[Federal Register Volume 60, Number 142 (Tuesday, July 25, 1995)]
[Proposed Rules]
[Pages 37949-37966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18015]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 60, No. 142 / Tuesday, July 25, 1995 / 
Proposed Rules  


[[Page 37949]]


DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Part 437

[Docket No. EE-RM-95-202]
RIN 1904-AA 74


Voluntary Home Energy Rating System Guidelines

AGENCY: Office of Energy Efficiency and Renewable Energy, U.S. 
Department of Energy.

ACTION: Notice of proposed rulemaking and public hearings.

-----------------------------------------------------------------------

SUMMARY: Today, the U.S. Department of Energy (``Department'' or 
``DOE'') is proposing statutorily required voluntary guidelines for 
home energy rating systems. The proposed voluntary guidelines are 
designed to encourage uniformity among systems for rating the annual 
energy efficiency of new and existing residential buildings. They 
provide for a uniform rating method; procedures for certification of 
the technical accuracy of the building energy analysis tools used to 
determine energy efficiency ratings; training of personnel conducting 
energy efficiency ratings; data collection and reporting; quality 
control; and monitoring and evaluation. The voluntary guidelines are 
intended for use by state and local governments, utilities, builders, 
real estate agents, lenders, agencies in mortgage markets, and others, 
to enable and encourage the assignment of energy efficiency ratings to 
residential buildings and the development of criteria for attractive 
financial instruments for energy efficient homes.

DATES: Written comments on the proposed rule (10 copies) must be 
received by the Department by October 23, 1995.
    A public hearing will be held on October 2, 1995.
    Requests to speak at the public hearing must be received by the 
Department by 4 pm on or before September 13, 1995. Ten copies of 
statement to be given at the public hearing must be received by the 
Department by 4 pm September 28, 1995.

ADDRESSES: All written comments (10 copies), requests to speak at the 
public hearing, and requests for the supporting documentation are to be 
submitted to: Voluntary Residential Energy Efficiency Rating 
Guidelines, Docket Number EE-RM-95-202, Buildings Division, EE-432, 
Office of Codes and Standards, U. S. Department of Energy, 1000 
Independence Avenue, SW., Room 1J-018, Washington, DC. 20585
    The public hearing will begin at 9:00 a.m., and will be held at the 
following location: Washington, D.C.: U.S. Department of Energy, 
Forrestal Building, 1000 Independence Avenue, SW., Room 1E-245 (1st 
Floor, E Corridor), Washington, D.C. 20585.
    Copies of the transcripts of the public hearing, individual oral 
statements, and the written public comments received may be viewed and/
or obtained from the DOE, Freedom of Information Reading Room, Room 1E-
190, 1000 Independence Avenue S.W., Washington, D.C. 20585, (202) 586-
6020, 9:00 a.m.-4:00 p.m.

FOR FURTHER INFORMATION CONTACT: Robert Mackie, Buildings Division, EE-
432, U.S. Department of Energy, Room 1J-018, 1000 Independence Avenue, 
SW., Washington, D.C. 20585, (202) 586-7892
Diana Dean, Office of General Counsel, GC-12, U.S. Department of 
Energy, Room 6B-231, 1000 Independence Avenue, SW., Washington, D.C. 
20585, (202) 586-7440

SUPPLEMENTARY INFORMATION:
I. Background
    A. Statutory Authority
    B. General Purpose
    C. Guideline Development
    D. Rating Method Development
    1. Reference House
    2. Star Rating Method
II. Description of the Proposed Rule
    A. Summary of the Voluntary Guidelines
    B. Section by Section Description of the Proposed Guidelines
    1. Section 437.1: Purpose.
    2. Section 437.2: Scope.
    3. Section 437.3: General definitions and acronyms.
    4. Section 437.4: Availability of ratings.
    5. Section 437.100: Rating procedure.
    6. Section 437.101: Rating point score and star rating.
    7. Section 437.102: Rating reporting.
    8. Section 437.103: Reference home configuration.
    9. Section 437.104: Minimum rated features.
    10. Section 437.105: Operating condition assumptions.
    11. Section 437.106: Non-rated energy consuming devices.
    12. Section 437.107: Projected ratings for to-be built homes.
    13. Section 437.200: Energy analysis tool requirements.
    14. Section 437.201: Site data collection manual.
    15. Section 437.202: Training home energy raters.
    16. Section 437.203: Quality control.
    17. Section 437.204: Monitoring and evaluation.
    18. Section 437.205: Guideline compliance.
    19. Section 437.206: Accreditation.
III. Procedural Requirements
    A. Environmental Review
    B. Regulatory Planning and Review
    C. Federalism
    D. Regulatory Flexibility Act
    E. Paperwork Reduction Act
IV. Public Comment Procedures
    A. Participation in Rulemaking
    B. Written Comment Procedures
    C. Public Hearing
    1. Procedure for Submitting Request to Speak
    2. Conduct of Hearing
I. Background

A. Statutory Authority

    Section 102 of the Energy Policy Act of 1992 (Pub L. 102-486), 
amended Title II of the National Energy Conservation Policy Act (Act) 
by adding sections 271-273 (42 U.S.C. 8236-8236b). Section 271 of the 
Act directs the Department to issue, by rule, voluntary guidelines that 
may be used by state and local governments, utilities, builders, real 
estate agents, lenders, agencies in mortgage markets, and others, to 
enable and encourage the assignment of energy efficiency ratings to 
residential buildings. Section 271 requires the Department to consult 
with the Secretary of Housing and Urban Development, the Secretary of 
Veterans Affairs, representatives of existing home energy rating 
programs, and other appropriate persons. In terms of specified content, 
section 271 provides that the voluntary guidelines shall:

    (1) encourage uniformity with regard to systems for rating the 
annual energy efficiency of residential buildings;
    (2) establish protocols and procedures for
    (A) certification of the technical accuracy of building energy 
analysis tools used to determine energy efficiency ratings; 

[[Page 37950]]

    (B) training of personnel conducting energy efficiency ratings;
    (C) data collection and reporting;
    (D) quality control; and
    (E) monitoring and evaluation;
    (3) encourage consistency with, and support for, the uniform 
plan for Federal energy efficient mortgages, including that 
developed under section 946 of the Cranston-Gonzalez National 
Affordable Housing Act (42 U.S.C. 12712 note) and pursuant to 
sections 105 and 106 of the Energy Policy Act of 1992;
    (4) provide that rating systems take into account local climate 
conditions and construction practices, solar energy collected on-
site, and the benefits of peak load shifting construction practices, 
and not discriminate among fuel types; and

    (5) establish procedures to ensure that residential buildings 
can receive an energy efficiency rating at the time of sale and that 
such rating is communicated to potential buyers.

    Section 105 of the Energy Policy Act of 1992 amends section 104 of 
the Cranston-Gonzalez National Affordable Housing Act, 42 U.S.C. 12704, 
by defining an ``energy efficient mortgage'' as a mortgage that 
provides financing incentives for the purchase of energy efficient 
homes, or that provides financing incentives to make energy efficiency 
improvements in existing homes by incorporating the cost of such 
improvements in the mortgage.

    The Department is developing the guidelines through notice and 
comment rulemaking because section 271 specifically requires that they 
be developed ``by rule.'' Nevertheless, compliance with the final 
guidelines is strictly voluntary.
B. General Purpose
    The principal purpose of a home energy rating system is to 
calculate a descriptive rating of the energy performance of a 
residential building. An accurate home energy rating system will give 
the lending industry the confidence it needs to underwrite energy 
efficient mortgages, offer financing mechanisms, and provide the real 
estate and appraisal industries with a basis for valuing energy 
efficiency in the home sale and resale markets. It is anticipated that 
by providing an accurate technical basis for projecting energy savings 
from installations of energy efficiency measures, the guidelines, when 
finalized, will play a critical role in establishing a market-based 
system to encourage homeowners to improve the energy efficiency of new, 
reconstructed or existing housing.
    Reliable and consistent energy analysis systems are prerequisites 
for financing residential energy efficiency through the mortgage 
process with energy efficient mortgages or energy efficient loans. 
Variation in current local and statewide home energy rating programs 
impedes the implementation of energy efficient mortgage programs 
because the Federal mortgage agencies and lenders are uncertain as to 
the reliability of the ratings.
    As of 1993, a number of states had developed their own unique home 
energy rating programs. The National Association of State Energy 
Officials (NASEO) stated that 14 states have state-wide or city-wide, 
scaled home energy rating programs for new and existing homes. Thirty-
three states had utility-run home energy rating certification programs 
for new homes in at least some areas of the state. In some areas both 
state and utility rating programs were in use.
    Today's proposed rule responds to the need of mortgage lending 
institutions for a reliable technical basis upon which to underwrite 
energy efficient mortgages. Providing this solid footing for mortgage 
underwriting will encourage lenders to issue a variety of energy-
related financial products which in turn will help stimulate the market 
for energy efficient housing measures.
    Along with access to attractive financing, homeowners could be 
encouraged to make investments in energy efficiency if they are valued 
in the real estate market. Currently, appraisals are based on 
comparables that do not necessarily value energy efficiency measures. A 
reliable home energy rating gives appraisers a sound basis for 
recognizing energy efficient measures that have been installed.
    Uniformity across different home energy rating systems could 
benefit consumers and the housing industry by making energy ratings a 
standard part of the real estate process. As ratings become widely 
utilized, consistency among systems will promote proper market 
valuation of improvements. Expanded use of home energy rating systems 
could stimulate increased use of energy efficiency and renewable energy 
technologies by making energy efficiency a quantitative, visible, and 
recognized attribute as homes are designed, built, bought, and 
remodeled.
C. Guideline Development
    The Department's Office of Building Technologies contracted with 
the Home Energy Rating Systems Council (HERS Council) in 1993 for the 
development of a Technical Report to be used as a basis for the 
guidelines proposed today. The Department acted in response to the 
provisions set forth in the Act to develop voluntary guidelines in 
consultation with the Secretary of Housing and Urban Development, the 
Secretary of Veterans Affairs, representatives of existing home energy 
rating programs, and other appropriate persons.''
    The HERS Council is a not-for-profit, corporation with a nineteen-
member board representing various stakeholders in the matter of home 
energy ratings. The HERS Council's membership includes builders, 
mortgage lenders, HERS providers, consumer groups, State energy 
offices, utilities, real estate agents and appraisers, and product 
manufacturers.
    The HERS Council formed a Technical Committee comprised of 
representatives from electric and gas utilities and utility trade 
associations, home energy rating providers, software developers, 
builders, state organizations, product manufacturers, and the heating, 
ventilation and air-conditioning industry. The Department also provided 
resources from the National Renewable Energy Laboratory to give 
technical support to the HERS Council during their work on the 
Technical Report.
    The Department, working through the HERS Council, attempted to 
reach all possible stakeholders to obtain comments during the 
development of these proposed guidelines. Representatives from the U.S. 
Department of Housing and Urban Development (HUD) and the U.S. 
Department of Veterans Affairs (VA) attended HERS Council and Technical 
Committee meetings to remain apprised of the material being developed 
and the Department has consulted with both HUD and VA on the contents 
of these proposed guidelines.
    Many of the larger and more active rating organizations 
participated in this effort, but the Department is aware that there are 
some home energy rating organizations not participating in the HERS 
Council. Therefore, the Technical Report created by the HERS Council, 
via a consensus process, may not reflect all opinions on the content of 
these guidelines. The proposed guidelines allow for delayed compliance 
as described below. The Department invites all interested parties to 
provide the Department with their views regarding the proposed 
guidelines in comments responding to this notice and at the public 
hearing.
D. Rating Method Development
    The proposed guidelines provide for a single method of rating homes 
that is consistent with the statutory requirement in section 271 of the 
Act to encourage uniformity with regard to systems for rating the 
annual energy efficiency of residential buildings. The HERS Council and 
the Technical 

[[Page 37951]]
Committee considered several existing rating methods. Many of the 
existing methods considered utilize a 100-point scale, and therefore, a 
large portion of consumers and financial institutions should find this 
type of scale an appropriate basis for ratings.
    Many of the existing 100-point methods, however, lack consistency 
in the specification of the extremes of the scale (0 and 100 points). 
In some of the existing methods, the least efficient fuel and type of 
heating system is used to define the least efficient end of the scale. 
In other existing methods, the best available technology is used to 
define the most efficient end of the scale. The exact parameters that 
determine the ``least efficient'' and ``most efficient'' ends of the 
scale are selected individually by each HERS provider which can result 
in a lack of consistency among providers.
    To promote consistency, the proposed scale utilizes a single fixed 
reference point from which energy efficiency is measured. The reference 
point is fixed at 80 points, and the proposed method assumes zero 
purchased energy at the top end of the 100-point scale. The top of the 
scale (100) represents a one hundred percent improvement over the 
reference point. Therefore, each point above 80 represents a five 
percent reduction in energy consumption from the reference point. 
Conversely, at a five percent increase in consumption per point, zero 
would represent purchased energy that is five (or more) times greater 
than the purchased energy consumed at the reference point. By selecting 
the energy efficiency of a hypothetical building (reference house) that 
remains constant as the reference point, the rating scale becomes both 
uniform and consistent over time. If no changes occur to the rated 
features of a home, then the rating also remains consistent over time.
1. Reference House
    The approach used to create the specifications for the reference 
home was to base the proposed scale specifications on an already 
recognized standard for ``energy efficiency.'' Two recognized standards 
for energy efficiency that are national in scope are the Council of 
American Building Officials (CABO), Model Energy Code (CABO-MEC) and 
the American Society of Heating, Refrigerating, and Air Conditioning 
Engineers (ASHRAE) Standard 90.2.
    The HERS Council Technical Committee compared the specifications of 
these two documents. Using computer programs that met the preliminary 
requirements of the proposed tool certification process found in 
proposed section 437.200, a comparison was made of calculated energy 
consumption for two standard prototype homes located in seven cities in 
the United States. The predicted energy consumption was similar for 
either standard in most climates. In predominantly heating climates, 
CABO was slightly more stringent, whereas ASHRAE tended to be slightly 
more stringent in climates where cooling was the greater need. The 
difference was not considered to be substantial.
    The HERS Technical Committee recommended the use of CABO-MEC as the 
basis for the reference home in the proposed rating method. CABO-MEC is 
the qualifying threshold for the energy efficient mortgage program of 
the Federal National Mortgage Association (Fannie Mae), and the Federal 
Housing Administration. Further, Section 101 of the Energy Policy Act 
of 1992 uses CABO-MEC as the benchmark for residential buildings in the 
Department's Building Energy Efficiency Standards Program.
    On the basis of the foregoing, the Department accepts the HERS 
Technical Committee's recommendations to use CABO-MEC. (See proposed 
section 437.102, ``Section Description of the Guidelines'', 
``Configuration of the Reference Home.'')
    As previously stated, several secondary mortgage programs, 
including HUD insured mortgages, recognize CABO-MEC as providing a 
level of energy efficiency that qualifies buyer for increases in their 
debt to income ratio limits. These programs currently reference the 
1992 edition of CABO-MEC. The Department selected the 1993 edition to 
establish insulation levels for the reference home because it provides 
for more realistic (higher) levels of efficiency in multi-family homes 
than those provided in the 1992 edition. In addition, some elements to 
define a reference home and a standard set of operating conditions are 
not present in the 1992 or 1993 editions of CABO-MEC, so they are taken 
from the 1994 Amendments. Details are provided in Section II.B. 
``Sections Descriptions'' under proposed section 437.103, 
``Configuration of the reference home'' and proposed section 437.105, 
``Operating condition assumptions.''
2. Star Rating Method
    Many of the existing HERS systems provide ``star'' ratings as a way 
of summarily representing the point scores. Many of the providers 
support the concept that a ``four star'' rating should denote 
efficiency. The proposed guidelines include the use of a ``star'' 
system. Under this system, which uses a ``one star'' to ``five stars-
plus'' scale, the reference home located at 80 points is awarded four 
stars.

    The divisions of the ``star'' scale in the proposed rating method 
were created by the HERS Technical Committee based on a study of 
calculated energy consumption. The HERS Technical Committee used 
incremental levels of efficiency to look at the range of performance 
that might be found in the existing housing stock. (For example, a pre-
1940 home with no modifications consumes approximately four times the 
energy used by a reference home.) The study also looked at logical 
incremental increases in levels of thermal performance above the levels 
found in the reference home. To attain those higher levels, the study 
looked at improved insulation equipment efficiency and the use of 
renewable energy sources such as passive and active solar. The ``star'' 
breakpoints presented in the proposed guidelines have their origins in 
this analysis by the HERS Technical Committee. Copies of the results of 
this study are available from the Department information contact listed 
in the ``Addresses'' paragraph of this proposed rulemaking. The 
Department has also placed a copy in its Freedom of Information Reading 
Room.

    Thus, the guidelines proposed today are based on the principle of a 
reference house and logical incremental changes in energy consumption. 
The expression of the results is captured in the ``star'' categories of 
energy efficiency.

    The Department invites comments regarding the potential acceptance 
of these guidelines by existing home energy rating providers and 
invites specific comments on the content of the guidelines. Commenters 
should bear in mind that these guidelines would not in themselves set 
any ``acceptable'' level of energy efficiency and that existing 
programs could use any point or points on the proposed scale for 
comparisons that encourage efficiency. Commenters are also encouraged 
to provide specific examples if comparisons to existing programs are 
offered.

II. Description of the Proposed Rule

A. Summary of the Proposed Voluntary Guidelines

    The proposed voluntary guidelines would establish: (1) A uniform 
national rating method, and protocols and procedures for certification 
of the technical accuracy of building energy analysis tools used to 
determine energy efficiency ratings; (2) training of 

[[Page 37952]]
personnel conducting energy efficiency ratings; (3) data collection and 
reporting; (4) quality control; (5) and monitoring and evaluation. They 
take into account local climate conditions and construction practices, 
solar energy collected on site, and the benefits of peak load shifting 
construction practices. They are designed not to discriminate among 
fuel types.
    The Department proposes to incorporate by reference test 
procedures, U values and Uo values, and on site inspection 
procedures upon publication of this rule as final. These materials are 
listed below:
    The ``Home Energy Rating Systems Building Simulation Test (HERS-
BESTTEST)'', NREL/TP-472-7332, National Renewable Energy Laboratory. 
The U values and Uo values, of paragraph 502.2 of the Model Energy 
Code, 1993 Edition, Council of American Building Officials. ``On Site 
Inspection Procedures'', Guidelines No. 10, Home Energy Rating Systems 
Council.
    Copies of these document may be reviewed at the Department of 
Energy, Freedom of Information Reading Room at the address stated 
above. Copies of these documents may also be obtained from the 
organizations and addresses listed below:
    ``Home Energy Rating Systems Building Simulation Test,'' NREL/TP-
472-7332, National Renewable Energy Laboratory, 1617 Cole Boulevard, 
Golden, CO 80401-3393.
    ``Model Energy Code,'' 1993 Edition, Council of American Building 
Officials, 5203 Leesburg Pile, Falls Church, VA 22041.
    ``On Site Inspection Procedures,'' Guidelines No. 10, HERS Council, 
1511 K Street, NW, Washington, DC 20005.

B. Section Descriptions

Subpart A--General Provisions
Proposed Section 437.1: Purpose
    Proposed Sec. 437.1 defines the purpose of part 437 as the 
establishment of voluntary guidelines to be used by Home Energy Rating 
System Providers to provide a consistent and uniform approach to rating 
homes for energy efficiency.
Proposed Section 437.2: Scope
    Proposed Sec. 437.2 specifies the types of homes that may be rated 
using the voluntary guidelines. Section 271 of the Act calls for the 
development of guidelines for ``residential buildings'' but does not 
define that term or otherwise dictate the types of homes to be covered 
by the guidelines. Consistent with the decision to base the proposed 
voluntary guidelines on CABO-MEC, the proposed scope is limited to 
residential buildings covered by CABO-MEC.
    Included are: (a) one and two family dwellings; and (b) all other 
residential buildings, three stories or less in height. As required by 
section 271, both existing and proposed homes are included in the 
proposed scope of the voluntary guidelines.
Proposed Section 437.3: General Definitions and Acronyms
    Proposed Sec. 437.3 provides a listing of all the general 
definitions and acronyms used in section 437. ``Home'' is defined in 
this section as a residence or dwelling unit in detached or attached 
structures of three stories or less. The rating industry as it exists 
today favors the term ``home energy rating'' and the Department elects 
to follow that convention. ``HERS provider'' is defined as a person or 
organization that develops, manages and operates a home energy rating 
system or ``HERS''. The rating industry as it exists today tends to use 
the term ``HERS provider'' to describe a person or organization that 
provides HERS generated ratings.
Proposed Section 437.4 Availability of Ratings
    To respond to the statutory requirement ``to ensure that 
residential buildings can receive an energy efficiency rating at the 
time of sale and that such rating is communicated to potential 
buyers,'' proposed Sec. 437.4 recommends certain actions by people or 
organizations that are typically involved with the sale of a home or 
the creation of a mortgage.
    The Department is of the view that informing home buyers of any 
available financing incentives related to energy efficiency will 
encourage consumers to take steps that will reduce energy use in this 
country. Consistent with that view, proposed Sec. 437.4(b) provides for 
encouraging multiple listing services to include available home energy 
rating information. The Department understands that there is concern 
among stakeholders that buyers may need additional time to investigate 
available incentives and, if necessary, have a rating conducted. In 
doing so, the process of home selling might be delayed. However the 
Department believes that delays can be minimized by lenders with proper 
administrative procedures.
    The Department also recognizes further concern that some existing 
homes may be viewed as less marketable as the result of a rating and 
therefore some homeowners may oppose the concept of rating homes. 
However the Department is not proposing that such a rating should be 
prerequisite to listing a home sale.
Proposed Section 437.100: Rating Procedure
    Proposed Sec. 437.100 sets forth a standard procedure to be used by 
each provider who voluntarily follows the proposed guidelines. A site 
visit would be required to collect data that is used in making a 
comparison of estimated yearly energy consumption between the home 
being rated and a standard reference home of the same size and shape. 
Only the energy consumed for heating, cooling and water heating would 
be used in this comparison. The reference home would be defined under 
proposed Sec. 437.103.
Proposed Section 437.101: Rating Point Score and Star Rating
    This proposed section describes the calculation procedure for 
determining a point score and star rating. The procedure would use the 
estimated energy consumption of the rated and reference houses to 
determine a rating score between 0 and 100 points. A score of 0 
indicates that the rated home consumes five times or more energy than 
reference home and is considered profoundly inefficient; a score of 100 
indicates that the rated home has zero annual purchased energy 
consumption for heating, cooling and water heating.
    In addition to a numerical score, the rating is expressed by a 
``star'' value of between one and five stars (five divisions) with a 
sixth division called ``Five Plus''. This section identifies the 
relationship of the numerical score to its corresponding ``star'' 
value.
Proposed Section 437.102: Rating Report
    Proposed Sec. 437.102 lists the minimum information that each 
rating provides. Proposed paragraphs (a)(5) and (a)(6) of this section 
would require each HERS provider to report the name of the agency 
certifying the accuracy of the energy analysis tool and the margin of 
error accepted by that agency. Section 271 of the Act requires that the 
guidelines establish procedures for certifying the technical accuracy 
of energy analysis tools, but gives no definition as to what 
constitutes ``technical accuracy.'' As proposed in section 437.200, 
these guidelines look to the accrediting agency to establish pass/fail 
criteria for energy analysis tools. The Department believes that the 
acceptable margin of error is an issue to be decided by the users of 
these ratings, such as consumers and lenders. 

[[Page 37953]]
Therefore, the purpose of these two proposed reporting requirements is 
to provide information that allows users to decide for themselves if 
the accuracy of the energy analysis tool, as defined by the accrediting 
body, is acceptable. The Department expects and encourages comments 
from the financial community on this issue.
    Proposed paragraph (a)(7) of this section requires each HERS 
provider to report the level of their accreditation as either ``basic 
compliance'' or ``full accreditation''. Existing HERS providers may 
have functioning systems that would comply, or could readily be made to 
comply with the majority of these guidelines, but would require lengthy 
periods of time to come into full compliance. In response to this 
situation, the Department proposes two levels of performance, basic 
compliance and full accreditation, with the opportunity for any 
existing HERS provider to meet certain guidelines with their present 
system for a period of up to two years, during which time they may 
represent themselves as being in basic, but not full compliance with 
the guidelines. The Department invites comments on the advisability of 
such a structure.
    Paragraph (a)(9) provides for the reporting of previous energy 
consumption data if it is made available by the homeowner. Various 
factors such as prior home improvements or unusual weather conditions 
make it necessary for the rater to determine the usefulness of such 
information and to determine if it should be included in the report.
    To facilitate energy efficient mortgages and loans as provided in 
section 271 of the Act, paragraph (b) of this proposed section provides 
for the report to include the estimated energy cost savings available 
with the rated home reconfigured with possible improvements to the 
minimum rated features. Paragraph (b)(2) also provides for reporting of 
``The Present Worth Value'' of the energy cost savings and the discount 
rate used to calculate that value. The Department considers this 
information necessary because it is used in the qualification process 
for Federally backed energy efficient mortgage programs such as those 
provided by the Department of Housing and Urban Development (HUD). The 
Department is not proposing a specific discount rate.
Proposed Section 437.103: Reference House Configuration
    Proposed Sec. 437.103 establishes the level of energy efficiency of 
the reference home. The insulation levels are those that are required 
by the Council of American Building Officials Model Energy Code, 1993 
edition (CABO-MEC), therefore, specific reference is made in this 
proposed section to have the enclosure elements configured to Paragraph 
502.2 of CABO-MEC. This paragraph establishes the criteria for building 
envelope components according to the severity of the normal winter 
weather conditions for the geographic location of the home. The 
Department considers this procedure to be appropriate for the 
determination of insulation levels for the reference home.
    To be responsive to the language in section 271 of the Act 
regarding the need to take into account ``solar energy collected on-
site,'' this proposed section would create what the Department 
considers a ``solar neutral `` reference home by fixing the following 
components:
    Fenestration Area--In proposed paragraph (a)(5)(i), the 
fenestration area is fixed at 18 percent of the conditioned floor area. 
The requirements for wall assemblies in CABO-MEC are based on the 
average U-values of those assemblies and therefore the total U-value of 
the wall assemblies including windows and doors is calculated, then 
divided by the gross wall area to determine the average. Since the area 
of glazing may vary depending on the thermal performance of the window 
itself and/or the opaque wall area, it is considered necessary to fix 
the amount of glazing to create consistency in the reference home. In 
the case of multi-family homes, where 18 percent of the conditioned 
floor area may exceed the actual exposed wall area, a formula is 
provided in proposed section 437.103 to establish the reference home 
fenestration on a ratio of exposed and common wall areas.
    Orientation--Also in proposed paragraph (a)(6)(i), glazing in the 
reference home would be distributed equally in each of four cardinal 
directions--north, south, east and west. As a result, the reference 
home is assumed to experience equally beneficial solar gains during 
heating season and equally detrimental solar gains during cooling. The 
rated home would reflect the benefits of favorable orientation and/or 
the negative impact of poor orientation. This principle is also 
utilized with regard to multi-family homes, which would assume 
hypothetical glazing in walls even though the actual wall in the rated 
home may be common with an adjoining unit and not have any windows.
    Adjustment to Fenestration Area--Proposed paragraph (a)(7) 
specifies the percentage of the fenestration area that be assumed as 
frame or sash. This serves to further refine the actual glazed area for 
purposes of solar contribution for heating or solar load for cooling. 
The value of 27 percent is taken from the information in Chapter 27 of 
the 1993 ASHRAE Handbook of Fundamentals which specifies a 27 percent 
frame area for a 3 ft. by 4 ft. operable wood residential window. Frame 
and sash adjustments to fenestration area in the rated home are based 
on the actual windows in use or as proposed for retrofit or to be built 
homes.
    Shading Coefficient--Proposed paragraph (a)(8) fixes the shading 
coefficient at 0.70 during the cooling season. This is consistent with 
the provisions for a reference house in section 8.8.3.2 of ASHRAE 
Standard 90.2, for energy efficient design of low rise residential 
buildings. It is also consistent with the provisions found in the 1994 
amendments to CABO-MEC. The 1994 amendments were used as a source of 
information to define this feature of the reference home because the 
1993 code lacks clarity on these necessary specifications. It should be 
noted that CABO states the use of draperies without providing a 
specific shading coefficient which still leaves some ambiguity that is 
avoided by following the ASHRAE approach. This part of the proposed 
guidelines also fixes the shading coefficient for the glazing area at 
0.88 during heating. This value is as stated in Chapter 27 of the 1989 
ASHRAE Handbook of Fundamentals for clear double \1/8\ inch glass. 
Shading coefficients for glazing in the rated home are based on the 
actual windows in use or as proposed, but also assuming the use of non-
white draperies on the same schedule as is specified for the reference 
home.
    In response to the language in section 271 of the Act that requires 
that these proposed guidelines not discriminate among fuel types, 
proposed paragraph (a)(10) provides that the reference home utilize the 
same energy sources for the same purposes as in the rated home. In the 
case of ratings that include proposed upgrades, this eliminates the 
possibility of a better rating by fuel switching. Energy suppliers are 
free to promote their particular fuel type by providing comparative 
operating costs but should do so outside of the information provided in 
the rating of the home as it exists.
    In proposed paragraph (a)(12), the equipment efficiencies specified 
for HVAC systems and domestic hot water equipment in the reference 
home, are the minimum efficiencies initially established by the 
National Appliance Energy Conservation Act of 1987 (NAECA)(Pub.L. 100-
12). In proposed paragraph (a)(11), the reference home is 

[[Page 37954]]
also assumed to have the same type of HVAC system, e.g., forced air or 
hot water, as the rated home, except that in the case of homes heated 
electrically, the reference home is assumed to be heated with an air 
source heat pump. The Department considers this to be consistent with 
the use of the minimum equipment efficiency established by NAECA, but 
acknowledges the fact that in some homes with an extremely efficient 
envelope, the use of resistance heat might very well represent the best 
value when life-cycle costing principals are applied. However, it is 
considered a greater risk to allow the combined inefficiency of a poor 
envelope using resistance heat to be mitigated if a heat pump system is 
not specified in the reference home.
    Proposed paragraph (a)(13) provides for standard adjustments to 
HVAC systems for duct or piping losses when the rated home has all or 
part of its distribution system outside of the conditioned space. The 
adjustment factors are consistent with those found in the 1994 
Amendments to CABO-MEC.
    Proposed paragraph (a)(14) provides specifications for water heater 
efficiency expressed as an energy factor (EF). The values specified are 
those found in the NAECA requirements for domestic water heaters.
    The seasonal average air leakage rate of 0.67 air changes per hour 
(ACH) established for the reference house in proposed paragraph (a)(15) 
is consistent with the 1994 amendments to CABO-MEC. Consideration was 
given to reducing that value to 0.50 air changes per hour as was done 
in the 1995 edition of CABO-MEC, but at 0.67 there can be a greater 
incentive to test with diagnostic equipment such as a blower door. With 
the reference home set at the lower level of 0.50, a tested home would 
receive minimal credit (0.15 ACH) in the rating before reaching the 
current ASHRAE minimum of 0.35 ACH assumed necessary for adequate 
ventilation. With an 0.67 rate as the basis for the reference home, a 
tested home has the opportunity to demonstrate a 0.32 ACH advantage in 
the rating. The minimum standard default value in proposed section 
437.104, unless diagnostic testing is conducted, is 0.67 so in no case 
could a rated house claim any advantage over the reference home without 
testing.
    Proposed paragraph (a)(16) sets standard assumptions for the 
building mass found in the reference building that would be considered 
when evaluating the benefits of mass for heat storage during both 
heating and cooling seasons. This approach allows designers of the 
rated home to incorporate passive solar strategies into the design and 
to receive full credit for mass provided for that purpose. The internal 
and structural mass values used are those found in the 1994 Amendments 
to CABO-MEC.
    The reference home defined by proposed section 437.103 represents a 
fixed rating point that will not change over time. Homes which have 
been rated will never need to be re-rated unless modifications have 
been made to the home which affect its energy efficiency.
    The Department invites comments on the configuration of the 
reference house but reminds comment writers that it is not the 
intention of these guidelines to use the reference house to set any 
specific level of efficiency. While the specifications happen to be 
consistent with some current energy efficient mortgage programs, anyone 
offering incentives for energy efficiency in financing or otherwise, is 
free to select any point on the rating scale as their ``threshold of 
energy efficiency'' or other basis for comparison. The objective in 
defining and using the reference home is consistency and the fact that 
it is fixed in time has no bearing on future definitions of ``energy 
efficiency'' or future qualifications for energy efficient financing 
programs.
Proposed Section 437.104: Minimum Rated Features
    Proposed Sec. 437.104 provides in Table 5, a list of building 
components and a corresponding list of features of those building 
components that must be considered when calculating the energy 
consumption for the rated home as required by Sec. 437.100. The 
Department recognizes that there are numerous additional features or 
devices that might affect energy consumption in buildings. Examples are 
ceiling fans, whole house fans, moveable insulation, etc., most of 
which are occupant controlled. The Department believes that those 
listed in Table 5 represent all the major influences on energy 
consumption and that it is not necessary to require that each HERS 
provider be able to evaluate all options and to do so would place an 
undue burden on many existing systems. Paragraph (h) of this section 
states that any HERS provider may base a rating on additional features 
if the energy analysis tool being used is capable of doing so.
    Proposed paragraph (c) provides methods, listed in the preferred 
order of use, to determine building envelope thermal characteristics.
    Proposed paragraph (d) allows for the use of default values when 
data for the minimum rated features is not available without expensive 
and destructive disassembly of the home. The Department believes that 
these default values are best determined by a person or persons 
knowledgeable about typical construction practices used in any given 
time frame for homes in any given area. For this reason, this section 
places the responsibility for establishing or approving default values 
on the accrediting body and reflects the expectation that the required 
expertise is present in that body.
    Paragraph (e) of this section deals specifically with air leakage. 
It states that if diagnostic testing equipment is not used to determine 
leakage, then based on observations of the general tightness of 
construction, a value of 0.67 air changes per hour or greater is to be 
used. This precludes the use of a lower, more efficient value in a 
rated home than is used for the reference home unless testing is done. 
It does not ensure that the energy consumption attributable to air 
leakage is accurately reported in the rating but neither do the models 
used to extrapolate annual average air leakage rates from a single 
diagnostic test. An experienced and well trained rater may make 
reasonable estimates of air leakage and doing so without the expense of 
diagnostic equipment reduces the cost of completing a rating. The 
Department invites comments on the sensitivity of the possible range of 
error which can occur with either estimated air leakage or in the 
models for diagnostic testing.
    Proposed paragraph (f) of this section provides methods, listed in 
a preferred order of use, for determining efficiencies of primary types 
of mechanical equipment. Proposed paragraph (g) provides as the last in 
order of preference, an age-based table of default values for typical 
space conditioning and domestic water heating equipment. A non-aged 
based table of default values is provided for less common types of 
mechanical equipment.
    These tables identified as Tables 6 and 7, were developed from the 
following references:

Department of Energy Residential Conservation Services Training Manual 
(1981)
California Home Energy Efficiency Rating System (CHEERS) equipment 
default table
Air Conditioning & Refrigeration Institute (ARI) historic equipment 
shipment data, weighted averages
Gas Appliance Manufacturers Association (GAMA) historic equipment 
shipment data, weighted averages

[[Page 37955]]

Oil equipment shipment data compiled by R. Krajewksi (Brookhaven 
National Laboratory), weighted averages
Proposed Section 437.105: Operating Condition Assumptions
    These guidelines are to be used to rate homes and not the occupants 
of the home. Therefore occupant dependent factors e.g., thermostat set 
points, are to be disregarded when estimating the energy consumption of 
the rated and reference homes. Instead, the standard operating 
conditions provided in proposed Sec. 437.105 are to be assumed.
    Proposed paragraph (a) of this section provides standard 
temperature control setpoints of 68  deg.F for heating and 78  deg.F 
for cooling which are consistent with those found in the 1994 
Amendments to CABO-MEC. When programmable offsets are available in the 
rated home, proposed paragraph (b) of this section specifies 
assumptions for the periods of offset and the amount of offset (5 
deg.F). These values are based on information obtained from an industry 
survey conducted by Minneapolis Honeywell that reported typical use of 
programmable thermostats. The Department considers these schedules and 
offsets to be conservative and therefore suitable as an operating 
conditioning assumption when the rated home is so equipped.
    Proposed paragraph (c) sets standard values for internal gains from 
lights, people and equipment to be used when calculating the space 
conditioning loads and energy consumption. These values are consistent 
with those found in the 1994 Amendments to CABO-MEC.
    Proposed paragraph (d) provides a formula for the determination of 
domestic hot water usage. This formula for daily usage, (30 gallons + 
(10 gallons  x  number of bedrooms)), is consistent with the formulas 
found in the 1994 Amendments to CABO-MEC and in ASHRAE Standard 90.2 
that establish domestic hot water usage.
    Proposed paragraph (e) would require the HERS provider to make a 
determination as to what weather data is to be used when calculating 
energy usage. The normal source of weather information is to be found 
in the typical meteorological year (TMY) data published by the National 
Climatic Center, Asheville, NC. The term ``climatologically most 
representative'' is used regarding the choice of location of the TMY 
data to be used. This is because the Department recognizes the 
possibility that the closest TMY weather site geographically may not be 
truly representative of the weather conditions found at the site of the 
home being rated. This proposed paragraph also allows interpolation of 
weather data if the interpolated weather information is consistent 
among all HERS providers operating within a State and is approved by 
the accrediting body.
    Proposed paragraph (f) provides that operating adjustments to 
equipment efficiencies are to be made to correct for climate and mis-
sizing of equipment. These correction factors may be obtained from 
recognized sources. The most logical sources of this information are 
the Air Conditioning and Refrigeration Institute (ARI) or ASHRAE. The 
requirements of this proposed paragraph would be met if the adjustments 
are either provided by or approved by the accrediting body and are 
consistent among all HERS providers operating within a State.
    Proposed paragraph (g) would require each HERS provider to use 
local utility or energy rates when calculating costs for reporting as 
required in proposed section 437.102. This paragraph also would provide 
for consistency among HERS providers on the updating of the rate 
information by requiring each HERS provider operating within a State to 
update information on the same schedule which is established by the 
accrediting body.
Proposed Section 437.106: Non-Rated Energy Consuming Devices
    The energy consumed by appliances and lights is not included in 
consumption used to determine the rating. Proposed Sec. 437.106 would 
establish standard consumption values for energy consuming devices such 
as appliances and lights since it is necessary to estimate the energy 
usage of these non-rated devices to comply with proposed Sec. 437.102 
(Rating Report). Proposed Sec. 437.102 would require that, in addition 
to reporting the estimated energy use for heating, cooling and water 
heating, each HERS provider reports the estimated energy use and cost 
of all other energy used in the rated home.
    The Department recognizes the fact that some appliances, especially 
refrigerators, may have a wide variance in energy use. There are also 
dramatic savings available with the use of alternative lighting 
fixtures. The primary reason behind the decision to neutralize the 
affect of appliances in the rating process is that the rating should 
not be based on items that are not a permanent part of the structure. 
Refrigerators and other appliances can be moved with the occupants or 
can be replaced with models that are more or less efficient. In the 
case of lighting, there are opportunities to include permanently wired 
fixtures in the rating but it is necessary to know the operating 
schedule of the lighting to properly identify savings. Therefore the 
rating would be based on the occupants and not on the house. In 
addition, the number of permanently wired fixtures in the typical home 
is limited and, in most cases, represent only a small part of the total 
energy use.
    In proposed Sec. 437.100(d), each HERS provider is encouraged to 
provide separate information on the cost of operating appliances.
    The electric energy use values proposed in Table 8 of this section 
are taken from documents published by the Electric Power Research 
Institute (EPRI). Those documents include: EPRI Residential End-Use 
Energy Consumption: A Survey of Conditional Demand Estimates 1989 and 
EPRI Residential Energy Usage Comparison Project: An Overview 1990.
    The gas energy use values proposed in this section are taken from 
documents published by the Gas Research Institute (GRI). Those 
documents are: GRI Baseline Projection Data Book, 1994 Edition; and GRI 
Interim Technical Input to NAECA Rulemaking for Gas-Fired Ranges, 1993.
Proposed Section 437.107 Projected Ratings for To-Be-Built Homes
    This section recognizes that homebuilders may wish to offer 
standard models that may be built on sites that vary in orientation. 
This would prevent a rater from meeting a provision of section 437.104 
which lists window and skylight orientation as a minimum rated feature. 
Therefore, a projected rating for to-be-built homes may be based on 
plans by estimating the energy consumption for each of the four 
cardinal orientations, (north, south, east and west), and basing the 
projected rating on the orientation that results in the greatest energy 
consumption.
    Projected ratings for to-be-built homes must also use a default 
value for air leakage of no less than 0.67 air changes per hour. The 
rating may be revised upon completion of the home if diagnostic testing 
results in a lower air leakage rate (and/or on the basis of actual 
orientation). The Department recognizes that this may be unfair to 
builders who consistently deliver homes with tighter construction 
because the projected rating will not reflect the benefit of additional 
investment in tightening of the home and may cause the rating to fall 
short of a level required to obtain a particular incentive. The final 
rulemaking could address this issue by allowing an exception to the 
default value for demonstrated consistency of tightness by a builder 

[[Page 37956]]
and the Department solicits comments on the appropriate basis on which 
that exception might be made (number of homes with demonstrated 
tightness, etc.).
Subpart C--How to Administer a Home Energy Rating System
Proposed Section 437.200: Energy Analysis Tool Requirements
    Proposed Sec. 437.200 establishes the minimum capabilities that an 
energy analysis tool must have in order to produce the information used 
in determining a rating. These include the ability to consider the 
effect of the following items when estimating energy use:
    Building types. (Proposed Sec. 437.2);
    Reference home configuration. (Proposed Sec. 437.103);
    Minimum rated features. (Proposed Sec. 437.104);
    Operating condition assumptions. (Proposed Sec. 437.105);
    Non rated energy consuming devices. (Proposed Sec. 437.106).
    Proposed paragraph (a)(5) is provided in response to section 
271(b)(2) of the Act which requires that the voluntary guidelines 
include protocols and procedures for certification of the technical 
accuracy of building energy analysis tools used to determine energy 
efficiency ratings.
    The National Renewable Energy Laboratory (NREL) has developed a 
Home Energy Rating System Building Energy Simulation Test (HERS 
BESTEST) for this purpose. HERS-BESTEST is published as a technical 
report identified as NREL/TP-472-7332, and is available from the 
information contact identified at the beginning of this notice or from 
the National Technical Information Service, U. S. Department of 
Commerce, Springfield, Virginia 22161.
    In developing HERS BESTEST, NREL used the results of three public 
domain dynamic analysis programs with time steps of one hour or less to 
establish reference energy consumption values as a basis for comparison 
of the energy consumption calculations generated by HERS tools. The 
programs used were DOE 2.1E, BLAST 3.0, and SERI-RES.
    The NREL report establishes the procedures to administer HERS-
BESTEST. The NREL report also provides suggested pass/fail criteria for 
certification of a rating tool based on the tools ability to correctly 
calculate, within an allowable deviation, building energy loads for a 
series of tests identified as Test Suite 1 of the HERS-BESTEST process.
    A single story slab on grade house with typical glazing and 
insulation is used as a base case with the HERS-BESTEST Tier 1 test 
suite consisting of variations to the building in these elements:
     Air leakage.
     Wall and ceiling R-value.
     Glazing area.
     Glazing physical properties.
     Glazing orientation.
     South overhang.
     Uninsulated slab.
     Insulated slab.
     Uninsulated basement.
     Insulated basement.
     Internal loads.
     Crawl space.
     Exterior surface color.
     Combination of features using the least energy efficient 
specifications for each.
    In each of the variations listed above, the energy loads calculated 
by the three public domain dynamic analysis programs differ by varying 
amounts. The variation can be up to fifteen percent of the mean of all 
three results. Thus a ``band width'' of results is created for each 
test case.
    Proposed Sec. 437.206 (Accreditation) provides that it is the 
responsibility of a State or any other organization established as an 
accrediting body, to establish the pass/fail criteria for certification 
of the tool. The suggested pass/fail criteria provided in the NREL 
report are based on the widest interval produced by either a deviation 
of four million BTU outside, on either side of the ``band width'' 
created in HERS-BESTEST or an interval produced by the 90% confidence 
interval for the population mean using a Students t distribution based 
on the reference results of HERS-BESTEST.
    Proposed paragraph (b) of this section provides for future energy 
analysis tool requirements. The Department believes that the accuracy 
of ratings will be improved with tools that utilize hourly simulations 
to handle the variables provided for in this proposed paragraph. 
Proposed paragraph (b) of this section sets a period of four years from 
the date of final rulemaking for HERS providers to improve their tools 
to meet the requirements of this part.
    The Department invites comments on the need for the degree of 
accuracy expected to result from the HERS-BESTEST procedure. Specific 
questions are: Can accuracy be best determined using empirical data 
that compares predictions to actual consumptions? Also, should HERS 
providers be able to self-certify the accuracy of the energy analysis 
tools?
Proposed Section 437.201: Site Data Collection Manual
    Proposed Sec. 437.100 states that data is to be collected at the 
site of the rated home. Proposed Sec. 437.201 would require each HERS 
provider to supply each data collector with a manual containing 
approved data collection procedures. Proposed paragraph (a) of this 
section provides, as a reference source for such procedures, Guideline 
No. 10 of the Home Energy Rating Systems Council HERS Guidelines. The 
Department has placed a copy of this guideline in the public file for 
this notice.
    The Department believes that a manual of this type can be most 
useful if it is directed to local building practice and history. 
Therefore, proposed paragraph (a) states that a HERS provider may use 
procedures established by the accrediting body or may create its own 
material as long as the procedures used are approved by the accrediting 
body.
Proposed Section 437.202: Training Home Energy Raters
    Proposed Sec. 437.202 would require each HERS provider to provide 
training to any employee who will be involved in the rating process. 
This section provides for the development of a syllabus to be used in 
this training.
    Proposed paragraph (a) of this section identifies the subject 
matter for a classroom training segment of the training. Proposed 
paragraph (b) would require a written examination. Paragraph (c) would 
require field training. Paragraph (d) specifies a probationary period.
    Proposed paragraph (e) provides for the use of a challenge test of 
competency for rater personnel with prior experience. The challenge 
test, if passed, would allow the HERS provider to waive the classroom 
training required by paragraph (a) of this proposed section.
    The classroom training agenda in proposed paragraph (a) was 
developed from information provided to the Department by the HERS 
Council Technical Committee and is based on recommendations made by 
personnel representing the following organizations: California Home 
Energy Efficiency Rating System (CHEERS), Energy Rated Homes of America 
(ERHA), Oregon Department of Energy, Policy & Planning Division, 
Western Massachusetts Electric Co. Energy Crafted Home Program.
    The Department considers these organizations to be among the most 
experienced HERS providers operating 

[[Page 37957]]
today. The Department also believes that the proposed training 
requirements are based on sound principles.
Proposed Section 437.203: Quality Control
    Proposed paragraph (a) requires each HERS provider to establish a 
Quality Assurance Plan and specifies the minimum elements of that plan. 
The first element listed as paragraph (a)(1) is the use of a peer 
review where other raters would be asked to critique the work of each 
rater as part of a continuing re-evaluation program. Proposed paragraph 
(b) would require HERS providers to establish a Quality Assurance File 
and specifies the minimum contents of that file. This paragraph further 
provides for a minimum updating cycle of two years for the information 
in this file, or sooner if changes are made to the HERS providers 
system.
    Proposed paragraph (c) would require HERS providers to maintain an 
electronic database of specific information on each home rated and 
specifies the minimum content of that database. The main purpose of 
maintaining this data is to support the monitoring and evaluation 
activities provided in proposed section 437.204. It may also be 
possible in the future to link these databases with National or State 
databases that track default data on mortgages or loans. Only selected 
parts of the database such as the unique ID number would be needed for 
that purpose.
    The specification of individual elements listed in proposed 
paragraphs (a), (b) and (c) is based on recommendations from the same 
organizations referenced in the discussion above on the development of 
proposed Sec. 437.202 and the Department considers the requirements to 
represent the minimum effort expected for quality control. Specific 
recommendations or comments are invited on this subject.
Proposed Section 437.204: Monitoring and Evaluation
    Proposed Sec. 437.204 requires each HERS provider to semi-annually 
evaluate the accuracy of ratings being performed by a periodic 
comparison of predicted and actual energy use.
    The Department believes that HERS providers should maintain certain 
information that would facilitate both their own monitoring and 
evaluation program and that of an accrediting body or other third-party 
reviewer. Proposed section 437.204 specifies that, in addition to the 
data specified in proposed Sec. 437.203, each HERS provider shall 
maintain a database consisting of authorizations for the release of 
consumption information by utility companies. Optimally, the HERS 
provider could maintain actual consumption data for each rated home, 
but even if the information were readily available that would place a 
significant administrative burden on the provider. The Department also 
recognizes the fact that in many cases these authorizations may be 
difficult or impossible to obtain, but believes the need exists to make 
a reasonable effort to do so. This data must be retained for a minimum 
of 10 percent of the ratings performed or 500 homes, whichever is less, 
in order to allow the accrediting body or other monitoring entity to 
make random selections of ratings to review.
    Proposed Section 437.205: Guideline Compliance
    Proposed Sec. 437.205 sets forth two levels of compliance for HERS 
providers and also sets future requirements for energy analysis tool 
capabilities. The Department considers this to be a phased-in approach 
to allow any existing HERS provider to represent themselves as 
operating in basic compliance with the requirements of this part while 
in the process of revising certain elements of their existing system to 
become fully accredited.
    Proposed paragraph (a) of this section provides a list of what must 
be demonstrated to be deemed fully accredited. Proposed paragraph 
(a)(4) sets forth requirements for the energy analysis tool to pass 
both Tier 1 and Tier 2 sets of tests of HERS-BESTEST. The Tier 2 set of 
tests test for the ability to evaluate the following features related 
to high mass passive solar design:
     Variations in mass;
     Glazing orientation;
     Glazing area;
     South overhang;
     East and west shading.
    Proposed paragraph (b) of this section provides for ``basic 
compliance'' by providing exceptions (with a maximum two year duration) 
to the full requirements provided in proposed paragraph (a) of this 
section.
    The exception permitted in paragraph (b)(1)is the acceptance of 
simplified utility rate structures. Since the rating is based on 
consumption, the rating accuracy is not compromised and only minor 
inaccuracies are anticipated in operating cost estimates.
    Paragraph (b)(2) allows an exception to the minimum rated features 
but it is unlikely that any key features would be excluded because the 
HERS provider would not pass the HERS-BESTEST procedure. The exception 
is most likely to be used because of the inability of existing systems 
to evaluate active solar water heating or passive solar systems.
    The exception to the use of standard operating conditions allowed 
by paragraph (b)(3) is also considered to have minimal impact because 
of the need to pass HER-BESTEST. If a HERS provider does not use the 
exact prescribed standard operating conditions the results could be 
slightly less accurate but they must still be within HERS-BESTEST 
parameters.
    Paragraph (b)(4) allows a HERS provider to be in basic compliance 
by passing only the Tier 1 set of HERS-BESTEST tests. The additional 
requirements found in the Tier 2 tests are all related to a high mass 
passive solar building and are not considered critical for basic 
compliance.
    The exception to specific training requirements allowed under 
paragraph (b)(5)is provided to recognize the fact that many successful 
HERS providers may not have training programs that exactly match the 
syllabus set forth in these proposed guidelines, and therefore are 
given an opportunity to demonstrate that suitable training has been 
provided.
    The Department believes that the exceptions listed will not 
significantly compromise the accuracy or the utility of ratings and 
provide for a reasonable period of time to become fully accredited.
Proposed Section 437.206: Accreditation
    Proposed Sec. 437.206 states a requirement that each HERS provider 
operating in voluntary compliance with these guidelines shall be 
accredited by an accrediting body such as a State or an independent 
entity meeting the criteria set forth in this section.
    In it's consultation with various stakeholders in the development 
of these proposed guidelines, the Department has received conflicting 
commentary on the need for a system of accrediting HERS providers and 
certifying the energy analysis tools used by these providers. The 
leading proponent of accreditation is the HERS Council, supported by 
its financial community members. Opposition is primarily found in 
existing operating HERS systems where an accreditation process and/or 
changes to meet the proposed guidelines could be disruptive to their 
present systems. Many of the proposed guidelines state that when 
certain information needed for the rating process is not readily 
available without destructive disassembly of the home or without costly 
diagnostic procedures, then standard default values may be used. Such 
default values are best developed by local entities 

[[Page 37958]]
based on local experience or historic data for building practice. The 
accreditation process would assure that the default values used were 
consistent among HERS providers operating within a defined area such as 
a State.
    As the proposed guidelines are themselves voluntary, a voluntary 
system, probably a combination of states and national entities, could 
be developed for home energy rating providers seeking accreditation and 
tool certification.
    The Department requests comments on the processes of accreditation 
and tool certification, and the establishment of appropriate entities 
for these purposes. Specific questions are:
    Should a national entity be created for accreditation of HERS?
    Should States accredit HERS and if so, who would accredit HERS in 
states where the State is unwilling or unable to do so?
    Should guidelines be developed for the accreditation process itself 
and if so, who should develop them?
    Is self-accreditation a viable approach and what process should be 
implemented to do so?

III. Procedural Requirements

A. Environmental Review

    The proposed quidelines were reviewed under the National 
Environmental Policy Act (42 U.S.C. 4321 et seq.), the Council on 
Environmental Quality regulations implementing the provisions of the 
National Environmental Policy Act (40 CFR parts 1500-1508), and the 
Department's regulations for compliance with the National Environmental 
Policy Act (10 CFR part 1021).
    DOE concludes that, under Category A11 (Technical advice and 
assistance) of Appendix A to Subpart D, ``Categorical Exclusions 
Applicable to General Agency Actions'', of 10 CFR part 1021, the 
voluntary guidelines are categorically excluded from further 
environmental documentation.

B. Regulatory Planning and Review

    The proposed guidelines do not constitutes a ``significant 
regulatory action'' as defined in section 3(f) of Executive Order 
12866, ``Regulatory Planning and Review'' (58 FR 51735), and has not 
been reviewed by the Office of Information and Regulatory Affairs of 
the Office of Management and Budget.

C. Federalism

    The proposed guidelines have been reviewed in accordance with 
Executive Order 12612, ``Federalism'' (52 FR 41685), which directs 
agencies to consider the impact of Federal actions on States, on the 
relationship between the Federal Government and the States, and on the 
distribution of power and responsibilities among the various levels of 
government.
    The guidelines proposed by DOE are strictly voluntary. No 
requirements or inducements have been placed upon the States to adopt 
the guidelines. Consequently, the guidelines do not contain sufficient 
federalism implications to warrant the preparation of a federalism 
assessment.
D. Regulatory Flexibility Act

    The proposed guidelines were analyzed under the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., which directs agencies to 
prepare a regulatory flexibility analysis for each proposed rule or 
certify that the rule will not have a ``significant economic impact on 
a substantial number of small entities.''
    The proposed guidelines are expected to have a minimal effect on 
small entities. The guidelines described are voluntary and no 
requirements or burdens have been imposed on any entity. As permitted 
by section 605 of the Regulatory Flexibility Act, DOE certifies that 
the proposed guidelines will not have a significant economic impact on 
a substantial number of small entities. Consequently, no regulatory 
flexibility analysis will be produced.

E. Paperwork Reduction Act

    These proposed guidelines were examined with respect to the 
Paperwork Reduction Act, 44 U.S.C. 3501 et seq., which directs agencies 
to minimize Federal information collection and reporting burdens 
imposed on individuals, small businesses, and State and local 
governments.
    These proposed guidelines establish voluntary guidelines for 
residential energy efficiency ratings and do not impose requirements 
for the collection or reporting of information to the Federal 
Government. Accordingly, clearance under the Paperwork Reduction Act of 
1980 is not required by the Office of Information and Regulatory 
Affairs of the Office of Management and Budget.

IV. Public Comment Procedures

A. Public Participation

    The Department encourages the maximum level of public participation 
in developing these guidelines. Individuals, Federal agencies, 
architects, engineers, utilities, States and local governments, 
building code organizations, builders, builder associations, building 
owners, building owner associations, consumers, mortgage lenders, and 
others are urged to submit written statements on the proposal. The 
Department also encourages interested persons to participate in the 
public hearing to be held in Washington, D.C., at the time and place 
indicated at the beginning of this Notice.
    The Department has established a comment period of 90 days 
following publication of this notice, for interested persons to comment 
on this proposal. All comments will be available for review in the 
Department's Freedom of Information Reading Room.

B. Written Comment Procedures

    Interested persons are invited to participate in this proceeding by 
submitting written data, views or arguments with respect to the 
subjects set forth in this notice. Instructions for submitting written 
comments are set forth in the beginning of this notice and below.
    Comments (with 7 copies) should be labeled both on the envelope and 
on the documents, ``Residential Energy Efficiency Rating Guidelines'' 
(Docket No. EE-RM-95-202)'' and must be received by the date indicated 
in the beginning of this notice, in order to insure full consideration. 
Additionally, the Department would appreciate an electronic copy of the 
comments to the extent possible. The Department is currently using the 
WordPerfect 5.1 word processing program. All comments received by the 
date specified at the beginning of this notice and other relevant 
information will be considered by the Department before final action is 
taken on the proposed regulation.
    All written comments received on the proposed voluntary guidelines 
will be available for public inspection at the Department's Freedom of 
Information Reading Room as provided at the beginning of this notice.
    Pursuant to the provisions of 10 CFR 1004.11, any person submitting 
information or data which the submitting person believes to be 
confidential and exempt by law from public disclosure, should submit 
one complete copy of the document, and 7 copies, if possible, from 
which the information believed to be confidential has been deleted. The 
submitter is to include a statement specifying why the information is 
privileged or confidential. The Department will make its own 
determination with regard to the confidential status of the information 
or data and treat it according to its determination. 

[[Page 37959]]


C. Public Hearing

1. Procedure for Submitting Requests To Speak
    In order to have the benefit of a broad range of public viewpoints 
in, developing these guidelines the Department will hold a public 
hearing. Listed earlier in this notice is the date and address for the 
hearing. Any person who has an interest in these proceedings, or who is 
a representative of any group or class of persons having an interest, 
may make a request for an opportunity to make an oral presentation at 
the public hearing. Such requests should be labeled both on the letter 
and the envelope, ``Residential Energy Efficiency Rating Guidelines'' 
(Docket No. EE-RM-95-202)'' and should be sent to the address and must 
be received by the time specified at the beginning of this notice.
    The person making the request should briefly describe the interest 
concerned and, if appropriate, state why he or she is a proper 
representative of the group or class of persons that has such an 
interest, and give a telephone number where he or she may be contacted. 
Each person selected to be heard will be so notified by the Department 
as to the approximate time they will be speaking.
    Each person to be heard is requested to bring to the hearing seven 
copies of their statement. In the event any person wishing to testify 
cannot meet this requirement, alternative arrangements can be made with 
the Office of Hearings and Dockets in advance by so indicating in a 
letter requesting to make an oral presentation.
    A list of the persons to be heard at the hearing will be available 
upon request from the Office of Hearings and Dockets. The list will 
also be available for inspection in the Department's Freedom of 
Information Reading Room.
2. Conduct of Hearing
    The Department reserves the right to select the persons to be heard 
at the public hearing, to schedule the representative presentations, 
and to establish the procedures governing the conduct of the hearing. 
The length of each presentation is limited to 20 minutes.
    A Department official will be designated to preside at the hearing. 
The hearing will not be judicial or evidentiary-type hearing, but will 
be conducted in accordance with 5 U.S.C. 553 and Section 501 of the 
Department of Energy Organization Act, 42 U.S.C. 7191. At the 
conclusion of all initial oral statements, each person who has made an 
oral statement will be given the opportunity to make a rebuttal 
statement, subject to time limitations. The rebuttal statements will be 
given in the order in which the initial statements were made. The 
official conducting the hearing will accept additional comments or 
questions from those attending, as time permits. Any interested person 
may submit to the presiding official written questions to be asked of 
any person making a statement at the hearing. The presiding official 
will determine whether the question is relevant or whether time 
limitations permit it to be presented for a response.
    Further questioning of speakers may be permitted by the Department. 
The presiding official will afford any interested person an opportunity 
to question the interested persons who made oral presentations, and 
employees of the United States who have made written or oral 
presentation with respect to disputed issues of material fact relating 
to the proposed rule. This opportunity will be afforded after any 
rebuttal statements, to the extent that the presiding official 
determines that such questioning is likely to result in a more timely 
and effective resolution of such issues. If the time provided is 
insufficient, the Department will consider affording an additional 
opportunity for questioning at a mutually convenient time. Persons 
interested in making use of this opportunity must submit their request 
to the presiding official no later than shortly after the completion of 
any rebuttal statements and be prepared to state specific 
justifications, including why the issue is one of disputed fact and how 
the proposed questions would expedite their resolution.
    Any further procedural rules regarding proper conduct of the 
hearing will be announced by the presiding official.
    Transcripts of the hearing will be made, and the entire record of 
this rulemaking, including the transcripts, will be retained by the 
Department and made available for inspection at the Department's 
Freedom of Information Reading Room as provided at the beginning of 
this notice. Any person may also purchase a copy of the transcript from 
the transcribing reporter.
    The Department may cancel the public hearing if the Department does 
not receive sufficient interest concerning the hearing. The Department 
will include for the record a copy of the statement of any person who 
requested to speak at a hearing that was canceled by the Department.

List of Subjects in 10 CFR Part 437

    Buildings, Energy conservation, Housing standards, Mortgages.

    Issued in Washington, DC, on July 11, 1995.
Christine A. Ervin,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, it is proposed to amend 
10 CFR Chapter II by adding part 437 to read as follows:

PART 437--VOLUNTARY HOME ENERGY RATING SYSTEM GUIDELINES

Subpart A--General Provisions

Sec.
437.1  Purpose.
437.2  Scope.
437.3  General definitions and acronyms.
437.4  Availability of ratings.

Subpart B--How To Rate a Home

Sec.
437.100  Rating procedure.
437.101  Rating point score and star rating.
437.102  Rating report.
437.103  Reference home configuration.
437.104  Minimum rated features.
437.105  Operating condition assumptions.
437.106  Non-rated energy consuming devices.
437.107  Projected ratings for to-be-built homes.

Subpart C--How To Administer a Home Energy Rating System

Sec.
437.200  Energy analysis tool requirements.
437.201  Site data collection manual.
437.202  Training home energy raters.
437.203  Quality control.
437.204  Monitoring and evaluation.
437.205  Guideline compliance.
437.206  Accreditation.

    Authority: 42 U.S.C. 8236-8236b

Subpart A--General Provisions


Sec. 437.1   Purpose.

    The provisions of this part establish voluntary guidelines which 
any provider of home energy ratings may follow to produce uniform 
energy efficiency ratings for residential buildings. The energy 
efficiency ratings produced under this part may be used to enable and 
encourage the use of home mortgages or home improvement loans that 
include incentives for energy efficiency in homes.


Sec. 437.2  Scope.

    These guidelines apply to existing or proposed site-constructed or 
manufactured residential buildings that are either one and two family 
dwellings, or other residential dwellings three stories or less in 
height excepting hotels and motels.


Sec. 437.3  General definitions and acronyms.

    As used in this part--

[[Page 37960]]

    Accrediting body means a State, local government, or other 
independent agency that meets the criteria provided in Sec. 437.206 of 
these guidelines for the accreditation of HERS providers.
    AGA means American Gas Association
    Annual Fuel Utilization Efficiency or AFUE means the ratio of 
annual output energy to annual input energy that includes any non-
heating season pilot input loss.
    Conditioned space, directly means an enclosed space having heating 
equipment with a capacity of 10 BTU/(hr-ft\2\), or cooling equipment 
with a capacity exceeding 10 BTU/(hr-ft\2\). An exception is if the 
heating and cooling equipment is designed and thermostatically 
controlled to maintain a process environment temperature less than 
65 deg. Fahrenheit or greater than 85 deg. Fahrenheit for the whole 
space the equipment serves.
    Conditioned space, indirectly means enclosed space that is not 
directly conditioned space:
    (1) With area weighted heat transfer coefficient (U-value) to 
directly conditioned space exceeding that to the outdoors or to 
unconditioned spaces; or
    (2) Through which air from directly conditioned spaces is 
transferred at a rate exceeding three air changes per hour.
    COP means Coefficient of Performance, which is the ratio of the 
rate of heat delivered to the rate of energy input, in consistent 
units, for a complete heat pump system under designated operating 
conditions.
    Data analyst means a person trained to enter the information 
compiled by a data collector into the rating tool and to produce the 
energy efficiency rating of a home.
    Data collector means a person trained to evaluate the minimum rated 
features of a home on site and collect all the information required to 
create a rating.
    Detached one- and two-family dwelling means a building with one or 
two independent dwelling units with an individual or central HVAC 
system.
    Energy analysis tool means a calculation procedure for determining 
a home's energy efficiency rating and estimating annual purchased 
energy consumption and cost.
    EER means Energy Efficiency Ratio, which is the ratio of net 
equipment cooling capacity in Btu/h to total rate of electric input in 
watts under designated operating conditions.
    Energy efficiency rating or rating means an unbiased indication of 
a home's relative energy efficiency based on consistent inspection 
procedures, operating assumptions, climate data and calculation 
methods.
    Energy factor means a measure of water heater energy efficiency as 
determined under Department of Energy Regulations. 10 CFR 
430.23(e)(2)(ii).
    Estimated annual energy cost savings means positive dollar 
difference between estimated annual energy costs for a home with energy 
saving measures and estimated annual energy costs of the same home in 
its current condition.
    Fenestration means a glazed opening in a building.
    Full rater means the person trained to perform the functions of 
both a data collector and a data analyst.
    HERS-BESTEST means the Home Energy Ratings System Building 
Simulation Test published in NREL Report No. NREL/TP-472-7332.
    HERS provider means a person or organization that develops, manages 
and operates a home energy rating system.
    Home means a one or two family dwelling, or multi-family dwelling 
of three stories or less.
    Home energy rater or rater means the person trained to inspect a 
home to evaluate the minimum rated features and prepare an energy 
efficiency rating. (see also Data collector, Data analyst, Full rater)
    Home Energy Rating System or HERS means the materials and 
procedures needed to operate a home energy rating program including but 
not limited to: marketing materials, training, publications, rating 
tool, quality control, data base collection and maintenance, 
agreements, data collection sheets, home owner reports, and other 
related materials and services.
    HSPF means Heating Seasonal Performance Factor which is the total 
heating output of a heat pump during its normal annual usage period for 
heating, in Btu, divided by the total electric energy input during the 
same period, in watt-hours.
    HVAC means Heating, Ventilating and Air Conditioning.
    Internal gains means the heat gains within a home attributable to 
lights, people, and miscellaneous equipment including domestic hot 
water equipment losses.
    NREL means National Renewable Energy Laboratory.
    Purchased energy means the portion of the total energy requirement 
of a home that is purchased from a utility or other energy supplier.
    Reference home means a hypothetical home configured to the 
specifications set forth in section 437.103 of these guidelines.
    R-value means thermal resistance value.
    SEER means seasonal energy efficiency ratio, which is the total 
cooling output of an air conditioner during its normal annual usage 
period for cooling, in Btu/h, divided by the total electric energy 
input during the same period, in watt-hours.
    Thermal storage mass means materials or equipment incorporated into 
a home that will store heat, produced by renewable or non renewable 
energy, for release at a later time.
    Trombe wall means a heavy mass wall, usually of masonry materials 
or containing water, constructed adjacent to a glazed area, for the 
purpose of collecting and storing solar energy.
    Typical Meteorological Year or TMY Data means hourly data published 
by the National Climatic Center, Asheville, NC. based on historical 
weather data for 216 locations.
    U-value means thermal transmittance value.


Sec. 437.4  Availability of ratings.

    The purposes of this rating system are to permit:
    (a) Each builder, real estate agent, lender, or organization in the 
mortgage business--
     (1) When rating information is available, to communicate that 
information in writing to home buyers prior to sale; and
    (2) To advise each applicant for financing of a home of incentives 
relating to qualification criteria, rate structure, or otherwise, 
available based on the energy efficiency of the home as measured by 
ratings conducted under these guidelines,
    (b) Each multi-listing service (MLS) to include available home 
energy rating information on any applicable listing.

Subpart B--How To Rate a Home


Sec. 437.100  Rating procedure.

    (a) To determine the energy efficiency rating of a home, each HERS 
provider shall--
    (1) If the rating is being conducted for an existing home, visit 
the site of the home being rated to collect the data needed to conduct 
the rating;
    (2) If the rating is being conducted for a to be built home, follow 
the procedures set forth in Sec. 437.107 of these guidelines to collect 
the data needed to conduct the rating;
    (3) Use the collected data to estimate the annual purchased energy 
consumption for heating, cooling and water heating for both the rated 
home and the reference home defined in Sec. 437.103.
    (4) If the energy efficiency rating is conducted to evaluate 
proposed energy 

[[Page 37961]]
conserving improvements to the home, conduct additional estimates of 
annual purchased energy consumption with the home reconfigured to 
include those improvements sufficient to consider interactions among 
improvement options.
    (b) Estimates completed by each HERS provider under paragraphs 
(a)(3) and (4) of this section must be--
    (1) Based on the minimum rated features set forth in Sec. 437.104 
of these guidelines;
    (2) Conducted using the standard operating assumptions established 
in Sec. 437.105;
    (3) Conducted using an energy analysis tool that has been certified 
for accuracy under Sec. 437.200.
    (c) Each HERS provider shall compare the estimates provided under 
paragraph (a) of this section to determine the energy efficiency rating 
of the home and if applicable, the energy efficiency rating of the home 
with proposed conservation measures installed.
    (d) To encourage the use of energy efficient appliances, each HERS 
provider may provide additional information on estimated appliance 
energy consumption of the appliances in use in the rated home. This 
information will not change the rating procedure set forth in this 
section.


Sec. 437.101  Rating point score and star rating.

    (a) Point score. The reference home has a score of 80 points on a 0 
to 100 point scale. A rated home with the same annual purchased energy 
consumption as its associated reference home also has a score of 80 
points. Every 0.05 decrease in the ratio (from 1:1) of the rated home's 
annual purchased energy consumption to the reference home's annual 
purchased energy consumption translates to an increase in the rated 
home's score of 1 point. An increase of 0.05 in the ratio translates to 
a decrease in the rated home's score of one point. Equation 1 is used 
to calculate the point score.

Equation 1

Point score = 100-((ER/EC)/.05)

Where--
ER=Estimated purchased energy consumption for heating, cooling and 
water heating of rated home (Btu).
EC=Estimated purchased energy consumption for heating, cooling and 
water heating of reference home (Btu).

    (b) Star rating. The rated home will be given a star rating between 
one and five-plus stars, determined by the numerical score and the 
corresponding number of stars depicted in Table 1;

                                 Table 1.--Score and Star Scales for Rated Homes                                
----------------------------------------------------------------------------------------------------------------
              Score                              Stars                    Annual purchased energy consumption   
----------------------------------------------------------------------------------------------------------------
0-39.............................  One..............................  > 3.0 x Reference house.                  
40-59............................  Two..............................  > 2.0 and < 3.0 x Reference House.        
60-79............................  Three............................  > 1.0 and <= 2.0 x Reference House.       
80-85............................  Four.............................  > 0.70 and <= 1.0 x Reference House.      
86-91............................  Five.............................  > 0.40 and <= 0.70 x Reference House.     
92-100...........................  Five Plus........................  >= zero and <= 0.40 x Reference House.    
----------------------------------------------------------------------------------------------------------------

    (c) Homes that utilize no purchased energy due to the use of 
technologies such as wind generation or photo voltaic power systems 
will require no calculations and will automatically be given a 100 
point score and a five-plus star rating


Sec. 437.102  Rating report.

    (a) For each rating conducted under this part, a report is to be 
prepared containing the following information:
    (1) The numerical rating score determined in Sec. 437.101;
    (2) The star rating determined in Sec. 437.101;
    (3) The estimated annual purchased energy consumption by fuel type 
of space heating, space cooling, domestic hot water, and all other 
energy use, and the total of these four estimates;
    (4) The estimated annual energy cost by fuel type of space heating, 
space cooling, domestic hot water, and all other energy use, and the 
total of these four estimates;
    (5) The name of the accrediting body certifying the accuracy of the 
energy analysis tool under Sec. 437.200.
    (6) The margin of estimating error accepted by the accrediting body 
certifying the energy analysis tool;
    (7) The level of accreditation, stated as either basic compliance 
or full accreditation determined under Sec. 437.205 (a) and Guidelines 
compliance; and
    (8) Whether infiltration was tested using diagnostic equipment or 
estimated by the HERS provider.
    (9) Any available and pertinent prior energy consumption data.
    (b) If ratings are conducted to evaluate energy saving improvements 
to the home, in addition to the information set forth under paragraph 
(a) this section, each rating report must include--
    (1) The estimated annual energy cost savings available with the 
home reconfigured to include those improvements;
    (2) The discount rate applied to, and present worth value of, the 
energy cost savings; and
    (3) The financing interest rate and life of the measure used by the 
HERS provider to determine the present worth value.
    (c) The rating report must also provide either:
    (1) The estimated appliance energy consumption of the rated home: 
or
    (2) Information that additional energy savings related to appliance 
use may be attainable and that the information available on Energy 
Guide labels and from other recognized sources may be used to consider 
the energy efficiency of appliances.
    (d) If the rating is a projected rating for a to-be-built home, 
conducted under Sec. 437.104(d) the rating shall be identified as a 
rating based on plans.
    (e) For each rating conducted under these guidelines, the following 
items are to be prominently displayed on all reports and labels:
    (1) Date of the rating;
    (2) Annual estimated energy costs for heating, cooling, water 
heating and all other use:
    (3) Rating point score: and
    (4) Star rating.


Sec. 437.103  Reference home configuration.

    (a) To conduct each rating under this part, each HERS provider 
shall establish a reference home that is used in an annual purchased 
energy consumption comparison with the rated home. The reference home 
is a hypothetical home configured using--
    (1) The same shape and size as the rated home;
    (2) The same area of surfaces bounding conditioned space as the 
rated home, but not including surfaces that neither gain nor lose heat;
    (3) All enclosure elements that meet, but not exceed, the 
requirements, expressed as U and Uo values, of 

[[Page 37962]]
paragraph 502.2 of the 1993 CABO Model Energy Code;
    (4) An area of exterior doors of 40 square feet and with the door 
U-value at 0.20.
    (5) Vertical fenestration area equal to--
    (i) For detached homes, 18% of the floor area of directly 
conditioned space;
    (ii) For attached homes, F x 18% of the floor area of directly 
conditioned space where:

    F=(exposed wall area)/(exposed wall area+common wall area)>=.56

    (6) Vertical fenestration distributed--
    (i) For detached homes, equally in each of the four cardinal 
directions, north, south, east and west; and
    (ii) For attached homes, equally in each of the four cardinal 
directions, north, south, east and west, which if necessary may assume 
fenestration in common walls;
    (7) A frame factor equal to 27% of the gross fenestration area 
calculated under paragraph (a)(5) of this section;
    (8) The glazed area of the fenestration with a shading coefficient 
(SC) of 0.70 assumed during the cooling season, which represents the 
combined SC of the glazing and the use of nonwhite draperies and with a 
SC of 0.88 representing the SC of the glazing only assumed at all other 
times;
    (9) No external shading assumed at any time;
    (10) The same energy sources for heating, cooling and water heating 
used in the rated home;
    (11) The same type of HVAC system(s) as the rated home except that 
if the rating is for any electrically heated home, the reference home 
HVAC system is an air source heat pump;
    (12) The efficiencies of HVAC systems set forth in Table 2;

                                 Table 2                                
------------------------------------------------------------------------
                         Type                            Units    Rating
------------------------------------------------------------------------
Heating Equipment:                                                      
  Gas or Oil Warm Air Furnace........................  AFUE         0.78
  Gas Boiler (water).................................  AFUE         0.80
  Gas Boiler (steam).................................  AFUE         0.75
  Oil Boiler (water or steam)........................  AFUE         0.80
Air Source Heat Pump:                                                   
  (split system).....................................  HSPF         6.80
  (package system)...................................  HSPF         6.60
Cooling Equipment:                                                      
Central Air Conditioner:                                                
  (split system).....................................  SEER        10.00
  (package system)...................................  SEER         9.70
Heat Pump:                                                              
  (split system).....................................  SEER        10.00
  (package system)...................................  SEER         9.70
------------------------------------------------------------------------

    (13) The heating and cooling system efficiencies proportionally 
adjusted for sections of ductwork located outside or inside conditioned 
space, with adjustment based on the configuration of the ductwork in 
the rated home and using the values set forth in Table 3 and Equation 
2;

   Table 3.--Forced Air and Hydronic Distribution System Loss Factors   
------------------------------------------------------------------------
                                                Outside                 
          Within conditioned space            conditioned  Unconditioned
                                                 space        basement  
------------------------------------------------------------------------
                    Forced Air Systems--Duct Location                   
------------------------------------------------------------------------
Heating 1.00................................       0.72          0.80   
Cooling 1.00................................       0.72          0.80   
                    Hydronic Systems--Piping Location                   
------------------------------------------------------------------------
1.00........................................       0.95          0.95   
------------------------------------------------------------------------

Equation 2

Adjusted Efficiency=Equipment Efficiency  x  Distribution Loss 
Factor
    (14) The energy factor for the water heater set forth in Table 4 
for the size used in the rated house;

                                 Table 4                                
------------------------------------------------------------------------
        Water heating              Rated storage capacity (gallons)     
------------------------------------------------------------------------
        Type           Unit     30 gal     40 gal     50 gal     60 gal 
------------------------------------------------------------------------
Gas.................  EF           0.56       0.54       0.53       0.51
Oil.................  EF           0.53       0.53       0.50       0.48
Electric............  EF           0.91       0.90       0.88      0.87 
------------------------------------------------------------------------
\1\ EF=Energy Factor.                                                   

    (15) A seasonal average air leakage rate of 0.67 air changes per 
hour;
    (16) An internal mass of 8 pounds per square foot of floor area and 
a structural mass of 3.5 pounds per square foot of floor area; and
    (17) No heat capacitance associated with solar storage mass within 
the thermal envelope of the rated home.
    (b) For walls of attached homes, the U-value calculation set forth 
under paragraph (a)(3) of this section is completed using the 
fenestration area calculated as F in paragraph (a)(5)(ii) of this 
section and the actual area of walls that experience heat loss or gain. 
Common walls that separate homes are not included in this calculation.


Sec. 437.104  Minimum rated features.

    (a) Each HERS provider shall complete the annual purchased energy 
consumption estimates for heating, cooling and water heating set forth 
in Sec. 437.100 of these guidelines using the energy loss and gain 
associated with the minimum features set forth in Table 5.
    (b) For existing homes, the envelope thermal characteristics of 
building elements 1 through 7 set forth in Table 5 are determined by 
site observation.
    (c) If data for the minimum rated features set forth in paragraph 
(b) of this section can not be obtained by observation or without 
destructive disassembly of the home, each HERS provider shall use 
default values. The default values are determined from the following 
sources listed in the preferential order of use--
    (1) for manufactured homes, available manufacturer's data;
    (2) current and historical local building practices; or
    (3) current and historical local building codes.
    (d) Default values set forth in paragraph (c) of this section will 
be established or approved by the accrediting body and consistent for 
each HERS provider operating within a state.
    (e) For existing homes, the determination of air leakage and duct 
leakage values set forth as building elements 10 and 11 in Table 5 are 
determined by data collected on site using the following procedures 
listed in preferential order of use:
    (1) current on-site diagnostic test data; or
    (2) observations of the condition of the building and duct system 
made by the HERS provider. Based on these observations values used will 
be;
    (i) for air leakage, 0.67 air changes per hour or greater with the 
minimum value 

[[Page 37963]]
of 0.67 to be used only when the rater observes features that denote 
tight construction; and
    (ii) for duct leakage, default values approved or established by 
the accrediting body.
    (f) For existing homes, the energy efficiency of the mechanical 
equipment set forth as building elements 12 through 14 in Table 5 is 
determined by data collected on site using the following sources listed 
in preferential order of use:
    (1) current on-site diagnostic test data;
    (2) name plate data;
    (3) manufacturer's data sheet; or
    (4) equipment directories.
    (g) If information on the energy efficiency of mechanical equipment 
cannot be determined from the sources listed in paragraph (f) of this 
section, the values set forth in Tables 6 and 7 shall be used.
    (h) Any HERS provider may base annual purchased energy consumption 
estimates for the rated home on additional features if the HERS 
provider's energy analysis tool is capable of doing so.

                    Table 5.--Minimum Rated Features                    
------------------------------------------------------------------------
    Building element                  Minimum rated features            
------------------------------------------------------------------------
1. Floor/Foundation      Construction type (slab-on-grade, crawl space, 
 Assembly.                basement), insulation (edge, under slab,      
                          cavity, sheathing), vented or unvented (crawl 
                          space), capacitance (if slab or basement      
                          receives appreciable solar gain).             
2. Walls...............  Construction type, insulation value (cavity,   
                          sheathing), capacitance, color (light, medium,
                          or dark).                                     
3. Roof/Ceiling          Construction type, insulation value (cavity,   
 Assembly.                sheathing), roof color (light, medium, or     
                          dark).                                        
4. Rim Joist...........  Insulation value (cavity, sheathing).          
5. Doors...............  Construction type, insulation value.           
6. Windows.............  Construction type, orientation, U-value (of    
                          complete assembly), solar heat gain           
                          coefficient, shading.                         
7. Skylights...........  Construction type, orientation, tilt, U-value  
                          (of complete assembly), heat gain coefficient,
                          shading.                                      
8. Passive Solar System  Solar aperture area and orientation, thermal   
 (Direct Gain System).    storage mass.                                 
9. Solar Domestic Hot    System type, collector type and area,          
 Water Equipment.         orientation, tilt, efficiency, storage tank   
                          size, pipe insulation value.                  
10. Air Leakage........  Air leakage measurement type (estimate, blower 
                          door test, tracer gas test), volume of        
                          conditioned space.                            
11. Distribution System  System type, location, insulation value (duct  
                          and pipe), air leakage (ducted systems only). 
12. Heating Equipment..  Equipment type, location, efficiency (AFUE,    
                          HSPF).                                        
13. Cooling Equipment..  Equipment type, location, efficiency (SEER,    
                          COP).                                         
14. Domestic Hot Water   Equipment type, location, energy factor or     
 Equipment.               seasonal efficiency, extra tank insulation    
                          value, pipe insulation value.                 
15. Control Systems....  Thermostat type.                               
------------------------------------------------------------------------


                                                                  Table 6.--Mechanical                                                                  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               1992 to  
                 Mechanical Systems                    Units     Pre-1960     1960-69      1970-74      1975-83      1984-87      1988-91      present  
--------------------------------------------------------------------------------------------------------------------------------------------------------
Heating:                                                                                                                                                
    Gas Furnace....................................  AFUE             0.60         0.60         0.65         0.65         0.68         0.76         0.78
    Gas Boiler.....................................  AFUE             0.60         0.60         0.65         0.65         0.70         0.77         0.80
    Oil Furnace or Boiler..........................  AFUE             0.60         0.65         0.72         0.75         0.80         0.80         0.80
    Air-Source Heat Pump...........................  HSPF             4.50         4.50         4.70         5.50         6.30         6.80         6.80
    Ground-Water Geothermal Heat Pump..............  COP              2.70         2.70         2.70         3.00         3.10         3.20         3.50
    Ground-Coupled Geothermal Heat Pump............  COP              2.30         2.30         2.30         2.50         2.60         2.70         3.00
Cooling:                                                                                                                                                
    Air-Source Heat Pump...........................  SEER             5.00         6.10         6.50         7.40         8.70         9.40        10.00
    Ground-Water Geothermal Heat Pump..............  EER             10.00        10.00        10.00        13.00        13.00        14.00        16.00
    Ground-Coupled Geothermal Heat Pump............  EER              8.00         8.00         8.00        11.00        11.00        12.00        14.00
    Central Air Conditioner........................  SEER             5.00         6.10         6.50         7.40         8.70         9.40        10.00
    Room Air Conditioner...........................  EER              5.00         6.10         6.10         6.70         7.70         8.10         8.50
Water Heating:                                                                                                                                          
    Storage Gas....................................  EF               0.47         0.47         0.47         0.49         0.55         0.56         0.56
    Storage Oil....................................  EF               0.47         0.47         0.47         0.48         0.49         0.54         0.56
    Storage Electric...............................  EF               0.79         0.80         0.80         0.81         0.83         0.87         0.88
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Table 7.--Mechanical Equipment Efficiency Values (Not Age-Based)    
------------------------------------------------------------------------
                                                        Units    Rating 
------------------------------------------------------------------------
Heating:                                                                
  Gas Wall Furnace (Fan)............................  SE           0.70 
  Gas Wall Heater (Gravity).........................  SE           0.65 
  Gas Floor Furnace.................................  SE           0.60 
  Gas Water Heater (Space Heating)..................  AFUE         0.75 
  Electric Furnace..................................  HSPF         3.413
  Electric Radiant..................................  HSPF         3.413
  Heat Pump Water Heater (Space)....................  HSPF         5.11 
  Electric Water Heater (Space).....................  HSPF         2.73 

[[Page 37964]]
                                                                        
Cooling:                                                                
  Electric Evaporative Cooling......................  EERrc       30    
  Gas Absorption Cooler.............................  COP          0.40 
Water Heating:                                                          
  Heat Pump.........................................  COP          2.00 
  Instantaneous Electric............................  EF           0.87 
  Instantaneous Gas.................................  EF           0.75 
  Solar (Use SRCC Adjustment Procedures)............  EF           2.00 
------------------------------------------------------------------------




Sec. 437.105  Operating condition assumptions.

    To conduct each rating under these guidelines, each HERS provider 
shall estimate the annual purchased energy consumption for heating, 
cooling and water heating for both the rated home and the reference 
home using the following assumptions--
    (a) Temperature control set points for heating and cooling of 
68 deg. F and 78 deg. F; .
    (b) Where programmable offsets are available in the rated home, 
5 deg. F temperature control point offsets with an 11 PM to 7 AM 
schedule for heating and a 9 AM to 3 PM schedule for cooling, and with 
no offsets assumed for the reference home;
    (c) Internal heat gains from lights, people and equipment of 3000 
Btu/hr for detached homes and 1500 Btu/hr for attached homes;
    (d) Estimated hot water usage based on Equation 3.

Equation 3

Gallons/day=30 gallons+(10 gallons * number of bedrooms).

    (e) the climatologically most representative TMY or equivalent 
weather data, which may be interpolated between weather sites if 
interpolation is established or approved by the accrediting body and 
consistent for each HERS provider operating within a state.
    (f) Corrections for climate conditions and mis-sizing of equipment, 
using correction factors to HSPF, SEER and AFUE that are established or 
approved by the accrediting body and consistent for each HERS provider 
operating within a state.
    (g) Local residential energy or utility rates that--
    (1) Include fuel/energy unit rates;
    (2) Include fuel/energy unit demand rates;
    (3) Include fuel/energy block rates;
    (4) Include customer service and fuel charges;
    (5) Are updated at least annually; and
    (6) Are confirmed by the accrediting body


Sec. 437.106  Non-rated energy consuming devices.

    Consistent with Sec. 437.102(a) (3) and (4) of these guidelines 
each HERS provider shall calculate and report the annual purchased 
energy consumption and energy cost for the operation of all non-rated 
energy consuming devices in the rated and reference homes. Actual 
efficiency of these devices is not considered and usage estimates are 
based on Table 8. The data in table 8 may be modified if they are 
established or approved by the accrediting body and consistent for each 
HERS provider operating within the state.

                               Table 8.--Annual Energy Use for Non-Rated Features                               
----------------------------------------------------------------------------------------------------------------
            End use               Units/year        Energy estimate                   Applicability             
----------------------------------------------------------------------------------------------------------------
Ceiling Fan...................  kWh..........  220/ea..................  If present.                            
Dishwasher....................  kWh..........  299/per cooking area....  If present, or if space is dedicated   
                                                                          for DW.                               
Dryer, electric...............  kWh..........  875/ea..................  If present, or if 220V wiring is       
                                                                          present @ dryer location.             
Dryer, gas....................  Therms.......  60/ea...................  If present, or if gas piping is present
                                kWh..........  100/ea                     @ dryer location.                     
Lights........................  kWh..........  940.....................  All homes.                             
Microwave Oven-built-in.......  kWh..........  191/per cooking area....  If permanently installed.              
Miscellaneous Plug Loads......  kWh..........  500.....................  All homes.                             
Pool Pump.....................  kWh..........  1700/ea.................  If present.                            
Range/Oven Combo-electric.....  kWh..........  450/per cooking area....  If present, or if 220V wiring is       
                                                                          present @ range location.             
Range/Oven Combo-gas w/pilot..  Therms.......  44/per cooking area.....  If present, or if gas piping is present
                                                                          @ range location.                     
Range/Oven Combo-gas w/o pilot  Therms.......  22/per cooking area.....  If present.                            
Refrigerator..................  kWh..........  1150....................  Each one present.                      
Television....................  kWh..........  720.....................  All homes.                             
Washer, clothes...............  kWh..........  99/ea...................  If present, or facilities present for  
                                                                          washer.                               
Well pump.....................  kWh..........  288/ea..................  If present.                            
----------------------------------------------------------------------------------------------------------------

Sec. 437.107  Projected ratings for to-be-built homes.

    (a) A HERS provider may calculate the projected rating of a to-be-
built home based on architectural drawings with material, mechanical 
and electrical specifications; and by--
    (1) Using a default value for air leakage of 0.67 air changes per 
hour; and
    (2) Using the planned location and orientation of the proposed 
home, or if the proposed orientation is unknown, calculating ratings 
for the home facing each of the four cardinal directions, north, south, 
east and west, and using the lowest rating score as the projected 
rating.
    (b) Upon completion of construction and verification of the 
proposed specifications, the rating may be revised using the air 
leakage rate based on on-site testing and the actual orientation of the 
home.

Subpart C--How To Administer a Home Energy Rating System


Sec. 437.200  Energy analysis tool requirements.

    (a) In order to be certified for the purpose of providing home 
energy ratings under these guidelines, an energy analysis tool must--
    (1) Demonstrate the ability to calculate annual purchased energy 
consumption for each building type for which ratings are provided;
    (2) Estimate the total annual purchased energy consumption 
associated with the minimum rated features set forth in Sec. 437.104;
    (3) Calculate energy use of non-rated energy consuming devices set 
forth in Sec. 437.105 of these guidelines;
    (4) Reflect the operating conditions assumptions described in 
Sec. 437.105 of these guidelines; and
    (5) Pass all tests in Tier 1 and Tier 2 of the Home Energy Ratings 
System Building Energy Simulation Test (HERS-

[[Page 37965]]
BESTEST)--NREL Report no. NREL/TP-472-7332 which is administered by, 
and has pass-fail criteria set by the accrediting body.
    (b) Future tool requirements. On or before [insert date four years 
from the date of the final rule], each HERS provider accredited under 
these guidelines, shall have updated their energy analysis tool to be 
capable of rating the following additional features--
    (1) Thermostat set-back and set-up;
    (2) Effects of part load and weather conditions on HVAC systems;
    (3) Demand and time of use utility rates;
    (4) Solar water heating;
    (5) Trombe walls;
    (6) Sunspaces; and
    (7) Whole house fans.
    (c) Energy analysis tools that are certified under paragraph (a)(5) 
of this section must be retested and recertified if a new version of 
the tool is released that includes changes to the engineering 
algorithms.


Sec. 437.201  Site data collection manual.

    Each HERS provider shall provide each data collector with a manual 
containing procedures for the on site collection of data that are:
    (a) Consistent with those provided in Guideline No. 10 of the Home 
Energy Rating Systems Council HERS Guidelines, titled ``On Site 
Inspection Procedures''; or
    (b) Established or approved by the accrediting body and updated as 
supplemental or revised information becomes available.


Sec. 437.202  Training home energy raters.

    Each person seeking a position as a full rater, data collector, or 
data analyst for any HERS provider shall receive training prior to 
performing rating tasks without supervision. The training will be 
conducted in accordance with a syllabus developed by each HERS 
provider. The syllabus must specify subjects that are applicable to 
each position (i.e. full rater, data collector or data analyst) and 
must include--
    (a) Classroom training. Each rater shall receive classroom training 
on--
    (1) Basic principles of heat transfer (i.e., viewing the home as a 
system);
    (2) The minimum rated features of buildings;
    (3) Variations in construction types and their ramifications;
    (4) Types and efficiencies of windows;
    (5) Types and efficiencies of heating, cooling, water heating, and 
lighting systems;
    (6) Types and characteristics of space conditioning and domestic 
hot water distribution systems;
    (7) Types of thermostatic controls;
    (8) Determination of azimuth;
    (9) Determination of air leakage;
    (10) Determination of fuels used by major appliances;
    (11) Utility rate structures;
    (12) On-site inspection procedures;
    (13) Producing a scale and dimension drawing of a home;
    (14) Calculating the area of rectangles, triangles, circles, ovals 
and combinations of these shapes;
    (15) Calculating the volume of boxes, pyramids, spheres, and other 
geometric shapes;
    (16) Communicating the benefits of energy saving measures and 
practices to the consumer; and
    (17) Quality assurance.
    (b) Written examination. Each rater shall be given a written 
examination that evaluates the rater's understanding of the subjects in 
paragraph (a) of this section.
    (c) Field training. Each rater shall perform two ratings (or 
portions of ratings for those seeking to be data collectors or data 
analysts), including software operations, in the presence of trainers.
    (d) Probationary period. Each rater shall complete a probationary 
period where close supervision is provided. This period covers a 
minimum of five ratings, after which the supervisor shall determine if 
additional training is needed.
    (e) Challenge test. A challenge test may be taken, which, if passed 
in all competencies, will waive the classroom training requirement. The 
requirements of paragraphs (c) and (d) of this section may not be 
waived.


Sec. 437.203  Quality control.

    (a) Each HERS provider shall establish a quality assurance plan 
that includes--
    (1) Periodic peer review and re-evaluation of raters;
    (2) Random auditing of each rater's work;
    (3) Evaluation of the training program by raters after field 
experience;
    (4) Customer evaluation of rating services;
    (5) Random review of the inputs into the rating tool to ensure that 
they are consistent with the data collected in the field; and
    (6) Verification of the accuracy and completion of the input forms 
and output of the first five ratings performed by each rater.
    (b) Each HERS provider shall maintain a permanent quality assurance 
file that is updated at least every two years or when changes to the 
system are made, and contains--
    (1) A description of local rate structures for electricity, gas and 
other locally used fuels;
    (2) A description of climatological data (including interpolation 
methods) used;
    (3) A description of the data storage and maintenance systems 
including--
    (i) Software for database;
    (ii) Training for data entry personnel; and
    (iii) Data quality assurance procedures that will be exercised;
    (4) A description of each rating tool that the HERS provider uses 
including a list of which home types the tool supports;
    (5) The results and date of the certified accuracy test conducted 
for the rating tool;
    (6) An example of the rating outputs that are produced;
    (7) The materials and tests used to provide training for home 
energy raters;
    (8) The materials used to document the site data collection 
procedures; and
    (9) A description of the individual elements of the quality 
assurance plan set forth in paragraph (a) of this section.
    (c) Each HERS provider shall maintain an electronic database of 
information for each home rated. The minimum content of the database 
is--
    (1) A unique file reference or ID number;
    (2) Date of on-site inspection;
    (3) Raters name;
    (4) Tool name and version;
    (5) Identification of weather data used for the rating;
    (6) Type of rating, either complete or projected;
    (7) Use of rating, either--
    (i) Time of sale rating;
    (ii) Pre-home improvement rating;
    (iii) Post home improvement rating; or
    (iv) Information only rating;
    (8) Address of rated home;
    (9) Home type;
    (10) Floor area of conditioned space;
    (11) Fuel types used by building HVAC and water heating systems;
    (12) Minimum rated feature energy efficiency data used to determine 
the rating;
    (13) In the four categories of heating, cooling, water heating and 
all other uses, the--
    (i) Estimated annual purchased energy consumption in total;
    (ii) Estimated annual purchased energy consumption by fuel;
    (iii) Estimated annual energy cost in total; and
    (iv) Estimated annual energy cost by fuel.
    (14) Estimated total annual energy cost for all uses; and 

[[Page 37966]]

    (15) Rating score of the rated home on 0-100 points scale and 1-5+ 
stars category.


Sec. 437.204  Monitoring and evaluation.

    (a) Each HERS provider shall at least semi-annually evaluate the 
accuracy of consumption and cost estimates by comparing predicted 
energy usage and costs to actual billing records.
    (b) To allow the accrediting body to monitor the accuracy of 
ratings, each HERS provider shall for 10% or for 500 of the homes rated 
annually, whichever is less, maintain a database of the following--
    (1) Homeowners authorization for the release of consumption 
information by utility company(s);
    (2) Weather data site selected for energy estimation;
    (3) Any energy efficiency improvements made to the home, date of 
completion, and whether the improvement plans were evaluated in the 
rating report.


Sec. 437.205  Guideline compliance.

    (a) Full accreditation. Any HERS provider may be accredited as 
being in full compliance with these guidelines if it demonstrates that 
it can--
    (1) Conducts ratings in accordance with the provisions of 
Sec. 437.100;
    (2) Reports the results of ratings in accordance with the 
provisions of Sec. 437.102 of these guidelines;
    (3) Produces documentation of a correctly configured reference home 
in accordance with the provisions of Sec. 437.103;
    (4) Provides documentation that their energy analysis tool is 
certified under Sec. 437.200 as having passed all HERS-BESTEST tests 
designated as Tier 1 and Tier 2 tests;
    (5) Provides training in accordance with the provisions of 
Sec. 437.202;
    (6) Provides documentation of a quality control plan and a 
permanent quality assurance file in accordance with the provisions of 
Sec. 437.203; and
    (7) Provides documentation of a monitoring and evaluation program 
in accordance with the provisions of Sec. 437.204.
    (b) Basic compliance. Any existing HERS provider may be accredited 
for a period of up to two years from [insert date of issuing final 
rule], as being in basic compliance with these guidelines, by 
demonstrating that it meets all the provisions of paragraph (a) of this 
section except that it may--
    (1) Use a simplification of utility rate structures;
    (2) Rate only the features set forth by Sec. 437.104, that may be 
rated with its existing system capabilities;
    (3) Use only those standard operating conditions set forth in 
Sec. 437.105 that can be handled by their existing energy analysis 
tool;
    (4) Pass only the Tier 1 set of HERS-BESTEST tests;
    (5) Meet the training requirements of Sec. 437.202 by--
    (i) Verification that each person with responsibilities in the 
conduction of ratings has completed classroom training on all items set 
forth in Sec. 437.202 (a) of these guidelines;
    (ii) Verification that each person with responsibilities for the 
conduction of ratings has received field training;
    (iii) Verification that all personnel have successfully passed a 
written objective examination in all areas applicable to their 
designated job descriptions; and
    (iv) Verification of a probationary period set forth in 
Sec. 437.202 (d); and
    (6) Use an existing program to monitoring and evaluate the accuracy 
of ratings;


Sec. 437.206  Accreditation.

    (a) Each HERS provider operating in voluntary compliance with these 
guidelines shall be accredited only by a State or other independent 
accrediting body having a person or persons--
    (1) Qualified to establish and coordinate standard default values 
within a State, for--
    (i) Default values for minimum rated features set forth in section 
437.104;
    (ii) Operating condition assumptions and local climatic data 
interpolation set forth in section 437.105 of these guidelines;
    (2) Qualified to administer the procedures for certification of 
energy analysis tools established by HERS-BESTEST set forth in the NREL 
Report no. NREL/TP-472-7332 referenced in Sec. 437.200;
    (3) Qualified to evaluate the training syllabus and procedures set 
forth in Sec. 437.202;
    (4) Qualified to review and evaluate the quality control procedures 
set forth in Sec. 437.203.
    (b) Any Lender or agency in a mortgage business who offers mortgage 
or loan incentives for energy efficiency on the basis of a home energy 
rating should require that any HERS provider conducting those ratings 
be accredited under these guidelines.

[FR Doc. 95-18015 Filed 7-20-95; 8:45 am]
BILLING CODE 6450-01-P