threshold under
NAICS code 333415 (air conditioning and warm air heating equipment
manufacturers and commercial and industrial refrigeration equipment
manufacturers). As such, DOE believes there are no qualifying small
business manufacturers in the room air conditioner industry.
For more information on the potential impact on small business
manufacturers, see section VI.B.
b. Cumulative Regulatory Burden
Several interested parties responded to DOE's request for comment
during the preliminary analysis period on regulations that could impose
a burden on manufacturers of clothes dryers and room air conditioners.
BSH stated that DOE should consider potential greenhouse gas
regulations and the EPA ban on hydrochlorofluorocarbon (HCFC)
refrigerants in new products since these regulations are relevant for
heat pump clothes dryers. (BSH, No. 23 at p. 5) In contrast, NPCC
stated that DOE should not include the cost of converting to
alternative refrigerants such as R-410A in its manufacturer impact
analysis for room air conditioners since the HCFC ban has already taken
effect. (NPCC, No. 32 at p. 4)
DOE acknowledges that the phase-out of hydrofluorocarbons (HFC) or
similar refrigerants could necessitate changes to heat pump clothes
dryers if current products offered on the market have to be redesigned.
DOE also notes that the most efficient electric clothes dryers on the
U.S. market today do not use heat pump technology, so a change in the
available refrigerants would not currently impact products on the U.S.
market. Because heat pump technology passed the screening criteria, it
is analyzed as in technology that could increase the efficiency of
residential clothes dryers. DOE has analyzed heat pump clothes dryers
as the max-tech units for electric clothes dryer product classes. In
its engineering analysis for these relevant product classes, DOE
assumed that these products would utilize refrigerants that are
currently available on the market. However, DOE does not include the
impacts of a potential change in available refrigerant for heat pump
clothes dryers because it would be speculative to predict the passage
of legislation or the outcome of future rulemakings that would alter
available refrigerants.
In response to the inclusion of the ban on HCFC refrigerants, DOE
notes that the ban is relevant to both heat pump clothes dryer
manufactures and room air conditioner manufacturers. The ban on R-22
became effective on January 1, 2010, so all products currently produced
must comply with this regulation. This ban, which required
manufacturers to cease using virgin R-22 in new equipment, necessitated
substantial product design changes and capital investments. DOE
accounts for these design changes in its engineering analysis by basing
its analysis for room air conditioners on the use of R-410A
refrigerant, as described in section IV.C.2.b. This allows DOE to
capture the impacts of the refrigerant change on product cost and
efficiency.
The ban also caused manufacturers to incur significant product and
capital conversion costs. Manufacturers had to redesign units for new
compressors and other new components and conduct extensive testing, and
in some cases manufacturers devoted full-time engineering resources to
this conversion for up to 2 years. Additionally, manufacturers had to
purchase new heat exchanger equipment and make other capital
investments. DOE did not include the costs of converting to alternative
refrigerants in the GRIM because these changes were not driven by the
standards established in today's final rule. DOE describes the HCFC ban
in further detail as part of the cumulative regulatory burden in
chapter 12 of the direct final rule TSD.
Several manufacturers also responded to DOE's request for comment
on the UL fire safety regulation for clothes dryers. Whirlpool stated
that this regulation has no effect on energy efficiency, but added that
DOE should include it as a regulatory burden. (Whirlpool, No. 22 at p.
2) BSH noted that the regulation takes effect in 2013. (BSH, No. 23 at
p. 6) ALS speculated that each clothes dryer manufacturer will have its
own concerns about this regulation and its impacts. (ALS, Public
Meeting Transcript, No. 21.4 at p. 154) HTC stated that it has
successfully passed UL 2158 safety guidelines for electric clothes
dryers and requested consideration of this compliance. (HTC, No. FDMS
DRAFT 0068 at p. 7)
DOE appreciates this input on the UL fire safety regulations for
clothes dryers. While DOE did not receive enough information to
calculate the cost of changes to baseline clothes dryers to comply with
UL 2158 in the engineering analysis, DOE agrees with Whirlpool that
this regulation would not impact energy efficiency and consequently
would not change the incremental costs calculated in the engineering
analysis. While the UL 2158 is not a Federal regulation, UL
certification is a de facto requirement for selling products in the
U.S. because of local building codes requiring all installed products
meet safety regulations and to avoid litigation. DOE included the
conversion costs for manufacturers to comply with UL 2158 as part of
the cumulative regulatory burden.
Additional information on the cumulative regulatory burden on
clothes dryer and room air conditioner manufacturers is included in
chapter 12 of the direct final rule TSD, including details on how DOE
treated the conversion costs for the UL 2158 regulation.
c. Employment Impacts
Two interested parties commented on DOE's characterization of the
domestic employment impacts for room air conditioner manufacturers. EEI
stated that if DOE concluded no room air conditioner production remains
in the United States, there should be no domestic impacts on
employment. EEI stated that further analysis may be necessary to
capture impacts on these manufacturers. (EEI, Public Meeting
Transcript, No. 21.4 at pp. 31-34) To follow up on this issue, GE
stated that revenue from non-domestic manufacturing helps fund the R&D
and domestic production of other products that room air conditioner
manufacturers produce. Therefore, the effects of room air conditioner
manufacturing spill over into other industries. (GE, Public Meeting
Transcript, No. 21.4 at pp. 33-34)
DOE's direct employment impact assessment focuses on domestic
employment impacts. These employment impacts are calculated in the GRIM
based on the domestic expenditures and labor content of room air
conditioner production. Because all room air conditioners are
manufactured abroad, any change in labor content resulting from amended
standards would impact labor requirements in non-domestic facilities
and would not be quantified in DOE's direct employment impact
assessment. While many room air conditioner manufacturers produce other
products
[[Page 22523]]
and a company's revenues in one industry may impact its overall
revenues and operations, DOE does not analyze spillover effects among
different business segments in its direct employment impact assessment.
DOE does analyze indirect employment impacts in the domestic economy in
section IV.J.
4. Manufacturer Interviews
DOE interviewed manufacturers representing more than 90 percent of
clothes dryer sales and approximately 50 percent of room air
conditioner sales. These interviews were in addition to those DOE
conducted as part of the engineering analysis. DOE used these
interviews to tailor the GRIM to incorporate unique financial
characteristics for each industry. All interviews provided information
that DOE used to evaluate the impacts of potential amended energy
conservation standards on manufacturer cash flows, manufacturing
capacities, and employment levels. See appendix 12-A of the direct
final rule TSD for additional information on the MIA interviews.
The following sections describe the most significant issues
identified by manufacturers.
a. Clothes Dryer Key Issues
Test Procedure
Manufacturers indicated that a key concern for this rulemaking was
ensuring that the test procedure accurately measured actual energy use.
In particular, manufacturers indicated that proposed changes to the RMC
value and the average number of annual cycles needed to be updated.
Manufacturers indicated that without these changes, consumers could be
negatively impacted by amended energy conservation standards because
clothes dryers have a limited number of improvements that would be cost
effective for most consumers.
UL Fire Containment Standard
Most manufacturers indicated that they had not fully investigated
the exact technical changes that will be required to meet the UL fire
containment regulation (UL 2158). However, manufacturers were concerned
that this regulation would require changes to all their products around
the same time that they would be required to meet the amended energy
conservation standard. Most manufacturers agreed that even if the exact
approach of meeting UL 2158 is different or unknown by individual
manufactures, DOE should still treat the regulation as an overall
burden.
Heat Pump Technology
Manufacturers indicated that the high capital conversion and
product conversion costs for clothes dryers at the second gap fill
levels or the maximum available units were significant and would
represent a substantial burden. Manufacturers also indicated that the
pathways to meeting those levels, while potentially costly, were well-
defined, proven in the market, and could be made within their existing
production facilities. Manufacturers also indicated, however, that heat
pump technology at the max-tech levels for electric product classes
would represent a significant departure from current products and add
significantly to the product and capital conversion costs. A heat pump
standard would require a total renovation of existing facilities. The
changes required to manufacture heat pumps would require revamping most
existing production equipment and redesigning a new platform. The
capital conversion costs would include equipment for new drum lines,
assembly line testing equipment, stamping equipment for cabinets, and
other production equipment to manufacturer the sealed systems. In
addition to the large development costs to develop new platforms,
manufacturers would have the additional expense of developing the
sealed system. Other increases to the product development costs for
heat pump clothes dryers that concerned manufacturers were the
significant retraining costs for their servicers and the marketing
costs to educate consumers and ensure they accept the new technology.
With the substantial change that would be required to develop,
manufacture, and educate consumers about heat pump clothes dryers,
manufacturers were concerned they might not be able to make all the
required changes with a 3-year lead time between the announcement of
the final rule and the compliance date of the amended energy
conservation.
Manufacturers also indicated that an energy conservation standard
at a level that effectively required a heat pump clothes dryer would
force them to consider off-shoring any remaining production in the
United States. Besides the significant capital and product conversion
costs, manufacturers indicated that the much higher labor content of a
heat pump clothes dryer would put additional pressure on moving
production out of the United States. Finally, manufacturers believed
that repair and maintenance costs would increase if an energy
conservation standard effectively required heat pump clothes dryers.
Repair and maintenance costs would increase due to the more expensive
components, potential lint management problems, and some manufacturers'
inexperience with the technology.
Impacts on Profitability
Manufacturers indicated that an amended energy conservation
standard would likely impact profits in the clothes dryer market.
Because there is currently no energy label requirement and no ENERGY
STAR program for clothes dryers, manufacturers indicated that, unlike
clothes washers, efficiency does not command any premium in the market
(either in percentage or absolute terms). Because it is difficult to
communicate any energy benefit to consumers, it is very unlikely that
they could benefit from higher production costs caused by amended
energy conservation standards.
In addition, manufacturers indicated that the large incremental
cost jumps at some of the higher efficiency levels, including heat pump
clothes dryers, were unlikely to be fully passed on to their customers.
Beside the inability to show the energy benefit of the products,
manufacturers indicated that the concentrated number of players in the
retail market would put pressure on all manufacturers to keep costs
down in response to amended energy conservation standards.
Manufacturers also indicated that many of their sales are from pairs of
clothes washers and dryers that have similar price points. If the cost
of clothes dryers increased, manufacturers felt that retailers would
not accept any price increase to keep the retail prices of the matched
pair similar.
b. Room Air Conditioner Key Issues
Impact on Manufacturer Profitability
Several manufacturers stated that they expect amended energy
conservation standards to negatively impact the profitability of room
air conditioners. Higher component, tooling, and development costs for
more efficient products would increase MPCs, but manufacturers believed
these higher costs could not necessarily be passed on to consumers due
to the nature of the industry. A few large retailers dominate the
industry and exert downward pressure on prices. Retailers demand low
prices because consumers have come to expect room air conditioners at
particular price points. For example, consumers expect many product
offerings of product class 1 for under $100, and retailers have
successfully maintained that price point through competitive bidding.
This has resulted
[[Page 22524]]
in price pressure on the most popular units as manufacturers accept
lower absolute profit on those units in the hopes of making a larger
per unit profit on other more costly products. Many room air
conditioner purchases are weather-dependent, so consumers could easily
forgo the purchase of a room air conditioner unit altogether if prices
increased. Consequently, manufacturers believed that cost increases
would be at least partly absorbed by manufacturers to keep retail
prices from rising sharply.
If amended energy conservation standards led to a significant
reduction in profitability, some manufacturers could exit the market
(as a number of large players have in recent years). Many manufacturers
source room air conditioner lines from overseas and do not own the
production equipment. This arrangement would allow manufacturers to
exit the industry without stranded assets.
Impact on Product Utility
Manufacturers believed a negative profitability impact could also
indirectly affect product utility. Several manufacturers indicated that
other features that do not affect efficiency could be removed or
component quality could be sacrificed to meet amended standard levels
and maintain product prices at levels that would be acceptable to
consumers.
Manufacturers also expressed concern that the energy savings from
more stringent energy conservation standards would not be great enough
to justify passing through the added costs to consumers. Currently,
manufacturers bundle higher efficiency with other desirable features to
justify higher prices for ENERGY STAR models. According to
manufacturers, if amended standards caused prices to increase, the
lower operating costs would not justify higher prices because the
energy savings would be low compared to the initial price of the unit.
Therefore, the increased cost of meeting the amended efficiency
requirements may cause manufacturers to reduce the number of features
to retain a reasonable price point.
The value of future ENERGY STAR levels is also a concern for
manufacturers. Many retailers and other distribution channels require
ENERGY STAR products. Because the features bundled with ENERGY STAR
products are the selling point to consumers, manufacturers were
concerned that a higher ENERGY STAR level after amended standards would
result in products with fewer features.
Manufacturers also stated that the financial burden of developing
products to meet amended energy conservation standards has an
opportunity cost due to limited capital and R&D dollars. Investments
incurred to meet amended energy conservation standards reflect foregone
investments in innovation and the development of new features that
consumers value and on which manufacturers earn higher absolute profit.
Component Availability
Several manufacturers stated they were concerned about component
availability. Compressor availability since the conversion to R-410A
was the main problem cited by manufacturers. Some manufacturers stated
that component suppliers do not give priority to room air conditioning
because the market is exclusive to North America and smaller than some
of the other markets they supply. Since the conversion R-410A,
manufacturers noted the total production capacity of compressor
suppliers has not fully rebounded. In addition, compressor suppliers
have yet to offer the same range of compressor capacities and
efficiency tiers.
Size Constraints
A number of manufacturers expressed concerns about physical
limitations of how large room air conditioners could grow. Most
residential buildings have standardized window openings. Because a
large portion of air conditioners are installed in these standardized
openings, products must still fit in these typical windows after they
have been redesigned. Manufacturers were largely concerned that the
limited opportunity for growth also limited opportunities for
efficiency improvements. Increasing the size of units also presents a
problem for smaller air conditioners, which typically operate at under
10,000 Btu/hr. Much of the appeal of these units is that they can be
lifted and installed by one person. Increasing the size of these units
would greatly alter the market and may cause consumers to purchase less
efficient portable air-conditioning units.
Manufacturers mentioned refrigerant charge as another reason why
room air conditioners are constrained by size. If manufacturers used
increased coil size and a smaller compressor capacity to improve
efficiency, the larger heat exchangers combined with the reduced
nominal compressor capacity could lead to a system refrigerant charge
amount that exceeds the recommended level. Exceeding recommended charge
levels could damage the compressor, thereby limiting the extent of
efficiency improvements associated with coil size growth. To counteract
the increase in charge levels, some manufacturers have used smaller
tubing in their heat exchangers. However, North American suppliers are
not currently properly equipped to support smaller tube sizes and might
not be willing to make the investment required to do so.
Several manufacturers stated that size is also a concern because
moving from a smaller chassis to larger chassis would cause material
costs to increase dramatically due to more costly components and the
potential capital costs required for development. If the adopted
standards required significant rather than incremental increases in
efficiency, the largest units in each capacity range would likely have
to move to the next largest or a new chassis in order to meet the
required efficiency levels. This is a notable concern for capacities
above 28,000 Btu/hr because manufacturers could choose to no longer
offer these product lines due to the conversion cost.
Numerous manufacturers stated that size constraints pose a problem
for non-louvered units in particular. Non-louvered units inherently
have less room for efficiency improvement because they need to fit into
the existing sleeves in buildings. They are also constrained by air
flow, increasing the depth does not result in significant efficiency
gains because air on the condenser side must still flow through the
rear face. Additionally, increasing depth creates a product that is
less aesthetically pleasing and could decrease the available space in
the room.
Product Switching
Some manufacturers noted that higher consumer prices after an
amended energy conservation standard could result in product switching
along the upper capacity boundaries of a product class if efficiency
requirements are not implemented proportionally across product classes.
For example, if after energy conservation standards are amended the
first cost of units in product class 1 is not proportionally lower than
units in product class 3, consumers who would have purchased product
class 1 units are likely to purchase less efficient, slightly higher
capacity units in product class 3. Without a significant price
differential between product classes, consumers would be more likely to
buy units with higher capacity, potentially lowering the calculated
energy savings.
J. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard.
[[Page 22525]]
Employment impacts consist of direct and indirect impacts. Direct
employment impacts are any changes in the number of employees of
manufacturers of the appliance products that are the subject of this
rulemaking, their suppliers, and related service firms. Indirect
employment impacts are changes in national employment that occur due to
the shift in expenditures and capital investment caused by the purchase
and operation of more efficient appliances. The MIA discussed above in
Section IV.I. addresses the direct employment impacts that concern
manufacturers of clothes dryers and room air conditioners. The
employment impact analysis addresses the indirect employment impacts.
Indirect employment impacts from standards consist of the net jobs
created or eliminated in the national economy, other than in the
manufacturing sector being regulated, due to: (1) Reduced spending by
end users on energy; (2) reduced spending on new energy supply by the
utility industry; (3) increased spending on new products to which the
new standards apply; and (4) the effects of those three factors
throughout the economy. DOE expects the net monetary savings from
standards to be redirected to other forms of economic activity. DOE
also expects these shifts in spending and economic activity to affect
the demand for labor in the short term, as explained below.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sectoral
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (BLS).\54\ The BLS regularly publishes its estimates
of the number of jobs per million dollars of economic activity in
different sectors of the economy, as well as the jobs created elsewhere
in the economy by this same economic activity. Data from BLS indicate
that expenditures in the utility sector generally create fewer jobs
(both directly and indirectly) than expenditures in other sectors of
the economy. There are many reasons for these differences, including
wage differences and the fact that the utility sector is more capital
intensive and less labor intensive than other sectors.\55\
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\54\ Data on industry employment, hours, labor compensation,
value of production, and the implicit price deflator for output for
these industries are available upon request by calling the Division
of Industry Productivity Studies (202-691-5618) or by sending a
request by e-mail to [email protected]. Available at: http://www.bls.gov/news.release/prin1.nr0.htm.
\55\ See: Bureau of Economic Analysis. Regional Multipliers: A
User Handbook for the Regional Input-Output Modeling System (RIMS
II). 1192. U.S. Department of Commerce: Washington, DC.
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Energy conservation standards have the effect of reducing consumer
utility bills. Because reduced consumer expenditures for energy likely
lead to increased expenditures in other sectors of the economy, the
general effect of efficiency standards is to shift economic activity
from a less labor-intensive sector (i.e., the utility sector) to more
labor-intensive sectors (e.g., the retail and service sectors). Thus,
based on the BLS data alone, DOE believes net national employment will
increase due to shifts in economic activity resulting from amended
standards for clothes dryers and room air conditioners.
For the standard levels considered in today's direct final rule,
DOE estimated indirect national employment impacts using an input/
output model of the U.S. economy called Impact of Sector Energy
Technologies (ImSET). ImSET is a spreadsheet model of the U.S. economy
that focuses on 187 sectors most relevant to industrial, commercial,
and residential building energy use.\56\ 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. The ImSET software includes a
computer-based I-O model with structural coefficients to characterize
economic flows among the 187 sectors. ImSET's national economic I-O
structure is based on a 2002 U.S. benchmark table, specially aggregated
to the 187 sectors. DOE estimated changes in expenditures using the NIA
spreadsheet. Using ImSET, DOE then estimated the net national, indirect
employment impacts by sector of potential amended efficiency standards
for clothes dryers and room air conditioners.
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\56\ J.M. Roop, M.J. Scott, and R.W. Schultz. ImSET 3.1: Impact
of Sector Energy Technologies. 2009. Pacific Northwest National
Laboratory: Richland, WA. PNNL-18412. Available at: http://www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf.
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For more details on the employment impact analysis and the results
of this analysis, see direct final rule TSD chapter 13.
K. Utility Impact Analysis
The utility impact analysis estimates several important effects on
the utility industry of the adoption of new or amended standards. For
this analysis, DOE used the NEMS-BT model to generate forecasts of
electricity consumption, electricity generation by plant type, and
electric generating capacity by plant type, that would result from each
TSL. DOE obtained the energy savings inputs associated with efficiency
improvements to considered products from the NIA. DOE conducts the
utility impact analysis as a scenario that departs from the latest AEO
Reference case. In the analysis for today's rule, the estimated impacts
of standards are the differences between values forecasted by NEMS-BT
and the values in the AEO2010 Reference case.
As part of the utility impact analysis, DOE used NEMS-BT to assess
the impacts on electricity prices of the reduced need for new electric
power plants and infrastructure projected to result from the considered
standards. In NEMS-BT, changes in power generation infrastructure
affect utility revenue requirements, which in turn affect electricity
prices. DOE estimated the change in electricity prices projected to
result over time from each TSL. For further discussion, see section
IV.G.5.
For more details on the utility impact analysis and the results of
this analysis, see chapter 14 of the direct final rule TSD.
L. Environmental Assessment
Pursuant to the National Environmental Policy Act and the
requirements of 42 U.S.C. 6295(o)(2)(B)(i)(VI), DOE prepared an
environmental assessment (EA) of the impacts of the standards for
clothes dryers and room air conditioners in today's direct final rule,
which it has included as chapter 15 of the direct final rule TSD. DOE
found that the environmental effects associated with the standards for
clothes dryers and room air conditioners were not significant.
Therefore, DOE issued a Finding of No Significant Impact (FONSI)
pursuant to NEPA, the regulations of the Council on Environmental
Quality (40 CFR parts 1500-1508), and DOE's regulations for compliance
with NEPA (10 CFR part 1021). The FONSI is available in the docket for
this rulemaking.
In the EA, DOE estimated the reduction in power sector emissions of
CO2, NOX, and Hg using the NEMS-BT computer
model. In the EA, NEMS-BT is run similarly to the AEO NEMS, except that
clothes dryer and room air conditioner energy use is reduced by the
amount of energy saved (by fuel type) due to each TSL. The inputs of
national energy savings come from the NIA spreadsheet model, while the
output is the forecasted physical emissions. The net benefit of each
TSL in today's direct final rule is the difference between the
forecasted emissions estimated by NEMS-BT at each TSL and the AEO 2010
Reference Case. NEMS-BT tracks CO2 emissions using a
detailed module that provides results with broad
[[Page 22526]]
coverage of all sectors and inclusion of interactive effects. Because
the on-site operation of gas clothes dryers requires use of fossil
fuels and results in emissions of CO2, NOX and
sulfur dioxide (SO2), DOE also accounted for the reduction
in these emissions due to standards at the sites where these appliances
are used.
DOE has determined that SO2 emissions from affected
fossil fuel fired combustion devices (also known as Electric Generating
Units (EGUs)) are subject to nationwide and regional emissions cap and
trading programs that create uncertainty about the standards' impact on
SO2 emissions. Title IV of the Clean Air Act, 42 U.S.C.
7401-7671q, sets an annual emissions cap on SO2 for affected
EGUs in the 48 contiguous states and the District of Columbia (DC).
SO2 emissions from 28 eastern States and DC are also limited
under the Clean Air Interstate Rule (CAIR, 70 FR 25162 (May 12, 2005)),
which created an allowance-based trading program. Although CAIR has
been remanded to the EPA by the U.S. Court of Appeals for the District
of Columbia (DC Circuit), see North Carolina v. EPA, 550 F.3d 1176 (DC
Cir. 2008), it remains in effect temporarily, consistent with the DC
Circuit's earlier opinion in North Carolina v. EPA, 531 F.3d 896 (DC
Cir. 2008). On July 6, 2010, EPA issued the Transport Rule proposal, a
replacement for CAIR, which would limit emissions from EGUs in 32
states, potentially through the interstate trading of allowances, among
other options. 75 FR 45210 (Aug. 2, 2010).
The attainment of the emissions caps is typically flexible among
EGUs and is enforced through the use of emissions allowances and
tradable permits. Under existing EPA regulations, and under the
Transport Rule if it is finalized, any excess SO2 emission
allowances resulting from the lower electricity demand caused by the
imposition of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by any regulated EGU. However, if
the standard resulted in a permanent increase in the quantity of unused
emission allowances, there would be an overall reduction in
SO2 emissions from the standards. While there remains some
uncertainty about the ultimate effects of efficiency standards on
SO2 emissions covered by the existing cap and trade system,
the NEMS-BT modeling system that DOE uses to forecast emissions
reductions currently indicates that no physical reductions in power
sector emissions would occur for SO2.
A cap on NOX emissions, affecting electric generating
units in the CAIR region, means that standards on clothes dryers and
room air conditioners may have little or no physical effect on
NOX emissions in the 28 eastern States and the DC covered by
CAIR, or any states covered by the proposed Transport Rule if the
Transport Rule is finalized. The standards would, however, reduce
NOX emissions in those 22 States not affected by the CAIR.
As a result, DOE used NEMS-BT to forecast emission reductions from the
standards considered for today's direct final rule.
Similar to emissions of SO2 and NOX, future
emissions of Hg would have been subject to emissions caps. In May 2005,
EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 (May 18,
2005). CAMR would have permanently capped emissions of mercury for new
and existing coal-fired power plants in all States by 2010. However, on
February 8, 2008, the DC Circuit issued its decision in New Jersey v.
Environmental Protection Agency, in which it vacated CAMR. 517 F.3d 574
(DC Cir. 2008). EPA has decided to develop emissions standards for
power plants under the Clean Air Act (Section 112), consistent with the
DC Circuit's opinion on the CAMR. See http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf. Pending EPA's
forthcoming revisions to the rule, DOE is excluding CAMR from its
environmental assessment. In the absence of CAMR, a DOE standard would
likely reduce Hg emissions and DOE plans to use NEMS-BT to estimate
these emission reductions. However, DOE continues to review the impact
of rules that reduce energy consumption on Hg emissions, and may revise
its assessment of Hg emission reductions in future rulemakings.
The operation of gas clothes dryers requires use of fossil fuels
and results in emissions of CO2, NOX, and
SO2 at the sites where these appliances are used. NEMS-BT
provides no means for estimating such emissions. DOE calculated the
effect of the standards in today's rule on the above site emissions
based on emissions factors derived from the literature.
Commenting on the preliminary TSD, AHAM stated that if DOE includes
values for CO2 reductions, it should also include
CO2 emissions that result indirectly from changes in a
standard, including increased manufacturing emissions, increased
transportation emissions, and reduced carbon emissions from peak load
reductions. (AHAM, No. 25 at p. 12) In response, DOE notes that the
inputs to the EA for national energy savings come from the NIA. In the
NIA, DOE accounts for only the primary energy savings associated with
considered standards. In so doing, EPCA directs DOE to consider (when
determining whether a standard is economically justified) ``the total
projected amount of energy * * * savings likely to result directly from
the imposition of the standard.'' 42 U.S.C. 6295(o)(2)(B)(i)(III) DOE
interprets ``directly from the imposition of the standard'' to include
energy used in the generation, transmission, and distribution of fuels
used by appliances. In addition, DOE is evaluating the full-fuel-cycle
measure, which includes the energy consumed in extracting, processing,
and transporting primary fuels (see section IV.G.3). Both DOE's current
accounting of primary energy savings and the full-fuel-cycle measure
are directly linked to the energy used by appliances. In contrast,
energy used in manufacturing and transporting appliances is a step
removed from the energy used by appliances. Thus, DOE did not consider
such energy use in either the NIA or the EA. DOE did include
CO2 emissions reductions resulting from projected impacts of
revised standards on electricity demand.
M. Monetizing Carbon Dioxide and Other Emissions Impacts
As part of the development of this direct final rule, DOE
considered the estimated monetary benefits likely to result from the
reduced emissions of CO2 NOX that are expected to
result from each of the TSLs considered. In order to make this
calculation similar to the calculation of the NPV of consumer benefit,
DOE considered the reduced emissions expected to result over the
lifetime of products shipped in the forecast period for each TSL. This
section summarizes the basis for the monetary values used for each of
these emissions and presents the benefits estimates considered.
For today's direct final rule, DOE is relying on a set of values
for the social cost of carbon (SCC) that was developed by an
interagency process. A summary of the basis for these values is
provided below, and a more detailed description of the methodologies
used is provided in appendix 15-A of the direct final rule TSD.
1. Social Cost of Carbon
Under Executive Order 12866, agencies must, to the extent permitted
by law, ``assess both the costs and the benefits of the intended
regulation and, recognizing that some costs and benefits are difficult
to quantify, propose or adopt a regulation only upon a reasoned
determination that the benefits of the intended regulation justify its
costs.'' The purpose of the SCC estimates
[[Page 22527]]
presented here is to allow agencies to incorporate the monetized social
benefits of reducing CO2 emissions into cost-benefit
analyses of regulatory actions that have small, or ``marginal,''
impacts on cumulative global emissions. The estimates are presented
with an acknowledgement of the many uncertainties involved and with a
clear understanding that they should be updated over time to reflect
increasing knowledge of the science and economics of climate impacts.
As part of the interagency process that developed these SCC
estimates, technical experts from numerous agencies met on a regular
basis to consider public comments, explore the technical literature in
relevant fields, and discuss key model inputs and assumptions. The main
objective of this process was to develop a range of SCC values using a
defensible set of input assumptions grounded in the existing scientific
and economic literatures. In this way, key uncertainties and model
differences transparently and consistently inform the range of SCC
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
The SCC is an estimate of the monetized damages associated with an
incremental increase in carbon emissions in a given year. It is
intended to include (but is not limited to) changes in net agricultural
productivity, human health, property damages from increased flood risk,
and the value of ecosystem services. Estimates of the SCC are provided
in dollars per metric ton of carbon dioxide.
When attempting to assess the incremental economic impacts of
carbon dioxide emissions, the analyst faces a number of serious
challenges. A recent report from the National Research Council \57\
points out that any assessment will suffer from uncertainty,
speculation, and lack of information about (1) future emissions of
greenhouse gases, (2) the effects of past and future emissions on the
climate system, (3) the impact of changes in climate on the physical
and biological environment, and (4) the translation of these
environmental impacts into economic damages. As a result, any effort to
quantify and monetize the harms associated with climate change will
raise serious questions of science, economics, and ethics and should be
viewed as provisional.
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\57\ National Research Council. Hidden Costs of Energy: Unpriced
Consequences of Energy Production and Use. National Academies Press:
Washington, DC. 2009.
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Despite the serious limits of both quantification and monetization,
SCC estimates can be useful in estimating the social benefits of
reducing carbon dioxide emissions. Consistent with the directive quoted
above, the purpose of the SCC estimates presented here is to make it
possible for agencies to incorporate the social benefits from reducing
carbon dioxide emissions into cost-benefit analyses of regulatory
actions that have small, or ``marginal,'' impacts on cumulative global
emissions. Most Federal regulatory actions can be expected to have
marginal impacts on global emissions.
For such policies, the agency can estimate the benefits from
reduced (or costs from increased) emissions in any future year by
multiplying the change in emissions in that year by the SCC value
appropriate for that year. The net present value of the benefits can
then be calculated by multiplying each of these future benefits by an
appropriate discount factor and summing across all affected years. This
approach assumes that the marginal damages from increased emissions are
constant for small departures from the baseline emissions path, an
approximation that is reasonable for policies that have effects on
emissions that are small relative to cumulative global carbon dioxide
emissions. For policies that have a large (non-marginal) impact on
global cumulative emissions, there is a separate question of whether
the SCC is an appropriate tool for calculating the benefits of reduced
emissions. DOE does not attempt to answer that question here.
At the time of the preparation of this notice, the most recent
interagency estimates of the potential global benefits resulting from
reduced CO2 emissions in 2010, expressed in 2009$, were
$4.9, $22.1, $36.3, and $67.1 per metric ton avoided. For emission
reductions that occur in later years, these values grow in real terms
over time. Additionally, the interagency group determined that a range
of values from 7 percent to 23 percent should be used to adjust the
global SCC to calculate domestic effects,\58\ although preference is
given to consideration of the global benefits of reducing
CO2 emissions.
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\58\ It is recognized that this calculation for domestic values
is approximate, provisional, and highly speculative. There is no a
priori reason why domestic benefits should be a constant fraction of
net global damages over time.
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It is important to emphasize that the interagency process is
committed to updating these estimates as the science and economic
understanding of climate change and its impacts on society improves
over time. Specifically, the interagency group has set a preliminary
goal of revisiting the SCC values within 2 years or at such time as
substantially updated models become available, and to continue to
support research in this area. In the meantime, the interagency group
will continue to explore the issues raised by this analysis and
consider public comments as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
To date, economic analyses for Federal regulations have used a wide
range of values to estimate the benefits associated with reducing
carbon dioxide emissions. In the final model year 2011 CAFE rule, the
Department of Transportation (DOT) used both a ``domestic'' SCC value
of $2 per ton of CO2 and a ``global'' SCC value of $33 per
ton of CO2 for 2007 emission reductions (in 2007 dollars),
increasing both values at 2.4 percent per year.\59\ See Average Fuel
Economy Standards Passenger Cars and Light Trucks Model Year 2011, 74
FR 14196 (March 30, 2009); Final Environmental Impact Statement
Corporate Average Fuel Economy Standards, Passenger Cars and Light
Trucks, Model Years 2011-2015 at 3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy). It also included a sensitivity analysis
at $80 per ton of CO2. A domestic SCC value is meant to
reflect the value of damages in the United States resulting from a unit
change in carbon dioxide emissions, while a global SCC value is meant
to reflect the value of damages worldwide.
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\59\ Values per ton of CO2 given in this section
refer to metric tons.
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A 2008 regulation proposed by DOT assumed a domestic SCC value of
$7 per ton of CO2 (in 2006 dollars) for 2011 emission
reductions (with a range of $0-$14 for sensitivity analysis), also
increasing at 2.4 percent per year. See Average Fuel Economy Standards,
Passenger Cars and Light Trucks, Model Years 2011-2015, 73 FR 24352
(May 2, 2008); Draft Environmental Impact Statement Corporate Average
Fuel Economy Standards, Passenger Cars and Light Trucks, Model Years
2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). A regulation for packaged terminal air conditioners and
packaged terminal heat pumps finalized by DOE in October of 2008 used a
domestic SCC range of $0 to $20 per ton CO2 for 2007
emission reductions (in 2007 dollars). 73 FR 58772, 58814 (Oct. 7,
2008) In addition, EPA's 2008 Advance Notice of Proposed Rulemaking for
Greenhouse Gases
[[Page 22528]]
identified what it described as ``very preliminary'' SCC estimates
subject to revision. See Regulating Greenhouse Gas Emissions Under the
Clean Air Act, 73 FR 44354 (July 30, 2008). EPA's global mean values
were $68 and $40 per ton CO2 for discount rates of
approximately 2 percent and 3 percent, respectively (in 2006 dollars
for 2007 emissions).
In 2009, an interagency process was initiated to offer a
preliminary assessment of how best to quantify the benefits from
reducing carbon dioxide emissions. To ensure consistency in how
benefits are evaluated across agencies, the Administration sought to
develop a transparent and defensible method, specifically designed for
the rulemaking process, to quantify avoided climate change damages from
reduced CO2 emissions. The interagency group did not
undertake any original analysis. Instead, it combined SCC estimates
from the existing literature to use as interim values until a more
comprehensive analysis could be conducted. The outcome of the
preliminary assessment by the interagency group was a set of five
interim values: Global SCC estimates for 2007 (in 2006 dollars) of $55,
$33, $19, $10, and $5 per ton of CO2.
These interim values represent the first sustained interagency
effort within the U.S. government to develop an SCC for use in
regulatory analysis. The results of this preliminary effort were
presented in several proposed and final rules and were offered for
public comment in connection with proposed rules, including the joint
EPA-DOT fuel economy and CO2 tailpipe emission proposed
rules. See CAFE Rule for Passenger Cars and Light Trucks Draft EIS and
Final EIS, cited above.
c. Current Approach and Key Assumptions
Since the release of the interim values, the interagency group
reconvened on a regular basis to generate improved SCC estimates, which
were used in this direct final rule. Specifically, the group considered
public comments and further explored the technical literature in
relevant fields.
The interagency group relied on three integrated assessment models
(IAMs) commonly used to estimate the SCC: The FUND, DICE, and PAGE
models.\60\ These models are frequently cited in the peer-reviewed
literature and were used in the last assessment of the
Intergovernmental Panel on Climate Change. Each model was given equal
weight in the SCC values that were developed.
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\60\ The models are described in appendix 15-A of the final rule
TSD.
---------------------------------------------------------------------------
Each model takes a slightly different approach to model how changes
in emissions result in changes in economic damages. A key objective of
the interagency process was to enable a consistent exploration of the
three models while respecting the different approaches to quantifying
damages taken by the key modelers in the field. An extensive review of
the literature was conducted to select three sets of input parameters
for these models: Climate sensitivity, socio-economic and emissions
trajectories, and discount rates. A probability distribution for
climate sensitivity was specified as an input into all three models. In
addition, the interagency group used a range of scenarios for the
socio-economic parameters and a range of values for the discount rate.
All other model features were left unchanged, relying on the model
developers' best estimates and judgments.
The interagency group selected four SCC values for use in
regulatory analyses. Three values are based on the average SCC from
three integrated assessment models, at discount rates of 2.5, 3, and 5
percent. The fourth value, which represents the 95th percentile SCC
estimate across all three models at a 3-percent discount rate, is
included to represent higher-than-expected impacts from temperature
change further out in the tails of the SCC distribution. For emissions
(or emission reductions) that occur in later years, these values grow
in real terms over time, as depicted in Table IV-33.
Table IV-33--Social Cost of CO2, 2010-2050
[In 2007 dollars per metric ton]
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------
5% Avg 3% Avg 2.5% Avg 3% 95th
----------------------------------------------------------------------------------------------------------------
2010........................................................ 4.7 21.4 35.1 64.9
2015........................................................ 5.7 23.8 38.4 72.8
2020........................................................ 6.8 26.3 41.7 80.7
2025........................................................ 8.2 29.6 45.9 90.4
2030........................................................ 9.7 32.8 50.0 100.0
2035........................................................ 11.2 36.0 54.2 109.7
2040........................................................ 12.7 39.2 58.4 119.3
2045........................................................ 14.2 42.1 61.7 127.8
2050........................................................ 15.7 44.9 65.0 136.2
----------------------------------------------------------------------------------------------------------------
It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable since they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Research
Council report mentioned above points out that there is tension between
the goal of producing quantified estimates of the economic damages from
an incremental ton of carbon and the limits of existing efforts to
model these effects. There are a number of concerns and problems that
should be addressed by the research community, including research
programs housed in many of the agencies participating in the
interagency process to estimate the SCC.
The U.S. government intends to periodically review and reconsider
estimates of the SCC used for cost-benefit analyses to reflect
increasing knowledge of the science and economics of climate impacts,
as well as improvements in modeling. In this context, statements
recognizing the
[[Page 22529]]
limitations of the analysis and calling for further research take on
exceptional significance. The interagency group offers the new SCC
values with all due humility about the uncertainties embedded in them
and with a sincere promise to continue work to improve them.
In summary, in considering the potential global benefits resulting
from reduced CO2 emissions, DOE used the most recent values
identified by the interagency process, adjusted to 2009$ using the GDP
price deflator values for 2008 and 2009. For each of the four cases
specified, the values used for emissions in 2010 were $4.9, $22.1,
$36.3, and $67.1 per metric ton avoided (values expressed in 2009$). To
monetize the CO2 emissions reductions expected to result
from amended standards for clothes dryers and room air conditioners in
2014-2043, DOE used the values identified in Table A1 of the ``Social
Cost of Carbon for Regulatory Impact Analysis Under Executive Order
12866,'' which is reprinted in appendix 16-A of the direct final rule
TSD, appropriately adjusted to 2009$.\61\ To calculate a present value
of the stream of monetary values, DOE discounted the values in each of
the four cases using the specific discount rate that had been used to
obtain the SCC values in each case.
---------------------------------------------------------------------------
\61\ Table A1 presents SCC values through 2050. For DOE's
calculation, it derived values after 2050 using the 3-percent per
year escalation rate used by the interagency group.
---------------------------------------------------------------------------
2. Valuation of Other Emissions Reductions
DOE investigated the potential monetary benefit of reduced
NOX emissions from the TSLs it considered. As noted above,
amended energy conservation standards would reduce NOX
emissions in those 22 States that are not affected by the CAIR, in
addition to the reduction in site NOX emissions nationwide.
DOE estimated the monetized value of NOX emissions
reductions resulting from each of the TSLs considered for today's
direct final rule based on environmental damage estimates from the
literature. Available estimates suggest a very wide range of monetary
values, ranging from $370 per ton to $3,800 per ton of NOX
from stationary sources, measured in 2001$ (equivalent to a range of
$447 to $4,591 per ton in 2009$).\62\ In accordance with OMB guidance,
DOE conducted two calculations of the monetary benefits derived using
each of the economic values used for NOX, one using a real
discount rate of 3 percent and another using a real discount rate of 7
percent.\63\
---------------------------------------------------------------------------
\62\ For additional information, refer to U.S. Office of
Management and Budget, Office of Information and Regulatory Affairs.
2006 Report to Congress on the Costs and Benefits of Federal
Regulations and Unfunded Mandates on State, Local, and Tribal
Entities. 2006. Washington, DC.
\63\ OMB, Circular A-4: Regulatory Analysis (Sept. 17, 2003).
---------------------------------------------------------------------------
DOE is aware of multiple agency efforts to determine the
appropriate range of values used in evaluating the potential economic
benefits of reduced Hg emissions. DOE has decided to await further
guidance regarding consistent valuation and reporting of Hg emissions
before it once again monetizes Hg in its rulemakings.
Commenting on the preliminary TSD, Whirlpool stated that
CO2 emissions should not be monetized because the market
value cannot be readily determined, the impact is negligible, and it is
already included in energy savings. (Whirlpool, No. 22 at p. 6) DOE
acknowledges that the market value of future CO2 emissions
reductions is uncertain, and for this reason it uses a wide range of
potential values, as described above. The impact of revised standards
for room air conditioners and clothes dryers on future CO2
emissions, described in section V.6 of this notice, is not negligible.
In addition, the value of CO2 emissions reductions is not
included in energy cost savings because the energy prices that DOE used
to calculate those savings do not include any taxes or other charges to
account for the CO2 emissions associated with the use of
electricity or natural gas by the considered appliances.
V. Analytical Results
The following section addresses the results from DOE's analyses
with respect to potential energy conservation standards for the
products examined as part of this rulemaking. It addresses the TSLs
examined by DOE, the projected impacts of each of these levels if
adopted as energy conservation standards for clothes dryers and room
air conditioners, and the standards levels that DOE sets forth in
today's direct final rule. Additional details regarding the analyses
conducted by the agency are contained in the publicly available direct
final rule TSD supporting this notice.
A. Trial Standard Levels
DOE analyzed the benefits and burdens of a number of TSLs for the
products that are the subject of today's direct final rule. A
description of each TSL DOE analyzed is provided below. DOE attempted
to limit the number of TSLs considered for the final rule by excluding
efficiency levels that do not exhibit significantly different economic
or engineering characteristics from the efficiency levels already
selected as a TSL. While DOE presents the results for only those
efficiency levels in TSL combinations, DOE presents the results for all
efficiency levels that it analyzed in chapter 10 of the direct final
rule TSD.
Table V-1 presents the TSLs and the corresponding product class
efficiency levels for clothes dryers. TSL 1 consists of the efficiency
levels with the largest market share with a positive NPV (at a 3-
percent discount rate). TSL 2 consists of the efficiency levels with
the highest NPV (at a 3-percent discount rate). TSL 3 consists of the
efficiency levels with the highest energy savings and a positive NPV
(at a 3-percent discount rate). TSL 4 consists of the efficiency levels
that reflect 5-percent efficiency increase above the baseline. TSL 4
also corresponds to the standards recommended by the Joint Petitioners.
TSL 5 consists of non heat pump design efficiency levels with the
highest energy savings. TSL 6 consists of the max-tech efficiency
levels.
Table V-1--Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
CEF
Product class -----------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard............................ 3.56 3.61 3.73 3.73 4.08 5.42
Vented Electric Compact 120V........................ 3.43 3.61 3.61 3.61 4.08 5.41
Vented Electric Compact 240V........................ 3.12 3.27 3.27 3.27 3.60 4.89
Vented Gas.......................................... 3.16 3.20 3.20 3.30 3.61 3.61
Ventless Electric Compact 240V...................... 2.55 2.69 2.69 2.55 2.80 4.03
Ventless Electric Combination Washer/Dryer.......... 2.08 2.56 2.56 2.08 2.56 3.69
----------------------------------------------------------------------------------------------------------------
[[Page 22530]]
Table V-2 presents the TSLs and the corresponding product class
efficiency levels for room air conditioners. TSL 1 consists of the
efficiency levels with the largest market share with a positive NPV (at
a 3-percent discount rate). TSL 2 consists of the ENERGY STAR levels
for each product class. TSL 3 consists of the efficiency levels with
the highest NPV (at a 3-percent discount rate). TSL 4 consists of the
efficiency levels set forth in the Joint Petition presented to DOE. TSL
5 consists of the efficiency levels with the highest energy savings and
a positive NPV (at a 7-percent discount rate). TSL 6 consists of the
max-tech efficiency levels.
Table V-2--Trial Standard Levels for Room Air Conditioners
----------------------------------------------------------------------------------------------------------------
CEER
Product class -----------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1.............................. 10.10 10.60 10.10 11.10 11.10 11.67
Group 2--includes PC 2, 3, 4, 11.................... 10.70 10.70 10.90 10.90 11.50 11.96
Group 3--includes PC 5A, 9, 13...................... 9.40 9.40 8.47 9.40 8.47 10.15
Group 4--includes PC 5B, 10......................... 9.40 9.40 8.48 9.00 8.48 9.80
Group 5--includes PC 6, 7, 8A, 12................... 9.30 9.30 9.60 9.60 10.00 10.35
Group 6--includes PC 8B, 14, 15, 16................. 9.30 9.30 9.50 9.50 9.50 10.02
----------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
Consumers affected by new or amended standards usually experience
higher purchase prices and lower operating costs. Generally, these
impacts on individual consumers are best captured by changes in life-
cycle costs and by the payback period. Therefore, DOE calculated the
LCC and PBP analyses for the potential standard levels considered in
this rulemaking. DOE's LCC and PBP analyses provided key outputs for
each TSL, which are reported by clothes dryer product class in Table V-
3 through Table V-8, and by room air conditioner product class in Table
V-9 through Table V-14. Each table includes the average total LCC and
the average LCC savings, as well as the fraction of product consumers
for which the LCC will either decrease (net benefit), or increase (net
cost), or exhibit no change (no impact) relative to the base-case
forecast. The last output in the tables is the median PBP for the
consumer purchasing a design that complies with the TSL. DOE presents
the median PBP because it is the most statistically robust measure of
the PBP. The results for each potential standard level are relative to
the efficiency distribution in the base case (no amended standards).
DOE based the LCC and PBP analyses on the range of energy consumption
under conditions of actual product use.
Table V-3--LCC and Payback Period Results for Electric Standard Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 3.56 $455 $867 $1,323 $0 0.7 97.6 1.7 3.9
2....................................................... 3.61 456 856 1,311 2 0.3 78.7 21.0 0.2
3, 4.................................................... 3.73 467 829 1,296 14 19.0 24.8 56.3 5.3
5....................................................... 4.08 583 761 1,343 -30 75.3 1.0 23.7 19.1
6....................................................... 5.42 879 580 1,459 -146 81.0 0.0 19.0 22.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-4--LCC and Payback Period Results for Electric Compact 120V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 3.43 $470 $384 $854 n/a 0 100 0 n/a
2, 3, 4................................................. 3.61 471 369 840 $14 4.0 0.0 96.0 0.9
5....................................................... 4.08 627 325 953 -99 95.5 0.0 4.5 36.1
6....................................................... 5.41 875 243 1,118 -264 95.4 0.0 4.6 40.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22531]]
Table V-5--LCC and Payback Period Results for Electric Compact 240V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 3.12 $470 $427 $896 n/a 0 100 0 n/a
2, 3, 4................................................. 3.27 471 411 882 $8 2.3 41.4 56.3 0.9
5....................................................... 3.60 627 373 1,000 -99 93.3 4.2 2.5 45.1
6....................................................... 4.89 875 272 1,147 -246 94.5 0.0 5.5 38.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-6--LCC and Payback Period Results for Gas Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................................... 3.16 $554 $445 $999 n/a 0 100 0 n/a
2, 3.................................................... 3.20 555 440 995 $0 0.5 92.9 6.6 2.2
4....................................................... 3.30 555 427 983 2 0.3 84.5 15.2 0.5
5, 6.................................................... 3.61 658 404 1,062 -69 87.7 10.5 1.8 73.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-7--LCC and Payback Period Results for Ventless 240V Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 4.................................................... 2.55 $1,093 $452 $1,545 n/a 0 100 0 n/a
2, 3.................................................... 2.69 1,094 431 1,525 $20 0.0 0.0 100.0 0.9
5....................................................... 2.80 1,176 411 1,587 -42 92.5 0.0 7.5 25.3
6....................................................... 4.03 1,462 261 1,722 -177 88.5 0.0 11.5 26.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-8--LCC and Payback Period Results for Ventless Combination Washer/Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEF Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 4.................................................... 2.08 $1,533 $565 $2,098 n/a 0 100 0 n/a
2, 3, 5................................................. 2.56 1,579 446 2,025 $73 20.6 0.0 79.4 5.3
6....................................................... 3.69 1,981 282 2,263 -166 82.4 0.0 17.6 22.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-9--LCC and Payback Period Results for Room Air Conditioners, < 6,000 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 3.................................................... 10.10 $361 $357 $718 $9 21.2 30.7 48.1 4.1
2....................................................... 10.60 374 341 715 11 32.8 30.7 36.6 5.8
4, 5.................................................... 11.10 393 326 719 7 64.6 1.2 34.2 8.6
6....................................................... 11.67 472 311 784 -58 90.4 0.0 9.6 20.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 22532]]
Table V-10--LCC and Payback Period Results for Room Air Conditioners, 8,000-13,999 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2.................................................... 10.70 $493 $557 $1,050 $16 9.3 60.5 30.2 0.0
3, 4.................................................... 10.90 497 547 1,045 22 33.6 2.2 64.1 2.8
5....................................................... 11.50 525 519 1,044 22 55.7 0.8 43.4 7.1
6....................................................... 11.96 605 500 1,104 -38 77.3 0.5 22.2 14.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-11--LCC and Payback Period Results for Room Air Conditioners, 20,000-24,999 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
3, 5.................................................... 8.47 $857 $750 $1,607 n/a 0 100 0 n/a
1, 2, 4................................................. 9.40 887 672 1,559 $6 5.1 85.3 9.6 4.3
6....................................................... 10.15 1,159 626 1,785 -214 97.6 2.1 0.3 73.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-12--LCC and Payback Period Results for Room Air Conditioners, > 25,000 Btu/h, With Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
3, 5.................................................... 8.48 $979 $823 $1,802 n/a 0 100 0 n/a
4....................................................... 9.00 1,019 777 1,796 $1 8.9 87.6 3.5 10.1
1, 2.................................................... 9.40 1,058 739 1,797 1 11.0 85.3 3.7 10.3
6....................................................... 9.80 1,313 712 2,025 -227 99.8 0.0 0.2 107.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-13--LCC and Payback Period Results for Room Air Conditioners, 8,000-10,999 Btu/h, Without Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2.................................................... 9.30 %495 $490 $986 $4 0.9 89.9 9.2 1.5
3, 4.................................................... 9.60 498 476 974 13 12.3 25.2 62.5 2.1
5....................................................... 10.00 512 454 966 20 38.0 5.6 56.3 4.9
6....................................................... 10.35 615 440 1,055 -66 91.8 1.9 6.2 25.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-14--LCC and Payback Period Results for Room Air Conditioners, > 11,000 Btu/h, Without Louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Life-cycle cost 2009$ LCC savings Payback
---------------------------------------------------------------------------- period
Percent of households that years
TSL CEER Discounted Average experience ---------
Installed operating LCC savings ------------------------------
cost cost 2009$ No Net Median
Net cost impact benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2.................................................... 9.30 $590 $698 $1,288 $5 2.2 89.9 7.9 2.6
3, 4, 5................................................. 9.50 596 684 1,279 11 22.7 30.6 46.6 3.7
9.80 611 660 1,271 18 36.0 17.3 46.6 5.3
[[Page 22533]]
6....................................................... 10.02 707 647 1,354 -64 92.6 0.0 7.3 25.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Consumer Subgroup Analysis
As described in section IV.H, DOE determined the impact of the
considered TSLs on low-income households and senior-only households.
Table V-15 and Table V-16 compare the average LCC savings at each
efficiency level for the two consumer subgroups with the average LCC
savings for the entire sample for each product class for clothes dryers
and room air conditioners, respectively. DOE found that the average LCC
savings for low-income households and senior-only households at the
considered efficiency levels are not substantially different from the
average for all households. Chapter 11 of the direct final rule TSD
presents the complete LCC and PBP results for the two subgroups.
Table V-15--Clothes Dryers: Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric standard Vented 120V Vented 240V
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low- Low- Low-
CEF Senior income All CEF Senior income All CEF Senior income All
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.56........................................... $0 $0 $0 3.48 $3 $3 $4 3.16 $2 $2 $2
3.61........................................... 2 2 2 3.61 14 13 14 3.27 9 8 8
3.73........................................... 7 12 14 3.72 -8 -5 -5 3.36 -8 -6 -5
3.81........................................... -40 -30 -27 3.80 -63 -57 -56 3.48 -54 -47 -47
4.08........................................... -62 -38 -30 4.08 -113 -99 -99 3.60 -110 -99 -99
5.42........................................... -245 -170 -146 5.41 -306 -262 -264 4.89 -291 -243 -246
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas Ventless 240V
Ventless Combination
--------------------------------------------------------------------------------------------------------------------------------------------------------
CEF Senior Low- All CEF Senior Low- All CEF Senior Low- All
income income income
--------------------------------------------------------------------------------------------------------------------------------------------------------
3.16........................................... $0 $0 $0 2.59 $5 $5 $5 2.35 $49 $76 $75
3.20........................................... 2 2 2 2.69 20 19 20 2.38 54 80 79
3.30........................................... -1 2 2 2.71 -14 -14 -13 2.46 68 93 93
3.41........................................... -76 -69 -69 2.80 -49 -42 -42 2.56 41 73 73
3.61........................................... -115 -100 -100 4.03 -234 -175 -177 3.69 -253 -162 -166
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-16--Room Air Conditioners: Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
< 6,000 Btu/h, with louvers 8,000-13,999 Btu/h, with louvers 20,000-24,999 Btu/h, with louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low- Low- Low-
CEER Senior income All CEER Senior income All CEER Senior income All
--------------------------------------------------------------------------------------------------------------------------------------------------------
10.10.......................................... $5 $12 $9 10.20 $8 $10 $9 9.00 $1 $7 $3
10.60.......................................... 4 17 11 10.70 13 18 16 9.40 3 13 6
11.10.......................................... -5 17 7 10.90 17 24 22 9.80 -17 8 -10
11.38.......................................... -17 9 -3 11.50 14 27 22 10.15 -223 -187 -214
11.67.......................................... -75 -44 -58 11.96 -49 -31 -38 ....... ....... ......... .......
--------------------------------------------------------------------------------------------------------------------------------------------------------
> 25,000 Btu/h, with louve8,000-10,999 Btu/h, without louvers
> 11,000 Btu/h, without louvers
--------------------------------------------------------------------------------------------------------------------------------------------------------
CEER Senior Low- All CEER Senior Low- All CEER Senior Low- All
income income income
--------------------------------------------------------------------------------------------------------------------------------------------------------
9.00........................................... $0 $4 $1 9.30 $4 $5 $4 9.30 $4 $6 $5
9.40........................................... -1 7 1 9.60 11 15 13 9.50 9 13 11
9.80........................................... -234 -209 -227 10.00 16 23 20 9.80 13 21 18
....... ......... ....... 10.35 -73 -62 -66 10.02 -71 -60 -64
--------------------------------------------------------------------------------------------------------------------------------------------------------
c. Rebuttable Presumption Payback
As discussed above, EPCA provides a rebuttable presumption that an
energy conservation standard is economically justified if the increased
purchase cost for a product that meets the standard is less than three
times the value of the first-year energy savings resulting from the
standard. In calculating a rebuttable presumption payback period for
the considered standard levels, DOE used discrete values rather than
distributions for input values, and, as required by EPCA, based the
energy use calculation on the DOE test procedures for the considered
products. As a result, DOE calculated a single rebuttable presumption
payback value, and not a distribution of payback periods, for each
efficiency level. Table V-17 and Table V-18 present the average
rebuttable presumption payback periods for those efficiency levels
where the increased
[[Page 22534]]
purchase cost for a product that meets a standard at that level is less
than three times the value of the first-year energy savings resulting
from the standard.
Table V-17--Clothes Dryers: Efficiency Levels With Rebuttable Payback
Period Less Than Three Years
------------------------------------------------------------------------
PBP
Product class CEF (years)
------------------------------------------------------------------------
Electric standard................................... 3.61 0.95
Electric compact 120V............................... 3.48 2.49
3.61 0.86
Electric compact 240V............................... 3.16 2.57
3.27 0.85
Gas................................................. 3.20 1.81
Ventless compact 240V............................... 2.59 2.33
2.69 0.83
Ventless combination washer/dryers.................. 2.46 0.42
2.46 0.68
2.46 0.74
------------------------------------------------------------------------
Table V-18--Room Air Conditioners: Efficiency Levels With Rebuttable
Payback Period Less Than Three Years
------------------------------------------------------------------------
PBP
Product class CEER (years)
------------------------------------------------------------------------
Room Air Conditioners (8000-13,999 Btu/h), with 10.2 1.1
Louvers............................................
10.7 1.6
10.9 1.8
Room Air Conditioners (20,000-24,999 Btu/h), with 9.0 0.9
Louvers............................................
9.4 1.1
9.8 1.9
Room Air Conditioners (> 25,000 Btu/h), with Louvers 9.0 2.1
9.4 2.4
Room Air Conditioners (8000-10,999 Btu/h), without 9.3 0.6
Louvers............................................
9.6 0.7
10.0 1.3
Room Air Conditioners (> 11,000 Btu/h), without 9.3 1.3
Louvers............................................
9.5 1.4
9.8 1.9
------------------------------------------------------------------------
While DOE examined the rebuttable-presumption criterion, it
considered whether the standard levels considered for today's rule are
economically justified through a more detailed analysis of the economic
impacts of these levels pursuant to 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE to definitively
evaluate the economic justification for a potential standard level
(thereby supporting or rebutting the results of any preliminary
determination of economic justification).
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of clothes dryers and room air
conditioners. The section below describes the expected impacts on
manufacturers at each TSL. Chapter 12 of the direct final rule TSD
explains the analysis in further detail.
a. Industry Cash Flow Analysis Results
The tables below depict the financial impacts on manufacturers
(represented by changes in INPV) and the conversion costs DOE estimates
manufacturers would incur at each TSL. Each set of results below shows
two tables of INPV impacts: The first table reflects the lower (less
severe) bound of impacts and the second represents the upper bound. To
evaluate this range of cash-flow impacts on each industry, DOE modeled
two different scenarios using different markup assumptions. These
assumptions correspond to the bounds of a range of market responses
that DOE anticipates could occur in the standards case. Each scenario
results in a unique set of cash flows and corresponding industry value
at each TSL.
The INPV results refer to the difference in industry value between
the base case and the standards case, which DOE calculated by summing
the discounted industry cash flows from the base year (2011) through
the end of the analysis period. The discussion also notes the
difference in cash flow between the base case and the standards case in
the year before the compliance date of potential amended energy
conservation standards. This figure provides a proxy for the magnitude
of the required conversion costs, relative to the cash flow generated
by the industry in the base case.
Cash Flow Analysis Results for Clothes Dryers
To assess the lower (less severe) end of the range of potential
impacts on the residential clothes dryer industry, DOE modeled the flat
markup scenario. The flat markup scenario assumes that in the standards
case manufacturers would be able to pass the higher productions costs
required for more efficient products on to their customers.
Specifically, the industry would be able to maintain its average base-
case gross margin, as a percentage of revenue, despite higher product
costs. In general, the larger the product price increases, the less
likely manufacturers are to achieve the cash flow from operations
calculated in this scenario because the less likely it is that
[[Page 22535]]
manufacturers would be able to fully markup these larger cost
increases.
To assess the higher (more severe) end of the range of potential
impacts on the residential clothes dryer industry, DOE modeled the
preservation of operating profit markup scenario. The scenario
represents the upper end of the range of potential impacts on
manufacturers because no additional operating profit is earned on the
higher production costs, eroding profit margins as a percentage of
total revenue.
DOE used the main NIA shipment scenario for the both the lower- and
higher-bound MIA scenarios that were used to characterize the potential
INPV impacts. The shipment forecast is an important driver of the INPV
results below (Table V-19 and Table V-20). The main NIA shipment
scenario includes a price elasticity effect, meaning higher prices in
the standards case result in lower shipments. Lower shipments also
reduce industry revenue, and, in turn, INPV.
Table V-19--Manufacturer Impact Analysis for Clothes Dryers--Flat Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.................................... 2009$ millions 1,003.6 1,001.1 1,000.0 962.5 939.2 827.1 699.7
Change in INPV.......................... 2009$ millions .......... -2.6 -3.6 -41.13 -64.46 -176.5 -303.9
% .......... -0.3% -0.4% -4.1% -6.4% -17.6% -30.3%
Product Conversion Costs................ 2009$ millions .......... 4 5 18 24 166 383
Capital Conversion Costs................ 2009$ millions .......... 0 2 48 71 328 536
---------------------------------------------------------------------------------------------------------------
Total Conversion Costs.............. 2009$ millions .......... 4 7 66 95 494 919
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-20--Manufacturer Impact Analysis for Clothes Dryers--Preservation of Operating Profit Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................... 2009$ millions 1,003.6 1,001.0 998.7 948.2 923.0 606.2 273.6
Change in INPV......................... 2009$ millions .......... -2.6 -4 -55.46 -80.63 -397.4 -730.0
% .......... -0.3% -0.5% -5.5% -8.0% -39.6% -72.7%
Product Conversion Costs............... 2009$ millions .......... 4 5 18 24 166 383
Capital Conversion Costs............... 2009$ millions .......... 0 2 48 71 328 536
----------------------------------------------------------------------------------------------------------------
Total Conversion Costs............. 2009$ millions .......... 4 7 66 95 494 919
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1 represents the baseline CEF for 120V electric compact clothes
dryers (product class 2), 240V electric compact clothes dryers (product
class 3), 240V compact ventless clothes dryers (product class 5), and
electric combination ventless clothes dryers (product class 6). TSL 1
represents a CEF of 3.56 for standard-size vented electric clothes
dryers (product class 1) and a CEF of 3.16 for gas vented clothes
dryers (product class 4). At TSL 1, DOE estimates impacts on INPV to
range -$2.55 million to -$2.62 million, or a change in INPV of -0.3
percent. At this proposed level, industry free cash flow is estimated
to decrease by approximately 1.6 percent to $68.6 million, compared to
the base-case value of $69.7 million in the year leading up to the
proposed energy conservation standards.
The design options DOE analyzed for product class 1 and 4 include
lowering standby power consumption only. Standby power changes would
result in only minor changes to baseline products and would take a
minimal effort by manufacturers to comply with the amended energy
conservation standards. The standby power changes at TSL 1 would
require relatively small product development efforts to reach the CEF
levels and would not change the assembly of currently products, greatly
limiting the necessary capital conversion costs. In addition, the
design options for standby power do not add significant costs to
existing products. Therefore, the impact on manufacturers is very small
at TSL 1.
TSL 2 represents a CEF of 3.61 for product class 1, a CEF of 3.61
for product class 2, a CEF of 3.27 for product class 3, a CEF of 3.20
for product class 4, a CEF of 2.69 for product class 5, and a CEF of
2.56 for product class 6. At TSL 2, DOE estimates impacts on INPV to
range -$3.6 million to -$4.9 million, or a change in INPV of -0.4
percent to -0.5 percent. At this proposed level, industry free cash
flow is estimated to decrease by approximately 3.0 percent to $67.6
million, compared to the base-case value of $69.7 million in the year
leading up to the proposed energy conservation standards.
The design options analyzed at TSL 2 for product classes 1 through
5 represent improvements to standby power consumption only. The changes
required at TSL 2 would not greatly alter baseline products for these
product classes because these analyzed design options are small
component changes for standby power for product classes 1 through 5.
The design options analyzed for product class 6 include changes to
active mode power consumption. However, these active mode changes for
product class 6 are also relatively minor and would take a minimal
effort by manufacturers to comply with the amended energy conservation
standards. For product class 6, the analyzed design option for active
mode is automatic cycle termination technology which adds very little
cost to the product and takes minimal capital and product conversion
costs to implement. Because the changes for product class 1 through 5
only include standby power changes and the active mode changes for
product class 6 are minor, the impact on manufacturers is very small at
TSL 2.
The efficiency requirements for product classes 2 to 6 are the same
at TSL 3 as at TSL 2. TSL 3, however, represents a further improvement
to a CEF of 3.73 for product class 1. At TSL 3, DOE estimates impacts
on INPV to range from -$41.1 million to -$55.5 million, or a change in
INPV of -4.1 percent to -5.5 percent. At this proposed level, industry
free cash flow is estimated to decrease by approximately 34.2 percent
to $45.9
[[Page 22536]]
million, compared to the base-case value of $69.7 million in the year
leading up to the proposed energy conservation standards.
The design options DOE analyzed for product class 1 include
improvements to standby and active power consumption (airflow
improvements, a dedicated heater duct, and an open cylinder drum).
While the actual design path taken by manufacturers could vary at TSL
3, these technologies represent incremental improvements and are well
known in the industry. The changes for design options analyzed for
product class 1 would require both changes to production equipment and
product development costs. These design options would not greatly alter
the production process for product class 1 and could be made within
most existing products. The conversion costs to implement these changes
are also relatively low compared to the total value of the industry.
The industry impacts would increase at TSL 3, however, because for
product class 1, manufacturers would have to make changes for a large
volume of the common standard-size electric models.
TSL 4 represents the baseline efficiency for product classes 5 and
6. TSL 4 also represents the same efficiency requirements for product
classes 2 and 3 as TSL 2 and TSL 3. TSL 4 also has the same efficiency
requirements for product class 1 as TSL 3, but represents a 3.30 CEF
for product class 4. At TSL 4, DOE estimates impacts on INPV to range -
$64.5 million to -$80.6 million, or a change in INPV of -6.4 percent to
-8.0 percent. At this proposed level, industry free cash flow is
estimated to decrease by approximately 49.8 percent to $35.0 million,
compared to the base-case value of $69.7 million in the year leading up
to the proposed energy conservation standards.
The impacts at TSL 4 are due primarily to the efficiency
requirements for product classes 1 and 4 because all other product
classes are at baseline efficiency or could be met with changes to
standby power consumption. For both product classes 1 and 4, DOE
analyzed changes to standby power consumption and the same improvements
to active mode power consumption for both gas and electric units
(airflow improvements, a dedicated heater duct, and an open cylinder
drum). As with TSL 3, while the actual design path taken by
manufacturers could vary at TSL 4, these technologies represent
incremental improvements to most products and are well known in the
industry. Industry impacts would increase at TSL 4, however, because
for both product classes 1 and 4, the changes would require
improvements in the most common standard-size gas and electric products
on the market today. The changes for design options analyzed for
product class 1 and 4 would require both changes to production
equipment and product development costs. These design options would not
greatly alter the production processes for either product class and
could be made within most existing products. The conversion costs to
implement these changes for both product class 1 and 4 are still
relatively low compared to the total value of the industry.
TSL 5 represents a CEF of 4.08 for product class 1, a CEF of 4.08
for product class 2, a CEF of 3.60 for product class 3, a CEF of 3.61
for product class 4, a CEF of 2.80 for product class 5, and a CEF of
2.56 for product class 6. At TSL 5, DOE estimates impacts on INPV to
range -$176.5 million to -$397.4 million, or a change in INPV of -17.6
percent to -39.6 percent. At this proposed level, industry free cash
flow is estimated to decrease by approximately 249.7 percent to -$104.4
million, compared to the base-case value of $69.7 million in the year
leading up to the proposed energy conservation standards.
Most of the impacts on INPV at TSL 5 are due to the efficiency
requirements for product classes 1 through 4. Very few products on the
market today meet the efficiency requirements at TSL 5, and for product
classes 1 through 4, TSL 5 represents the most efficient units
currently on the market. The design options DOE analyzed for these
product classes included similar design options for all product classes
as for product classes 1 and 4 at TSL 4 (airflow improvements, a
dedicated heater duct, and an open cylinder drum) plus additional
changes. In addition to airflow improvements, a dedicated heater duct,
and an open cylinder drum, the design options analyzed by DOE also
include modulating heat, inlet air preheating, and a more efficient fan
motor. Out of all these design options used the reach the required
efficiencies at TSL 5, inlet air preheating would require the most
substantial changes to existing products because it would change the
ducting system. This change would impact drum stamping equipment and,
possibly, the fabrication of the cabinets for some product lines. The
impacts also increase dramatically at TSL 5 due to the large increase
in production costs for the additional design options beyond those
needed to reach the required efficiencies at TSL 4. The large
incremental costs result in lower shipments due to the price
elasticity. These additional costs also cause a greater impact on INPV
if manufactures are unable to earn additional profit on these added
costs (under the preservation of operating profit markup scenario).
TSL 6 represents the max-tech level for all product classes. The
max-tech level corresponds to a CEF of 5.42 for product class 1, a CEF
of 5.41 for product class 2, a CEF of 4.89 for product class 3, a CEF
of 3.61 for product class 4, a CEF of 4.03 for product class 5, and a
CEF of 3.69 for product class 6. At TSL 6, DOE estimates impacts on
INPV to range -$303.9 million to -$730.0 million, or a change in INPV
of -30.3 percent to -72.7 percent. At this proposed level, industry
free cash flow is estimated to decrease by approximately 467.5 percent
to -$256.2 million, compared to the base-case value of $69.7 million in
the year leading up to the proposed energy conservation standards.
At TSL 6, the efficiency requirements for all electric clothes
dryers would effectively require a heat pump clothes dryer. Currently,
there are no heat pump clothes dryers on the market in the United
States. Manufacturing exclusively heat pump clothes dryers would be
extremely disruptive to existing manufacturing facilities. A heat pump
standard would require a total renovation of existing facilities and
would force the industry to design completely new clothes dryer
platforms. The capital conversion costs for these changes are extremely
large--more than double the capital conversion costs calculated for
these products to meet TSL 5. The product development costs to
manufacturer heat pump clothes dryers also increase substantially
because manufacturers must not only redesign clothes washer platforms,
but also design the heat pump system. Manufacturers also indicated that
training their service and installation network to use a completely
different technology would be extremely costly, as would the cost to
educate consumers. Finally, the impacts on INPV are also great at TSL 6
because the cost of a heat pump clothes dryer is more than double a
minimally compliant clothes dryer in the market today. If manufactures
are unable to earn additional profit on these production costs,
profitability is severely impacted.
Cash Flow Analysis Results for Room Air Conditioners
To assess the lower (less severe) end of the range of potential
impacts on the room air conditioner industry, DOE modeled the flat
markup scenario. The
[[Page 22537]]
flat markup scenario assumes that in the standards case manufacturers
would be able to pass the higher productions costs required for more
efficient products on to their customers. Specifically, the industry
would be able to maintain its average base-case gross margin, as a
percentage of revenue, despite higher product costs. In general, the
larger the product price increases, the less likely manufacturers are
to achieve the cash flow from operations calculated in this scenario
because the less likely it is that manufacturers would be able to fully
markup these larger cost increases.
To assess the higher (more severe) end of the range of potential
impacts on the room air conditioner industry, DOE modeled the
preservation of operating profit markup scenario. Through its
discussion with manufacturers, DOE found that manufacturers are faced
with significant market pressure to keep prices low. Consumers are
accustomed to certain price points for room air conditioners, and they
could forgo their purchases if prices increased significantly because
many purchases are weather-dependent impulse buys. As a result, several
key retailers exert their purchasing power to pressure manufacturers to
offer product lines at low prices. Higher efficiency units that earn a
premium in the base case are bundled with additional features that
drive higher prices. Thus, manufacturers are skeptical that customers
would accept higher prices for increased energy efficiency because it
does not command higher margins in the current market. Under such a
scenario, it follows that the large retailers that compose the
relatively concentrated customer base of the industry would not accept
manufacturers fully passing through the additional cost of improved
efficiency because consumers would be wary of higher prices. Therefore,
to assess the higher (more severe) end of the range of potential
impacts, DOE modeled the preservation of operating profit markup
scenario in which higher energy conservation standards result in lower
manufacturer markups. This markup is applied to both the minimum
standard level and the de facto minimally efficient products due to the
modeled efficiency migration over time. This scenario models
manufacturers' concerns that the higher costs of more efficient
technology would harm profitability if the full cost increases cannot
be passed on. The scenario represents the upper end of the range of
potential impacts on manufacturers because no additional operating
profit is earned on the investments required to meet the proposed
amended energy conservation standards, while higher production costs
erode profit margins and result in lower cash flows from operations.
DOE used the main NIA shipment scenario for the both the lower- and
higher-bound MIA scenarios that were used to characterize the potential
INPV impacts. The shipment forecast is an important driver of the INPV
results below (Table V-21 and Table V-22). The main NIA shipment
scenario includes a price elasticity effect, meaning higher prices in
the standards case result in lower shipments. Lower shipments also
reduce industry revenue, and, in turn, INPV.
Table V-21--Manufacturer Impact Analysis for Room Air Conditioners--Flat Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2009$ millions......... 956.0.................. 911.8 890.6 890.3 844.7 869.5 875.9
Change in INPV...................... 2009$ millions......... ....................... (44.2) (65.4) (65.7) (111.3) (86.6) (80.2)
%...................... ....................... -4.6% -6.8% -6.9% -11.6% -9.1% -8.4%
Product Conversion Costs............ 2009$ millions......... ....................... 22 29 41 61 74 117
Capital Conversion Costs............ 2009$ millions......... ....................... 46 69 61 109 101 193
-------------------------------------------------------------------------------------------------------------------
Total Conversion Costs.............. 2009$ millions......... ....................... 68 98 102 171 176 310
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table V-22--Manufacturer Impact Analysis for Room Air Conditioners--Preservation of Operating Profit Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Units Base case -----------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................ 2009$ millions......... 956.0.................. 871.1 843.3 843.6 778.4 771.6 611.5
Change in INPV...................... 2009$ millions......... ....................... (84.9) (112.7) (112.4) (177.6) (184.4) (344.5)
%...................... ....................... -8.9% -11.8% -11.8% -18.6% -19.3% -36.0%
Product Conversion Costs............ 2009$ millions......... ....................... 22 29 41 61 74 117
Capital Conversion Costs............ 2009$ millions......... ....................... 46 69 61 109 101 193
-------------------------------------------------------------------------------------------------------------------
Total Conversion Costs.............. 2009$ millions......... ....................... 68 98 102 171 176 310
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1 represents a CEER of 9.30 for product class 8A (without
reverse cycle and without louvered sides--8,000 to 10,999 Btu/h) and
product class 8B (without reverse cycle and without louvered sides--
11,000 to 13,999 Btu/h); 9.40 for product class 5A (without reverse
cycle and with louvered sides--20,000 to 24,999 Btu/h) and product
class 5B (without reverse cycle and with louvered sides--25,000 Btu/h
and more); 10.10 for product class 1 (without reverse cycle and with
louvered sides--less than 6,000 Btu/h); and 10.70 for product class 3
(without reverse cycle and with louvered sides--8,000 to 13,999 Btu/h).
At TSL 1, DOE estimates impacts on INPV to range from -$44.2 million to
-$84.9 million, or a change in INPV of -4.6 percent to -8.9 percent. At
this proposed level, industry free cash flow is estimated to decrease
by approximately 27.7 percent to $62.4 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed
energy conservation standards.
The INPV impacts at TSL 1 are relatively minor, in part because the
vast majority of manufacturers produce
[[Page 22538]]
units that exceed this level (such as, ENERGY STAR and other high
efficiency units) in significant volumes. Approximately 60 percent of
product class 3 shipments, 85 percent of product class 5A and 5B
shipments, and 90 percent of product class 8A and 8B shipments
currently meet this TSL. By contrast, the vast majority of product
class 1 shipments are baseline units. Although most of the design
options DOE analyzed at this proposed level are one-for-one component
swaps, some more complex design options that would be required at TSL 1
necessitate more substantial changes. These design options that have a
significant impact on conversion costs at TSL 1 are heat exchanger
changes and increased chassis volumes. Changes to the condenser or
evaporator require machinery for new dies for every product line and
require greater design effort than component swaps. Increased chassis
volumes require a complete redesign of the product and substantial
tooling to make the unit larger. Although some room air conditioners,
particularly those in product class 1, will require these changes at
TSL 1, these changes would not be required across the entire industry
because the majority of units in most product classes already meet TSL
1. As such, DOE estimated total product conversion costs of $22 million
and capital conversion costs of $46 million, which is relatively low
compared to the industry value of $956 million.
The efficiency requirements for product class 3, product class 5A,
product class 5B, product class 8A, and product class 8B are the same
at TSL 2 as TSL 1. Thus, the only change from TSL 1 occurs for product
class 1, which requires a CEER of 10.60 at TSL 2. DOE estimates the
INPV impacts at TSL 2 range from -$65.4 million to -$112.7 million, or
a change in INPV of -6.8 percent to -11.8 percent. At this proposed
level, the industry cash flow is estimated to decrease by approximately
40.5 percent to $51.4 million, compared to the base-case value of $86.3
million in the year leading up to the proposed energy conservation
standard.
The additional impacts at TSL 2 relative to TSL 1 result from the
further improvements manufacturers must make to meet a CEER of 10.6 for
product class 1. Most units in product class 1 would need to increase
their chassis size even further than at TSL 1 in order to meet TSL 2,
resulting in estimated product and capital conversion costs of $29
million and $69 million, respectively.
TSL 3 represents different efficiency levels for every product
class compared to TSL 2. TSL 3 represents the baseline CEERs of 8.47
and 8.48 for product classes 5A and 5B, respectively, meaning that no
amended standards would be set and no impacts on INPV would occur. TSL
3 represents a CEER of 9.50 for product class 8B, 9.60 for product
class 8A, 10.10 for product class 1, and 10.90 for product class 3. DOE
estimates the INPV impacts at TSL 3 to range from -$65.7 million to -
$112.4 million, or a change in INPV of -6.9 percent to -11.8 percent.
At this proposed level, the industry cash flow is estimated to decrease
by approximately 40.5 percent to $51.4 million, compared to the base-
case value of $86.3 million in the year leading up to the standards.
At TSL 3, several product classes require design options that
increase conversion costs. For product class 1, some units would
require increased chassis volumes, though not as substantially as at
TSL 2. For product class 3, all smaller units would require chassis
changes, driving the majority of the conversion costs at TSL 3. For
product classes 8A and 8B, some changes to the heat exchangers would be
required. However, no conversion costs would be applied to product
classes 5A and 5B, resulting in total product and capital conversion
costs at TSL 3 of $41 million and $61 million, respectively.
TSL 4 represents the same efficiency requirements as TSL 3 for
product classes 3, 8A, and 8B. For product class 5B, TSL 4 represents a
CEER of 9.00. For product class 5A, TSL 4 represents a CEER of 9.40,
and for product class 1, TSL 4 represents a CEER of 11.10. DOE
estimates the INPV impacts at TSL 4 to range from -$111.3 million to -
$177.6 million, or a change in INPV of -11.6 percent to -18.6 percent.
At this proposed level, the industry cash flow is estimated to decrease
by approximately 69.1 percent to $26.7 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed
energy conservation standards.
At TSL 4, significant changes to the manufacturing process would be
required. Product classes 1, 5A, and 5B would all require increased
chassis volumes, and product classes 1 and 5A would also require heat
exchanger changes. These design options drive increases of $20 million
in product conversion costs and $48 million in capital conversion costs
compared to TSL 3.
TSL 5 represents the same efficiency requirements as TSL 4 for
product classes 1 and 8B. For product classes 5A and 5B, TSL 5
represents the baseline CEERs of 8.47 and 8.48, respectively, so all
impacts of TSL 4 on these product classes, such as chassis changes,
would not be required. For product class 8A, TSL 5 represents a CEER of
10.00, and for product class 3, TSL 5 represents a CEER of 11.50. DOE
estimates the INPV impacts at TSL 5 to range from -$86.6 million to -
$184.4 million, or a change in INPV of -9.1 percent to -19.3 percent.
At this proposed level, the industry cash flow is estimated to decrease
by approximately 69.3 percent to $26.5 million, compared to the base-
case value of $86.3 million in the year leading up to the proposed
energy conservation standards.
At TSL 5, impacts are negative under both scenarios due to the high
conversion costs that exist at TSL 5. Although capital conversion costs
would be $8 million lower at TSL 5 than at TSL 4 due to the removal of
any capital costs associated with product classes 5A and 5B (despite
higher capital costs for product class 3), product conversion costs are
$13 million higher at TSL 5 compared to TSL 4 because a greater number
of product lines would need to be redesigned at this level.
TSL 6 represents max-tech for all room air conditioners. The max-
tech level corresponds to CEERs of 9.80, 10.02, 10.15, 10.35, 11.67,
and 11.96 for product classes 5B, 8B, 5A, 8A, 1, and 3, respectively.
DOE estimates the INPV impacts at TSL 6 to range from -$80.2 million to
-$344.5 million, or a change in INPV of -8.4 percent to -36.0 percent.
At this proposed level, the industry cash flow is estimated to decrease
by 124.8 percent to -$21.4 million, compared to the base-case value of
$86.3 million in the year leading up to the proposed energy
conservation standards.
At TSL 6, all products would need to be fully redesigned, resulting
in large product and capital conversion costs of $117 million and $193
million, respectively. These conversion costs are mostly driven by the
high-volume product classes 1 and 3 and their associated chassis and
heat exchanger changes.
b. Impacts on Employment
Clothes Dryer Employment Impacts
For clothes dryers, DOE used the GRIM to estimate the domestic
labor expenditures and number of domestic production workers in the
base case and at each TSL from 2011 to 2043. DOE used statistical data
from the most recent U.S. Census Bureau's 2008
[[Page 22539]]
``Annual Survey of Manufacturers,'' the results of the engineering
analysis, and interviews with manufacturers to determine the inputs
necessary to calculate industry-wide labor expenditures and domestic
employment levels. Labor expenditures for the manufacture of a product
are a function of the labor intensity of the product, the sales volume,
and an assumption that wages in real terms remain constant.
In the GRIM, DOE used the labor content of each product and the
manufacturing production costs from the engineering analysis to
estimate the annual labor expenditures in the clothes dryers and room
air conditioner industries. DOE used Census data and interviews with
manufacturers to estimate the portion of the total labor expenditures
that is attributable to domestic labor.
The production worker estimates in this section only cover workers
up to the line-supervisor level who are directly involved in
fabricating and assembling a product within an Original Equipment
Manufacturer (OEM) facility. Workers performing services that are
closely associated with production operations, such as material handing
with a forklift, are also included as production labor. DOE's estimates
account only for production workers who manufacture the specific
products covered by this rulemaking.
The employment impacts shown in Table V-23 represent the potential
production employment that could result following amended energy
conservation standards. The upper end of the results in this table
estimates the total potential increase in the number of production
workers after amended energy conservation standards. To calculate the
total potential increase, DOE assumed that manufacturers continue to
produce the same scope of covered products in domestic production
facilities and domestic production is not shifted to lower-labor-cost
countries. Because there is a real risk of manufacturers evaluating
sourcing decisions in response to amended energy conservation
standards, the lower end of the range of employment results in Table V-
23 includes the estimated total number of U.S. production workers in
the industry who could lose their jobs if all existing production were
moved outside of the United States. While the results present a range
of employment impacts following the compliance date of amended energy
conservation standards, the discussion below also includes a
qualitative discussion of the likelihood of negative employment impacts
at the various TSLs. Finally, the employment impacts shown are
independent of the employment impacts from the broader U.S. economy,
which are documented in chapter 13 of the direct final rule TSD.
Using the GRIM, DOE estimates that in the absence of amended energy
conservation standards, there would be 4,426 domestic production
workers involved in manufacturing residential clothes dryers in 2014.
Using 2008 Census Bureau data and interviews with manufacturers, DOE
estimates that approximately three-quarters of clothes dryers sold in
the United States are manufactured domestically. Table V-23 shows the
range of the impacts of potential amended energy conservation standards
on U.S. production workers in the clothes dryer industry.
Table V-23--Potential Changes in the Total Number of Domestic Clothes Dryer Production Workers in 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base case 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Workers in 2014 3,962 3,962 3,965 4,370 4,420 5,040 6,218
(without changes in production locations)...........
Potential Changes in Domestic Production Workers in ........... 0-(3,962) 3-(3,962) 408-(3,962) 458-(3,962) 1,078-(3,962) 2,256-(3,962)
2014 *..............................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative numbers.
All examined TSLs show relatively minor impacts on domestic
employment levels at the lower end of the range. In particular, the
design options used in the engineering analysis for TSL 1 and TSL 2
almost exclusively involve changes to standby power. These TSLs would
not measurably impact domestic employment levels.
At TSL 3 through TSL 5, DOE analyzed design options for the most
common product classes that would add labor content to the final
product. If manufacturers continue to produce these more complex
products in house, it is likely that employment would increase in
response to the energy conservation standards. At TSL 3 through 5,
greater levels of domestic production employment are also likely
because, while requiring more labor, the product changes could be made
within existing platforms. The ability to make product changes within
existing platforms mitigates some of the pressure to find lower labor
costs because this decision would add disruptions with suppliers and
add capital costs. However, TSL 6 would effectively require heat pump
clothes dryers for all electric units. Manufacturers indicated that
such a drastic change to existing products could force them to consider
moving domestic production to countries with lower labor costs. Besides
the large capital conversion costs, the much higher labor content in
heat pump clothes dryers would also put pressure on manufacturers to
consider a lower-labor-cost country.
Room Air Conditioner Employment Impacts
DOE's research suggests that currently no room air conditioners are
made domestically. All manufacturers or their domestic distributors do
maintain offices in the United States to handle design, technical
support, training, certification, and other requirements. As amended
energy conservation standards for room air conditioners are
implemented, however, DOE does not anticipate any changes in domestic
employment levels.
c. Impacts on Manufacturing Capacity
Clothes Dryers
At TSL 1 through TSL 5, manufacturers could maintain capacity
levels and continue to meet market demand under amended energy
conservation standards. While the changes required at these TSLs would
require changes that could be made within most existing designs, TSL 6,
which would effectively require heat pump technology, could result in
short-term capacity constraints. Significant changes to production
facilities would be required if amended energy conservation standards
effectively
[[Page 22540]]
mandated heat pump clothes dryers at TSL 6. Several manufacturers
stated that they could move all or part of their production if they
were required to exclusively manufacture heat pump clothes dryers.
Because of these drastic changes, a 3-year time period between the
announcement of the final rule and the compliance date of the amended
energy conservation standard might not be sufficient to design and
manufacture products that have yet to be introduced in the United
States and which would require new dryer designs from each manufacturer
that continued to offer electric clothes dryers for the United States
market.
Room Air Conditioners
DOE anticipates that amended energy conservation standards would
not significantly affect the production capacity of room air
conditioner manufacturers. Manufacturers mentioned two issues that
could potentially constrain capacity. One is the availability of high
efficiency compressors, which are currently difficult to obtain.
Because amended energy conservation standards would cause the demand
for high efficiency compressors to increase, manufacturers worried that
they would not be able to obtain the quantities they need to maintain
desired production levels. DOE understands that compressor availability
is a concern at present. DOE does not believe this shortage will
continue when amended standards take effect in 2014 because the number
of R-410A compressors available for the room air conditioner industry
has already greatly expanded since the ban on R-22 took effect. Because
there is a 3-year delay between the announcement of the final rule and
the compliance date of the amended energy conservation standard, DOE
believes suppliers will have sufficient time to anticipate demand and
ramp up production of high efficiency compressors for room air
conditioners.
The second potential capacity constraint involves changes to
existing chassis sizes, which could be required by amended energy
conservation standards. Manufacturers stated that increasing chassis
volume requires significant product development and capital
investments, which could severely disrupt production at their
facilities. DOE understands that increasing chassis volume causes
substantial conversion costs, which are quantified in the GRIM. DOE
does not believe, however, that the proposed standards would
significantly affect production capacity. Even though chassis size
increases require large capital and product conversion costs, this
design option is not required across all analyzed product classes. In
addition, manufacturers were more concerned about the capital and
product conversion costs to make these changes than having a three year
implementation period to do so, and DOE has accounted for these costs
in the establishment of the room air conditioner standards. DOE
believes that room air conditioner manufacturers will be able to
increase chassis volumes by 2014 while maintaining production capacity
levels and continuing to meet market demand for all room air
conditioner standard levels.
d. Impacts on Sub-Groups of Manufacturers
Using average cost assumptions to develop an industry cash-flow
estimate is not adequate for assessing differential impacts among
manufacturer subgroups. Small manufacturers, niche equipment
manufacturers, and manufacturers exhibiting a cost structure
substantially different from the industry average could be affected
disproportionately. While DOE analyzed the impacts to small business in
section VI.B, DOE did not identify any other subgroups for clothes
dryers or room air conditioners for this rulemaking based on the
results of the industry characterization.
e. Cumulative Regulatory Burden
While any one regulation may not impose a significant burden on
manufacturers, the combined effects of several impending regulations
may have serious consequences for some manufacturers, groups of
manufacturers, or an entire industry. Assessing the impact of a single
regulation may overlook this cumulative regulatory burden. In addition
to energy conservation standards, other regulations can significantly
affect manufacturers' financial operations. Multiple regulations
affecting the same manufacturer can strain profits and can lead
companies to abandon product lines or markets with lower expected
future returns than competing products. For these reasons, DOE conducts
an analysis of cumulative regulatory burden as part of its rulemakings
pertaining to appliance efficiency.
During previous stages of this rulemaking DOE identified a number
of requirements, in addition to amended energy conservation standards
for clothes dryers and room air conditioners, with which manufacturers
of these products will be required to comply. Manufacturers provided
comment on some of these regulations during the preliminary analysis
period, including UL 2158, which deals with fire containment in
electric clothes dryers, and the Montreal Protocol, which banned R-22
refrigerant in new room air conditioners. DOE summarizes and addresses
these comments in section IV.I.3.b and provides additional details of
the cumulative regulatory burden analysis in chapter 12 of the direct
final rule TSD.
3. National Impact Analysis
a. Significance of Energy Savings
To estimate the energy savings through 2043 attributable to
potential standards for clothes dryers and room air conditioners, DOE
compared the energy consumption of these products under the base case
to their anticipated energy consumption under each TSL. As discussed in
section IV.E, the results account for a rebound effect of 15 percent
for room air conditioners (that is, 15 percent of the total savings
from higher product efficiency are ``taken back'' by consumers through
more intensive use of the product).
Table V-24 and Table V-25 present DOE's forecasts of the national
energy savings for each TSL for clothes dryers and room air
conditioners, respectively. The savings were calculated using the
approach described in section IV.G. Chapter 10 of the direct final rule
TSD presents tables that also show the magnitude of the energy savings
if the savings are discounted at rates of 7 and 3 percent. Discounted
energy savings represent a policy perspective in which energy savings
realized farther in the future are less significant than energy savings
realized in the nearer term.
Table V-24--Clothes Dryers: Cumulative National Energy Savings in Quads
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard.............. 0.000 0.038 0.347 0.347 1.268 2.923
Vented Electric Compact 120V.......... 0.000 0.000 0.000 0.000 0.002 0.003
[[Page 22541]]
Vented Electric Compact 240V.......... 0.000 0.001 0.001 0.001 0.006 0.016
Vented Gas............................ 0.000 0.009 0.009 0.038 0.164 0.164
Ventless Electric Compact 240V........ 0.000 0.002 0.002 0.000 0.004 0.016
Ventless Electric Combination Washer/ 0.000 0.011 0.011 0.000 0.011 0.023
Dryer................................
-------------------------------------------------------------------------
Total............................. 0.00 0.062 0.37 0.386 1.455 3.145
----------------------------------------------------------------------------------------------------------------
Table V-25--Room Air Conditioners: Cumulative National Energy Savings in Quads
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................ 0.046 0.083 0.046 0.133 0.133 0.171
Group 2--includes PC 2, 3, 4, 11...... 0.051 0.115 0.161 0.161 0.327 0.445
Group 3--includes PC 5A, 9, 13........ 0.001 0.001 0.000 0.001 0.000 0.008
Group 4--includes PC 5B, 10........... 0.000 0.000 0.000 0.000 0.000 0.003
Group 5--includes PC 6, 7, 8A, 12..... 0.004 0.004 0.006 0.006 0.014 0.021
Group 6--includes PC 8B, 14, 15, 16... 0.002 0.002 0.004 0.004 0.004 0.016
-------------------------------------------------------------------------
Total............................. 0.105 0.205 0.218 0.305 0.477 0.665
----------------------------------------------------------------------------------------------------------------
DOE also performed a sensitivity to investigate the impact of
adding the rebound effect on the NES for the six energy efficiency TSLs
for clothes dryers in appendix 10-C of the TSD. As described in more
detail in the TSD, at least one study estimated a potential rebound
effective of 5 percent for clothes dryers. The NES results for this
sensitively show a consistent, small decrease in potential energy
savings from a standard. (Refer to section IV.E for a discussion of the
rebound effect.)
DOE recognizes that there may be forms of direct consumer rebound
that have not been measured in previous studies. For example, if
automatic termination of clothes dryer cycles leaves clothes feeling
humid or damp, then consumers may change to longer timed drying cycles.
DOE is addressing this type of rebound effect in updates of its clothes
dryer test procedure which provides for a field use factor that relates
tested clothes dryer energy use to in-field energy use. If DOE detects
a significant rebound effect from changing characteristics of clothes
dryers, DOE will consider such effects in updates of its test procedure
regulations and in future amendments to the energy conservation
standards, as appropriate.
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV to the nation of the total costs
and savings for consumers that would result from particular standard
levels for clothes dryers and room air conditioners. In accordance with
the OMB's guidelines on regulatory analysis (OMB Circular A-4, section
E, September 17, 2003), DOE calculated NPV using both a 7-percent and a
3-percent real discount rate. The 7-percent rate is an estimate of the
average before-tax rate of return to private capital in the U.S.
economy, and reflects the returns to real estate and small business
capital as well as corporate capital. DOE used this discount rate to
approximate the opportunity cost of capital in the private sector,
since recent OMB analysis has found the average rate of return to
capital to be near this rate. In addition, DOE used the 3-percent rate
to capture the potential effects of standards on private consumption
(for example, through higher prices for products and the purchase of
reduced amounts of energy). This rate represents the rate at which
society discounts future consumption flows to their present value. This
rate can be approximated by the real rate of return on long-term
government debt (that is, yield on Treasury notes minus annual rate of
change in the Consumer Price Index), which has averaged about 3 percent
on a pre-tax basis for the last 30 years.
Table V-26 through Table V-29 show the consumer NPV results for
each TSL DOE considered for clothes dryers and room air conditioners,
using both a 7-percent and a 3-percent discount rate. In each case, the
impacts cover the lifetime of products purchased in 2014-2043. See
chapter 10 of the direct final rule TSD for more detailed NPV results.
Table V-26--Cumulative Net Present Value of Consumer Benefits for Clothes Dryers, 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard.............. 0.00 0.40 2.779 2.779 2.125 0.563
Vented Electric Compact 120V.......... 0.00 0.005 0.005 0.005 -0.013 -0.029
Vented Electric Compact 240V.......... 0.00 0.014 0.014 0.014 -0.066 -0.12
Vented Gas............................ 0.00 0.094 0.094 0.215 -1.906 -1.906
Ventless Electric Compact 240V........ 0.00 0.019 0.019 0.00 -0.010 -0.036
[[Page 22542]]
Ventless Electric Combination Washer/ 0.00 0.086 0.086 0.00 0.086 0.00
Dryer................................
-------------------------------------------------------------------------
Total............................. 0.00 0.619 2.998 3.013 0.216 -1.528
----------------------------------------------------------------------------------------------------------------
Table V-27--Cumulative Net Present Value of Consumer Benefits for Clothes Dryers, 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
Vented Electric Standard.............. 0.00 0.168 1.017 1.017 -1.079 -5.025
Vented Electric Compact 120V.......... 0.00 0.002 0.002 0.002 -0.011 -0.024
Vented Electric Compact 240V.......... 0.00 0.006 0.006 0.006 -0.051 -0.101
Vented Gas............................ 0.00 0.039 0.039 0.051 -1.474 -1.474
Ventless Electric Compact 240V........ 0.00 0.008 0.008 0.00 -0.013 -0.050
Ventless Electric Combination Washer/ 0.00 0.031 0.031 0.00 0.031 -0.043
Dryer................................
-------------------------------------------------------------------------
Total............................. 0.00 0.254 1.104 1.076 -2.596 -6.716
----------------------------------------------------------------------------------------------------------------
Table V-28--Cumulative Net Present Value of Consumer Benefits for Room Air Conditioners, 3-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................ 0.276 0.362 0.276 0.245 0.245 -1.838
Group 2--includes PC 2, 3, 4, 11...... 0.427 0.902 1.162 1.162 1.121 -2.374
Group 3--includes PC 5A, 9, 13........ -0.001 -0.003 0.00 -0.003 0.00 -0.481
Group 4--includes PC 5B, 10........... -0.002 -0.008 0.00 -0.002 0.00 -0.229
Group 5--includes PC 6, 7, 8A, 12..... 0.036 0.036 0.049 0.049 0.066 -0.379
Group 6--includes PC 8B, 14, 15, 16... 0.011 0.011 0.024 0.024 0.024 -0.314
-------------------------------------------------------------------------
Total............................. 0.747 1.30 1.511 1.474 1.456 -5.616
----------------------------------------------------------------------------------------------------------------
Table V-29--Cumulative Net Present Value of Consumer Benefits for Room Air Conditioners, 7-Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
Group 1--includes PC 1................ 0.117 0.12 0.117 -0.02 -0.02 -1.386
Group 2--includes PC 2, 3, 4, 11...... 0.21 0.438 0.558 0.558 0.307 -2.084
Group 3--includes PC 5A, 9, 13........ -0.002 -0.003 0.00 -0.003 0.00 -0.317
Group 4--includes PC 5B, 10........... -0.002 -0.006 0.00 -0.002 0.00 -0.169
Group 5--includes PC 6, 7, 8A, 12..... 0.019 0.019 0.025 0.025 0.029 -0.262
Group 6--includes PC 8B, 14, 15, 16... 0.006 0.006 0.012 0.012 0.012 -0.223
-------------------------------------------------------------------------
Total............................. 0.349 0.575 0.712 0.57 0.328 -4.441
----------------------------------------------------------------------------------------------------------------
DOE investigated the impact of different learning rates on the NPV
for the six energy efficiency TSLs for room air conditioners and
clothes dryers. The NPV results presented above in Table V.26 to Table
V.29 are based on learning rates of 38.9% for room air conditioners and
41.6% for clothes dryers, both of which are referred to as the
``default'' learning rates. DOE considered three learning rate
sensitivities: (1) A ``high learning'' rate; (2) a ``low learning''
rate;
[[Page 22543]]
and (3) a ``no learning'' rate. In addition, for clothes dryers there
is a fourth sensitivity: ``Clothes Dryers Only''. The ``high learning''
rates are 41.4-percent for room air conditioners and 42.9-percent for
clothes dryers. The ``low learning' rates are 31.0-percent for room air
conditioners and 33.9-percent for clothes dryers. The ``no learning''
rate sensitivity, which is zero-percent for all products, assumes
constant real prices over the entire forecast period. For clothes
dryers, ``clothes dryers only'' is based on limited set of historical
price data specifically for clothes dryers and the learning rate is
52.2-percent. Refer to section IV.F.1 for details on the development of
the above learning rates.
For room air conditioners, Table V.31 provides the annualized NPV
of consumer benefits at a 7-percent discount rate for each of the six
energy efficiency TSLs for the ``default'' learning rate and the three
sensitivity cases. Table V.32 provides the same annualized NPVs but at
a 3-percent discount rate. For clothes dryers, Table V.33 provides the
annualized NPV of consumer benefits at a 7-percent discount rate for
each of the six energy efficiency TSLs for the ``default'' learning
rate and the four sensitivity cases. Table V.34 provides the same
annualized NPVs but at a 3-percent discount rate. Included as part of
the annualized NPV in Table V.31 through Table V.34 is the annualized
present value of monetized benefits from CO2 and
NOX emissions reductions. Section V.B.6 below provides a
complete description and summary of the monetized benefits from
CO2 and NOX emissions reductions. For details on
the development of the learning rate sensitivities and the
corresponding NPV results, see appendix 10-C of the final rule TSD.
Table V-30--Room Air Conditioners: Annualized Net Present Value of Consumer Benefits Including Annualized
Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions for Energy Efficiency TSLs for
Products Shipped in 2014-2043
[3 Percent discount rate]
----------------------------------------------------------------------------------------------------------------
Trial standard level Learning rate (LR)
----------------------------------------------------------------------------------------------------------------
No learning: LR =
Default: LRRoomAC Low sensitivity: High sensitivity: 0% (constant real
= 38.9% LRRoomAC = 31.0% LRRoomAC = 41.4% prices)
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
1................................... 0.079 0.075 0.081 0.059
2................................... 0.080 0.076 0.082 0.061
3................................... 0.092 0.088 0.093 0.072
4................................... 0.096 0.088 0.098 0.061
5................................... 0.106 0.091 0.111 0.037
6................................... (0.241) (0.289) (0.226) (0.463)
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
Table V-31--Room Air Conditioners: Annualized Net Present Value of Consumer Benefits Including Annualized
Present Value of Monetized Benefits From CO2 and NOX Emissions Reductions for Energy Efficiency TSLs for
Products Shipped in 2014-2043
[7 Percent discount rate]
----------------------------------------------------------------------------------------------------------------
Trial standard level Learning rate (LR)
----------------------------------------------------------------------------------------------------------------
No learning: LR =
Default: LRRoomAC Low sensitivity: High sensitivity: 0% (constant real
= 38.9% LRRoomAC = 31.0% LRRoomAC = 41.4% prices)
----------------------------------------------------------------------------------------------------------------
Billion 2009$
----------------------------------------------------------------------------------------------------------------
1................................... 0.059 0.055 0.060 0.041
2................................... 0.060 0.057 0.061 0.043
3................................... 0.072 0.068 0.073 0.056
4................................... 0.066 0.060 0.069 0.037
5................................... 0.058 0.045 0.062 (0.000)
6................................... (0.313) (0.355) (0.300) (0.502)
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
[[Page 22544]]
Table V-32--Clothes Dryer: Annualized Net Present Value of Consumer Benefits Including Annualized Present Value of Monetized Benefits From CO2 and NOX
Emissions Reductions for Energy Efficiency TSLs for Products Shipped in 2014-2043
[3 Percent discount rate]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level Learning rate (LR)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No learning: LR = Sensitivity
Default: LRCD = Low sensitivity: High sensitivity: 0% (constant real (Clothes dryers
41.6% LRCD = 33.9% LRCD = 42.9% prices) only): LR = 52.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................ 0.001 0.001 0.001 0.001 0.001
2........................................................ 0.036 0.036 0.036 0.035 0.036
3........................................................ 0.178 0.173 0.179 0.158 0.183
4........................................................ 0.180 0.175 0.181 0.156 0.186
5........................................................ 0.110 0.033 0.121 (0.220) 0.199
6........................................................ 0.185 0.018 0.209 (0.531) 0.378
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
Table V-33--Clothes Dryer: Annualized Net Present Value of Consumer Benefits Including Annualized Present Value of Monetized Benefits From CO2 and NOX
Emissions Reductions for Energy Efficiency TSLs for Products Shipped in 2014-2043
[7 Percent discount rate]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level Learning rate (LR)
--------------------------------------------------------------------------------------------------------------------------------------------------------
No Learning: LR = Sensitivity
Default: LRCD = Low Sensitivity: High Sensitivity: 0% (constant real (Clothes Dryers
41.6% LRCD = 33.9% LRCD = 42.9% prices) Only): LR = 52.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Billion 2009$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................................................ 0.001 0.001 0.001 0.001 0.001
2........................................................ 0.025 0.024 0.025 0.024 0.025
3........................................................ 0.114 0.110 0.114 0.098 0.118
4........................................................ 0.113 0.108 0.113 0.094 0.118
5........................................................ (0.111) (0.176) (0.103) (0.375) (0.041)
6........................................................ (0.282) (0.421) (0.263) (0.853) (0.130)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
c. Impacts on Employment
DOE develops estimates of the indirect employment impacts of
potential standards on the economy in general. As discussed above, DOE
expects energy conservation standards for clothes dryers and room air
conditioners to reduce energy bills for consumers of these products,
and the resulting net savings to be redirected to other forms of
economic activity. These expected shifts in spending and economic
activity could affect the demand for labor. As described in section
IV.J, to estimate these effects DOE used an input/output model of the
U.S. economy. Table V-34 presents the estimated net indirect employment
impacts in 2020 and 2043 for the TSLs that DOE considered in this
rulemaking. Chapter 13 of the direct final rule TSD presents more
detailed results.
Table V-34--Net Increase in Jobs From Indirect Employment Effects Under Clothes Dryer and Room Air Conditioner Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Thousands
-----------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Residential Clothes Dryers:
2020................................................ 0.00 0.00 0.41 0.36 -1.37 -3.16
2043................................................ 0.01 0.01 1.82 1.75 4.25 9.30
Room Air Conditioners:
2020................................................ 0.90 0.88 0.97 1.34 2.04 3.22
2043................................................ 0.74 0.73 0.74 1.16 1.94 3.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
The input/output model suggests that today's proposed standards are
likely to increase the net demand for labor in the economy. The
projected gains are very small, however, relative to total national
employment (currently approximately 120 million). Moreover, neither the
BLS data nor the input/output model DOE
[[Page 22545]]
uses includes the quality or wage level of the jobs.
4. Impact on Utility or Performance of Products
As presented in section III.D.1.d of this notice, DOE concluded
that none of the TSLs considered in this notice would reduce the
utility or performance of the clothes dryers or room air conditioners
under consideration in this rulemaking. DOE also notes that
manufacturers of these products currently offer clothes dryers and room
air conditioners that meet or exceed today's standards. (42 U.S.C.
6295(o)(2)(B)(i)(IV))
5. Impact of Any Lessening of Competition
DOE has also considered any lessening of competition that is likely
to result from amended standards. The Attorney General determines the
impact, if any, of any lessening of competition likely to result from a
proposed standard, and transmits such determination to DOE, together
with an analysis of the nature and extent of such impact. (42 U.S.C.
6295(o)(2)(B)(i)(V) and (B)(ii))
DOE published an NOPR containing energy conservation standards
identical to those set forth in today's direct final rule and
transmitted a copy of today's direct final rule and the accompanying
TSD to the Attorney General, requesting that the DOJ provide its
determination on this issue. DOE will consider DOJ's comments on the
rule in determining whether to proceed with the direct final rule. DOE
will also publish and respond to DOJ's comments in the Federal Register
in a separate notice.
6. Need of the Nation To Conserve Energy
An improvement in the energy efficiency of the products subject to
today's rule is likely to improve the security of the nation's energy
system by reducing overall demand for energy. Reduced electricity
demand may also improve the reliability of the electricity system. As a
measure of this reduced demand, Table V-35 presents the estimated
reduction in electricity generating capacity in 2043 for the TSLs that
DOE considered in this rulemaking.
Table V-35--Reduction in Electric Generating Capacity in 2043 Under Clothes Dryer and Room Air Conditioner Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gigawatts
-----------------------------------------------------------------------------------------------
Clothes Dryers.......................................... 0.002 0.060 0.358 0.345 1.27 2.27
Room Air Conditioners................................... 0.348 0.429 0.436 0.632 1.01 1.46
--------------------------------------------------------------------------------------------------------------------------------------------------------
Energy savings from amended standards for clothes dryers and room
air conditioners are expected to produce environmental benefits in the
form of reduced emissions of air pollutants and greenhouse gases
associated with electricity production. Table V-36 provides DOE's
estimate of cumulative CO2, NOX, and Hg emissions
reductions that would be expected to result from the TSLs considered in
this rulemaking. In the environmental assessment (chapter 15 of the
direct final rule TSD), DOE reports annual CO2,
NOX, and Hg emissions reductions for each TSL.
As discussed in section IV.L, DOE has not reported SO2
emissions reductions from power plants because there is uncertainty
about the effect of energy conservation standards on the overall level
of SO2 emissions in the United States due to SO2
emissions caps. DOE also did not include NOX emissions
reduction from power plants in States subject to CAIR because an energy
conservation standard would not affect the overall level of
NOX emissions in those States due to the emissions caps
mandated by CAIR.
Table V-36--Emissions Reduction Estimated for Clothes Dryer and Room Air Conditioner Trial Standard Levels
[Cumulative for 2014 through 2043]
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Clothes Dryers:
CO2 million metric tons............................. 0.119 2.99 17.75 18.67 70.47 186.6
NOX thousand tons................................... 0.097 2.41 14.26 15.14 57.26 151.3
Hg tons............................................. 0.000 0.009 0.053 0.051 0.188 0.569
Room Air Conditioners:
CO2 million metric tons............................. 9.83 11.88 12.49 17.4 26.89 37.68
NOX thousand tons................................... 8.02 9.69 10.2 14.2 21.91 30.69
Hg tons............................................. 0.012 0.015 0.017 0.022 0.032 0.044
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE also estimated monetary benefits likely to result from the
reduced emissions of CO2 and NOX that DOE
estimated for each of the TSLs considered for clothes dryers and room
air conditioners. In order to make this calculation similar to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of products shipped in
2014-2043. Thus, the emissions reductions extend past 2043.
As discussed in section IV.M, DOE used values for the SCC developed
by an interagency process. The four values for CO2 emissions
reductions resulting from that process (expressed in 2009$) are $4.9/
ton (the average value from a distribution that uses a 5-percent
discount rate), $22.1/ton (the average value from a distribution that
uses a 3-percent discount rate), $36.3/ton (the average value from a
distribution that uses a 2.5-percent discount rate), and $67.1/ton (the
95th-percentile value from a distribution that uses a 3-percent
[[Page 22546]]
discount rate). These values correspond to the value of emission
reductions in 2010; the values for later years are higher due to
increasing damages as the magnitude of climate change increases. For
each of the four cases, DOE calculated a present value of the stream of
annual values using the same discount rate as was used in the studies
upon which the dollar-per-ton values are based. Table V-37 and Table V-
38 present the global values of CO2 emissions reductions at
each TSL. DOE calculated domestic values as a range from 7 percent to
23 percent of the global values, and these results are presented in
Table V-39 and Table V-40.
Table V-37--Clothes Dryers: Estimates of Global Present Value of CO2 Emissions Reduction Under Trial Standard
Levels
----------------------------------------------------------------------------------------------------------------
Million 2009$
---------------------------------------------------------------------------
TSL 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
average * average * rate, average * 95th percentile *
----------------------------------------------------------------------------------------------------------------
1................................... 1 3 5 10
2................................... 15 79 134 239
3................................... 88 465 793 1417
4................................... 93 489 834 1490
5................................... 351 1848 3148 5626
6................................... 929 4894 8339 14902
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
from a different part of the distribution. Values presented in the table incorporate the escalation of the SCC
over time.
Table V-38--Room Air Conditioners: Estimates of Global Present Value of CO2 Emissions Reduction Under Trial
Standard Levels
----------------------------------------------------------------------------------------------------------------
Million 2009$
---------------------------------------------------------------------------
TSL 5% discount rate, 3% discount rate, 2.5% discount 3% discount rate,
average * average * rate, average * 95th percentile *
----------------------------------------------------------------------------------------------------------------
1................................... 43 212 357 648
2................................... 52 259 436 790
3................................... 55 271 455 826
4................................... 77 382 642 1164
5................................... 118 591 996 1803
6................................... 166 833 1404 2541
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
from a different part of the distribution. Values presented in the table incorporate the escalation of the SCC
over time.
Table V-39--Clothes Dryers: Estimates of Domestic Present Value of CO2 Emissions Reduction Under Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Million 2009$ *
-------------------------------------------------------------------------------------------------------------------
TSL 5% discount rate, average 3% discount rate, average 2.5% discount rate, average 3% discount rate, 95th
** ** ** percentile **
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... 0.042 to 0.14.............. 0.22 to 0.72............... 0.37 to 1.22............... 0.67 to 2.19.
2................................... 1.04 to 3.43............... 5.50 to 18.1............... 9.37 to 30.8............... 16.7 to 55.0.
3................................... 6.19 to 20.3............... 32.6 to 107................ 55.5 to 182................ 99.2 to 326.
4................................... 6.51 to 21.4............... 34.3 to 113................ 58.4 to 192................ 104 to 343.
5................................... 24.6 to 80.7............... 129 to 425................. 220 to 724................. 394 to 1294.
6................................... 65.1 to 214................ 343 to 1126................ 584 to 1918................ 1043 to 3428.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7 percent and 23 percent of the global values.
** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the
distribution. Values presented in the table incorporate the escalation of the SCC over time.
Table V-40--Room Air Conditioners: Estimates of Domestic Present Value of CO2 Emissions Reduction Under Trial Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
Million 2009$ *
-------------------------------------------------------------------------------------------------------------------
TSL 5% discount rate, average 3% discount rate, average 2.5% discount rate, average 3% discount rate, 95th
** ** ** percentile **
--------------------------------------------------------------------------------------------------------------------------------------------------------
1................................... 3.00 to 9.85............... 14.9 to 48.8............... 25.0 to 82.1............... 45.4 to 149.
2................................... 3.64 to 12.0............... 18.1 to 59.6............... 30.5 to 100................ 55.3 to 182.
3................................... 3.83 to 12.6............... 18.9 to 62.3............... 31.9 to 105................ 57.8 to 190.
4................................... 5.36 to 17.6............... 26.7 to 87.8............... 45.0 to 148................ 81.5 to 268.
5................................... 8.29 to 27.2............... 41.4 to 136................ 69.7 to 229................ 126 to 415.
[[Page 22547]]
6................................... 11.6 to 38.3............... 58.3 to 192................ 98.3 to 323................ 178 to 584.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Domestic values are presented as a range between 7 percent and 23 percent of the global values.
** Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn from a different part of the
distribution. Values presented in the table incorporate the escalation of the SCC over time.
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed in
this rulemaking on reducing CO2 emissions is subject to
change. DOE, together with other Federal agencies, will continue to
review various methodologies for estimating the monetary value of
reductions in CO2 and other GHG emissions. This ongoing
review will consider the comments on this subject that are part of the
public record for this and other rulemakings, as well as other
methodological assumptions and issues. However, consistent with DOE's
legal obligations, and taking into account the uncertainty involved
with this particular issue, DOE has included in this final rule the
most recent values and analyses resulting from the ongoing interagency
review process.
DOE also estimated a range for the cumulative monetary value of the
economic benefits associated with NOX emissions reductions
anticipated to result from amended standards for clothes dryers and
room air conditioners. The dollar-per-ton values that DOE used are
discussed in section IV.M. Table V-41 and Table V-42 present the
cumulative present values for each TSL calculated using seven-percent
and three-percent discount rates.
Table V-41--Clothes Dryers: Estimates of Present Value of NOX Emissions
Reduction Under Trial Standard Levels
------------------------------------------------------------------------
3% discount rate 7% discount rate
TSL Million 2009$ Million 2009$
------------------------------------------------------------------------
1........................... 0.031 to 0.314...... 0.013 to 0.136.
2........................... 0.759 to 7.8........ 0.328 to 3.37.
3........................... 4.49 to 46.2........ 1.94 to 19.98.
4........................... 4.77 to 49.02....... 2.06 to 21.2.
5........................... 18.0 to 185......... 7.8 to 80.2.
6........................... 47.6 to 490......... 20.6 to 212.
------------------------------------------------------------------------
Table V-42--Room Air Conditioners: Estimates of Present Value of NOX
Emissions Reduction Under Trial Standard Levels
------------------------------------------------------------------------
3% discount rate 7% discount rate
TSL Million 2009$ Million 2009$
------------------------------------------------------------------------
1........................... 2.34 to 24.0........ 1.25 to 12.9.
2........................... 2.83 to 29.1........ 1.50 to 15.4.
3........................... 2.99 to 30.7........ 1.61 to 16.6.
4........................... 4.16 to 42.7........ 2.2 to 22.6.
5........................... 6.40 to 65.8........ 3.35 to 34.4.
6........................... 8.96 to 92.1........ 4.64 to 47.7.
------------------------------------------------------------------------
The NPV of the monetized benefits associated with emissions
reductions can be viewed as a complement to the NPV of the consumer
savings calculated for each TSL considered in this rulemaking. Table V-
43 shows an example of the calculation of the combined NPV including
benefits from emissions reductions for the case of TSL 4 for clothes
dryers. Table V-44 through Table V-47 present the NPV values that
result from adding the estimates of the potential economic benefits
resulting from reduced CO2 and NOX emissions in
each of four valuation scenarios to the NPV of consumer savings
calculated for each TSL considered in this rulemaking, at both a 7-
percent and 3-percent discount rate. The CO2 values used in
the columns of each table correspond to the four scenarios for the
valuation of CO2 emission reductions presented in section
IV.M.
[[Page 22548]]
Table V-43--Adding Net Present Value of Consumer Savings to Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions at TSL
4 for Clothes Dryers
------------------------------------------------------------------------
Present value Discount rate
Category billion 2009$ (percent)
------------------------------------------------------------------------
Benefits:
Operating Cost Savings....... 1.726 7%
4.099 3%
CO2 Reduction Monetized Value 0.093 5
(at $4.9/metric ton) *......
CO2 Reduction Monetized Value 0.489 3
(at $22.1/metric ton) *.....
CO2 Reduction Monetized Value 0.834 2.5
(at $36.3/metric ton) *.....
CO2 Reduction Monetized Value 1.49 3
(at $67.1/metric ton) *.....
NOX Reduction Monetized Value 0.012 7
(at $2,519/ton) *...........
0.027 3
Total Monetary Benefits **... 2.227 7
4.615 3
Costs:
Total Incremental Installed 0.65 7
Costs.......................
1.086 3
Net Benefits/Costs:
Including CO2 and NOX**...... 1.58 7
3.53 3
------------------------------------------------------------------------
* These values represent global values (in 2009$) of the SCC in 2010
under several scenarios. The values of $4.9, $22.1, and $36.3 per ton
are the averages of SCC distributions calculated using 5-percent, 3-
percent, and 2.5-percent discount rates, respectively. The value of
$67.1 per ton represents the 95th percentile of the SCC distribution
calculated using a 3-percent discount rate. See section IV.M for
details. The value for NOX (in 2009$) is the average of the low and
high values used in DOE's analysis.
** Total Monetary Benefits for both the 3-percent and 7-percent cases
utilize the central estimate of social cost of CO2 emissions
calculated at a 3% discount rate, which is equal to $22.1/ton in 2010
(in 2009$).
Table V-44--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% discount rate added with:
---------------------------------------------------------------------------
SCC Value of SCC Value of SCC Value of SCC Value of
TSL $4.9/metric ton $22.1/metric ton $36.3/metric ton $67.1/metric ton
CO2* and Low CO2* and Medium CO2* and Medium CO2* and High
Value for NOX** Value for NOX** Value for NOX** Value for NOX**
billion 2009$ billion 2009$ billion 2009$ billion 2009$
----------------------------------------------------------------------------------------------------------------
1................................... 0.00061 0.00320 0.00540 0.00965
2................................... 0.0152 0.0804 0.136 0.243
3................................... 0.0903 0.476 0.804 1.437
4................................... 0.0950 0.501 0.846 1.512
5................................... 0.359 1.892 3.192 5.707
6................................... 0.950 5.010 8.455 15.114
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
emissions. High Value corresponds to $4,591 per ton of NOX emissions.
Table V-45--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% discount rate added with:
---------------------------------------------------------------------------
SCC Value of SCC Value of SCC Value of SCC Value of
TSL $4.9/metric ton $22.1/metric ton $36.3/metric ton $67.1/metric ton
CO2* and Low CO2* and Medium CO2* and Medium CO2* and High
Value for NOX** Value for NOX** Value for NOX** Value for NOX**
billion 2009$ billion 2009$ billion 2009$ billion 2009$
----------------------------------------------------------------------------------------------------------------
1................................... 0.00062 0.00330 0.00550 0.00983
2................................... 0.0157 0.0829 0.138 0.247
3................................... 0.0929 0.491 0.818 1.463
4................................... 0.0977 0.516 0.861 1.539
5................................... 0.369 1.949 3.250 5.812
6................................... 0.977 5.163 8.608 15.392
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
emissions. High Value corresponds to $4,591 per ton of NOX emissions.
[[Page 22549]]
Table V-46--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Room Air
Conditioners
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 7% discount rate added with:
----------------------------------------------------------------------------
SCC Value of $4.9/ SCC Value of SCC Value of SCC Value of
TSL metric ton CO2* $22.1/metric ton $36.3/metric ton $67.1/metric ton
and Low Value for CO2* and Medium CO2* and Medium CO2* and High
NOX** billion Value for NOX** Value for NOX** Value for NOX**
2009$ billion 2009$ billion 2009$ billion 2009$
----------------------------------------------------------------------------------------------------------------
1.................................. 0.044 0.219 0.364 0.661
2.................................. 0.054 0.267 0.444 0.805
3.................................. 0.0563 0.280 0.464 0.843
4.................................. 0.0788 0.394 0.655 1.187
5.................................. 0.122 0.610 1.015 1.838
6.................................. 0.171 0.859 1.430 2.588
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
emissions. High Value corresponds to $4,591 per ton of NOX emissions.
Table V-47--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
Value of Monetized Benefits From CO2 and NOX Emissions Reductions Under Trial Standard Levels for Room Air
Conditioners
----------------------------------------------------------------------------------------------------------------
Consumer NPV at 3% discount rate added with:
----------------------------------------------------------------------------
SCC Value of $4.9/ SCC Value of SCC Value of SCC Value of
TSL metric ton CO2* $22.1/metric ton $36.3/metric ton $67.1/metric ton
and Low Value for CO2*and Medium CO2* and Medium CO2* and High
NOX** billion Value for NOX** Value for NOX** Value for NOX**
2009$ billion 2009$ billion 2009$ billion 2009$
----------------------------------------------------------------------------------------------------------------
1.................................. 0.045 0.226 0.370 0.672
2.................................. 0.055 0.275 0.452 0.819
3.................................. 0.0576 0.288 0.472 0.857
4.................................. 0.0807 0.405 0.666 1.207
5.................................. 0.125 0.627 1.032 1.869
6.................................. 0.175 0.884 1.454 2.633
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2010, in 2009$. Their present values have been calculated with
scenario-consistent discount rates. See section IV.M for a discussion of the derivation of these values.
** Low Value corresponds to $447 per ton of NOX emissions. Medium Value corresponds to $2,519 per ton of NOX
emissions. High Value corresponds to $4,591 per ton of NOX emissions.
Although adding the value of consumer savings to the values of
emission reductions provides a valuable perspective, two issues should
be considered. First, the national operating cost savings are domestic
U.S. consumer monetary savings that occur as a result of market
transactions, while the value of CO2 reductions is based on
a global value. Second, the assessments of operating cost savings and
the SCC are performed with different methods that use quite different
time frames for analysis. The national operating cost savings is
measured for the lifetime of products shipped in 2014-2043. The SCC
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one ton of carbon
dioxide in each year. These impacts continue well beyond 2100.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI))) In
developing the direct final rule, DOE has also considered the Joint
Petition submitted to DOE. DOE recognizes the value of consensus
agreements submitted by parties in accordance with 42 U.S.C. 6295(p)(4)
and has weighed the value of such consensus in establishing the
standards set forth in today's final rule. DOE has encouraged the
submission of consensus agreements as a way to get diverse stakeholders
together, to develop an independent and probative analysis useful in
DOE standard setting, and to expedite the rulemaking process. DOE also
believes that standard levels recommended in the consensus agreement
may increase the likelihood for regulatory compliance, while decreasing
the risk of litigation.
C. Proposed Standards
When considering proposed standards, the new or amended energy
conservation standard that DOE adopts for any type (or class) of
covered product shall be designed to achieve the maximum improvement in
energy efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining
whether a standard is economically justified, DOE must determine
whether the benefits of the standard exceed its burdens to the greatest
extent practicable, in light of the seven statutory factors discussed
previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or amended standard
must also ``result in significant conservation of energy.'' (42 U.S.C.
6295(o)(3)(B))
The Department considered the impacts of standards at each trial
[[Page 22550]]
standard level, beginning with maximum technologically feasible level,
to determine whether that level was economically justified. Where the
max-tech level was not economically justified, DOE then considered the
next most efficient level and undertook the same evaluation until it
reached the highest efficiency level that is both technologically
feasible and economically justified and saves a significant amount of
energy.
To aid the reader as DOE discusses the benefits and burdens of each
trial standard level, DOE has included tables that present a summary of
the results of DOE's quantitative analysis for each TSL. In addition to
the quantitative results presented in the tables, DOE also considers
other burdens and benefits that affect economic justification. These
include the impacts on identifiable subgroups of consumers, such as
low-income households and seniors, who may be disproportionately
affected by a national standard. Section V.B.1 presents the estimated
impacts of each TSL for these subgroups.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. This undervaluation suggests that
regulation that promotes energy efficiency can produce significant net
private gains (as well as producing social gains by, for example,
reducing pollution). There is evidence that consumers undervalue future
energy savings as a result of (1) a lack of information; (2) a lack of
sufficient salience of the long-term or aggregate benefits; (3) a lack
of sufficient savings to warrant delaying or altering purchases (for
example, an inefficient ventilation fan in a new building or the
delayed replacement of a water pump); (4) excessive focus on the short
term, in the form of inconsistent weighting of future energy cost
savings relative to available returns on other investments; (5)
computational or other difficulties associated with the evaluation of
relevant tradeoffs; and (6) a divergence in incentives (that is, renter
versus owner; builder vs. purchaser). Other literature indicates that
with less than perfect foresight and a high degree of uncertainty about
the future, consumers may trade off these types of investments at a
higher than expected rate between current consumption and uncertain
future energy cost savings.
In its current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways: (1) If consumers forego a purchase
of a product in the standards case, this decreases sales for product
manufacturers and the cost to manufacturers is included in the MIA, and
(2) DOE accounts for energy savings attributable only to products
actually used by consumers in the standards case; if a regulatory
option decreases the number of products used by consumers, this
decreases the potential energy savings from an energy conservation
standard. DOE provides detailed estimates of shipments and changes in
the volume of product purchases in chapter 9 of the TSD. However, DOE's
current analysis does not explicitly control for heterogeneity in
consumer preferences, preferences across subcategories of products or
specific features, or consumer price sensitivity variation according to
household income (Reiss and White 2004).
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE seeks comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
1. Benefits and Burdens of TSLs Considered for Clothes Dryers
Table V-48 and Table V-49 present a summary of the quantitative
impacts estimated for each TSL for clothes dryers. The efficiency
levels contained in each TSL are described in section V.A.
Table V-48--Summary of Results for Clothes Dryer Trial Standard Levels: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings 0.00............... 0.062.............. 0.37............... 0.39.............. 1.45.............. 3.14.
(quads).
--------------------------------------------------------------------------------------------------------------------------------------------------------
NPV of Consumer Benefits (2009$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate............. 0.00............... 0.62............... 3.00............... 3.01.............. 0.22.............. (1.53).
7% discount rate............. 0.01............... 0.25............... 1.10............... 1.08.............. (2.60)............ (6.72).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).... 0.119.............. 2.99............... 17.75.............. 18.67............. 70.47............. 186.6.
NOX (thousand tons).......... 0.097.............. 2.41............... 14.26.............. 15.14............. 57.26............. 151.3.
Hg (ton)..................... 0.000.............. 0.009.............. 0.053.............. 0.051............. 0.188............. 0.569.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Value of Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2009$ million) *........ 1 to 10............ 15 to 239.......... 88 to 1417......... 93 to 1490........ 351 to 5626....... 929 to 14902.
NOX--3% discount rate (2009 0.031 to 0.314..... 0.759 to 7.8....... 4.49 to 46.2....... 4.77 to 49.0...... 18.0 to 185....... 47.6 to 490.
million).
NOX--7% discount rate (2009$ 0.013 to 0.136..... 0.328 to 3.37...... 1.94 to 20.0....... 2.06 to 21.2...... 7.8 to 80.2....... 20.6 to 212.
million).
Generation Capacity Reduction 0.002.............. 0.060.............. 0.358.............. 0.345............. 1.27.............. 2.27.
(GW)\**\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Potential Change in 0.00 to (3.96)..... 0.00 to (3.96)..... 0.41 to (3.96)..... 0.46 to (3.96).... 1.08 to (3.96).... 2.26 to (3.96).
Domestic Production Workers
in 2014 (thousands).
[[Page 22551]]
Indirect Domestic Jobs 0.01............... 0.01............... 1.82............... 1.75.............. 4.25.............. 9.30.
(thousands)\**\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
** Changes in 2043.
Table V-49--Summary of Results for Clothes Dryer Trial Standard Levels: Consumer and Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million). (2.5) to (2.5)..... (3.6) to (4.9)..... (41.1) to (55.5)... (64.5) to (80.6).. (176.5) to (397.4) (303.9) to
(730.0).
Industry NPV (% change)...... (0.3) to (0.3)..... (0.4) to (0.5)..... (4.1) to (5.5)..... (6.4) to (8.0).... (17.6) to (39.6).. (30.3) to (72.7).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Mean LCC Savings * (2009$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............ $0................. $2................. $14................ $14............... ($30)............. ($146).
Compact 120V................. $0................. $14................ $14................ $14............... ($99)............. ($264).
Compact 240V................. $0................. $8................. $8................. $8................ ($99)............. ($246).
Gas.......................... $0................. $2................. $2................. $2................ ($100)............ ($100).
Ventless 240V................ $0................. $20................ $20................ $0................ ($42)............. ($177).
Ventless Combination Washer/ $0................. $73................ $73................ $0................ $73............... ($166).
Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Median PBP (years) **
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............ 3.9................ 0.2................ 5.3................ 5.3............... 19.1.............. 22.1.
Compact 120V................. n/a................ 0.9................ 0.9................ 0.9............... 36.1.............. 40.1.
Compact 240V................. 0.0................ 0.9................ 0.9................ 0.9............... 45.1.............. 38.2.
Gas.......................... 2.2................ 0.5................ 0.5................ 11.7.............. 49.5.............. 49.5.
Ventless 240V................ n/a................ 0.9................ 0.9................ n/a............... 25.3.............. 26.9.
Ventless Combination Washer/ n/a................ 5.3................ 5.3................ n/a............... 5.3............... 22.4.
Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distribution of Consumer LCC Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard:
Net Cost (%)............. 1%................. 0%................. 19%................ 19%............... 75%............... 81%.
No Impact (%)............ 98%................ 79%................ 25%................ 25%............... 1%................ 0%.
Net Benefit (%).......... 2%................. 21%................ 56%................ 56%............... 24%............... 19%.
Compact 120V:
Net Cost (%)............. 0%................. 4%................. 4%................. 4%................ 95%............... 95%.
No Impact (%)............ 100%............... 0%................. 0%................. 0%................ 0%................ 0%.
Net Benefit (%).......... 0%................. 96%................ 96%................ 96%............... 5%................ 5%.
Compact 240V:
Net Cost (%)............. 0%................. 2%................. 2%................. 2%................ 93%............... 95%.
No Impact (%)............ 100%............... 41%................ 41%................ 41%............... 4%................ 0%.
Net Benefit (%).......... 0%................. 56%................ 56%................ 56%............... 3%................ 5%.
Gas: ................... ................... ................... .................. .................. ..................
Net Cost (%)............. 1%................. 0%................. 0%................. 32%............... 95%............... 95%.
No Impact (%)............ 93%................ 85%................ 85%................ 42%............... 1%................ 1%.
Net Benefit (%).......... 7%................. 15%................ 15%................ 26%............... 4%................ 4%.
Ventless 240V:
Net Cost (%)............. 0%................. 0%................. 0%................. 0%................ 92%............... 88%.
No Impact (%)............ 100%............... 0%................. 0%................. 100%.............. 0%................ 0%.
Net Benefit (%).......... 0%................. 100%............... 100%............... 0%................ 8%................ 12%.
Ventless Combination Washer/
Dryer:
Net Cost (%)................. 0%................. 21%................ 21%................ 0%................ 21%............... 82%.
No Impact (%)................ 100%............... 0%................. 0%................. 100%.............. 0%................ 0%.
Net Benefit (%).............. 0%................. 79%................ 79%................ 0%................ 79%............... 18%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* For LCCs, a negative value means an increase in LCC by the amount indicated.
** In some cases the standard level is the same as the baseline efficiency level, so no consumers are impacted and therefore calculation of a payback
period is not applicable.
DOE first considered TSL 6, which represents the max-tech
efficiency levels. TSL 6 would save 3.14 quads of energy, an amount DOE
considers significant. Under TSL 6, the NPV of consumer benefit would
be -$6.72 billion, using a discount rate of 7 percent, and -$1.53
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 186.6 Mt of
CO2, 151.3
[[Page 22552]]
thousand tons of NOX, and 0.569 ton of Hg. The estimated
monetary value of the CO2 emissions reductions at TSL 6
ranges from $929 million to $14,902 million. Total generating capacity
in 2043 is estimated to decrease by 2.27 GW under TSL 6.
At TSL 6, the average LCC impact is a cost (LCC increase) of $146
for electric standard clothes dryers, a cost of $264 for 120V compact
clothes dryers, a cost of $246 for 240V compact clothes dryers, a cost
of $100 for gas clothes dryers, a cost of $177 for ventless 240V
clothes dryers, and a cost of $166 for combination washer/dryers. The
median payback period is 22.1 years for electric standard clothes
dryers, 40.1 years for 120Vcompact clothes dryers, 38.2 years for 240V
compact clothes dryers, 49.5 years for gas clothes dryers, 26.9 years
for ventless 240V clothes dryers, and 22.4 years for combination
washer/dryers. The fraction of consumers experiencing an LCC benefit is
19 percent for electric standard clothes dryers, 5 percent for 120V
compact clothes dryers, 5 percent for 240V compact clothes dryers, 4
percent for gas clothes dryers, 12 percent for ventless 240V clothes
dryers, and 18 percent for combination washer/dryers. The fraction of
consumers experiencing an LCC cost is 81 percent for electric standard
clothes dryers, 95 percent for 120Vcompact clothes dryers, 95 percent
for 240V compact clothes dryers, 95 percent for gas clothes dryers, 88
percent for ventless 240V clothes dryers, and 82 percent for
combination washer/dryers.
At TSL 6, the projected change in INPV ranges from a decrease of
$303.9 million to a decrease of $730.0 million. TSL 6 would effectively
require heat pump clothes dryers for all electric clothes dryer product
classes. Changing all electric models to use heat pump technology would
be extremely disruptive to current manufacturing facilities and would
require substantial product and capital conversion costs. In addition,
the large cost increases would greatly harm manufacturer profitability
if they were unable to earn additional operating profit on these
additional costs. At TSL 6, DOE recognizes the risk of very large
negative impacts if manufacturers' expectations concerning reduced
profit margins and large conversion costs are realized. If the high end
of the range of impacts is reached as DOE expects, TSL 6 could result
in a net loss of 72.6 percent in INPV to clothes dryer manufacturers.
DOE concludes that at TSL 6 for residential clothes dryers, the
benefits of energy savings, generating capacity reductions, emission
reductions, and the estimated monetary value of the CO2
emissions reductions would be outweighed by the negative NPV of
consumer benefits, the economic burden on a significant fraction of
consumers due to the large increases in product cost, and the
conversion costs and profit margin impacts that could result in a very
large reduction in INPV for the manufacturers. Consequently, the
Secretary has concluded that TSL 6 is not economically justified.
DOE next considered TSL 5. TSL 5 would save 1.45 quads of energy,
an amount DOE considers significant. Under TSL 5, the NPV of consumer
benefit would be -$2.60 billion, using a discount rate of 7 percent,
and $0.22 billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 70.47 Mt of
CO2, 57.26 thousand tons of NOX, and 0.188 tons
of Hg. The estimated monetary value of the CO2 emissions
reductions at TSL 5 ranges from $351 million to $5,626 million. Total
generating capacity in 2043 is estimated to decrease by 1.27 GW under
TSL 5.
At TSL 5, the average LCC impact is a cost (LCC increase) of $30
for electric standard clothes dryers, a cost of $99 for 120Vcompact
clothes dryers, a cost of $99 for 240V compact clothes dryers, a cost
of $100 for gas clothes dryers, a cost of $42 for ventless 240V clothes
dryers, and a savings of $73 for combination washer/dryers. The median
payback period is 19.1 years for electric standard clothes dryers, 36.1
years for 120Vcompact clothes dryers, 45.1 years for 240V compact
clothes dryers, 49.5 years for gas clothes dryers, 25.3 years for
ventless 240V clothes dryers, and 5.3 years for combination washer/
dryers. The fraction of consumers experiencing an LCC benefit is 24
percent for electric standard clothes dryers, 5 percent for 120Vcompact
clothes dryers, 3 percent for 240V compact clothes dryers, 4 percent
for gas clothes dryers, 8 percent for ventless 240V clothes dryers, and
79 percent for combination washer/dryers. The fraction of consumers
experiencing an LCC cost is 75 percent for electric standard clothes
dryers, 95 percent for 120Vcompact clothes dryers, 93 percent for 240V
compact clothes dryers, 95 percent for gas clothes dryers, 92 percent
for ventless 240V clothes dryers, and 21 percent for combination
washer/dryers.
At TSL 5, the projected change in INPV ranges from a decrease of
$176.5 million to a decrease of $397.4 million. While most changes at
TSL 5 could be made within existing product design, redesigning units
to the most efficient technologies on the market today would take
considerable capital and product conversion costs. At TSL 5, DOE
recognizes the risk of very large negative impacts if manufacturers are
not able to earn additional operating profit from the additional
production costs to reach TSL 5. If the high end of the range of
impacts is reached as DOE expects, TSL 5 could result in a net loss of
39.6 percent in INPV to clothes dryer manufacturers.
The Secretary concludes that at TSL 5 for residential clothes
dryers, the benefits of energy savings, generating capacity reductions,
emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the large increases in product cost, and the
conversion costs and profit margin impacts that could result in a large
reduction in INPV for the manufacturers. Consequently, the Secretary
has concluded that TSL 5 is not economically justified.
DOE then considered TSL 4. TSL 4 would save 0.39 quads of energy,
an amount DOE considers significant. Under TSL 4, the NPV of consumer
benefit would be $1.08 billion, using a discount rate of 7 percent, and
$3.01 billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 18.67 Mt of
CO2, 15.14 thousand tons of NOX, and 0.051 ton of
Hg. The estimated monetary value of the CO2 emissions
reductions at TSL 4 ranges from $93 million to $1,490 million. Total
generating capacity in 2043 is estimated to decrease by 0.345 GW under
TSL 4.
At TSL 4, DOE projects that the average LCC impact is a savings
(LCC decrease) of $14 for electric standard clothes dryers, a savings
of $14 for 120V compact clothes dryers, a savings of $8 for 240V
compact clothes dryers, a savings of $2 for gas clothes dryers, and no
change for ventless 240V clothes dryers and combination washer/dryers.
The median payback period is 5.3 years for electric standard clothes
dryers, 0.9 years for 120V compact clothes dryers, 0.9 years for 240V
compact clothes dryers, 11.7 years for gas clothes dryers, and is not
applicable for ventless 240V clothes dryers and combination washer/
dryers.\64\ The fraction of consumers experiencing an LCC benefit is 56
percent for electric standard clothes dryers, 96 percent for 120V
compact
[[Page 22553]]
clothes dryers, 56 percent for 240V compact clothes dryers, 26 percent
for gas clothes dryers, zero percent for ventless 240V clothes dryers,
and zero percent for combination washer/dryers. The fraction of
consumers experiencing an LCC cost is 19 percent for electric standard
clothes dryers, 4 percent for 120V compact clothes dryers, 2 percent
for 240V compact clothes dryers, 32 percent for gas clothes dryers,
zero percent for ventless 240V clothes dryers, and zero percent for
combination washer/dryers.
---------------------------------------------------------------------------
\64\ For these product classes, the efficiency level at TSL 4 is
the same as the baseline efficiency level, so no consumers are
impacted and therefore calculation of a payback period is not
applicable.
---------------------------------------------------------------------------
At TSL 4, the projected change in INPV ranges from a decrease of
$64.5 million to a decrease of $80.6 million. The design changes
required at TSL 4 for the most common standard-size gas and electric
products are incremental improvements that are well known in the
industry but would still require moderate product and capital
conversion costs to implement. At TSL 4, DOE recognizes the risk of
negative impacts if manufacturers' expectations concerning reduced
profit margins are realized. If the high end of the range of impacts is
reached as DOE expects, TSL 4 could result in a net loss of 8.0 percent
in INPV to clothes dryer manufacturers.
DOE concludes that at TSL 4 for residential clothes dryers, the
benefits of energy savings, generating capacity reductions, emission
reductions and the estimated monetary value of the CO2
emissions reductions, and positive NPV of consumer benefits outweigh
the economic burden on some consumers due to the increases in product
cost and the profit margin impacts that could result in a reduction in
INPV for the manufacturers.
In addition, the efficiency levels in TSL 4 correspond to the
recommended levels in the consensus agreement, which DOE believes sets
forth a statement by interested persons that are fairly representative
of relevant points of view (including representatives of manufacturers
of covered products, States, and efficiency advocates) and contains
recommendations with respect to an energy conservation standard that
are in accordance with 42 U.S.C. 6295(o). Moreover, DOE has encouraged
the submission of consensus agreements as a way to get diverse
stakeholders together, to develop an independent and probative analysis
useful in DOE standard setting, and to expedite the rulemaking process.
DOE also believes that standard levels recommended in the consensus
agreement may increase the likelihood for regulatory compliance, while
decreasing the risk of litigation.
After considering the analysis, comments to the preliminary TSD,
and the benefits and burdens of TSL 4, the Secretary concludes that
this trial standard level will offer the maximum improvement in
efficiency that is technologically feasible and economically justified,
and will result in the significant conservation of energy. Therefore,
DOE today adopts TSL 4 for residential clothes dryers. The amended
energy conservation standards for clothes dryers, expressed as CEF, are
shown in Table V-50 .
Table V-50--Amended Energy Conservation Standards for Clothes Dryers
------------------------------------------------------------------------
Residential clothes dryers
-------------------------------------------------------------------------
Minimum CEF
Product class levels lb/kWh
------------------------------------------------------------------------
1. Vented Electric, Standard (4.4 ft\3\ or greater 3.73
capacity)...........................................
2. Vented Electric, Compact (120 V) (less than 4.4 3.61
ft\3\ capacity).....................................
3. Vented Electric, Compact (240 V) (less than 4.4 3.27
ft\3\ capacity).....................................
4. Vented Gas........................................ 3.30
5. Ventless Electric, Compact (240 V) (less than 4.4 2.55
ft\3\ capacity).....................................
6. Ventless Electric Combination Washer/Dryer........ 2.08
------------------------------------------------------------------------
2. Benefits and Burdens of TSLs Considered for Room Air Conditioners
Table V-51 and Table V-52 present a summary of the quantitative
impacts estimated for each TSL for room air conditioners. The
efficiency levels contained in each TSL are described in section V.A.
Table V-51--Summary of Results for Room Air Conditioner Trial Standard Levels: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Energy Savings 0.105.............. 0.205.............. 0.218.............. 0.305............. 0.477............. 0.665.
(quads).
--------------------------------------------------------------------------------------------------------------------------------------------------------
NPV of Consumer Benefits (2009$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate............. 0.75............... 1.30............... 1.51............... 1.47.............. 1.46.............. (5.62).
7% discount rate............. 0.35............... 0.57............... 0.71............... 0.57.............. 0.33.............. (4.44).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Cumulative Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).... 9.83............... 11.9............... 12.5............... 17.4.............. 26.9.............. 37.7.
NOX (thousand tons).......... 8.02............... 9.69............... 10.2............... 14.2.............. 21.9.............. 30.7.
Hg (ton)..................... 0.012.............. 0.015.............. 0.017.............. 0.022............. 0.032............. 0.044.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Value of Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2009$ million) *........ 43 to 648.......... 52 to 790.......... 55 to 826.......... 77 to 1164........ 118 to 1803....... 166 to 2541.
NOX--3% discount rate (2009$ 2.34 to 24.0....... 2.83 to 29.1....... 2.99 to 30.7....... 4.16 to 42.7...... 6.40 to 65.8...... 8.96 to 92.1.
million).
[[Page 22554]]
NOX--7% discount rate (2009$ 1.25 to 12.9....... 1.50 to 15.4....... 1.61 to 16.6....... 2.2 to 22.6....... 3.35 to 34.4...... 4.64 to 47.7.
million).
Generation Capacity Reduction 0.348.............. 0.429.............. 0.436.............. 0.632............. 1.01.............. 1.46.
(GW) **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employment Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Potential Changes in N/A................ N/A................ N/A................ N/A............... N/A............... N/A.
Domestic Production Workers
in 2014 (thousands).
Indirect Domestic Jobs 0.74............... 0.73............... 0.74............... 1.16.............. 1.94.............. 3.07.
(thousands) **.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.
** Changes in 2043.
Table V-52--Summary of Results for Room Air Conditioner Trial Standard Levels: Consumer and Manufacturer Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2009$ million).... (44.2) to (84.9)......... (65.4) to (112.7)........ (65.7) to (112.4)........ (111.3) to (177.6)....... (86.6) to (184.4)....... (80.2) to (344.5).
Industry NPV (% change)......... (4.6) to (8.9)........... (6.8) to (11.8).......... (6.9) to (11.8).......... (11.6) to (18.6)......... (9.1) to (19.3)......... (8.4) to (36.0).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Mean LCC Savings * (2009$)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers..... $9....................... $11...................... $9....................... $7....................... $7...................... ($58).
8,000-13,999 Btu/h, with Louvers $16...................... $16...................... $22...................... $22...................... $22..................... ($38).
20,000-24,999 Btu/h, with $6....................... $6....................... $0....................... $6....................... $0...................... ($214).
Louvers.
> 25,000 Btu/h, with Louvers.... $1....................... $1....................... $0....................... $1....................... $0...................... ($227).
8,000-10,999 Btu/h, without $4....................... $4....................... $13...................... $13...................... $20..................... ($66).
Louvers.
> 11,000 Btu/h, without Louvers. $5....................... $5....................... $11...................... $11...................... $11..................... ($64).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Median PBP (years) **
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
<6,000 Btu/h, with Louvers...... 4.1...................... 5.8...................... 4.1...................... 8.6...................... 8.6..................... 20.9.
8,000-13,999 Btu/h, with Louvers 0.0...................... 0.0...................... 2.8...................... 2.8...................... 7.1..................... 14.7.
20,000-24,999 Btu/h, with 4.3...................... 4.3...................... n/a...................... 4.3...................... n/a..................... 73.8.
Louvers.
> 25,000 Btu/h, with Louvers.... 10.3..................... 10.3..................... n/a...................... 10.1..................... n/a..................... 107.7.
8,000-10,999 Btu/h, without 1.5...................... 1.5...................... 2.1...................... 2.1...................... 4.9..................... 25.2.
Louvers.
> 11,000 Btu/h, without Louvers. 2.6...................... 2.6...................... 3.7...................... 3.7...................... 3.7..................... 25.9.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Distribution of Consumer LCC Impacts
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
< 6,000 Btu/h, with Louvers:
Net Cost (%)................ 21%...................... 33%...................... 21%...................... 65%...................... 65%..................... 90%.
No Impact (%)............... 31%...................... 31%...................... 31%...................... 1%....................... 1%...................... 0%.
Net Benefit (%)............. 48%...................... 37%...................... 48%...................... 34%...................... 34%..................... 10%.
8,000-13,999 Btu/h, with
Louvers:
Net Cost (%)................ 9%....................... 9%....................... 34%...................... 34%...................... 56%..................... 77%.
No Impact (%)............... 60%...................... 60%...................... 2%....................... 2%....................... 1%...................... 0%.
Net Benefit (%)............. 30%...................... 30%...................... 64%...................... 64%...................... 43%..................... 22%.
[[Page 22555]]
20,000-24,999 Btu/h, with
Louvers:
Net Cost (%)................ 5%....................... 5%....................... 0%....................... 5%....................... 0%...................... 98%.
No Impact (%)............... 85%...................... 85%...................... 0%....................... 85%...................... 0%...................... 2%.
Net Benefit (%)............. 10%...................... 10%...................... 0%....................... 10%...................... 0%...................... 0%.
> 25,000 Btu/h, with Louvers:
Net Cost (%)................ 11%...................... 11%...................... 0%....................... 9%....................... 0%...................... 100%.
No Impact (%)............... 85%...................... 85%...................... 0%....................... 88%...................... 0%...................... 0%.
Net Benefit (%)............. 4%....................... 4%....................... 0%....................... 4%....................... 0%...................... 0%.
8,000-10,999 Btu/h, without
Louvers:
Net Cost (%)................ 1%....................... 1%....................... 12%...................... 12%...................... 38%..................... 92%.
No Impact (%)............... 90%...................... 90%...................... 25%...................... 25%...................... 6%...................... 2%.
Net Benefit (%)............. 9%....................... 9%....................... 62%...................... 62%...................... 56%..................... 6%.
> 11,000 Btu/h, without Louvers:
Net Cost (%)................ 2%....................... 2%....................... 23%...................... 23%...................... 23%..................... 93%.
No Impact (%)............... 90%...................... 90%...................... 31%...................... 31%...................... 31%..................... 0%.
Net Benefit (%)............. 8%....................... 8%....................... 47%...................... 47%...................... 47%..................... 7%.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* For LCCs, a negative value means an increase in LCC by the amount indicated.
** In some cases the standard level is the same as the baseline efficiency level, so no consumers are impacted and therefore calculation of a payback period is not applicable.
DOE first considered TSL 6, which represents the max-tech
efficiency levels. TSL 6 would save 0.665 quads of energy, an amount
DOE considers significant. Under TSL 6, the NPV of consumer benefit
would be -$4.44 billion, using a discount rate of 7 percent, and -$5.62
billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 37.7 Mt of
CO2, 30.7 thousand tons of NOX, and 0.044 tons of
Hg. The estimated monetary value of the CO2 emissions
reductions at TSL 6 ranges from $166 million to $2,541 million. Total
generating capacity in 2043 is estimated to decrease by 1.46 GW under
TSL 6.
At TSL 6, the average LCC impact is a cost (LCC increase) of $58
for room air conditioners < 6,000 Btu/h, with louvers; a cost of $38
for room air conditioners 8,000-13,999 Btu/h, with louvers; a cost of
$214 for room air conditioners 20,000-24,999 Btu/h, with louvers; a
cost of $227 for room air conditioners > 25,000 Btu/h, with louvers; a
cost of $66 for room air conditioners 8,000-10,999 Btu/h, without
louvers; and a cost of $64 for room air conditioners > 11,000 Btu/h,
without louvers. The median payback period is 20.9 years for room air
conditioners < 6,000 Btu/h, with louvers; 14.7 years for room air
conditioners 8,000-13,999 Btu/h, with louvers; 73.8 years for room air
conditioners 20,000-24,999 Btu/h, with louvers; 107.7 years for room
air conditioners > 25,000 Btu/h, with louvers; 25.2 years for room air
conditioners 8,000-10,999 Btu/h, without louvers; and 25.9 years for
room air conditioners > 11,000 Btu/h, without louvers. The fraction of
consumers experiencing an LCC benefit is 10 percent for room air
conditioners < 6,000 Btu/h, with louvers; 22 percent for room air
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for
room air conditioners > 25,000 Btu/h, with louvers; 6 percent for room
air conditioners 8,000-10,999 Btu/h, without louvers; and 7 percent for
room air conditioners > 11,000 Btu/h, without louvers. The fraction of
consumers experiencing an LCC cost is 90 percent for room air
conditioners < 6,000 Btu/h, with louvers; 77 percent for room air
conditioners 8,000-13,999 Btu/h, with louvers; 98 percent for room air
conditioners 20,000-24,999 Btu/h, with louvers; 100 percent for room
air conditioners > 25,000 Btu/h, with louvers; 92 percent for room air
conditioners 8,000-10,999 Btu/h, without louvers; and 93 percent for
room air conditioners > 11,000 Btu/h, without louvers.
At TSL 6, the projected change in INPV ranges from a decrease of
$80.2 million to a decrease of $344.5 million. At TSL 6, DOE recognizes
the risk of large negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached as DOE expects, TSL 6 could result in a net
loss of 36.0 percent in INPV to room air conditioner manufacturers.
The Secretary concludes that at TSL 6 for room air conditioners,
the benefits of energy savings, generating capacity reductions,
emission reductions, and the estimated monetary value of the
CO2 emissions reductions would be outweighed by the negative
NPV of consumer benefits, the economic burden on a significant fraction
of consumers due to the large increases in product cost, and the
capital conversion costs and profit margin impacts that could result in
a large reduction in INPV for the manufacturers. Consequently, the
Secretary has concluded that TSL 6 is not economically justified.
DOE next considered TSL 5. TSL 5 would save 0.477 quads of energy,
an amount DOE considers significant. Under TSL 5, the NPV of consumer
benefit would be $0.33 billion, using a discount rate of 7 percent, and
$1.46 billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 5 are 26.9 Mt of
CO2, 21.9 thousand tons of NOX, and 0.032 ton of
Hg. The estimated monetary value of the CO2 emissions
reductions at TSL 5 ranges from $118 million to $1,803 million. Total
generating capacity in 2043 is estimated to decrease by 1.01 GW under
TSL 5.
At TSL 5, the average LCC impact is a savings (LCC decrease) of $7
for room air conditioners < 6,000 Btu/h, with louvers; a savings of $22
for room air conditioners 8,000-13,999 Btu/h, with
[[Page 22556]]
louvers; a savings of $0 for room air conditioners 20,000-24,999 Btu/h,
with louvers; a savings of $0 for room air conditioners > 25,000 Btu/h,
with louvers; a savings of $20 for room air conditioners 8,000-10,999
Btu/h, without louvers; and a savings of $11 for room air conditioners
> 11,000 Btu/h, without louvers. The median payback period is 8.6 years
for room air conditioners < 6,000 Btu/h, with louvers; 7.1 years for
room air conditioners 8,000-13,999 Btu/h, with louvers; not applicable
for room air conditioners 20,000-24,999 Btu/h, with louvers or for room
air conditioners > 25,000 Btu/h, with louvers; \65\ 4.9 years for room
air conditioners 8,000-10,999 Btu/h, without louvers; and 3.7 years for
room air conditioners > 11,000 Btu/h, without louvers. The fraction of
consumers experiencing an LCC benefit is 34 percent for room air
conditioners <6,000 Btu/h, with louvers; 43 percent for room air
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for
room air conditioners > 25,000 Btu/h, with louvers; 56 percent for room
air conditioners 8,000-10,999 Btu/h, without louvers; and 47 percent
for room air conditioners > 11,000 Btu/h, without louvers. The fraction
of consumers experiencing an LCC cost is 65 percent for room air
conditioners <6,000 Btu/h, with louvers; 56 percent for room air
conditioners 8,000-13,999 Btu/h, with louvers; zero percent for room
air conditioners 20,000-24,999 Btu/h, with louvers; zero percent for
room air conditioners > 25,000 Btu/h, with louvers; 38 percent for room
air conditioners 8,000-10,999 Btu/h, without louvers; and 23 percent
for room air conditioners > 11,000 Btu/h, without louvers.
---------------------------------------------------------------------------
\65\ In these cases the standard level is the same as the
baseline efficiency level, so no consumers are impacted and
therefore calculation of a payback period is not applicable.
---------------------------------------------------------------------------
At TSL 5, the projected change in INPV ranges from a decrease of
$86.6 million to a decrease of $184.4 million. At TSL 5, DOE recognizes
the risk of moderately negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached as DOE expects, TSL 5 could result in a net
loss of 19.3 percent in INPV to room air conditioner manufacturers.
The Secretary concludes that at TSL 5 for room air conditioners,
the benefits of energy savings, positive NPV of consumer benefits,
generating capacity reductions, emission reductions, and the estimated
monetary value of the CO2 emissions reductions would be
outweighed by the economic burden on a significant fraction of
consumers in some product classes due to the large increases in product
cost, and the capital conversion costs and profit margin impacts that
could result in a moderate reduction in INPV for the manufacturers. In
particular, the fraction of consumers experiencing an LCC cost is 56
percent for room air conditioners with 8,000-13,999 Btu/h, with
louvers, which is the product class with the largest market share.
Based on the above findings, the Secretary has concluded that TSL 5 is
not economically justified.
DOE then considered TSL 4. TSL 4 would save 0.305 quads of energy,
an amount DOE considers significant. Under TSL 4, the NPV of consumer
benefit would be $0.57 billion, using a discount rate of 7 percent, and
$1.47 billion, using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 17.4 Mt of
CO2, 14.2 thousand tons of NOX, and 0.022 ton of
Hg. The estimated monetary value of the CO2 emissions
reductions at TSL 4 ranges from $77 million to $1,164 million. Total
generating capacity in 2043 is estimated to decrease by 0.632 GW under
TSL 4.
At TSL 4, DOE projects that the average LCC impact is a savings
(LCC decrease) of $7 for room air conditioners < 6,000 Btu/h, with
louvers; a savings of $22 for room air conditioners 8,000-13,999 Btu/h,
with louvers; a savings of $6 for room air conditioners 20,000-24,999
Btu/h, with louvers; a savings of $1 for room air conditioners > 25,000
Btu/h, with louvers; a savings of $13 for room air conditioners 8,000-
10,999 Btu/h, without louvers; and a savings of $11 for room air
conditioners > 11,000 Btu/h, without louvers. The median payback period
is 8.6 years for room air conditioners < 6,000 Btu/h, with louvers; 2.8
years for room air conditioners 8,000-13,999 Btu/h, with louvers; 4.3
years for room air conditioners 20,000-24,999 Btu/h, with louvers; 10.1
years for room air conditioners > 25,000 Btu/h, with louvers; 2.1 years
for room air conditioners 8,000-10,999 Btu/h, without louvers; and 3.7
years for room air conditioners > 11,000 Btu/h, without louvers. The
fraction of consumers experiencing an LCC benefit is 34 percent for
room air conditioners < 6,000 Btu/h, with louvers; 64 percent for room
air conditioners 8,000-13,999 Btu/h, with louvers; 10 percent for room
air conditioners 20,000-24,999 Btu/h, with louvers; 4 percent for room
air conditioners > 25,000 Btu/h, with louvers; 62 percent for room air
conditioners 8,000-10,999 Btu/h, without louvers; and 47 percent for
room air conditioners > 11,000 Btu/h, without louvers. The fraction of
consumers experiencing an LCC cost is 65 percent for room air
conditioners < 6,000 Btu/h, with louvers; 34 percent for room air
conditioners 8,000-13,999 Btu/h, with louvers; 5 percent for room air
conditioners 20,000-24,999 Btu/h, with louvers; 9 percent for room air
conditioners > 25,000 Btu/h, with louvers; 12 percent for room air
conditioners 8,000-10,999 Btu/h, without louvers; and 23 percent for
room air conditioners > 11,000 Btu/h, without louvers.
At TSL 4, the projected change in INPV ranges from a decrease of
$111.3 million to a decrease of $177.6 million. DOE recognizes the risk
of moderately negative impacts if manufacturers' expectations
concerning reduced profit margins are realized. If the high end of the
range of impacts is reached as DOE expects, TSL 4 could result in a net
loss of 18.6 percent in INPV to room air conditioner manufacturers.
The Secretary concludes that at TSL 4 for room air conditioners,
the benefits of energy savings, generating capacity reductions,
emission reductions and the estimated monetary value of the
CO2 emissions reductions, positive NPV of consumer benefits
and positive average consumer LCC savings outweigh the economic burden
on some consumers (a significant fraction for one product class but
small to moderate fractions for the other product classes) due to the
increases in product cost, and the capital conversion costs and profit
margin impacts that could result in a moderate reduction in INPV for
the manufacturers.
In addition, the efficiency levels in TSL 4 correspond to the
recommended levels in the consensus agreement, which DOE believes sets
forth a statement by interested persons that are fairly representative
of relevant points of view (including representatives of manufacturers
of covered products, States, and efficiency advocates) and contains
recommendations with respect to an energy conservation standard that
are in accordance with 42 U.S.C. 6295(o). Moreover, DOE has encouraged
the submission of consensus agreements as a way to get diverse
stakeholders together, to develop an independent and probative analysis
useful in DOE standard setting, and to expedite the rulemaking process.
DOE also believes that standard levels recommended in the consensus
agreement may increase the likelihood for regulatory
[[Page 22557]]
compliance, while decreasing the risk of litigation.
After considering the analysis, comments on the preliminary TSD,
and the benefits and burdens of TSL 4, DOE concludes that this trial
standard level will offer the maximum improvement in efficiency that is
technologically feasible and economically justified, and will result in
the significant conservation of energy. Therefore, DOE today adopts TSL
4 for room air conditioners. The amended energy conservation standards
for room air conditioners, expressed as CEER, are shown in Table V-53.
Table V-53--Amended Energy Conservation Standards for Room Air
Conditioners
------------------------------------------------------------------------
Room air conditioners
-------------------------------------------------------------------------
Minimum CEER
Product class levels Btu/Wh
------------------------------------------------------------------------
1. Without reverse cycle, with louvered sides, and 11.0
less than 6,000 Btu/h...............................
2. Without reverse cycle, with louvered sides, and 11.0
6,000 to 7,999 Btu/h................................
3. Without reverse cycle, with louvered sides, and 10.9
8,000 to 13,999 Btu/h...............................
4. Without reverse cycle, with louvered sides, and 10.7
14,000 to 19,999 Btu/h..............................
5a. Without reverse cycle, with louvered sides, and 9.4
20,000 to 24,999 Btu/h..............................
5b. Without reverse cycle, with louvered sides, and 9.0
25,000 Btu/h or more................................
6. Without reverse cycle, without louvered sides, and 10.0
less than 6,000 Btu/h...............................
7. Without reverse cycle, without louvered sides, and 10.0
6,000 to 7,999 Btu/h................................
8a. Without reverse cycle, without louvered sides, 9.6
and 8,000 to 10,999 Btu/h...........................
8b. Without reverse cycle, without louvered sides, 9.5
and 11,000 to 13,999 Btu/h..........................
9. Without reverse cycle, without louvered sides, and 9.3
14,000 to 19,999 Btu/h..............................
10. Without reverse cycle, without louvered sides, 9.4
and 20,000 Btu/h or more............................
11. With reverse cycle, with louvered sides, and less 9.8
than 20,000 Btu/h...................................
12. With reverse cycle, without louvered sides, and 9.3
less than 14,000 Btu/h..............................
13. With reverse cycle, with louvered sides, and 9.3
20,000 Btu/h or more................................
14. With reverse cycle, without louvered sides, and 8.7
14,000 Btu/h or more................................
15. Casement-Only.................................... 9.5
16. Casement-Slider.................................. 10.4
------------------------------------------------------------------------
3. Summary of Benefits and Costs (Annualized) of the Standards
The benefits and costs of today's standards can also be expressed
in terms of annualized values. The annualized monetary values are the
sum of (1) the annualized national economic value, expressed in 2009$,
of the benefits from operating products that meet the proposed
standards (consisting primarily of operating cost savings from using
less energy, minus increases in equipment purchase costs, which is
another way of representing consumer NPV), and (2) the monetary value
of the benefits of emission reductions, including CO2
emission reductions.\66\ The value of the CO2 reductions,
otherwise known as the Social Cost of Carbon (SCC), is calculated using
a range of values per metric ton of CO2 developed by a
recent interagency process. The monetary costs and benefits of
cumulative emissions reductions are reported in 2009$ to permit
comparisons with the other costs and benefits in the same dollar units.
---------------------------------------------------------------------------
\66\ DOE used a two-step calculation process to convert the
time-series of costs and benefits into annualized values. First, DOE
calculated a present value in 2011, the year used for discounting
the NPV of total consumer costs and savings, for the time-series of
costs and benefits using discount rates of three and seven percent
for all costs and benefits except for the value of CO2
reductions. For the latter, DOE used a range of discount rates, as
shown in Table V.50. From the present value, DOE then calculated the
fixed annual payment over a 30-year period, starting in 2011, that
yields the same present value. The fixed annual payment is the
annualized value. Although DOE calculated annualized values, this
does not imply that the time-series of cost and benefits from which
the annualized values were determined would be a steady stream of
payments.
---------------------------------------------------------------------------
Although combining the values of operating savings and
CO2 reductions provides a useful perspective, two issues
should be considered. First, the national operating savings are
domestic U.S. consumer monetary savings that occur as a result of
market transactions while the value of CO2 reductions is
based on a global value. Second, the assessments of operating cost
savings and CO2 savings are performed with different methods
that use quite different time frames for analysis. The national
operating cost savings is measured for the lifetime of products shipped
in 2014-2043. The SCC values, on the other hand, reflect the present
value of future climate-related impacts resulting from the emission of
one ton of carbon dioxide in each year. These impacts go well beyond
2100.
Table V-54 and Table V-55 show the annualized values for clothes
dryers and room air conditioners, respectively. Using a 7-percent
discount rate and the SCC value of $22.1/ton in 2010 (in 2009$), the
cost of the standards for clothes dryers in today's rule is $52.3
million per year in increased equipment costs, while the annualized
benefits are $139.1 million per year in reduced equipment operating
costs, $25.0 million in CO2 reductions, and $0.9 million in
reduced NOX emissions. In this case, the net benefit amounts
to $112.7 million per year. DOE has calculated that the annualized
increased equipment cost can range from $50.5 to $66.6 million per year
depending on assumptions and modeling of equipment price trends. The
high end of this range corresponds to a constant real equipment price
trend. Using the central estimate of energy-related benefits, DOE
estimates that calculated net benefits can range from $98.4 to $114.5
million per year. Using a 3-percent discount rate and the SCC value of
$22.1/ton in 2010 (in 2009$), the cost of the standards for clothes
dryers in today's rule is $55.4 million per year in increased equipment
costs, while the benefits are $209.1 million per year in reduced
operating costs, $25.0 million in CO2 reductions, and $1.4
million in reduced NOX emissions. In this case, the net
benefit amounts to $180.1 million per year. DOE has calculated that the
range in the annualized increased equipment cost can range from $53.1
to $73.5 million per year depending on assumptions and modeling of
equipment price trends. The high end of this range corresponds to a
constant real equipment price trend. Using the central estimate of
energy-
[[Page 22558]]
related benefits, DOE estimates that calculated net benefits can range
from $162.0 to $182.4 million per year.
Using a 7-percent discount rate and the SCC value of $22.1/ton in
2010 (in 2009$), the cost of the standards for room air conditioners in
today's rule is $107.7 million per year in increased equipment costs,
while the annualized benefits are $153.7 million per year in reduced
equipment operating costs, $19.5 million in CO2 reductions,
and $0.999 million in reduced NOX emissions. In this case,
the net benefit amounts to $66.4 million per year. DOE has calculated
that the annualized increased equipment cost can range from $105.7 to
$136.6 million per year depending on assumptions and modeling of
equipment price trends. The high end of this range corresponds to a
constant real equipment price trend. Using the central estimate of
energy-related benefits, DOE estimates that calculated net benefits can
range from $37.5 to $68.4 million per year. Using a 3-percent discount
rate and the SCC value of $22.1/ton in 2010 (in 2009$), the cost of the
standards for room air conditioners in today's rule is $111.0 million
per year in increased equipment costs, while the benefits are $186.2
million per year in reduced operating costs, $19.5 million in
CO2 reductions, and $1.20 million in reduced NOX
emissions. In this case, the net benefit amounts to $95.9 million per
year. DOE has calculated that the range in the annualized increased
equipment cost can range from $108.0 to $146.0 million per year
depending on assumptions and modeling of equipment price trends. The
high end of this range corresponds to a constant real equipment price
trend. Using the central estimate of energy-related benefits, DOE
estimates that calculated net benefits can range from $60.9 to $98.9
million per year.
Table V-54--Annualized Benefits and Costs of Amended Standards (TSL 4) for Clothes Dryers Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized (million 2009$/year)
Discount rate -----------------------------------------------------------------------------
Primary estimate> * Low estimate> * High estimate> *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......................... 7% 139.1 120.6 158.3
3% 209.1 177.4 241.3
CO2 Reduction at $4.9/t **...................... 5% 6.0 6.0 6.0
CO2 Reduction at $22.1/t **..................... 3% 25.0 25.0 25.0
CO2 Reduction at $36.3/t **..................... 2.5% 39.8 39.8 39.8
CO2 Reduction at $67.1/t **..................... 3% 76.0 76.0 76.0
NOX Reduction at $2,519/ton **.................. 7% 0.9 0.9 0.9
3% 1.4 1.4 1.4
Total[dagger]............................... 7% plus CO2 range 146.1 to 216.1 127.6 to 197.6 165.3 to 235.3
7% 165.0 146.5 184.3
3% 235.4 203.7 267.6
3% plus CO2 range 216.5 to 286.5 184.8 to 254.8 248.7 to 318.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs....................... 7% 52.3 66.6 50.5
3% 55.4 73.5 53.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger].............................. 7% plus CO2 range 93.7 to 163.7 61.0 to 131.0 114.8 to 184.8
7% 112.7 79.9 133.8
3% 180.1 130.2 214.5
3% plus CO2 range 161.1 to 231.1 111.3 to 181.3 195.6 to 265.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
and High Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
for the equipment price trend.
** The CO2 values represent global values (in 2009$) of the social cost of CO2 emissions in 2010 under several scenarios. The values of $4.9, $22.1, and
$36.3 per ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates, respectively. The value of
$67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value for NOX (in 2009$) is the
average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
$22.1/ton in 2010 (in 2009$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are
calculated using the labeled discount rate, and those values are added to the full range of CO2 values.
Table V-55--Annualized Benefits and Costs of Amended Standards (TSL 4) for Room Air Conditioners Sold in 2014-2043
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monetized (million 2009$/year)
Discount rate -----------------------------------------------------------------------------
Primary estimate * Low estimate * High estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......................... 7% 153.7 145.1 161.9
3% 186.2 174.2 197.3
CO[ihel2] Reduction at $4.9/t **................ 5% 5.0 5.0 5.0
CO[ihel2] Reduction at $22.1/t **............... 3% 19.5 19.5 19.5
[[Page 22559]]
CO[ihel2] Reduction at $36.3/t **............... 2.5% 30.7 30.7 30.7
CO[ihel2] Reduction at $67.1/t **............... 3% 59.4 59.4 59.4
NOX Reduction at $2,519/ton **.................. 7% 0.999 0.999 0.999
3% 1.197 1.197 1.197
Total [dagger].............................. 7% plus CO[ihel2] ra159.6 to 214.0 151.1 to 205.5 167.9 to 222.3
7% 174.1 165.5 182.4
3% 206.8 194.9 218.0
3% plus CO[ihel2] ra192.3 to 246.7 180.4 to 234.8 203.5 to 257.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Incremental Product Costs....................... 7% 107.7 136.6 105.7
3% 111.0 146.0 108.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total [dagger].............................. 7% plus CO[ihel2] ran51.9 to 106.3 43.4 to 97.8 62.2 to 116.6
7% 66.4 28.9 76.7
3% 95.9 48.9 110.0
3% plus CO[ihel2] ran81.4 to 135.8 34.4 to 88.8 95.5 to 149.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The Primary, Low, and High Estimates utilize forecasts of energy prices and housing starts from the AEO2010 Reference case, Low Economic Growth case,
and Low Economic Growth case, respectively. Low estimate corresponds to the low net benefit estimate and uses the zero real price trend sensitivity
for equipment prices, and the high estimate corresponds to the high net benefit estimate and utilizes the high technological learning rate sensitivity
for the equipment price trend.
** The CO[ihel2] values represent global values (in 2009$) of the social cost of CO[ihel2] emissions in 2010 under several scenarios. The values of
$4.9, $22.1, and $36.3 per ton are the averages of SCC distributions calculated using 5-percent, 3-percent, and 2.5-percent discount rates,
respectively. The value of $67.1 per ton represents the 95th percentile of the SCC distribution calculated using a 3-percent discount rate. The value
for NOX (in 2009$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the SCC value calculated at a 3-percent discount rate, which is
$22.1/ton in 2010 (in 2009$). In the rows labeled as ``7% plus CO[ihel2] range'' and ``3% plus CO[ihel2] range,'' the operating cost and NOX benefits
are calculated using the labeled discount rate, and those values are added to the full range of CO[ihel2] values.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem that it intends to address, including, where applicable,
the failures of private markets or public institutions that warrant new
agency action, as well as to assess the significance of that problem.
The problems that today's standards address are as follows:
(1) There is a lack of consumer information and/or information
processing capability about energy efficiency opportunities in clothes
dryer and room air conditioner market.
(2) There is 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).
(3) There are external benefits resulting from improved energy
efficiency of clothes dryers and room air conditioners that are not
captured by the users of such equipment. These benefits include
externalities related to environmental protection and energy security
that are not reflected in energy prices, such as reduced emissions of
greenhouse gases.
In addition, DOE has determined that today's regulatory action is
an ``economically significant regulatory action'' under section 3(f)(1)
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive
Order requires that DOE prepare a regulatory impact analysis (RIA) on
today's rule and that the Office of Information and Regulatory Affairs
(OIRA) in the Office of Management and Budget (OMB) review this rule.
DOE presented to OIRA for review the draft rule and other documents
prepared for this rulemaking, including the RIA, and has included these
documents in the rulemaking record. The assessments prepared pursuant
to Executive Order 12866 can be found in the technical support document
for this rulemaking. They are available for public review in the
Resource Room of DOE's Building Technologies Program, 950 L'Enfant
Plaza, SW., Suite 600, Washington, DC 20024, (202) 586-2945, between 9
a.m. and 4 p.m., Monday through Friday, except Federal holidays.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563
is supplemental to and explicitly reaffirms the principles, structures,
and definitions governing regulatory review established in Executive
Order 12866. To the extent permitted by law, agencies are required by
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a
reasoned determination that its benefits justify its costs (recognizing
that some benefits and costs are difficult to quantify); (2) tailor
regulations to impose the least burden on society, consistent with
obtaining regulatory objectives, taking into account, among other
things, and to the extent practicable, the costs of cumulative
regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity); (4) to the extent
feasible, specify performance objectives, rather than specifying the
behavior or manner of compliance that regulated entities must adopt;
and (5) identify and assess available alternatives to direct
regulation, including providing
[[Page 22560]]
economic incentives to encourage the desired behavior, such as user
fees or marketable permits, or providing information upon which choices
can be made by the public.
We emphasize as well that Executive Order 13563 requires agencies
``to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible.'' In its
guidance, the Office of Information and Regulatory Affairs has
emphasized that such techniques may include ``identifying changing
future compliance costs that might result from technological innovation
or anticipated behavioral changes.'' For the reasons stated in the
preamble, DOE believes that today's direct final rule is consistent
with these principles, including that, to the extent permitted by law,
agencies adopt a regulation only upon a reasoned determination that its
benefits justify its costs and select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of a final regulatory flexibility analysis (FRFA) for any
rule that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. As required
by Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking'' 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (http://www.gc.doe.gov).
For the manufacturers of residential clothes dryers and room air
conditioners, the Small Business Administration (SBA) has set a size
threshold, which defines those entities classified as ``small
businesses'' for the purposes of the statute. DOE used the SBA's small
business size standards to determine whether any small entities would
be subject to the requirements of the rule. 65 FR 30836, 30850 (May 15,
2000), as amended at 65 FR 53533, 53545 (Sept. 5, 2000) and codified at
13 CFR part 121. The size standards are listed by NAICS code and
industry description and are available at http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.
Residential clothes dryer manufacturing is classified under NAICS Code
335224, ``Household Laundry Equipment Manufacturing'' and room air
conditioner manufacturing is classified under NAICS Code 333415, ``Air-
Conditioning and Warm Air Heating Equipment and Commercial and
Industrial Refrigeration Equipment Manufacturing.'' The SBA sets a
threshold of 1,000 employees or less and 750 employees or less,
respectively, for these categories in order for an entity to be
considered as a small business, as shown in Table VI-1.
Table VI-1--SBA Classification of Small Businesses Potentially Affected
by This Rule
------------------------------------------------------------------------
Employee
Industry description Revenue limit limit NAICS
------------------------------------------------------------------------
Household Laundry Equipment N/A............ 1,000 335224
Manufacturing.
Air-Conditioning and Warm Air N/A............ 750 333415
Heating Equipment and Commercial
and Industrial Refrigeration
Equipment Manufacturing.
------------------------------------------------------------------------
DOE reviewed the potential standard levels considered in today's
notice under the provisions of the Regulatory Flexibility Act and the
procedures and policies published on February 19, 2003. To estimate the
number of small businesses that could be impacted by the amended energy
conservation standards, DOE conducted a market survey using all
available public information to identify potential small manufacturers.
DOE's research included the AHAM membership directory, product
databases (the AHRI, AHAM, CEC, and ENERGY STAR databases), individual
company Web sites, and the SBA dynamic small business search to find
potential small business manufacturers. DOE also asked stakeholders and
industry representatives if they were aware of any other small business
manufacturers during manufacturer interviews and at previous DOE public
meetings. DOE reviewed all publicly available data and contacted
various companies, as necessary, to determine whether they met the
SBA's definition of a small business manufacturer of covered
residential clothes dryers or room air conditioners. DOE screened out
companies that did not offer products covered by this rulemaking, did
not meet the definition of a ``small business,'' or are foreign owned
and operated.
1. Residential Clothes Dryer Industry
The majority of residential clothes dryers are currently
manufactured in the United States by one corporation that accounts for
over 70 percent of the market. Two additional large manufacturers with
foreign and domestic production hold much of the remaining share of the
market. The small portion of the remaining residential clothes dryer
market is supplied by a combination of international and domestic
companies, all of which have small market shares.
Based on its review of the dynamic small business search on the SBA
Web site (http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm), the Central
Contracting Registration (https://www.bpn.gov/CCRSearch/Search.aspx),
and input from commenters, DOE identified only one manufacturer who
could potentially be considered a small business under NAICS Code
335224, ``Household Laundry Equipment Manufacturing.'' DOE does not
believe, however, that this company would be directly impacted by the
standards established for clothes dryers in today's final rule. DOE
notes that while the potential small business manufacturer has
developed a highly efficient technology that could be used by other
manufacturers to increase the efficiency of clothes dryers, the company
does not produce clothes dryers and the technology is not yet
commercially available. DOE acknowledges that the technology developed
by this small business is a potential design option for clothes dryers,
but DOE does not believe this rulemaking would in any way affect the
ability of this company to commercialize or sell its technology.
2. Room Air Conditioner Industry
No room air conditioners are manufactured in the United States.
Most manufacturing takes place in Asia, primarily China, with limited
production in Mexico. In recent years at least two major manufacturers
have exited the market. At least three major
[[Page 22561]]
corporations supply a majority of the market. The remaining market
share is held by several large companies. DOE did not identify any
small business manufacturers of room air conditioners.
For room air conditioners, DOE initially identified at least 11
distinct manufacturers of room air conditioners sold in the United
States. DOE initially determined that 10 of these were large or
foreign-owned and operated. DOE determined that the one room air
conditioner manufacturer that was previously designated as a small
business manufacturer was acquired by another company and now exceeds
SBA's employment threshold for consideration as a small business under
the appropriate NAICS code. As such, DOE did not identify any small
business manufacturers of room air conditioners.
Based on the discussion above, DOE certifies that the standards for
clothes dryers and room air conditioners set forth in today's rule
would not have a significant economic impact on a substantial number of
small entities. Accordingly, DOE has not prepared a regulatory
flexibility analysis for this rulemaking. DOE will transmit this
certification to SBA as required by 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
Manufacturers of clothes dryers and room air conditioners must
certify to DOE that their products comply with any applicable energy
conservation standards. In certifying compliance, manufacturers must
test their products according to the DOE test procedures for clothes
dryers and room air conditioners, including any amendments adopted for
those test procedures. DOE has proposed regulations for the
certification and recordkeeping requirements for all covered consumer
products and commercial equipment, including clothes dryers and room
air conditioners. 75 FR 56796 (Sept. 16, 2010). The collection-of-
information requirement for the certification and recordkeeping is
subject to review and approval by OMB under the Paperwork Reduction Act
(PRA). This requirement has been submitted to OMB for approval. Public
reporting burden for the certification is estimated to average 20 hours
per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act
DOE has prepared an environmental assessment (EA) of the impacts of
the direct final rule pursuant to the National Environmental Policy Act
of 1969 (42 U.S.C. 4321 et seq.), the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations
for compliance with the National Environmental Policy Act (10 CFR part
1021). This assessment includes an examination of the potential effects
of emission reductions likely to result from the rule in the context of
global climate change, as well as other types of environmental impacts.
The EA has been incorporated into the direct final rule TSD as chapter
15. DOE found that the environmental effects associated with the
standards for clothes dryers and room air conditioners were not
significant. Therefore, DOE is issuing a Finding of No Significant
Impact (FONSI), pursuant to NEPA, the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and DOE's regulations
for compliance with NEPA (10 CFR part 1021). The FONSI is available in
the docket for this rulemaking.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4,
1999), imposes certain requirements on agencies formulating and
implementing policies or regulations that preempt State law or that
have federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive Order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. EPCA governs and
prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of today's direct
final rule. States can petition DOE for exemption from such preemption
to the extent, and based on criteria, set forth in EPCA. (42 U.S.C.
6297) No further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform'' imposes on Federal agencies the general duty
to adhere to the following requirements: (1) Eliminate drafting errors
and ambiguity; (2) write regulations to minimize litigation; and (3)
provide a clear legal standard for affected conduct rather than a
general standard and promote simplification and burden reduction. 61 FR
4729 (February 7, 1996). Section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6) addresses other important issues affecting clarity
and general draftsmanship under any guidelines issued by the Attorney
General. Section 3(c) of Executive Order 12988 requires Executive
agencies to review regulations in light of applicable standards in
section 3(a) and section 3(b) to determine whether they are met or it
is unreasonable to meet one or more of them. DOE has completed the
required review and determined that, to the extent permitted by law,
this direct final rule meets the relevant standards of Executive Order
12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law. 104-4, sec. 201 (codified at 2 U.S.C.
1531). For a proposed regulatory action likely to result in a rule that
may cause the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector of $100 million or more in any
one year (adjusted annually for inflation), section 202 of UMRA
requires a Federal agency to publish a written statement that estimates
the resulting costs, benefits, and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of State, local, and Tribal
[[Page 22562]]
governments on a proposed ``significant intergovernmental mandate,''
and requires an agency plan for giving notice and opportunity for
timely input to potentially affected small governments before
establishing any requirements that might significantly or uniquely
affect small governments. On March 18, 1997, DOE published a statement
of policy on its process for intergovernmental consultation under UMRA.
62 FR 12820; also available at http://www.gc.doe.gov.
Although today's rule does not contain a Federal intergovernmental
mandate, it may impose expenditures of $100 million or more on the
private sector. Specifically, the final rule could impose expenditures
of $100 million or more. Such expenditures may include (1) investment
in research and development and in capital expenditures by home
appliance manufacturers in the years between the final rule and the
compliance date for the new standard, and (2) incremental additional
expenditures by consumers to purchase higher efficiency home
appliances.
Section 202 of UMRA authorizes an agency to respond to the content
requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. 2 U.S.C. 1532(c). The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
Supplementary Information section of this notice and the ``Regulatory
Impact Analysis'' section of the direct final rule TSD for this rule
respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. 2 U.S.C. 1535(a). DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the rule unless DOE publishes an
explanation for doing otherwise or the selection of such an alternative
is inconsistent with law. As required by 42 U.S.C. 6295(h) and (o),
6313(e), and 6316(a), today's rule would establish energy conservation
standards for clothes dryers and room air conditioners that are
designed to achieve the maximum improvement in energy efficiency that
DOE has determined to be both technologically feasible and economically
justified. A full discussion of the alternatives considered by DOE is
presented in the ``Regulatory Impact Analysis'' section of the direct
final rule TSD.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
DOE has determined, under Executive Order 12630, ``Governmental
Actions and Interference with Constitutionally Protected Property
Rights,'' 53 FR 8859 (March 18, 1988), that this regulation would not
result in any takings which might require compensation under the Fifth
Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most
disseminations of information to the public under guidelines
established by each agency pursuant to general guidelines issued by
OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and
DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has
reviewed today's notice under the OMB and DOE guidelines and has
concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use,'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has concluded that today's regulatory action, which sets forth
energy conservation standards for clothes dryers and room air
conditioners, is not a significant energy action because the proposed
standards are not likely to have a significant adverse effect on the
supply, distribution, or use of energy, nor has it been designated as
such by the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects on the direct final rule.
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology (OSTP), issued its Final Information Quality
Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005).
The Bulletin establishes that certain scientific information shall be
peer reviewed by qualified specialists before it is disseminated by the
Federal Government, including influential scientific information
related to agency regulatory actions. The purpose of the bulletin is to
enhance the quality and credibility of the Government's scientific
information. Under the Bulletin, the energy conservation standards
rulemaking analyses are ``influential scientific information,'' which
the Bulletin defines as ``scientific information the agency reasonably
can determine will have, or does have, a clear and substantial impact
on important public policies or private sector decisions.'' 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
[[Page 22563]]
disseminated and is available at the following Web site: http://www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
M. Congressional Notification
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of this rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(2).
VII. Public Participation
A. Submission of Comments
DOE will accept comments, data, and information regarding this
direct final rule no later than the date provided in the DATES section
at the beginning of this rule. Interested parties may submit comments
using any of the methods described in the ADDRESSES section at the
beginning of this notice.
Submitting comments via regulations.gov. The regulations.gov Web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name (if any), and
submitter representative name (if any). If your comment is not
processed properly because of technical difficulties, DOE will use this
information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment or in any documents attached to your comment.
Any information that you do not want to be publicly viewable should not
be included in your comment, nor in any document attached to your
comment. Persons viewing comments will see only first and last names,
organization names, correspondence containing comments, and any
documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery, or mail. Comments and
documents submitted via email, hand delivery, or mail also will be
posted to regulations.gov. If you do not want your personal contact
information to be publicly viewable, do not include it in your comment
or any accompanying documents. Instead, provide your contact
information on a cover letter. Include your first and last names, email
address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. Email submissions are
preferred. If you submit via mail or hand delivery, please provide all
items on a CD, if feasible. It is not necessary to submit printed
copies. No facsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, written in English and are free of any defects or
viruses. Documents should not contain special characters or any form of
encryption and, if possible, they should carry the electronic signature
of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. According to 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 via
email, postal mail, or hand delivery two well-marked copies: one copy
of the document marked confidential including all the information
believed to be confidential, and one copy of the document marked non-
confidential with the information believed to be confidential deleted.
Submit these documents via email or on a CD, if feasible. 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.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of today's direct
final rule.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Reporting and
recordkeeping requirements, and Small businesses.
Issued in Washington, DC, on April 8, 2011.
Kathleen Hogan,
Deputy Assistant Secretary for Energy Efficiency, Office of Technology
Development, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE amends chapter II,
subchapter D, of title 10 of the Code of Federal Regulations, as set
forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Revise Sec. 430.32 paragraphs (b), and (h) to read as follows:
[[Page 22564]]
Sec. 430.32 Energy and water conservation standards and effective
dates.
* * * * *
(b) Room air conditioners.
------------------------------------------------------------------------
Energy efficiency Combined energy
ratio, effective efficiency ratio,
Product class from Oct. 1, 2000 effective as of
to April 20, 2014 April 21, 2014
------------------------------------------------------------------------
1. Without reverse cycle, with 9.7 11.0
louvered sides, and less than
6,000 Btu/h......................
2. Without reverse cycle, with 9.7 11.0
louvered sides, and 6,000 to
7,999 Btu/h......................
3. Without reverse cycle, with 9.8 10.9
louvered sides, and 8,000 to
13,999 Btu/h.....................
4. Without reverse cycle, with 9.7 10.7
louvered sides, and 14,000 to
19,999 Btu/h.....................
5a. Without reverse cycle, with 8.5 9.4
louvered sides, and 20,000 to
24,999 Btu/h.....................
5b. Without reverse cycle, with 8.5 9.0
louvered sides, and 25,000 Btu/h
or more..........................
6. Without reverse cycle, without 9.0 10.0
louvered sides, and less than
6,000 Btu/h......................
7. Without reverse cycle, without 9.0 10.0
louvered sides, and 6,000 to
7,999 Btu/h......................
8a. Without reverse cycle, without 8.5 9.6
louvered sides, and 8,000 to
10,999 Btu/h.....................
8b. Without reverse cycle, without 8.5 9.5
louvered sides, and 11,000 to
13,999 Btu/h.....................
9. Without reverse cycle, without 8.5 9.3
louvered sides, and 14,000 to
19,999 Btu/h.....................
10. Without reverse cycle, without 8.5 9.4
louvered sides, and 20,000 Btu/h
or more..........................
11. With reverse cycle, with 9.0 9.8
louvered sides, and less than
20,000 Btu/h.....................
12. With reverse cycle, without 8.5 9.3
louvered sides, and less than
14,000 Btu/h.....................
13. With reverse cycle, with 8.5 9.3
louvered sides, and 20,000 Btu/h
or more..........................
14. With reverse cycle, without 8.0 8.7
louvered sides, and 14,000 Btu/h
or more..........................
15. Casement-Only................. 8.7 9.5
16. Casement-Slider............... 9.5 10.4
------------------------------------------------------------------------
* * * * *
(h) Clothes dryers. (1) Gas clothes dryers manufactured after
January 1, 1988 shall not be equipped with a constant burning pilot.
(2) Clothes dryers manufactured on or after May 14, 1994 and before
April 21, 2014, shall have an energy factor no less than:
------------------------------------------------------------------------
Energy factor
Product class (lbs/kWh)
------------------------------------------------------------------------
i. Electric, Standard (4.4 ft\3\ or greater capacity) 3.01
ii. Electric, Compact (120V) (less than 4.4 ft\3\ 3.13
capacity)...........................................
iii. Electric, Compact (240V) (less than 4.4 ft\3\ 2.90
capacity)...........................................
iv. Gas.............................................. 2.67
------------------------------------------------------------------------
(3) Clothes dryers manufactured on or after April 21, 2014, shall
have a combined energy factor no less than:
------------------------------------------------------------------------
Combined energy
Product class factor (lbs/kWh)
------------------------------------------------------------------------
i. Vented Electric, Standard (4.4 ft\3\ or greater 3.73
capacity)...........................................
ii. Vented Electric, Compact (120V) (less than 4.4 3.61
ft\3\ capacity).....................................
iii. Vented Electric, Compact (240V) (less than 4.4 3.27
ft\3\ capacity).....................................
iv. Vented Gas....................................... 3.30
v. Ventless Electric, Compact (240V) (less than 4.4 2.55
ft\3\ capacity).....................................
vi. Ventless Electric, Combination Washer-Dryer...... 2.08
------------------------------------------------------------------------
* * * * *
[FR Doc. 2011-9040 Filed 4-20-11; 8:45 am]
BILLING CODE 6450-01-P