[Federal Register Volume 72, Number 220 (Thursday, November 15, 2007)]
[Proposed Rules]
[Pages 64432-64515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-22040]



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Part IV





Department of Energy





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Office of Energy Efficiency and Renewable Energy



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10 CFR Parts 430 and 431



Energy Conservation Program: Energy Conservation Standards for Certain 
Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas Kitchen 
Ranges and Ovens, and Microwave Ovens) and for Certain Commercial and 
Industrial Equipment (Commercial Clothes Washers); Proposed Rule

  Federal Register / Vol. 72, No. 220 / Thursday, November 15, 2007 / 
Proposed Rules  

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DEPARTMENT OF ENERGY

Office of Energy Efficiency and Renewable Energy

10 CFR Parts 430 and 431

[Docket No. EE-2006-STD-0127]
RIN 1904-AB49


Energy Conservation Program: Energy Conservation Standards for 
Certain Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas 
Kitchen Ranges and Ovens, and Microwave Ovens) and for Certain 
Commercial and Industrial Equipment (Commercial Clothes Washers)

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

ACTION: Advance notice of proposed rulemaking and notice of public 
meeting.

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SUMMARY: The Energy Policy and Conservation Act (EPCA or the Act) 
authorizes the Department of Energy (DOE) to establish energy 
conservation standards for various consumer products and commercial and 
industrial equipment--including residential dishwashers, dehumidifiers, 
and electric and gas kitchen ranges and ovens and microwave ovens 
(hereafter referred to as ``cooking products''), as well as commercial 
clothes washers--if DOE determines that energy conservation standards 
would be technologically feasible and economically justified, and would 
result in significant energy savings. DOE is publishing this advance 
notice of proposed rulemaking (ANOPR) to consider establishing energy 
conservation standards for these products and to announce a public 
meeting to receive comments on a variety of issues.

DATES: DOE will hold a public meeting on December 13, 2007, starting at 
9 a.m. in Washington, DC. DOE must receive requests to speak at the 
public meeting no later than 4 p.m., November 29, 2007. DOE must 
receive a signed original and an electronic copy of statements to be 
given at the public meeting no later than 4 p.m., December 6, 2007.
    DOE will accept comments, data, and information regarding the ANOPR 
before or after the public meeting, but no later than January 29, 2008. 
See section IV, ``Public Participation,'' of this ANOPR for details.

ADDRESSES: The public meeting will be held at the Holiday Inn Capital, 
550 C Street, SW., DC 20024.
    Any comments submitted must identify the ANOPR for Home Appliance 
Products, and provide the docket number EE-2006-STD-0127 and/or 
Regulatory Information Number (RIN) 1904-AB49. Comments may be 
submitted using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected]. Include the 
docket number EE-2006-STD-0127 and/or RIN 1904-AB49 in the subject line 
of the message.
     Mail: Ms. Brenda Edwards-Jones, U.S. Department of Energy, 
Building Technologies Program, Mailstop EE-2J, 1000 Independence 
Avenue, SW., Washington, DC 20585-0121. Please submit one signed paper 
original.
     Hand Delivery/Courier: Ms. Brenda Edwards-Jones, U.S. 
Department of Energy, Building Technologies Program, Room 1J-018, 1000 
Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-
2945. Please submit one signed paper original.
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section IV of this document 
(Public Participation).
    Docket: For access to the docket to read background documents or 
comments received, visit the U.S. Department of Energy, Forrestal 
Building, Room 1J-018 (Resource Room of the Building Technologies 
Program), 1000 Independence Avenue, SW., Washington, DC, (202) 586-
2945, between 9 a.m. and 4 p.m., Monday through Friday, except Federal 
holidays. Please call Ms. Brenda Edwards-Jones at the above telephone 
number for additional information regarding visiting the Resource Room. 
Please note: DOE's Freedom of Information Reading Room (Room 1E-190 at 
the Forrestal Building) no longer houses rulemaking materials.

FOR FURTHER INFORMATION CONTACT: Stephen Witkowski, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies, EE-2J, 1000 Independence Avenue, SW., Washington, DC 
20585-0121, (202) 586-7463. E-mail: [email protected].
    Francine Pinto or Eric Stas, U.S. Department of Energy, Office of 
the General Counsel, Forrestal Building, Mail Station GC-72, 1000 
Independence Avenue, SW., Washington, DC, 20585. Telephone: (202) 586-
9507. E-mail: [email protected] or [email protected].
    Regarding the public meeting, Brenda Edwards-Jones, U.S. Department 
of Energy, Building Technologies Program, Room 1J-018, 1000 
Independence Avenue, SW., Washington, DC 20585. Telephone: (202) 586-
2945. E-mail: [email protected].

SUPPLEMENTARY INFORMATION: 
I. Introduction
    A. Purpose of the Advance Notice of Proposed Rulemaking
    B. Overview of the Analyses Performed
    1. Engineering Analysis
    2. Energy and Water Use Characterization
    3. Markups to Determine Equipment Price
    4. Life-Cycle Cost and Payback Period Analyses
    5. National Impact Analysis
    C. Authority
    D. Background
    1. History of Standards Rulemaking for Residential Dishwashers, 
Dehumidifiers, and Cooking Products; and Commercial Clothes Washers
    2. Current Rulemaking Process
    3. Analysis Process
    4. Miscellaneous Rulemaking Issues
    a. Joint Stakeholder Recommendations
    b. Standby Power for Dishwashers and Cooking Products
    5. Test Procedures
II. Analyses for the Four Appliance Products
    A. Market and Technology Assessment
    1. Product Classes
    a. Dishwashers
    b. Dehumidifiers
    c. Cooking Products
    d. Commercial Clothes Washers
    2. Market Assessment
    3. Technology Assessment
    a. Dishwashers
    b. Dehumidifiers
    c. Cooking Products
    d. Commercial Clothes Washers
    B. Screening Analysis
    1. Purpose
    a. Technological Feasibility
    b. Practicability To Manufacture, Install, and Service
    c. Adverse Impacts on Product Utility or Product Availability
    d. Adverse Impacts on Health or Safety
    2. Design Options
    a. Dishwashers
    b. Dehumidifiers
    c. Cooking Products
    1. Cooktops and Ovens
    2. Microwave Ovens
    d. Commercial Clothes Washers
    C. Engineering Analysis
    1. Approach
    2. Technologies Unable To Be Included in the Engineering 
Analysis
    3. Product Classes, Baseline Models, and Efficiency Levels 
Analyzed
    a. Dishwashers
    b. Dehumidifiers
    c. Cooking Products
    d. Commercial Clothes Washers
    4. Cost-Efficiency Results
    a. Dishwashers
    b. Dehumidifiers
    c. Cooking Products
    d. Commercial Clothes Washers
    D. Energy Use and End-Use Load Characterization

[[Page 64433]]

    1. Dishwashers
    2. Dehumidifiers
    3. Cooking Products
    a. Cooktops and Ovens
    b. Microwave Ovens
    4. Commercial Clothes Washers
    E. Markups To Determine Equipment Price
    1. Distribution Channels
    2. Approach for Manufacturer Markups
    3. Approach for Retailer and Distributor Markups
    4. Sales Taxes
    5. Summary of Markups
    F. Rebuttable Presumption Payback Periods
    G. Life-Cycle Cost and Payback Period Analyses
    1. Approach Taken in the Life-Cycle Cost Analysis
    2. Life-Cycle Cost Inputs
    a. Total Installed Cost Inputs
    b. Operating Cost Inputs
    c. Effective Date
    d. Equipment Assignment for the Base Case
    3. Payback Period Inputs
    4. Life-Cycle Cost and Payback Period Results
    H. Shipments Analysis
    1. Shipments Model
    2. Data Inputs
    3. Shipments Forecasts
    I. National Impact Analysis
    1. Approach
    2. Base Case and Standards Case Forecasted Efficiencies
    3. National Impact Analysis Inputs
    4. National Impact Analysis Results
    J. Life-Cycle Cost Subgroup Analysis
    K. Manufacturer Impact Analysis
    1. Sources of Information for the Manufacturer Impact Analysis
    2. Industry Cash Flow Analysis
    3. Manufacturer Subgroup Analysis
    4. Competitive Impacts Assessment
    5. Cumulative Regulatory Burden
    6. Preliminary Results for the Manufacturer Impact Analysis
    L. Utility Impact Analysis
    M. Employment Impact Analysis
    N. Environmental Assessment
    O. Regulatory Impact Analysis
III. Candidate Energy Conservation Standard Levels
IV. Public Participation
    A. Attendance at Public Meeting
    B. Procedure for Submitting Requests To Speak
    C. Conduct of Public Meeting
    D. Submission of Comments
    E. Issues on Which the Department of Energy Seeks Comment
    1. Microwave Oven Standby Power
    2. Product Classes
    3. Commercial Clothes Washer Horizontal Axis Designs
    4. Compact Dishwashers
    5. Microwave Oven Design Options
    6. Technologies Unable To Be Analyzed and Exempted Product 
Classes
    7. Dishwasher Efficiency and Its Impact on Cleaning Performance
    8. Dehumidifier Use
    9. Commercial Clothes Washer Per-Cycle Energy Consumption
    10. Commercial Clothes Washer Consumer Prices
    11. Repair and Maintenance Costs
    12. Efficiency Distributions in the Base Case
    13. Commercial Clothes Washer Shipments Forecasts
    14. Base-Case and Standards-Case Forecasted Efficiencies
    15. Dehumidifier Cost and Efficiency Relationships
    16. Trial Standard Levels
V. Regulatory Review and Procedural Requirements
VI. Approval of the Office of the Secretary

I. Introduction

A. Purpose of the Advance Notice of Proposed Rulemaking

    The purpose of this ANOPR is to provide interested persons with an 
opportunity to comment on:
    1. The product classes that the Department of Energy (DOE) is 
planning to analyze in this rulemaking;
    2. The analytical framework, models, and tools (e.g., life-cycle 
cost (LCC) and national energy savings (NES) spreadsheets) DOE is using 
in performing analyses of the impacts of energy conservation standards 
for residential dishwashers, dehumidifiers, cooking products, and 
commercial clothes washers (CCWs) (collectively referred to in this 
ANOPR as ``the four appliance products'');
    3. The analyses performed for the ANOPR, including in particular 
the results of the engineering analyses, the LCC and payback period 
(PBP) analyses, and the NES and national impact analyses, which are 
presented in the ANOPR Technical Support Document (TSD): Energy 
Efficiency Standards for Consumer Products and Commercial and 
Industrial Equipment: Residential Dishwashers, Dehumidifiers, And 
Cooking Products And Commercial Clothes Washers, \1\ as summarized in 
this ANOPR (2007 TSD); and
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    \1\ To be published on the DOE Web site at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html
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    4. The candidate energy conservation standard levels that DOE has 
developed from these analyses.

B. Overview of the Analyses Performed

    The Energy Policy and Conservation Act (42 U.S.C. 6291 et seq.) 
directs DOE to consider establishing or amending energy conservation 
standards for various consumer products and commercial and industrial 
equipment, including the four appliance products which are the subject 
of this ANOPR. For each of these products, DOE conducted in-depth 
technical analyses for this ANOPR in the following areas: (1) 
Engineering, (2) energy and water use characterization, (3) markups to 
determine equipment price, (4) LCC and PBP, (5) shipments, (6) national 
impacts, and (7) preliminary manufacturer impacts. The ANOPR presents a 
discussion of the methodologies and assumptions utilized in these 
analyses. For each type of analysis, Table I.1 identifies the sections 
in this document that contain the results of the analysis, and 
summarizes the methodologies, key inputs, and assumptions for the 
analysis. DOE consulted with interested parties in developing these 
analyses, and invites further input from stakeholders on these topics. 
Obtaining that input is the purpose of this ANOPR. Thus, it should be 
noted that the analytical results presented here are subject to 
revision following review and input from stakeholders and other 
interested parties. The final rule will contain the final analytical 
results.

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         Table I.1.--In-Depth Technical Analyses Conducted for the Advance Notice of Proposed Rulemaking
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                                                                                             ANOPR section for
         Analysis area             Methodology         Key inputs       Key assumptions           results
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Engineering (TSD Chapter 5):
    Dishwashers...............  Efficiency level   Component cost     Analysis can be     Section II.C.3.
    Dehumidifiers.............   approach           data;              extended in
                                 supplemented       Performance        subsequent
                                 with design        values.            analyses to
                                 option analysis.                      product classes
                                                                       and efficiency
                                                                       levels for which
                                                                       the Association
                                                                       of Home Appliance
                                                                       Manufacturers
                                                                       (AHAM) did not
                                                                       provide data.
    Cooking Products..........  .................  .................  Historical data
                                                                       from DOE's 1996
                                                                       analysis on
                                                                       residential
                                                                       cooking products
                                                                       are still
                                                                       representative of
                                                                       current
                                                                       manufacturing
                                                                       costs.
    Commercial Clothes Washers  .................  .................  Analysis can be
                                                                       extended to
                                                                       energy and water
                                                                       efficiency levels
                                                                       for which AHAM
                                                                       did not provide
                                                                       data.
Energy and Water Use
Characterization
(TSD Chapter 6):
    Dishwashers...............  Establish per-     Per-cycle energy   Per-cycle water     Section II.D.1.
                                 cycle energy and   and water use;     use is a direct
                                 water use and      Average annual     function of per-
                                 then multiply by   usage of 215       cycle energy use
                                 annual cycles.     cycles based on    (based on AHAM
                                                    DOE test           data).
                                                    procedure;
                                                    Variability of
                                                    usage based on
                                                    Energy
                                                    Information
                                                    Administration
                                                    (EIA)'s
                                                    Residential
                                                    Energy
                                                    Consumption
                                                    Survey (RECS).
    Dehumidifiers.............  Establish daily    Per-cycle energy   Average usage of    Section II.D.2.
                                 energy use by      and water use;     1095 hours is
                                 dividing product   Average annual     representative of
                                 capacity by        usage of 1095      dehumidifier use.
                                 efficiency and     hours based on
                                 then multiply by   AHAM estimates;
                                 annual hourly      Variability of
                                 usage.             usage based on
                                                    multiple sources.
    Cooking Products..........  Use recent survey  Recent survey      Recent survey data  Section II.D.3.
                                 data to estimate   data from          are indicative of
                                 annual energy      California and     current household
                                 use.               Florida--indicat   cooking habits;
                                                    es a drop in       Historical data
                                                    annual energy      from DOE's 1996
                                                    use of ~40% for    analysis on
                                                    electric and gas   residential
                                                    ranges and ~15%    cooking products
                                                    for microwave      are still
                                                    ovens relative     representative of
                                                    to DOE test        component energy
                                                    procedure          use (e.g., self-
                                                    estimates;         cleaning, clock,
                                                    Variability of     ignition).
                                                    usage based on
                                                    EIA's RECS.
    Commercial Clothes Washers  Establish per-     Per-cycle energy   Per-cycle energy    Section II.D.4.
                                 cycle energy and   and water use;     use data in DOE's
                                 water use and      Average daily      2000 TSD on
                                 then multiply by   usage of 3.4       residential
                                 annual cycles.     cycles for multi-  clothes washers
                                                    family and 6       is representative
                                                    cycles for         of per-cycle
                                                    laundromats;       drying and per-
                                                    Variability of     cycle machine
                                                    usage based on     energy for
                                                    multiple sources.  commercial
                                                                       washers.
Markups to Determine
Equipment Price
(TSD Chapter 7):
    Dishwashers...............  Assess financial   Distribution       Markups for         Section II.E.
    Dehumidifiers.............   data from: (1)     channels; SEC      baseline and more-
    Cooking Products..........   U.S. Securities    reports on         efficient
    Commercial Clothes Washers   and Exchange       appliance          equipment are
                                 Commission (SEC)   manufacturers;     different.
                                 reports on         U.S. Census
                                 appliance          Business
                                 manufacturers to   Expenditure
                                 develop            Survey; State
                                 manufacturer       sales taxes;
                                 markups and (2)    Shipments to
                                 the U.S. Census    different States.
                                 Business
                                 Expenditure
                                 Survey to
                                 develop retailer
                                 and commercial
                                 distributor
                                 markups. Use
                                 markups to
                                 transform
                                 manufacturer
                                 costs into
                                 consumer prices.

[[Page 64435]]

 
LCC and PBP
(TSD Chapter 8):
    Dishwashers...............  Use Monte Carlo    Manufacturer       Only 3% of          II.G.4
                                 simulation in      costs; Markups     consumers
                                 combination with   (including sales   purchase
                                 inputs that are    taxes);            dishwashers at
                                 characterized      Installation       existing minimum
                                 with probability   costs; Annual      standards (based
                                 distributions to   energy (and        on AHAM data);
                                 establish a        water)             Standards do not
                                 distribution of    consumption;       impact repair and
                                 consumer           Energy (and        maintenance
                                 economic impacts   water) prices      costs; AEO2007
                                 (i.e., LCC         and future         basis for energy
                                 savings and        trends;            price forecasts;
                                 PBPs) that         Maintenance and    Average product
                                 identify the       repair costs;      lifetime is 12.3
                                 percent of.        Product            years; Average
                                                    lifetime;          discount rate is
                                                    Discount rates.    5.6%.
    Dehumidifiers.............  .................  .................  Approximately 30%
                                                                       of consumers
                                                                       purchase
                                                                       dehumidifiers at
                                                                       existing minimum
                                                                       standards (based
                                                                       on AHAM data);
                                                                       Standards do not
                                                                       impact repair and
                                                                       maintenance
                                                                       costs; Annual
                                                                       Energy Outlook
                                                                       (AEO) 2007 basis
                                                                       for energy price
                                                                       forecasts;
                                                                       Average product
                                                                       lifetime is 11
                                                                       years; Average
                                                                       discount rate is
                                                                       5.6%.
    Cooking Products..........  .................  .................  For gas ranges,
                                                                       only 18 percent
                                                                       of consumers
                                                                       purchase
                                                                       equipment with
                                                                       standing pilots;
                                                                       For electric
                                                                       cooking products
                                                                       and microwave
                                                                       ovens, 100
                                                                       percent of
                                                                       consumer purchase
                                                                       equipment at
                                                                       baseline levels;
                                                                       Average product
                                                                       lifetime is 19
                                                                       years for
                                                                       electric and gas
                                                                       ranges and 9
                                                                       years for
                                                                       microwave ovens;
                                                                       Standards do not
                                                                       impact repair and
                                                                       maintenance
                                                                       costs; AEO2007
                                                                       basis for energy
                                                                       price forecasts;
                                                                       Average discount
                                                                       rate is 5.6%.
    Commercial Clothes Washers  .................  .................  Approximately 80
                                                                       percent of
                                                                       consumers
                                                                       purchase
                                                                       equipment at
                                                                       existing minimum
                                                                       standards (based
                                                                       on AHAM data);
                                                                       Standards do not
                                                                       impact repair and
                                                                       maintenance
                                                                       costs; AEO2007
                                                                       basis for energy
                                                                       price forecasts;
                                                                       Average product
                                                                       lifetime is 7.1
                                                                       or 11.3 years
                                                                       depending on
                                                                       product
                                                                       application;
                                                                       Discount rate can
                                                                       be estimated by
                                                                       company-weighted
                                                                       average cost of
                                                                       capital.
Shipments (TSD Chapter 9):

[[Page 64436]]

 
    Dishwashers...............  Forecast           Historical         Market segments     II.H.3.
    Dehumidifiers.............   shipments          shipments (for     are: new
    Cooking Products..........   through the use    calibration        construction,
    Commercial Clothes Washers   of a product       purposes);         replacements, and
                                 stock accounting   Historical         first-time owners
                                 model by           product            (existing
                                 dividing market    saturations; New   households
                                 into segments--    construction       without the
                                 e.g., new          forecasts;         product);
                                 construction,      Survival           Sensitivity to
                                 replacements,      functions (based   `relative price'
                                 and early          on product         is low.
                                 replacements, or   lifetimes);       Market segments
                                 first-time         Sensitivity to     are: replacements
                                 owners; Use        `relative          and first-time
                                 increases in       price,' i.e.,      owners;
                                 purchase price     sensitivity to     Sensitivity to
                                 and savings in     the combined       `relative price'
                                 operating costs    effect of          is low.
                                 to forecast the    purchase price    Market segments
                                 impact of          increases,         are: new
                                 standards on       operating cost     construction,
                                 shipments.         savings, and       replacements, and
                                                    household income.  early
                                                                       replacements;
                                                                       Sensitivity to
                                                                       `relative price'
                                                                       is low.
                                                                      Market segments
                                                                       are: new
                                                                       construction and
                                                                       replacements; New
                                                                       construction
                                                                       shipments driven
                                                                       by multi-family
                                                                       housing market
                                                                       only; Sensitivity
                                                                       to `relative
                                                                       price' is low.
National Impacts
(TSD Chapter 10):
    Dishwashers...............  Forecast national  Annual forecasted  Annual shipments    Section II.I.4.
    Dehumidifiers.............   annual energy      shipments;         from shipments
    Cooking Products..........   (and water) use,   Forecasted base    model; Forecasted
    Commercial Clothes           national annual    case and           base case and
     Washers..                   equipment costs,   standards case     standards case
                                 and national       efficiencies;      efficiencies
                                 annual operating   Per-unit annual    remain frozen at
                                 cost savings.      energy (and        levels in the
                                                    water)             year 2012;
                                                    consumption, Per-  National Energy
                                                    unit total         Modeling System
                                                    installed costs;   (NEMS) basis for
                                                    Per-unit           site-to-source
                                                    operating costs;   conversion
                                                    Site-to-source     factors; Discount
                                                    conversion         rates are 3
                                                    factors for        percent and 7
                                                    electricity and    percent real
                                                    natural gas;       based on Office
                                                    Discount rates;    of Management and
                                                    Effective date     Budget (OMB)
                                                    of standard; and   guidelines;
                                                    Present year.      Future costs
                                                                       discounted to
                                                                       present year:
                                                                       2007.
----------------------------------------------------------------------------------------------------------------

1. Engineering Analysis
    The engineering analysis establishes the relationship between the 
cost and efficiency of a product DOE is evaluating for standards. This 
relationship serves as the basis for cost and benefit calculations for 
individual consumers, manufacturers, and the Nation. The engineering 
analysis identifies representative baseline equipment, which is the 
starting point for analyzing technologies that provide energy 
efficiency improvements. Baseline equipment here refers to a model or 
models having features and technologies typically found in equipment 
currently offered for sale. The baseline model in each product class 
represents the characteristics of products in that class, and, for 
products already subject to energy conservation standards, usually is a 
model that just meets the current standard. After identifying the 
baseline models, DOE estimates their manufacturing cost, after which, 
DOE estimates the incremental manufacturing costs for producing more 
efficient equipment.
    For dishwashers, dehumidifiers, and CCWs, the engineering analysis 
uses industry-supplied cost-efficiency data, which are based on an 
efficiency-level approach (which calculates the relative costs of 
achieving increases in energy efficiency levels), and cost-efficiency 
curves that DOE derived based on a design-option approach (which 
calculates the incremental costs of adding specific design options to a 
baseline model). For kitchen ranges and ovens (including microwave 
ovens), DOE established cost-efficiency curves using its 1996 Technical 
Support Document for Residential Cooking Products,\2\ updated to the 
present time in the 2007 TSD for this rulemaking, as discussed below. 
Some stakeholders provided comments to DOE that the design options and 
associated efficiency increments were still valid for cooking products 
other than microwave ovens. For microwave ovens, DOE analyzed current 
efficiency data to validate the efficiency increments specified in the 
1996 technical analysis, after which it was determined that no changes 
to those increments were necessary. To determine manufacturing cost 
increments, DOE, with the concurrence of manufacturers, used producer 
price index (PPI) data from the Bureau of Labor Statistics (BLS) to 
scale costs identified in the 1996 analysis to 2006$. Section II.C on 
the engineering analysis discusses this cost-efficiency relationship, 
as well as the product

[[Page 64437]]

classes analyzed, the representative baseline units, and the 
methodology to be used to extend the analysis to product classes for 
which DOE did not receive data
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    \2\ Available online at DOE's website: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
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2. Energy and Water Use Characterization
    The energy use and water characterization provides estimates of 
annual energy and water consumption for the four appliance products, 
which DOE uses in the subsequent LCC and PBP analyses and the national 
impact analysis (NIA). DOE developed energy consumption estimates for 
all of the product classes analyzed in the engineering analysis, as the 
basis for its energy and water use estimates. In the case of 
dishwashers, DOE used the annual usage (in cycles per year) established 
in its test procedure to estimate the product's annual energy and water 
use. For dehumidifiers, DOE relied on industry-supplied estimates of 
annual usage (in hours per year) to estimate the product's annual 
energy use. For kitchen ranges and ovens, the 2004 California 
Residential Appliance Saturation Study (CA RASS) \3\ and a year-long 
monitoring study conducted in 1999 by the Florida Solar Energy Center 
(FSEC) \4\ indicate that household cooking has continued to drop since 
the mid-1990s; DOE used these surveys as the basis for estimating 
product annual energy use. For CCWs, DOE used industry-sponsored 
research to estimate the product's annual energy and water use. For 
further details on the CCW estimates, see section II.D.4 of this ANOPR.
---------------------------------------------------------------------------

    \3\ California Energy Commission. California Statewide 
Residential Appliance Saturation Study, June 2004. Prepared for the 
California Energy Commission by KEMA-XENERY, Itron, and RoperASW. 
Contract No. 400-04-009. http://www.energy.ca.gov/appliances/rass/index.html.
    \4\ Parker, D. S. Research Highlights from a Large Scale 
Residential Monitoring Study in a Hot Climate. Proceeding of 
International Symposium on Highly Efficient Use of Energy and 
Reduction of its Environmental Impact, January 2002. Japan Society 
for the Promotion of Science Research for the Future Program, Osaka, 
Japan. JPS-RFTF97P01002: pp. 108-116. Also published as FSEC-PF369-
02, Florida Solar Energy Center, Cocoa, FL. http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-369-02/index.htm.
---------------------------------------------------------------------------

3. Markups to Determine Equipment Price
    DOE derives consumer prices for products based on manufacturer 
markups, retailer markups (for residential products), distributor 
markups (for CCWs), and sales taxes. In deriving these markups, DOE has 
determined: (1) The distribution channels for product sales; (2) the 
markup associated with each party in the distribution channels, and (3) 
the existence and magnitude of differences between markups for baseline 
equipment (``baseline markups'') and for more-efficient equipment 
(``incremental markups''). DOE calculates both overall baseline and 
overall incremental markups based on the product markups at each step 
in the distribution channel. It defines the overall baseline markup as 
the ratio of consumer price (not including sales tax) and manufacturer 
cost for baseline equipment; the overall incremental markup relates the 
change in the manufacturer sales price of higher-efficiency models (the 
incremental cost increase) to the change in the retailer or distributor 
sales price. DOE determined manufacturer markups through the use of 
U.S. Securities and Exchange Commission (SEC) reports on appliance 
manufacturers, and used U.S. Census Business Expenditure Surveys to 
develop retailer and commercial distributor markups. DOE collected 
consumer retail prices for each of the four appliance products to 
provide a rough validation of its markups for baseline equipment. 
Baseline equipment is produced in large volumes, is not heavily laden 
with consumer features, and is typically competitively priced by 
retailers and distributors; therefore, collected retail prices of 
baseline equipment are likely to reflect the actual cost of producing 
and selling minimally-compliant products.
    Because DOE's approach for calculating baseline retail prices 
through the use of manufacturing costs, baseline markups, and sales 
taxes are intended to capture only the cost of producing minimally-
compliant equipment, any collected baseline retail prices serve as a 
good check on the prices calculated through the markup approach. But 
because more-efficient equipment often includes non-energy related 
features, DOE cannot rely solely on collected retail prices for high-
efficiency products to validate the prices determined through its 
markup approach. Current retail prices for high-efficiency equipment 
likely reflect the added cost of consumer amenities that have no impact 
on efficiency and, therefore, mask the incremental price associated 
with features that only affect product efficiency.
4. Life-Cycle Cost and Payback Period Analyses
    The LCC and PBP analyses determine the economic impact of potential 
standards on individual consumers. The LCC is the total consumer 
expense for a product over the life of the product. The LCC analysis 
compares the LCCs of products designed to meet possible energy-
efficiency standards with the LCCs of the products likely to be 
installed in the absence of standards. DOE determines LCCs by 
considering: (1) Total installed cost to the purchaser (which consists 
of manufacturer costs, sales taxes, distribution chain markups, and 
installation cost); (2) the operating expenses of the product 
(determined by energy and water use, energy and water prices, and 
repair and maintenance costs); (3) product lifetime; and (4) a discount 
rate that reflects the real consumer cost of capital and puts the LCC 
in present value terms.
    The PBP represents the number of years needed to recover the 
increase in purchase price (including the incremental installation 
cost) of more-efficient equipment through savings in the operating cost 
of the product. It is the change in total installed cost due to 
increased efficiency divided by the change in annual operating cost 
from increased efficiency.
5. National Impact Analysis
    The NIA estimates both the national energy savings (NES) and the 
net present value (NPV) of total customer costs and savings expected to 
result from new standards at specific efficiency levels (referred to as 
candidate standard levels). In conducting the NIA, DOE calculated NES 
and NPV for any given candidate standard level for each of the four 
appliance products as the difference between a base case forecast 
(without new standards) and the standards case forecast (with 
standards). DOE determined national annual energy consumption by 
multiplying the number of units in use (by vintage \5\) by the average 
unit energy (and water) consumption (also by vintage). Cumulative 
energy savings are the sum of the annual NES determined over a 
specified time period, which in the NIA consisted of the range of years 
for which the forecast was made. The national NPV is the sum over time 
of the discounted net savings each year, which consists of the 
difference between total operating cost savings and increases in total 
installed costs. Critical inputs to this analysis include shipments 
projections, retirement rates (based on estimated product or equipment 
lifetimes), and estimates of changes in shipments and retirement rates 
in response to changes in product or equipment costs due to standards.
---------------------------------------------------------------------------

    \5\ The term ``vintage'' refers to the age of the unit in years.

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

[[Page 64438]]

C. Authority

    Part B of Title III of EPCA established the energy conservation 
program for consumer products other than automobiles, including 
dishwashers and electric and gas kitchen ranges and ovens (which 
include microwave ovens). (This ANOPR refers to electric and gas 
kitchen ranges and ovens and microwave ovens collectively as ``cooking 
products.'') Amendments to EPCA in the National Appliance Energy 
Conservation Act of 1987 (Pub. L. 100-12; NAECA) established energy 
conservation standards for dishwashers and cooking products, as well as 
requirements for determining whether these standards should be amended. 
(See 42 U.S.C. 6295(g) and (h), respectively) Subsequent amendments 
expanded Title III of EPCA to include additional consumer products and 
certain commercial and industrial equipment, including dehumidifiers 
and CCWs. In particular, sections 135(c)(4) and 136(e) of the Energy 
Policy Act of 2005, Public Law 109-58; (EPACT 2005) amended EPCA to 
authorize DOE to consider the need to modify the energy conservation 
standards that the Act, as amended, prescribed for dehumidifiers (42 
U.S.C. 6295(cc)) and for CCWs (42 U.S.C. 6313(e)), respectively. This 
includes authority for DOE to amend the water efficiency standard the 
Act, as amended, prescribes for commercial clothes washers.
    Before DOE prescribes any new or amended standard for any of the 
four appliance products, however, it must first solicit comments on a 
proposed standard. Moreover, DOE must design each new or amended 
standard for these products to achieve the maximum improvement in 
energy efficiency that is technologically feasible and economically 
justified, and such a standard must also result in significant 
conservation of energy. (42 U.S.C. 6295(o)(2)(A) and (o)(3); 42 U.S.C. 
6316(a)) To determine whether a proposed standard is economically 
justified, DOE must, after receiving comments on the proposed standard, 
determine whether the benefits of the standard exceed its burdens to 
the greatest extent practicable, weighing the following seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of products subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products which are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i); 42 U.S.C. 6316(a))

D. Background

1. History of Standards Rulemaking for Residential Dishwashers, 
Dehumidifiers, and Cooking Products; and Commercial Clothes Washers
    For dishwashers, NAECA amended EPCA to establish prescriptive 
standards, requiring that dishwashers be equipped with an option to dry 
without heat, and further requiring that DOE conduct two cycles of 
rulemakings to determine if more stringent standards are justified. (42 
U.S.C. 6295 (g)(1) and (4)) On May 14, 1991, DOE issued a final rule 
establishing the first set of performance standards for dishwashers (56 
FR 22250); the new standards became effective on May 14, 1994 (10 CFR 
430.32(f)). DOE initiated a second standards rulemaking for dishwashers 
by issuing an ANOPR on November 14, 1994 (59 FR 56423). However, as a 
result of the priority-setting process outlined in its Procedures for 
Consideration of New or Revised Energy Conservation Standards for 
Consumer Products (the ``Process Rule'') (61 FR 36974 (July 15, 1996); 
10 CFR part 430, Subpart C, Appendix A), DOE suspended the standards 
rulemaking for dishwashers.
    Section 135(c)(4) of EPACT 2005 added dehumidifiers as products 
covered under EPCA and established standards for them that will become 
effective on October 1, 2007. (42 U.S.C. 6295(cc)) DOE has incorporated 
these standards into its regulations (70 FR 60407, 60414 (October 18, 
2005); 10 CFR 430.32(v)). The amendments to EPCA also require that DOE 
issue a final rule by October 1, 2009, to determine whether these 
standards should be amended. (42 U.S.C. 6295(cc)) If amended standards 
are justified, they must become effective by October 1, 2012. (Id.) In 
the event that DOE fails to publish such a final rule, the EPACT 2005 
specifies a new set of amended standards with an effective date of 
October 1, 2012. (Id.)
    As with dishwashers, NAECA amended EPCA to establish prescriptive 
standards for cooking products, requiring gas ranges and ovens with an 
electrical supply cord that are manufactured on or after January 1, 
1990 not to be equipped with a constant burning pilot, and requiring 
DOE to conduct two cycles of rulemakings for ranges and ovens to 
determine if the standards established should be amended. (42 U.S.C. 
6295 (h)(1)-(2)) DOE initially analyzed standards for cooking products 
as part of an eight-product standards rulemaking. It issued a notice of 
proposed rulemaking (NOPR) on March 4, 1994, proposing performance 
standards for gas and electric residential cooking products, including 
microwave ovens (59 FR 10464). In accordance with the Process Rule, DOE 
refined its standards analysis for cooking products. For gas cooking 
products, DOE focused on the economic justification for eliminating 
constant burning pilots. Partially due to the difficulty of 
conclusively demonstrating that elimination of constant burning pilots 
was economically justified for gas cooking products without an 
electrical supply cord, DOE issued a final rule on September 8, 1998, 
that covered only electric cooking products, including microwave ovens 
(63 FR 48038). The final rule found that no standards were justified 
for electric cooking products. DOE never completed its standards 
rulemaking for gas cooking products.
    Similar to dehumidifiers, EPACT 2005 included amendments to EPCA 
that added CCWs as covered equipment, and it also established standards 
for such equipment that is manufactured on or after January 1, 2007. 
(EPACT 2005, section 136(a) and (e); 42 U.S.C. 6311(1) and 6313(e)) DOE 
has incorporated these standards into its regulations (70 FR 60407, 
60416 (October 18, 2005); 10 CFR 431.156). EPACT 2005 also requires 
that DOE issue a final rule by January 1, 2010, to determine whether 
these standards should be amended. (EPACT 2005, section 136(e); 42 
U.S.C. 6313(e))
2. Current Rulemaking Process
    To initiate the current rulemaking to develop standards for the 
four appliance products, on March 15, 2006, DOE published on its Web 
site the Rulemaking Framework for Commercial Clothes Washers and 
Residential Dishwashers, Dehumidifiers, and Cooking Products (the 
Framework

[[Page 64439]]

Document). The Framework Document describes the procedural and analytic 
approaches DOE anticipates using to evaluate the establishment of 
energy conservation standards for these products. This document is 
available at: http://www.eere.energy.gov/buildings/appliance_standards/pdfs/home_appl_framework_31506.pdf.
    DOE subsequently published a notice announcing the availability of 
the Framework Document, inviting written public comments to be 
submitted by May 11, 2006, and announcing a public meeting to discuss 
the proposed analytical framework for this rulemaking (71 FR 15059 
(March 27, 2006)). At the April 27, 2006 public meeting, DOE described 
the different analyses it would conduct, such as the LCC and PBP 
analyses, the methods proposed for conducting them, and the 
relationship among the various analyses. Manufacturers, trade 
associations, environmental advocates, regulators, and other interested 
parties attended the meeting. The major issues discussed at the public 
meeting were: (1) Relevance of the existing DOE test procedure for 
microwave ovens; (2) baseline unit definitions for the four appliance 
products; (3) product classes for the four appliance products; (4) 
consideration of limiting standby power as a design option for all four 
appliance products; (5) technology options for improving efficiency for 
all four appliance products; (6) type of approach to employ for the 
engineering analysis; (7) efficiency levels to consider for all four 
appliance products; (8) inclusion of a water factor for dishwashers; 
(9) consideration of cleaning performance in setting dishwasher 
standards; (10) implications of clothes container volume on CCW 
efficiency; (11) proposed approaches for specifying typical annual 
energy and water consumption for all four products; (12) potential data 
sources for characterizing variability in annual energy and water 
consumption; (13) typical distribution channels and markups for all 
four appliance products; (14) data sources for retail prices; (15) type 
of approach to employ for the LCC and PBP analyses; (16) variability of 
forecasted energy and water prices; (17) repair, maintenance, and 
installation cost relationship to product efficiency; (18) product 
lifetimes; (19) development of consumer discount rates; (20) purchase 
price impacts on product shipments; (21) forecasted saturation rates of 
commercial clothes washers; (22) consumer subgroups; (23) water and 
wastewater utility impacts; and (24) wastewater discharge impacts.
    Written comments submitted during the Framework Document comment 
period elaborated on the issues raised at the meeting and also 
addressed other major issues, including the following: (1) Transparency 
of manufacturer cost data development; (2) engineering data 
availability for dishwashers, kitchen ranges and ovens, and CCWs; and 
(3) inclusion of embedded energy in supplying water and treating 
wastewater.
    DOE developed two spreadsheet tools for this rulemaking. The first 
tool calculates LCC and PBPs. There are six LCC spreadsheets, one each 
for the following products: (1) Dishwashers, (2) dehumidifiers, (3) 
cooktops, (4) ovens, (5) microwave ovens, and (6) CCWs. Each of the LCC 
spreadsheets includes product efficiency distributions and has the 
capability to determine LCC savings and PBPs based on average values. 
The spreadsheets also can be combined with Crystal Ball (a commercially 
available software program) to generate a Monte Carlo simulation, which 
incorporates uncertainty and variability considerations. The second 
tool (the NIA spreadsheet tool) calculates the impacts of candidate 
standards at various levels on shipments and calculates the NES and NPV 
at various candidate standard levels. There are five NIA spreadsheets, 
one each for the following products and combinations of products: (1) 
Dishwashers, (2) dehumidifiers, (3) cooktops and ovens, (4) microwave 
ovens, and (5) CCWs. DOE posted these spreadsheets on its Web site on 
December 4, 2006, for early stakeholder review and comment.\6\
---------------------------------------------------------------------------

    \6\ Available online at DOE's Web site: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products.html
---------------------------------------------------------------------------

    Comments received since publication of the Framework Document have 
helped identify issues involved in this rulemaking, and have provided 
information that has contributed to DOE's proposed resolution of these 
issues. This ANOPR quotes and summarizes many of these public comments. 
A parenthetical reference at the end of a quotation or paraphrase 
provides the location of the item in the public record.
3. Analysis Process
    Table I.2 sets forth the analyses DOE has conducted and intends to 
conduct in its evaluation of standards for CCWs, and residential 
dishwashers, cooking products, and dehumidifiers. Until recently, DOE 
performed the manufacturer impact analysis (MIA) in its entirety 
between the ANOPR and NOPR during energy conservation standards 
rulemakings. As noted in the table, however, DOE has performed a 
preliminary MIA for this ANOPR. DOE believes this change will improve 
the rulemaking process.

        Table I.2.--The Four Appliance Products--Analysis Process
------------------------------------------------------------------------
            ANOPR                    NOPR              Final rule
------------------------------------------------------------------------
Market and technology          Revised ANOPR    Revised analyses.
 assessment.                    analyses.
Screening analysis...........  Life-cycle cost
                                sub-group
                                analysis.
Engineering analysis.........  Manufacturer
                                impact
                                analysis.
Energy use and end-use load    Utility impact
 characterization.              analysis.
Markups for equipment price    Net national
 determination.                 employment
                                impacts.
Life-cycle cost and payback    Environmental
 period analyses.               assessment.
Shipments analysis...........  Regulatory
                                impact
                                analysis.
National impact analysis.....
Preliminary manufacturer
 impact analysis.
------------------------------------------------------------------------

    The analyses listed in Table I.2 reflect analyses used in the 
rulemaking, including the development of economic models and analytical 
tools. In addition, in an effort to support groups of interested 
parties seeking to develop and present consensus recommendations on 
standards, DOE posted draft versions of its LCC and NIA spreadsheets on 
its Web site. If timely new data, models, or tools that enhance the 
development of standards become

[[Page 64440]]

available, DOE will incorporate them into this rulemaking.
4. Miscellaneous Rulemaking Issues
a. Joint Stakeholder Recommendations
    The Edison Electric Institute (EEI) suggested that DOE should use a 
negotiated rulemaking process for residential dishwashers and cooking 
equipment, because manufacturers appear to want regulatory certainty 
for these products. EEI suggested a separate negotiated process for 
CCWs because these products are designed for a different market. For 
dehumidifiers, EEI suggested DOE analyze the standards identified in 
EPACT 2005 that are due to become effective in 2012, and if they are 
technically feasible, economically justified, and will not reduce 
competition, consider a negotiated rulemaking so that standards can be 
issued before the October 1, 2009 deadline mandated by EPACT 2005. 
(EEI, No. 7 at p. 2) \7\
---------------------------------------------------------------------------

    \7\ A notation in the form ``EEI, No. 7, p. 2'' identifies a 
written comment that DOE has received and has included in the docket 
of this rulemaking. This particular notation refers to a comment (1) 
by the Edison Electric Institute, (2) in document number 7 in the 
docket of this rulemaking, and (3) appearing on page 2 of document 
number 7.
---------------------------------------------------------------------------

    The Process Rule specifically identifies ``consensus proposals for 
new or revised standards as an effective mechanism for balancing the 
economic, energy, and environmental interests affected by standards. 
Thus, notwithstanding any other policy on selection of proposed 
standards, a consensus recommendation on an updated efficiency level 
submitted by a group that represents all interested parties will be 
proposed by DOE if it is determined to meet the statutory criteria.'' 
(10 CFR Part 430, Appendix A to Subpart C, section 5(e)(2)). Therefore, 
DOE encourages the submittal of any consensus proposals or joint 
stakeholder recommendations pertaining to any or all of the four 
appliance products. If the supporting analyses provided by the group 
address all of the statutory criteria and use valid economic 
assumptions and analytical methods, DOE expects to use these supporting 
analyses as the basis of a proposed rule.
b. Standby Power for Dishwashers and Cooking Products
    Standby power is currently incorporated into the energy factor \8\ 
(EF) for conventional ovens via the measurement of clock power 
consumption and for gas cooktops via the energy consumption of constant 
burning pilots, both of which are incorporated into the EF calculation 
for their respective products. The dishwasher test procedure includes a 
measurement of standby power, but standby energy use is not 
incorporated into calculated EF. The issue of whether to include 
standby power in the energy efficiency metrics for dishwashers and 
cooking products was addressed in several comments that DOE received. 
The Alliance to Save Energy, American Council for an Energy-Efficient 
Economy (ACEEE), Appliance Standards Awareness Project, Natural 
Resources Defense Council, and Northeast Energy Efficiency Partnerships 
(hereafter ``Joint Comment'') stated that standby energy use should be 
included in the analyses for all products, with the appropriate metric 
for the standards being annual energy consumption rather than energy 
factor. The Joint Comment stated that EPACT 2005 instructs DOE to 
consider standby power in its rulemaking for all products, and where 
significant, to include standby power in some fashion into the 
appropriate standard. The Joint Comment further stated that standby 
energy use can be significant for clothes washers, dishwashers, and 
microwave ovens. (Joint Comment, No. 9 at p. 2)
---------------------------------------------------------------------------

    \8\ Energy factor (EF) is a measure of the energy consumption 
required by the product under the conditions of the DOE test 
procedure. The units of EF vary depending on the product. For 
example, the EF for dishwashers is expressed in cycles/kWh, while 
the EF for dehumidifiers is in liters/kWh.
---------------------------------------------------------------------------

    For dishwashers, Potomac Resources Inc. (Potomac) commented that it 
would be useful to address standby power directly through design 
options such as the power supply. (Public Meeting Transcript, No. 5 at 
p. 61) \9\ ACEEE, EEI, and Whirlpool Corporation (Whirlpool) agreed 
that standby power is important to include in the energy use 
calculations, but EEI and Whirlpool argued that individual system 
components should not be regulated, instead stating that standby power 
should be addressed for the system as a whole. (Public Meeting 
Transcript, No. 5 at pp. 62, 64, and 66) ACEEE commented that if 
standby energy use is determined to be significant, then DOE's analysis 
should include design options, efficiency levels, or increased annual 
energy consumption to capture efficiency improvement opportunities. 
(Public Meeting Transcript, No. 5 at p. 64) ACEEE, the Association of 
Home Appliance Manufacturers (AHAM), and Whirlpool stated that if DOE 
incorporates standby power into the efficiency standard, it should do 
this through maximum annual energy usage rather than a prescriptive 
standby power level. These commenters argued that such an approach 
would allow manufacturers flexibility in meeting the standard. (Public 
Meeting Transcript, No. 5 at p. 125; AHAM, No. 14 at p. 8; Whirlpool, 
No. 10 at p. 8) Whirlpool further commented that if standby power is 
included in annual energy consumption, DOE should add 8.5 kilowatt-
hours (kWh) to the standard, equating to one watt standby power per 
covered appliance over the course of a year. In addition, Whirlpool 
argued that standby power should not be driven so low that it impacts 
the adoption of electronics that can shift start times to off-peak 
periods. (Whirlpool, No. 10 at p. 8)
---------------------------------------------------------------------------

    \9\ A notation in the form ``Public Meeting Transcript, No. 5 at 
p. 61'' identifies an oral comment that DOE received during the 
April 27, 2006, Framework public meeting and which was recorded in 
the public meeting transcript in the docket for this rulemaking 
(Docket No. EE-2006-STD-0127), maintained in the Resource Room of 
the Building Technologies Program. This particular notation refers 
to a comment (1) made during the public meeting, (2) recorded in 
document number 5, which is the public meeting transcript that is 
filed in the docket of this rulemaking, and (3) which appears on 
pages 61 of document number 5.
---------------------------------------------------------------------------

    In response to the comments, we note that the analysis DOE 
conducted for dishwashers does not explicitly consider design options 
to reduce standby energy consumption. DOE conducted the engineering 
analysis to capture the costs associated with improving EF only. The 
cost data AHAM provided and the product teardowns did not specifically 
account for changes in standby power. The LCC analysis, however, does 
account for standby power in the calculation of annual energy 
consumption. The LCC assumes a baseline standby power draw of two 
watts, totaling 17 kWh of annual energy consumption. DOE assumes this 
same consumption level at all EF values. If technologies to decrease 
standby power consumption are determined to be a significant source of 
energy savings and are technologically feasible and economically 
justified, DOE plans to consider standby power as part of an overall 
energy efficiency standard focusing on maximum annual energy usage, 
rather than a separate standby power level, in order to allow 
manufacturers maximum flexibility in specifying features and design 
options while still remaining below a certain annual energy consumption 
level. As one approach, DOE tentatively believes that a reduction in 
the two-watt baseline standby power level could be reflected in a 
corresponding reduction in annual energy usage, which could be modeled 
for the purposes of this analysis as an equivalent change in EF. DOE 
seeks comment on the specification of annual energy usage as the metric 
for dishwasher standards.

[[Page 64441]]

    ACEEE commented during the Framework public meeting that the use of 
standby power needs to be considered for all cooking products. (Public 
Meeting Transcript, No. 5 at p. 91) AHAM recognized that standby power 
consumption is essentially already included in the test procedure for 
ovens and cooktops; however, for microwave ovens, a test procedure 
revision would be required. (Public Meeting Transcript, No. 5 at p. 92) 
AHAM also stated that manufacturers (driven by consumer/market desires) 
want the flexibility to produce microwave ovens with different 
displays, and, thus, different levels of standby power consumption, in 
order to provide products with market differentiation. Therefore, AHAM 
recommended that standby power not be considered as a separate 
prescriptive requirement, but instead, if regulated, standby power 
should be incorporated in an annual energy consumption metric (AHAM, 
No. 17 at p. 4). Contrary to these views, GE Consumer & Industrial (GE) 
opposed incorporating standby power into efficiency standards because 
that would result in a determination of higher energy consumption under 
the regulation for ``intelligent'' appliances. (GE, No. 13 at p. 4)
    DOE added low-standby-power electronic controls as design options 
for both standard and self-cleaning gas ovens, as well as for both 
standard and self-cleaning electric ovens. However, it did not include 
these design options when setting overall efficiency levels for these 
products because DOE does not have efficiency improvement or 
incremental cost information on them. DOE is seeking data to conduct 
this analysis and requests stakeholder comment on this issue.
    AHAM provided data on microwave standby power for a sample of 21 
microwave ovens available in the U.S. market. For the AHAM submission, 
standby power was tested in accordance with International 
Electrotechnical Commission (IEC) 62301-2005, Household electrical 
appliances--Measurement of standby power. These data show a wide range 
of standby power use. Microwave oven standby power consumption is 
understood to be a function of the digital clock display, with more 
complex graphical displays drawing more power. AHAM did not provide the 
type of oven characteristics information which could provide more 
insight into the factors affecting standby power or the costs 
associated with reducing the standby energy consumption.
    For the NOPR analysis, DOE is considering purchasing, testing, and 
analyzing microwave ovens to better understand the utility, cost, and 
cost implications of reducing standby power consumption. Addition of a 
standby power test to the existing test procedure would be necessary 
before standby power could be included in an efficiency standard. DOE 
intends to modify the test procedure accordingly because it believes 
that standby power represents a significant portion of microwave oven 
annual energy usage. According to the DOE test procedure, the annual 
useful cooking energy output of a microwave oven is 79.8 kWh. For a 
baseline microwave oven with an efficiency of 55.7 percent, annual 
energy consumption for cooking processes is 143.3 kWh. Each watt of 
standby power represents an additional 8.76 kWh per year, or 6 percent 
of the annual cooking energy consumption. AHAM-supplied data 
demonstrated a wide variation in existing standby power levels, with 
values ranging between 1.5 and 5.8 watts, such that the likely impact 
of a standard would be significant. DOE will conduct testing and 
teardown analysis in support of the test procedure NOPR to incorporate 
standby power. DOE plans to complete the test procedure change prior to 
publishing the NOPR for this standard-setting rulemaking.
    DOE specifically seeks data and stakeholder feedback on how to 
conduct an analysis of standby power for microwave ovens. This is 
identified as Issue 1 under ``Issues on Which DOE Seeks Comment'' in 
section IV.E of this ANOPR.
5. Test Procedures
    A test procedure outlines the method to determine the energy 
efficiency and annual energy use of products and equipment, and it is 
used as the basis for representation and determination of compliance 
with energy conservation standards. Section 7(b) of the Process Rule 
provides that DOE will propose necessary modifications to the test 
procedures for a product before issuing an ANOPR concerning energy 
conservation standards for that product. Section 7(c) of the Process 
Rule states that DOE will issue a final modified test procedure prior 
to issuing a proposed rule for energy conservation standards.
    DOE has established test procedures for each of the four appliance 
products subject to today's notice. DOE last revised its test 
procedures for cooking products in 1997, to make several revisions to 
more accurately measure the efficiency of these products (62 FR 51976 
(Oct. 3, 1997); 10 CFR part 430, Subpart B, Appendix I). Similarly, in 
2003, DOE revised its test procedures for dishwashers to more 
accurately measure their efficiency, as well as their water use (68 FR 
51887 (Aug. 29, 2003); 10 CFR part 430, Subpart B, Appendix C). At this 
time, DOE does not expect to make further changes to the dishwasher 
test procedure.
    EPACT 2005 amended EPCA to require that CCWs be rated according to 
the same test procedures established for residential clothes washers. 
(EPACT 2005, section 136(f); 42 U.S.C. 6314(a)(8)) DOE adopted those 
test procedures for CCWs in its final rule published on October 18, 
2005 (70 FR 60407, 60416). EPACT 2005 also amended EPCA to specify that 
the U.S. Environmental Protection Agency (EPA) test criteria used under 
the Energy Star Program must serve as the basis for DOE's test 
procedure for dehumidifiers. (EPACT 2005, section 135(b); 42 U.S.C. 
6293(b)(13)) The Energy Star test criteria for dehumidifiers require 
that American National Standards Institute (ANSI)/AHAM Standard DH-1-
2003, Dehumidifiers, be used to measure energy use during capacity-
rating tests, and that the Canadian Standards Association (CAN/CSA) 
standard CAN/CSA-C749-1994 (R2005), Performance of Dehumidifiers, be 
used to calculate the energy factor. DOE has adopted these test 
criteria, along with related definitions and tolerances, as its test 
procedure for dehumidifiers (71 FR 71340, 71347, 71366, 713667-68 (Dec. 
8, 2006); 10 CFR part 430, Subpart B, Appendix X).
    DOE received comments pertaining to its test procedures for kitchen 
ranges and ovens and CCWs. With regard to kitchen ranges and ovens, 
Wolf Appliance Company, LLC , an affiliate of Sub-Zero Freezer Company, 
Inc. (Wolf), and Whirlpool suggested that DOE modify its test procedure 
for residential kitchen ranges and ovens because it is inadequate for 
measuring the energy use of certain product characteristics and 
features. Specifically, Wolf stated that the current test procedure 
does not accurately measure the performance and efficiency of several 
components (such as larger burner rings, heavier burner grates, and 
high performance convection systems). (Wolf, No. 6 at p. 1) Whirlpool 
stated that the current test procedure does not measure energy 
consumption as a function of oven cavity size, does not address the 
fundamental differences in commercial-type products \10\ versus more 
traditional residential cooking products, and does not recognize that

[[Page 64442]]

gas surface burner efficiency is a function of the burner rate. 
Whirlpool added that the microwave oven test procedure does not account 
for the variation in the product's size and wattage, both of which 
affect microwave oven energy consumption. (Whirlpool, No. 10 at p. 6) 
With regard to CCWs, Whirlpool noted that commercial laundry practices 
differ from the more familiar residential practices in several key 
respects (e.g., the test procedure assumes that a modest eight-pound 
load will be used, but commercial washers typically are filled with a 
larger load). (Whirlpool, No. 10 at p. 3)
---------------------------------------------------------------------------

    \10\ Commercial-type cooktops and ovens are characterized by 
higher burner firing rates, larger dimensions, and heavier 
components than typical residential cooking products.
---------------------------------------------------------------------------

    In response, DOE recognizes that there may be issues with its test 
procedures for measuring the energy use impacts of the cooking product 
characteristics noted by Wolf and Whirlpool. However, with the 
exception of standby power consumption for microwave ovens, DOE does 
not intend to initiate rulemakings to modify its test procedures for 
appliances covered by this rulemaking, before finalizing amended energy 
conservation standards, for the reasons that follow. DOE intends to 
initiate a test procedure modification for microwave ovens to include 
standby power consumption because the data received from AHAM indicates 
that standby power represents a significant portion of annual energy 
usage and because the data shows a wide spread in current standby power 
levels. DOE does not plan a test procedure change for conventional 
ovens because the oven test procedure already measures standby power in 
the form of clock power and, for standard gas ovens, the pilot light. 
For cooktops, DOE does not believe that standby power not already 
captured in the test procedure represents a significant portion of 
annual energy consumption. Gas cooktops already measure the energy 
consumption of standing pilots, which for the baseline configuration 
are assumed to consume 600 kWh annually and which are in addition to 
the annual cooking energy consumption. In comparison, each watt of 
standby power consumes 8.76 kWh annually. For electric cooktops, DOE 
does not have any data on standby power consumption that indicate the 
potential for significant energy savings. Therefore, a test procedure 
change to measure standby power for cooktops would not be warranted. 
With regard to CCWs, although for efficiency rating purposes CCWs use 
the residential clothes washer test procedure, DOE's methods for 
characterizing the energy and water use for commercial washers (as 
described in section II.D.4) accounted for the consumer usage patterns 
specific to this product.
    DOE specifically seeks data and stakeholder feedback on the 
decision to retain the existing test procedures for appliances covered 
under this rulemaking other than microwave ovens. This is identified as 
Issue 6 under ``Issues on Which DOE Seeks Comment'' in section IV.E of 
this ANOPR.

II. Analyses for the Four Appliance Products

    This section addresses the analyses DOE has performed and intends 
to perform for this rulemaking. For each product covered by this 
rulemaking (i.e., residential dishwashers, dehumidifiers, and cooking 
products, and CCWs), DOE will perform a set of separate analyses, 
including a market and technology assessment, a screening analysis, an 
engineering analysis, an energy use and water use characterization, LCC 
and PBP analyses, a shipments analysis, a NIA, and a MIA. A separate 
sub-section addresses each type of analysis, which contains a general 
introduction that describes the analysis and a discussion of related 
comments received from interested parties.

A. Market and Technology Assessment

    When DOE begins a standards rulemaking, it develops information 
that provides an overall picture of the market for the products 
concerned, including the nature of the product, the industry structure, 
and market characteristics for the product. This activity consists of 
both quantitative and qualitative efforts based primarily on publicly 
available information. The subjects addressed in the market and 
technology assessment for this rulemaking include product classes, 
baseline units, technologies for design options, manufacturers, 
quantities and types of products sold and offered for sale, retail 
market trends, industry cost structure, and regulatory and non-
regulatory programs. This information serves as resource material 
throughout the rulemaking.
1. Product Classes
    In general, when evaluating and establishing energy efficiency 
standards, DOE divides covered products into classes by: (1) The type 
of energy used, and (2) capacity or other performance-related features 
that affect consumer utility and efficiency. Different energy 
conservation standards may apply to different product classes. The 
following describes and discusses the product classes DOE plans to use 
in this rulemaking.
a. Dishwashers
    For dishwashers, the size of the unit significantly affects the 
amount of energy consumed due to the corresponding amount of water 
heating required. In other words, standard-sized dishwashers with 
relatively greater water consumption have significantly greater energy 
use than compact units. Because standard dishwashers offer enhanced 
consumer utility over compact units (i.e., the ability to wash more 
dishes), DOE has established the following product classes, which are 
based on the size of the dishwasher (as specified in ANSI/AHAM Standard 
DW-1-2005, Dishwashers):
     Compact (capacity less than eight place settings plus six 
serving pieces); and
     Standard (capacity equal to or greater than eight place 
settings plus six serving pieces).
    AHAM and EEI both commented that the two product classes are 
appropriate for the analysis. (Public Meeting Transcript, No. 5 at p. 
55; AHAM, No. 14 at p. 8; EEI, No. 7 at p. 3) Potomac, however, 
suggested that the standard product class should be disaggregated to at 
least several product classes based on place-setting capacity. (Public 
Meeting Transcript, No. 5 at pp. 61-62). American Rivers, Association 
of Metropolitan Water Agencies, Austin Water Utility, California Urban 
Water Conservation Council, East Bay Municipal Utility District, and 
Seattle Public Utilities (hereafter ``Multiple Water Organizations'') 
recommended that one or more new product classes be defined in addition 
to compact and standard sizes, which would allow flexibility for 
manufacturers to make smaller or larger machines. According to the 
Multiple Water Organizations, consumers would then be encouraged to 
wash full dishwasher loads rather than partial or multiple loads. 
(Multiple Water Organizations, No. 11 at p. 2) DOE notes that current 
dishwasher models include single- and two-drawer units as well as 
dishwashers that provide a user-selectable option for upper-or lower-
rack-only washing to aid in running optimal load sizes. Therefore, DOE 
believes the current two product classes offer adequate flexibility in 
terms of dishwasher loading to maintain consumer utility and wash 
performance for different load sizes. Thus, additional product classes 
are not warranted.
b. Dehumidifiers
    EPACT 2005 sets energy conservation standards for dehumidifiers 
based on the capacity of the unit as measured in

[[Page 64443]]

pints of water extracted per day. (EPACT 2005, section 135(c); 42 
U.S.C. 6295(cc)) Specifically, for units manufactured on or after 
October 1, 2007, EPACT 2005 sets a separate standard for dehumidifiers 
in each of the following five categories: (1) 25.00 pints/day or less, 
(2) 25.01-35.00 pints/day, (3) 35.01-54.00 pints/day, (4) 54.01-74.99 
pints/day, and (5) 75.00 pints/day or more. (Id.) EPACT 2005 also 
prescribes more stringent energy conservation standards that would go 
into effect if DOE fails to issue amended standards that apply to 
products manufactured on or after October 1, 2012. (Id.) In prescribing 
these standards, EPACT 2005 subdivides the 35.01-54.00 pints/day 
category into two categories: 35.01-45.00 pints/day and 45.01-54.00 
pints/day. Therefore, in accordance with EPACT 2005 amendments to EPCA, 
DOE is using the following product classes for dehumidifiers:
     25.00 pints/day or less;
     25.01-35.00 pints/day;
     35.01-45.00 pints/day;
     45.01-54.00 pints/day;
     54.01-74.99 pints/day; and
     75.00 pints/day or more.
    During the Framework public meeting and Framework comment period, 
stakeholders differed as to appropriate specifications for the product 
classes for dehumidifiers. EEI asked whether a distinction should be 
made between fixed and portable dehumidifers. (EEI, No. 7 at p. 3) AHAM 
opposed EEI's suggestions, expressing a preference for the product 
classes as identified in EPACT 2005. (Public Meeting Transcript, No. 5 
at p. 70; AHAM, No. 14 at p. 9)
    While fixed and portable dehumidifiers offer different utility in 
terms of ease of installation and flexibility in location, DOE is 
unaware of any dehumidification performance differences. Therefore, DOE 
has determined that additional product classes are not warranted based 
on portability, and for the purpose of this rulemaking, DOE intends to 
maintain the dehumidifier product classes as defined by EPACT 2005 
(i.e., a ``self-contained, electrically operated, and mechanically 
encased assembly''). (EPACT 2005, section 135(a); 42 U.S.C. 6291(34))
    DOE also received comments that baseline unit characteristics for 
dehumidifiers may not be possible to establish since EPACT 2005 will 
not come into effect until October 1, 2007. DOE performed its 
engineering analysis across a wide range of unit capacities and 
efficiencies to capture as complete a picture of the 25-75 pints/day 
dehumidifier market as possible. In total, DOE has disassembled and 
analyzed 14 dehumidifiers to date. Furthermore, DOE used market and 
technology assessment research and consulted with numerous stakeholders 
to determine basline unit characteristics. (Refer to Chapters 3 and 5 
of the TSD for further details.) DOE intends to use EPACT 2005-
compliant dehumidifiers as a baseline since manufacturers are already 
modifying any non-compliant product they have to meet this new minimum 
energy efficiency level.
c. Cooking Products
    For cooking products, DOE based its product classes on energy 
source (i.e., gas or electric) and cooking method (i.e., cooktops, 
ovens, and microwave ovens). DOE identified five categories of cooking 
products:
     Gas cooktops;
     Electric cooktops;
     Gas ovens;
     Electric ovens; and
     Microwave ovens.
    In its regulations implementing EPCA, DOE defines a ``conventional 
range'' as ``a class of kitchen ranges and ovens which is a household 
cooking appliance consisting of a conventional cooking top and one or 
more conventional ovens.'' 10 CFR 430.2. In this rulemaking, DOE is not 
treating gas and electric ranges as a distinct product category and is 
not basing its product classes on that category. Because ranges consist 
of both a cooktop and oven, any potential cooktop and oven standards 
would apply to the individual components of the range. As a result, 
product classes for ranges, for the purpose of standards-setting, are 
not warranted.
    This general approach for defining product classes was validated in 
comments received after the Framework public meeting. EEI stated that 
the product classes are appropriate. (EEI, No. 7 at p. 3) Wolf stated 
that the burden of considering new product classes since the previous 
rulemaking (including modification of existing test procedures) is not 
justified by the small potential energy savings. (Wolf, No. 6 at p. 2)
    DOE also received comments during the Framework public meeting and 
subsequent comment period questioning whether DOE should consider for 
analysis product classes for cooking products with small shipment 
volumes. Whirlpool noted that the rationale for excluding certain 
product classes from analysis in the previous rulemaking (e.g., grills, 
griddles, induction cooktops, and warming/simmering burners) was based 
upon consideration of factors such as the lack of an appropriate test 
procedure, the niche nature of those products, and the small amount of 
empirical data. Since these conditions still remain today, Whirlpool 
commented that DOE should not analyze these classes. (Whirlpool, No. 10 
at p. 5) Wolf stated during the Framework public meeting that product 
classes that were not analyzed in the prior rulemaking need to be 
considered in this standards rulemaking. (Public Meeting Transcript, 
No. 5 at p. 84) DOE is not aware of any data upon which to determine 
the measurement of energy efficiency or energy efficiency 
characteristics of products in these niche classes. Therefore, DOE will 
not conduct analyses on product classes that were identified but 
excluded in the previous rulemaking. DOE seeks efficiency data and 
inputs to characterize any limitations of the test procedure for these 
product classes. This topic is identified as Issue 6 under ``Issues on 
Which DOE Seeks Comment'' in section IV.E of this ANOPR.
    The single product class that DOE proposes to use for gas cooktops 
is gas cooktops/conventional burners, in accordance with the previous 
rulemaking.
    AHAM commented that if DOE decides to proceed with further analysis 
of cooking products, DOE should include an additional product class for 
high-performance, commercial-style products. AHAM stated that the 
unique utility and performance attributes associated with high-
performance cooking products must be recognized and allowed to continue 
under the ``safe harbor'' provisions of NAECA, which prevent Federal 
energy efficiency standards from resulting in the unavailability of 
product types, classes, performance characteristics, and other key 
aspects of the product that are currently available. (42 U.S.C. 6295 
(o)(4)) Due to test procedure complexities and small market share, AHAM 
recommends that DOE exempt high-performance, commercial-style 
residential cooking products. (AHAM, No. 14 at p. 2) DOE received 
additional comments specifically regarding commercial-type ranges. 
These comments are discussed in the context of gas cooktops, although 
it should be recognized that similar responses apply to the oven 
component of the range as well. During the Framework public meeting, 
EEI suggested a need to establish the market share of commercial-type 
ranges for this rulemaking. (Public Meeting Transcript, No. 5 at p. 81) 
Both AHAM and Wolf stated that commercial-type ranges warrant a 
separate product class. (Public

[[Page 64444]]

Meeting Transcript, No. 5 at pp. 84 and 86). Wolf further elaborated in 
the comment period after the Framework public meeting that the unique 
utility and performance attributes of commercial-type ranges (explained 
below) justify a separate product class. (Wolf, No. 6 at p. 1) DOE 
considers commercial-style ranges to be those products which 
incorporate gas cooktops with higher input rate burners (i.e., greater 
than 14,000 Btu/h) and heavy-duty grates that provide faster cooking 
and the ability to cook larger quantities of food in larger cooking 
vessels. The burners are optimized for the larger-scale cookware to 
maintain high cooking performance. Similarly, DOE considers commercial-
style ovens to have higher input rates (i.e., greater than 22,500 Btu/
h) and dimensions to accommodate larger cooking utensils or greater 
quantity of food items, as well as features to optimize cooking 
performance. GE stated that commercial-type products should be exempt 
from regulation due to their unique utility and cost, but if they are 
regulated, they should be categorized into a separate product class. 
(GE, No. 13 at p. 2) Whirlpool commented that, although shipments of 
commercial-type products have increased since the prior rulemaking, 
they still remain a niche product. Whirlpool shared GE's position that 
these products should be exempt from regulation, particularly since 
there is a lack of efficiency data available and there is little 
potential for meaningful energy savings. (Whirlpool, No. 10 at p. 6)
    After considering stakeholder comments, DOE has tentatively decided 
to exclude high-performance, commercial-style gas cooktops (including 
the cooktop component of commercial-style ranges) from the energy 
efficiency standard due to the lack of available data for determining 
efficiency characteristics of those products. In addition, the test 
procedure for gas cooktops is based on measuring temperature rise in an 
aluminum block with a diameter dictated by the firing rate of the 
burner. The maximum diameter of the test block is sufficient to measure 
higher output residential-scale burners. For commercial-type burners 
that must have larger diameter burner rings to accomplish complete 
combustion, however, this maximum test block diameter may be too small 
to achieve proper heat transfer and may not be representative of the 
dimensions of suitable cookware. However, DOE is not aware of any data 
to determine the measurement of energy efficiency or energy efficiency 
characteristics for commercial-style cooktops. DOE seeks data and 
inputs regarding the energy efficiency of commerical-type cooktops as 
well as any limitations of the test procedure for this product class. 
This topic is identified as Issue 6 under ``Issues on Which DOE Seeks 
Comment'' in section IV.E of this ANOPR.
    Whirlpool and AHAM commented that DOE should add sealed gas burners 
as a separate product class. (Public Meeting Transcript, No. 5 at pp. 
82 and 85) Whirlpool stated that the added utility of sealed burners 
based upon the ease of consumer cleaning justifies this distinction. In 
addition, the increasing firing rates of sealed burners since the 
previous rulemaking coupled with the necessary grate height increase to 
achieve proper combustion make sealed burners less efficient than open 
burners. Whirlpool cited the 1983 International Gas Research Conference 
(IGRC)\11\ report that claimed an efficiency reduction associated with 
sealed burners. In Whirlpool's opinion, the boiling water tests upon 
which this conclusion was based represented an inappropriate metric, 
and any efficiency determination for sealed burners must be based on 
the DOE test procedure. For these reasons, Whirlpool recommended 
development of a separate product class for sealed burners. (Public 
Meeting Transcript, No. 5 at pp. 82-83 and 88) AHAM stated that gas 
sealed burners should be considered as a separate product class within 
gas cooktops because changes are required to provide appropriate 
amounts of primary and secondary air for proper combustion, which 
inherently affects energy efficiency. (AHAM, No. 14 at p. 2)
    DOE has observed that there are conflicting data on the impacts of 
sealed burners on energy efficiency measurements. In the previous 
rulemaking, AHAM had stated that sealed burners often have a lower gas 
input rating than conventional burners due to the reduction in 
secondary air. The sealed burner must obtain all of its secondary air 
from air that is available above the cooktop. To obtain sufficient air 
for proper combustion, it becomes necessary to either raise the grate 
height or to derate the burner. The IGRC report, however, states that 
the reduction in secondary air results in more primary aeration to the 
sealed burner. The increased primary aeration allows for a reduced pan-
to-burner separation and increased burner efficiency.
    According to the boiling water tests conducted in the report, the 
efficiency of conventional burners ranged from 42 percent to 48 
percent, while the sealed burner was rated at an efficiency of 53 
percent. Commenters have not provided data showing the correlation of 
boiling water tests with efficiency testing according to the DOE test 
procedure, as would render the IGRC report inapplicable. Accordingly, 
without clear indication that the performance of sealed burners is 
sufficiently distinct from that of conventional open gas burners, DOE 
will retain the single product class for gas cooktops and consider 
sealed burners as a design option within that class.
    The American Gas Association (AGA) also proposed two product 
classes for gas cooktops, differentiated by the method of heat transfer 
associated with the burners. The two product classes suggested by the 
AGA would consist of direct-flame contact burners that provide 
conductive heat transfer and other burner types that employ convective 
and radiant heat transfer. (AGA, No. 12 at p. 2) DOE believes that the 
method of heat transfer does not provide any unique utility, nor are 
there data available that characterize substantially different 
performance based on heat transfer means. Thus, DOE will retain a 
single product class for gas cooktops.
    For electric cooktops, DOE determined that the ease of cleaning 
smooth elements means that they have greater utility to the consumer 
than coil elements. Because smooth elements typically use more energy 
than coil elements, DOE has defined the following product classes for 
electric cooktops:
     Electric cooktop/low or high wattage open (coil) elements; 
and
     Electric cooktop/smooth elements.
---------------------------------------------------------------------------

    \11\ J. Flood and T. Enga, ``Energy Conservation `Aspects of 
Cooking Appliances,'' Proceedings of the 1983 International Gas 
Research Conference, June 13, 1983, London, UK, pp 741-54. Available 
online at: http://www.osti.gov/energycitations.
---------------------------------------------------------------------------

    AHAM stated that if DOE decides to proceed with further analysis of 
cooking products, DOE should include an additional product class for 
induction cooktops. AHAM commented the utility and performance 
attributes associated with high-performance cooking products must be 
recognized and allowed to continue under the safe harbor provisions of 
NAECA. Due to test procedure complexities, small market share, and lack 
of empirical data, AHAM and Whirlpool recommended that DOE exempt 
induction cooktops. Whirlpool further commented that if induction 
cooktops are analyzed, they must be treated as a separate product 
class, which would entail development of a new test procedure. (Public 
Meeting Transcript, No. 5 at p. 85; AHAM, No. 14 at pp. 2-4; Whirlpool, 
No. 10 at p.

[[Page 64445]]

5) During the engineering analysis (Chapter 5 of the TSD) DOE 
determined that induction cooktops cannot be tested according the 
existing test procedure, and, therefore, DOE will not consider this 
technology for the ANOPR analysis. DOE seeks efficiency data and inputs 
to characterize any limitations of the test procedure for induction 
cooktops. This topic is identified as Issue 6 under ``Issues on Which 
DOE Seeks Comment'' in section IV.E of this ANOPR.
    For electric ovens, DOE determined that the type of oven-cleaning 
system is a utility feature that affects performance. DOE found that 
standard ovens and ovens using a catalytic continuous-cleaning process 
use roughly the same amount of energy. On the other hand, self-cleaning 
ovens use a pyrolytic process that provides enhanced consumer utility 
with different overall energy consumption, as compared to either 
standard or catalytically-lined ovens, due to the amount of energy used 
during the cleaning cycle and better insulation. Thus, DOE has defined 
the following product classes for electric ovens:
     Electric oven/standard oven with or without a catalytic 
line; and
     Electric oven/self-clean oven.
    AHAM concurred with this approach during the Framework public 
meeting, stating that non-self-cleaning and self-cleaning ovens should 
remain as separate product classes. (Public Meeting Transcript, No. 5 
at pp. 85-86) AHAM and Whirlpool both commented that the feature of a 
``catalytic line'' is obsolete and, therefore, should be removed from 
the non-self-cleaning oven product class description. (Public Meeting 
Transcript, No. 5 at p. 86; Whirlpool, No. 10 at pp. 9-10) While DOE is 
not aware of any electric ovens currently on the market that are 
catalytically lined, it will retain the current description for 
completeness.
    For gas ovens, for the same reasons as for electric ovens, DOE is 
using the following product classes:
     Gas oven/standard oven with or without a catalytic line; 
and
     Gas oven/self-clean oven.
    AHAM stated that if DOE decides to proceed with further analysis, 
DOE should include additional product classes for high-performance, 
commercial-style products, which include commercial-style gas ovens 
(i.e., with burner firing rates greater than 22,500 Btu/h). AHAM 
commented that the utility and performance attributes associated with 
high-performance cooking products must be recognized and allowed to 
continue under the safe harbor provisions of NAECA. Due to test 
procedure complexities and small market share, AHAM recommended that 
DOE exempt high-performance, commercial-style products. (Public Meeting 
Transcript, No. 5 at pp. 85-86; AHAM, No. 14 at pp. 2-4) DOE recognizes 
that the test procedure may not adequately measure performance of 
commercial-style ovens. The single test block may not adequately 
measure the temperature distribution that is inherent with the larger 
cavity volumes and higher firing rates typically found in these 
products. DOE is not aware of any data upon which to determine the 
measurement of energy efficiency or energy efficiency characteristics 
for commercial-style ovens, so therefore will not conduct an analysis 
on this product class at this time. DOE seeks data and inputs regarding 
the energy efficiency of commercial-type cooktopsstyle ovens as well as 
any limitations of the test procedure for this product class. This 
topic is identified as Issue 6 under ``Issues on Which DOE Seeks 
Comment'' in section IV.E of this ANOPR.
    As discussed for electric ovens, AHAM and Whirlpool stated that the 
``catalytic line'' descriptor for the standard gas oven product class 
is obsolete and should be removed. While DOE is not aware of any gas 
ovens currently on the market that are catalytically lined, it will 
retain the current description for completeness.
    Finally, microwave ovens will constitute a single product class in 
this rulemaking. DOE did not break down this category of cooking 
product into further product classes. This product class can encompass 
microwave ovens with and without browning (thermal) elements, but does 
not include microwave ovens that incorporate convection systems. DOE is 
unaware of any data evaluating the efficiency characteristics of 
microwave ovens incorporating convection systems, so therefore this 
type of unit will not be included in the analysis. DOE seeks data and 
inputs on the performance of microwave ovens with convection systems. 
This topic is identified as Issue 6 under ``Issues on Which DOE Seeks 
Comment'' in section IV.E of this ANOPR.
    AHAM stated during the Framework public meeting that additional 
product classes for microwave ovens are needed that would likely be a 
function of volume and wattage, and possibly installation configuration 
(i.e., counter-top versus over-the-range ovens). (Public Meeting 
Transcript, No. 5 at pp. 86-87) In comments submitted after the 
Framework public meeting, AHAM reiterated these comments and added that 
humidity sensors would also need to be considered. However, AHAM 
conceded that the lack of efficiency data makes it impossible to 
determine the appropriate product classes at this time. (AHAM, No. 14 
at p. 6) Similarly, Whirlpool stated that, without existing energy 
consumption standards, it does not have any data to formulate 
appropriate product classes for microwave ovens, and the company 
commented that obtaining these data would be costly and time consuming. 
(Whirlpool, No. 10 at p. 6) After the Framework public meeting, AHAM 
supplied microwave oven efficiency data to DOE that failed to identify 
any correlation between efficiency and either rated output power or 
cavity volume. Therefore, DOE has decided not to define product classes 
as a function of features such as volume or wattage, and instead will 
retain the single product class of microwave ovens with or without 
thermal elements.
    Comments did not strongly support the inclusion of microwave/
thermal ovens in the analyses. In addition, several comments used the 
term ``combination ovens'' to refer to not only microwave/thermal ovens 
but also other technologies, such as halogen bulbs. EEI questioned 
whether DOE would consider combination ovens for future analysis, 
referring to both microwave plus thermal and microwave plus convection 
units. (Public Meeting Transcript, No. 5 at p. 139) GE and AHAM both 
commented that the DOE test procedure is inadequate to measure 
combination ovens. AHAM further stated that the small market share of 
combination ovens should preclude them from the analysis. (Public 
Meeting Transcript, No. 5 at pp. 140-141). In comments submitted after 
the Framework meeting, EEI stated that, depending on market share, 
combination ovens could impact baseline energy usage. Although EEI did 
not suggest including combination ovens in the analyses, it did state 
that DOE should ensure that any standards do not eliminate these 
products from the market. (EEI, No. 7 at p. 6) Whirlpool, however, 
expressed its opinion that combination ovens should not be considered a 
separate product class due to variations in design and low market 
share. (Whirlpool, No. 10 at p. 6)
    DOE recognizes that the microwave oven test procedure can only test 
the microwave heating function of microwave/thermal ovens, and that it 
cannot test the browning function of the radiant or halogen elements. 
However, such browning features are typically a secondary function of a 
microwave/thermal unit, with the primary cooking

[[Page 64446]]

being accomplished via microwave heating. In combination units, the 
convection system performs a significant portion of the cooking 
process, and, therefore, the inability to measure performance of the 
convection component would render the test procedure inadequate. DOE 
has no information that demonstates a difference in energy performance 
between microwave/thermal ovens operating in microwave mode and 
microwave ovens. Therefore, DOE will include microwave ovens with 
thermal browning elements in the single product class. As discussed 
above, DOE will not conduct an analysis at this time of combination 
microwave ovens due to a lack of data evaluating energy efficiency or 
energy efficiency characteristics of microwave ovens incoporating 
convection systems.
    DOE received several comments regarding additional product classes 
for cooking products not specifically covered in the above product 
classes. For example, EEI questioned whether outdoor natural-gas-fired 
or propane-fired grills are a covered product for this analysis, and, 
if so, it recommended that DOE conduct an investigation into shipments 
and usage patterns. (EEI, No. 7 at p. 5) The test procedures 
established in 10 CFR Part 430, Subpart B, Appendix I are specified for 
kitchen ranges and ovens. Further, the test procedures provide for 
estimating annual operating cost for conventional ranges, conventional 
cooking tops, conventional ovens, microwave ovens, and microwave/
conventional ranges. In response, DOE believes that the specification 
of ``kitchen'' and ``household cooking appliance'' in the definitions 
of ``conventional range'' and ``conventional cooking top'' excludes 
outdoor gas/propane grills. Therefore, DOE has decided not to include 
outdoor gas/propane grills in the present analyses.
    EEI also commented after the Framework public meeting that DOE 
should include compact cooking products such as toaster ovens in the 
analysis. (EEI, No. 7 at p. 3) However, the definition of 
``conventional oven'' provided in 10 CFR 430.2 states, in relevant 
part, ``It does not include portable or countertop ovens which use 
electric resistance heating for the cooking or heating of food and are 
designed for an electrical supply of approximately 120 volts.'' 
Therefore, DOE is not including toaster ovens in the present analyses 
because they are not covered products.
    In sum, in this rulemaking DOE is using the following eight product 
classes in analyzing and setting standards for cooking products:
     Gas cooktops/conventional burners;
     Electric cooktop/low or high wattage open (coil) elements;
     Electric cooktop/smooth elements;
     Gas oven/standard oven with or without a catalytic line;
     Gas oven/self-clean oven;
     Electric oven/standard oven with or without a catalytic 
line;
     Electric oven/self-clean oven; and
     Microwave oven with or without thermal elements.
d. Commercial Clothes Washers
    EPACT 2005 amendments to EPCA placed all CCWs in one product class 
and applied a single standard for energy efficiency and a single 
standard for water efficiency for this equipment. (EPACT 2005, section 
136(e); 42 U.S.C. 6313(e)) This class encompasses both top-loading 
(vertical-axis) and front-loading (horizontal-axis) units.
    During the Framework public meeting and Framework comment period, 
DOE received comments expressing opposing viewpoints regarding the use 
of one or two product classes for CCWs. Alliance Laundry Systems (ALS) 
pressed for two product classes, because ALS believes that in the eyes 
of consumers, horizontal- and vertical-axis washers can be 
significantly differentiated in terms of utility and cost. (Public 
Meeting Transcript, No. 5 at p. 42) However, the Joint Comment argued 
for a single product class, saying that consumers only want to clean 
their clothes and, thus, make no distinction between washer product 
platforms. (Joint Comment, No. 9 at p. 5) The Joint Comment argued 
that, according to EPCA's definition of classes found at 42 U.S.C. 
6219(a), commercial clothes washers should be treated as one class 
because ``the function * * * of commericial clothes washers (i.e., 
cleaning clothes) does not depend on the orientation of the clothes 
washer drum axis.'' (Joint Comment, No. 9 at p. 5) In addition, the 
Joint Comment contended that DOE chose to maintain one product class 
during the residential clothes washer rulemaking \12\ and, as a result, 
urged DOE to do the same in this rulemaking. (Joint Comment, No. 9 at 
p. 5) EEI also supported DOE's designation of a single commercial 
clothes washer product class. (EEI, No. 7 at p. 3) AHAM ``recommends 
that the Department conduct its analysis using the product categories 
currently provided for in its regulations.'' (AHAM, No. 14 at p. 7) The 
Multi-Housing Laundry Association (MLA) deferred to its member 
manufacturers' opinions regarding a single product class. (MLA, No. 8 
at p. 2) All manufacturers interviewed by DOE as part of the 
manufacturer impact analysis opposed the elimination of vertical-axis 
washers, which could arise as an issue if a single product class is 
analyzed. (See TSD, Chapter 12.)DOE recognizes that, by analyzing a 
single product class and applying a single standard for energy 
efficiency and a single standard for water efficiency to all CCWs, 
absent the consideration of other relevant factors, the highest 
economically justified standards could be sufficiently stringent as to 
possibly cause manufacturers to cease production of vertical-axis 
washers.
---------------------------------------------------------------------------

    \12\ DOE notes that the Joint Comment is incorrect. DOE has 
established five classes of residential clothes washers, including 
top-loading compact, top-loading standard and front-loading (See 10 
CFR part 430, section 430.32(g)). DOE understands how some 
stakeholders could believe there is only one class of standard-size 
residential clothes washers in DOE's regulations since the value of 
the energy efficiency standard is the same for both classes. While 
the standards are the same, DOE notes they are separate in DOE's 
regulations found at 430.32(g). The max tech level for the two 
classes are different, because of the utility features, and are, 
therefore, separate classes.
---------------------------------------------------------------------------

    As noted above, EPCA, as amended by EPACT 2005, applies a single 
standard for energy efficiency and a single standard for water 
efficiency to all CCWs. The Congress enacted a single standard for CCWs 
some years after DOE has established five classes for residential 
clothes washers, which may suggest that Congress's initial assessment 
was that a single class would be most reasonable when updating these 
standards. The statutory provisions do not, however, specifically 
prevent DOE from exercising its technical expertise to create separate 
product classes subject to the same standards, if such differentiation 
is determined to be appropriate.
    After considering the comments on the Framework Document, DOE 
decided to keep the single class of commercial clothes washers for 
today's ANOPR, but remains open to the possibility of changing this 
approach if further comments demonstrate that such a change is 
warranted. The Joint Comment, for example, argued that the function of 
clothes washers is to clean clothes and that all commercial clothes 
washers perform this function and, therefore, should be treated as a 
single class. DOE has previously rejected this argument. The 
residential clothes washer rulemaking history clearly demonstrated that 
size, the axis of access and certain technologies (e.g., suds savings) 
had consumer utility that affect performance and, therefore, warranted 
separate classes for residential products. Nevertheless, DOE has 
decided to maintain a single class

[[Page 64447]]

for CCWs in today's ANOPR, for the reasons that follow. First, other 
stakeholders did not provide any compelling information to support 
proposing multiple product classes for CCWs, Second, even though there 
may be some performance-related features on existing CCWs that might 
warrant multiple CCW product classes (as was demonstrated in the 
residential clothes washer rulemaking), technologies may be available 
to enable top-loading units to attain the same efficiency level as 
front-loading units, thereby rendering any product class distinction 
meaningless.
    In tentatively deciding to retain a single product class for CCWs, 
DOE was sensitive to other considerations including the likely outcome 
of requisite U.S. Department of Justice (DOJ) review of the potential 
impacts, if any, of efficiency standards on competition, given that a 
large percentage of the overall market for commercial washers is 
produced by one manufacturer that specializes in vertical-axis 
machines. Another consideration may be the potential effect of 
multiple-class standards on the market shares of vertical-axis and 
horizontal-axis machines. For example, if separate standards further 
widened the first cost differences between these two classes of 
washers, then the overall result might be a decline in the market share 
of the more energy efficient horizontal-axis machines, which could more 
than offset any energy savings achieved in vertical-axis machines.
    DOE notes that sections 325 (o)(4) and 327(d)(4) of EPCA require 
DOE to consider the availability of performance characteristics, 
features, and other characteristics in setting standards and in 
considering State petitions for exemption from Federal preemption. (42 
U.S.C. 6295(o)(4) and 6297(d)(4)) The California Energy Commission 
(CEC) submitted a petition for exemption from Federal preemption by 
DOE's residential clothes washer standard.\13\ One of the factors on 
which DOE based its denial of the CEC petition was that it would make 
top-loading clothes washers unavailable in the market. (71 FR 78157)
---------------------------------------------------------------------------

    \13\ DOE Docket No. EE-RM-PET-100, submitted by the California 
Energy Commission.
---------------------------------------------------------------------------

    Based on the discussion above, DOE requests comments on clothes 
washer product classes and, if DOE were to keep a single class for 
commercial clothes washers, how to consider the requirements of section 
325(o)(4) of EPCA in considering Trial Standard Levels. DOE 
specifically seeks feedback on these product classes and invites 
interested persons to submit written presentations of data, views, and 
arguments as discussed in section IV.E of this ANOPR.
2. Market Assessment
    AHAM is the trade association representing the majority of 
dishwasher, dehumidifier, and cooking product manufacturers. AHAM 
conducts market and consumer research studies and publishes a biennial 
Major Appliance Fact Book. AHAM also develops and maintains technical 
standards for various appliances to provide uniform, repeatable 
procedures for measuring specific product characteristics and 
performance features. Other trade associations relevant to this 
rulemaking include the Coin Laundry Association (CLA), representing the 
30,000 coin laundry owners globally, and the MLA, a trade association 
of operator and supplier companies providing professional laundry 
services for the multi-housing industry.
    The majority of the domestic share of CCWs is held by four major 
manufacturers: ALS, the Maytag Corporation (Maytag), Whirlpool, and GE. 
Maytag and Whirlpool merged in 2006 but have continued to maintain both 
product lines to this date.
    DOE estimates that there are approximately 13 manufacturers of 
residential dishwashers that serve the domestic market. Approximately 
94 percent of the market is served by four manufacturers: AB Electrolux 
(Frigidaire), GE, Maytag, and Whirlpool. The merger between Whirlpool 
and Maytag resulted in the combined company accounting for 51 percent 
of the domestic market.
    DOE estimates that there are approximately 18 manufacturers of 
residential dehumidifiers that serve the domestic market. Approximately 
two thirds of the market is represented by two manufacturers: Whirlpool 
and LG Electronics (LG).
    DOE estimates that there are approximately 14 manufacturers of 
cooking products (including ovens, cooktops, and ranges) that serve the 
U.S. market. The majority of the cooking products market is represented 
by four companies: Frigidaire, GE, Maytag, and Whirlpool. GE and 
Whirlpool represent nearly three quarters of the electric range 
products market. GE represents over a third of the gas range products 
market, while the combined Whirlpool and Maytag comprise over a 
quarter.
    The microwave oven market differs from the rest of the domestic 
cooking product market in that many of the manufacturers are foreign-
owned companies with manufacturing facilities outside of the United 
States. Many of the domestic appliance manufacturers rebrand foreign-
manufactured microwave products. Major microwave oven manufacturers 
are: LG, Samsung Electronics America, Inc. (Samsung), and the Sharp 
Electronics Corporation (Sharp), serving 67 percent of the domestic 
market. The second tier of approximately 9 manufacturers serves the 
remaining 33 percent of the domestic market.
    Due to mergers and acquisitions, the home appliance industry 
continues to consolidate. While the degree of market share 
concentration varies by product type, the market shares of a few 
companies provide evidence in support of this characterization. 
According to the September 2006 issue of Appliance Magazine, Whirlpool, 
GE, Frigidaire, and Maytag comprise 92 percent of the U.S. core 
appliance market share. ``Core appliances'' include dishwashers, 
freezers, ranges, refrigerators, and clothes washers. Whirlpool and 
Maytag were allowed by the U.S. Department of Justice (DOJ) to complete 
a merger on March 31, 2006, after an investigation that focused 
primarily on residential laundry but with consideration of impacts 
across all product lines. Although opponents of the merger had asserted 
that the combined companies would control as much as 70 percent of the 
residential laundry market and as much as 50 percent of the residential 
dishwasher market,\14\ DOJ determined that the merger would not give 
Whirlpool excessive market power in the sale of its products and that 
any attempt to raise prices would likely be unsuccessful. In support of 
this claim, DOJ noted: (1) Other U.S. brands, including Sears Brands 
LLC (Kenmore), GE, and Frigidaire, are well established; (2) foreign 
manufacturers, including LG and Samsung, are gaining market share; (3) 
existing U.S. manufacturers are operating below production capacity; 
(4) the large home appliance retailers have alternatives available to 
resist price increase attempts; and (5) Whirlpool and Maytag 
substantiated large cost savings and other efficiencies that would 
benefit consumers. The Whirlpool-Maytag merger follows several other 
mergers and acquisitions in the home appliance industry. For example, 
Maytag acquired Jenn-Air Corporation in 1982, Magic Chef, Inc. in 1986, 
and Amana Appliances in 2001. Whirlpool acquired the KitchenAid 
division of Hobart Corporation in 1986. White Consolidated Industries 
(WCI)

[[Page 64448]]

acquired the Frigidaire division of General Motors Corporation in 1979, 
and AB Electrolux acquired WCI (and therefore Frigidaire) in 1986. See 
Chapter 3 of the TSD for more information regarding manufacturers of 
CCWs and residential dishwashers, dehumidifiers, and cooking products.
---------------------------------------------------------------------------

    \14\ P. Hussmann, ``Justice to Extend Maytag-Whirlpool Merger 
Review,'' Newton Daily News Online (Feb. 14, 2006).
---------------------------------------------------------------------------

    In addition, DOE considers the possibility of small businesses 
being impacted by the promulgation of energy conservation standards for 
CCWs and residential dishwashers, dehumidifiers, and cooking products. 
At this time, DOE is not aware of any small manufacturers, defined by 
the Small Business Administration as having 750 employees or fewer, who 
produce products that fall under this rulemaking and who, therefore, 
would be impacted by a minimum efficiency standard. Should any small 
business manufacturers of the four appliance products be identified, 
DOE will study the potential impacts on these small businesses in 
greater detail during the MIA, which it will conduct as a part of the 
NOPR analysis. See Chapter 3 of the TSD for more information regarding 
small business manufacturers of CCWs and residential dishwashers, 
dehumidifiers, and cooking products.
    Next, DOE identified distribution channels for each of the products 
covered by this rulemaking. For CCWs, DOE determined that the market 
consists of laundromats, private multi-family housing, and large 
institutions (e.g., military barracks, universities, and housing 
authorities). Most large institutions and a majority of private multi-
family housing (between 50 and 90 percent) do not purchase clothes 
washers directly. Rather, these organizations lease their laundry space 
to a third party known as a route operator. Route operators supply 
laundry equipment and maintain facilities in exchange for a percentage 
of the laundry revenue. Laundromats and some private building managers 
purchase or lease clothes washers directly from distributors. The main 
difference between route operators and distributors is the length of 
service provided to their clients. Route operators provide ongoing 
support while distributor support ends at the point of sale.
    The distribution chain for residential appliances, including 
dishwashers, dehumidifiers, and cooking products, differs from 
commercial products, since the majority of consumers purchase their 
appliances directly from retailers. These retailers include: (1) Home 
improvement, appliance, and department stores; (2) Internet retailers; 
(3) membership warehouse clubs; and (4) kitchen remodelers. DOE 
determined that over 93 percent of residential appliances are 
distributed from the manufacturer directly to a retailer. See Chapter 3 
of the TSD for more information regarding distribution channels for 
CCWs and residential dishwashers, dehumidifiers, and cooking products.
    DOE considers regulatory and non-regulatory initiatives that affect 
CCWs and residential dishwashers, dehumidifiers, and cooking products. 
NAECA established Federal standards for residential dishwashers, which 
were subsequently amended by DOE by a final rule published in the 
Federal Register on May 14, 1994. (56 FR 22250) NAECA established 
prescriptive standards for gas cooking products, requiring gas ranges 
and ovens with an electrical supply cord not to be equipped with 
constant burning pilots, and directed DOE to conduct two cycles of 
rulemakings to determine if more stringent standards are justified. (42 
U.S.C. 6295 (h)(1)-(2)) DOE issued a NOPR on March 4, 1994, proposing 
performance standards for gas and electric residential cooking 
products, including microwave ovens. 59 FR 10464. In accordance with 
its 1996 Process Rule, DOE refined its standards analysis of cooking 
products. With regard to gas cooking products, DOE focused on the 
economic justification for eliminating standing pilot lights. Partially 
due to the difficulty of conclusively demonstrating that elimination of 
standing pilot lights was economically justified, DOE issued a final 
rule on September 8, 1998, that covered only electric cooking products, 
including microwave ovens. 63 FR 48038. The final rule found that 
standards were not economically justified for electric cooking 
products. DOE never completed its standards rulemaking for gas cooking 
products.
    Section 136(e) of EPACT 20005 amends section 342 of EPCA, 42 U.S.C. 
6313, to add subsection (e) for CCWs. Likewise, section 135(c)(4) of 
EPACT 2005 amends section 325 of EPCA, 42 U.S.C. 6295, to add 
subsection (cc) for dehumidifiers. New subsection 342(e), 42 U.S.C. 
6313(e) establishes energy conservation standards for CCWs. Further, it 
requires that DOE issue a final rule by January 1, 2010, to determine 
whether the standards for CCWs should be amended. New subsection 
325(cc), 42 U.S.C. 6295(cc), establishes energy conservation standards 
for dehumidifiers based on a unit's capacity to extract moisture from 
the surrounding air (in pints/day). These Federally mandated standards 
for dehumidifiers will be the national standards when they take effect 
on October 1, 2007. In addition, EPACT 2005 requires that by October 1, 
2009, DOE issue a final rule for dehumidifiers to determine whether the 
standards should be amended. (EPACT 2005, section 135(c)(4)) Further, 
in the event that DOE fails to publish a final rule requiring new 
standards to take effect by October 1, 2012, EPACT 2005 also prescribes 
a new set of amended standards for dehumidifiers. (Id.)
    Prior to the passage of EPACT 2005, the following States proposed 
and adopted State-level efficiency regulations for CCWs that are 
identical, or very similar, to EPACT 2005 regulations: Arizona, 
California, Connecticut, Maryland, New Jersey, Oregon, Rhode Island, 
and Washington. The EPACT 2005 energy and water use standards for CCWs 
preempt any State efficiency standards since they became effective 
January 1, 2007.\15\ In addition to the efficiency standards discussed 
above, the State of California requires that commercial top-loading, 
semi-automatic clothes washers and commercial suds-saving clothes 
washers manufactured on or after January 1, 2005 have an unheated rinse 
water option.
---------------------------------------------------------------------------

    \15\ None of these States submitted a petition for waiver to 
DOE, seeking to maintain their existing efficiency standards for 
commercial clothes washers.
---------------------------------------------------------------------------

    DOE reviewed several voluntary programs that promote energy-
efficient CCWs, residential dishwashers, dehumidifiers, and cooking 
products in the United States. Many programs, including the Consortium 
for Energy Efficiency (CEE), Energy Star, and the Federal Energy 
Management Program (FEMP), establish voluntary energy conservation 
standards for these products. CEE issues voluntary specifications for 
CCWs and standard-sized dishwashers under its Commercial, Family-Sized 
Washer Initiative and Super-Efficient Home Appliance Initiative, 
respectively. Energy Star, a voluntary labeling program backed by the 
EPA and DOE, identifies energy efficient products through a 
qualification process. To qualify, a product must exceed Federal 
minimum standards by a specified amount, or if no Federal standard 
exists, exhibit selected energy-saving features. The Energy Star 
program works to recognize the top quartile of products on the market, 
meaning that approximately 25 percent of products on the market meet or 
exceed the Energy Star levels. Energy Star specifications exist for 
many products, including CCWs, dishwashers, and dehumidifiers. FEMP

[[Page 64449]]

works to reduce the cost and environmental impact of the Federal 
government by advancing energy efficiency and water conservation, 
promoting the use of distributed and renewable energy, and improving 
utility management decisions at Federal sites. FEMP helps Federal 
buyers identify and purchase energy efficient equipment, including 
CCWs, residential dishwashers, and microwave ovens. See Chapter 3 of 
the TSD for more information regarding regulatory and non-regulatory 
initiatives. During the engineering analysis (Chapter 5 of the TSD), 
efficiency levels specified by many of these initiatives will be 
analyzed during the generation of cost-efficiency curves.
    DOE reviewed data collected by the U.S. Census Bureau, EPA, and 
AHAM to evaluate annual residential appliance product shipment trends 
and the value of these shipments. As the number of new home starts and 
the percentage of consumers with multiple units of some appliances 
increases annually, the unit shipments of most appliances are expected 
to increase as well. The shipments of built-in dishwashers increased by 
over 76 percent from 1995 to 2005, while the shipments of portable 
dishwashers declined 35 percent in the same time period. After a period 
of decline from 1995 to 2002, shipments of dehumidifiers increased 
sharply in 2003 and have continued to rise through 2005. Shipments of 
dehumidifiers nearly doubled between 1995 and 2005. From 1995 to 2005, 
shipments of electric and gas free-standing ranges and surface cooking 
units, electric built-in ranges, and microwave ovens increased, while 
shipments of built-in gas ranges decreased. However, in real dollars, 
the value of shipments for the household appliance industry has 
declined by nearly 14 percent over the period from 1994 to 2005.
    The historical shipments data shown in Tables II.1, II.2, and II.3 
and the historical market saturation data shown in Table II.4 provide a 
better picture of the market for the four appliance products. The 
market saturation data indicate the percentage of the housing stock 
with the appliance. The data in Table II.4 also include for each of the 
given years the number of appliances in the housing stock. Because 
commercial clothes washers are not a household appliance, market 
saturation data are not provided. The historical shipments and market 
saturation data for dishwashers, dehumidifiers, and cooking products 
are from the 2005 AHAM Fact Books,\16\ while the commercial clothes 
washer historical shipments data are based on data provided to DOE by 
AHAM for the years 2002-2005 and Appliance Magazine for the years 1988-
1998.\17\
---------------------------------------------------------------------------

    \16\ AHAM, 2005 Fact Book, 2005. Washington, DC. Available for 
purchase at: http://www.aham.org/ht/d/Store/name/FACTBOOK.
    \17\ `Statistical Review'. Appliance Magazine, April, 1998, 
1999.

                        Table II.1.--Industry Shipments of Dishwashers and Dehumidifiers
                                   [Domestic and import in thousands of units]
----------------------------------------------------------------------------------------------------------------
                                                                    Dishwashers
                      Year                       ------------------------------------------------  Dehumidifiers
                                                     Built-In        Portable          Total
----------------------------------------------------------------------------------------------------------------
2005............................................           7,294             133           7,428           1,957
2004............................................           6,953             153           7,106           1,672
2003............................................           6,280             148           6,428           1,311
2002............................................           6,049             158           6,207             799
2001............................................           5,478             149           5,627             806
2000............................................           5,663             164           5,827             975
1999............................................           5,542             170           5,712             950
1998............................................           4,969             175           5,144           1,031
1997............................................           4,653             173           4,826             820
1996............................................           4,417             189           4,606             977
1995............................................           4,141             205           4,346           1,003
----------------------------------------------------------------------------------------------------------------


                                                   Table II.2.--Industry Shipments of Cooking Products
                                                       [Domestic and import in thousands of units]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                               Cooking products
                                                    ----------------------------------------------------------------------------------------------------
                                                                   Electric ranges                               Gas ranges
                        Year                        ----------------------------------------------------------------------------------------
                                                                            Surface                                     Surface               Microwave
                                                       Free-     Built-In   cooking     Total      Free-     Built-In   cooking     Total       ovens
                                                      standing               units                standing               units
--------------------------------------------------------------------------------------------------------------------------------------------------------
2005...............................................      4,685        973        542      6,201      3,139         64        560      3,762       13,862
2004...............................................      4,612        963        570      6,145      3,124         67        528      3,719       15,526
2003...............................................      4,238        841        543      5,622      2,897         67        455      3,419       14,274
2002...............................................      4,030        780        528      5,338      2,781         71        416      3,268       13,311
2001...............................................      3,842        726        498      5,066      2,580         72        384      3,036       13,446
2000...............................................      3,826        706        494      5,026      2,729         70        377      3,176       12,644
1999...............................................      3,785        705        493      4,983      2,698         72        367      3,137       11,422
1998...............................................      3,481        652        506      4,639      2,543         71        336      2,950       10,365
1997...............................................      3,177        617        446      4,240      2,391         73        280      2,744        8,883
1996...............................................      3,123        614        418      4,155      2,366         72        272      2,710        8,771
1995...............................................      2,931        598        389      3,917      2,391         84        240      2,715        8,162
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 64450]]


      Table II.3.--Industry Shipments of Commercial Clothes Washers
                          [Thousands of units]
------------------------------------------------------------------------
                          Year                                 Units
------------------------------------------------------------------------
2005....................................................             177
2004....................................................             178
2003....................................................             191
2002....................................................             175
2001....................................................             194
2000....................................................             215
1999....................................................             239
1998....................................................             265
1997....................................................             241
1996....................................................             232
1995....................................................             209
1994....................................................             205
1993....................................................             190
1992....................................................             188
1991....................................................             193
1990....................................................             225
1989....................................................             215
1988....................................................             213
------------------------------------------------------------------------


        Table II.4.--Appliance Market Saturations: Number of Households With Product (in Millions) and Percentage of U.S. Households With Product
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             1970                1982                1990                2001                2005
                       Product                       ---------------------------------------------------------------------------------------------------
                                                       Number    Percent   Number    Percent   Number    Percent   Number    Percent   Number    Percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers.........................................        12      18.9      37.2      44.5      50.3      53.9      61.8      59.3      80.2      73.7
Dehumidifiers.......................................        NA        NA       9.2        11      15.6      16.7      14.7      14.1      20.6      18.9
Electric Ranges/Cooktops*...........................      25.8      40.6      48.4        58      58.4      62.6      69.2      66.3        71      65.3
Gas Ranges/Cooktops*................................      36.6      57.7      35.7      42.7      36.1      38.7      39.4      37.8      42.2        39
Microwave Ovens.....................................      Neg.      Neg.      21.4      25.6      77.2      82.7      94.6   ** 90.7      97.2     89.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Cooktops not included in 1970 or 1982 data.
** Includes over-the-range and countertop microwave ovens.

    During the Framework public meeting, DOE solicited comments 
regarding existing databases to track CCW efficiencies. ALS commented 
that the existing CEC database contains useful data and should be 
reviewed. (Public Meeting Transcript, No. 5 at p. 44) As of March 2007, 
the CEC database had 626 entries for dishwashers and 196 entries for 
CCWs. This database, however, does not specify which models are 
current, and it does not appear to cover the entire range of dishwasher 
models. DOE also consulted the Energy Star database for residential 
clothes washers, dishwashers, and dehumidifiers. DOE subsequently used 
these data to identify units for reverse engineering tear-downs and 
other analysis. Whenever possible, DOE investigated the design options 
of the listed appliances, which then helped DOE design the interview 
guides for the MIA interviews with stakeholders to solicit comments 
about design options. DOE used the data for residential clothes washers 
as an additional means of validation for the CCW analysis.
    Natural Resources Canada (NRCan) publishes a database of electric 
cooking appliance performance. Although it is not completely 
representative of the current U.S. cooking products market, this 
database covers products available in the Canadian market, which 
overlaps with the U.S. market. Chapter 3 of the TSD presents data that 
detail the energy factors of standard and self-cleaning electric ranges 
and ovens, along with coil-element and smooth element electric 
cooktops.
    DOE also evaluated import and export trends for CCWs and 
residential dishwashers, dehumidifiers, and cooking products as 
reported by the U.S. Census Bureau and AHAM, as well as the market 
saturation for dishwashers, dehumidifiers, and cooking products 
according to AHAM. On the whole, major appliance unit imports increased 
1.8 percent in 2005 from 2004. Major appliance unit exports increased 
13.5 percent over the same period. In terms of market saturation, while 
the percentage of U.S. households with electric ranges and/or cooktops 
and microwave ovens has decreased slightly since 2001, the market 
saturation of dishwashers, dehumidifiers, and gas cooking products has 
increased. See Chapter 3 of the TSD for more information regarding 
historical shipments and market saturation.
    From AHAM data \18\18 and the U.S. Department of Labor's Consumer 
Price Index, DOE estimated average retail prices for residential 
appliances, including clothes washers, dishwashers, dehumidifiers, and 
cooking products. Although prices for electric and gas ranges have 
increased in the period from 1980 to 2005, the increase has been at a 
much slower rate than the annual rate of inflation. Prices of 
residential dishwashers, dehumidifiers, microwave ovens, and clothes 
washers have decreased in the same time period. DOE also developed the 
household appliance industry cost structure from publicly available 
information from the U.S. Census Bureau, the Annual Survey of 
Manufacturers (ASM), and the SEC 10-K reports filed by publicly-owned 
manufacturers. The statistics illustrate a steady decline in the number 
of production and non-production workers in the industry.
---------------------------------------------------------------------------

    \18\ Data submitted to DOE as part of this rulemaking, contained 
in DOE Docket No. EE-2006-STD-0127.
---------------------------------------------------------------------------

    Inventory levels, expressed both in dollars and as a percentage of 
value of shipments, have steadily declined since 1995 for the household 
appliance industry, according to the ASM. DOE obtained full-production-
capacity utilization rates from the U.S. Census Bureau, Survey of Plant 
Capacity from 1994 to 2004. Full production capacity is defined as the 
maximum level of production an establishment could attain under normal 
operating conditions. In the Survey of Plant Capacity report, the full 
production utilization rate is a ratio of the actual level of 
operations to the full production level. The full-production-capacity 
utilization rate for household appliances in aggregate, along with the 
rates for cooking appliances and household laundry appliances, show a 
decrease in utilization from 1994 to 2004, although trends in subsets 
of that time period have fluctuated. See Chapter 3 of the TSD for more 
information regarding retail pricing, industry cost structure, 
inventory levels, and production capacity utilization.

[[Page 64451]]

3. Technology Assessment
    In the technology assessment, DOE identifies technologies and 
design options that appear to be feasible means of improving product 
efficiency, and characterizes energy efficiency of residential 
dishwashers, dehumidifiers, and cooking products, and CCWs currently 
available in the marketplace. This assessment provides the technical 
background and structure on which DOE bases its screening and 
engineering analyses.
a. Dishwashers
    DOE identified technologies to increase the energy efficiency of 
residential dishwashers primarily from a review of the following three 
sources: (1) DOE's ANOPR initiating a standards rulemaking for 
dishwashers, published on November 14, 1994 (59 FR 56423); (2) recent 
information provided by trade publications; and (3) design data 
identified in manufacturer product offerings. Except where otherwise 
noted, design options are taken from the 1994 ANOPR. DOE derived the 
variable washing pressure and variable-speed drive technologies from 
the February 2006 edition of Appliance Magazine. DOE grouped these 
technologies together because they collectively address manufacturers' 
design tradeoffs between the mechanical soil removal function of the 
water and the cycle time and energy associated with the dishwasher 
pump. Condenser and fan/jet drying are technologies listed in one 
manufacturer's product offerings. DOE also identified supercritical 
carbon dioxide washing from the November 2005 issue of Appliance 
Magazine. It added low-standby-loss electronic controls based on DOE's 
analysis of controller standby power in dishwashers currently on the 
market.
    In addition to these design options, the multiple water 
organizations commented that DOE should consider a two-drawer design or 
similar option which would improve efficiency under partial loads. The 
multiple water organizations also believe DOE should consider any 
design option that would reduce pre-rinsing. (Multiple Water 
Organizations, No. 11 at p. 3) In interviews with manufacturers, DOE 
determined that two-drawer designs contain no control systems to link 
the operation of one drawer with another, so that each drawer acts in 
its own capacity as a compact-size dishwasher. Therefore, a two-drawer 
design cannot be considered as a design option. Minimizing consumer 
pre-rinsing depends on maintaining cleaning performance; there are no 
design options that specifically address pre-rinsing. Any design option 
that achieves energy efficiency improvements without incurring 
significant performance penalties will indirectly address pre-rinsing.
    DOE considered the design options that follow.
     Condenser drying
     Fan/jet drying
     Flow-through heating
     Improved fill control
     Improved food filter
     Improved motor efficiency
     Improved spray-arm geometry
     Increased insulation
     Low-standby-loss electronic controls
     Microprocessor controls and fuzzy logic, including 
adaptive or soil-sensing controls
     Modified sump geometry, with and without dual pumps
     Reduced inlet-water temperature
     Supercritical carbon dioxide washing
     Ultrasonic washing
     Variable washing pressure and flow rates
    DOE characterized energy efficiency as an EF, expressed as cycles/
kWh for dishwashers currently on the market via a survey of the CEC 
database of certified dishwashers.\19\
---------------------------------------------------------------------------

    \19\ Available online at: http://www.energy.ca.gov/appliances/appliance/excel_based_files/.
---------------------------------------------------------------------------

b. Dehumidifiers
    DOE has not previously conducted a comprehensive analysis of energy 
conservation standards for dehumidifiers because there are currently no 
Federal standards for these products. The first such standards become 
effective October 2007. To build a list of possible design options, DOE 
surveyed the marketplace for dehumidifier design options by reviewing a 
wide assortment of product literature, through discovery during the 
teardown analysis, during stakeholder interviews, and by using its 
previous room-air conditioning rulemaking analysis as a source for 
further design options. DOE identified the following design options as 
possible means to improve dehumidifier performance.
     Built-in hygrometer/humidistat
     Improved compressor efficiency
     Improved condenser performance
     Improved controls
     Improved defrost methods
     Improved demand-defrost controls
     Improved evaporator performance
     Improved fan and fan-motor efficiency
     Improved flow-control devices
     Low-standby-loss electronic controls
     Washable air filters
    Based on product literature research, comments, and teardown 
analysis, DOE has identified compressor, heat exchanger, and fan motor 
improvements as the most common ways by which manufacturers improve the 
energy efficiency of their dehumidifiers as measured by the DOE test 
procedure.
    During the Framework public meeting and Framework comment period, 
stakeholders asked that DOE add improved control systems to the 
dehumidifier design options list. ACEEE and other energy efficiency 
advocates recommended that improved controls (such as fuzzy logic) be 
added to the design option list to better control the dehumidifier. 
(Public Meeting Transcript, No. 5 at p. 73; Joint Comment, No. 9 at p. 
4) DOE agrees that such control technologies offering potential energy 
savings are being implemented by manufacturers, and, therefore, it 
added improved controls as a design option for dehumidifiers.
c. Cooking Products
    DOE most recently analyzed energy conservation standards for 
cooking products in 1996 and 1997. In the 1997 analysis, DOE analyzed 
only gas cooking products to determine the technical and economic 
feasibility of eliminating standing pilot lights. In its prior 
analysis, DOE identified many technologies that have the potential for 
improving gas and electric cooking efficiency. It has considered all of 
these in this rulemaking. In addition, DOE identified low-standby-loss 
electronic controls as a design option for several cooking products, 
based on review of standby power data for microwave ovens and the 
potential applicability to conventional cooking products as well. 
Radiant elements for smooth electric cooktops, which were included in 
the previous analysis, were not considered as a design option for this 
rulemaking because manufacturer data provided to DOE in the prior 
rulemaking indicated that this technology does not offer an efficiency 
improvement over the baseline according to the DOE test procedure. DOE 
considered the technologies that follow.
    For gas cooktops:
     Catalytic burners
     Electronic ignition
     Insulation
     Radiant gas burners
     Reduced excess air at burner
     Reflective surfaces
     Sealed burners
     Thermostatically-controlled burners
    For open (coil) element electric cooktops:
     Electronic controls

[[Page 64452]]

     Improved contact conductance
     Insulation
     Low-standby-loss electronic controls
     Reflective surfaces
    For smooth element electric cooktops:
     Electronic controls
     Halogen elements
     Induction elements
     Low-standby-loss electronic controls
    For gas and electric ovens:
     Bi-radiant oven (electric only)
     Forced convection
     Halogen lamp oven (electric only)
     Improved and added insulation
     Improved door seals
     Low-standby-loss electronic controls
     No oven-door window
     Oven separator
     Pilotless ignition (gas only)
     Radiant burner (gas only)
     Reduced conduction losses
     Reduced thermal mass
     Reduced vent rate
     Reflective surfaces
     Steam cooking
    DOE received several comments that the design options from the 
previous rulemaking are still relevant because there have been no major 
technological breakthroughs in conventional cooking products since that 
time. AHAM recommended looking at the same design options because there 
has been no change in the market other than for induction cooking, 
which according to AHAM is so expensive it should not be considered. 
(Public Meeting Transcript, No. 5 at p. 93) ACEEE and the Joint Comment 
agreed with retaining the design options from the previous rulemaking, 
stating that only modest updates are needed for conventional cooking 
products. (Public Meeting Transcript, No. 5 at p. 97; Joint Comment, 
No. 9 at p. 3) Whirlpool stated that many of the previous design 
options either are not economically justifiable or have safety issues 
(Public Meeting Transcript, No. 5 at p. 94), while Wolf commented that 
the cost and risk of modifying today's well-performing products with 
questionable design options should not be underestimated. (Wolf, No. 6 
at p. 2) DOE believes the aforementioned design options are still 
relevant and has retained them for analysis. Consumer safety is a 
screening criterion that DOE has applied in the screening analysis 
(Chapter 4 of the TSD), and DOE assessed economic viability in the LCC 
and PBP analyses (Chapter 8 of the TSD).
    For microwave ovens, in the previous rulemaking, DOE identified all 
of the technologies listed below, with the exception of cooking 
sensors, dual magnetrons, and low-standby-loss electronic controls. DOE 
identified cooking sensors from product literature, while dual 
magnetrons were identified in the February 2006 edition of Appliance 
Design as a means to decrease cooking times. DOE identified low-
standby-loss electronic controls by reviewing AHAM data for standby 
power. In addition, DOE received comments stating that it needed to 
consider sensors and controls that detect completion of the cooking 
process and variable power supplies that adjust power to the magnetron 
during cooking. (Public Meeting Transcript, No. 5 at p. 91; Joint 
Comment, No. 9 at p. 3) DOE did not receive any information regarding 
the energy efficiency impacts of variable power supplies, and, 
therefore, will limit the design option relating to variable magnetron 
output to dual magnetrons. In view of the above, DOE considered the 
design options that follow.
     Added insulation
     Cooking sensors
     Dual magnetrons
     Eliminate or improve ceramic stirrer cover
     Improved fan efficiency
     Improved magnetron efficiency
     Improved power supply efficiency
     Low-standby-loss electronic controls
     Modified wave guide
     Reflective surfaces
    In written comments, AHAM stated that DOE considered many design 
options for microwave ovens in its 1998 rule and that, after extensive 
analysis, DOE determined that no design options were technologically 
feasible or economically justifiable. AHAM also stated that there have 
been no technological or economic breakthroughs since the previous 
determination that would change the previous conclusion. (AHAM, No. 17 
at p. 1) However, ACEEE disagreed, stating that there have been some 
significant changes in microwave oven technology since the prior 
rulemaking. Thus, it stated that the previous design options need to be 
reviewed. (Public Meeting Transcript, No. 5 at p. 97)
    During the Framework public meeting and Framework comment period, 
DOE received comments that the lack of efficiency data for microwave 
ovens would hinder DOE's ability to establish efficiency levels, and 
that DOE should conduct a test program specifically to obtain such 
efficiency data since it would be difficult for the manufacturers to do 
so themselves. Whirlpool stated that manufacturers are not using the 
microwave oven test procedure and, as a result, there is a lack of 
efficiency data. (Public Meeting Transcript, No. 5 at p. 86) Whirlpool 
commented that the absence of a microwave oven energy efficiency 
standard has resulted in a dearth of data on microwave ovens. 
(Whirlpool, No. 10 at p. 10). ACEEE commented that, because there are 
very few data on microwave ovens, the baseline efficiency level needs 
to be updated from the numbers in the previous rulemaking. (Public 
Meeting Transcript, No. 5 at p. 91) ACEEE further stated that the 
process to update the data should include collecting as much 
information from manufacturers as possible, then supplementing these 
data with product testing. The purpose of these test data, according to 
ACEEE, should be to assess the validity of the efficiency levels 
analyzed in the previous rulemaking rather than to quantify a new cost-
efficiency relationship. (Public Meeting Transcript, No. 5 at pp. 142-
143) AHAM concurred with DOE's intention to conduct microwave oven 
efficiency testing as part of this rulemaking because it would take 
industry a significant amount of time to provide efficiency data. AHAM 
suggested DOE may want to commission the National Institute of 
Standards and Technology or some other source to do an independent 
evaluation. (Public Meeting Transcript, No. 5 at p. 143) The Joint 
Comment stated that because microwave oven technology has changed 
substantially since the previous rulemaking, DOE should quickly collect 
current data on product performance and features from manufacturers, 
and fill in gaps where necessary. Manufacturers could then provide 
incremental cost data at the selected efficiency levels. (Joint 
Comment, No. 9 at p. 3)
    Stakeholders questioned which microwave oven test procedure should 
be used. he current DOE test procedure requires manufacturers to test 
to IEC 705-1988, Household Microwave Ovens--Methods for Measuring 
Performance, and Amendment 2-1993. The current IEC test procedure is 
designated IEC 60705 Edition 3.2-2006. Differences between the 1988 and 
current IEC test procedures can result in differences in measured 
microwave oven efficiency. In comments received during the Framework 
public meeting, Sharp asked which test procedure would be used to 
define microwave oven efficiency. (Public Meeting Transcript, No. 5 at 
p. 141)
    Recognizing the lack of existing energy efficiency data, AHAM 
conducted a test program on 21

[[Page 64453]]

microwave ovens from nine manufacturers, representing a broad spectrum 
of units available in the marketplace and incorporating a variety of 
capacities and features. AHAM tested microwave oven efficiency 
according to DOE's test procedure and standby power according to IEC 
62301-2005, Household Electrical Appliances--Measurement of Standby 
Power. AHAM found no correlation between energy efficiency and rated 
output power or cavity volume. Efficiencies ranged from 54.8 percent to 
61.8 percent. Given the uncertainties in the test procedure, resulting 
in large test-to-test variations, DOE considers these efficiencies to 
be comparable to the efficiencies in the prior rulemaking's analysis. 
Standby power also showed no correlation with rated output power, 
varied significantly from unit to unit, and ranged from 1.5 watts to 
5.8 watts. The FEMP database of microwave oven standby power indicates 
that 90 percent of reported microwave ovens consume greater than 2 
watts in standby mode.
    The energy efficiency data upon which DOE based its analysis was 
measured according to the DOE test procedure, which references IEC 705-
1988 and Amendment 2-1993. DOE does not plan to revise the test 
procedure to incorporate IEC 60705 Edition 3.2-2006, to measure the 
cooking efficiency, because DOE is unaware of any efficiency comparison 
data that would justify such a change. However, as discussed above, DOE 
is examining changes to the test procedure to measure standby-power 
use.
d. Commercial Clothes Washers
    DOE identified technologies to improve the energy efficiency of 
CCWs. The majority of these technologies are described in the 1996 
report entitled Design Options for Clothes Washers. (LBNL-47888, 
October 1996, Lawrence Berkeley National Laboratory) Steam washing and 
improved horizontal-axis-washer drum design were identified in the 
September 2005 edition of Appliance Magazine. DOE identified the low-
standby-power design option during its engineering analysis review of 
all AHAM product classes. It added spray rinse and advanced agitator 
design options in response to comments received following the Framework 
public meeting. DOE considered the design options that follow.
     Adaptive control systems
     Added insulation
     Advanced agitation concepts for vertical-axis machines
     Automatic fill control
     Bubble action
     Direct-drive motor
     Electrolytic disassociation of water
     Horizontal-axis design
     Horizontal-axis design with recirculation
     Improved fill control
     Improved horizontal-axis-washer drum design
     Improved water extraction to lower remaining moisture 
content
     Increased motor efficiency
     Low-standby-power design
     Ozonated laundering
     Reduced thermal mass
     Spray rinse or similar water-reducing rinse technology
     Steam washing
     Suds savings
     Thermostatically-controlled mixing valves
     Tighter tub tolerance
     Ultrasonic washing
    The Multiple Water Organizations requested that DOE add the 
following design options: (1) Spray rinse, (2) nutating or other 
advanced agitators, (3) advanced power supplies, and (4) steam 
cleaning. (Multiple Water Organizations, No. 11 at p. 1 ) ACEEE 
requested that DOE consider more water-saving design options (e.g., 
spray rinse), in addition to energy-saving design options. (Public 
Meeting Transcript, No. 5 at p. 51) In a joint letter, the Joint 
Comment requested the addition of a spray wash design option. (Joint 
Comment, No. 9 at p. 5)
    DOE has added advanced agitation concepts for vertical-axis 
washers. These agitation systems include nutating plates, side-mounted 
mounted impellers, and any other agitation technology that eliminates 
the need for the traditional large and centrally-mounted agitator found 
in vertical-axis clothes washer tubs. While such agitation systems are 
currently only found on high-end residential clothes washers, they have 
the potential to be adapted for CCWs and can reduce the water 
consumption of vertical-axis clothes washers substantially.
    DOE has also added spray rinse as a design option but notes that 
this design option may not be appropriate for the commercial laundry 
market. ALS commented that some water-reduction design options (such as 
the ``innovative rinse technology'' in its vertical-axis models) have 
faced strong opposition from some consumers. (ALS, No. 19 at p. 1) 
Whirlpool noted that commercial customers tend to overload their 
washers, which leads to unacceptable rinsing performance. (Whirlpool, 
No. 10 at p. 3) Given that the industry has fielded washers with rinse-
water use reduction technologies (such as spray rinse) in the past and 
continues to develop other water saving approaches, DOE will consider 
this design option.
    During the Framework public meeting, stakeholders asked DOE whether 
it will address standby power in CCWs. Potomac suggested that DOE 
consider technologies that limit standby power in CCWs. Such design 
options could include improved power supplies or other technologies 
that limit power consumption in standby mode. (Public Meeting 
Transcript, No. 5 at p. 52) DOE recognizes the importance of studying 
all aspects of power consumption by consumer appliances. With the 
growing trend of upgrading consumer appliances to use electronic 
controllers, standby power has become a topic of interest across all 
appliance categories.
    During the Framework public meeting, DOE solicited comments 
regarding existing databases to track CCW efficiencies. ALS commented 
that the existing CEC database is a good source of information and that 
DOE should review it. (Public Meeting Transcript, No. 5 at p. 44) DOE 
subsequently used that database and others to identify CCWs that meet 
various modified energy factor (MEF) and WF levels. Whenever possible, 
DOE investigated the design options of the listed washers, which then 
helped DOE design the interview guides for the MIA interviews with 
stakeholders to solicit comments about design options.
    Additional detail on the technology assessment can be found in 
Chapter 3 of the TSD.

B. Screening Analysis

1. Purpose
    The purpose of the screening analysis is to evaluate the design 
options that improve the efficiency of a product, in order to determine 
which options to consider further and which options to screen out 
because they may not be technologically feasible, may exhibit 
practicability problems (related to manufacture, installation, or 
service), may result in adverse impact on product utility or product 
availability, or may have an adverse impact on health or safety. DOE 
consults with industry, technical experts, and other interested parties 
in developing a list of design options for consideration. DOE then 
applies the following set of screening criteria to determine which 
design options are unsuitable for further consideration in the 
rulemaking (10 CFR Part 430, Subpart C, Appendix A at 4(a)(4) and 
5(b)).
a. Technological Feasibility
    DOE will consider technologies incorporated in commercial products 
or in working prototypes to be technologically feasible.

[[Page 64454]]

b. Practicability To Manufacture, Install, and Service
    If mass production of a technology in commercial products and 
reliable installation and servicing of the technology could be achieved 
on the scale necessary to serve the relevant market at the time of the 
effective date of the standard, then DOE will consider that technology 
practicable to manufacture, install, and service.
c. Adverse Impacts on Product Utility or Product Availability
    If DOE determines a technology to have significant adverse impact 
on the utility of the product to significant subgroups of consumers, or 
to result in the unavailability of any covered product type with 
performance characteristics (including reliability), features, sizes, 
capacities, and volumes that are substantially the same as products 
generally available in the U.S. at the time, it will not consider this 
technology further.
d. Adverse Impacts on Health or Safety
    If DOE determines that a technology will have significant adverse 
impacts on health or safety, it will not consider this technology 
further.
2. Design Options
a. Dishwashers
    For dishwashers, DOE screened out reduced inlet-water temperature, 
supercritical carbon dioxide washing, and ultrasonic washing 
technologies, for the reasons that follow.
    Reduced inlet-water temperature requires that dishwashers tap the 
cold water line for the water supply, which would require significant 
alteration of existing dishwasher installations in order to accommodate 
newly-purchased units incorporating this design option. Whirlpool 
commented that such a retrofit of existing residential plumbing 
necessary to accommodate a reduced inlet-water temperature design would 
be costly, and, therefore, DOE should eliminate this design option. 
(Whirlpool, No. 10 at p. 4) DOE agrees that this design option does not 
meet the screening criterion of practicability to install. Therefore, 
DOE screened out reduced inlet-water temperature from further analysis. 
AHAM supported this decision. (AHAM, No. 14 at p. 8)
    Supercritical carbon dioxide washing, in which supercritical carbon 
dioxide dissolves grease from the dishware instead of conventional 
detergent and water, is in the research stage, so DOE believes it would 
not be practicable to manufacture, install, and service at the time of 
the effective date of an amended standard. Furthermore, it is also not 
yet possible to assess whether it will have any adverse impacts on 
equipment utility to consumers or equipment availability, or any 
adverse impacts on consumers' health or safety. Therefore, DOE screened 
out supercritical carbon dioxide washing from further analysis.
    For ultrasonic washing, high frequency energy input into the wash 
water creates cavitation bubbles that remove soil from the dishware via 
mechanical scrubbing action. With this technology, consumer utility is 
decreased due to the potential for the ultrasonic cleaning action to 
damage fragile dishware and due to the perception that the low 
temperatures do not sterilize dishes. Whirlpool also commented that 
ultrasonic dishwashing is beyond the technological scope of current 
product development. (Whirlpool, No. 10 at p. 4) Since no manufacturer 
currently produces ultrasonic dishwashers, it is impossible to assess 
whether this design option would have any impacts on consumer health or 
safety, or product availability. Therefore, DOE screened out ultrasonic 
dishwashing from further analysis. In comments submitted after the 
Framework public meeting, AHAM agreed that DOE should eliminate 
ultrasonic dishwashing. (AHAM, No. 14 at p. 8) Table II.5 lists the 
dishwasher design options that DOE has retained for analysis.

          Table II.5.--Retained Design Options for Dishwashers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Condenser drying.
2. Fan/jet drying.
3. Flow-through heating.
4. Improved fill control.
5. Improved food filter.
6. Improved motor efficiency.
7. Improved spray-arm geometry.
8. Increased insulation.
9. Low-standby-loss electronic controls.
10. Microprocessor controls and fuzzy logic, including adaptive or soil-
 sensing controls.
11. Modified sump geometry, with and without dual pumps.
12. Variable washing pressures and flow rates.
------------------------------------------------------------------------

    According to Whirlpool, soil sensors have contributed to 
significant dishwasher water and energy savings. However, Whirlpool is 
unaware of any further technological breakthroughs which would 
dramatically change the energy consumption of dishwashers. 
Approximately 90 percent of dishwashers are currently Energy Star-
qualified. (Whirlpool, No. 10 at p. 1) DOE has noted that many 
dishwashers are able to meet Energy Star requirements without the use 
of a soil sensor. It may be assumed that the incorporation of soil 
sensors to such models offers the potential for additional energy 
savings. DOE also notes that there are multiple technologies that can 
be used by themselves or to complement others to determine soiling 
levels inside a dishwasher. For example, it is possible to use a 
pressure sensor, rather than the more typical turbidity sensors, to 
detect clogging of a filter to infer soil loads. The maximum 
technologically feasible (``max-tech'') dishwasher that DOE 
investigated went a step further, featuring both a turbidity and a 
pressure sensor, implying a benefit from using both sensor 
technologies. Since there are many approaches to and levels of 
sophistication of soil sensing may be taken to depending on the 
underlying dishwasher platform, DOE will retain soil sensing for 
further analysis.
    Whirlpool also stated that variable washing pressures and flow 
rates and condenser drying are beyond the technological scope of 
current product development, and therefore DOE should eliminate them 
from further analysis. (Whirlpool, No. 10 at p. 4) AHAM stated without 
elaboration that condenser drying should be eliminated from the 
analysis. (AHAM, No. 14 at p. 8) In reviewing current dishwasher 
models, DOE noted multiple instances in which manufacturer 
specifications indicate variable washing pressures and flow rates. For 
example, such a strategy may include alternating wash water to the top 
and bottom racks. In addition, DOE is aware of at least one dishwasher 
platform on the market with true condensation drying, in which 
relatively cool ambient air is drawn across the outside of the 
stainless steel dishwasher cavity, providing a surface on which 
moisture from the hotter dishware can condense. Since variable washing 
pressures and flow rates and condenser drying are already in wide 
distribution, DOE will retain these design options for further 
analysis.
    AHAM also requested that DOE replace the term ``fan/jet drying'' 
with the term ``fan-assist drying'' and clarify the term ``flow-through 
heating.'' (AHAM, No. 14 at p. 8) DOE believes that the change to fan-
assist drying is appropriate, and will designate the design option in 
further analyses accordingly.
    ``Flow-through heating'' is differentiated from conventional 
dishwasher heating by the positioning of the heating element. 
Conventional dishwasher heaters use a tubular electric resistance 
element positioned inside the dishwasher cavity, above the sump, where 
it is exposed to the wash

[[Page 64455]]

and rinse water. Flow-through heaters pass the water through a metallic 
tube around which a resistive heating element is wrapped. Consequently, 
less water is typically required in the dishwasher sump for flow-
through heaters since they form an integrated part of the water flow 
path and do not require high levels of standing water above the sump, 
as do tubular heating elements. Therefore, the potential exists for 
dishwashers using flow-through heating to have reduced water and energy 
consumption.
b. Dehumidifiers
    For dehumidifiers, all technologies meet the screening criteria.
    Table II.6 lists the dehumidifier design options that DOE has 
retained for analysis.

         Table II.6.--Retained Design Options for Dehumidifiers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Built-in hygrometer/humidistat.
2. Improved compressor efficiency.
3. Improved condenser performance.
4. Improved controls.
5. Improved defrost methods.
6. Improved demand-defrost controls.
7. Improved evaporator performance.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.
10. Low-standby-loss electronic controls.
11. Washable air filters.
------------------------------------------------------------------------

c. Cooking Products.
    For cooking products, Whirlpool commented that DOE should eliminate 
from this analysis all design options that DOE eliminated in the 
previous rulemaking for reasons of feasibility, cost, and/or consumer 
safety. (Whirlpool, No. 10 at pp. 5-7) DOE will evaluate each design 
option again, and only will eliminate from further consideration those 
technologies that fail to meet one or more of the screening criteria.
1. Cooktops and Ovens
    For gas cooktops, DOE screened out catalytic burners, radiant gas 
burners, reduced excess air at burner, and reflective surfaces for the 
reasons that follow.
    DOE is not aware of any commercialized catalytic burners for gas 
cooktops. Therefore, DOE believes they would not be practicable to 
manufacture, install, and service at the time of the effective date of 
an amended standard. Also, because this technology is in the research 
stage, it is not possible to assess whether it will have any adverse 
impacts on equipment utility to consumers or equipment availability, or 
any adverse impacts on consumers' health or safety. Therefore, DOE has 
decided to exclude catalytic burners from further analysis.
    In the previous rulemaking, manufacturers concluded that infrared 
jet-impingement radiant gas burners would not be able to comply with 
the ANSI Standard Z21.1-2005, Household Cooking Gas Appliances. Field 
testing had shown that users were unable to turn down the burner 
satisfactorily, which indicated a potential health and safety risk. 
More recently, a silicon carbide radiant burner has been tested to the 
Japanese Industrial Standard (JIS) S 2103-1996, Gas Burning Appliances 
for Domestic Use, but there is no data to evaluate whether this burner 
would conform to the ANSI standard since it is not commercially 
available in the U.S. Due to potential impacts on consumer health and 
safety, DOE screened out radiant gas burners from further analysis.
    Reduced excess air at the burner has not been definitively shown to 
increase efficiency. Also, because the technology has not been 
commercialized, DOE believes it would not be practicable to 
manufacture, install, and service at the time of the effective date of 
an amended standard. In addition, DOE cannot assess adverse impacts on 
consumers' utility, health, or safety or equipment availability for 
this technology. Further, Whirlpool suggests there are combustion-
related issues with reducing excess air. (Public Meeting Transcript, 
No. 5 at p. 94) DOE agrees that reducing excess air at the burner 
increases the possibility of adverse conditions such as poor flame 
quality and elevated carbon monoxide levels, which would suggest 
adverse impacts on consumers' utility, health, and safety. For these 
reasons, DOE screened out reduced excess air at the burner from further 
analysis.
    In the previous rulemaking, manufacturers reported adverse impacts 
on consumer utility due to the requirement for regular and careful 
cleaning of reflective surfaces, and this concern remains at present. 
In addition, since this technology has still not been commercialized, 
DOE cannot assess the impacts on consumer health and safety or 
equipment availability. Therefore, DOE screened out reflective surfaces 
for gas cooktops from further analysis.
    Table II.7 lists the gas cooktop design options that DOE has 
retained for analysis.

          Table II.7.--Retained Design Options for Gas Cooktops
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Electronic ignition.
2. Insulation.
3. Sealed burners.
4. Thermostatically-controlled burners.
------------------------------------------------------------------------

    The Joint Comment agreed with the inclusion of electronic ignition 
for gas ranges, and thereby for gas cooktops and ovens. They stated 
that earlier analysis found significant, cost-effective savings 
achieved by eliminating pilot lights. (Joint Comment, No. 9 at p. 3)
    For electric open (coil) cooktops, DOE screened out reflective 
surfaces, for the reasons that follow.
    In the previous rulemaking, manufacturers reported adverse impacts 
on consumer utility due to the requirement for regular and careful 
cleaning of reflective surfaces, and this concern remains at present. 
Furthermore, because this technology has still not been commercialized, 
DOE cannot assess its impacts on consumer health and safety or 
equipment availability. Therefore, DOE screened out reflective surfaces 
from further analysis for electric coil cooktops.
    Table II.8 lists the electric open (coil) cooktop design options 
that DOE has retained for analysis.

  Table II.8.--Retained Design Options for Electric Open (Coil) Element
                                Cooktops
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Electronic controls.
2. Improved contact conductance.
3. Insulation.
4. Low-standby-loss electronic controls.
------------------------------------------------------------------------

    For electric smooth cooktops, all technologies meet the screening 
criteria.
    Table II.9 lists the electric smooth cooktop design options that 
DOE has retained for analysis.

    Table II.9.--Retained Design Options for Electric Smooth Element
                                Cooktops
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Electronic controls.
2. Halogen elements.
3. Induction elements.
4. Low-standby-loss electronic controls.
------------------------------------------------------------------------

    For ovens, DOE screened out added insulation, bi-radiant oven, 
halogen lamp oven, no oven door window, oven separator, reduced thermal 
mass, and reflective surfaces, for the reasons that follow.
    Although some analyses have shown reduced energy consumption by 
increasing the thickness of the insulation in the oven cabinet walls 
and doors from two inches to four inches,

[[Page 64456]]

consumer utility would be negatively impacted by the necessary 
reduction in cavity volume to maintain the same oven footprint and 
overall cabinet volume. Therefore, DOE screened out added insulation. 
The improved insulation design option, however, will be retained, 
because insulation with a higher density (i.e., greater insulating 
value) does not require additional space and thus would not impact oven 
cavity size.
    The last working prototype of a bi-radiant oven known to DOE was 
tested in the 1970s. The technology requires a low-emissivity cavity, 
electronic controls, and highly absorptive cooking utensils. The need 
for specialized cookware and cavity maintenance issues negatively 
impact consumer utility. Therefore, DOE screened out bi-radiant ovens 
from further analysis.
    While GE currently markets a line of electric ovens that 
incorporates halogen elements along with conventional resistance 
heating elements, microwave heating, and, optionally, a convection 
system, DOE is not aware of any ovens that utilize halogen lamps alone 
as the heating element, and no data were found or submitted to 
demonstrate how efficiently halogen elements alone perform relative to 
conventional ovens. DOE believes that it would not be practicable to 
manufacture, install, and service halogen lamps for use in consumer 
cooking products on the scale necessary to serve the relevant market at 
the time of the standard's effective date. Therefore, DOE screened out 
halogen lamp ovens.
    The previous rulemaking's analysis reported a small annual energy 
savings associated with no oven door window, but that consumer 
practices of opening the door to inspect the food while cooking could 
negate any benefit. EEI commented during the Framework public meeting 
that DOE should eliminate the no oven door window design option due to 
the potential impact on utility and safety, and it is likely that the 
technology is not a feasible option for most ovens. EEI also suggested 
evaluating double-pane or similar oven door windows. (Public Meeting 
Transcript, No. 5 at p. 94; EEI, No. 7 at p. 6) DOE agrees that reduced 
consumer utility along with decreased safety due to the additional door 
openings justify elimination of this design option from further 
analysis. In addition, DOE addresses the efficiency impact of double-
pane or other highly insulated oven door windows by means of the 
reduced conduction losses design option, which has been retained for 
further analysis.
    An oven separator has been researched but has never been put into 
production. Manufacturers stated during the previous rulemaking that a 
separator could not be economically designed for conventional gas 
ovens. The use of a separator in electric ovens would require the 
installation of an additional element and a non-conventional control 
system. Manufacturers also stated that it would be difficult to obtain 
Underwriters Laboratory and AGA approvals and meet existing ANSI 
standards because of the effect the separator would have on safety and 
performance. Manufacturers also stated that consumer acceptance would 
probably be low because appliances such as microwave and toaster ovens 
already exist to cook small loads. In addition, the separator would 
have to be designed to be ``fool-proof'' to prevent consumers from 
accidentally installing it incorrectly. With regard to energy use, the 
additional metal added to the oven by the separator (increased thermal 
mass) might result in increased energy losses, although data provided 
by AHAM indicated an increase in efficiency of approximately 0.82 
percentage points in an electric oven. However, the anticipated 
negative impacts on consumer utility and safety, along with 
practicability to manufacture, resulted in DOE screening out the oven 
separator from further analysis. Whirlpool expressed support for 
elimination of this design option, mentioning consumer safety as one of 
many issues. (Public Meeting Transcript, No. 5 at p. 95) For example, 
safety issues could arise in a gas oven if the separator is incorrectly 
installed, resulting in improper burner operation.
    In the previous rulemaking, manufacturers commented that a thermal 
mass reduction in ovens was not possible without compromising 
structural integrity (during both use and transportation) and 
increasing heat losses. Although tests by the Gas Research Institute 
(GRI) showed a small efficiency improvement, the issues of structural 
integrity and associated consumer product safety led DOE to eliminate 
thermal mass reduction from further analysis.
    Manufacturers stated in the previous rulemaking that reflective 
surfaces degrade throughout the life of the oven, particularly for 
self-cleaning ovens, and GRI reported tests that showed this design 
option can actually result in a decrease of energy efficiency. The 
uncertainty in energy savings, coupled with a lack of sophistication in 
the technology in terms of maintaining the reflective surfaces over the 
lifetime of the oven, led DOE to eliminate this technology from further 
analysis.
    Table II.10 lists the gas and electric oven design options that DOE 
has retained for analysis.

    Table II.10.--Retained Design Options for Gas and Electric Ovens
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Forced convection.
2. Improved door seals.
3. Improved insulation.
4. Low-standby-loss electronic controls.
5. Pilotless ignition (gas only).
6. Radiant burner (gas only).
7. Reduced conduction losses.
8. Reduced vent rate.
9. Steam cooking.
------------------------------------------------------------------------

    The Joint Comment recommended that DOE study the energy used by 
ignition devices in gas ovens. (Joint Comment, No. 9 at p. 3) DOE will 
include the gas energy consumption of pilot lights and electrical 
energy consumption of pilotless ignition in the engineering analysis 
(see Chapter 5 of the TSD).
2. Microwave Ovens
    For microwave ovens, all technologies meet the screening criteria.
    Table II.11 lists the microwave oven design options that DOE has 
retained for analysis.

        Table II.11.--Retained Design Options for Microwave Ovens
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Added insulation.
2. Cooking sensors.
3. Dual magnetrons.
4. Eliminate or improve ceramic stirrer cover.
5. Improved fan efficiency.
6. Improved magnetron efficiency.
7. Improved power supply efficiency.
8. Low-standby-loss electronic controls.
9. Modified wave guide.
10. Reflective surfaces.
------------------------------------------------------------------------

    AHAM submitted written comments on the microwave oven design 
options. For improved fan efficiency, AHAM commented that, since the 
fan accounts for less than 2 percent of the total energy consumption in 
the microwave oven, a high efficiency fan would improve energy factor 
by less than 0.5 percent. Therefore, AHAM argued that efficient fans 
are not economically justified. (AHAM, No. 17 at pp. 2-3) However, AHAM 
did not provide any data that supported their conclusion of a lack of 
economic justification. Therefore, DOE will consider improved fan 
efficiency in its analysis.
    According to AHAM, considerable effort has already been expended to 
optimize magnetron efficiency.

[[Page 64457]]

Manufacturers' specifications indicate that typical efficiency is about 
73 percent with only a plus or minus 2 percentage point variance. Thus, 
AHAM argued that there is little opportunity to improve microwave 
energy efficiency for manufacturers using magnetrons. (AHAM, No. 17 at 
p. 3) A literature review that DOE performed, however, determined that 
oscillation efficiencies of up to 78 percent have been reported. DOE 
has decided to retain improved magnetron efficiency for analysis, 
because this design option: (1) Is technologically feasible; (2) is 
practicable to manufacture, install, and service; (3) does not result 
in loss of product utility or product availability; and (4) does not 
have adverse impacts on health or safety.
    AHAM commented that there are two types of high-voltage power 
supplies used in microwave ovens, as described below. The most common 
type is the inductive capacitance transformer, which has an efficiency 
of about 82 percent. More expensive inverter-based power supplies are 
about 84 percent efficient. Higher efficiency general purpose 
transformers do not have stable enough output power for microwave oven 
application. AHAM stated that, among the units tested, there was no 
correlation between power supply type and cooking efficiency. AHAM also 
does not believe there is a cost-effective opportunity for improving 
the efficiency of the power supply. (AHAM, No. 17 at p. 3) However, 
AHAM did not submit any data demonstrating a lack of correlation 
between power supply type and cooking efficiency or refuting economic 
justification. Therefore, DOE will consider improved power supply 
efficiency in its analysis, during which it will assess economic 
viability.
    For reflective surfaces, AHAM commented that manufacturers are 
already using surface finishes to optimize efficiency. Also, AHAM 
stated that proper oven cavity design would obviate the need to add any 
metallic plates inside the cavity to match the highest oscillation 
impedance of the magnetron. (AHAM, No. 17 at p. 2) Testing by 
manufacturers, however, has shown that a high-grade stainless steel or 
reflective material steel coating can improve efficiency by 0.5 percent 
over painted cold-rolled steel. Since DOE is aware of data 
demonstrating efficiency improvement as a function of surface 
reflectivity, DOE will retain reflective surfaces for analysis.
d. Commercial Clothes Washers
    During the Framework public meeting and Framework comment period, 
DOE solicited comments from stakeholders regarding which design options 
found in residential clothes washers would be applicable to CCWs. 
However, multiple manufacturers of CCWs cautioned that CCWs are not 
just slightly modified extensions of their residential product lines, 
and, thus, some design options currently found on their residential 
lines may not be applicable for commercial use.
    In addition, ALS requested that DOE recognize the unique 
environment in which CCWs operate and how that precludes the 
implementation of several design options found in the residential 
market. Such options could be incompatible with the requirements 
regarding ruggedness, reliability, and performance routinely demanded 
in a commercial setting. (Public Meeting Transcript, No. 5 at p. 43) 
For example, Whirlpool stated that design options such as spray rinse 
have not performed adequately in commercial settings due to the routine 
problem of overloading by consumers. Commenters also asserted that 
inadequate rinsing performance typically leads consumers to re-run 
loads, thereby increasing water and energy consumption.
    Whirlpool, ALS, and AHAM requested that the following design 
options be removed from consideration: Bubble action, electrolytic 
disassociation of water, ozonated laundering, reduced thermal mass, 
suds saving, ultrasonic washing, and horizontal-axis design. Whirlpool 
and AHAM additionally requested that steam washing be removed from 
consideration. Whirlpool stated that all of the aforementioned design 
options were removed from consideration during the recent residential 
clothes washer rulemaking and, therefore, should be removed from 
consideration during this rulemaking as well. ALS provided a similar 
rationale for the design options it requested to be excluded. AHAM 
further requested that the improved horizontal-axis-washer drum design 
option be removed. (Whirlpool, No. 10 at p. 3; Public Meeting 
Transcript, No. 5 at p. 49; AHAM, No. 14 at p. 7)
    In light of the available information, DOE subsequently screened 
out bubble action, electrolytic disassociation of water, ozonated 
laundering, reduced thermal mass, suds saving, and ultrasonic washing 
from further analysis, for the reasons that follow.
    Although bubble washing has been incorporated into commercial 
products, production is extremely limited and further commercialization 
would require manufacturers to develop entirely new platforms. 
Therefore, DOE does not believe that this technology would be 
practicable to manufacture, install, and service on the scale necessary 
to serve the relevant market at the time of the effective date of an 
amended standard. For these reasons, DOE screened out the bubble action 
design option.
    DOE is not considering electrolytic disassociation of water and 
ozonated laundering because these technologies are at the research 
stage. Therefore, DOE believes that it would not be practicable to 
manufacture, install, and service either technology on the scale 
necessary to serve the relevant market at the time of the effective 
date of an amended standard. Also, because these technologies are in 
the research stage, it is not possible to assess whether they will have 
any adverse impacts on equipment utility to consumers or equipment 
availability, or any adverse impacts on consumers' health or safety. 
Therefore, DOE screened out electrolytic disassociation of water and 
ozonated laundering as design options for improving the energy 
efficiency of CCWs.
    Reduced thermal mass has not been incorporated into clothes 
washers, so DOE believes that it would not be practicable to 
manufacture, install, and service this technology on the scale 
necessary to serve the relevant market at the time of the effective 
date of an amended standard. Also, because this technology has not been 
incorporated into clothes washers, it is not possible to assess whether 
it will have any adverse impacts on equipment utility to consumers or 
equipment availability, or any adverse impacts on consumers' health or 
safety. Therefore, DOE screened out reduced thermal mass as a design 
option for improving the energy efficiency of CCWs.
    Suds-saving residential clothes washers, in which wash water is 
stored for subsequent reuse, were previously commercially available, 
but required an adjacent washtub to store suds in between wash cycles. 
Due to these installation requirements, DOE believes that suds saving 
clothes washers would be impractical to install in many locations. 
Suds-saving clothes washers reduce consumer utility by requiring 
consumers to occupy space adjacent to the washer with an additional 
washtub. In a commercial setting, this may limit the number of clothes 
washers that may be installed. Consumers must also wash clothes 
sequentially to fully capture the energy saving benefits of suds 
saving. Delays between wash cycles allow the saved water to cool, 
reducing wash performance and energy savings. Finally, suds-saving 
clothes washers can carry over heavy soiling between

[[Page 64458]]

clothing loads, reducing wash performance as well. Therefore, DOE will 
not consider suds saving as a design option for improving the energy 
efficiency of commercial clothes washers.
    Ultrasonic washing promotes mechanical soil removal through the 
introduction of ultrasonic vibrations into the wash tub. This 
technology has been demonstrated in clothes washers, but the ultrasonic 
clothes washer did not adequately remove soil from the clothes. Thus, 
ultrasonic clothes washing would reduce consumer utility by not 
adequately washing clothes. In addition, bubble cavitations caused by 
standing ultrasonic waves could potentially damage some fragile 
clothing or clothing fasteners, further reducing consumer utility. 
Since no manufacturers currently produce ultrasonic clothes washers, it 
is impossible to assess whether it will have any impacts on consumers' 
health or safety, or product availability. For these reasons, DOE 
screened out ultrasonic washing as a design option for improving the 
energy efficiency of CCWs.
    In the comment period following the Framework public meeting, EEI 
suggested that at least one major detergent manufacturer has formulated 
a cold-water detergent, capable of washing all types of clothes in cold 
water. According to EEI, such detergents promise significant energy 
savings since they could eliminate the need for heated water in CCWs. 
(EEI, No. 7 at p. 4) While cold-water detergents show promise, the 
present clothes washer test procedure does not recognize the potential 
energy benefits of such detergents. DOE will consider possible future 
amendments to the test procedure to account for cold-water detergents. 
Thus, in the context of the present rulemaking, DOE will not analyze 
the potential impact of cold-water detergents.
    Table II.12 lists the CCW design options that DOE has retained for 
analysis. For further review of the retained design options, please see 
Chapter 3 of the TSD.

  Table II.12.--Retained Design Options for Commercial Clothes Washers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Adaptive control systems.
2. Added insulation.
3. Advanced agitation concepts for vertical-axis machines.
4. Automatic water fill control.
5. Direct-drive motor.
6. Horizontal-axis design.
7. Horizontal-axis design with recirculation.
8. Improved fill control.
9. Improved horizontal-axis-washer drum design.
10. Improved water extraction to lower remaining moisture content.
11. Increased motor efficiency.
12. Low-standby-power design.
13. Spray rinse or similar water-reducing rinse technology.
14. Steam washing.
15. Thermostatically-controlled mixing valves.
16. Tighter tub tolerance.
------------------------------------------------------------------------

    In general, for more detail on how DOE developed all of the 
technology options discussed above and the process for screening these 
options, refer to the technology and screening section (Chapter 4) of 
the TSD.

C. Engineering Analysis

    In the engineering analysis DOE evaluates a range of product 
efficiency levels and their associated manufacturing costs. The purpose 
of the analysis is to estimate the incremental manufacturer selling 
prices for a product that would result from achieving increased 
efficiency levels, above the level of the baseline model, in each 
product class. The engineering analysis considers technologies and 
design option combinations not eliminated in the screening analysis. 
The LCC analysis uses the cost-efficiency relationships developed in 
the engineering analysis.
    DOE typically structures its engineering analysis around one of 
three methodologies. These are: (1) The design-option approach, which 
calculates the incremental costs of adding specific design options to a 
baseline model; (2) the efficiency-level approach, which calculates the 
relative costs of achieving increases in energy efficiency levels, 
without regard to the particular design options used to achieve such 
increases; and/or (3) the reverse engineering or cost-assessment 
approach, which involves a ``bottom-up'' manufacturing cost assessment 
based on a detailed bill of materials derived from teardowns of the 
product being analyzed. Deciding which methodology to use for the 
engineering analysis depends on the product, the design options under 
study, and any historical data that DOE can draw on.
    Traditionally, DOE used a design-approach for all of its cost-
benefit analyses. However, in more recent rulemakings, DOE has shifted 
to using an efficiency-level approach that may or may not be 
supplemented with a reverse-engineering analysis. The shift is due to 
past input from stakeholders who were concerned about the possibility 
of double-counting the energy-efficiency benefits of various design 
options. While the efficiency-level approach has the benefit of being 
absolute (each appliance has a tested efficiency and derivable 
manufacturing cost), it depends on the appliance actually having an 
efficiency test that manufacturers report. For product classes where 
there are no published efficiencies, a design-option approach remains 
the best alternative to an efficiency-level approach.
1. Approach
    DOE solicited comments during the Framework public meeting and 
subsequent comment period on the possible approaches to the engineering 
analysis. ALS and AHAM stated during the Framework public meeting that 
they support the efficiency-level approach generally, and ACEEE 
commented that the efficiency-level approach should be verified with 
the design-option approach, recognizing that there is variation in how 
manufacturers implement design options. (Public Meeting Transcript, No. 
5 at pp. 65, 73 and 107-110) AHAM commented that manufacturers will use 
different design options to achieve higher efficiency levels. (Public 
Meeting Transcript, No. 5 at p. 55) AHAM stated that the design-option 
approach has validity only for cooking products, but can serve as a 
means of cross-checking the analysis for the other products. (Public 
Meeting Transcript, No. 5 at p. 110) Whirlpool, GE, and AHAM stated 
that DOE should analyze CCWs, dishwashers, and dehumidifiers with the 
efficiency-level approach, while using a design-option approach for 
cooking products. (Whirlpool, No. 10 at pp. 4 and 7; GE, No. 13 at p. 
3; AHAM, No 14 at pp. 4-9)
    In comments submitted during the comment period after the Framework 
public meeting, the Joint Comment disagreed with using the efficiency-
level approach as the primary means to estimate efficiency costs. The 
Joint Comment stated that the design-option approach is very important 
and should be included for all products as a complement to and 
validation of manufacturer estimates. The Joint Comment stated that 
manufacturers have historically estimated higher costs during the 
rulemaking stage, as compared to the actual costs when the standards 
take effect. In addition, the design-option approach allows 
interactions between design options to factor into the analysis to take 
advantage of synergies between measures and to

[[Page 64459]]

avoid double-counting of energy savings. The Joint Comment also 
expressed the need for DOE to make detailed manufacturing cost data 
publicly available, while maintaining manufacturers' confidentiality to 
protect their competitive positions. They described manufacturer cost 
estimates as a ``black box'' for other stakeholders. (Joint Comment, 
No. 9 at pp. 1-2)
    DOE conducted the engineering analysis for this rulemaking using an 
efficiency-level approach supplemented by a design-option approach for 
CCWs, dishwashers, and dehumidifiers. DOE based this analysis on 
detailed incremental cost data primarily supplied by AHAM. DOE 
supplemented these industry-supplied data with its own design-option 
analysis by performing limited product efficiency testing and physical 
teardown analysis of several dishwashers and dehumidifiers, and by 
conducting manufacturer interviews for all three products. The teardown 
analysis used the reverse engineering approach and resulted in the 
production of detailed bills of materials for dishwashers and 
dehumidifiers.
    For cooking products, DOE conducted the engineering analysis for 
this rulemaking using the design-option approach, under which it 
identifies incremental increases in manufacturer selling prices for 
each design option or combination of design options. As discussed in 
section I.B.1 of this ANOPR, DOE based much of this analysis on cost 
and efficiency information supplied in the previous rulemaking's 
analysis, with costs updated to reflect current pricing. DOE 
supplemented this analysis with new data that AHAM supplied for 
microwave ovens.
    In summary, DOE used an efficiency-level approach supported by a 
design-option approach for CCWs, dishwashers, and dehumidifiers, and a 
design-option approach for cooking products. Stakeholders were 
supportive of this approach for cooking products. For CCWs, 
dishwashers, and dehumidifiers, DOE supplemented the industry-supplied 
data with consultation with outside experts and further review of 
publicly available cost and performance information. The supplemental 
design-option analysis (which included the reverse engineering) allowed 
for validation of the efficiency-level data, transparency in 
assumptions and results, and the ability to perform independent 
analyses for verification. In addition, the supplemental design-option 
analysis allowed DOE to generate analytically-derived cost-efficiency 
curves for product classes for which industry-supplied curves were not 
provided. The methodology DOE used to perform the efficiency-level and 
design-option analyses is described in further detail in the 
engineering analysis (Chapter 5 of the TSD).
    The Joint Comment recommended that the computation of manufacturing 
costs also take into account the effect of market forces by using the 
simple average of the lowest cost estimate and the weighted-average 
cost. The Joint Comment stated that manufacturers with below-average 
costs will determine market prices, since higher-priced manufacturers 
will need to ``sharpen their pencils'' to reduce costs in order to 
maintain market share. Additionally, the Joint Comment stated that 
manufacturers should ensure that their cost estimates reflect mass 
production, since efficiency standards will make today's niche products 
commodity products in the future. (Joint Comment, No. 9 at p. 2) In 
response, we note that DOE conducted its analysis using the average 
costs provided by industry, because DOE believes these are the most 
representative of manufacturer costs. The AHAM-supplied average cost by 
efficiency level is shipment-weighted, which thus represents the most 
likely average cost for the industry to make an incremental efficiency 
change. The limited DOE reverse-engineering analysis based on two 
dishwasher platforms that span an efficiency range from 0.58 to 1.11 EF 
also largely agreed with the AHAM-supplied average incremental cost 
data. The effects of mass production were captured in the cost 
estimates and reflected in the production volume estimates that AHAM 
provided, as well as in the production volumes used in DOE's cost 
modeling.
    The methodology DOE used to perform the efficiency-level and 
design-option analyses and reverse engineering are described in further 
detail in the engineering analysis chapter (Chapter 5) of the TSD.\20\
---------------------------------------------------------------------------

    \20\ The engineering analysis does not take into account future 
increases in manufacturing efficiency which would affect the cost-
efficiency relationship, due to the inherently speculative nature of 
such an inquiry. Accordingly, this analysis is based on extant 
products and manufacturing processes.
---------------------------------------------------------------------------

2. Technologies Unable To Be Included in the ANOPR Analysis
    In performing the engineering analysis, DOE did not consider for 
analysis certain technologies that met the screening criteria but were 
unable to be further evaluated for one or more of the following 
reasons: (1) Data are not available to evaluate consumer usage of a 
product incorporating the technology, and, therefore the test procedure 
conditions and methods may not be applicable; (2) data are not 
available to evaluate the energy efficiency characteristics of the 
technology; and (3) available data suggest that the efficiency benefits 
of the technology are negligible. In the first two cases, DOE is unable 
to adequately assess how these technologies impact annual energy 
consumption. Although it did not consider these technologies further in 
the ANOPR analyses, DOE specifically seeks data and inputs on consumer 
usage, performance characteristics, and representative test methods and 
conditions to extend the analyses to these technologies and to evaluate 
the test procedures for the NOPR. This is identified as Issue 6 under 
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
    For technologies that lack consumer usage details (including 
operating conditions, duration, and frequency), DOE believes that the 
existing test procedures may specify conditions and methods that are 
not representative of actual usage. DOE further believes that even if 
data were available to amend the test procedure, such changes could be 
extensive enough to require total revision, which in turn could warrant 
the creation of a separate product class for that technology in the 
event that the test procedure changes indicated unique utility. For 
example, many dehumidifiers feature a built-in relative humidity (RH) 
sensor, or hygrometer, and most (including all units upon which DOE 
conducted reverse-engineering) feature a built-in humidistat, a device 
that allows the consumer to set the desired RH level for the room. When 
the humidity near the dehumidifier drops below the user-defined or pre-
set value, the dehumidifier automatically shuts off. This sensor-
controlled system presumably saves energy by avoiding running the 
dehumidifier when the RH is such that further dehumidification would be 
neither effective nor desirable. However, there is no industry 
consensus on patterns in ambient conditions and usage. If such 
parameters were known to DOE, the test procedure, which currently 
specifies constant ambient temperature and humidity, would need to be 
revised to measure energy savings associated with these technologies. 
Therefore, the built-in hygrometer/humidistat design option was not 
considered for further analysis. Similar exclusions based on lack of 
information on representative consumer usage were

[[Page 64460]]

made for several other design options. For dehumidifiers, these 
included improved controls, improved flow-control devices, and low-
standby-loss controls. For cooking products, these included 
thermostatically-controlled gas cooktop burners, electronic controls 
for electric cooktops, cooking sensors for microwave ovens, and steam 
cooking for electric ovens.
    Furthermore, certain technologies cannot be measured according to 
the conditions and methods specified in the existing test procedure. 
For example, induction cooktops require ferromagnetic cookware in order 
to transfer energy to the food contents. The test block specified in 
the DOE test procedure is aluminum and thus is unable to measure the 
efficiency of induction cooktops. Although DOE is aware of a NIST study 
that suggests induction cooktops provide an efficiency improvement over 
baseline electric smooth cooktops, DOE did not consider this design 
option further in the ANOPR analysis because of the unresolved nature 
of the NIST data. DOE seeks input from stakeholders on whether the NIST 
data warrants further study for the NOPR. Similarly, for dehumidifiers 
DOE excluded improved defrost measures and washable air filters. Low-
standby-loss electronic controls were not analyzed for electric 
cooktops, microwave ovens, and commercial clothes washer because, even 
though DOE considers consumer usage of these products to be well-
defined, the current test procedures do not measure standby power. For 
microwave ovens specifically, for reasons described in section I.D.4.b, 
DOE is considering amending the test procedure to incorporate a 
measurement of standby power consumption. Other cooking product 
technologies that do not have energy benefits captured by the test 
procedures include radiant burners for gas ovens. As mentioned above, 
DOE specifically seeks data and inputs on representative test methods 
and conditions to extend the analyses to these technologies and to 
evaluate the test procedures for the NOPR. This is identified as Issue 
6 under ``Issues on Which DOE Seeks Comment'' in section IV.E of this 
ANOPR.
    Available data suggest that some of the design options would result 
in such small energy savings as to be negligible. For example, 
according to AHAM, dual magnetrons in microwave ovens do not improve 
energy efficiency due to the added losses associated with two magnetron 
heaters. AHAM also commented that are no significant energy savings 
opportunities associated with improved ceramic stirrers, modified 
waveguides, or added insulation. (AHAM, No. 17 at pp. 2-3) Similarly, 
DOE is unaware of any data that indicates a measurable energy 
efficiency impact of insulation in gas and electric coil cooktops. DOE 
will be reevaluating microwave oven design options through reverse-
engineering, and will update the design options and efficiency levels 
as necessary for the NOPR. For commercial clothes washers, DOE removed 
improved drum designs for horizontal-axis clothes washers. Because DOE 
intends to focus on the technologies with measurable impact on 
efficiency, design options with negligible energy savings have been 
eliminated from further consideration.
    For further information on these design options, refer to the 
market and technology assessment chapter (Chapter 3) and engineering 
analysis chapter (Chapter 5) of the TSD.
3. Product Classes, Baseline Models, and Efficiency Levels Analyzed
    DOE conducted the engineering analysis on the single product class 
for CCWs and on all product classes for cooking products. For 
dishwashers, DOE identified baseline models and efficiency levels for 
the standard-sized dishwasher product class. It then scaled these 
standard dishwasher efficiency levels by the ratio of the current 
minimum efficiency standards for standard-versus-compact product 
classes to obtain the efficiency levels for compact-sized machines. For 
dehumidifiers, DOE conducted the engineering analysis on product 
classes for which it received incremental cost data, with the 
expectation that the analysis results will be extended to the remaining 
product classes in subsequent analyses.
    For each product class, DOE selected a baseline model as a 
reference point, against which to measure changes resulting from energy 
conservation standards. The baseline model in each product class 
represents the basic characteristics of products in that class. 
Typically, it is a model that just meets current required energy 
conservation standards.
    Tables II.13 through II.20 provide all of the efficiency levels DOE 
analyzed in the engineering analysis and the reference source of each 
level for each of the four appliance product classes analyzed. Many of 
these efficiency levels correspond to those set by energy efficiency 
programs or organizations, including the DOE and EPA Energy Star 
Program, and the CEE. DOE calculated other levels from existing levels 
to fill in gaps.
    For the purpose of today's ANOPR, DOE considers the highest 
candidate standard levels, identified in section II.C.3 below, to be 
the maximum technologically feasible level. DOE notes that in some 
cases the highest efficiency level was identified based on a review of 
available product literature for products commercially available (i.e., 
commercial clothes washers and dehumidifiers). For cooking products, 
the maximum levels identified in section II.C.3.c are based on data 
developed from the design option analysis in the previous rulemaking. 
(For more information, see the market and technology assessment 
(Chapter 3) and engineering analysis (Chapter 5) of the TSD.) Because 
DOE is required to determine the maximum technologically feasible 
energy efficiency level(s) in any notice of proposed rulemaking (42 
U.S.C. 6295 (p)(2)), DOE seeks comment on the highest energy efficiency 
levels identified in today's ANOPR for the purpose of determining 
appropriate maximum technologically feasible energy efficiency levels 
in the proposed rule.
a. Dishwashers
    For dishwashers, the energy conservation standards are expressed as 
a minimum EF, which is a function of cycles per kWh. In this 
rulemaking, DOE is using baseline models that have the following 
efficiencies, which are the current minimum standards for compact and 
standard capacity dishwashers (10 CFR 430.32(f)):
     Compact = 0.62 EF
     Standard = 0.46 EF
    For standard dishwasher efficiency levels, DOE used the Energy Star 
criteria, CEE Tier 1 and 2 levels, and the current maximum technology 
that is commercially available. DOE also added two levels to fill the 
gap between CEE Tier 2 and the current maximum technology that is 
commercially available. DOE achieved scaling for compact dishwashers by 
using the ratio of current standard levels for standard size versus 
compact size units, although it determined the max-tech level by a 
review of technology in the current Energy Star database of certified 
dishwashers. Table II.13 lists the levels DOE analyzed for compact and 
standard dishwashers:

       Table II.13.--Efficiency Levels for Residential Dishwashers
------------------------------------------------------------------------
                                                       Energy Factor,
                                                        (cycles/kWh)
                 Efficiency levels                 ---------------------
                                                     Compact    Standard
------------------------------------------------------------------------
Baseline..........................................       0.62       0.46

[[Page 64461]]

 
1.................................................       0.78       0.58
2.................................................       0.84       0.62
3.................................................       0.88       0.65
4.................................................       0.92       0.68
5.................................................       1.01       0.72
6.................................................       1.08       0.80
7.................................................       1.74       1.11
------------------------------------------------------------------------

    DOE has specified the current Federal dishwasher standard as the 
baseline unit efficiency level, recognizing that a significant 
percentage of dishwashers on the market meet or exceed Energy Star 
levels. Whirlpool agreed with this approach, commenting that this 
baseline efficiency level maintains a necessary entry-level product. It 
noted that raising the baseline efficiency above the standard could 
make entry-level dishwashers unaffordable to low-end consumers, thus 
driving down market penetration of dishwashers and increasing hand-
washing and the associated water and energy consumption. Whirlpool also 
commented that market-pull programs such as Energy Star are responsible 
for higher efficiency units on the market. (Public Meeting Transcript, 
No. 5 at pp. 59-60 and 66-67; Whirlpool, No. 10 at p. 8)
    Northwest Power and Conservation Council (NWPCC), however, 
commented that the baseline EF may need to be raised above the current 
Federal standard. (Public Meeting Transcript, No. 5 at p. 57) Other 
stakeholders agreed. For example, Potomac commented that the baseline 
EF should represent a shipment-weighted average (likely to be between 
0.46 and 0.58), which was the Energy Star level in effect at the time 
of the Framework public meeting. (Public Meeting Transcript, No. 5 at 
pp. 123-124) ACEEE commented that, since over 80 percent of the market 
meets the current Energy Star level, that level might be appropriate as 
the baseline. (Public Meeting Transcript, No. 5 at p. 124) After the 
Framework public meeting, the Multiple Water Organizations stated that 
the baseline should be above the current Federal standard, and that 
using the standard as the baseline would distort the analyses by making 
higher efficiency levels appear more costly and burdensome to achieve 
than they really are. (Multiple Water Organizations, No. 11 at p. 3)
    In light of the above, DOE believes that setting the baseline at 
the current Federal standard appropriately analyzes entry-level 
dishwashers, and, thus, we are retaining an engineering baseline EF of 
0.46 for standard-sized dishwashers. As will be discussed in section 
II.G.2.d, because some consumers already purchase products with 
efficiencies greater than the baseline levels, the LCC and PBP analysis 
considers the distribution of products currently sold. This is done to 
accurately estimate the percentage of consumers that would be affected 
by a particular standard level and to prevent overstating the benefits 
to consumers of increased minimum efficiency standards. Also, as will 
be discussed in section II.I.2, the resulting shipment-weighted 
efficiency (SWEF) that is determined from the distribution of products 
currently sold, as well as historical SWEFs, are accounted for in the 
NIA.
    Whirlpool commented that, of the efficiency levels suggested in the 
Framework Document, efficiency levels up to an EF of 0.68 are 
reasonable, while the ``gap fill'' levels are arbitrary and the max-
tech level is taken from an extremely expensive, niche machine from a 
manufacturer with negligible market share. (Whirlpool, No. 10 at p. 4) 
ACEEE and the Joint Comment recommended including an efficiency level 
for standard dishwashers between the 0.68 and 0.75 EF levels. They 
suggested an EF of 0.71 or 0.72 since there are three manufacturers 
with models currently at 0.72 EF. (Public Meeting Transcript, No. 5 at 
p. 124; Joint Comment, No. 9 at p. 4) DOE selected a 0.72 EF dishwasher 
as one of its teardown units on the basis of its highest level of 
design option combinations for a given platform. Additionally, AHAM 
stated that some efficiency levels exceed the point for which AHAM 
members can provide meaningful cost-efficiency data. (AHAM, No. 14 at 
p. 8) Thus, AHAM's aggregated manufacturer data were limited to a 
maximum EF of 0.72. DOE included this efficiency level in its analysis 
because one of the platforms upon which DOE performed the reverse-
engineering analysis included a model at an EF of 0.72 as its highest 
efficiency version. DOE extended its analysis to include EF up to the 
max-tech level of 1.11 because this unit represented the high end of an 
additional product platform that DOE reverse-engineered.
    The Joint Comment, Multiple Water Organizations, and Austin Water 
Utility (AWU) commented that DOE should conduct an analysis to 
determine whether it should define a standard for water consumption in 
addition to energy consumption. The Multiple Water Organizations 
recommended assigning a water factor to each proposed dishwasher 
efficiency level, and substantiating the relationship between energy 
and water consumption. They stated that water consumption is not so 
tightly correlated with energy consumption as to obviate the need for a 
separately stated WF. They referred DOE to databases maintained by 
NRCan and the Oregon Department of Energy for data on dishwasher energy 
and water consumption. (Public Meeting Transcript, No. 5 at p. 63; 
Joint Comment, No. 9 at pp. 3-4; Multiple Water Organizations, No. 11 
at p. 3) DOE notes that it does not have statutory authority to 
prescribe a water consumption standard for dishwashers.
    The City of Seattle suggested that DOE base the efficiency metric 
on energy and water use per place setting, rather than an EF according 
to the two product classes. (Public Meeting Transcript, No. 5 at p. 58) 
In response, we note that the current test procedure does not have any 
provision for defining efficiency as a function of the number of place 
settings a dishwasher can clean, and, therefore, DOE is currently 
unable to define an efficiency metric on this basis.
    Whirlpool commented that cleaning performance must be taken into 
consideration at higher efficiency levels, and it stated that, at the 
max-tech level, cleaning performance would be highly suspect. (Public 
Meeting Transcript, No. 5 at p. 123) DOE notes that while there is no 
provision in the current DOE test procedure for measuring cleaning 
performance, interviews conducted by DOE with manufacturers indicated 
that the manufacturers are unwilling to compromise cleaning performance 
to achieve higher energy efficiency at the expense of market share. 
Manufacturer concerns over the potential loss of consumer utility at 
higher standard levels are discussed in Chapter 12, MIA, of the TSD.
b. Dehumidifiers
    For dehumidifiers, each energy efficiency level is expressed as a 
minimum EF, which is a function of liters per kWh. In this rulemaking, 
DOE is using baseline models that have the following efficiencies, 
which are the current minimum standards for this product (EPACT 2005, 
section 135(c)(4); 42 U.S.C. 6295(cc); 70 FR 60407, 60414, (October 18, 
2005); 10 CFR 430.32(v)):
     25.00 pints/day or less = 1.00 EF
     25.01-35.00 pints/day = 1.20 EF
     35.01-45.00 pints/day = 1.30 EF
     54.01-74.99 pints/day = 1.50 EF
    DOE combined two product classes defined by EPACT 2005--25.00 
pints/

[[Page 64462]]

day or less and 25.01-35.00 pints/day--to form a single product class 
of 0-35.00 pints/day for this analysis, due to the similar aggregation 
of data by AHAM in its manufacturer cost data submittal. EPACT 2005 
also defines two other product classes, 45.01-54.00 pints/day and 75.00 
pints/day or more, which DOE did not analyze since AHAM did not provide 
data for them. For purposes of conducting the NIA, DOE believes that 
the results from the product classes analyzed can be extended to the 
two statutorily-set product classes for which AHAM data (or comparable 
data) are unavailable. This approach is believed to be valid due to 
chassis and component similarities among the product classes, with 
primary differences due to scaling. DOE's approach for extending the 
results to the omitted product classes is discussed further in section 
II.I.3 of this ANOPR. DOE seeks comment on this approach to extend the 
engineering analysis to product classes for which a complete analysis 
was not performed.
    In the Framework public meeting and during the Framework comment 
period, DOE received comments on the dehumidifier engineering analysis 
approach. All stakeholders agreed that DOE should analyze multiple 
product classes to capture the particular efficiency characteristics of 
varying capacity levels. Instead of extrapolating from one capacity 
platform, multiple stakeholders recommended analyzing a minimum of 
three capacities (small, medium, and large) to serve as a baseline. 
(Public Meeting Transcript, No. 5 at pp. 70 and 126-128; AHAM, No. 14 
at p. 9; Joint Comment, No. 9 at p. 4 ; EEI, No. 7 at pp. 3 and 5) 
Whirlpool recommended defining ``small'' as <25 pints/day, ``medium'' 
as 35-45 pints/day, and ``large'' as 75+ pints/day capacity. 
(Whirlpool, No. 10 at p. 5) AHAM recommended that DOE analyze 
separately each capacity range mentioned in the Framework Document, 
because component availability, compressor efficiencies, and other 
factors vary widely. (AHAM, No. 14 at p. 9) As discussed above, DOE 
performed a complete analysis for the product classes for which AHAM 
supplied data, and extended the results to the remaining product 
classes in subsequent analyses.
    DOE received numerous comments from stakeholders regarding the 
appropriateness of the dehumidifier energy efficiency levels under 
review in the Framework Document. AHAM stated concerns regarding the 
max-tech and some of the intermediate efficiency levels, recommending 
that DOE eliminate the EF level of 1.74 for the 35-45 pints/day product 
category and replace it with an EF level of 1.45-1.50, which AHAM 
argued is more representative of max-tech in that capacity range. 
(Public Meeting Transcript, No. 5 at pp. 72 and 129; AHAM, No. 14 at p. 
9) EEI questioned some of the max-tech levels set for the lower 
capacity ranges. (Public Meeting Transcript, No. 5 at p. 126) Referring 
to Table 5.3 in the Framework Document, Whirlpool commented that the 
industry considers an EF of 1.4 for 35-45 pints/day as the de facto 
baseline efficiency standard. Thus, Whirlpool stated that DOE should 
drop the EF levels of 1.35 and below for this product class. Whirlpool 
also commented that the efficiency standards described by the EF level 
of 1.50 may not be attainable and should be reduced to an EF of 1.45. 
Whirlpool stated that an EF of 1.50 would make dehumidifiers so 
expensive that consumers would forgo them and live with damp, unhealthy 
basements instead. Thus, Whirlpool argued that an even higher EF level 
would not be economically justified, and it recommended that DOE drop 
the max-tech level EF of 1.74. (Whirlpool, No. 10 at p. 5)
    Based on comments received, DOE analyzed three product classes (0-
35.00 pints/day, 35.01-45.00 pints/day, and 54.01-74.99 pints/day) and 
five efficiency levels for each product class. The levels DOE analyzed 
are set forth in Table II.14. DOE also reviewed the efficiency levels 
proposed in the Framework Document using available databases, 
stakeholder interviews, and insights from the reverse engineering 
efforts. As discussed above, through its tear-down analysis, DOE found 
dehumidifiers with energy efficiency levels at the highest candidate 
standard level identified in section III of today's notice. Therefore, 
DOE believes that the efficiency levels defined in the Framework 
Document are representative of currently available models, and, 
therefore, we have retained them for further analysis. DOE seeks 
comment on the highest energy efficiency levels identified in today's 
ANOPR for the purpose of determining appropriate maximum 
technologically feasible energy efficiency levels in the proposed rule.

                          Table II.14.--Efficiency Levels for Residential Dehumidifiers
----------------------------------------------------------------------------------------------------------------
                                                                            Energy factor (liters/kWh)
----------------------------------------------------------------------------------------------------------------
                                                                      0-35.00       35.01-45.00     54.01-74.99
                        Efficiency levels                           (pints/day)     (pints/day)     (pints/day)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................            1.20            1.30            1.50
1...............................................................            1.25            1.35            1.55
2...............................................................            1.30            1.40            1.60
3...............................................................            1.35            1.45            1.65
4...............................................................            1.40            1.50            1.70
5...............................................................            1.45            1.74            1.80
----------------------------------------------------------------------------------------------------------------

c. Cooking Products
    For residential cooking products (except for the prescriptive 
standard for gas products), there are no existing minimum energy 
conservation standards, as previous analyses failed to determine 
economic justification for them. The DOE test procedure uses an EF to 
rate the efficiency of cooking products. The EF for these products is 
the ratio of the annual useful cooking energy output of the residential 
cooking appliance (i.e., the energy conveyed to the item being heated) 
to its total annual energy consumption. In accordance with the previous 
rulemaking for residential cooking products, DOE has selected the 
following baseline EFs for the product classes DOE is using in this 
rulemaking:
     Electric cooktops, open (coil) elements = 0.737 EF
     Electric cooktops, smooth elements = 0.742 EF
     Gas cooktops, conventional burners = 0.156 EF
     Electric ovens, standard with or without a catalytic line 
= 0.107 EF
     Electric ovens, self-clean = 0.096 EF
     Gas ovens, standard with or without a catalytic line = 
0.030 EF

[[Page 64463]]

     Gas ovens, self-clean = 0.054 EF
     Microwave ovens = 0.557 EF
    During the Framework public meeting, Whirlpool suggested that DOE 
might need to update baseline efficiency levels to reflect changes in 
current oven cavity volumes. DOE has defined baseline volumes for gas 
and electric non-self cleaning and self-cleaning ovens as 3.9 cubic 
feet in accordance with the previous rulemaking. Whirlpool believes 
this volume is too small to be representative of current ovens. At the 
Framework public meeting, Whirlpool stated that, since the mid-1990s, 
oven volumes have increased due to consumer usage patterns and consumer 
demand. As a result, Whirlpool stated that a more representative 
baseline volume would be five cubic feet. (Public Meeting Transcript, 
No. 5 at pp. 90 and 132) DOE has retained the 3.9 cubic feet volume to 
define the efficiency standard at baseline because there are a large 
number of ovens on the market sized for a 27-inch built-in installation 
which incorporate this cavity volume. The analysis accounts for larger 
oven cavity volumes by scaling the efficiency standard according to 
linear functions. DOE defined these scaling functions for gas and 
electric standard and self-cleaning ovens based on oven volume, since 
it is recognized that efficiency is affected by thermal mass and vent 
rates that are functions of volume. The scaling functions consist of 
linear equations relating EF to volume, which are described in greater 
detail in the TSD. DOE believes the slopes and intercepts of these 
equations from the previous rulemaking to still be valid. Whirlpool 
agreed that oven efficiency is a function of volume, and stated that 
the relationship is similar for gas and electric ovens. However, 
Whirlpool commented that DOE should review the linear equations from 
the previous rulemaking. (Public Meeting Transcript, No. 5 at pp. 90, 
133, and 138) DOE has not identified any technological changes that 
would impact the efficiency-volume relationship, and, therefore, we are 
retaining the equations as defined.
    Whirlpool also suggested that baseline efficiency levels might need 
to account for sealed burners and high-input-rate burners as separate 
product classes. (Public Meeting Transcript, No. 5 at p. 131) As 
discussed previously, DOE determined that sealed burners do not warrant 
a separate product class due to insufficient evidence that the 
performance of sealed burners is distinct from that of conventional 
open gas burners. Therefore, DOE analyzed a single product class for 
gas cooktops. Given the lack of empirical data, DOE will not analyze 
commercial-type ranges (the type of appliances normally incorporating 
high-input-rate burners) as a separate product class.
    During the Framework public meeting, the AWU questioned whether 
baseline units would be equipped with standing pilot ignition systems, 
while Whirlpool stated that self-cleaning ovens do not have standing 
pilot lights. (Public Meeting Transcript, No. 5 at p. 136 and 138) In 
comments received after the Framework public meeting, EEI stated that 
gas pilot lights contribute to significant standby energy losses. 
According to EEI calculations, gas cooktop pilot lights (assuming 8000 
hours of standby) account for 18.72 therms of the total annual baseline 
energy consumption of 33 therms, or 56.7 percent. Similarly, of the 
29.6 therms annual baseline energy consumption for standard gas ovens, 
EEI attributes 14.0 therms, or 47.3 percent, to the pilot light. (EEI, 
No. 7 at p. 5) Conversely, AGA disputed DOE's presumption of 
significant energy savings associated with the elimination of standing 
pilot lights. AGA argued that it is likely that less that 20 percent of 
gas ranges currently have pilot ignition, and therefore potential 
energy savings will be less than the 0.06 quads over 30 years that DOE 
had estimated in the prior rulemaking. AGA concluded that pilot 
ignition cooking appliances are a niche product with unique utility, 
and their elimination would result in equity issues to consumers for 
whom installing electrical service adjacent to the range hookup is not 
economically justified. (AGA, No. 12 at pp. 2-3) DOE has structured the 
analysis for standing pilot igntion systems as a design option 
associated with the baseline configurations because DOE has determined 
that cooktops incorporating such ignition systems do not provide unique 
utility. Power outages are not frequent and long enough for residential 
electricity customers to consider operation during a lack of electric 
power a significant utility. Between 90 and 93 percent of such 
customers experience no electricity outages longer than four hours per 
year.\21\
---------------------------------------------------------------------------

    \21\ A. P. Sanghvi, Cost-Benefit Analysis of Power System 
Reliability: Determination of Interruption Costs. Prepared by RCG/
Hagler Bailly, Inc., Arlington, VA for Electric Power Research 
Institute, Palo Alto, CA, EL-6791. Vol. 2, p. 3-3 and Vol. 3, p. 3-
3. Available online at http://www.epri.com.
---------------------------------------------------------------------------

    To analyze the cost-efficiency relationships for each of the 
classes of cooking products, DOE retained the efficiency levels from 
the previous rulemaking for residential cooking products. For gas 
cooktops/conventional burners and gas standard ovens with or without a 
catalytic line, the baseline efficiency level assumes that the product 
is equipped with standing pilot lights and the first standards 
efficiency level corresponds to the elimination of standing pilot 
lights. However, because the cleaning cycle of gas self-clean ovens 
requires electrical energy use, EPCA in effect requires that such ovens 
currently be equipped with a non-standing pilot ignition system because 
a standing pilot light ignition system is disallowed if there is an 
electrical cord provided on the product. Therefore, the baseline 
efficiency level for these ovens assumes they lack a standing pilot 
light, as do all of the efficiency levels DOE analyzed for this 
rulemaking. Further, the first standards efficiency level is not based 
on elimination of a standing pilot, but rather on the addition of the 
forced convection design option. For microwave ovens, DOE used the 
efficiency levels corresponding to those in the previous rulemaking, 
after first determining that these levels are representative of the 
range of efficiencies of currently-available products. Tables II.15 
through II.19 set forth the levels DOE analyzed for cooking products. 
For open coil-type and smooth electric cooktops, only a single 
standards efficiency level is analyzed because design options 
associated with higher efficiency levels were either screened out, as 
described in section II.B.2.c.1, or eliminated from the analysis for 
the reasons described in section II.C.2. For gas and electric ovens, 
the efficiency levels reported in Tables II.17 and II.18 are slightly 
different than those identified in the previous rulemaking's analysis. 
Refer to Chapter 5 of the TSD for an explanation of the cause for these 
slight differences in the oven efficiency levels.

      Table II.15.--Efficiency Levels for Residential Gas Cooktops
------------------------------------------------------------------------
                                                  Conventional burners
------------------------------------------------------------------------
                                                  Cooking       Energy
               Efficiency levels                 efficiency     factor
------------------------------------------------------------------------
Baseline......................................        0.399        0.156
1.............................................        0.399        0.399
2.............................................        0.420        0.420
------------------------------------------------------------------------

    Whirlpool and GE both commented that gas cooktop efficiencies 
should scale with burner size, in a similar manner as the relationship 
between oven efficiency and volume. (Public Meeting Transcript, No. 5 
at pp. 134-135) The test procedure, however, currently contains 
provisions for testing gas cooktop burners with different size test 
blocks, depending on maximum burner firing rate. Because the test

[[Page 64464]]

procedure already accounts for burner size, DOE will retain the 
existing efficiency levels without a scaling function for burner size.

                        Table II.16.--Efficiency Levels for Residential Electric Cooktops
----------------------------------------------------------------------------------------------------------------
                                             Open (coil) elements                     Smooth elements
         Efficiency levels         -----------------------------------------------------------------------------
                                      Cooking efficiency    Energy factor    Cooking efficiency    Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline..........................  0.737................           0.737  0.742................           0.742
1.................................  0.769 (max-tech).....           0.769  0.753 (max-tech).....           0.753
----------------------------------------------------------------------------------------------------------------

    DOE received a comment from Whirlpool that the efficiency levels 
for electric cooktops listed in Table II.16 are representative of 
currently available technology. (Public Meeting Transcript, No. 5 at p. 
137)

                            Table II.17.--Efficiency Levels for Residential Gas Ovens
----------------------------------------------------------------------------------------------------------------
                                                Standard oven                        Self-cleaning oven
         Efficiency levels         -----------------------------------------------------------------------------
                                      Cooking efficiency    Energy factor    Cooking efficiency    Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline..........................  0.059................          0.0298  0.071................          0.0540
1.................................  0.058 (globar                  0.0536  0.088................          0.0625
                                     ignition).
2.................................  0.061................          0.0566  0.088................          0.0627
3.................................  0.062................          0.0572  0.089 (max-tech).....          0.0632
4.................................  0.065................          0.0593  .....................  ..............
5.................................  0.065................          0.0596  .....................  ..............
6.................................  0.066 (max-tech).....          0.0600  .....................  ..............
1a\(1)\...........................  0.058................          0.0583  .....................  ..............
----------------------------------------------------------------------------------------------------------------
Note: Efficiency levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the
  need for a standing pilot--but the technologies for each design are different. Efficiency level 1 is a hot
  surface ignition device while efficiency level 1a is a spark ignition device. Efficiency level 1a is presented
  at the end of the table because efficiency levels 2 through 6 are derived from efficiency level 1.


                         Table II.18.--Efficiency Levels for Residential Electric Ovens
----------------------------------------------------------------------------------------------------------------
                                                Standard oven                        Self-cleaning oven
         Efficiency levels         -----------------------------------------------------------------------------
                                      Cooking efficiency    Energy factor    Cooking efficiency    Energy factor
----------------------------------------------------------------------------------------------------------------
Baseline..........................  0.122................          0.1066  0.138................          0.1099
1.................................  0.128................          0.1113  0.138................          0.1102
2.................................  0.134................          0.1163  0.142 (max-tech).....          0.1123
3.................................  0.137................          0.1181  .....................  ..............
4.................................  0.140................          0.1206  .....................  ..............
5.................................  0.141 (max-tech).....          0.1209  .....................  ..............
----------------------------------------------------------------------------------------------------------------


     Table II.19.--Efficiency Levels for Residential Microwave Ovens
------------------------------------------------------------------------
                                                                Energy
                     Efficiency levels                          factor
------------------------------------------------------------------------
Baseline...................................................        0.557
1..........................................................        0.586
2..........................................................        0.588
3..........................................................        0.597
4 (max-tech)...............................................        0.602
------------------------------------------------------------------------

    AHAM noted that many microwave oven design features impact energy 
efficiency, and that the choice of features may be dictated by 
marketplace demands. For example, higher wattage cavity lamps produce a 
brightly illuminated cavity interior, but increasing the lamp wattage 
by only 10 watts could lower efficiency by about 0.5 percent. Even so, 
some manufacturers select higher wattage lamps for product 
differentiation. Manufacturers also may focus on features that optimize 
cooking performance, such as mode stirrers, that may also be 
accompanied by small increases in energy consumption. (AHAM, No. 17 at 
p. 2) DOE recognizes that manufacturers may choose to incorporate 
features that enhance product differentiation at the expense of energy 
consumption. For a given energy efficiency level, manufacturers must 
weigh the appropriate combination of design options and other features 
to meet the energy consumption requirement set forth in the relevant 
efficiency standard.
d. Commercial Clothes Washers
    For all CCWs, EPCA establishes the following energy and water 
conservation standards: A minimum MEF of 1.26 and a maximum WF of 9.5. 
(EPACT 2005, section 136(e); 42 U.S.C. 6313(e); see also 70 FR 60416 
(Oct. 18, 2005), adding 10 CFR 431.156) In this rulemaking, DOE is 
using a baseline model that has those efficiencies.
    As indicated previously for CCWs, EPCA mandates that DOE determine 
both a minimum MEF and a maximum WF. For the purposes of analyzing the 
cost-efficiency relationships for this product, DOE based some of the 
efficiency levels on the MEF and WF specifications prescribed by the 
Energy Star program and the CEE Commercial Clothes Washer Initiative, 
and the maximum levels that are currently commercially available. These 
levels are set forth in the Table II.20:

[[Page 64465]]



     Table II.20.--Efficiency Levels for Commercial Clothes Washers
------------------------------------------------------------------------
                                        Modified Energy    Water Factor
           Efficiency levels            Factor (ft \3\/    (gallons/ft
                                              kWh)             \3\)
------------------------------------------------------------------------
Baseline..............................             1.26              9.5
1.....................................             1.42              9.5
2.....................................             1.60              8.5
3.....................................             1.72              8.0
4.....................................             1.80              7.5
5.....................................             2.00              5.5
6 (max-tech)..........................             2.20              5.1
------------------------------------------------------------------------

    In the Framework public meeting and during the Framework comment 
period, DOE received comments regarding how some energy efficiency 
levels under consideration for CCWs could eliminate vertical-axis 
clothes washers. GE stated concerns regarding proposed standards levels 
for CCWs. GE commented that low WFs may not be attainable with 
vertical-axis clothes washers, thereby eliminating this low-cost 
platform from the CCW market, which in turn could lead to a decline in 
the number of clothes washers available in multi-family housing due to 
increased costs. GE urged DOE to consider the consumer utility of 
vertical-axis clothes washers, and it further argued that some proposed 
standards levels may not be attainable even with horizontal-axis 
clothes washers. (Public Meeting Transcript, No. 5 at p. 45; GE, No. 13 
at p. 3) Whirlpool argued that a WF below 9.5 could render a top-
loading CCW incapable of washing clothes properly and that NAECA would 
not allow the elimination of a product class. (Whirlpool, No. 10 at p. 
7) In response to these comments, DOE notes that it placed all CCWs in 
one product class pursuant to EPACT 2005 (see discussion of product 
class definition for CCWs in section II.A.1.d of this ANOPR), which 
applies a single standard for energy efficiency and a single standard 
for water efficiency to all of the CCWs. (EPACT 2005, section 136(e); 
42 U.S.C. 6313(e)) Thus, as discussed in II.C.3.d above, DOE is 
treating commercial clothes washers as a single class that encompasses 
both top- and front-loading units.
    Several stakeholders requested that DOE consider additional 
efficiency levels for the CCW rulemaking. For example, ACEEE requested 
that DOE evaluate a 2.0 MEF and 5.5 WF level, since multiple clothes 
washer models with this efficiency level are on the market. (Public 
Meeting Transcript, No. 5 at p. 51; Public Meeting Transcript, No. 5 at 
p. 121) Potomac recommended that DOE consider the CEC waiver petition's 
WF breakpoint of 6.0.\22\ (Public Meeting Transcript, No. 5 at p. 118) 
The Joint Comment and the Multiple Water Organizations requested a gap-
fill level between the 1.8 MEF and the 2.79 MEF max-tech efficiency 
levels at 2.0 MEF/5.5 WF as per CEE Tier 3B, or 2.0 MEF/6.0 WF. (Joint 
Comment, No. 9 at p. 5; Multiple Water Organizations, No. 11 at p. 1) 
As shown in Table II.20, DOE is evaluating a level of 2.0 MEF combined 
with a 5.5 WF.
---------------------------------------------------------------------------

    \22\ DOE published a Federal Register notice on February 6, 2006 
acknowledging receipt of and summarizing the California Energy 
Commission's Petition for Exemption from Federal Preemption of 
California's Water Conservation Standards for Residential Clothes 
Washers (71 FR 6022) (Docket No. EE-RM-PET-100).
---------------------------------------------------------------------------

    DOE received numerous comments regarding the appropriateness of the 
max-tech level defined in the CCW section of the Framework Document. 
AHAM objected to the hybrid approach of choosing the MEF from one 
washer model while choosing a WF from another, as this does not 
represent an actual CCW. (Public Meeting Transcript, No. 5 at p. 46) 
AHAM subsequently recommended the elimination of this efficiency level. 
(AHAM, No. 14 at p. 7) According to Whirlpool, this max-tech level was 
particularly objectionable because of the hybrid origin of the MEF and 
WF. (Public Meeting Transcript, No. 5 at p. 118) Some stakeholders 
countered that the hybrid approach is a reasonable way to estimate what 
could be attainable but that the economics of such a CCW would probably 
preclude such a standards level. (Public Meeting Transcript, No. 5 at 
p. 121; Joint Comment, No. 9 at p. 5) EEI and multiple stakeholders 
also suggested that, if DOE were to reject the hybrid approach, DOE 
could instead consider a max-tech level of 2.48 MEF and 3.5 WF, since 
that represents an actual clothes washer. (EEI, No. 7 at p. 6; Multiple 
Water Organizations, No. 11 at p. 2) In response to these comments, DOE 
subsequently altered the Framework Document exploratory efficiency 
levels to include a max-tech level where it took the MEF and WF from an 
existing clothes washer.
    In addition to comments regarding the appropriateness of the max-
tech level, DOE received further comments regarding adding more 
efficiency levels to the CCW analysis during the Framework public 
meeting and through subsequent written comments. ALS agreed with 
analyzing all proposed effiency levels with the exception of max-tech, 
which ALS rejected because of the hybrid origin of the MEF and WF, and 
because DOE derived these levels from residential clothes washer data. 
(Public Meeting Transcript, No. 5 at pp. 117-118) Multiple Water 
Organizations recommended that DOE adopt step-like incremental 
increases in both MEF and WF for each efficiency level. (Multiple Water 
Organizations, No. 11 at p. 2)
    During the Framework comment period, DOE received multiple comments 
regarding the applicability of residential clothes washer efficiency 
levels in a commerical setting. Both Whirlpool and GE submitted that 
the efficiency levels achieved by residential clothes washers are not 
representative of levels achievable by commercial products, which 
experience harder and more frequent use than residential products. 
(Whirlpool, No. 10 at p. 9; GE, No. 13 at p. 3) AHAM stated that the 
efficiency levels set forth in the Framework Document are not 
appropriate and recommended that DOE consider the different nature of 
CCWs. (AHAM, No. 14 at p. 7) DOE recognizes that current product 
offerings in the commercial laundry market do not include products at 
each efficiency level for which DOE is performing an analysis. DOE 
notes, however, that products exist that meet all the levels specified, 
so manufacturing cost data are available to assess CCWs that meet or 
exceed the levels specified. Since the standards are minimum 
performance standards, not presciptive standards, these levels do not 
represent predetermined technologies and are therefore not tied to the 
residential or commercial markets.
    DOE also received comments regarding data requests for the CCW 
engineering analysis. Whirlpool stated

[[Page 64466]]

that data for the baseline level are readily available, and that data 
for some higher efficiency levels are also available. (Whirlpool, No. 
10 at p. 9) According to Whirlpool, the low volume of the U.S. CCW 
market, the limited scope of products, and the small number of 
manufacturers complicates the task of establishing manufacturing cost 
data in a way that does not lead to the disclosure of confidential 
information. (Whirlpool, No. 10 at p. 12) The Multiple Water 
Organizations requested that DOE work closely with manufacturers to 
obtain and make manufacturing cost data available before the ANOPR is 
published. (Multiple Water Organizations, No. 11 at p. 2) DOE worked 
with AHAM and stakeholders to obtain as much data as possible. DOE 
withheld from publication whatever data could not be aggregated to 
maintain confidentiality.
    Additional detail on the product classes, baseline models, and 
efficiency levels can be found in Chapter 5 of the TSD.
4. Cost-Efficiency Results
    DOE reports the results of the engineering analysis as cost-
efficiency data (or ``curves'') in the form of incremental 
manufacturing costs versus EF (or MEF and WF for CCWs). These data form 
the basis for subsequent analyses in the ANOPR. DOE received industry-
aggregated curves for CCWs, dishwashers, and dehumidifiers from AHAM. 
DOE validated these data through manufacturer interviews for all three 
products and the independent generation of similar curves for 
dishwashers and dehumidifiers. DOE based these curves on testing and 
reverse engineering activities, which resulted in the generation of a 
detailed bill of materials for each product.
    For cooking products, DOE retained the cost data at each efficiency 
level that it had defined in the previous rulemaking's analysis, 
updated by scaling incremental manufacturing costs by the PPI from 1990 
(the reference year in the prior analysis) to 2006. In addition, for 
microwave ovens, DOE received efficiency test data submitted by AHAM. 
The following table summarizes the data that DOE's engineering analysis 
used to generate the cost-efficiency results.

                                   Table II.21.--Engineering Analysis Methods
----------------------------------------------------------------------------------------------------------------
                                                                         Products
                                         -----------------------------------------------------------------------
                 Method                        Cooking                                             Commercial
                                              products         Dishwashers      Dehumidifiers    clothes washers
----------------------------------------------------------------------------------------------------------------
AHAM Data...............................          [radic]           [radic]           [radic]           [radic]
Review of Past TSD......................          [radic]   ................  ................          [radic]
Product Teardown........................  ................          [radic]           [radic]   ................
Product Testing.........................  ................          [radic]   ................  ................
Manufacturer Interviews.................  ................          [radic]           [radic]           [radic]
----------------------------------------------------------------------------------------------------------------

a. Dishwashers
    For dishwashers, AHAM provided manufacturing cost data up to an 
efficiency level of 0.72 EF. DOE supplemented AHAM's efficiency-level 
cost data submittal with cost information generated from the efficiency 
testing and teardown of currently-available dishwashers. DOE conducted 
efficiency testing of six dishwashers, representing a range of EFs 
across two different product platforms. Beyond the measurements 
required to measure the performance according to the DOE test 
procedure, the testing consisted of multi-submetering to record 
disaggregated energy consumption associated with various design 
options. The EFs of the washers tested were 0.58, 0.64, 0.68, 0.78, 
0.93, and 1.11.
    In addition to efficiency testing, DOE performed reverse 
engineering on the six units tested, as well as on an additional 
dishwasher with an EF of 0.72. This last dishwasher was not yet 
available on the market at the time of testing but was released for 
high-volume manufacturing three weeks later. To validate the AHAM data 
and supply incremental cost information above the 0.72 EF level, DOE 
tore down the seven dishwashers (three high-efficiency dishwashers that 
shared the same basic platform and four other washers spanning the 
efficiency range 0.58-0.72 EF). A comparison of AHAM's and DOE's costs 
indicates that DOE's cost estimates are somewhat lower that the AHAM 
average costs, but above the AHAM minimum.
    The purpose of comparing DOE's and AHAM's results was to assess the 
reasonableness of AHAM's data submission, and DOE believes this has 
been demonstrated. DOE's teardown sample size was very small and could 
not be expected to adequately capture the variability of all products 
in the marketplace. Another reason why DOE's results are lower than 
AHAM's average is the influence of product platforms. DOE's teardown 
analysis and manufacturer interviews confirmed that upgrading 
components can only raise EF to a certain point and that overall system 
architecture limits EF. The platform which DOE reverse-engineered is 
among the most efficient available from large-volume manufacturers 
(with an EF that spans the range of 0.58 to 0.72). Thus, it is 
reasonable to assume that starting from a lower efficiency platform 
will result in larger incremental costs. The results of the testing and 
teardown analysis, including the list of design options identified and 
other observations, can be further reviewed in Chapter 5 of the TSD. If 
the reverse-engineering sample size had been larger, it is reasonable 
to assume that the range of incremental costs by efficiency level would 
have broadened. As a result, DOE feels that the AHAM submission is 
reasonable and reflective of the gamut of dishwasher platforms and 
their inherent efficiencies on the market today.
    Standard dishwasher cost-efficiency results are shown in Table 
II.22. DOE was unable to obtain incremental manufacturing cost 
information for compact dishwashers. Accordingly, DOE particularly 
seeks stakeholder feedback on how it can extend the results of the 
analysis for the standard-class dishwashers to compact dishwashers. 
This is identified as Issue 4 under ``Issues on Which DOE Seeks 
Comment'' in section IV.E of this ANOPR.

  Table II.22.--Incremental Manufacturing Cost for Residential Standard
                               Dishwashers
------------------------------------------------------------------------
                                Standard
-------------------------------------------------------------------------
                                                            Incremental
               Energy factor  (cycles/kWh)                     cost
------------------------------------------------------------------------
Baseline................................................  ..............
0.58....................................................           $4.01
0.62....................................................            7.38

[[Page 64467]]

 
0.65....................................................           14.00
0.68....................................................           30.35
0.72....................................................           71.38
0.80....................................................          129.28
1.11....................................................          180.66
------------------------------------------------------------------------

b. Dehumidifiers
    For dehumidifiers, AHAM collected incremental manufacturing cost 
data from its member companies and submitted them to DOE. DOE validated 
AHAM's efficiency-level cost data submittal with a design-options-
based/reverse engineering analysis, tearing down 14 dehumidifiers 
representing a range of capacities and efficiencies. In generating the 
cost-efficiency results, DOE combined the first two product classes 
proposed by EPACT 2005, 25.00 pints/day or less and 25.01-35.00 pints/
day, because some manufacturers did not have shipments in the 25.01 to 
35.00 pints/day category. To prevent disclosure of sensitive 
information, AHAM did not provide data for the EPACT 2005 categories 
45.01-54.00 pints/day and 75 pints/day and greater because fewer than 
three manufacturers produce units in these categories. Therefore cost-
efficiency curves were only generated for the following product 
classes: 0 to 35.00 pints/day, 35.01 to 45.00 pints/day, and 54.01 to 
74.99 pints/day. Results of the reverse engineering analysis for the 
product classes analyzed were in good agreement with the AHAM data. The 
following table shows the dehumidifier cost-efficiency results. AHAM 
provided all of the data for the three product classes analyzed, except 
the value for an EF of 1.74 in the 35.01 to 45.00 product class, which 
DOE extrapolated from the AHAM data.

      Table II.23.--Incremental Manufacturing Cost for Residential
                              Dehumidifiers
------------------------------------------------------------------------
                                     Energy factor  (L/     Incremental
     Product class,  pints/day              kWh)               cost
------------------------------------------------------------------------
0 to 35.00........................  Baseline............  ..............
                                    1.25................           $3.12
                                    1.30................            4.92
                                    1.35................           10.41
                                    1.40................           18.80
                                    1.45................           25.61
35.01 to 45.00....................  Baseline............  ..............
                                    1.35................            6.11
                                    1.40................           14.47
                                    1.45................           22.68
                                    1.50................           32.84
                                    1.74................           74.72
54.01 to 74.99....................  Baseline............  ..............
                                    1.55................            4.18
                                    1.60................            8.00
                                    1.65................           12.36
                                    1.70................           23.18
                                    1.80................           33.94
------------------------------------------------------------------------

c. Cooking Products
    For conventional cooking products, DOE derived the cost-efficiency 
curves from the previous rulemaking's analysis, scaling the incremental 
manufacturing costs by the PPI in accordance with stakeholder comments. 
Tables II.24 through II.30 and Table II.32 detail the cost-efficiency 
results.

    Table II.24.--Incremental Manufacturing Cost for Residential Gas
                                Cooktops
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............           0.156  ..............
1.................  0 + Electronic                 0.399          $12.06
                     Ignition.
2.................  1 + Sealed Burners..           0.420           32.06
------------------------------------------------------------------------


  Table II.25.--Incremental Manufacturing Cost for Residential Electric
                              Coil Cooktops
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............           0.737  ..............
1.................  0 + Improved Contact           0.769           $2.28
                     Conductance.
------------------------------------------------------------------------


[[Page 64468]]


  Table II.26.--Incremental Manufacturing Cost for Residential Electric
                             Smooth Cooktops
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............           0.742  ..............
1.................  0 + Halogen Lamp               0.753          $89.09
                     Element.
------------------------------------------------------------------------


    Table II.27.--Incremental Manufacturing Cost for Residential Gas
                             Standard Ovens
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............          0.0298  ..............
1.................  0 + Electric Globar           0.0536          $12.06
                     Ignition.
2.................  1 + Improved                  0.0566           15.64
                     Insulation.
3.................  2 + Improved Door             0.0572           16.72
                     Seals.
4.................  3 + Forced                    0.0593           38.86
                     Convection.
5.................  4 + Reduced Vent              0.0596           40.48
                     Rate.
6.................  5 + Reduced                   0.0600           44.11
                     Conduction Losses.
1a................  0 + Electronic Spark          0.0583           15.00
                     Ignition.
------------------------------------------------------------------------


 Table II.28.--Incremental Manufacturing Cost for Residential Gas Self-
                             Cleaning Ovens
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............          0.0540  ..............
1.................  0 + Forced                    0.0625          $11.01
                     Convection.
2.................  1 + Reduced                   0.0627           15.38
                     Conduction Losses.
3.................  2 + Improved Door             0.0632           16.60
                     Seals.
------------------------------------------------------------------------


  Table II.29.--Incremental Manufacturing Cost for Residential Electric
                             Standard Ovens
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............          0.1066  ..............
1.................  0 + Reduced Vent              0.1113           $1.63
                     Rate.
2.................  1 + Improved                  0.1163            4.84
                     Insulation.
3.................  2 + Improved Door             0.1181            8.53
                     Seals.
4.................  3 + Forced                    0.1206           48.14
                     Convection.
5.................  4 + Reduced                   0.1209           51.69
                     Conduction Losses.
------------------------------------------------------------------------


  Table II.30.--Incremental Manufacturing Cost for Residential Electric
                           Self-Cleaning Ovens
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............          0.1099  ..............
1.................  0 + Reduced                   0.1102           $4.37
                     Conduction Losses.
2.................  1 + Forced                    0.1123           43.98
                     Convection.
------------------------------------------------------------------------

    For conventional ovens, the linear relationships for EF versus 
volume allow scaling of the efficiency levels to cavity volumes other 
than the baseline volume. Table II.31 shows the slopes and intercepts 
of these relationships. The table does not show values for every oven 
efficiency level because the previous rulemaking did not analyze data 
at every efficiency level, and because certain design options have been 
screened out in the current analysis.

              Table II.31.--Slopes and Intercepts for Oven Energy Factor Versus Volume Relationship
----------------------------------------------------------------------------------------------------------------
                                                       Intercepts, Electric               Intercepts, Gas
                                                 ---------------------------------------------------------------
                      Level                               Slope = -0.0157                 Slope = -0.0073
                                                 ---------------------------------------------------------------
                                                     Standard       Self-Clean       Standard       Self-Clean
----------------------------------------------------------------------------------------------------------------
0...............................................  ..............          0.1632          0.0865          0.0865
1...............................................          0.1752  ..............          0.0895  ..............
2...............................................          0.1802  ..............  ..............  ..............

[[Page 64469]]

 
3...............................................          0.1822  ..............          0.0935  ..............
----------------------------------------------------------------------------------------------------------------
Note: EF = (Slope x Volume) + Intercept where Volume is expressed in cubic feet.

    For microwave ovens, the design options and efficiency levels DOE 
analyzed are those identified in the previous rulemaking, with 
incremental manufacturing costs scaled by the PPI.
    DOE specifically seeks stakeholder feedback on the approach of 
analyzing additional design options that would result in a lowering of 
the energy consumption of non-cooking features (e.g., standby power), 
even though the test procedure currently does not account for such 
usage in EF. This is identified as Issue 5 under ``Issues on Which DOE 
Seeks Comment'' in section IV.E of this ANOPR. It should be noted that 
DOE is considering the addition of standby power measurement to the 
test procedure, as identified as Issue 1 under ``Issues on Which DOE 
Seeks Comment'' in section IV.E of this ANOPR. The table below shows 
the cost-efficiency results for microwave ovens.

 Table II.32.--Incremental Manufacturing Cost for Residential Microwave
                                  Ovens
------------------------------------------------------------------------
                      Efficiency level                      Incremental
       Level               source               EF             cost
------------------------------------------------------------------------
0.................  Baseline............           0.557  ..............
1.................  0 + More Efficient             0.586           $8.68
                     Power Supply.
2.................  1 + More Efficient             0.588           17.95
                     Fan.
3.................  2 + More Efficient             0.597           32.53
                     Magnetron.
4.................  3 + Reflective                 0.602           51.11
                     Surfaces.
------------------------------------------------------------------------

d. Commercial Clothes Washers
    For CCWs, DOE derived the cost-efficiency curves from AHAM-
submitted data. Due to limited data collected, AHAM supplied cost data 
only at 1.42 MEF/9.5 WF and 2.0 MEF/5.5 WF. Based on a survey of CCWs 
currently sold, it is DOE's understanding that all products sold which 
meet an efficiency level of 1.6 EF/8.5 MEF or greater are based on a 
horizontal axis platform. Furthermore, based on interviews with 
manufacturers of CCWs, it is DOE's understanding that energy and water 
efficient vertical-axis-based designs currently sold in the residential 
market are not being considered for market introduction into the 
commercial laundry sector. Such designs include spray rinse and non-
agitator vertical-axis clothes washers that replace the agitator with 
an impeller, nutating plate, or other alternative manipulator. 
Manufacturers commented during interviews that such designs are not 
appropriate for the heavy-duty demands of commercial laundry 
applications.
    Notwithstanding the lack of manufacturing data for CCWs at several 
efficiency levels, the information gathered from the market research 
and manufacturer interviews suggests that CCWs cannot attain 
satisfactory cleaning performance at or above efficiency level 2 (1.6 
MEF and 8.5 WF) without the use of horizontal-axis technology. Thus, 
since DOE believes vertical-axis CCWs cannot perform satisfactorily at 
these efficiency levels, DOE assumes that all units sold at efficiency 
level 2 and higher will be horizontal-axis CCWs and likely, more 
efficient than required. In determining the incremental costs 
associated with these efficiency levels, DOE notes that, like 
dishwashers, CCWs are platform-driven products where a given platform 
achieves an inherent efficiency based on design and an optimized 
control strategy. This inherent efficiency can be further enhanced via 
design option improvements that the control strategy can incorporate. 
However, a manufacturer may also choose to offer a range of product 
efficiencies and redesign existing products to offer a less-efficient 
unit for marketing or other reasons. The per-unit cost of redesigning a 
product to reduce the efficiency is typically low, though a 
manufacturer will have to pay an up-front cost to develop the new 
controller, pay for certifications, etc. Thus, there is a disincentive 
to develop less-efficient units (i.e., ones that marginally meet the 
standard) unless the market is large enough to have the scale to 
support multiple price points based in part on energy efficiency.
    Thus, it is not surprising that the CCW market currently does not 
offer a wide range of efficiencies for a given axis of rotation. The 
scale of the market is small, and the presence of an Energy Star 
program deters manufacturers from offering CCWs that have efficiencies 
that lie between the baseline and Energy Star efficiency levels, as 
such units would be more costly than a baseline unit yet not be 
eligible for rebates from utilities. Since all manufacturers currently 
produce horizontal-axis CCWs in the range of 2.0 MEF/5.5 WF, no 
platform change would be required to the existing horizontal-axis CCW 
lines to meet any efficiency level up to and including 2.0 MEF/5.5 
WF.\23\ During interviews with DOE, manufacturers provided estimates of 
the cost increment to meet 2.2 MEF/5.1 WF, ranging from $316 to $450. 
DOE notes that $316 is the manufacturing cost increment provided by 
AHAM to take a CCW from a baseline efficiency level of 1.26 MEF/9.5 WF 
to a level of 2.0 MEF/5.5 WF. Thus, DOE expects that the incremental 
costs between 1.60 MEF/8.5 WF and 2.2 MEF/5.1 WF would be constant at 
the same value as those provided by AHAM for

[[Page 64470]]

the level 2.0 MEF/5.5 WF. For further information, see Chapter 5 of the 
TSD.
---------------------------------------------------------------------------

    \23\ DOE recognizes, however, that changes to the horizontal-
axis CCW lines may be needed to meet higher production volumes. Any 
investment to the horizontal-axis CCW production lines to 
accommodate higher sales volumes were not captured in this analysis. 
For a qualitative discussion of capital expenditures required for 
such a product conversion, see the preliminary manufacturer impact 
analysis chapter (Chapter 12) of the TSD.
---------------------------------------------------------------------------

    DOE specifically seeks feedback on the validity of this approach. 
DOE seeks information about lower-cost alternatives to horizontal-axis 
designs for levels greater than 1.42 MEF/9.5 WF and lower than 2.0 MEF/
5.5 WF. Additionally, DOE seeks information that would enable it to 
change the energy and water features of the 2.0 MEF/5.5 WF level to 
allow for manufacturer cost differentiation at the lower (and the 
higher) levels. DOE is also interested in receiving comment on how to 
weigh the impacts of a market-shift from vertical-axis technologies to 
horizontal-axis technologies. These issues are identified as Issue 3 
under ``Issues on Which DOE Seeks Comment'' in section IV.E of this 
ANOPR.
    The following table shows the preliminary commercial clothes washer 
cost-efficiency results.

   Table II.33.--Incremental Manufacturing Cost for Commercial Clothes
                                 Washers
------------------------------------------------------------------------
                                                            Incremental
               Efficiency levels  (MEF/WF)                     cost
------------------------------------------------------------------------
Baseline................................................  ..............
1.42/9.5................................................          $74.73
1.60/8.5................................................          316.35
1.72/8.0................................................          316.35
1.80/7.5................................................          316.35
2.00/5.5................................................          316.35
2.20/5.1................................................          316.35
------------------------------------------------------------------------

    Additional detail on the cost-efficiency results can be found in 
Chapter 5 of the TSD.

D. Energy Use and Water Use Characterization

    The purpose of the energy use characterization, which DOE performed 
for the four appliance products covered in the ANOPR, is to help assess 
the energy-savings potential of different product efficiencies. The 
purpose of the water use characterization, performed only for CCWs and 
residential dishwashers, is to help assess the water-savings potential 
of more efficient products. DOE relied on existing test procedures, as 
well as the Energy Information Administration (EIA)'s Residential 
Energy Consumption Survey (RECS) and other sources (which are described 
below for each product) to establish a range of energy (and water) use 
for the four appliance products.
1. Dishwashers
    DOE relied on the information in the DOE test procedure to 
establish the typical annual energy and water consumption of 
dishwashers. 10 CFR Part 430, Subpart B, Appendix C. In particular, DOE 
determined the annual energy and water consumption of dishwashers by 
multiplying the per-cycle energy and water use by the number of cycles 
per year, consistent with the DOE test procedure.
    Dishwasher per-cycle energy consumption consists of three 
components: (1) Water-heating energy; (2) machine energy; and (3) 
drying energy. The machine energy consists of the motor energy (for 
water pumping and food disposal) and booster heater energy. The DOE 
test procedure provides equations to calculate the total per-cycle 
dishwasher energy consumption.
    The largest component of dishwasher energy consumption is water-
heating energy use, which is directly dependent on water use. AHAM 
stated that it was not possible to provide either disaggregated per-
cycle energy use or water use data by standard level because, for any 
given standard level, the disaggregated energy use components and water 
use can vary greatly depending on dishwasher design. (AHAM, No. 14 at 
p. 8) However, AHAM did provide data showing how aggregate per-cycle 
energy use and per-cycle water use has changed over time since 1993. An 
analysis of the submitted AHAM data demonstrated that the relationship 
between energy and water use is nearly linear. This correlation is 
largely due to the energy required to heat water to the test procedure 
inlet temperature of 120 [deg]F (49 [deg]C) that most dishwashers use. 
The energy required to heat the inlet water to 120 [deg]F (49 [deg]C) 
usually represents the largest proportion of the overall per-cycle 
energy usage. Therefore, by knowing the aggregate per-cycle energy use, 
DOE determined the per-cycle water use and, in turn, the per-cycle 
water-heating energy consumption using DOE test procedure equations.
    DOE analyzed the energy and water use for candidate standard levels 
ranging from 0.58 EF to 1.11 EF for standard-sized dishwashers. Because 
Whirlpool does not produce products with efficiencies higher than 0.68 
EF, Whirlpool commented that it cannot provide energy and water 
consumption data for efficiency levels 0.72 EF, 0.80 EF, and 1.11 EF. 
(Whirlpool, No. 10 at pp. 9 and 12) However, based on the relationship 
between aggregate per-cycle energy use (which can be deduced from the 
dishwasher EF) and water use, which AHAM provided, DOE was able to 
estimate the energy use and water use of dishwashers at all candidate 
standard levels. Table II.34 shows the candidate standard levels for 
standard-sized dishwashers and their corresponding per-cycle energy and 
water use.
    Per-cycle energy use is disaggregated into two general categories: 
(1) Water heating; and (2) machine (e.g., motor energy for pumping) and 
dish drying from an electrical heating element. DOE estimated the per-
cycle energy use by taking the inverse of the EF. It estimated the per-
cycle water consumption based on the relationship between energy and 
water use. DOE estimated the per-cycle water-heating energy consumption 
by assuming the use of an electric water heater and multiplying the 
per-cycle water consumption by an assumed temperature rise of 70 [deg]F 
(21 [deg]C) and a specific heat of water of 0.0024 kWh/gal x [deg]F 
(4.186 joule/gram x [deg]C). The per-cycle machine and drying energy 
were determined by DOE by subtracting the water-heating energy 
consumption from the total energy consumption. The table below provides 
the standby power, which DOE assumed to be two watts. EEI questioned 
the degree to which consumers use the ``heated dry'' option to dry 
dishes instead of air-drying. (EEI, No. 7 at p. 5) For purposes of 
developing the per-cycle energy use and water use data shown below in 
Table II.34, DOE based the amount of time that the heated dry option is 
used on the DOE test procedure (i.e., 50 percent of the dishwasher 
cycles).

[[Page 64471]]



          Table II.34.--Standard Dishwashers: Per-Cycle Energy and Water Use by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
                                                                           Energy Use Components
                                                                       ----------------------------
  Candidate Standard Level         EF        Energy Use     Water Use       Water       Machine +      Standby
                                                                           Heating       Drying
----------------------------------------------------------------------------------------------------------------
                                cycles/kWh     kWh/cycle     gal/cycle     kWh/cycle     kWh/cycle            kW
                             -----------------------------------------------------------------------------------
Baseline....................          0.46          2.17          8.16          1.37          0.80         0.002
1...........................          0.58          1.72          6.07          1.02          0.70         0.002
2...........................          0.62          1.61          5.56          0.93          0.68         0.002
3...........................          0.65          1.54          5.21          0.88          0.66         0.002
4...........................          0.68          1.47          4.90          0.82          0.65         0.002
5...........................          0.72          1.39          4.52          0.76          0.63         0.002
6...........................          0.80          1.25          3.87          0.65          0.60         0.002
7...........................          1.11          0.90          2.25          0.38          0.52         0.002
----------------------------------------------------------------------------------------------------------------

    DOE determined the average annual energy and water consumption by 
multiplying the per-cycle energy and water consumption by the number of 
cycles per year. In 2003, DOE revised its test procedure for 
dishwashers to more accurately establish their efficiency and energy 
and water use. The 2003 test procedure amendments included a reduction 
in the average use cycles per year, from 264 to 215 cycles per 
year.\24\ Arthur D. Little (ADL) conducted a comprehensive analysis of 
dishwasher usage in 2001 that revealed that dishwashers are used, on 
average, 215 cycles per year. This usage pattern is currently used to 
establish the annual energy consumption of dishwashers with the DOE 
test procedure.
---------------------------------------------------------------------------

    \24\ 68 FR 51887 (August 29, 2003).
---------------------------------------------------------------------------

    In the context of the present rulemaking, DOE analyzed additional 
sources to determine whether the number of dishwasher cycles per year 
has changed. For example, DOE reviewed EIA's 2001 RECS data, which 
includes the annual usage of households with dishwashers. Of the more 
than 4,800 households in RECS, almost 2,500 have dishwashers. However, 
the average-use value for dishwashers is 180 cycles per year, with 
minimum and maximum values of 26 and 500 cycles per year, respectively. 
The Joint Comment argued that DOE should continue to use 215 cycles per 
year in its analysis of dishwashers. The organizations maintained that 
any estimate derived from the EIA's 2001 RECS is not nearly as robust 
as the estimate derived from the work conducted by ADL to revise the 
dishwasher test procedure. For example, the Joint Comment stated that 
RECS represents a much smaller sample than the one ADL used (about 
2,500 households versus 26,000 households) and that the questions 
pertaining to dishwashers in RECS are just one component in a very 
large and complex survey instrument dealing with all aspects of home 
energy use. (Joint Comment, No. 9 at p. 4) The Multiple Water 
Organizations also urged DOE to retain the use of 215 cycles per year 
in the analysis. (Multiple Water Organizations, No. 11 at p. 3) 
Whirlpool also stated that DOE should retain the use of 215 cycles per 
year in its analysis. (Whirlpool, No. 10 at p. 9) Because the ADL 
survey is a much more comprehensive and larger survey than the survey 
performed for RECS, DOE chose an average usage of 215 cycles per year 
as the most representative value for average dishwasher use.
    Therefore, the annual energy and water consumption shown in Table 
II.35 reflect an annual usage of 215 cycles per year. The annual water-
heating energy consumption reflects the use of either an electric, gas-
fired, or oil-fired water heater.

                               Table II.35.--Standard Dishwashers: Annual Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Energy                                       Annual energy use                                     Annual
                                                   factor    ---------------------------------------------------------------------------------------  water
                                               --------------                            Water heating*                                Machine +       use
           Candidate standard level                          ---------------------------------------------------------------------      drying +    ---------
                                                                                                             Oil                    standby[dagger]    1000
                                                  cycle/kWh     Electric         Gas     ----------------------------------------- -----------------   gal/
                                                                                            kWh/year     MMBtu/year    MMBtu/year       kWh/year       year
---------------------------------------------------------------------------------------------------------------------------------- --------------------------
Baseline......................................          0.46           295          1.34          1.24           190           1.8
1.............................................          0.58           219          1.00          0.92           168           1.3
2.............................................          0.62           201          0.91          0.85           163           1.2
3.............................................          0.65           188          0.86          0.79           160           1.1
4.............................................          0.68           177          0.80          0.74           156           1.1
5.............................................          0.72           163          0.74          0.69           153           1.0
6.............................................          0.80           140          0.64          0.59           146           0.8
7.............................................          1.11            81          0.37          0.34           129          0.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Electric, gas-fired, and oil-fired water heating based on water heater efficiencies of 100 percent for electric, 75 percent for gas, and 81 percent
  for oil.
[dagger] Standby annual energy use based on a dishwasher cycle length of one hour. Thus, Standby hours = 8766 hours-215 x 1 hour = 8551 hours.

    Whirlpool and EEI stated that DOE must account for the effects of 
pre-washing when establishing dishwasher energy use. EEI stated that 
DOE should account for pre-washing in estimating the baseline energy 
use of dishwashers.

[[Page 64472]]

Whirlpool stated that increasing the efficiency of dishwashers too far 
may result in wash performance being compromised, thereby forcing 
consumers to pre-wash more and resulting in increased energy and water 
consumption. (Whirlpool, No. 10 at p. 2; EEI, No. 7 at p. 5) EEI also 
stated that the analysis should capture the effects of reduced 
household cooking product usage on dishwasher usage. (EEI, No. 7 at p. 
3) Because DOE could not identify sources of data showing whether the 
amount of pre-washing is impacted by dishwasher efficiency, DOE 
conducted its analysis by assuming that hand- or pre-washing habits are 
not affected by product efficiency. But because increased diswasher 
energy efficiency may require future designs to utlize less water, DOE 
recognizes the possibility that more efficient dishwashers may degrade 
wash performance. Therefore, DOE seeks feedback on whether more 
efficient dishwasher designs will lead to increased hand- or pre-
washing and, if so, what increase in energy and water use can be 
expected. This is identified as Issue 7 under ``Issues on Which DOE 
Seeks Comment'' in section IV.E of this ANOPR. Considering the effects 
of reduced household cooking product use on dishwasher usage, and 
because DOE's dishwasher use assumptions are based on relatively recent 
survey data collected by ADL, DOE believes that any impacts from 
reduced cooking are captured in the updated use value of 215 cycles per 
year.
    As previously stated, of the more than 4,800 households in RECS, 
almost 2,500 have dishwashers. As will be described later in section 
II.G on the LCC and PBP analysis, DOE used the RECS household samples 
with their associated baseline annual energy consumption to conduct the 
LCC and PBP analyses. Additional detail on the energy and water use 
characterization of dishwashers can be found in Chapter 6 of the TSD.
2. Dehumidifiers
    The ANSI/AHAM Standard DH-1-2003, ``Dehumidifiers,'' for energy 
consumption measurements during capacity-rating tests, and CAN/CSA-
C749-94, ``Performance of Dehumidifiers,'' for energy factor 
calculations, that DOE codified under EPCA in a final rule for 
dehumidifiers provide a method for determining the product's rated 
efficiency in liters/kWh--but provide no method for establishing annual 
energy consumption (71 FR 71340 (December 8, 2006); 10 CFR 430.23(z)). 
DOE determined the annual energy consumption of dehumidifiers by first 
dividing the capacity (in pints per day) by the unit efficiency (in 
liters per kWh) and then multiplying it by the usage in hours per year.
    Both AHAM and Whirlpool commented on the difficulty of determining 
the energy consumption of dehumidifiers. Whirlpool stated that energy 
consumption varies considerably depending on geographic location and 
that average energy consumption is likely lower than the energy use DOE 
suggested in its Framework Document. In consultation with manufacturers 
and others familiar with that type of product, AHAM estimated that 
dehumidifier use is between 875 and 1,315 hours per year, and it 
recommended that DOE use the mid-point (1,095 hours) as the norm (with 
sensitivity analyses at 875 and 1,315 hours/year). AHAM also stated 
that many dehumidifiers shut off automatically once their condensation 
buckets are full, and the organization argued that such feature reduces 
use, because it is assumed that consumers do not regularly empty the 
bucket. (AHAM, No. 14 at p. 10; Whirlpool, No. 10 at p. 9) Because the 
AHAM data were developed based on the experience of manufacturers, DOE 
believes that the AHAM data are the most representative of actual use. 
Therefore, DOE relied on the data AHAM provided, but DOE did consider 
other sources of data for estimating annual energy consumption. In 
comparison with AHAM's recommendation that DOE use 1,095 operating 
hours per year as the norm, other literature sources from ADL, Energy 
Star, and LBNL, provide higher use values of 1,620, 2,851, and 4,320 
hours/year, respectively. Therefore, although DOE relied on AHAM's 
estimate of 1,095 hours to calculate a dehumidifier's average energy 
consumption, DOE used the higher use values from the above sources to 
demonstrate how they would impact annual energy consumption.
    DOE specifically seeks feedback on whether AHAM's estimate of 1,095 
hours per year is representative, on average, of dehumidifier use. This 
is identified as Issue 8 under ``Issues on Which DOE Seeks Comment'' in 
section IV.E of this ANOPR.
    For the six product classes of dehumidifiers, DOE calculated the 
baseline annual energy consumption (i.e., the consumption corresponding 
to the standards for each product class that take effect in 2007), 
based on the annual use assumptions presented in Table II.36 below. As 
shown in the table, the calculated annual energy use has an extensive 
range based on the capacity and efficiency of the dehumidifier and the 
hours of operation.

                                      Table II.36.--Dehumidifier Annual Energy Consumption Derived From Hourly Use
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Product class                           Average size             EF                      Annual energy use (kWh/year)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          AHAM
                      Pints/day                        Pints/day    Liters/day   Liters/kWh  ------------------------------    ADL     Energy     LBNL-
                                                                                                 Low       Mid      High                Star      high
--------------------------------------------------------------------------------------------------------------------------------------------------------
<=25.00.............................................         20.0          9.5          1.0        345       432       519       639      1124      1703
25.01-35.00.........................................         30.0         14.2          1.2        431       540       648       798      1405      2129
35.01-45.00.........................................         40.0         18.9          1.3        531       664       798       983      1730      2621
45.01-54.00.........................................         50.0         23.7          1.3        664       830       997      1228      2162      3276
54.01-74.99.........................................         64.5         30.5          1.5        742       928      1115      1373      2417      3662
>=75.00.............................................         85.0         40.2          2.25       652       816       979      1207      2123      3218
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 64473]]

    Table II.37 presents the annual energy consumption by candidate 
standard level for the predominant dehumidifier product class, 25.0-
35.00 pints/day. The annual energy consumption reflects an annual use 
corresponding to AHAM's mid-estimate of annual hourly operation (i.e., 
1,095 hours per year). Refer to Chapter 6 of the TSD for the annual 
energy consumption by candidate standard level for the other five 
dehumidifier product classes.

 Table II.37 25.01.--35.00 Pints/Day Dehumidifiers: Annual Energy Use by
                        Candidate Standard Level
------------------------------------------------------------------------
                                               Efficiency      Annual
                                             --------------  energy use
          Candidate  standard level                        -------------
                                               liters/kWh     kWh/year
------------------------------------------------------------------------
Baseline....................................          1.20           540
1...........................................          1.25           518
2...........................................          1.30           498
3...........................................          1.35           480
4...........................................          1.40           463
5...........................................          1.45           447
------------------------------------------------------------------------

    Unlike dishwashers, RECS does not have any data that indicate the 
use or annual energy consumption of dehumidifiers. Therefore, DOE did 
not use RECS to determine the variability of annual energy consumption. 
Rather, DOE relied exclusively on the data that AHAM provided (see 
Table II.37) to characterize the variability in annual energy 
consumption. As discussed previously, DOE used AHAM's estimate of 1,095 
hours to calculate the average annual energy consumption. To 
characterize the variability of use, DOE used a triangular probability 
distribution that had an average value of 1,095 hours per year, ranging 
from a minimum value of 875 hours to a maximum value of 1,315 hours. As 
will be described later in section II.G on the LCC and PBP analysis, 
DOE employed use variability in calculating annual energy consumption 
when it conducted the LCC and PBP analyses. Additional detail on the 
energy use characterization of dehumidifiers can be found in Chapter 6 
of the TSD.
3. Cooking Products
a. Cooktops and Ovens
    The annual energy consumption of electric and gas ranges (i.e., 
cooktops and ovens) has been in continual decline since the late 1970s. 
DOE's prior rulemaking on residential cooking products identified 
several studies that estimated the annual energy consumption of 
electric and gas ranges.\25\ The studies that covered the time period 
of 1977-1992 showed a steady decline in the annual energy consumption. 
Based on these studies, DOE published revisions to its test procedure 
as a final rule in 1997, which included a reduction in the annual 
useful cooking energy output and a reduction in the number of self-
cleaning oven cycles per year.\26\ The annual useful cooking energy 
output relates the energy factor of the cooking appliance to the annual 
energy consumption. Therefore, the lower the annual useful cooking 
energy output, the lower the annual energy consumption of the cooking 
appliance.
---------------------------------------------------------------------------

    \25\ U.S. Department of Energy-Office of Codes and Standards. 
Technical Support Document for Residential Cooking Products, Volume 
2: Potential Impact of Alternative Efficiency Levels for Residential 
Cooking Products, April, 1996. Prepared for the U.S. DOE by Lawrence 
Berkeley National Laboratory, Berkeley, CA. Appendix A. Available 
online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
    \26\ 62 FR 51976 (Oct. 3, 1997).
---------------------------------------------------------------------------

    Whirlpool and EEI stated that the annual energy consumption of 
cooking products is very likely lower than it was in the mid-1990s due 
to changes in consumer eating habits (i.e., people eating out more 
often). (Whirlpool, No. 10 at p. 10; EEI, No. 7 at p. 3) Based on more 
recent studies of cooking annual energy use, DOE confirmed that cooking 
energy consumption has continued to decline since the mid-1990s. 
Research results from the 2004 California Residential Appliance 
Saturation Study (CA RASS) \27\ and the Florida Solar Energy Center 
(FSEC) \28\ show that the annual energy consumption for most electric 
and gas cooktops and ovens is roughly 40 percent less than the energy 
use during the mid-1990s.
---------------------------------------------------------------------------

    \27\ California Energy Commission. California Statewide 
Residential Appliance Saturation Study, June 2004. (Prepared for the 
CEC by KEMA-XNERGY, Itron, and RoperASW. Contract No. 400-04-009). 
Available online at: http://www.energy.ca.gov/appliances/rass/index.html.
    \28\ Parker, D. S. Research Highlights from a Large Scale 
Residential Monitoring Study in a Hot Climate. Proceedings of 
International Symposium on Highly Efficient Use of Energy and 
Reduction of its Environmental Impact, January 2002. Japan Society 
for the Promotion of Science Research for the Future Program, Osaka, 
Japan. JPS-RFTF97P01002: pp. 108-116. Also published as FSEC-PF369-
02, Florida Solar Energy Center, Cocoa, FL. Available online at: 
http://www.fsec.ucf.edu/en/publications/html/FSEC-PF-369-02/index.htm
---------------------------------------------------------------------------

    Based on the more recent annual energy use data, DOE established 
the annual energy consumption for cooktops and ovens by candidate 
standard level. Tables II.38 through II.40 show the annual energy 
consumption by candidate standard level for the electric coil, electric 
smooth, and gas cooktop product classes, respectively. Tables II.41 
through II.44 show the annual energy consumption by candidate standard 
level for the electric standard, electric self-cleaning, gas standard, 
and gas self-cleaning oven product classes, respectively. For gas 
standard ovens (Table II.43), candidate standard level 1 (globar or hot 
surface ignition) and candidate standard level 1a (spark ignition) are 
addressed separately because the technologies have different energy use 
characteristics. Although both technologies are used for the same 
purpose (i.e., to eliminate the need for a standing pilot), hot surface 
ignition uses a significant amount of electrical energy while spark 
ignition uses a negligible amount of electricity. The use of a globar 
ignition device is the technology most commonly used to eliminate the 
need for a standing pilot in gas ovens. Therefore, in the case of gas 
standard ovens, efficiency levels two through six follow efficiency 
level `1' (globar ignition) rather than level `1a' (spark ignition), 
and in the case of gas self-cleaning ovens, the baseline efficiency 
level is based on the use of a globar ignition device. For more details 
on how DOE developed the annual energy consumption for each product 
class, refer to Chapter 6 of the TSD.

   Table II.38.--Electric Coil Cooktops: Annual Energy Consumption by
                        Candidate Standard Level
------------------------------------------------------------------------
                                                           Annual energy
                                                 Energy     consumption
          Candidate  standard level              factor  ---------------
                                                             kWh/year
------------------------------------------------------------------------
Baseline.....................................      0.737           128.2
1............................................      0.769           122.9
------------------------------------------------------------------------


  Table II.39.--Electric Smooth Cooktops: Annual Energy Consumption by
                        Candidate Standard Level
------------------------------------------------------------------------
                                                           Annual energy
                                                 Energy     consumption
          Candidate  standard level              factor  ---------------
                                                             kWh/year
------------------------------------------------------------------------
Baseline.....................................      0.742           128.2
1............................................      0.753           126.3
------------------------------------------------------------------------


[[Page 64474]]


                Table II.40.--Gas Cooktops: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
                                                      Cooking         Cooking          Pilot           Total
    Candidate standard level       Energy factor    efficiency   -----------------------------------------------
                                                     (percent)      MMBtu/year      MMBtu/year      MMBtu/year
----------------------------------------------------------------------------------------------------------------
Baseline........................           0.156            39.9            0.72            2.01            2.74
1...............................           0.399            39.9            0.72  ..............            0.72
2...............................           0.420            42.0            0.69  ..............            0.69
----------------------------------------------------------------------------------------------------------------


          Table II.41.--Electric Standard Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
                                                             Cooking       Cooking        Clock         Total
         Candidate standard level              Energy      efficiency  -----------------------------------------
                                               factor       (percent)     kWh/year      kWh/year      kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline..................................        0.1066          12.2         132.4          34.2         166.5
1.........................................        0.1113          12.8         125.9          34.2         160.1
2.........................................        0.1163          13.4         119.7          34.2         153.9
3.........................................        0.1181          13.7         117.6          34.2         151.8
4.........................................        0.1206          14.0          70.7          34.2         149.0
5.........................................        0.1209          14.1          70.6          34.2         148.6
----------------------------------------------------------------------------------------------------------------


        Table II.42.--Electric Self-Cleaning Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
                                               Cooking       Cooking     Self-clean       Clock         Total
  Candidate standard level       Energy      efficiency  -------------------------------------------------------
                                 factor       (percent)     kWh/year       kWh/year     kWh/year      kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline....................        0.1099          13.8         116.6          21.1          33.3         171.0
1...........................        0.1102          13.8         116.2          21.1          33.3         170.6
2...........................        0.1123          14.2         113.5          21.1          33.3         167.9
----------------------------------------------------------------------------------------------------------------


                                 Table II.43.--Gas Standard Ovens: Annual Energy Consumption by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Cooking            Cooking                Ignition                  Total
                Candidate standard level                    Energy    efficiency -----------------------------------------------------------------------
                                                            factor    (percent)    MMBtu/yr     kWh/yr     MMBtu/yr     kWh/yr     MMBtu/yr     kWh/yr
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline................................................     0.0298          5.9        0.82  ..........        1.01  ..........        1.83         0.0
1*......................................................     0.0536          5.8        0.84  ..........  ..........        21.1        0.84        21.1
2.......................................................     0.0566          6.1        0.80  ..........  ..........        21.1        0.80        21.1
3.......................................................     0.0572          6.2        0.79  ..........  ..........        21.1        0.79        21.1
4.......................................................     0.0593          6.5        0.75         1.8  ..........        21.1        0.75        22.9
5.......................................................     0.0596          6.5        0.75         1.8  ..........        21.1        0.75        22.9
6.......................................................     0.0600          6.6        0.74         1.8  ..........        21.1        0.74        22.9
1a*.....................................................     0.0583          5.8        0.84  ..........  ..........  ..........        0.84         0.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the
  technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
  ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2 through 6 are derived from
  candidate standard level 1.


                                                  Table II.44.--Gas Self-Cleaning Ovens: Annual Energy Consumption by Candidate Standard Level
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Cooking             Cooking                 Self-clean           Ignition      Clock               Total
                   Candidate  standard level                       Energy       effc'y   -------------------------------------------------------------------------------------------------------
                                                                   factor     (percent)     MMBtu/yr      kWh/yr      MMBtu/yr      kWh/yr       kWh/yr       kWh/yr      MMBtu/yr      kWh/yr
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline......................................................       0.0540          7.1         0.68  ...........         0.17          0.7         21.1         31.5         0.86         53.3
1.............................................................       0.0625          8.8         0.56          1.8         0.17          0.7         21.1         31.5         0.73         55.1
2.............................................................       0.0627          8.8         0.55          1.8         0.17          0.7         21.1         31.5         0.73         55.1
3.............................................................       0.0632          8.9         0.55          1.8         0.17          0.7         21.1         31.5         0.72         55.1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE used 2001 RECS data to establish the variability of annual 
cooking energy consumption for cooktops and ovens. RECS indicates which 
households in the survey of 4,822 households use electric and gas 
ranges, ovens, and cooktops. With regard to electric cooking products, 
2,895 household records have cooktops; 1,159 household records have 
standard ovens, and 1,601 household records have self-cleaning ovens. 
With regard to gas cooking products, 1,597 household records have 
cooktops either in electric ranges or as stand-alone units; 959 
household records have standard ovens, and 494 household records have 
self-cleaning ovens. The above totals represent cooktops and ovens in 
households either as a stand-alone unit or as part of a range.
    Although RECS does not provide the annual energy consumption of the 
cooking product for each household record, it does provide the 
frequency of cooking use. Thus, DOE used the

[[Page 64475]]

frequency of use to define the variability of the annual energy 
consumption. Conducting the analysis in this manner captured the 
observed variability in annual energy consumption while maintaining the 
average annual energy consumption shown above in Tables II.38 through 
II.44. To determine the variability of cooking product energy 
consumption, DOE first equated the weighted-average cooking frequency 
from RECS with the average energy use values reported in Tables II.38 
through II.44. DOE then varied the annual energy consumption for each 
RECS household based on its reported cooking frequency.
    For more details on cooking frequency variability and its impact on 
the variability of annual energy consumption, as well as additional 
detail on the energy use characterization of kitchen ranges and ovens, 
refer to Chapter 6 of the TSD. As will be described later in section 
II.G on the LCC and PBP analyses, DOE used the RECS household samples 
with their associated baseline annual energy consumption to conduct the 
LCC and PBP analyses.
b. Microwave Ovens
    After an increase since the late 1970s, the annual energy 
consumption of microwave ovens has remained relatively steady since the 
late 1980s. DOE's previous rulemaking on residential cooking products 
identified studies that estimated the annual energy consumption of 
microwave ovens.\29\ With the exception of one study based on the use 
of conditional demand analysis,\30\ the studies, which covered the time 
period 1988-1994, showed that annual energy consumption was no more 
than 200 kWh/year. Based on these studies, DOE published revisions to 
its test procedure as a final rule in 1997 that included an increase in 
the annual useful cooking energy output that more than doubled the test 
procedure's original value from the late 1970s (62 FR 51976 (October 3, 
1997)). The annual useful cooking energy output relates the energy 
factor of the microwave oven to the annual energy consumption. 
Therefore, the higher the annual useful cooking energy output, the 
higher the annual energy consumption.
---------------------------------------------------------------------------

    \29\ U.S. Department of Energy--Office of Codes and Standards. 
Technical Support Document for Residential Cooking Products, Volume 
2: Potential Impact of Alternative Efficiency Levels for Residential 
Cooking Products, April, 1996. Prepared for the U.S. DOE by Lawrence 
Berkeley National Laboratory, Berkeley, CA. Appendix A. Available 
online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html
    \30\ Electric Power Research Institute. Residential End-Use 
Energy Consumption: A Survey of Conditional Demand Estimates, 
October 1989. Palo Alto, CA. CU-6487. Available online at: http://my.epri.com/portal/server.pt?space=CommunityPage&cached=true&parentname=ObjMgr&parentid=2&control=SetCommunity&CommunityID=221&PageIDqueryComId=0
---------------------------------------------------------------------------

    A more recent study from the 2004 CA RASS is roughly in line with 
the average result from the previous studies showing that annual energy 
consumption has declined 15 percent since the mid-1990s. Based on the 
CA RASS study, DOE established the annual energy consumption for 
microwave ovens by candidate standard level as shown in Table II.45. 
For more details on how DOE developed the annual energy consumption for 
microwave ovens, refer to Chapter 6 of the TSD.

              Table II.45.--Microwave Ovens: Annual Energy Consumption by Candidate Standard Level
----------------------------------------------------------------------------------------------------------------
                                                                                      Cooking          Total
                    Candidate standard level                       Energy factor    efficiency   ---------------
                                                                                     (percent)       kWh/year
----------------------------------------------------------------------------------------------------------------
Baseline........................................................           0.557            55.7           131.0
1...............................................................           0.586            58.6           124.5
2...............................................................           0.588            58.8           124.1
3...............................................................           0.597            59.7           122.2
4...............................................................           0.602            60.2           121.2
----------------------------------------------------------------------------------------------------------------

    In its Framework Document, DOE requested energy use data for the 
individual components of the microwave oven (e.g., magnetron filament, 
magnetron power supply, and fan and motor). Sharp stated that the 
measurement methods in the DOE test procedure require the establishment 
of only the total input power of the oven and not the input power 
associated with individual components. Therefore, Sharp argued that if 
the oven is being tested in accordance with the DOE test procedure, 
disaggregated energy use data is neither apposite nor readily 
available. (Public Meeting Transcript, No. 5 at p. 108) DOE agrees that 
its test procedure only requires the measurement of total energy use, 
so, for purposes of this analysis, DOE has decided to only consider the 
total energy consumption of the product.
    With regard to the variability of annual cooking energy 
consumption, as it did for cooktops and ovens, DOE used RECS to 
establish microwave oven use variability. The 2001 RECS indicates that 
4,149 of the 4,822 households in the survey use microwave ovens. 
Similar to electric and gas cooktops and ovens, although RECS does not 
provide the annual energy consumption of microwave ovens for each 
household record, it does provide the frequency of cooking use. Thus, 
DOE used the frequency of microwave use to define the variability of 
the annual energy consumption. Conducting the analysis in this manner 
captured the observed variability in annual energy consumption while 
maintaining the average annual energy consumption shown above in Table 
II.45. To determine the variability of cooking product energy 
consumption, DOE first equated the weighted-average cooking frequency 
from RECS with the average energy use values reported above in Table 
II.45. DOE then varied the annual energy consumption for each RECS 
household based on its reported cooking frequency.
    For more details on cooking frequency variability and its impact on 
the variability of annual energy consumption, as well as additional 
detail on the energy use characterization of microwave ovens, refer to 
Chapter 6 of the TSD. As will be described later in section II.G on the 
LCC and PBP analyses, DOE used the RECS household samples with their 
associated baseline annual energy consumption to conduct the LCC and 
PBP analyses.
4. Commercial Clothes Washers
    DOE determined the annual energy and water consumption of CCWs by 
multiplying the per-cycle energy and water use by the number of cycles 
per year. CCW per-cycle energy consumption has three components: (1)

[[Page 64476]]

Water-heating energy; (2) machine energy; and (3) drying energy. The 
machine energy is comprised of the motor energy for turning an agitator 
or rotating a drum.
    The test procedures DOE recently codified at 10 CFR 431.154 are 
based on measuring the performance of residential clothes washers, and, 
therefore, the cycles-per-year values only indirectly reflect CCW usage 
through comparison with their residential counterparts (71 FR 71340). 
However, both ALS and EEI stated that CCW use is highly variable. ALS 
stated that CCW use varies based on the clothes washer market (e.g., 
laundry and multi-housing). ALS recommended contacting the MLA, the 
CLA, and route operators to obtain relevant use data. (Public Meeting 
Transcript, No. 5 at pp. 156-157; EEI, No. 7 at p. 6) As discussed in 
more detail below, DOE has relied on several studies including research 
sponsored by the MLA and the CLA (trade associations representing the 
commercial laundry industry) to establish typical use cycles for CCWs.
    As shown in Table II.46, DOE analyzed the energy and water use for 
specific candidate standard levels for CCWs. GE commented that because 
clothes container volume (capacity) may change with product efficiency, 
DOE should not use a constant capacity when determining the energy and 
water consumption of CCWs. GE suggested that DOE evaluate energy 
consumption on a per-cubic-foot basis. (Public Meeting Transcript, No. 
5 at p. 158) DOE agrees that capacity does impact product efficiency, 
but no data were provided or identified on how capacity may change with 
increased efficiency. Therefore, DOE maintained a constant capacity in 
its analysis of annual energy consumption by candidate standard level. 
However, DOE invites additional comments and data regarding the 
relationship between CCW capacity and efficiency.
    EEI requested clarification as to whether the energy consumption 
analysis for CCWs would capture reduced dryer energy consumption as a 
result of higher clothes washer efficiencies. (Pubic Meeting 
Transcript, No. 5 at p. 154) In response, we note that CCWs are rated 
with an MEF, and inherent in the determination of the MEF is the energy 
required to dry clothes. Therefore, DOE did capture the impact of 
higher efficiencies on dryer energy use.
    Table II.46 shows the candidate standard levels for CCWs and their 
corresponding per-cycle energy and water use. DOE determined the per-
cycle clothes-drying energy use by first establishing the remaining 
moisture content (RMC) based on the relationship between RMC and the 
MEF, and then using the DOE test procedure equation that determines the 
per-cycle energy consumption for the removal of moisture. DOE took the 
per-cycle machine energy use from its 2000 TSD for residential clothes 
washers.\31\ In the 2000 TSD, for MEFs up to 1.40, machine energy is 
0.133 kWh/cycle. For MEFs greater than 1.40, machine energy is 0.114 
kWh/cycle. With the per-cycle clothes-drying and machine energy known, 
DOE determined the per-cycle water-heating energy use by first 
determining the total per-cycle energy use (the clothes container 
volume divided by the MEF) and then subtracting from it the per-cycle 
clothes-drying and machine energy.
---------------------------------------------------------------------------

    \31\ U.S. Department of Energy. Final Rule Technical Support 
Document (TSD): Energy Efficiency Standards for Consumer Products: 
Clothes Washers, December 2000. Washington, DC. Chapter 4, Table 
4.1. Available online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/clothes_washers.html.
---------------------------------------------------------------------------

    DOE specifically seeks stakeholder feedback on whether the 
residential clothes washer per-cycle energy consumption values for 
clothes-drying and machine use taken from its 2000 TSD are 
representative of CCWs. This is identified as Issue 9 under ``Issues on 
Which DOE Seeks Comment'' in section IV.E of this ANOPR.
    EEI commented that detergents formulated for cold-water washes are 
now available. Because no hot water will be required if these 
detergents are used, the baseline energy consumption will be impacted. 
(EEI, No. 7 at p. 4) However, DOE cannot assume that consumers will 
routinely use cold-water detergents. Thus, although cold-water 
detergents may be available, DOE determined the water-heating energy 
use using the specifications set forth in the DOE test procedure. The 
per-cycle water-heating energy use in Table II.46 below depicts the use 
of an electric water heater and a 2.8 ft\3\ clothes container volume. 
DOE determined the per-cycle hot water use by dividing the per-cycle 
water-heating energy use by a temperature rise of 75 [deg]F (21 [deg]C) 
and a specific heat of 0.0024 kWh/gal x [deg]F (4.186 joule/gram x 
[deg]C). DOE determined the total water use by multiplying the WF by 
the clothes container volume.

                          Table II.46.--Commercial Clothes Washers: Per-Cycle Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    MEF             WF                                 Energy use                       Water use
                                            -------------------------------             ----------------------------------------------------------------
          Candidate standard level                                              RMC        Machine       Dryer      Water Heat      Hot         Total
                                              cu.ft./kWh/cyc    gal/cu.ft.   (percent)  ----------------------------------------------------------------
                                                                                           kWh/cyc      kWh/cyc      kWh/cyc      gal/cyc      gal/cyc
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...................................              1.26         9.50         53.7        0.133         1.27         0.82          4.5         26.6
1..........................................              1.42         9.50         51.2        0.133         1.21         0.63          3.5         26.6
2..........................................              1.60         8.50         48.4        0.114         1.13         0.50          2.8         23.8
3..........................................              1.72         8.00         46.5        0.114         1.09         0.43          2.4         22.4
4..........................................              1.80         7.50         45.3        0.114         1.06         0.39          2.1         21.0
5..........................................              2.00         5.50         42.2        0.114         0.98         0.31          1.7         15.4
6..........................................              2.20         5.10         39.0        0.114         0.90         0.26          1.5         14.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE determined the average annual energy and water consumption for 
CCWs by multiplying the per-cycle energy and water consumption by the 
number of cycles per year. Because the predominant applications of CCWs 
are in multi-family buildings and laundromats, DOE focused only on 
these two building applications to determine the appropriate number of 
CCW cycles per year. Other applications include lodging establishments 
(e.g., hotels and motels), in-patient health care facilities, and 
nursing homes. Relative to multi-family buildings and laundromats, 
these other applications are a small segment of the market. Therefore, 
DOE believes it is not critical to the analysis to accurately 
characterize CCW usage for these applications. As mentioned above, DOE 
relied on several

[[Page 64477]]

studies including research sponsored by the MLA and the CLA to 
establish typical use cycles for CCWs. Of the studies on CCW usage, 
seven focused on multi-family buildings demonstrating that usage ranged 
from one to almost eleven cycles per day.\32\ The sparse data for 
laundromats from three studies showed a variation between three to 
eight cycles per day.\33\
---------------------------------------------------------------------------

    \32\ The seven studies were conducted or commissioned by the 
following organizations: (1) City of Toronto (1999); (2) Federal 
Energy Management Program (2000); (3),Southern California Edison 
(2000); (4) MLA (2002); (5) Wisconsin Focus on Energy (2004); (6) 
Equipoise Consulting (2004); and (7) CEE.
    \33\ The three studies were conducted or commissioned by the 
following organizations: (1) Equipoise Counsulting (2004); (2) CEE; 
and (3) the CLA.
---------------------------------------------------------------------------

    Tables II.47 and II.48 show the annual energy and water consumption 
for multi-family buildings and laundromats, respectively. The energy 
and water consumption values provided below are based on average use 
cycles of 3.4 cycles per day for multi-family buildings and 6 cycles 
per day for laundromats. For details on the studies reviewed by DOE to 
develop the average use cycles of CCWs, refer to Chapter 6 of the TSD. 
In the tables below, the annual water-heating and clothes-drying energy 
consumption reflects the use of both an electric or a gas water heater 
and dryer.

                   Table II.47.--Commercial Clothes Washers, Multi-Family Application: Annual Energy and Water Use by Efficiency Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Annual energy use
                                                                      -----------------------------------------------------------------
       Candidate standard level                MEF             WF            Water heating                Drying                        Annual water use
                                                                      ----------------------------------------------------   Machine
                                                                         Electric       Gas        Electric       Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          cu.ft./kWh/cyc   gal/cu.ft.       kWh/yr     MMBtu/yr       kWh/yr     MMBtu/yr       kWh/yr     1000 gal/year
                                       -----------------------------------------------------------------------------------------------------------------
Baseline..............................              1.26         9.50         1020         4.64         1583         6.05          166              33.1
1.....................................              1.42         9.50          788         3.58         1503         5.74          166              33.1
2.....................................              1.60         8.50          625         2.84         1414         5.40          142              29.7
3.....................................              1.72         8.00          532         2.42         1354         5.18          142              27.9
4.....................................              1.80         7.50          482         2.19         1315         5.02          142              26.2
5.....................................              2.00         5.50          387         1.76         1215         4.64          142              19.2
6.....................................              2.20         5.10          328         1.49         1116         4.26          142              17.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


                Table II.48.--Commercial Clothes Washers, Laundromat Application: Annual Energy and Water Use by Candidate Standard Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Annual Energy Use
                                                                      -----------------------------------------------------------------
       Candidate standard level                MEF             WF            Water heating                Drying                        Annual water use
                                                                      ----------------------------------------------------   Machine
                                                                         Electric       Gas        Electric       Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                          cu.ft./kWh/cyc   gal/cu.ft.       kWh/yr     MMBtu/yr       kWh/yr     MMBtu/yr       kWh/yr     1000 gal/year
                                       -----------------------------------------------------------------------------------------------------------------
Baseline..............................              1.26         9.50         1793         8.16         2782        10.63          291              58.3
1.....................................              1.42         9.50         1385         6.30         2642        10.10          291              58.3
2.....................................              1.60         8.50         1098         4.99         2485         9.50          250              52.1
3.....................................              1.72         8.00          935         4.25         2380         9.10          250              49.1
4.....................................              1.80         7.50          847         3.85         2310         8.83          250              46.0
5.....................................              2.00         5.50          680         3.10         2136         8.16          250              33.7
6.....................................              2.20         5.10          576         2.62         1961         7.49          250              31.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE determined the variability in annual energy and water 
consumption based on usage data from the several CCW studies cited 
above. The studies DOE identified provided eight average use values for 
multi-family buildings ranging from a low of 1.5 cycles per day to a 
high of 6.4 cycles per day. For laundromats, the low and high values 
are three and eight cycles per day, respectively. DOE weighted the 
usage from each study to vary the annual energy and water consumption 
of CCWs when it conducted the LCC and PBP analyses. To reflect the 
usage patterns reported in the various studies, DOE weighted the use 
studies equally for multi-family applications. For laundromats, DOE 
used a triangular distribution that ranged from three to eight cycles 
per day and skewed it to yield an average value of six cycles per day. 
This range was based solely on data from the CLA. Of the three studies 
that DOE used to establish usage, only the CLA study provided a range. 
Because the two other studies, one from Equipoise Consulting and the 
other from CEE, provided an average use of six cycles per day, DOE 
skewed the triangular distribution to yield an average value of six 
cycles per day.
    As will be described later in section II.G on the LCC and PBP 
analyses, DOE used the usage variability to vary the annual energy and 
water consumption for multi-family and laundromat applications when it 
conducted the LCC and PBP analyses. Additional detail on the energy and 
water use characterization of CCWs can be found in Chapter 6 of the 
TSD.

E. Markups To Determine Equipment Price

    This section explains how DOE developed the markups to equipment 
prices that it used to derive total installed cost for the four 
appliance products (see Chapter 7 of the TSD). The total installed cost 
is the sum of the consumer equipment price and the installation cost. 
DOE multiplied the manufacturing costs developed from the

[[Page 64478]]

engineering analysis by the supply-chain markups it developed (along 
with sales taxes) to arrive at the consumer equipment prices, and added 
to them the installation costs to arrive at the final, installed prices 
for baseline products, as well as higher-efficiency products.
1. Distribution Channels
    Before it could develop markups, DOE needed to identify 
distribution channels (i.e., how the product is distributed from the 
manufacturer to the consumer). AHAM's 2003 Fact Book shows that over 93 
percent of residential appliances (including dishwashers, 
dehumidifiers, and cooking products) are distributed from the 
manufacturer directly to a retailer. Thus, DOE analyzed markups for 
residential dishwasher, dehumidifier, and cooking product sales on the 
premise that these appliances are sold based on a manufacturer-to-
retailer distribution channel. Wolf commented that for commercial-style 
cooking products, distributors are also involved in the distribution of 
the equipment. (Public Meeting Transcript, No. 5 at p. 177). For its 
analysis of cooking products, DOE designated commercial-style equipment 
as a separate product class that was exempted from the analysis due to 
the lack of available data for determining efficiency characteristics. 
Therefore, DOE did not consider the distribution channels for 
commercial-style equipment.
    For CCWs, the consumer is usually a commercial establishment. EEI 
and ALS both commented on the distribution channels for this product. 
EEI stated that national accounts may be applicable if users (e.g., 
hotels) are purchasing units in bulk from dealers. ALS stated that the 
distribution channels DOE identified during its Framework workshop were 
correct and added that laundromat owners generally go through 
distributors to purchase their clothes washers, whereas multi-housing 
owners generally go through route operators. (Public Meeting 
Transcript, No. 5 at pp. 175-176).
    DOE developed the distribution channels for this analysis of CCWs 
after reviewing data that CEE developed.\34\ The CEE data indicate that 
the relevant portions of the commercial, family-sized clothes washer 
market can be divided into three areas: (1) Laundromats; (2) private 
multi-family housing; and (3) large institutions (e.g., military 
barracks, universities, housing authorities, lodging establishments, 
and health care facilities). For these three market areas, the CEE data 
indicate that an overwhelming majority of CCWs are sold through either 
distributors or route operators. Consistent with ALS's comment, the CEE 
data show that laundromats generally purchase their equipment through 
distributors, whereas multi-family housing and large institutions 
generally lease their equipment from route operators. Because the CEE 
data do not indicate that national accounts are a significant 
distribution channel, DOE did not consider them in its analysis. Thus, 
for purposes of developing the markups for CCWs, DOE based its 
calculations on the distribution channel that involves only 
distributors. DOE estimated that the markups and the resulting consumer 
equipment prices for the distribution channel involving distributors 
would be representative of the prices paid by consumers acquiring their 
equipment from route operators.
---------------------------------------------------------------------------

    \34\ Consortium for Energy Efficiency, Commercial Family-Sized 
Washers: An Initiative Description of the Consortium for Energy 
Efficiency, 1998. Available online at: http://www.cee1.org/com/cwsh/cwsh-main.php3
---------------------------------------------------------------------------

    DOE specifically seeks feedback on whether determining CCW consumer 
prices based solely on the distribution channel that includes 
distributors will result in representative equipment prices for all CCW 
consumers. This is identified as Issue 10 under ``Issues on Which DOE 
Seeks Comment'' in section IV.E of this ANOPR.
2. Approach for Manufacturer Markups
    DOE developed an average manufacturer markup by examining the 
annual Securities and Exchange Commission (SEC) 10-K reports filed by 
four publicly-traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes residential 
dishwashers, dehumidifiers, and cooking products and commercial clothes 
washers.\35\ The four manufacturers represent a nearly 50 percent 
market share for core appliances. Because these companies are typically 
diversified, producing a range of different appliances, an industry 
average markup was assumed by DOE to be representative for the 
manufacture of each type of appliance. DOE evaluated markups for the 
years between 2002 and 2005, inclusive.
---------------------------------------------------------------------------

    \35\ Security Exchange Commission, SEC 10-K Reports, Various 
dates, 2002-2005, Security Exchange Commission. Available online at: 
http://www.sec.gov/
---------------------------------------------------------------------------

3. Approach for Retailer and Distributor Markups
    DOE based the retailer markups (for residential products) and 
distributor markups (for CCWs) on financial data from the U.S. Census 
Business Expenditure Survey (BES).\36\ DOE organized the financial data 
into balance sheets that break down cost components incurred by firms 
that sell the products.
---------------------------------------------------------------------------

    \36\ U.S. Census Bureau. 1997 Economic Census, Business Expense 
Survey, Retail Trade, Household Appliance Stores and Merchant 
Wholesalers, Machinery, Equipment, and Supplies, 1997. Washington, 
DC Available online at: http://www.census.gov/csd/bes/bes97.htm
---------------------------------------------------------------------------

    DOE developed baseline and incremental markups to transform the 
manufacturer sales price into a consumer equipment price. DOE used the 
baseline markups, which cover all of a retailer's or distributor's 
costs, to determine the sales price of baseline models (equipment sold 
under existing market conditions). The baseline markup relates the 
manufacturer sales price to the retailer sales price (in the case of 
residential products) or distributor sales price (in the case of CCWs). 
Incremental markups cover only those costs that scale with a change in 
the manufacturer's sales price. Incremental markups are coefficients 
that relate the change in the manufacturer sales price of higher 
efficiency models (equipment sold under market conditions with new 
efficiency standards) to the change in the retailer or distributor 
sales price.
    DOE used financial data from the BES, in the ``Household Appliance 
Stores'' category, to calculate markups used by retailers that apply to 
residential dishwashers, cooking products, and dehumidifiers. It used 
financial data from the BES for the category ``Machinery, Equipment, 
and Supplies Merchant Wholesalers'' to calculate markups used by 
distributors for CCWs. Using these markups, DOE generated retail prices 
for each potential standard level, assuming that each level would 
represent a new minimum efficiency standard.
    For CCWs, DOE undertook efforts to validate the retail prices that 
it generated through the use of distributor markups. Both the Seattle 
Public Utilities (SPU) and ALS suggested sources for establishing the 
retail price of CCWs. SPU stated that it may have relevant data that it 
obtained through one of its rebate incentive programs. ALS suggested 
that DOE contact the MLA, route operators, and property owners. (Public 
Meeting Transcription, No. 5 at pp. 174 and 176) DOE contacted several 
national distributors of commercial laundry equipment to collect CCW 
retail price data. DOE also identified a few company Web sites that 
provided retail price information. DOE did obtain the price data 
offered by SPU, but because all of the data corresponded to high-
efficiency, front-

[[Page 64479]]

loading, horizontal-axis washers, the data were not useful for 
identifying the price differential between baseline and more-efficient 
products. With the price data it did collect, DOE attempted to develop 
a retail price-versus-efficiency curve. However, most of the price data 
collected from distributors and Web sites did not provide the necessary 
information to establish the efficiency of these commercial clothes 
washers. Therefore, DOE was only able to establish the retail price 
differential between a typical top-loading, vertical-axis machine and a 
front-loading, horizontal-axis machine. The retail price difference 
(approximately $500) is very close to the retail price DOE generated 
through the use of markups. Therefore, for the price difference between 
a typical top-loading machine and a typical front-loading machine, DOE 
confirmed that its retail price increment for achieving CCW 
efficiencies in the range of 1.72 to 2.20 MEF were reasonable. Chapter 
3 of the TSD provides details on DOE's CCW retail price data collection 
effort.
4. Sales Taxes
    The sales tax component of the DOE mark-up analysis represents 
State and local sales taxes that are applied to the consumer appliance 
price. It is a multiplicative factor that increases the consumer 
appliance price. DOE derived State and local taxes from data provided 
by the Sales Tax Clearinghouse.\37\ These data represent weighted 
averages that include county and city rates. DOE then derived 
population-weighted average tax values for each Census division and 
large State.
---------------------------------------------------------------------------

    \37\ Sales Tax Clearinghouse, Inc. State sales tax rates along 
with combined average city and county rates, 2006. Available online 
at: http://thestc.com/STrates.com.
---------------------------------------------------------------------------

5. Summary of Markups
    Table II.49 summarizes each product's markups at each stage in the 
distribution channel and the overall baseline and incremental markups, 
as well as sales taxes. AHAM questioned what the typical overall markup 
is for home appliances and stated that, for residential clothes 
washers, a prior standards rulemaking analysis established an overall 
markup of approximately 2.0. (Public Meeting Transcript, No. 5 at p. 
177) As shown in Table II.49, the overall baseline markup is 
approximately 2.0 for all products, almost the same as the markup DOE 
used in its residential clothes washer standard rulemaking. The overall 
incremental markup, which DOE applied to an incremental change in 
manufacturing costs to develop an incremental change in retail price, 
is approximately 1.60. Additional detail on markups can be found in 
Chapter 7 of the TSD.

                                                            Table II.49.--Summary of Markups
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Dishwashers                 Dehumidifiers              Cooking products           Commercial clothes washers
            Markup            --------------------------------------------------------------------------------------------------------------------------
                                  Baseline        Incr.         Baseline        Incr.       Baseline        Incr.         Baseline            Incr.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer.................  1.26
                               1.26
                               1.26
                               1.26
--------------------------------------------------------------------------------------------------------------------------------------------------------
Retailer.....................  1.45           1.15           1.45           1.15          1.45          1.15
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distributor..................  .............  .............  .............  ............  ............  ............  1.43              1.18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sales Tax....................  1.068
                               1.065
                               1.069*
                               1.068
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall......................  1.95           1.55           1.95           1.54          1.95          1.55          1.93              1.59
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Represents average of all seven product classes of cooking products.

F. Rebuttable Presumption Payback Periods

    A more energy efficient device will usually cost more to buy than a 
device of standard energy efficiency. However, the more efficient 
device will usually cost less to operate due to reductions in operating 
costs (i.e., lower energy bills). The PBP is the time (usually 
expressed in years) it takes to recover the additional installed cost 
of the more efficient device (i.e., the incremental cost) through 
energy cost savings. EPCA establishes a rebuttable presumption that a 
standard for any of the four appliance products is economically 
justified ``[i]f the Secretary finds that the additional cost to the 
consumer of purchasing a product complying with an energy conservation 
standard level will be less than three times the value of the energy * 
* * savings during the first year that the consumer will receive as a 
result of the standard, as calculated under the applicable test 
procedure * * * '' (42 U.S.C. 6295(o)(2)(B)(iii) and 6316(a))
    To evaluate the rebuttable presumption, DOE estimated the 
additional cost of purchasing a more efficient, standard-compliant 
product, and compared this cost to the value of the energy saved during 
the first year of operation of the product. DOE understands that the 
increased cost of purchasing a standard-compliant product includes the 
cost of installing the product for use by the purchaser. DOE calculated 
the rebuttable presumption PBP (rebuttable PBP), as the ratio of the 
value of the increased installed price above the baseline efficiency 
level to the first year's energy cost savings. When this PBP is less 
than three years, the rebuttable presumption is satisfied. When this 
PBP is equal to or more than three years, the rebuttable presumption is 
not satisfied. In such case, the Secretary must take such information 
into account when determining whether a standard is economically 
justified. (42 U.S.C. 6295(o)(2)(B)(iii))
    Inputs to the PBP calculation are the first seven inputs shown in 
Table II.57 found in section II.G.2 of this ANOPR. The rebuttable PBPs 
differ from the other PBPs calculated in the LCC analysis, in that the 
calculation of rebuttable PBP uses discrete values (rather than 
distributions) for inputs. Other than the use of single-point values, 
the most notable difference between the distribution PBP and the 
rebuttable PBP is the latter's reliance on the DOE test procedure to 
determine a product's annual energy (and water) consumption. The 
distribution PBP is based on the annual energy and water consumption 
data described in section II.D, which are characterized with a range of 
values as opposed to the discrete single-point value that is used for 
the rebuttable PBP.

[[Page 64480]]

    For dishwashers, DOE based the annual energy and water consumption 
values that it used to determine the rebuttable PBP on the number of 
cycles per year specified in the DOE test procedure. The number of 
cycles from the DOE test procedure, 215 cycles per year, is equal to 
the average number of cycles that DOE used in its determination of 
distribution PBPs. Thus, on average, the rebuttable PBP for dishwashers 
is virtually the same as the average distribution PBP.
    For dehumidifiers, the DOE test procedure does not provide a method 
for determining the product's annual energy consumption. As a result, 
the DOE test procedure does not offer a basis for determining the 
rebuttable PBP. Therefore, for its determination of rebuttable PBP, DOE 
decided to use the same average operational use estimate of 1,095 hours 
that it used in its determination of distribution PBPs. Thus, the 
rebuttable PBP for dehumidifiers is virtually the same as the average 
distribution PBP.
    For cooking products, DOE determined the rebuttable PBP based on 
DOE test-procedure-derived annual energy consumption values which are, 
on average, greater than the annual energy use that DOE used to 
determine the distribution PBPs. Thus, the rebuttable PBPs for cooking 
products are shorter than the distribution PBPs. Because the 
distribution PBPs are based on more recent data that more accurately 
reflects the current energy consumption of cooking products, the 
distribution PBPs are more reflective of actual PBPs than the 
rebuttable PBPs.
    For CCWs, DOE based the annual energy and water consumption values 
that it used to determine the rebuttable PBP on the number of cycles 
per year specified in the DOE test procedure. The CCW test procedure 
cites the residential clothes washer test procedure to establish 
efficiency ratings as well as annual energy and water consumption. As a 
result, the annual number of use cycles, 392 cycles per year, for 
determining the annual energy and water consumption of CCWs, is 
representative of residential use, not commercial use. Because 
residential use is significantly lower than the average usage for 
commercial applications--1,241 cycles per year in multi-family 
buildings and 2,190 cycles per year in laundromats--the average annual 
energy and water consumption DOE used to determine rebuttable PBP is 
significantly less than the consumption expected to be associated with 
actual usage. As a result, the rebuttable PBP is significantly longer 
than the distribution PBPs for both multi-family and laundromat 
applications. To emphasize, DOE calculated the rebuttable PBPs based on 
residential use to comply with the requirements of EPCA, namely, to 
calculate the rebuttable PBP under the applicable test procedure. DOE 
understands that the distribution PBP, which is based on commercial 
use, reflects the actual PBP of CCW.
    DOE calculated rebuttable PBPs for each standard level relative to 
the distribution of product efficiencies that were used for the base 
case. Section II.G.2.d of this ANOPR provides details on the base case 
efficiency distributions for each of the four appliance products.
    Tables II.50 through II.56 show the nationally-averaged, rebuttable 
PBPs calculated for all product classes and candidate standard levels 
for each considered product.

  Table II.50.--Standard-Sized Dishwashers: Rebuttable Payback Periods
------------------------------------------------------------------------
                                                                   PBP
              Candidate standard level                   EF       years
------------------------------------------------------------------------
Baseline............................................      0.46  ........
1...................................................      0.58       0.7
2...................................................      0.62       2.1
3...................................................      0.65       4.6
4...................................................      0.68       9.5
5...................................................      0.72      17.9
6...................................................      0.80      21.8
7...................................................      1.11      16.6
------------------------------------------------------------------------


                                                 Table II.51.--Dehumidifiers: Rebuttable Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    0-35.00 pints/day*                                  35.01-45.00 pints/day                          54.01-74.99 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Candidate Standard Level          EF       PBP years           Level             EF       PBP years           Level             EF       PBP years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.........................        1.20  ...........  Baseline............        1.30  ...........  Baseline............        1.50  ...........
1................................        1.25         2.4   1...................        1.35         4.0   1...................        1.55         2.3
2................................        1.30         1.7   2...................        1.40         5.5   2...................        1.60         2.2
3................................        1.35         3.0   3...................        1.45         5.8   3...................        1.65         2.6
4................................        1.40         4.3   4...................        1.50         6.5   4...................        1.70         4.7
5................................        1.45         5.7   5...................        1.74         8.0   5...................        1.80        4.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* PBP based on the annual energy consumption and operating cost associated with the 25.01-35.00 pints/day class.


                                                   Table II.52.--Cooktops: Rebuttable Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Electric coil                                        Electric smooth                                      Gas
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Candidate standard level           EF       PBP  years          Level             EF       PBP  years          Level             EF      PBP  years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..........................       0.737  ...........  Baseline............       0.742  ...........  Baseline............       0.156  ..........
1.................................       0.769         3.7   1...................       0.753         410   1...................       0.399         1.3
                                    ..........  ...........                        ..........  ...........  2...................       0.420          34
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                                         Table II.53. Ovens: Rebuttable Payback Periods
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                    Electric standard                                   Electric self-clean                              Gas standard                               Gas self-clean
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    PBP                                           PBP                                          PBP                                         PBP
       Candidate standard level            EF      years             Level               EF      years             Level              EF      years             Level              EF     years
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..............................   0.1066  ........  Baseline.................   0.1099  ........  Baseline................   0.0298  ........  Baseline................   0.0540  .......

[[Page 64481]]

 
1.....................................   0.1113      2.2   1........................   0.1102     88.6   1*......................   0.0536      4.2   1.......................   0.0625      6.5
2.....................................   0.1163      3.3   2........................   0.1123    120.2   2.......................   0.0566      4.8   2.......................   0.0627      8.8
3.....................................   0.1181      5.1   .........................  .......  ........  3.......................   0.0572      5.2   3.......................   0.0632      9.0
4.....................................   0.1206     24.0   .........................  .......  ........  4.......................   0.0593     20.0   ........................  .......  .......
5.....................................   0.1209     25.2   .........................  .......  ........  5.......................   0.0596     20.3   ........................  .......  .......
                                        .......  ........                                      ........  6.......................   0.0600     21.4   ........................  .......  .......
                                        .......  ........                             .......  ........  1a*.....................   0.0583      1.4   ........................  .......  .......
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the technologies for
  each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark ignition device. Candidate standard level 1a is presented
  at the end of the table because candidate standard levels 2 through 6 are derived from candidate standard level 1.


        Table II.54.--Microwave Ovens: Rebuttable Payback Periods
------------------------------------------------------------------------
                                                                   PBP
               Candidate standard level                    EF     years
------------------------------------------------------------------------
Baseline..............................................    0.557  .......
1.....................................................    0.586     18.9
2.....................................................    0.588     36.8
3.....................................................    0.597     52.5
4.....................................................    0.602     73.9
------------------------------------------------------------------------


   Table II.55.--Commercial Clothes Washers, Multi-Family Application:
                       Rebuttable Payback Periods
------------------------------------------------------------------------
                                                                   PBP
           Candidate standard level              MEF       WF     years
------------------------------------------------------------------------
Baseline.....................................     1.26     9.50  .......
1............................................     1.42     9.50     24.0
2............................................     1.60     8.50     34.2
3............................................     1.72     8.00     25.6
4............................................     1.80     7.50     21.2
5............................................     2.00     5.50     13.6
6............................................     2.20     5.10      9.6
------------------------------------------------------------------------


    Table II.56.--Commercial Clothes Washers, Laundromat Application:
                       Rebuttable Payback Periods
------------------------------------------------------------------------
                                                                   PBP
           Candidate standard level              MEF       WF     years
------------------------------------------------------------------------
Baseline.....................................     1.26     9.50  .......
1............................................     1.42     9.50     29.8
2............................................     1.60     8.50     39.1
3............................................     1.72     8.00     29.1
4............................................     1.80     7.50     24.0
5............................................     2.00     5.50     15.0
6............................................     2.20     5.10     10.7
------------------------------------------------------------------------

    Some of the candidate standard levels appear to satisfy the 
rebuttable presumption test, but others do not. However, PBPs 
calculated based on energy consumption in actual field conditions are 
generally more accurate than, and may differ significantly from, the 
PBPs calculated under the rebuttable presumption test, which are based 
on energy consumption under the DOE test procedure. Therefore, in the 
LCC and PBP analyses described in the following section, DOE evaluated 
the candidate standard levels for the considered products using 
conditions that reflect normal use of the equipment.
    While DOE has examined the rebuttable presumption PBPs, DOE does 
not expect to determine the economic justification for any of the 
standard levels analyzed based on the ANOPR rebuttable presumption 
analysis. DOE's decision on standard levels will take into account the 
more detailed analysis of the economic impacts of increased efficiency 
pursuant to section 325(o)(2)(B)(i) of EPCA. (42 U.S.C. 
6295(o)(2)(B)(i))

G. Life-Cycle Cost and Payback Period Analyses

    The LCC and PBP analyses determine the economic impact of potential 
standards on consumers. The effects of standards on individual 
consumers--or commercial consumers in the case of CCWs--include changes 
in operating expenses (usually lower) and changes in total installed 
cost (usually higher). DOE analyzed the net effect of these changes for 
the four appliance products, first, by calculating the changes in 
consumers' LCCs likely to result from candidate standard levels as 
compared to a base case (no new standards). The LCC calculation 
considers total installed cost (which includes manufacturer selling 
price, sales taxes, distribution channel markups, and installation 
cost), operating expenses (energy, repair, and maintenance costs), 
equipment lifetime, and discount rate. DOE performed the LCC analysis 
from the perspective of the consumer of each product.
    DOE also analyzed the effect of changes in operating expenses and 
installed costs by calculating the PBP of potential standards relative 
to a base case. The PBP estimates the amount of time it would take the 
individual or commercial consumer to recover the assumed higher 
purchase expense of more energy efficient equipment through lower 
operating costs. Similar to the LCC, the PBP is based on the total 
installed cost and the operating expenses. However, unlike in the LCC, 
DOE considers only the first year's operating expenses in the 
calculation of the PBP. Because the PBP does not account for changes in 
operating expense over time or the time value of money, it is also 
referred to as a simple PBP. DOE utilizes the simple PBP because of its 
simplicity, transparency, and clarity. The simple PBP is a good 
approximation of more complex metrics that are based on operating 
expenses that do not change significantly from year to year. For 
purposes of capturing the annual change in operating expenses, DOE uses 
the LCC which accounts for the lifetime operating expenses of the 
product. For more detail on the LCC and PBP analyses, refer to Chapter 
8 of the TSD.
1. Approach
    During the Framework workshop, DOE considered conducting the LCC 
and PBP analyses using an approach that characterized inputs to the 
analysis with average values and handling any uncertainties or 
variability in the inputs through the use of scenarios that analyzed 
the effect of high and low values on the results. In recent standards 
rulemakings for other products (e.g., residential furnaces and boilers 
and distribution transformers), DOE conducted the LCC and PBP analyses 
by modeling both the uncertainty and variability in the inputs using 
Monte Carlo simulation and probability distributions. Although more 
extensive than the aforementioned approach based on the use of average 
inputs, the Monte Carlo approach provides additional information, 
specifically the percentage of consumers benefiting from and being 
burdened by

[[Page 64482]]

a prospective standard. The Joint Comment supported DOE's retention of 
Monte Carlo-based LCC and PBP analyses for this rulemaking, as long as 
the additional work required to perform the analyses over a simpler 
approach is not extensive. The Joint Comment stated that the Monte 
Carlo approach provides useful information on the percentage of 
consumers benefiting from and being burdened by an efficiency standard. 
(Joint Comment, No. 9 at p. 3) EEI and NWPCC also urged DOE to retain 
the Monte Carlo approach due to the additional information it provides 
over a simpler analysis. (EEI, No. 7 at p. 5; Public Meeting 
Transcription, No. 5 at p. 228) DOE agrees with the comments that the 
benefits of conducting the LCC and PBP with a Monte Carlo approach 
outweigh the extra effort it takes to implement it. Therefore, DOE 
developed its LCC and PBP spreadsheet models incorporating both Monte 
Carlo simulation and probability distributions by using Microsoft Excel 
spreadsheets combined with Crystal Ball (a commercially available add-
in program).
    In addition to characterizing several of the inputs to the analysis 
with probability distributions, in the case of residential dishwashers, 
dehumidifiers, and cooking products, DOE also developed a sample of 
individual households that use each of the appliances. The household 
sample sizes for these residential products are: 2,476 household 
records from dishwashers; 578 for dehumidifiers; 2,895 for electric 
cooktops; 1,159 for electric standard ovens; 1,601 for electric self-
cleaning ovens; 1,597 for gas cooktops; 959 for gas standard ovens; and 
494 for gas self-cleaning ovens. By developing household samples, DOE 
was able to perform the LCC and PBP calculations for each household to 
account for the variability in energy (and water) consumption and/or 
energy price associated with each household. DOE used EIA's 2001 RECS 
to develop household samples for each of the above three sets of 
products. The 2001 RECS is a national sample survey of housing units 
that collects statistical information on the consumption of and 
expenditures for energy in housing units along with data on energy-
related characteristics of the housing units and occupants. The 2001 
RECS consists of for 4,822 housing units and was constructed by EIA to 
be a national representation of the household population in the U.S. Of 
the household sub-samples used in the LCC and PBP analysis, only two 
(for dehumidifiers and gas self-cleaning ovens) have a size which is 
less than 20 percent of the total 2001 RECS housing unit size. Even so, 
the potential errors associated with these smaller sub-sample sizes are 
not anticipated to be so large as to affect the validity of the 
results. Specifically, the standard error of a sample of size 'n' is 
the sample's standard deviation divided by the square root of 'n'. For 
the full 2001 RECS sample the associated standard error is the sample's 
standard deviation multiplied by 1.5 percent. For the dehumidifier and 
gas self-cleaning oven sub-samples, the associated standard error is 
the sub-sample's standard deviation multiplied by 4.5 percent. Although 
the standard error of the sub-samples is three times the size of the 
entire 2001 RECS, it is still less than five percent. DOE believes a 
standard error of less than five percent is still small enough to yield 
meaningful results. Therefore, DOE believes the results generated from 
the household samples for dishwashers, dehumidifiers, and cooking 
products are representative of U.S. households using these appliances.
    For dishwashers and cooking products, DOE used EIA's 2001 RECS to 
establish the variability in annual energy use and energy pricing. (DOE 
also established the variability of annual water use and water pricing 
for dishwashers using the 2001 RECS.) Note, as discussed previously in 
section II.D on the energy and water use of the four appliance 
products, DOE characterized the average energy use of dishwashers and 
cooking products on relatively recent studies (for dishwashers, a 2001 
study performed by ADL, and for cooking products, studies from the 2004 
CA RASS and the FSEC). Therefore, to emphasize, DOE used RECS to 
establish the variability in annual energy use of dishwashers and 
cooking products, not the average consumption. For dehumidifiers, DOE 
used RECS to establish only the variability in electricity pricing. By 
using RECS, DOE was able to assign a unique annual energy use and/or 
energy price to each household in the sample. Due to the large sample 
of households considered in the LCC and PBP analyses, the range of 
annual energy use and/or energy prices is quite large. Thus, although 
the annual energy use and/or energy pricing are not uncertain for any 
particular household, their variability across all households 
contributes to the range of LCCs and PBPs calculated for any particular 
candidate standard level.
    For CCWs, DOE was unable to develop a consumer sample, since 
neither RECS nor EIA's Commercial Building Energy Consumption Survey 
(CBECS) provide the necessary data to develop one. As a result, DOE was 
not able to use a consumer sample to establish the variability in 
energy use (and water use) and energy pricing (and water pricing) for 
CCWs. Instead, DOE established the variability and uncertainty in 
energy and water use for CCWs by defining the uncertainty and 
variability in the use (cycles per day) of the equipment. The 
variability and uncertainty in energy and water pricing are 
characterized by regional differences in energy and water prices.
2. Life-Cycle Cost Inputs
    For each efficiency level analyzed, the LCC analysis requires input 
data for the total installed cost of the equipment, the operating cost, 
and the discount rate. Table II.57 summarizes the inputs and key 
assumptions DOE used to calculate the customer economic impacts of 
various candidate standard levels for each product. A more detailed 
discussion of the inputs follows.

  Table II.57.--Summary of Inputs and Key Assumptions Used in the Life-
                           Cycle Cost Analyses
------------------------------------------------------------------------
               Input                             Description
------------------------------------------------------------------------
Baseline Manufacturer Cost........  The baseline manufacturer cost is
                                     the cost incurred by the
                                     manufacturer to produce equipment
                                     meeting existing minimum efficiency
                                     standards.
Standard-Level Manufacturer Cost    Standard-level manufacturer cost
 Increases.                          increases are the incremental
                                     change in manufacturer cost
                                     associated with producing equipment
                                     at a standard level.
Markups and Sales Tax.............  Markups and sales tax convert the
                                     manufacturer cost to a consumer
                                     equipment price.
Installation Cost.................  The installation cost is the cost to
                                     the consumer of installing the
                                     equipment and represents all costs
                                     required to install the equipment
                                     other than the marked-up consumer
                                     equipment price. The installation
                                     cost includes labor, overhead, and
                                     any miscellaneous materials and
                                     parts.

[[Page 64483]]

 
Annual Energy (and Water)           The annual energy consumption is the
 Consumption.                        site energy use associated with
                                     operating the equipment. The annual
                                     water consumption, which is
                                     applicable to dishwashers and CCWs,
                                     is the site water use associated
                                     with operating the equipment. The
                                     annual energy (and water)
                                     consumption vary with the product
                                     efficiency.
Energy and Water Prices...........  Energy and water prices are the
                                     prices paid by consumers for energy
                                     (i.e., electricity, gas, or oil)
                                     and water. Multiplying the annual
                                     energy and water consumption by the
                                     energy and water prices yields the
                                     annual energy cost and water cost,
                                     respectively.
Repair and Maintenance Costs......  Repair costs are associated with
                                     repairing or replacing components
                                     that have failed. Maintenance costs
                                     are associated with maintaining the
                                     operation of the equipment.
Energy and Water Price Trends.....  DOE uses energy and water price
                                     trends to forecast energy and water
                                     prices into the future and, along
                                     with the product lifetime and
                                     discount rate, to establish the
                                     lifetime energy and water costs.
Product Lifetime..................  The product lifetime is the age at
                                     which the equipment is retired from
                                     service.
Discount Rate.....................  The discount rate is the rate at
                                     which DOE discounts future
                                     expenditures to establish their
                                     present value.
------------------------------------------------------------------------

a. Total Installed Cost Inputs
    The inputs to calculate total installed cost are as follows. 
``Baseline manufacturer cost'' is the cost incurred by the manufacturer 
to produce equipment meeting existing minimum efficiency standards. 
``Standard-level manufacturer cost increases'' are the change in 
manufacturer cost associated with producing equipment to meet a 
particular energy efficiency level (i.e., the incremental cost). 
Markups and sales tax convert the manufacturer cost to a consumer 
equipment price. The installation cost is the cost to the consumer of 
installing the equipment and represents all costs required to install 
the equipment other than the marked-up consumer equipment price. Thus, 
the total installed cost equals the consumer equipment price plus the 
installation cost. For a complete discussion on manufacturer costs 
refer back to section II.C in this ANOPR. For details on markups and 
sales taxes, refer back to section II.E in this ANOPR.
    More specifically, installation costs include labor, overhead, and 
any miscellaneous materials and parts. DOE determined installation 
costs for dishwashers, cooktops and ovens, and CCWs based on data in 
the RS Means Plumbing Cost Data, 2005.\38\ RS Means provides estimates 
on the labor required to install each of above three products.
---------------------------------------------------------------------------

    \38\ RS Means. Plumbing Cost Data, 28th Edition, 2005. Kingston, 
MA. p. 97. Available online for purchase at: http://www.remeans.com/.
---------------------------------------------------------------------------

    For dishwashers, DOE based its installation cost for baseline 
equipment on the nationally representative average cost associated with 
the installation of a four-or-more-cycle dishwasher as provided by RS 
Means. In addition, DOE determined that installation costs would not be 
impacted by increased standard levels. In reference to a design 
requiring a reduction in the inlet water temperature, Whirlpool stated 
that because it would require a cold water line to be plumbed to the 
dishwasher in addition to the hot water line, this design would incur 
greater installation costs than a baseline dishwasher. (Public Meeting 
Transcript, No. 5 at p. 204) DOE agrees with Whirlpool, but in its 
development of the manufacturing cost-versus-efficiency relationship, 
DOE did not believe that any of the standard levels would require a 
reduction in inlet water temperature. Thus, DOE did not alter its 
decision to keep the installation cost constant for more efficient 
designs.
    For cooktops and ovens, DOE based its installation cost for 
baseline equipment on the nationally representative average cost 
associated with the installation of 30-inch, free-standing cooking 
ranges as provided by RS Means. DOE estimated that the costs of 
installing a range are also representative of the costs of installing 
either a cooktop or an oven. However, Whirlpool suggested that DOE 
should assess whether more efficient cooking products incur increased 
installation costs. (Whirlpool, No. 10 at p. 10) As a basis for 
assessing whether installation costs vary with product efficiency, DOE 
used its own supplemental analysis to the previous rulemaking's TSD. In 
the supplemental analysis, DOE determined that only gas cooktops and 
ovens with electronic ignition devices would incur added installation 
costs.\39\ Because DOE did not receive any information to the contrary, 
DOE retained this determination for its current analysis. For gas 
cooktops and ovens, the previous analysis estimated, as an upper bound, 
that 20 percent of households using gas cooktops and ovens that do not 
require electricity to operate would require the installation of an 
electrical outlet in the kitchen to bring electrical service to the 
product. DOE used data from RS Means to estimate the installation cost 
of an electrical outlet.
---------------------------------------------------------------------------

    \39\ U.S. Department of Energy. Technical Support Document 
Energy Conservation Standards for Consumer Products Cooking 
Products, Supplemental Chapter 4--Life Cycle Cost and Payback 
Periods, Washington, DC. Available online at: http://www.eere.energy.gov/buildings/appliance_standards/residential/cooking_products_0998_r.html.
---------------------------------------------------------------------------

    For CCWs, GE stated that because CCWs are more difficult to install 
than typical residential clothes washers, the installation costs 
associated with residential washers should not be used as a basis for 
establishing CCW installation costs. (Public Meeting Transcript, No. 5 
at p. 46) DOE agrees with GE and based its installation cost for 
baseline equipment on the nationally representative average costs 
associated with the installation of a four-cycle, coin operating CCW as 
provided by RS Means. DOE determined that installation costs would not 
be impacted by increased standard levels because none of the CCWs 
currently on the market differ from each other in terms of installation 
requirements despite existing variations in their level of efficiency. 
All CCW have similar connections for electrical power, incoming water, 
and drains. In addition to these basic connections, CCW may require 
some additional cabling for vending systems and monitoring. However, 
neither vending systems nor system monitoring enhances CCW energy 
efficiency.
    Lastly, for dehumidifiers and microwave ovens, DOE determined that 
there are no costs associated with the installation of these products 
as a function of energy efficiency. Both types of products only require 
an available outlet to begin operating. Some dehumidifiers may require 
some additional work to allow condensate to drain directly into a 
drain. However, this product functionality is not related to energy 
efficiency--it simply relieves the user from having to drain the 
condensate bucket from time to time.
    Additional details on the development of installation costs can be 
found in Chapter 8 of the TSD.

[[Page 64484]]

b. Operating Cost Inputs
    The operating cost inputs are as follows. Annual energy consumption 
is the site energy use associated with operating an appliance product. 
Annual water consumption, which is applicable to dishwashers and CCWs, 
is the site water use associated with operating an appliance product. 
Energy and water prices are the prices paid by consumers for energy 
(i.e., electricity, gas, or oil) and water. DOE used energy and water 
price trends to forecast energy and water prices into the future. 
Multiplying the annual energy and water consumption by the energy and 
water prices yields the annual energy cost and water cost, 
respectively. Repair costs are associated with repairing or replacing 
components that have failed. Maintenance costs are associated with 
maintaining the operation of the equipment. The product lifetime is the 
age at which the equipment is retired from service. The discount rate 
is the rate at which DOE discounted future expenditures to establish 
their present value. The inputs for estimating annual energy (and 
water) consumption are discussed in section II.D.
    With regard to energy prices, DOE derived average prices for 13 
geographic areas consisting of the nine U.S. Census divisions, with 
four large States (New York, Florida, Texas, and California) treated 
separately. For Census divisions containing one of these large States, 
DOE calculated the regional average values leaving out data for the 
large State--for example, the Pacific region average does not include 
California, and the West South Central does not include Texas. EEI 
stated that DOE should use commercial energy prices to conduct the LCC 
and PBP analyses of CCWs and residential prices to conduct the analyses 
for the residential products. (EEI, No. 7 at p. 4) DOE agreed with 
EEI's suggestion, and as described below, DOE developed residential 
energy prices for its analysis of dishwashers, dehumidifiers, and 
cooking products, and commercial energy prices for CCWs.
    With regard to water prices, DOE derived average prices for the 
four Census regions. As described below, DOE used survey data survey 
covering approximately 300 water utilities and 200 wastewater utilities 
to develop water and wastewater prices. Because a sample of 200-300 
utilities is not large enough to calculate regional prices for all U.S. 
Census divisions and large States (for comparison, DOE used electricity 
price data form more than 3000 utilities), DOE calculated regional 
values at the Census region level (Northeast, South, Midwest, and 
West). Using these energy and water price data, DOE analyzed their 
variability at the regional level for each of the four appliance 
products.
    For the three residential products (i.e., dishwashers, 
dehumidifiers, and cooking products), DOE used 2001 RECS data to 
develop a sample of individual households that use each of the 
appliances. By developing household samples, DOE was able to perform 
the LCC and PBP calculations for each household to account for the 
regional variability in energy and water prices associated with each 
household. Because households use either electric, gas, or oil water 
heaters, DOE had to develop residential electricity, natural gas, and 
oil prices for its analysis of dishwashers. For dehumidifiers, DOE used 
only residential electricity prices because this product runs strictly 
using electricity. Since cooking products consist of electric and gas 
equipment, DOE had to use both residential electricity and natural gas 
prices in its analysis.
    For CCWs, DOE was unable to develop a consumer sample, since 
neither RECS nor EIA's CBECS provide the necessary data to develop one. 
Thus, DOE characterized energy and water price regional variability 
with probability distributions. It based the probability associated 
with each regional energy and water price on the population weight of 
each region. Because commercial laundry establishments use either 
electric or gas water heaters and dryers, DOE developed both commercial 
electricity and natural gas prices for its analysis of CCWs.
    DOE estimated residential and commercial electricity prices for 
each of the 13 geographic areas based on data from EIA Form 861, Annual 
Electric Power Industry Report. These data are published annually and 
include annual electricity sales in kWh, revenues from electricity 
sales, and number of consumers, for the residential, commercial, and 
industrial sectors, for every utility serving final consumers. DOE 
calculated an average residential electricity price by first estimating 
an average residential price for each utility--by dividing the 
residential revenues by residential sales--and then calculating a 
regional average price by weighting each utility with customers in a 
region by the number of residential consumers served in that region. 
The calculation methodology uses recently available EIA data from 2004. 
The calculation methodology of an average commercial electricity price 
is identical to that for residential price, except that DOE used 
commercial sector data.
    DOE estimated residential and commercial natural gas prices in each 
of the 13 geographic areas based on data from the EIA publication 
Natural Gas Monthly.\40\ This publication includes a compilation of 
monthly natural gas delivery volumes and average consumer prices by 
State, for residential, commercial, and industrial customers. 
Specifically, DOE used the complete annual data for 2005 to calculate 
an average summer and winter price for each area. It calculated 
seasonal prices because, for some end uses, seasonal variation in 
energy consumption is significant. DOE defined summer as the months May 
through September, with all other months defined as winter. DOE 
calculated an average natural gas price by first calculating the summer 
and winter prices for each State, using a simple average over the 
appropriate months, and then calculating a regional price by weighting 
each State in a region by its population. This method differs from the 
method used to calculate electricity prices, because EIA does not 
provide consumer-level or utility-level data on gas consumption and 
prices. The calculation methodology of an average commercial natural 
gas price is identical to that for residential price, except that DOE 
used commercial sector data.
---------------------------------------------------------------------------

    \40\ DOE-Energy Information Administration, Natural Gas Monthly, 
available online at: http://www.eia.doe.gov/oil_gas/natural_gas/data_publications/natural_gas_monthly/ngm.htm.
---------------------------------------------------------------------------

    DOE estimated residential oil prices in each of the 13 geographic 
areas based on data from EIA's Petroleum Navigator.\41\ From this Web 
site, available data include a compilation of monthly oil delivery 
volumes and average consumer prices by State, for residential, 
commercial, and industrial customers. Specifically, DOE used the 
complete annual data for 2005 to calculate an average oil price. It 
first calculated the prices for each State using simple averages and 
then calculated a regional price, weighting each State in a region by 
its population.
---------------------------------------------------------------------------

    \41\ DOE Energy Information Administration, Petroleum Navigator, 
available online at: http://tonto.eia.doe.gov/dnav/pet/pet_pri_top.asp.
---------------------------------------------------------------------------

    DOE obtained residential water and wastewater price data from the 
2004 Water and Wastewater Rate Survey conducted by Raftelis Financial 
Consultants and the American Water Works Association.\42\ The survey 
covers approximately 300 water utilities and

[[Page 64485]]

200 wastewater utilities, with each industry analyzed separately. The 
water survey includes, for each utility, the cost to consumers of 
purchasing a given volume of water. In this case, the data include a 
division of the total consumer cost into fixed and volumetric charges. 
Pacific Gas & Electric Company (PG&E) suggested that DOE determine the 
marginal price of water and wastewater for its analysis. PG&E claimed 
that the marginal cost of improving wastewater treatment plants to 
comply with State and Federal regulations is very high. Because higher 
marginal costs translate into higher marginal prices, PG&E states that 
the marginal price would be a more accurate representation of the 
economic savings due to reduced water consumption. (Public Meeting 
Transcript, No. 5 at p. 190) As PG&E suggested, DOE calculated only the 
volumetric charge to determine water prices, since only this charge 
would be affected by a change in water consumption. Including the fixed 
charge in the average water price would lead to a slightly higher water 
price. For wastewater utilities, the format is similar, but the cost 
refers to the cost of treating a given volume of wastewater.
---------------------------------------------------------------------------

    \42\ Raftelis Financial Consultants, Inc. 2004 RFC/AWWA Water 
and Wastewater Rate Survey, 2004. Charlotte, NC, Kansas City, MO, 
and Pasadena, CA. Available online at: http://www.raftelis.com/ratessurvey.html.
---------------------------------------------------------------------------

    EEI stated that price of water and wastewater is highly variable 
depending on consumer use or volume and geographic location. (Public 
Meeting Transcript, No. 5 at p. 192) DOE agrees with EEI in determining 
regional water and wastewater prices. However, a sample of 200-300 
utilities is not large enough to calculate regional prices for all U.S. 
Census divisions and large States (for comparison, the EIA Form 861 
data include more than 3,000 utilities). For this reason, DOE 
calculated regional values at the Census-region level (Northeast, 
South, Midwest, and West). DOE calculated average per-unit-volume 
prices by first calculating the per-unit-volume price for each utility 
by dividing the total volumetric cost by the volume delivered, then 
calculating a State-level average price by weighting each utility in a 
given State by the number of consumers it serves (either residential or 
commercial), and finally arriving at a regional average by combining 
the State-level averages, weighting each by the population of that 
State. This third step helps reduce any bias in the sample that may 
occur due to relative under-sampling of large States.
    For further details of the methodology that DOE used for deriving 
energy and water prices, see Chapter 8 of the TSD.
    In terms of trends, DOE used price forecasts by the EIA to estimate 
the trends in natural gas, oil, and electricity prices. The Joint 
Comment stated that current EIA energy price forecasts are too low and 
will likely be revised upwards over the next few years. The Joint 
Comment requested that DOE use the latest available price forecasts 
from EIA to conduct their analyses. (Joint Comment, No. 9 at p. 2) To 
estimate future energy prices, DOE used EIA's Annual Energy Outlook 
(AEO) 2007, containing the latest available price forecasts from 
EIA.\43\ To arrive at prices in future years, DOE multiplied the 
average prices described in the preceding section by the forecast of 
annual average price changes in AEO 2007. Because AEO 2007 forecasts 
prices to 2030, DOE followed past guidelines provided to the Federal 
Energy Management Program (FEMP) by EIA and used the average rate of 
change during 2020-2030 for electricity and the average rate of change 
during 2015-2020 for natural gas and oil to estimate the price trends 
after 2030. More recent guidelines to FEMP suggest that a 10-year 
rather than a 15-year historical time period be used to extrapolate 
natural gas and oil prices. DOE intends to use the more recent 
guidelines to extrapolate gas and oil prices for the NOPR. For the 
analyses to be conducted for the NOPR and Final Rule, DOE intends to 
update its energy price forecasts at those stages of the rulemaking 
based on the latest available AEO.
---------------------------------------------------------------------------

    \43\ U.S. Department of Energy-Energy Information 
Administration. Annual Energy Outlook 2007 with Projections to 2030, 
February, 2007. Washington, DC. DOE/EIA-0383 (2007).
---------------------------------------------------------------------------

    NWPCC commented that energy rate caps will be coming off in the 
next few years for many States in the U.S. and asked whether EIA's 
energy price forecasts take this into account. (Public Meeting 
Transcript, No. 5 at p. 193) In response, we note that EIA conducts an 
annual review of changes in energy prices by supply region and State in 
developing its AEO. In estimating future energy prices, EIA determines 
which regions of the country are regulated (i.e., with rate caps) and 
which are competitive or will become competitive soon (i.e., without 
rate caps). In past AEOs, EIA assumed that prices in fully competitive 
regions would reflect spot market prices and would be passed on to 
consumers immediately. EIA expects that the end of price reductions and 
caps in many States will push competitive regions closer to that 
representation of competition; however, EIA anticipates that most 
customers in fully competitive regions will not experience price 
changes immediately in response to changes in market generation costs. 
Consequently, for AEO 2007, EIA built lags into the calculation of 
competitive energy prices to simulate the delay from the time suppliers 
experience cost changes to the time consumers experience price changes 
as a result of the length of fixed-price contracts for standard-offer 
service (i.e., rates typically provided by regulated utilities) and 
competitive retail service.
    National Consumer Law Council (NCLC) asked how DOE will account for 
the variability in future electricity prices in the analyses. (Public 
Meeting Transcript, No. 5 at p. 188) In response, we note that DOE 
addressed future variability in electricity prices by incorporating 
three separate projections from AEO 2007 into the spreadsheet models 
for calculating LCC and PBP: (1) Reference Case; (2) Low Economic 
Growth Case; and (3) High Economic Growth Case. These three cases 
reflect the uncertainty of economic growth in the forecast period. The 
high and low growth cases show the projected effects of alternative 
growth assumptions on energy markets.
    To estimate the future trend for water and wastewater prices, DOE 
used data on the historic trend in the national water price index (U.S. 
city average) from 1970 through 2005 provided by the Bureau of Labor 
Statistics. DOE extrapolated a future trend based on the linear growth 
over the 1970-2005 time period.
    For further details on DOE's method for forecasting energy and 
water prices, see Chapter 8 of the TSD.
    With respect to repair and maintenance costs, DOE assumed that 
small, incremental changes in products related to efficiency result in 
either no or only very small changes in repair and maintenance costs, 
as compared to baseline products. DOE acknowledges there is a greater 
probability that equipment with efficiencies that are significantly 
greater than the baseline will incur some level of increased repair and 
maintenance costs because such equipment is more likely to incorporate 
technologies that are not widely available.
    On this point, Whirlpool stated that, in general, more-efficient 
products use more sophisticated components and controls, thereby 
increasing repair and maintenance costs. (Whirlpool, No. 10 at p. 10) 
Whirlpool also stated, in regard to cooking products, that repair and 
maintenance costs for more-efficient products will be higher than these 
types of costs for current baseline products. For example, Whirlpool 
cited two design options--bi-radiant ovens and electronic controls--as 
technologies that would incur higher repair and maintenance costs. 
Whirlpool suggested that DOE should obtain data on repair

[[Page 64486]]

and maintenance costs during the course of its data collection for the 
engineering analysis (similar comment provided by AHAM). (Whirlpool, 
No. 10 at p. 10; Public Meeting Transcript, No. 5 at pp. 199-200; AHAM, 
No. 14 at p. 5) With respect to CCWs, ALS stated that repair and 
maintenance costs for front-loading washers are much higher than for 
top-loading washers. (Public Meeting Transcript, No. 5 at p. 201) DOE 
requested that manufacturers and other stakeholders provide information 
regarding appropriate repair and maintenance costs if stakeholders 
believe such estimates are necessary. However, DOE did not receive any 
input, and, therefore, did not include any changes in repair and 
maintenance costs for products more efficient than baseline products in 
this ANOPR.
    DOE specifically seeks feedback on its assumption that increases in 
product energy efficiency would not have a significant impact on the 
repair and maintenance costs for the four appliance products covered by 
this rulemaking. This is identified as Issue 11 under ``Issues on Which 
DOE Seeks Comment'' in section IV.E of this ANOPR.
    With regard to appliance product lifetimes, DOE received several 
comments on the appropriate sources for establishing their length. For 
dishwashers, ACEEE stated that some sources indicate that dishwasher 
lifetime is 14 years, while Whirlpool commented that Appliance 
Magazine's estimate of nine years for dishwasher lifetime is reasonable 
and the most representative of actual consumer behavior. (Public 
Meeting Transcript, No. 5 at p. 206; Whirlpool, No. 10 at p 10) For 
dehumidifiers, the Joint Comment estimated a product lifetime of 15 
years based on discussions with manufacturers and other sources. The 
Joint Comment stated that Appliance Magazine generally provides shorter 
lifetimes as compared to other sources. In contrast, Whirlpool 
commented that Appliance Magazine's estimate of eight years for 
dehumidifier lifetime is reasonable and the most consistent with actual 
consumer behavior. (Joint Comment, No. 9 at p. 5; Whirlpool, No. 10 at 
p 10) For cooking products, both AHAM and Whirlpool stated that the 
best source for cooking product lifetimes is Appliance Magazine, as 
they believe it provides estimated lifetimes which are consistent with 
actual consumer behavior. (AHAM, No. 14 at p. 5; Whirlpool, No. 10 at 
p. 10) Finally, for CCWs, ALS stated that because CCWs are typically 
used more often than residential clothes washers, CCW lifetime will be 
significantly shorter than the lifetime of residential machines. It 
suggested that the best sources for CCW product lifetime data are the 
MLA and route operators. (Public Meeting Transcript, No. 5 at p. 206)
    To estimate the lifetime for each product covered by this 
rulemaking, DOE used only primary sources of data. For example, the 
Federal government's Energy Star Web site \44\ provides lifetime 
estimates for dishwashers and dehumidifiers, but the estimates are 
actually based on data from Appliance Magazine. Because, in this case, 
Appliance Magazine is the primary source of data, DOE did not use the 
Energy Star Web site as a primary source to estimate product lifetimes. 
DOE used a variety of sources to establish the lifetime of each of the 
considered products, including Appliance Magazine. Using the primary 
sources of data, DOE characterized product lifetimes with uniform 
probability distributions ranging from a minimum to a maximum value. 
Microwave ovens were the exception, since DOE used a triangular 
probability distribution for these products instead. DOE determined the 
average product lifetime by calculating the average value from the 
applicable primary sources of data. To establish the minimum and 
maximum product lifetime, DOE generally used the high and low values 
from these sources for each of the four appliance products. See Chapter 
8 of the TSD for more details.
---------------------------------------------------------------------------

    \44\ Energy Star Web site: http://www.energystar.gov/.
---------------------------------------------------------------------------

    To establish discount rates for the residential products (i.e., 
dishwashers, dehumidifiers, and cooking products), DOE derived 
estimates of the finance cost of purchasing the considered products. 
Following financial theory, the finance cost of raising funds to 
purchase appliances can be interpreted as: (1) The financial cost of 
any debt incurred to purchase equipment, or (2) the opportunity cost of 
any equity used to purchase equipment. For the residential products, 
the purchase of equipment for new homes entails different finance costs 
for consumers than the purchase of replacement equipment. Thus, DOE 
used different discount rates for new construction and replacement 
installations. NCLC questioned how DOE would evaluate the cost of 
household equity and debt to develop discount rates for residential 
products. (Public Meeting Transcript, No. 5 at p. 196) As described 
below, DOE used the Federal Reserve Board's Survey of Consumer Finances 
(SCF) for the years 1989, 1992, 1995, 1998, 2001, and 2004 as the basis 
for using household equity and debt to calculate discount rates for 
residential products.\45\ The SCF defines the shares of various equity 
and debt classes held by U.S. households, thereby allowing DOE to 
properly weight the equity and debt holdings to derive residential 
discount rates. EEI commented that because interest rates have been 
rising since 2003, making the cost of capital higher for residential 
and commercial consumers, DOE should take into account the most recent 
financial data when developing discount rates. (EEI, No. 7 at p. 4) As 
described below, DOE used the most recent data available, including 
data from the SCF to establish appropriate residential discount rates, 
and data from Damodaran Online to establish commercial discount 
rates.\46\
---------------------------------------------------------------------------

    \45\ The Federal Reserve Board. 1989, 1992, 1995, 1998, 2001, 
2004 Survey of Consumer Finances, 1989, 1992, 1995, 1998, 2001, 
2004. Available online at: http://www.federalreserve.gov/pubs/oss/oss2/scfindex.html.
    \46\ Damodaran Online is a widely used source of information 
about company debt and equity financing for most types of firms, and 
was the source of data for this analysis on educational services, 
hotels, and real estate investment trusts. See http://pages.stern.nyu.edu/adamodar/.
---------------------------------------------------------------------------

    New equipment is often purchased as part of the purchase of a home, 
which is almost always financed with a mortgage loan. DOE estimated 
discount rates for new-housing equipment using the effective real 
(after-inflation) mortgage rate for homebuyers. This rate corresponds 
to the interest rate after deduction of mortgage interest for income 
tax purposes and after adjusting for inflation. The data sources DOE 
used for mortgage interest rates are the SCFs in 1989, 1992, 1995, 
1998, 2001, and 2004. After adjusting for inflation and interest tax 
deduction, effective real interest rates on mortgages across the six 
surveys averaged 3.2 percent.
    For residential replacement equipment, DOE's approach for deriving 
discount rate involved identifying all possible debt or asset classes 
that might be used to purchase replacement equipment, including 
household assets that might be affected indirectly. DOE did not include 
debt from primary mortgages and equity of assets considered non-liquid 
(such as retirement accounts), since these would likely not be affected 
by replacement equipment purchases. DOE estimated the average shares of 
the various debt and equity classes in the average U.S. household 
equity and debt portfolios using SCF data for 1989, 1992, 1995, 1998, 
2001, and 2004. DOE used the mean share of each class across the six 
sample years as a basis for estimating the effective financing rate for 
replacement equipment. DOE estimated

[[Page 64487]]

interest or return rates associated with each type of equity and debt 
using SCF data and other sources. The mean real effective rate across 
all types of household debt and equity, weighted by the shares of each 
class, is 5.6 percent.
    For CCWs, DOE derived the discount rate from the cost of capital of 
publicly-traded firms in the sectors that purchase CCWs. These 
companies typically finance equipment purchases through debt and equity 
capital. DOE estimated the cost of capital of these firms as the 
weighted average of the cost of equity financing and the cost of debt 
financing. The costs of debt and equity financing are usually 
obtainable from publicly available data concerning the major types of 
companies in the sectors that purchase CCWs. Damodaran Online is a 
widely used source of information about company debt and equity 
financing for most types of firms, and it was the source of data for 
this analysis on educational services, hotels, and real estate 
investment trusts. Since Damodaran Online does not include data for 
firms in the personal services sector (Standard Industrial 
Classification 7200), DOE used data from Ibbotson's Associates \47\ for 
this sector.
---------------------------------------------------------------------------

    \47\ Ibbotson Associates is a leading authority on asset 
allocation with expertise in capital market expectations and 
portfolio implementation. See Ibbotson's Associates Statistics for 
SIC 72, available online at: http://www.ibbotson.com
---------------------------------------------------------------------------

    DOE estimated the cost of equity using the capital asset pricing 
model (CAPM). The CAPM assumes that the cost of equity for a particular 
company is proportional to the systematic risk faced by that company, 
where high risk is associated with a high cost of equity and low risk 
is associated with a low cost of equity. The systematic risk facing a 
firm is determined by several variables: (1) The risk coefficient of 
the firm; (2) the expected return on risk-free assets; and (3) the 
equity risk premium (ERP). The risk coefficient of the firm indicates 
the risk associated with that firm relative to the price variability in 
the stock market. The expected return on risk-free assets is defined by 
the yield on long-term government bonds. The ERP represents the 
difference between the expected stock market return and the risk-free 
rate.
    The cost of debt financing is the interest rate paid on money 
borrowed by a company. The cost of debt is estimated by adding a risk 
adjustment factor to the risk-free rate. This risk adjustment factor 
depends on the variability of stock returns represented by standard 
deviations in stock prices.
    DOE estimated the weighted-average cost of capital (WACC) using the 
respective shares of equity and debt financing for each of the sectors 
that purchase CCWs. It calculated the real WACC by adjusting the cost 
of capital by the expected rate of inflation. To obtain an average 
discount rate value, DOE used additional data from the CEE on the 
number of CCWs in use in various sectors. Weighting each sector by its 
market share, DOE estimated the average discount rate for companies 
that purchase CCWs to be 5.7 percent, using an inflation rate of 2.5 
percent (the average of inflation rates over the 2001-2005 time 
period). For further details on DOE's method for estimating discount 
rates, see Chapter 8 of the TSD.
    One additional issue pertaining to the LCC operating cost inputs 
concerns the potential ``split incentives'' that exist in the CCW 
market. Several organizations commented that under a split incentive 
situation, the party purchasing more-efficient and more-expensive 
equipment may not realize the operating cost savings from the more-
efficient equipment. For example, commenters asserted that under new 
energy efficiency standards, route operators would incur the burden of 
higher purchase prices due to more-efficient equipment; property owners 
would realize the benefits of operating cost savings, and end-users may 
incur the burden of increased costs to use the washers. (Public Meeting 
Transcript, No. 5 at p. 239; EEI, No. 7 at p. 4; MLA, No. 8 at p. 2; 
Whirlpool, No. 10 at p. 13; Multiple Water Organizations, No. 11 at p. 
2) In its LCC and PBP analyses, DOE did not explicitly consider the 
potential of split incentives in the CCW market, because it believes 
that the probability of such a split incentive was very low. The actual 
consumers of this product (primarily property-owners of multi-family 
buildings and laundromats) realize both the burden of increased 
purchase prices and the benefit of reduced operating cost savings. Any 
split incentive that would occur for end-users in the form of increased 
vending prices is likely to be very low due to the competitive nature 
of the market. For example, if end-users feel as though they are paying 
excessively high prices to use a service, they will seek out cheaper 
options to obtain the service, thereby forcing providers to adjust 
their prices in accordance with what is a reasonable return on their 
investment. Due to the checks and balances that occur in the 
marketplace, DOE believes it is unnecessary to explicitly account for 
the possible inequities to end-users that may arise from a split 
incentive.
c. Effective Date
    The effective date is the future date when a new standard becomes 
effective. Based on DOE's implementation report for energy conservation 
standards activities submitted under Section 141 of EPACT 2005, a final 
rule for the four appliance products being considered for this 
standards rulemaking is scheduled for completion in March 2009. The 
effective date of any new energy efficiency standards for these 
products will be three years after the final rule is published in the 
Federal Register (i.e., March 2012). DOE calculated the LCC for all 
consumers as if they each would purchase a new piece of equipment in 
the year the standard takes effect.
d. Equipment Assignment for the Base Case
    For purposes of conducting the LCC analysis, DOE analyzed candidate 
standard levels relative to a baseline efficiency level. However, some 
consumers already purchase products with efficiencies greater than the 
baseline levels. Thus, to accurately estimate the percentage of 
consumers that would be affected by a particular standard level, DOE 
took into account the distribution of product efficiencies currently in 
the marketplace. In other words, DOE conducted the analysis by taking 
into account the full breadth of product efficiencies that consumers 
already purchase under the base case (i.e., the case without new energy 
efficiency standards).
    DOE's approach for conducting the LCC analysis for residential 
products (i.e., dishwashers, dehumidifiers, cooking products) relied on 
developing samples of households that use each of the products. DOE 
used a Monte Carlo simulation technique to perform the LCC calculations 
on the households in the sample. Using the current distribution of 
product efficiencies, DOE assigned each household in the sample a 
specific product efficiency. Because it performed the LCC calculations 
on a household-by-household basis, DOE based the LCC for a particular 
standard level on the efficiency of the product in the given household. 
For example, if a household was assigned a product efficiency that is 
greater than or equal to the efficiency of the standard level under 
consideration, the LCC calculation would reveal that this household is 
not impacted by an increase in product efficiency that is equal to the 
standard level.
    For dishwashers, DOE characterized base case market shares based on 
data that AHAM provided that show the distribution of standard-sized

[[Page 64488]]

dishwasher efficiencies sold in 2005. Table II.58 presents the market 
shares of the candidate standard levels in the base case for standard-
sized dishwashers. The market shares in Table II.58 represent the 
products that households would have been anticipated to purchase in the 
year 2012 in the absence of new standards.

    Table II.58.--Standard-Sized Dishwashers: Base Case Market Shares
------------------------------------------------------------------------
                                                                Market
            Candidate standard level                  EF         share
                                                               (percent)
------------------------------------------------------------------------
Baseline........................................        0.46         3.0
*...............................................        0.50         2.0
*...............................................        0.54         2.0
1...............................................        0.58        43.0
*...............................................        0.60        17.0
2...............................................        0.62        22.0
3...............................................        0.65         8.0
4...............................................        0.68         2.5
5...............................................        0.72         0.2
6...............................................        0.80         0.2
7...............................................        1.11        0.2
------------------------------------------------------------------------
* Intermediate efficiency level.

    For dehumidifiers, DOE characterized base case market shares based 
on data that AHAM provided that show the distribution of dehumidifier 
efficiencies in 2005 for two of the six product classes: 35.01-45.00 
pints/day and 54.01-74.99 pints/day. Because DOE conducted the 
engineering and LCC and PBP analyses on the combined product class of 
0-35.00 pints/day product class as well as these two classes, DOE had 
to estimate the market share data for the combined 0-35.00 pints/day 
product class. Without any data provided by either AHAM or 
manufacturers or available from other sources, DOE assumed that the 
market shares for the combined 0-35.00 pints/day class were equivalent 
to the market shares for the closest product class--the 35.01-45.00 
pint/day product class. For purposes of conducting the NIA, DOE 
estimated that the market share data for the 35.01-45.00 pints/day and 
54.01-74.99 pints/day classes could be used to characterize the base 
case market shares for the 45.01-54.00 pints/day and 75 pints/day and 
greater product classes, respectively. Table II.59 presents the market 
shares of the efficiency levels in the base case for the three classes 
of dehumidifiers that DOE used to conduct the LCC analysis. The market 
shares in Table II.59 represent the equipment that households would 
have been anticipated to purchase in the year 2012 in the absence of 
new standards.

                                                  Table II.59.--Dehumidifiers: Base Case Market Shares
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     0-35.00 pints/day                                   35.01-45.00 pints/day                          54.01-74.99 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Market                                         Market                                        Market
               Level                    EF         share             Level             EF         share             Level             EF         share
                                                 (percent)                                      (percent)                                      (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..........................        1.20          27   Baseline............        1.30          27   Baseline............        1.50          31
1.................................        1.25          35   1...................        1.35          35   1...................        1.55           0
2.................................        1.30           0   2...................        1.40           0   2...................        1.60          57
3.................................        1.35           0   3...................        1.45           0   3...................        1.65          12
4.................................        1.40          38   4...................        1.50          38   4...................        1.70           0
5.................................        1.45           0   5...................        1.74           0   5...................        1.80           0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because DOE currently does not regulate cooking product efficiency 
with an energy efficiency descriptor, very little is known regarding 
the distribution of product efficiencies that consumers in the United 
States currently purchase. Therefore, for all electric cooking 
products, including microwave ovens, and gas self-cleaning ovens, DOE 
estimated that 100 percent of the market existed at the baseline 
efficiency levels. For gas cooktops and gas standard ovens, data are 
available, both from DOE's previous rulemaking analysis and the 
Appliance Recycling Information Center, to indicate the historical 
percentage of products shipped with standing pilots. Therefore, DOE was 
able to estimate the percentage of the gas cooktop and gas standard 
oven market that is still sold with standing pilot lights. Table II.60 
presents the market shares of the efficiency levels in the base case 
for gas cooktops and gas standard ovens. In the table, candidate 
standard level 1 represents products without standing pilot light 
ignition systems. The market shares in Table II.60 represent the 
equipment that households would have been anticipated to purchase in 
the year 2012 in the absence of new energy conservation standards.

                   Table II.60.--Gas Cooktops and Gas Standard Ovens: Base Case Market Shares
----------------------------------------------------------------------------------------------------------------
                         Gas cooktops                                          Gas standard ovens
----------------------------------------------------------------------------------------------------------------
                                                 Market share       Candidate                      Market share
   Candidate standard level           EF           (percent)     standard level         EF           (percent)
----------------------------------------------------------------------------------------------------------------
Baseline......................           0.156             6.8  Baseline........          0.0298            17.6
1.............................           0.399            93.2  1*..............          0.0536            82.4
2.............................           0.420               0  2...............          0.0566               0
                                ..............  ..............  3...............          0.0572               0
                                ..............  ..............  4...............          0.0593               0
                                ..............  ..............  5...............          0.0596               0
                                ..............  ..............  6...............          0.0600               0

[[Page 64489]]

 
                                ..............  ..............  1a*.............          0.0583              0
----------------------------------------------------------------------------------------------------------------
\*\ For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the
  same purpose--eliminate the need for a standing pilot--but the technologies for each design are different.
  Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
  ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard
  levels 2 through 6 are derived from candidate standard level 1.

    For CCWs, DOE was unable to develop a consumer sample. However, it 
took into account the base case mix of CCW efficiencies by 
characterizing the current mix of product efficiencies as a probability 
distribution. In other words, as DOE performed the Monte Carlo 
simulation, it evaluated each standard level analyzed against the 
distribution of product efficiencies in the base case.
    DOE derived its base case market share data for CCWs based on 
shipment-weighted efficiency data that AHAM provided. Table II.61 
presents the market shares of the candidate standard levels in the base 
case for standard-sized dishwashers. The market shares in Table II.61 
represent the products that households would have been anticipated to 
purchase in the year 2012 in the absence of new energy conservation 
standards.

                        Table II.61.--Commercial Clothes Washers: Base Case Market Shares
----------------------------------------------------------------------------------------------------------------
                                                                                                   Market share
                              Level                                     MEF             WF           (percent)
----------------------------------------------------------------------------------------------------------------
Baseline........................................................            1.26            9.50            79.7
1...............................................................            1.42            9.50             0.0
2...............................................................            1.60            8.50             0.0
3...............................................................            1.72            8.00             0.0
4...............................................................            1.80            7.50             0.0
5...............................................................            2.00            5.50            20.3
6...............................................................            2.20            5.10             0.0
----------------------------------------------------------------------------------------------------------------

    For more details on how DOE developed the base case product 
efficiency distributions for the four appliance products in the LCC 
analysis, refer to Chapter 8 of the TSD.
    DOE specifically seeks feedback on its methodology and data sources 
for developing the base case product efficiency distributions for the 
four appliance products. This is identified as Issue 12 under ``Issues 
on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
3. Payback Period Inputs
    As described above, the PBP is the amount of time it takes the 
consumer to recover the additional installed cost of more-efficient 
equipment through energy (and water) cost savings, as compared to 
baseline equipment. Simple payback period does not take into account 
changes in operating expense over time or the time value of money. 
Payback periods are expressed in years. Payback periods greater than 
the life of the product mean that the increased total installed cost is 
not recovered in reduced operating expenses.
    The inputs to the calculation of the PBP are the total installed 
cost of the equipment to the customer for each efficiency level and the 
annual (first-year) operating expenditures for each efficiency level. 
The PBP calculation uses the same inputs as the LCC analysis, except 
that energy (and water) price trends and discount rates are not needed. 
The calculation needs energy prices only for the year in which a new 
standard is expected to take effect, in this case the year 2012.
4. Life-Cycle Cost and Payback Period Results
    DOE calculated the LCC and PBP results relative to the base case 
forecast for each product class. As mentioned above, the base case 
consists of the projected pattern of equipment purchases that would 
occur in the absence of new efficiency standards.
    The following tables (Table II.62 through Table II.75) present the 
findings from the LCC and PBP analyses DOE performed for this ANOPR. 
DOE determined the values at each candidate standard level by excluding 
the percentage of households not impacted by the standard (i.e., those 
who, in base case, already purchase a unit at or above the given 
efficiency level). Figures showing the distribution of LCCs, LCC 
impacts, and PBPs with their corresponding probability of occurrence 
are presented in Chapter 8 of the TSD.
    Table II.62 shows the LCC and PBP results for standard-sized 
dishwashers. For example, candidate standard level 3 (0.65 EF) shows an 
average LCC savings of $17. Note that for standard level 3, 10.6 
percent of the housing units in 2012 are shown to have already 
purchased a dishwasher at standard level 3 in the base case and, thus, 
have zero savings due to the standard. If one compares the LCC of the 
baseline at 0.46 EF ($1124) to the standards case at 0.65 EF ($1025), 
then the difference in the LCCs is $99. However, since the base case 
includes a significant number of households that are not impacted by 
the standard, the average savings over all of the households is 
actually $17, not $99. With regard to the PBPs shown below, DOE 
determined the median and average values by excluding the percentage of 
households not impacted by the standard. For example, in the case of 
standard level 3, 10.6 percent of the households did not factor into 
the calculation of the median and average PBP.

[[Page 64490]]



                                  Table II.62.--Standard-Sized Dishwashers: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average                          ------------------------------------
                                               installed   operating    Average     Average                               Net
                                                 price       cost         LCC       savings    Net cost    No impact    benefit     Median      Average
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................        0.46        $700        $424      $1,124  ..........  ..........  ..........  ..........  ..........
1...............................        0.58         706         339       1,045          $4         0.1        92.8         7.1         0.9         1.5
2...............................        0.62         712         318       1,029          13        11.3        32.8        56.0         2.8         5.1
3...............................        0.65         722         303       1,025          17        32.6        10.6        56.8         5.9        10.9
4...............................        0.68         747         291       1,038           5        58.6         3.1        38.4        11.9        22.2
5...............................        0.72         811         275       1,086         -43        82.9         0.6        16.5        22.5        42.3
6...............................        0.80         900         249       1,149        -106        90.1         0.4         9.5        28.3        51.5
7...............................        1.11         980         183       1,162        -119        83.3         0.3        16.4        21.9        39.3
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Tables II.63, II.64, and II.65 show the LCC and PBP results for 
dehumidifiers. For example, in the case of the 35.01-45.00 pints/day 
class, candidate standard level 3 (1.45 EF) shows an average LCC 
savings of $8. Note that for standard level 3, 38.2 percent of the 
housing units in 2012 are shown to have already purchased a 
dehumidifier at standard level 3 in the base case and, thus, have zero 
savings due to the standard. If one compares the LCC of the base case 
at 1.30 EF ($676) to the standards case at 1.45 EF ($657), then the 
difference in the LCCs is $19. However, since the base case includes a 
significant number of households that are not impacted by the standard, 
the average savings over all of the households is actually $8, not $19. 
With regard to the PBPs shown below, DOE determined the median and 
average values by excluding the percentage of households not impacted 
by the standard. For example, in the case of standard level 3 for the 
35.01-45.00 pints/day class, 38.2 percent of the households did not 
factor into the calculation of the median and average PBP.

                               Table II.63.--Dehumidifiers, 0-35.00 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Life-cycle cost *                     Life-cycle cost savings *                Payback period
                                             ------------------------------------------------------------------------------------        (years) *
                                                                                                        Households with          -----------------------
    Candidate standard level      Efficiency    Average     Average                          ------------------------------------
                                  liters/kWh   installed   operating    Average     Average                               Net
                                                 price       cost         LCC       savings    Net cost    No impact    benefit     Median      Average
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................        1.20        $137        $422        $558  ..........  ..........  ..........  ..........  ..........  ..........
1...............................        1.25         142         405         546          $3         0.0        73.1        26.9         2.6         2.5
2...............................        1.30         142         389         533          11         0.0        38.4        61.6         1.7         1.8
3...............................        1.35         153         375         528          15         0.2        38.4        61.4         3.2         3.1
4...............................        1.40         166         361         527          15         5.5        38.4        56.2         4.6         4.5
5...............................        1.45         176         349         525          17        25.9         0.0        74.1         5.7        5.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
* LCC, LCC savings, and PBP based on the annual energy consumption and operating cost associated with the 25.01-35.00 pints/day product class.


                             Table II.64.--Dehumidifiers, 35.01-45.00 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level      Efficiency    Average     Average                          ------------------------------------
                                  liters/kWh   installed   operating    Average     Average                               Net
                                                 price       cost         LCC       savings    Net cost    No impact    benefit     Median      Average
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................        1.30        $157        $519        $676  ..........  ..........  ..........  ..........  ..........  ..........
1...............................        1.35         167         500         666          $3         1.5        73.1        25.5         4.4         4.2
2...............................        1.40         167         482         661           6        15.2        38.2        46.6         5.9         5.8
3...............................        1.45         192         465         657           8        17.5        38.2        44.3         6.2         6.1
4...............................        1.50         208         450         658           8        22.7        38.2        39.1         7.0         6.8
5...............................        1.74         272         388         660           5        54.1         0.0        45.9         8.5         8.3
--------------------------------------------------------------------------------------------------------------------------------------------------------


                             Table II.65.--Dehumidifiers, 54.01-74.99 Pints/Day: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level      Efficiency    Average     Average                          ------------------------------------
                                  liters/kWh   installed   operating    Average     Average                               Net
                                                 price       cost         LCC       savings    Net cost    No impact    benefit     Median      Average
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................        1.50        $189        $725        $914  ..........  ..........  ..........  ..........  ..........  ..........

[[Page 64491]]

 
1...............................        1.55         195         702         897          $5         0.0        68.5        31.5         2.5         2.4
2...............................        1.60         195         680         881          10         0.0        68.5        31.5         2.4         2.4
3...............................        1.65         208         659         867          22         0.0        12.3        87.7         2.8         2.7
4...............................        1.70         224         640         864          25        14.1         0.0        85.9         4.8         4.9
5...............................        1.80         241         604         845          44         7.8         0.0        92.2         4.4         4.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Tables II.66, II.67, and II.68 show the LCC and PBP results for 
cooktops. For example, in the case of gas cooktops, candidate standard 
level 1 (pilotless ignition with an efficiency of 0.399 EF) shows an 
average LCC savings of $19. Note that for standard level 1, 93.4 
percent of the housing units in 2012 are shown to have already 
purchased a gas cooktop with pilotless ignition in the base case and, 
thus, have zero savings due to the standard. If one compares the LCC of 
the baseline at 0.106 EF ($716) to the standards case at 0.399 EF 
($435), then the difference in the LCCs is $281. However, since the 
base case includes a significant number of households that are not 
impacted by the standard, the average savings over all of the 
households is actually $19, not $281. With regard to the PBPs shown 
below, DOE determined the median and average values by excluding the 
percentage of households not impacted by the standard. For example, in 
the case of standard level 1 for gas cooktops, 93.4 percent of the 
households did not factor into the calculation of the median and 
average PBP.

                                    Table II.66.--Electric Coil Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average     Average     Average  ------------------------------------
                                               installed   operating      LCC       savings                               Net       Median      Average
                                                 price       cost                              Net cost    No impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................       0.737        $251        $150        $401  ..........  ..........  ..........  ..........  ..........  ..........
1...............................       0.769         255         144         399          $3       35.0%        0.0%       65.0%         8.1        18.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                   Table II.67.--Electric Smooth Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average     Average     Average  ------------------------------------
                                               installed   operating      LCC       savings                               Net       Median      Average
                                                 price       cost                              Net cost    No impact    benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................       0.742        $288        $150        $438  ..........  ..........  ..........  ..........  ..........  ..........
1...............................       0.753         528         148         676       -$238      100.0%        0.0%        0.0%     1,685.2     4,266.3
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                         Table II.68.--Gas Cooktops: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average                          ------------------------------------
                                               installed   operating    Average     Average                               Net
                                                 price       cost         LCC       savings    Net cost    No impact    benefit     Median      Average
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................       0.106        $289        $428        $716  ..........  ..........  ..........  ..........  ..........  ..........
1...............................       0.399         322         113         435         $19         0.0        93.4         6.7         1.3         1.4
2...............................       0.420         351         107         458          -5        93.2         0.0         6.8        75.3       195.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Tables II.69 through II.72 show the LCC and PBP results for ovens. 
For example, in the case of gas standard ovens, candidate standard 
level 1 (pilotless ignition with an efficiency of 0.058 EF) shows an 
average LCC savings of $16. Note that for standard level 1, 83 percent 
of the housing units in 2012 are shown to have already purchased a gas 
standard oven with pilotless ignition in the base case and, thus, have 
zero savings due to the standard. If one compares the LCC of the base 
case at 0.030 EF ($697) to the standards case at 0.058 EF ($603), then 
the difference in the LCCs is $94. However, since the base case 
includes a significant number of households that are not impacted by 
the standard, the average savings over all of the households is 
actually $16, not $94. With regard to the PBPs shown below, DOE 
determined the median and average values by excluding the percentage of 
households not impacted by the standard. For example, in the case of 
standard level 1 for gas standard ovens, 83 percent of the households 
did

[[Page 64492]]

not factor into the calculation of the median and average PBP. Also of 
note regarding PBPs, the large difference in the average and median 
values for electric self-cleaning ovens and standard level 5 for gas 
standard ovens are due to outliers in the distribution of results. The 
Monte Carlo simulation for electric self-cleaning ovens and standard 
level 5 for gas ovens yielded a few results with PBPs in excess of one 
million years. A limited number of excessively long PBPs produce an 
average PBP that is very long. Therefore, in these cases, the median 
PBP is a more representative value to gauge the length of the PBP.

                                    Table II.69.--Electric Standard Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings             Payback period (years)
                                             -----------------------------------------------------------------------------------------------------------
                                                                                                        Households with
    Candidate standard level          EF        Average     Average                          ------------------------------------
                                               installed   operating    Average     Average                               Net       Median      Average
                                                 price       cost         LCC       savings    Net cost    No impact    benefit
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................      0.1066        $392        $189        $581  ..........  ..........  ..........  ..........  ..........  ..........
1...............................      0.1113         395         182         576          $5        38.3         0.0        61.8         6.0        45.6
2...............................      0.1163         399         175         574           7        46.5         0.0        53.5         9.1        68.7
3...............................      0.1181         405         172         577           4        54.5         0.0        45.5        13.8       103.9
4...............................      0.1206         462         169         631         -50        96.4         0.0         3.6        65.5       493.6
5...............................      0.1209         467         169         636         -55        97.1         0.0         2.9        68.7       517.9
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                 Table II.70.--Electric Self-Cleaning Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average     Average     Average  ------------------------------------
                                               installed   operating      LCC       savings    Net cost    No impact  No benefit    Median      Average
                                                 price       cost                              (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................      0.1099        $463        $200        $663  ..........  ..........  ..........  ..........  ..........  ..........
1...............................      0.1102         469         199         669        -$88        74.6         0.0        25.4       196.7     1,071.7
2...............................      0.1123         527         196         723        -142        81.9         0.0        18.1       266.7     1,453.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                      Table II.71.--Gas Standard Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings                 Payback period
                                             ------------------------------------------------------------------------------------         (years)
                                                                                                        Households with          -----------------------
    Candidate standard level          EF        Average     Average     Average     Average  ------------------------------------
                                               installed   operating      LCC       savings    Net cost    No impact  No benefit    Median      Average
                                                 price       cost                              (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................      0.0298        $409        $288        $697  ..........  ..........  ..........  ..........  ..........  ..........
1*..............................      0.0536         442         162         603         $16         0.0        83.0        17.0         3.3         3.4
2...............................      0.0566         447         154         601          18        46.1         0.0        53.9         8.4       136.1
3...............................      0.0572         448         153         601          18        47.9         0.0        52.1         9.4       152.3
4...............................      0.0593         481         149         630         -11        77.4         0.0        22.6        27.2       460.1
5...............................      0.0596         483         148         632         -12        77.9         0.0        22.1        27.9     1,907.4
6...............................      0.0600         488         148         636         -17        79.5         0.0        20.5        30.1       426.3
1a*.............................      0.0583         446         134         580          39         0.0         0.0       100.0         2.2        2.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a standing pilot--but the
  technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate standard level 1a is a spark
  ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2 through 6 are derived from
  candidate standard level 1.


                                    Table II.72.--Gas Self-Cleaning Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings             Payback period (years)
                                             -----------------------------------------------------------------------------------------------------------
                                                                                                        Households with
    Candidate standard level          EF        Average     Average     Average     Average  ------------------------------------
                                               installed   operating      LCC       savings    Net cost    No impact  No benefit    Median      Average
                                                 price       cost                              (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................      0.0540        $529        $200        $729  ..........  ..........  ..........  ..........  ..........  ..........
1...............................      0.0625         545         183         727          $1        58.3         0.0        41.7        11.8       158.0
2...............................      0.0627         551         182         733          -5        67.3         0.0        32.7        16.1       235.3
3...............................      0.0632         553         182         734          -6        68.4         0.0        31.6        16.7       149.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 64493]]

    Table II.73 shows the LCC and PBP results for microwave ovens. For 
example, candidate standard level 4 (0.602 EF) shows an average LCC 
cost increase of $68. The median and average PBPs for standard level 4 
are 132.2 and 327.5 years, respectively.

                                        Table II.73.--Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        Life-cycle cost                       Life-cycle cost savings             Payback period (years)
                                             -----------------------------------------------------------------------------------------------------------
                                                                                                        Households with
    Candidate standard level          EF        Average     Average                          ------------------------------------
                                               installed   operating    Average     Average                               Net       Median      Average
                                                 price       cost         LCC       savings    Net cost    No impact    benefit
                                                                                               (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline........................       0.557        $219         $89        $308  ..........  ..........  ..........  ..........  ..........  ..........
1...............................       0.586         232          84         316          -8        93.0         0.0         7.0        33.9        84.0
2...............................       0.588         246          84         329         -21        98.6         0.0         1.4        65.8       163.1
3...............................       0.597         267          83         349         -41        99.6         0.0         0.4        93.9       232.5
4...............................       0.602         294          82         376         -68        99.9         0.0         0.1       132.2       327.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Tables II.74 and II.75 show the LCC and PBP results for both 
product applications of CCWs. For example, in the case of the multi-
family application, candidate standard level 5 (2.00 MEF/5.50 WF) shows 
an average LCC savings of $404. Note that for standard level 5, 20.9 
percent of consumers in 2012 are assumed to already be using a CCW in 
the base case at standard level 5 and, thus, have zero savings due to 
the standard. If one compares the LCC of the base case at 1.26 MEF/9.50 
WF ($3303) to the standards case at 2.00 MEF/5.50 WF ($2794), then the 
difference in the LCCs is $509. However, since the base case includes a 
significant number of consumers that are not impacted by the standard, 
the average savings over all of the consumers is actually $404, not 
$509. With regard to the PBPs shown below, DOE determined the median 
and average values by excluding the percentage of households not 
impacted by the standard. For example, in the case of standard level 5, 
20.9 percent of the consumers did not factor into the calculation of 
the median and average PBP.

                     Table II.74.--Commercial Clothes Washers, Multi-Family Application: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Life-cycle cost                     Life-cycle cost savings              Payback period
                                                      -------------------------------------------------------------------------------       (years)
                                                                                                            Households with          -------------------
         Candidate standard level             MEF/WF    Average     Average                      ------------------------------------
                                                       installed   operating   Average   Average                              Net
                                                         price       cost        LCC     savings   Net cost    No impact    benefit    Median    Average
                                                                                                   (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................  1.26/9.50       $722      $2,581    $3,303  ........  ..........  ..........  ..........  ........  ........
1.........................................  1.42/9.50        840       2,454     3,294         7        42.0        20.9        37.1       8.4       8.9
2.........................................  1.60/8.50      1,224       2,189     3,413       -86        61.5        20.9        17.6      11.9      12.8
3.........................................  1.72/8.00      1,224       2,053     3,277        21        43.3        20.9        35.9       8.8       9.5
4.........................................  1.80/7.50      1,224       1,943     3,167       109        30.4        20.9        48.8       7.3       7.9
5.........................................  2.00/5.50      1,224       1,571     2,794       404         9.3        20.9        69.9       4.6       5.1
6.........................................  2.20/5.10      1,224       1,446     2,670       529         6.3         0.0        93.7       3.8       3.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


                      Table II.75.--Commercial Clothes Washers, Laundromat Application: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Life-cycle cost                     Life-cycle cost savings              Payback period
                                                      -------------------------------------------------------------------------------       (years)
                                                                                                            Households with          -------------------
         Candidate standard level             MEF/WF    Average     Average                      ------------------------------------
                                                       installed   operating   Average   Average                              Net
                                                         price       cost        LCC     savings   Net cost    No impact    benefit    Median    Average
                                                                                                   (percent)   (percent)   (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..................................  1.26/9.50       $722      $2,772    $3,494  ........  ..........  ..........  ..........  ........  ........
1.........................................  1.42/9.50        840       2,647     3,487         5        35.9        20.9        43.2       5.3       5.6
2.........................................  1.60/8.50      1,224       2,354     3,577       -66        61.5        20.9        17.7       6.9       7.3
3.........................................  1.72/8.00      1,224       2,207     3,431        50        29.2        20.9        50.0       5.1       5.4
4.........................................  1.80/7.50      1,224       2,085     3,308       147        13.6        20.9        65.5       4.3       4.5
5.........................................  2.00/5.50      1,224       1,661     2,885       482         0.7        20.9        78.5       2.7       2.8
6.........................................  2.20/5.10      1,224       1,532     2,755       612         0.2         0.0        99.8       2.2       2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    DOE presents these findings to facilitate stakeholder review of the 
LCC and PBP analyses. DOE seeks information and comments relevant to 
the assumptions, methodology, and results for these analyses. See 
Chapter 8 of the TSD for additional detail on the LCC and PBP analyses.

H. Shipments Analysis

    This section presents DOE's shipments analysis, which is an input 
into the NIA (section II.I). DOE will also

[[Page 64494]]

use shipments estimates as input to the MIA, which is discussed in 
section II.K. DOE will undertake the MIA after the ANOPR is published, 
and will report the MIA findings in the NOPR.
    As indicated above and in the discussion below of the NIA, for each 
product, DOE has developed a base case forecast to depict what would 
happen to energy and water use, and to consumer costs for purchase and 
operation of the product, if DOE does not adopt new energy conservation 
standards. To evaluate the impacts of such new standards, DOE compares 
these base case forecasts to forecasts of what would happen if DOE 
adopts new standards at various higher efficiency levels. One element 
of both types of forecasts is product shipments. In determining the 
base case, DOE considered historical shipments, the mix of efficiencies 
sold in the absence of standards, and how that mix might change over 
time.
1. Shipments Model
    DOE estimated shipments for each of the four appliance products 
using a separate Shipments Model. Furthermore, in the case of cooking 
products, DOE developed two separate Shipments Models--one for cooktops 
and ovens and another for microwave ovens. Therefore, DOE developed a 
total of five separate Shipments Models (i.e., two for cooking products 
and one each for dishwashers, dehumidifiers, and CCWs). Each Shipments 
Model was calibrated against historical shipments. For purposes of 
estimating the impacts of prospective candidate standard levels on 
product shipments, each Shipments Model accounts for the combined 
effects of changes in purchase price, annual operating cost, and 
household income on the consumer purchase decision.
    In overview, each Shipments Model considers specific market 
segments, the results for which are then aggregated to estimate total 
product shipments. In the case of all of the four appliance products 
(with the exception of dehumidifiers), DOE accounted for at least two 
market segments: (1) New construction and (2) existing buildings (i.e., 
replacing failed equipment). For dehumidifiers, DOE did not consider 
the new construction market since this product, unlike most major 
household appliances, is not standard equipment for new households. 
Instead, in addition to accounting for replacements, DOE accounted for 
the market of existing households acquiring new dehumidifiers for the 
first time. Furthermore, for the following products, DOE accounted for 
a third market segment: Cooking products (early replacements); 
dishwashers (existing households acquiring the equipment for the first 
time); and CCWs (retired units not replaced).
    With regard to the market of existing households purchasing 
dehumidifiers, Whirlpool commented that shipments to existing 
households that do not already own a dehumidifier are likely very low 
for two reasons. First, Whirlpool stated that historical data indicate 
that annual dehumidifier shipments have been relatively constant, and 
second, the most significant new housing growth has been in the 
Southern and Western regions of the U.S. where central air conditioning 
(as opposed to dehumidifiers) is used to condition the space. 
(Whirlpool, No. 10 at p. 12) Contrary to Whirlpool's claim, based on 
historical data, DOE found that shipments have more than doubled since 
1990, with an increase of nearly 50 percent over the 2003-2005 time 
period. In allocating shipments to existing households with a 
dehumidifier, DOE used the historical data to estimate which portion of 
the shipments went to these existing households. DOE first determined 
that portion of the shipments that served as replacements and then 
allocated the remaining portion to existing households without a 
dehumidifier. As a result of this calculation, DOE estimated that 0.6 
percent of existing households without a dehumidifier would annually 
purchase this product over the period 2005-2042.
    With regard to the estimation of forecasted commercial clothes 
washer shipments, ALS stated that the market for CCWs is already 
saturated and may decline in the future. ALS believes that the trend in 
multi-housing is to install in-apartment washers rather than provide 
common area commercial laundry. Both ALS and MLA stated that 
approximately 200,000 to 230,000 commercial washers are shipped per 
year. Whirlpool stated that a saturation-based Shipments Model could be 
developed to forecast shipments. However, because historical industry 
shipments have been constant, Whirlpool suggested that DOE either hold 
future product saturations constant or allow them to decline. (Public 
Meeting Transcript, No. 5 at pp. 213 and 219; MLA, No. 8 at p. 1; 
Whirlpool, No. 10 at p. 12)
    DOE confirmed that over the period of 1988-1998, annual shipments 
of clothes washers stayed roughly in the range between 200,000 to 
230,000 units per year. But based on data provided by AHAM, shipments 
dropped to approximately 180,000 units for the year 2005. DOE confirmed 
this shipments drop (from a peak of 265,000 units in 1998) using 
commercial laundry quantity index data from the U.S. Census Bureau.\48\ 
For purposes of calibrating its Shipments Model, DOE attributed this 
drop to non-replacements (i.e., a portion of CCWs that were retired 
from service over the period 1999-2005 were not replaced). Because DOE 
tied its CCW shipments estimates to forecasts of new multi-family 
construction as provided by EIA's AEO 2007, and because AEO 2007 
forecasts modest growth in multi-family construction starts, DOE's 
Shipments Model projected that shipments would recover and gradually 
increase after the drop witnessed over the 1999-2005 period.
---------------------------------------------------------------------------

    \48\ U.S. Department of Commerce-Bureau of Economic Analysis. 
Industry Economic Accounts, Gross-Domestic-Product-(GDP)-by-
Industry-Data, 1998- NAICS data: GDPbyInd--SHIP--NAICS and SIC Data: 
GDPhyind--SHIP--SIC, Commercial Laundry Quantity Index Data, NAICS 
code 333312. Washington, DC. Available online at: http://preview.bea.gov/industry/gdpbyind_data.htm.
---------------------------------------------------------------------------

    Due to the dramatic drop in shipments seen in the historical data, 
DOE specifically seeks feedback on its assumptions regarding the 
shipments forecasts for CCWs. This is identified as Issue 13 under 
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.
    In principle, each market segment and each product class responds 
differently to both the base case demographic and economic trends and 
to the implementation of standards. Furthermore, retirements, early 
replacements, and efficiency trends are dynamic and can vary among 
product classes. Rather than simply extrapolating a current shipments 
trend, the base case shipments analysis uses driver input variables, 
such as construction forecasts and product lifetime distributions, to 
forecast sales in each market segment.
    DOE's Shipments Models take an accounting approach, by tracking 
market shares of each product class, the vintage of units in the 
existing stock, and expected construction trends. The Models estimate 
shipments due to replacements using sales in previous years and 
assumptions about the life of the equipment. Therefore, estimated sales 
due to replacements in a given year are equal to the total stock of the 
appliance minus the sum of the appliances sold in previous years that 
still remain in the stock. DOE must determine the useful service life 
of the appliance to determine how long the appliance is likely to 
remain in stock.
2. Data Inputs
    As discussed above, shipments are driven primarily by two market

[[Page 64495]]

segments: (1) New construction and (2) replacements.
    New housing forecasts and market saturation data comprised the two 
primary inputs for DOE's estimates of new construction shipments. ``New 
housing'' includes newly-constructed single-family and multi-family 
units (referred to as ``new housing completions'') and mobile home 
placements. As noted above for CCWs, DOE's Shipments Model used only 
newly-constructed multi-family units, as DOE estimated shipments are 
driven solely by multi-family construction starts. For new housing 
completions and mobile home placements, DOE used actual data through 
2005, and adopted the projections from EIA's AEO 2007 for the period of 
2006-2030.\49\ To determine new construction shipments for each of the 
four appliance products (except dehumidifiers), DOE used forecasts of 
housing starts coupled with the product market saturation data for new 
housing. DOE used the 2001 RECS to establish dishwasher and cooktop 
market saturations for new housing. For commercial clothes washers, DOE 
relied on the new construction market saturation data from CEE.\50\
---------------------------------------------------------------------------

    \49\ 49 U.S. Department of Energy-Energy Information 
Administration. Annual Energy Outlook 2007 with Projections to 2030, 
February, 2007. Washington, DC. DOE/EIA-0383 (2007). Available 
online at: http://www.eia.doe.gov/oiaf/aeo/index.html
    \50\ Consortium for Energy Efficiency. Commercial Family-Sized 
Washers: An Initiative Description of the Consortium for Energy 
Efficiency, 1998. Boston, MA. Available online at: http://www.cee1.org/com/cwsh/cwsh-main.php3.
---------------------------------------------------------------------------

    In the specific case of dehumidifiers, EEI stated that DOE should 
account for the market saturation of dehumidifying equipment integrated 
into central space-conditioning systems when evaluating the overall 
dehumidifier market saturation. (Public Meeting Transcript, No. 5 at p. 
220) In response, we note that DOE's Shipments Model for dehumidifiers 
takes into consideration saturation data pertaining only to 
dehumidifiers manufactured as independent units. Although growth in 
central space-conditioning systems with fully-integrated dehumidifying 
equipment may have an impact on forecasted dehumidifier shipments, DOE 
was unable to obtain any data that indicate the growth of these systems 
and their impact on the overall dehumidifier market.
    In general, DOE estimated replacements using product retirement 
functions that it developed from product lifetimes. For all of the four 
appliance products (with the exception of microwave ovens), DOE based 
the retirement function on a uniform probability distribution for the 
product lifetime. The Shipments Models assume that no units are retired 
below a minimum product lifetime and that all units are retired before 
exceeding a maximum product lifetime. NWPCC noted that DOE should 
calibrate the Shipments Models to historical shipments data to ensure 
that the estimates of product lifetimes are reasonable. (Public Meeting 
Transcript, No. 5 at p. 215) As noted previously, DOE calibrated each 
Shipments Model against historical shipments. In its calibrations, 
which entailed estimating which portion of shipments are replacements, 
DOE used the product lifetimes that it established for the LCC analysis 
(refer to section II.G.2.b for more details). DOE found that the 
product lifetimes provided reasonable estimates of overall shipments 
for each of the products.
3. Shipments Forecasts
    Table II.76 shows the results of the shipments analysis for the 
base case for each of the products. Of the products listed in Table 
II.76, dehumidifiers, gas cooktops and ovens, and electric cooktops and 
ovens are comprised of several product classes. Specifically, 
dehumidifiers consist of six product classes; gas cooktops and ovens 
consist of three classes, and electric cooktops and ovens consist of 
four classes. For each of these products (with each product consisting 
of more than one product class, except CCW) DOE's analysis estimated 
the aggregate shipments. Once it had established the aggregate 
shipments estimate, DOE then allocated the shipments to each product 
class based on historical market share data. Chapter 9 of the TSD 
provides details on the product class market shares for dehumidifiers, 
gas cooktops and ovens, and electric cooktops and ovens.

                              Table II.76.--Forecasted Shipments for Home Appliances, 2012-2042, Base Case (million units)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          Product                              2012      2015      2020      2025      2030      2035      2040      2042     Cumulative
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers................................................      8.12      8.73      9.62     10.36     11.17     11.76     12.28     12.48          328
Dehumidifiers..............................................      1.82      1.99      2.39      2.65      2.98      3.30      3.59      3.71           86
Gas cooktops and ovens.....................................      3.80      3.82      4.05      4.26      4.43      4.57      4.75      4.82          133
Electric cooktops and ovens................................      6.24      6.41      7.03      7.52      7.88      8.26      8.72      8.91          235
Microwave ovens............................................     16.11     15.41     17.54     17.67     19.61     20.01     21.50     21.53          578
Commercial clothes washers.................................      0.24      0.24      0.27      0.29      0.32      0.34      0.37      0.38          9.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

    To estimate the combined effects on product shipments from 
increases in equipment purchase price and decreases in equipment 
operating costs due to new efficiency standards, DOE conducted a 
literature review and a statistical analysis on a limited set of 
appliance price, efficiency, and shipments data.
    In the literature, DOE found only a few studies of appliance 
markets that are relevant to this rulemaking analysis, and identified 
no studies that use time-series of equipment price and shipments data 
after 1980. The information that DOE summarized from the literature 
suggests that the demand for appliances is price inelastic.
    DOE did not find enough equipment purchase price and operating cost 
data to perform a complex analysis of dynamic changes in the appliance 
market. Rather, DOE used purchase price and efficiency data specific to 
residential refrigerators, clothes washers, and dishwashers over the 
period 1980-2002 to evaluate broad market trends and to conduct simple 
regression analyses. These data indicate that there has been a rise in 
appliance shipments and a decline in appliance purchase price and 
operating costs over the time period. Household income has also risen 
during this time. DOE combined the available economic information into 
one variable, termed the ``relative price,'' which is the sum of the 
purchase price and the present value of operating cost savings divided 
by household income, and used this variable to conduct a regression 
analysis. DOE's regression analysis suggested that the relative price 
elasticity of demand, averaged over the three appliances, is -0.34. For 
example,

[[Page 64496]]

for a relative price increase of 10 percent, shipments decrease by 3.4 
percent. Note that because the relative price elasticity incorporates 
the impacts from three effects (i.e., purchase price, operating cost, 
and household income), the impact from any single effect is mitigated 
by changes from the other two effects. The relative price elasticity of 
-0.34 is consistent with estimates in the literature. Nevertheless, DOE 
stresses that the measure is based on a small data set, using simple 
statistical analysis. More important, the measure is based on the 
premise that economic variables (including purchase price, operating 
costs, and household income) explain most of the trend in appliances 
per household in the U.S. since 1980. Changes in appliance quality and 
consumer preferences may have occurred during this period, but DOE did 
not account for them in this analysis. Despite these uncertainties, DOE 
believes that its estimate of the relative price elasticity of demand 
provides a reasonable assessment of the impact that purchase price, 
operating cost, and household income have on product shipments.
    Because DOE's forecasts of shipments and national impacts due to 
standards is over a 30-year time period, consideration must be given as 
to how the relative price elasticity is affected once a new standard 
takes effect. DOE considers the relative price elasticity of -0.34 to 
be a short-run value. DOE was unable to identify sources specific to 
household durable goods, such as appliances, to indicate how short-run 
and long-run price elasticities differ. Therefore, to estimate how the 
relative price elasticity changes over time, DOE relied on a study 
pertaining to automobiles showing that the automobile price elasticity 
of demand changes in the years following a purchase price change.\51\ 
With increasing years after the purchase price change, the price 
elasticity becomes more inelastic until it reaches a terminal value 
around the tenth year after the price change. For its shipments 
analysis, DOE incorporated a relative price elasticity change that 
resulted in a terminal value of approximately one-third (-0.11) of the 
short-run elasticity (-0.34). In other words, consumer purchase 
decisions, in time, become less sensitive to the initial change in the 
product's relative price.
---------------------------------------------------------------------------

    \51\ S. Hymans. Consumer Durable Spending: Explanation and 
Prediction, Brookings Papers on Economic Activity, 1971. Vol. 1971, 
No. 1, pp. 234-239. Available for purchase online at: http://links.jstor.org/sici?sici=0007-2303(1970)1970%3A2%3C173%3ACDSEAP%3E2.0.CO%3B2-S.
---------------------------------------------------------------------------

    PG&E commented that consumers will replace failed equipment 
regardless of the increased purchase price due to efficiency standards. 
(Public Meeting Transcript, No. 5 at p. 224) In its regression analysis 
of appliance purchase price, efficiency, and shipments data, DOE did 
not attempt to quantify the shipments impacts to separate markets 
(i.e., new construction and replacements). Because DOE's regression 
analysis focused on the impacts to aggregate shipments, it applied the 
sensitivity to purchase price, operating cost, and household income 
equally to all markets. DOE believes this level of precision is 
sufficient for capturing the effect that these three factors have on 
overall product shipments.
    Additional detail on the shipments analysis can be found in Chapter 
9 of the TSD.

I. National Impact Analysis

    The NIA assesses cumulative NES and the cumulative national 
economic impacts of candidate standards levels. The analysis measures 
economic impacts using the NPV metric, which represents the net present 
value (i.e., future amounts discounted to the present) of total 
customer costs and savings expected to result from new standards at 
specific efficiency levels. For a given candidate standard level, DOE 
calculated both the NPV and the NES as the difference between a base 
case forecast and the standards case. A summary of this analysis is 
provided below, but additional detail on the NIA for the four appliance 
products may be found in Chapter 10 of the TSD.
    DOE determined national annual energy consumption as the product of 
the annual energy consumption per unit and the number of units of each 
vintage. This approach accounts for differences in per-unit energy 
consumption from year to year. Cumulative energy savings are the sum of 
the annual NES determined over a specified time period. DOE calculated 
net economic savings each year as the difference between total 
operating cost savings and increases in total installed costs. 
Cumulative savings are the sum of the annual NPV determined over a 
specified time period.
1. Approach
    Over time, in the standards case, more-efficient products gradually 
replace less efficient products. This affects the calculation of the 
NES and NPV, which are both a function of the total number of units in 
use and their efficiencies, and, thus, are dependent on annual 
shipments and the lifetime of a product. Both calculations start by 
using the estimate of shipments and the quantity of units in service 
that DOE derived from the Shipments Model.
    With regard to the estimation of NES, because more-efficient units 
of a product gradually replace less efficient ones, the per-unit energy 
consumption of the products in service gradually decreases in the 
standards case relative to the base case. To estimate the resulting 
total energy savings for each candidate efficiency level, DOE first 
calculated the national site-energy consumption for each of the four 
appliance products for each year, beginning with the expected effective 
date of the standards (2012), for the base case forecast and each 
standards case forecast. (Site energy is the energy directly consumed 
by the units of the product in operation.) Second, DOE determined the 
annual site-energy savings, consisting of the difference in site-energy 
consumption between the base case and the standards case. Third, DOE 
converted the annual site-energy savings into the annual amount of 
energy saved at the source of electricity generation or of natural gas 
production (the source energy) using site-to-source conversion factors. 
Finally, DOE summed the annual source-energy savings from 2012 to 2042 
to calculate the total NES for that period. DOE performed these 
calculations for each candidate standard level.
    To estimate NPV, DOE calculated the net impact each year as the 
difference between total operating cost savings (including gas and/or 
electricity and water, repair, and maintenance cost savings) and 
increases in total installed costs (which consist of the incremental 
increase in manufacturer selling price, sales taxes, distribution chain 
markups, and installation cost). DOE calculated the NPV of each 
candidate standard level over the life of the equipment, using the 
following three steps. First, DOE determined the difference between the 
equipment costs under the candidate standard level case and the base 
case, to get the net equipment cost increase resulting from the 
candidate standard level. Second, DOE determined the difference between 
the base case operating costs and the candidate standard level 
operating costs, to get the net operating cost savings resulting from 
the candidate standard level. Third, DOE determined the difference 
between the net operating cost savings and the net equipment cost 
increase to get the net savings (or expense) for each year. DOE then 
discounted the annual net savings (or expenses) to the year 2006 for 
products bought in or before 2042 and summed the discounted values to 
provide the NPV of a candidate standard

[[Page 64497]]

level. An NPV greater than zero shows net savings (i.e., the candidate 
standard level would reduce customer expenditures relative to the base 
case in present value terms). An NPV that is less than zero indicates 
that the candidate standard level would result in a net increase in 
customer expenditures in present value terms.
    Another aspect of the NIA is the consideration of market-pull or 
voluntary programs that promote the adoption of more-efficient 
equipment. PG&E stated that market-pull programs do not necessarily 
diminish the impact of mandatory efficiency standards. Whirlpool stated 
that the effectiveness of one type of market-pull program (Energy Star) 
could be diminished if mandatory standards are set prematurely. 
Whirlpool argued that existing product efficiencies are approaching 
Energy Star levels, thereby diminishing the effectiveness of the 
program if mandatory standards are set too high. (Public Meeting 
Transcript, No. 5 at p. 223; Whirlpool, No. 10 at p. 11) In response, 
DOE notes that for some products, market-pull programs (e.g., Energy 
Star) have likely increased the share of energy-efficient equipment 
both prior to and after the implementation date of any new standards. 
For example, in the case of dishwashers, the shipment-weighted 
efficiency has increased at an average annul rate of approximately 2.5 
percent since mandatory efficiency standards came into effect in 1994. 
The Energy Star program, which came into effect for dishwashers in 
1996, was likely responsible for at least some of the gain in 
dishwasher efficiency. Although DOE recognizes that market-pull 
programs such as Energy Star play a factor in increasing the energy 
efficiency of appliances, DOE was not able to obtain information that 
quantified precisely how such programs affect equipment efficiencies on 
a national basis. Consequently, DOE did not explicitly incorporate the 
impact of market-based initiatives that may be implemented in the 
future into the analysis.
2. Base Case and Standards Case Forecasted Efficiencies
    A key component of DOE's estimates of NES and NPV are the energy 
efficiencies that it forecasts over time for the base case (without new 
standards) and each of the standards cases. The forecasted efficiencies 
represent the annual shipment-weighted energy efficiency of the 
products under consideration over the forecast period (i.e., from the 
estimated effective date of a new standard to 30 years after the 
standard becomes effective). Because key inputs to the calculation of 
the NES and NPV are dependent on the estimated efficiencies, they are 
of great importance to the analysis. In the case of the NES, the per-
unit annual energy (and water) consumption is a direct function of 
product efficiency. With regard to the NPV, two inputs (the per-unit 
total installed cost and the per-unit annual operating cost), both 
depend on efficiency. The per-unit total installed cost is a direct 
function of efficiency while the per-unit annual operating cost, 
because it is a direct function of the per-unit energy (and water) 
consumption, is indirectly dependent on product efficiency.
    As first discussed in section II.G.2.d on the development of base 
case efficiencies, for each of the four appliance products, DOE, using 
data provided by AHAM, based its development of the product 
efficiencies in the base case on the assignment of equipment 
efficiencies in the year 2005. The year 2005 is the latest year for 
which AHAM provided product efficiency data. In other words, DOE 
determined the distribution of product efficiencies currently in the 
marketplace to develop a shipment-weighted energy efficiency for the 
year 2005. For dehumidifiers, it is important to reiterate that DOE 
estimated that the product efficiencies in the base case for the 25.00 
pints/day and less, 25.01-35.00 pints/day, and the 45.01-54.00 pints/
day product classes were equivalent to those developed for the 35.01-
45.00 pints/day class. DOE also estimated the base case product 
efficiencies developed for the 54.01-74.99 product class could be 
applied to the 75.00 pints/day and greater product class.
    Using the shipment-weighted efficiency for the year 2005 as a 
starting point, DOE developed base case forecasted efficiencies based 
on estimates of future efficiency growth. For the period spanning 2005-
2012 (2012 being the estimated effective date of a new standard), DOE 
estimated that there would be no growth in shipment-weighted efficiency 
(i.e., no change in the distribution of product efficiencies). With the 
exception of dishwashers (discussed below), because there are no 
historical data to indicate how product efficiencies have changed over 
time, DOE estimated that forecasted efficiencies would remain frozen at 
the 2012 efficiency level until the end of the forecast period (30 
years after the effective date (i.e., 2042)). Although DOE recognizes 
the possibility that product efficiencies may change over time, DOE is 
not in a position to speculate as to how these product efficiencies may 
change without historical information. DOE did forecast the market 
share of gas standard ranges equipped with standing pilot lights to 
estimate the impact of eliminating standing pilot lights for gas 
cooktops and gas standard ovens.
    In the case of dishwashers, historical data show that shipment-
weighted efficiencies have grown at an average annual rate of 
approximately two percent since 1980. As discussed earlier, some of 
this efficiency gain during the 1990s is likely attributable to the 
Energy Star program. However, historical data also show that the 
consumer dishwasher retail price has dropped considerably (almost 50 
percent) over the same time period. Because the per-unit installed cost 
(or consumer retail price) is tied to efficiency, using an efficiency 
growth of two percent per year would be expected to result in ever-
increasing dishwasher retail prices over time. However, since 
forecasting an increasing retail price is counter to the historical 
data, DOE believes that the most plausible assumption is that 
dishwasher efficiencies will remain frozen at the 2012 efficiency level 
until the end of the forecast period.
    For its determination of standards-case forecasted efficiencies, 
DOE used a ``roll-up'' scenario to establish the shipment-weighted 
efficiency for the year that standards would become effective (i.e., 
2012). DOE believed that product efficiencies in the base case, which 
did not meet the standard level under consideration, would ``roll-up'' 
to meet the new standard level. Also, DOE believed that all product 
efficiencies in the base case that were above the standard level under 
consideration would not be affected. Using the shipment-weighted 
efficiency in the year 2012 as a starting point, DOE developed 
standards case forecasted efficiencies. For all of the four appliance 
products, DOE made the same estimates regarding forecasted standards-
case efficiencies as for the base case, namely, that forecasted 
efficiencies remained frozen at the 2012 efficiency level until the end 
of the forecast period. By maintaining the same growth rate for 
forecasted efficiencies in the standards case as in the base case 
(i.e., zero growth), DOE retained a constant efficiency difference or 
gap between the two cases over the length of the forecast period. 
Although frozen trends may not reflect what happens to base case and 
standards case product efficiencies in the future, DOE believes that 
maintaining a frozen efficiency difference between the base case and 
standards case provides a reasonable

[[Page 64498]]

estimate of the impact that standards have on product efficiency.
    DOE specifically seeks feedback on its estimates of forecasted 
base-case and standards-case efficiencies and its view of how standards 
impact product efficiency distributions in the year that standards take 
effect. This is identified as Issue 14 under ``Issues on Which DOE 
Seeks Comment'' in section IV.E of this ANOPR.
3. National Impact Analysis Inputs
    The inputs for the determination of NES are annual energy (and 
water) consumption per unit, shipments, equipment stock, national 
annual energy consumption, and site-to-source conversion factors.
    Because the annual energy (and water) consumption per unit are 
directly dependent on efficiency, DOE used the SWEFs associated with 
the base case and each standards case, in combination with the annual 
energy (and water use) data, to estimate the shipment-weighted average 
annual per-unit energy (and water) consumption under the base case and 
standards cases.
    The NIA uses forecasted shipments for the base case and all 
standards cases. As noted earlier, the increased total installed cost 
of more-efficient equipment causes some customers to forego equipment 
purchases. Consequently, shipments forecasted under the standards cases 
are lower than under the base case. For dehumidifiers and microwave 
ovens, to avoid the inclusion of savings due to displaced shipments, 
DOE used the standards-case shipments projection and the standards-case 
stock to calculate the annual energy consumption in the base case. 
However, in the case of dishwashers and CCWs, because DOE explicitly 
accounted for the energy and water consumption of the displaced 
shipments, DOE maintained the use of the base-case shipments to 
determine the annual energy consumption in the base case.
    In the case of dishwashers, Whirlpool and AHAM commented that an 
increase in purchase price due to standards may result in some 
consumers foregoing dishwasher purchases. Any consumers who had to 
switch to hand washing would increase their energy and water 
consumption, since dishwashing is more energy and water efficient than 
hand washing. (Whirlpool, No. 10 at p. 10; AHAM, No. 14 at p. 9) DOE 
agrees with Whirlpool and AHAM. DOE envisioned in its analysis that 
consumers foregoing the purchase of a new unit due to an increase in 
the efficiency standard would hand wash their dishes, and accounted for 
the energy and water consumption associated with these consumers 
switching to hand washing. Based on the results of two recent European 
studies, DOE estimated that hand washing would use 140 percent more 
energy and 350 percent more water than dishwashing.\52\ \53\
---------------------------------------------------------------------------

    \52\ R. Stamminger, Badura, R., Broil, G., Dorr, S., and 
Elschendroich, A., A European Comparison of Cleaning Dishes by Hand, 
2004. University of Bonn, Germany. Available online at: http://www.landtechnik.uni-bonn.de/ifl_research/ifl_research_project.php?sec=HT&no=1.
    \53\ Market Transformation Programme--Briefing Note. BNW16: A 
comparison of washing up by hand with a domestic dishwasher, 
February 13, 2006. Market Transformation Programme, United Kingdom. 
Available online at: http://www.mtprog.com/.
---------------------------------------------------------------------------

    In the case of electric and gas cooking products, because the 
housing market is fully saturated (i.e., all households have cooking 
appliances), available information suggested that standards would 
neither impact shipments nor cause shifts in electric and gas cooking 
product market shares. Therefore, DOE's standards case shipments for 
electric and gas cooking products were identical to its base case 
shipments.
    With regard to CCWs, MLA stated some apartment builders would 
install in-apartment washers (i.e., washers for each apartment unit) 
rather than common-area washers if the increase in CCW purchase prices 
caused by standards is too high. MLA commented that a market switch 
from common-area washers to in-apartment washers would result in 
increased energy and water consumption, since consumers would tend to 
use their in-apartment washers more frequently. (MLA, No. 8 at p. 3) 
DOE did account for the drop in CCW shipments caused by standards, but 
did not factor in that builders may install more in-apartment washers 
when faced with higher CCW purchase prices. Rather, because there is a 
significant used CCW market, DOE believes that establishments that 
forgo the purchase of a CCW due to standards would instead purchase a 
used clothes washer with an efficiency equal to the baseline level 
(i.e., 1.26 MEF/9.5 WF). DOE believes that the option of purchasing 
used CCWs is more likely, as used CCWs are a less expensive option to 
builders than installing in-apartment washers.
    An extensive description of the methodology for conducting and 
generating the shipments forecasts for each of the four appliance 
products can be found in Chapter 9 of the TSD.
    The equipment stock in a given year is the number of products 
shipped and installed from earlier years and which survive in the given 
year. The NIA spreadsheet models keep track of the number of units 
shipped each year. DOE believes that the products have an increasing 
probability of retiring as they age.
    The national energy consumption is the product of the annual energy 
consumption per unit and the number of units of each vintage. This 
calculation accounts for differences in unit energy consumption from 
year to year.
    The site-to-source conversion factor is the multiplicative factor 
DOE uses for converting site energy consumption into primary or source 
energy consumption. In the analysis for today's ANOPR, DOE used annual 
site-to-source conversion factors based on the version of the National 
Energy Modeling System (NEMS) that corresponds to EIA's AEO 2006.\54\ 
These conversion factors take into account natural gas losses from 
pipeline leakage and natural gas used for pumping energy and 
transportation fuel. For electricity, the conversion factors vary over 
time due to projected changes in generation sources (i.e., the power 
plant types projected to provide electricity to the country). DOE 
estimated that conversion factors remain constant at 2030 values 
throughout the remainder of the forecast. EEI stated that mandated 
increases in renewable energy use throughout the country will affect 
the overall efficiency of electricity generation, thereby resulting in 
less primary energy being saved from energy savings realized at the 
site. (EEI, No. 7 at p. 4) In response, we note that AEO 2006 provided 
a review of renewable energy programs that were in effect in 23 States 
at the end of 2005. Therefore, it is anticipated that the site-to-
source conversion factors that DOE used in its analysis capture the 
effects of renewable energy use.
---------------------------------------------------------------------------

    \54\ For the standards rulemakings, DOE will generally use the 
same economic growth and development assumptions that underlie the 
most current AEO published by EIA. For its determination of site-to-
source conversion factors, DOE used the version of NEMS 
corresponding to AEO 2006 for the ANOPR due to the unavailability of 
the AEO 2007 version at the time DOE conducted the NIA. For its 
analyses for the NOPR and final rule, DOE is committed to using the 
latest available version of NEMS.
---------------------------------------------------------------------------

    The Joint Comment stated that the NIA for dishwashers and CCWs 
should include energy saved as a result of reduced water use, including 
water savings in power generation, water pumping (particularly in the 
West), water treatment, and sewage treatment. (Joint Comment, No. 9 at 
pp. 3 and 5) Multiple Water Organizations also stated that DOE should 
account for the embedded energy in water supply and wastewater 
treatment when establishing the energy savings due to increases in

[[Page 64499]]

dishwasher and CCW efficiency. (Multiple Water Organizations, No. 11 at 
p. 2) To include the energy required for treatment and delivery of 
water in the NIA would require the development of new analytical tools. 
As just noted above, DOE currently takes savings in site energy 
consumption and uses EIA's NEMS to calculate source energy savings at 
the generation plant, using site-to-source conversion factors from NEMS 
that take into account the economic interactions between the energy 
sector and the rest of the economy. Proper accounting of embedded 
energy impacts at a national scale, including the embedded energy due 
to water savings, would require a new version of NEMS that analyzes 
spending and energy use in dozens, if not hundreds, of economic 
sectors. In addition, this version of NEMS would need to account for 
shifts in spending between these various sectors to account for the 
marginal embedded energy differences between these sectors. DOE 
currently does not have access to such a tool, nor does it have the 
capability to accurately estimate the source energy savings impacts of 
decreased water or wastewater consumption and expenditures. There are 
activites being conducted or initiated by the U.S. Geological Survey 
(USGS), EPA, and DOE to study water and wastewater issues. The USGS 
compiles national water data but not at the utility level. The EPA is 
sponsoring the WaterSense Program and programs to promote energy 
efficiency in water and wastewater treatment. Finally, DOE is in the 
midst of a National Energy-Water Roadmap Program that it initiated in 
2005, as requested in congressional appropriations in FY 2005. However, 
none of these activites has yet provided the necessary sources of data 
or tools to allow calculation of the embedded energy in water. Although 
DOE cannot yet determine the embedded energy in water savings, both the 
LCC and PBP analyses and the NIA do include the economic savings from 
decreased water and wastewater charges. Such economic savings should 
include the economic value of any energy savings that may be included 
in the provision of consumer water and wastewater services.
    The inputs to the NPV calculation are total installed cost per 
unit, annual operating cost savings per unit, total annual installed 
cost increases, total annual operating cost savings, discount factor, 
present value of increased installed costs, and present value of 
operating cost savings.
    For each of the four appliance products, the NPV calculation uses 
the total installed cost per unit as a function of product efficiency. 
Because the per-unit total annual installed cost is directly dependent 
on efficiency, DOE used the base case and standards case SWEFs in 
combination with the total installed costs to estimate the shipment-
weighted average annual per-unit total installed cost under the base 
case and standards cases.
    As first discussed in the engineering analysis for dehumidifiers 
(see section II.C.2.b), total installed cost and efficiency 
relationships were defined for a subset of the six product classes. 
Therefore, for purposes of conducting the NIA for dehumidifiers, DOE 
applied the cost-efficiency data that were developed for this product 
class subset to those classes for which no cost-efficiency 
relationships were developed. Specifically, DOE applied the costs 
developed for the combined 0-35.00 pints/day class to the two 
individual classes that comprise the combined class--25.00 pints/day 
and less and 25.01-35.00 pints/day. Further, DOE applied the costs 
developed for the 35.01-45.00 pints/day and 54.01-74.99 pints/day 
product classes to the 45.01-54.00 pints/day and 75.00 pints/day and 
greater product classes, respectively. In its application of total 
installed costs to those product classes where no cost data were 
developed, DOE did not interpolate or extrapolate the cost data to 
account for product efficiency differences between the classes. For 
example, DOE utilized the exact same total installed costs that were 
developed for the baseline and standard levels for the 35.01-45.00 
pints/day product class to characterize the baseline and standard level 
total installed costs for the 45.01-54.00 pints/day product class. 
Chapter 10 of the ANOPR provides additional details on DOE's approach 
for estimating the total installed costs for the dehumidifier product 
classes.
    DOE specifically seeks feedback on its approach for characterizing 
the total installed costs for those dehumidifier product classes in 
which DOE was not able to develop cost-efficiency relationships. This 
is identified as Issue 15 under ``Issues on Which DOE Seeks Comment'' 
in section IV.E of this ANOPR.
    The annual operating cost savings per unit includes changes in the 
energy, water, repair, and maintenance costs. DOE believed there would 
be no increase in maintenance and repair costs due to standards for the 
four appliance products. Therefore, for each of the products, DOE 
determined the per-unit annual operating cost savings based only on the 
energy (and water) cost savings due to a standard efficiency level. EEI 
suggested that DOE should include water and wastewater prices in the 
analysis. (Public Meeting Transcript, No. 5 at p. 231) In response, we 
note that DOE determined the per-unit annual operating cost savings by 
taking the per-unit annual energy (and water) consumption savings 
developed for each product and multiplying it by the appropriate energy 
(and water) price. As described previously, DOE forecasted the per-unit 
annual energy (and water) consumption for the base case and each 
standards case for all four appliance products by freezing the 
consumption at levels estimated for the year 2012. DOE forecasted 
energy prices based on EIA's AEO 2007. DOE forecasted water prices 
based on trends in the national water price index as provided by the 
BLS.\55\
---------------------------------------------------------------------------

    \55\ U.S. Department of Labor--Bureau of Labor Statistics. 
Consumer Price Indexes, Item: Water and sewerage maintenance, Series 
Id: CUUR0000SEHG01, U.S. city average (not seasonally adjusted), 
2006. Washington, DC. Available online at: http://www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------

    The total annual installed cost increase is equal to the annual 
change in the per-unit total installed cost (difference between base 
case and standards case) multiplied by the shipments forecasted in the 
standards case. As with the calculation of the NES, DOE did not 
calculate total annual installed costs using base case shipments. 
Rather, to avoid the inclusion of savings due to displaced shipments in 
the case of dehumidifiers and microwave ovens, DOE used the standards 
case shipments projection and, in turn, the standards case stock, to 
calculate the costs. In the case of dishwashers, DOE believes that any 
consumers foregoing the purchase of a new unit due to standards would 
shift to hand washing. In the case of CCWs, DOE believes that any drop 
in shipments caused by standards would result in the purchase of used 
machines. Electric and gas cooking products are the notable exception. 
For electric and gas cooking products, because the market is fully 
saturated, DOE believed that standards would neither impact shipments 
nor cause shifts in electric and gas cooking product market shares. 
Therefore, for electric and gas cooking products, DOE used the base 
case shipments to determine costs for all standards cases.
    The total annual operating cost savings are equal to the change in 
the annual operating costs (difference between base case and standards 
case) per unit multiplied by the shipments forecasted in the standards 
case. As noted above for the calculation of total annual installed 
costs, DOE did not

[[Page 64500]]

necessarily calculate operating cost savings using the base case 
shipments.
    DOE multiplies monetary values in future years by the discount 
factor to determine the present value. DOE estimated national impacts 
using both a three-percent and a seven-percent real discount rate as 
the average real rate of return on private investment in the U.S. 
economy. DOE uses these discount rates in accordance with guidance 
provided by the Office of Management and Budget (OMB) to Federal 
agencies on the development of regulatory analysis (OMB Circular A-4 
(Sept. 17, 2003), particularly section E, ``Identifying and Measuring 
Benefits and Costs''). For the sake of these analyses, DOE defines the 
present year as 2007.
    The present value of increased installed costs is the annual 
installed cost increase in each year (i.e., the difference between the 
standards case and base case), discounted to the present, and summed 
for the time period over which DOE is considering the installation of 
equipment (i.e., from the effective date of standards, 2012, to the 
year 2042). The increase in total installed cost refers to both the 
incremental equipment cost and the incremental installation cost 
associated with the higher energy efficiency of equipment purchased in 
the standards case compared to the base case.
    The present value of operating cost savings is the annual operating 
cost savings (i.e., the difference between the base case and standards 
case), discounted to the present, and summed over the period from the 
effective date (2012) to the time when the last unit installed in 2042 
is retired from service. Savings are decreases in operating costs 
associated with the higher energy efficiency of equipment purchased in 
the standards case compared to the base case. Total annual operating 
cost savings is the savings per unit multiplied by the number of units 
of each vintage surviving in a particular year. Equipment consumes 
energy over its entire lifetime, and for units purchased in 2042, the 
consumption includes energy consumed until the unit is retired from 
service.
    Table II.77 summarizes the NES and NPV inputs to the NIA 
spreadsheet model. For each input, the table gives a brief description 
of the data source. For details, see Chapter 10 of the TSD.

   Table II.77.--National Energy Savings and Net Present Value Inputs
------------------------------------------------------------------------
            Input                           Data description
------------------------------------------------------------------------
Shipments....................  Annual shipments from Shipments Model.
                                (See Chapter 9 of the TSD for more
                                details.)
Effective Date of Standard...  2012.
Base-Case Forecasted           Shipment-weighted efficiency (SWEF)
 Efficiencies.                  determined in the year 2005 for each of
                                the four appliance products. SWEF held
                                constant over forecast period of 2005-
                                2042. (See Chapter 10 of the TSD for
                                more details.)
Standards-Case Efficiencies..  ``Roll-up'' scenario used for determining
                                SWEF in the year 2012 for each standards
                                case and for each of the four appliance
                                products. SWEF held constant over
                                forecast period of 2012-2042. (See
                                Chapter 10 of the TSD for more details.)
Annual Energy Consumption per  Annual weighted-average values are a
 Unit.                          function of SWEF. (See Chapter 10 of the
                                TSD for more details.)
Total Installed Cost per Unit  Annual weighted-average values are a
                                function of SWEF. (See Chapter 10 of the
                                TSD for more details.)
Energy and Water Cost per      Annual weighted-average values are a
 Unit.                          function of the annual energy
                                consumption per unit and energy (and
                                water) prices. (For more details on
                                energy and water prices, see Chapter 8
                                of the TSD.)
Repair Cost and Maintenance    No changes in repair and maintenance cost
 Cost per Unit.                 due to standards.
Escalation of Energy and       Energy Prices: 2007 EIA AEO forecasts (to
 Water Prices.                  2030) and extrapolation to 2042. (See
                                Chapter 8 of the TSD for more details.)
                                Water Prices: Linear extrapolation of
                                historical trend in national water price
                                index. (See Chapter 8 of the TSD for
                                more details.)
Energy Site-to-Source          Conversion varies yearly and is generated
 Conversion.                    by DOE/EIA's NEMS* program (a time-
                                series conversion factor; includes
                                electric generation, transmission, and
                                distribution losses).
Discount Rate................  3 and 7 percent real.
Present Year.................  Future expenses are discounted to year
                                2007.
------------------------------------------------------------------------
* Chapter 13 on the utility impact analysis and the environmental
  assessment report of the TSD provide more details on NEMS.

4. National Impact Analysis Results
    Below are the NES results (and national water savings results for 
dishwashers and CCWs) for the candidate standard levels analyzed for 
the four appliance products. NES results are cumulative to 2042 and are 
shown as primary energy savings in quads. National water savings (NWS) 
results are expressed in billions of gallons. DOE based the inputs to 
the NIA spreadsheet model on weighted-average values, yielding results 
that are discrete point values, rather than a distribution of values as 
in the LCC and PBP analyses. Chapter 10 of the TSD provides discounted 
NES and NWS results based on discount rates of three and seven percent.
    Table II.78 shows the NES and NWS results for the candidate 
standard levels analyzed for standard-sized dishwashers.

        Table II.78.--Dishwashers: Cumulative National Energy Savings and National Water Savings Results
----------------------------------------------------------------------------------------------------------------
                                                                                                   NWS  billion
                   Candidate standard level                           EF           NES  quads        gallons
----------------------------------------------------------------------------------------------------------------
1............................................................            0.46             0.09               72
2............................................................            0.58             0.35              271
3............................................................            0.62             0.61              458
4............................................................            0.65             0.86              595
5............................................................            0.72             1.11              659
6............................................................            0.80             1.54              808

[[Page 64501]]

 
7............................................................            1.11             2.77             1611
----------------------------------------------------------------------------------------------------------------

    Table II.79 shows the NES results for the candidate standard levels 
analyzed for dehumidifiers.

                                         Table II.79.--Dehumidifiers: Cumulative National Energy Savings Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         <= 25.00         25.01-35.00       35.01-45.00       45.01-54.00       54.01-74.99        <= 75.00        ALL
                                    --------------------------------------------------------------------------------------------------------------------
      Candidate standard level                  NES               NES               NES               NES               NES              NES *     NES
                                        EF     quads      EF     quads      EF     quads      EF     quads      EF     quads      EF     quads    quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................     1.10     0.01     1.25     0.01     1.35     0.01     1.45     0.01     1.55     0.01     2.38     0.00     0.04
2..................................     1.20     0.02     1.30     0.02     1.40     0.02     1.50     0.02     1.60     0.02     2.50     0.00     0.11
3..................................     1.25     0.02     1.35     0.04     1.45     0.04     1.55     0.04     1.65     0.05     2.55     0.00     0.18
4..................................     1.30     0.02     1.40     0.05     1.50     0.05     1.60     0.05     1.70     0.07     2.60     0.00     0.25
5..................................     1.38     0.03     1.45     0.06     1.74     0.13     2.02     0.18     1.80     0.12     2.75     0.00    0.53
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NES greater than zero but less than 0.005 quads.

    Tables II.80 and II.81 show the NES results for the candidate 
standard levels analyzed for cooktops and ovens, respectively.

                       Table II.80.--Cooktops: Cumulative National Energy Savings Results
----------------------------------------------------------------------------------------------------------------
                                                    Electric coil        Electric smooth             Gas
           Candidate standard level            -----------------------------------------------------------------
                                                    EF     NES quads      EF     NES quads      EF     NES quads
----------------------------------------------------------------------------------------------------------------
1.............................................      0.769       0.04      0.753       0.02      0.399       0.10
2.............................................  .........  .........  .........  .........      0.420       0.15
----------------------------------------------------------------------------------------------------------------


                                             Table II.81.--Ovens: Cumulative National Energy Savings Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Elec standard        Elec self-clean        Gas standard         Gas self-clean
                                                                 ---------------------------------------------------------------------------------------
                    Candidate standard level                                    NES                   NES                   NES                   NES
                                                                      EF       quads        EF       quads        EF       quads        EF       quads
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 *.............................................................     0.1113       0.03     0.1102       0.01     0.0536       0.04     0.0625       0.09
2...............................................................     0.1163       0.05     0.1123       0.04     0.0566       0.07     0.0627       0.09
3...............................................................     0.1181       0.06  .........  .........     0.0572       0.08     0.0632       0.10
4...............................................................     0.1206       0.07  .........  .........     0.0593       0.09  .........  .........
5...............................................................     0.1209       0.08  .........  .........     0.0596       0.09  .........  .........
6...............................................................  .........  .........  .........  .........     0.0600       0.10  .........  .........
1a *............................................................  .........  .........  .........  .........     0.0583       0.13  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
  standing pilot--but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
  standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
  through 6 are derived from candidate standard level 1.

    Table II.82 shows the NES results for the candidate standard levels 
analyzed for microwave ovens.

    Table II.82.--Microwave Ovens: Cumulative National Energy Savings
                                 Results
------------------------------------------------------------------------
        Candidate standard level                EF          NES  quads
------------------------------------------------------------------------
1.......................................           0.586            0.19

[[Page 64502]]

 
2.......................................           0.588            0.20
3.......................................           0.597            0.25
4.......................................           0.602            0.26
------------------------------------------------------------------------

    Table II.83 shows the NES and NWS results for the candidate 
standard levels analyzed for CCWs.

 Table II.83.--Commercial Clothes Washers: Cumulative National Energy Savings and National Water Savings Results
----------------------------------------------------------------------------------------------------------------
                                                                                                   NWS  billion
                    Candidate standard level                          MEF/WF        NES  quads        gallons
----------------------------------------------------------------------------------------------------------------
1...............................................................       1.42/9.50            0.12               0
2...............................................................       1.60/8.50            0.21             233
3...............................................................       1.72/8.00            0.26             350
4...............................................................       1.80/7.50            0.30             466
5...............................................................       2.00/5.50            0.36             933
6...............................................................       2.20/5.10            0.43            1050
----------------------------------------------------------------------------------------------------------------

    Below are the NPV results for the candidate standard levels 
considered for the product classes of each of the four appliance 
products. Results are cumulative and are shown as the discounted value 
of these savings in dollar terms. The present value of increased total 
installed costs is the total installed cost increase (i.e., the 
difference between the standards case and base case), discounted to the 
present, and summed over the time period in which DOE evaluates the 
impact of standards (i.e., from the effective date of standards (2012) 
to the year 2042).
    Savings are decreases in operating costs (including energy and 
water) associated with the higher energy efficiency of equipment 
purchased in the standards case compared to the base case. Total 
operating cost savings are the savings per unit multiplied by the 
number of units of each vintage (i.e., the year of manufacture) 
surviving in a particular year. Equipment consumes energy and must be 
maintained over its entire lifetime. For units purchased in 2042, the 
operating cost includes energy and water consumed until the last unit 
is retired from service.
    The tables below show the NPV results for the candidate standard 
levels analyzed for each of the four appliance products, based on 
discount rates of three and seven percent.
    Table II.84 shows the NPV results for the candidate standard levels 
analyzed for standard-sized dishwashers.

    Table II.84.--Dishwashers: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent
                                                 Discount Rates
----------------------------------------------------------------------------------------------------------------
                                                                                                NPV
                                                                                 -------------------------------
                    Candidate standard level                            EF          7% Discount     3% Discount
                                                                                   rate  billion   rate  billion
                                                                                       2006$           2006$
----------------------------------------------------------------------------------------------------------------
1...............................................................            0.46            0.38            0.94
2...............................................................            0.58            1.29            3.29
3...............................................................            0.62            1.73            4.72
4...............................................................            0.65            0.90            3.61
5...............................................................            0.72           -2.75           -2.94
6...............................................................            0.80           -7.25          -10.77
7...............................................................            1.11           -7.28           -8.16
----------------------------------------------------------------------------------------------------------------

    Tables II.85 and II.86 show the NPV results for the candidate 
standard levels analyzed for dehumidifiers.

[[Page 64503]]



                        Table II.85.--Dehumidifiers: Cumulative Net Present Value Results Based on a Seven-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         <= 25.00         25.01-35.00       35.01-45.00       45.01-54.00       54.01-74.99         >=75.00        ALL
                                    --------------------------------------------------------------------------------------------------------------------
                                               NPV @             NPV @             NPV @             NPV @             NPV @            NPV * @   NPV @
      Candidate standard level                   7%                7%                7%                7%                7%                7%       7%
                                        EF    billion     EF    billion     EF    billion     EF    billion     EF    billion     EF    billion  billion
                                               2006$             2006$             2006$             2006$             2006$             2006$    2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................     1.10     0.01     1.25     0.02     1.35     0.01     1.45     0.01     1.55     0.02     2.38     0.00     0.08
2..................................     1.20     0.05     1.30     0.06     1.40     0.03     1.50     0.03     1.60     0.05     2.50     0.00     0.21
3..................................     1.25     0.05     1.35     0.07     1.45     0.04     1.55     0.04     1.65     0.10     2.55     0.00     0.31
4..................................     1.30     0.04     1.40     0.07     1.50     0.03     1.60     0.04     1.70     0.11     2.60     0.00     0.31
5..................................     1.38     0.05     1.45     0.08     1.74     0.00     2.02     0.21     1.80     0.19     2.75     0.00     0.54
--------------------------------------------------------------------------------------------------------------------------------------------------------
* NPV greater than zero but less than $0.005 billlion.


                        Table II.86.--Dehumidifiers: Cumulative Net Present Value Results Based on a Three-Percent Discount Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         <= 25.00         25.01-35.00       35.01-45.00       45.01-54.00       54.01-74.99      [gteqt]75.00      ALL
                                    --------------------------------------------------------------------------------------------------------------------
                                               NPV @             NPV @             NPV @             NPV @             NPV @            NPV * @   NPV @
      Candidate standard level                   3%                3%                3%                3%                7%                3%       3%
                                        EF    billion     EF    billion     EF    billion     EF    billion     EF    billion     EF    billion  billion
                                               2006$             2006$             2006$             2006$             2006$             2006$    2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................     1.10     0.04     1.25     0.04     1.35     0.04     1.45     0.04     1.55     0.06     2.38     0.00     0.22
2..................................     1.20     0.11     1.30     0.14     1.40     0.09     1.50     0.09     1.60     0.12     2.50     0.01     0.57
3..................................     1.25     0.13     1.35     0.20     1.45     0.13     1.55     0.14     1.65     0.27     2.55     0.01     0.87
4..................................     1.30     0.12     1.40     0.21     1.50     0.14     1.60     0.16     1.70     0.32     2.60     0.01     0.96
5..................................     1.38     0.15     1.45     0.25     1.74     0.19     2.02     0.66     1.80     0.55     2.75     0.01     1.81
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Tables II.87 and II.88 show the NPV results for the candidate 
standard levels analyzed for cooktops and ovens, respectively.

                  Table II.87.--Cooktops: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Electric coil                      Electric smooth                           Gas
                                             -----------------------------------------------------------------------------------------------------------
          Candidate standard level                         NPV @ 7%    NPV @ 3%                NPV @ 7%    NPV @ 3%                NPV @ 7%    NPV @ 3%
                                                  EF        billion     billion       EF        billion     billion       EF        billion     billion
                                                             2006$       2006$                   2006$       2006$                   2006$       2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...........................................       0.769        0.05        0.18       0.753       -7.48      -14.28       0.399        0.29        0.67
2...........................................  ..........  ..........  ..........  ..........  ..........  ..........       0.420       -0.65       -0.98
--------------------------------------------------------------------------------------------------------------------------------------------------------


                    Table II.88.--Ovens: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent Discount Rates
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Elec standard             Elec self-clean              Gas standard              Gas self-clean
                                             -----------------------------------------------------------------------------------------------------------
                                                        NPV  @   NPV @             NPV @    NPV @            NPV 2 @   NPV @            NPV 2 @  NPV 2 @
          Candidate standard level                        7%       3%                7%       3%                7%       35                7%       3%
                                                 EF    billion  billion     EF    billion  billion     EF    billion  billion     EF    billion  billion
                                                        2006$    2006$             2006$    2006$             2006$    2006$             2006$    2006$
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 *.........................................   0.1113     0.06     0.17   0.1102    -0.28    -0.53   0.0536     0.10     0.24   0.0625    -0.01     0.18
2...........................................   0.1163     0.08     0.27   0.1123    -2.87    -5.41   0.0566     0.11     0.34   0.0627    -0.12     0.02
3...........................................   0.1181     0.03     0.19  .......  .......  .......   0.0572     0.11     0.34   0.0632    -0.14    -0.05
4...........................................   0.1206    -0.81    -1.39  .......  .......  .......   0.0593    -0.33    -0.45  .......  .......  .......
5...........................................   0.1209    -0.88    -1.52  .......  .......  .......   0.0596    -0.36    -0.50  .......  .......  .......
6...........................................  .......  .......  .......  .......  .......  .......   0.0600    -0.42    -0.62  .......  .......  .......
1a *........................................  .......  .......  .......  .......  .......  .......   0.0583     0.35     0.92  .......  .......  .......
--------------------------------------------------------------------------------------------------------------------------------------------------------
* For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
  standing pilot--but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
  standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
  through 6 are derived from candidate standard level 1.


[[Page 64504]]

    Tables II.89 shows the NPV results for the candidate standard 
levels analyzed for microwave ovens.

  Table II.89.--Microwave Ovens: Cumulative Net Present Value Results Based on Seven-Percent and Three-Percent
                                                 Discount Rates
----------------------------------------------------------------------------------------------------------------
                                                                                                NPV
                                                                                 -------------------------------
                    Candidate standard level                            EF          7% Discount     3% Discount
                                                                                   rate  billion   rate  billion
                                                                                       2006$           2006$
----------------------------------------------------------------------------------------------------------------
1...............................................................           0.586           -1.40           -2.48
2...............................................................           0.588           -3.52           -6.51
3...............................................................           0.597           -6.58          -12.28
4...............................................................           0.602          -10.35          -19.40
----------------------------------------------------------------------------------------------------------------

    Table II.90 shows the NPV results for the candidate standard levels 
analyzed for CCWs.

Table II.90.--Commercial Clothes Washers: Cumulative Net Present Value Results Based on Seven-Percent and Three-
                                             Percent Discount Rates
----------------------------------------------------------------------------------------------------------------
                                                                                                NPV
                                                                                 -------------------------------
                    Candidate standard level                          MEF/WF        7% Discount     3% Discount
                                                                                   rate  billion   rate  billion
                                                                                       2006$           2006$
----------------------------------------------------------------------------------------------------------------
1...............................................................       1.42/9.50            0.04            0.20
2...............................................................       1.60/8.50           -0.09            0.22
3...............................................................       1.72/8.00            0.23            0.99
4...............................................................       1.80/7.50            0.49            1.64
5...............................................................       2.00/5.50            1.41            3.87
6...............................................................       2.20/5.10            1.77            4.74
----------------------------------------------------------------------------------------------------------------

J. Life-Cycle Cost Subgroup Analysis

    The LCC subgroup analysis evaluates impacts of standards on 
identifiable groups of customers, such as different population groups 
of consumers or different business types, which may be 
disproportionately affected by any national energy efficiency standard 
level. In the NOPR phase of this rulemaking, DOE will analyze the LCCs 
and PBPs for customers that fall into such groups. The analysis will 
determine whether any particular group of consumers would be adversely 
affected by any of the trial standard levels.
    Also, DOE plans to examine variations in energy prices and energy 
use that might affect the NPV of a standard for customer sub-
populations. To the extent possible, DOE will obtain estimates of the 
variability of each input parameter and consider this variability in 
the calculation of customer impacts. Variations in energy use for a 
particular product depend on a number of factors, such as climate and 
type of user. DOE plans to perform sensitivity analyses to consider how 
differences in energy use will affect subgroups of customers.
    DOE will determine the effect on customer subgroups using the LCC 
spreadsheet model. NWPCC stated that the Monte Carlo approach, if 
implemented in the LCC and PBP analyses, can be used to conduct the 
subgroup analysis. NWPCC stated that the Monte Carlo approach is 
suitable for identifying different subgroups, such as regional 
subgroups, that may be impacted differently by standards. (Public 
Meeting Transcript, No. 5 at p. 235) As described in section II.G on 
the LCC and PBP analyses, DOE used a Monte Carlo approach to conduct 
the LCC and PBP analyses. The spreadsheet model it used for the LCC 
analysis, which incorporates the use of Monte Carlo sampling, can be 
used with different data inputs. The standard LCC analysis includes 
various customer types that use the four appliance products. DOE can 
analyze the LCC for any subgroup, such as low-income consumers, by 
using the LCC spreadsheet model and sampling only that subgroup. 
Details of this model are explained in section II.G.
    DOE received several comments as to which subgroups it should 
analyze. EEI suggested that DOE consider low-income and senior 
subgroups. It stated that low-income consumers are more likely to use 
CCWs, and that seniors tend to use dishwashers and cooking products 
less frequently than the overall population. (EEE, No. 7 at p. 6) For 
CCWs, ALS stated that DOE should consider low-income consumers and 
senior citizens, especially if standards cause an increase in vending 
prices. ALS stated that the resulting increase in vending price would 
lead to less available disposable income for low-income and senior 
consumers to use commercial laundry. MLA expressed the same concerns, 
but only for low-income consumers. (Public Meeting Transcript, No. 5 at 
p. 237; MLA, No. 8 at p. 2)
    GE and PG&E suggested that DOE consider regional subgroups. GE 
stated that regional subgroups for dishwashers and cooking products 
would be appropriate because the regional saturations for both sets of 
products vary significantly. (Public Meeting Transcript, No. 5 at pp. 
240-241) PG&E stated that DOE should consider regional subgroups for 
dehumidifiers. (Public Meeting Transcript, No. 5 at p. 237) Lastly, the 
EPA thought it would be

[[Page 64505]]

prudent to consider subgroups that are not served by water and sewer 
service providers, but by wells and septic systems. EPA believes that 
these consumers use less water than the overall population. (Public 
Meeting Transcript, No. 5 at p. 234)
    DOE intends to analyze the impacts of candidate standards on low-
income and senior subgroups. DOE also will evaluate whether regional 
variations are significant enough to warrant an analysis of regional 
subgroups for dishwashers, dehumidifiers, and cooking products. In its 
analysis of dishwashers and CCWs, DOE will also consider evaluating 
those consumer subgroups not served by water and sewer. In its analysis 
of subgroups, DOE will be especially sensitive to purchase price 
increases (``first-cost'' increases) to avoid negative impacts on 
identifiable population groups such as low-income households (in the 
case of residential products) or small businesses with low annual 
revenues (in the case of CCWs), which may not be able to afford a 
significant increase in product or equipment prices.

K. Manufacturer Impact Analysis

    The purpose of the MIA is to identify the likely impacts of energy 
conservation standards on manufacturers. DOE has begun and will 
continue to conduct this analysis with input from manufacturers and 
other interested parties. DOE will subsequently apply a similar 
methodology to its evaluation of standards. During the MIA, DOE will 
consider financial impacts and a wide range of quantitative and 
qualitative industry impacts that might occur following the adoption of 
a standard. For example, if DOE adopts a particular standard level, it 
could require changes to manufacturing practices. DOE will identify and 
understand these impacts through interviews with manufacturers and 
other stakeholders during the NOPR stage of its analysis.
    Recently, DOE announced changes to the MIA format through a report 
issued to Congress on January 31, 2006 (as required by section 141 of 
EPACT 2005), entitled ``Energy Conservation Standards Activities.'' 
Previously, DOE did not report any MIA results during the ANOPR phase 
of energy conservation standards rulemakings; however, under this new 
format, DOE has collected, evaluated, and reported some preliminary 
information and data in section II.K.6 of this ANOPR. For further 
information on the MIA process, the analysis, and the results, please 
refer to Chapter 12 of the TSD.
    DOE conducts the MIA in three phases. In Phase I, DOE creates an 
industry profile to characterize the industry, and conducts a 
preliminary MIA to identify important issues that require 
consideration. Results of the Phase I analysis are presented in Chapter 
12 of the TSD. In Phase II, DOE prepares an industry cash flow model 
and an interview questionnaire to guide subsequent discussions. In 
Phase III, DOE interviews manufacturers, and assesses the impacts of 
standards both quantitatively and qualitatively. It assesses industry 
and subgroup cash flow and net present value through use of the 
Government Regulatory Impact Model (GRIM). DOE then assesses impacts on 
competition, manufacturing capacity, employment, and regulatory burden 
based on manufacturer interview feedback and discussions. Results of 
the Phase II and Phase III analyses are presented in the NOPR TSD.
1. Sources of Information for the Manufacturer Impact Analysis
    Many of the analyses described above provide important inputs to 
the MIA. Such inputs include manufacturing costs and prices from the 
engineering analysis, retail price forecasts, and shipments forecasts. 
DOE supplements this information with company financial data and other 
information gathered during interviews with manufacturers. As discussed 
below, this interview process plays a key role in the MIA because it 
allows interested parties to privately express their views on important 
issues. To preserve confidentiality, DOE aggregates these perspectives 
across manufacturers, creating a combined opinion or estimate for use 
in its analyses. This process enables DOE to incorporate sensitive 
information from manufacturers in the rulemaking process without 
specifying precisely which manufacturer provided a certain set of data.
    DOE conducts detailed interviews with manufacturers to gain insight 
into the range of potential impacts of standards. During the 
interviews, DOE typically solicits both quantitative and qualitative 
information on the potential impacts of efficiency levels on sales, 
direct employment, capital assets, and industrial competitiveness. DOE 
prefers an interactive interview process, rather than a written 
response to a questionnaire, because it helps clarify responses and 
identify additional issues. Before each interview, DOE circulates a 
draft document showing its estimates of financial parameters based on 
publicly available information, such as filings with the SEC, articles 
in trade publications, etc. DOE subsequently solicits comments and 
suggestions on these estimates during the interviews.
    DOE asks interview participants to identify any confidential 
information that they have provided, either orally or in writing. DOE 
considers all information collected, as appropriate, in its decision-
making process. However, DOE does not make confidential information 
available in the public record. DOE also asks participants to identify 
all information that they wish to have included in the public record, 
but that they do not want to have associated with their interview or 
company; DOE incorporates such information into the public record, but 
reports it without attribution.
    Finally, DOE collates the completed interview questionnaires and 
prepares a summary of the major issues. For more detail on the 
methodology used in the MIA, refer to Chapter 12 of the TSD.
2. Industry Cash Flow Analysis
    The industry cash flow analysis relies primarily on the GRIM, which 
helps identify the effects of various efficiency regulations and other 
regulations on manufacturers. The basic structure of the GRIM is a 
standard annual cash flow analysis that uses price and volume 
information as an input, builds on fundamental base cost information, 
and accepts a set of regulatory conditions as changes in costs and 
investments. DOE uses the GRIM to analyze the financial impacts of more 
stringent energy conservation standards on the industry.
    The GRIM analysis uses several factors to determine annual cash 
flows from a new standard: (1) Annual expected revenues; (2) 
manufacturer costs including cost of goods sold; (3) depreciation; (4) 
research and development; (5) selling, general, and administrative 
expenses; (6) taxes; and (7) conversion capital expenditures. DOE 
compares the results against base case projections that involve no new 
standards. The financial impact of new standards is the difference 
between the two sets of discounted annual cash flows. For more 
information on the industry cash flow analysis, refer to Chapter 12 of 
the TSD.
3. Manufacturer Subgroup Analysis
    Industry cost estimates are not adequate to assess differential 
impacts among subgroups of manufacturers. For example, small and niche 
manufacturers, or manufacturers whose cost structure differs 
significantly from the industry average, could experience a 
disproportionate impact due to standards changes. Because DOE cannot 
consider the impact on every firm

[[Page 64506]]

individually, the results of the industry characterization are 
typically used to group manufacturers exhibiting similar 
characteristics.
    During MIA interviews, DOE discusses the potential subgroups and 
subgroup members it has identified for the analysis. DOE encourages the 
manufacturers to recommend subgroups or characteristics that are 
appropriate for the subgroup analysis. For more detail on the 
manufacturer subgroup analysis, refer to Chapter 12 of the TSD.
4. Competitive Impacts Assessment
    Another factor which DOE must consider in standard setting is 
whether a new standard is likely to reduce industry competition, and 
the Attorney General must determine the impacts, if any, of reduced 
competition. DOE makes a determined effort to gather and report firm-
specific financial information and impacts. In particular, the 
competitive impacts assessment focuses on the impacts of new energy 
efficiency standards on smaller manufacturers. DOE bases this 
assessment on manufacturing cost data and on information collected from 
interviews with manufacturers. Hence, manufacturer interviews also 
focus on gathering information to help assess asymmetrical cost 
increases to some manufacturers, increased proportions of fixed costs 
that could increase business risks, and potential barriers to market 
entry (e.g., proprietary technologies).
5. Cumulative Regulatory Burden
    DOE recognizes and seeks to mitigate the overlapping effects on 
manufacturers of new or revised DOE standards and other regulatory 
actions affecting the same equipment. Thus, DOE analyzes and considers 
the impact on manufacturers of multiple, product-specific regulatory 
actions.
    Based on its own research and discussions with manufacturers, DOE 
has identified several regulations relevant to dishwasher, 
dehumidifier, cooking product, and CCW manufacturers, including 
existing or new standards, the phase-out of hydrochlorofluorocarbon 
refrigerants, the prohibition of phosphate-containing detergents in 
some jurisdictions, standards for other products made by dishwasher, 
dehumidifier, cooking product, and CCW manufacturers, including State 
standards, and foreign energy conservation standards. (Although foreign 
standards do not directly affect products entering the U.S., they do 
impact manufacturer operations, in that they represent additional 
business expenses for manufacturers selling outside the U.S. market.)
    DOE will study the potential impacts of these cumulative burdens in 
greater detail during the MIA conducted during the NOPR phase.
6. Preliminary Results for the Manufacturer Impact Analysis
    DOE conducted a preliminary evaluation of the impact of potential 
new regulations for the products to be covered by this rulemaking on 
manufacturer financial performance, manufacturing capacity and 
employment levels, and product utility and innovation. A primary focus 
was to identify the cumulative burden that industry faces from the 
overlapping effect of new or recent energy conservation standards and/
or other regulatory action affecting the same product or industry.
    The primary sources of information for this analysis were telephone 
interviews with manufacturers of dishwashers, dehumidifiers, and CCWs 
carried out during the first quarter of FY 2007. To maintain 
confidentiality, DOE did not identify the individual manufacturers that 
disclosed information. Instead, the evaluation only reports aggregated 
information and does not disclose sensitive information or identify 
company-specific information. For the preliminary MIA, DOE conducted 
interviews with manufacturers primarily to identify key issues and gain 
insights into the qualitative impacts of energy conservation standards. 
For each product, DOE used an interview guide to gather responses from 
multiple manufacturers on several issues. All the interview guides 
covered the same general topic areas, but DOE adapted them, as 
appropriate, to address each product category. (Copies of the interview 
guides for CCW, dehumidifier, and dishwasher manufacturers are 
contained in Appendix B of the TSD.)
    However, DOE did not interview cooking product manufacturers at 
this stage due to feedback from stakeholders such as AHAM and several 
cooking product manufacturers, suggesting that DOE limit its efforts to 
updating the extensive 1996 cooking product technical analysis; these 
stakeholders reasoned that such an update would properly represent 
prices, design options, and manufacturer issues for products covered by 
the present rulemaking. Thus, DOE updated the 1996 cooking products 
analysis and plans to interview manufacturers of cooking products 
during the NOPR stage of this rulemaking to get feedback on its 
analysis and results.
    During the course of the preliminary MIA, DOE interviewed 
manufacturers representing over 80 percent of domestic dishwasher 
sales, 66 percent of domestic dehumidifier sales, and practically 100 
percent of CCW sales. DOE used these same interviews to review the 
engineering analysis cost and performance data contained in chapter 5 
of the TSD. However, during the course of the MIA interviews, focus of 
the discussion was shifted from technology-related topics to business-
related topics. DOE's objective was to become familiar with each 
company's particular market approach and financial structure, and its 
concerns and issues related to new efficiency standards. Most of the 
information received from these meetings is protected by non-disclosure 
agreements and resides with DOE's contractors. Before each visit, DOE 
provided company representatives with an interview guide that included 
the topics that DOE hoped to cover. The topics included:
     Key issues--the most important things to consider in 
setting new standards from the perspective of manufacturers;
     Product mix--effects of potential standard levels on a 
manufacturer's product mix;
     Profitability--insights into market forces which could 
affect a manufacturer's profitability;
     Conversion costs--estimates of costs required to meet new 
standards;
     Manufacturing capacity and employment levels--decisions to 
upgrade, remodel, or relocate existing facilities and resulting changes 
in employment patterns resulting from new energy efficiency standards;
     Market share and industry consolidation--changes to 
competitive dynamics of the marketplace and the possible consequences 
for consumers;
     Product utility and innovation--effect of standards on 
product utility and innovation; and
     Cumulative burden--assessment of the level and timing of 
investments manufacturers are expecting to incur as a result of other 
regulations.
    Additionally, DOE often introduced, entertained, and discussed 
other topics during the course of the interviews, such as the impact of 
various design options on energy efficiency, how testing standards and 
usage patterns vary by market, and performance issues.
    Perhaps the most important aspect of the preliminary MIA was the 
opportunity it created for DOE to identify key manufacturer issues 
early in the development of new standards.

[[Page 64507]]

During the interviews, DOE engaged the manufacturers in a discussion of 
their perception of the key issues in the rulemaking. DOE then added 
these key issues to the list of questions and topics explored during 
the interviews.
    The concerns that rose to the level of key issues in the opinion of 
dishwasher manufacturers included: (1) The potential elimination of 
entry-level dishwashers from the market; (2) a possible reduction in 
dishwasher washing performance; (3) the increased likelihood of 
consumers hand washing and pre-rinsing dishes; and (4) the potential 
relocation of production facilities overseas.
    The key issues expressed by dehumidifier manufacturers included: 
(1) The ability to pass cost increases on to consumers; (2) increased 
pressure from foreign competition; and (3) the ability to maintain 
Energy Star product offerings.
    The key issues for CCW manufacturers included: (1) The risk of 
eliminating vertical-axis washers from the market; (2) reduced product 
shipments due to a move away from central laundry facilities to in-unit 
residential laundry and prolonging the life of existing equipment; (3) 
reduced cleaning performance of some energy-saving design options; (4) 
the possible relocation of production facilities outside the country; 
and (5) the potential for industry consolidation and/or the elimination 
of the low-volume manufacturer.
    For more preliminary results for the MIA, such as other impacts on 
financial performance, impacts on product utility and performance, and 
additional details on the impacts of cumulative regulatory burden, 
refer to Chapter 12 of the TSD.

L. Utility Impact Analysis

    The utility impact analysis estimates the effects on the utility 
industry of reduced energy consumption due to improved appliance 
efficiency. The analysis compares modeling results for the base case 
with results for each candidate standards case. For each of the four 
appliance products, the analysis will consist of forecasted differences 
between the base and standards cases for electricity generation, 
installed capacity, sales, and prices. For CCWs, as well as residential 
dishwashers and cooking products, the analysis also will examine 
differences in sales of natural gas.
    To estimate these effects of proposed standards on the electric and 
gas utility industries, DOE intends to use a variant of the EIA's 
NEMS.\56\ EIA uses NEMS to produce its AEO. NEMS produces a widely 
recognized reference case forecast for the United States and is 
available in the public domain. DOE will use a variant known as NEMS-
Building Technologies (BT) to provide key inputs to the analysis.
---------------------------------------------------------------------------

    \56\ For more information on NEMS, please refer to the U.S. 
Department of Energy, Energy Information Administration 
documentation. A useful summary is National Energy Modeling System: 
An Overview 2003, DOE/EIA-0581(2003), March 2003. DOE/EIA approves 
use of the name NEMS to describe only an official version of the 
model without any modification to code or data. Because this 
analysis entails some minor code modifications and the model is run 
under various policy scenarios that are variations on DOE/EIA 
assumptions, in this analysis, DOE refers to it by the name NEMS-BT.
---------------------------------------------------------------------------

    The use of NEMS for the utility impact analysis offers several 
advantages. As the official DOE energy forecasting model, NEMS relies 
on a set of premises that are transparent and have received wide 
exposure and commentary. NEMS allows an estimate of the interactions 
between the various energy supply and demand sectors and the economy as 
a whole. The utility impact analysis will determine the changes for 
electric utilities in installed capacity and in generation by fuel type 
produced by each candidate standard level, as well as changes in gas 
and electricity sales to the commercial sector (for CCWs) and the 
consumer sector (for residential dishwashers, dehumidifiers, and 
cooking products). (Because dehumidifiers neither operate on gas nor 
rely on water heated by gas, standards for this product do not affect 
gas sales.)
    DOE plans to conduct the utility impact analysis as a variant of 
the NEMS used to produce the AEO 2007, applying the same basic set of 
premises. For example, the utility impact analysis uses the operating 
characteristics (e.g., energy conversion efficiency, emissions rates) 
of future electricity generating plants and the prospects for natural 
gas supply as specified in the AEO reference case.
    DOE will also explore deviations from some of the AEO 2007 
reference case premises to represent alternative futures. Two 
alternative scenarios use the high- and low-economic-growth cases of 
AEO 2007. (The reference case corresponds to medium growth.) The high-
economic-growth case uses higher projected growth rates for population, 
labor force, and labor productivity, resulting in lower predicted 
inflation and interest rates relative to the reference case. The 
opposite is true for the low-growth case. Starting in 2012, the high-
growth case predicts growth in per capita gross domestic product of 3.4 
percent per year, compared with 2.9 percent per year in the reference 
case and 2.2 percent per year in the low-growth case. As part of 
varying supply-side growth determinants in these cases, AEO 2007 also 
varies the forecasted energy prices for all three economic growth 
cases. Different economic growth cases affect the rate of growth of 
electricity demand.
    The electric utility industry analysis will consist of NEMS-BT 
forecasts for generation, installed capacity, sales, and prices. The 
gas utility industry analysis will consist of NEMS-BT forecasts of 
sales and prices. The NEMS-BT provides reference case load shapes for 
several end uses, including residential dishwashing and cooking, but 
does not provide load shapes \57\ specifically for dehumidifiers and 
CCWs. Because most of the energy consumed by clothes washers is 
expended on water heating, DOE intends to use NEMS-BT's commercial 
water-heating load shapes to characterize CCWs. For dehumidifiers, 
because this end use is operated in a similar manner to air-
conditioning equipment, DOE intends to use NEMS-BT residential space-
cooling load shapes to characterize it. For electrical end uses, NEMS-
BT uses predicted growth in demand for each end use to build up a 
projection of the total electrical system load growth for each region, 
which it uses in turn to predict the necessary additions to capacity. 
For both electrical and gas end uses, NEMS-BT accounts for the 
implementation of efficiency standards by decrementing the appropriate 
reference case load shape. DOE will determine the size of the decrement 
using data for the per-unit energy savings developed in the LCC and PBP 
analyses (see Chapter 8 of the TSD) and the forecast of shipments 
developed for the NIA (see Chapter 9 of the TSD). For more information 
on the utility impact analysis, refer to Chapter 13 of the TSD.
---------------------------------------------------------------------------

    \57\ The ``load shape'' defines how the product uses energy on 
an hourly basis over the course of the day.
---------------------------------------------------------------------------

    EEI commented that an accurate assessment of electric utility 
impacts requires an evaluation of the type of load of the appliance 
(i.e., whether the load is primarily during system peak demand or off-
peak). (Public Meeting Transcript, No. 5 at p. 264) In response, we 
note that in 2001, EIA conducted a review of its end-use load shapes 
and updated them to better reflect actual end use behavior.\58\ As a 
result, DOE has

[[Page 64508]]

confidence that the NEMS-BT provides a good representation of the type 
of loads exhibited by its end uses.
---------------------------------------------------------------------------

    \58\ Alternative Sectoral Load Shapes for NEMS, Department of 
Energy--Energy Information Administration, Washington, DC, August 
2001. Available online at: http://www.onlocationinc.com/LoadShapesAlternative2001.pdf.
---------------------------------------------------------------------------

    With regard to gas utility impacts, the AGA commented that NEMS-BT 
does not address these impacts in a meaningful way. AGA suggested that 
DOE should conduct a workshop on proposed modeling approaches to 
analyzing gas utility impacts. (AGA, No. 12 at p. 3) As noted above, 
NEMS-BT allows for the determination of changes in gas sales due to 
efficiency standards. Therefore, DOE's gas utility impact analysis goes 
no further than assessing the impact on gas sales.
    Since the AEO 2007 version of NEMS forecasts only to the year 2030, 
DOE would be required to extrapolate results for such forecasts to 
2042. DOE conducts an extrapolation to 2042 to be consistent with the 
analysis period being used by DOE in the NIA. However, DOE has 
determined that it will not be feasible to extend the forecast period 
of NEMS-BT for the purposes of this analysis, in part because EIA does 
not have an approved method for extrapolation of many outputs beyond 
2030. While it might seem reasonable in general to make simple linear 
extrapolations of results, in practice this is not advisable because 
outputs could be contradictory. For example, changes in the fuel mix 
implied by extrapolations of those outputs could be inconsistent with 
the extrapolation of marginal emissions factors. An analysis of various 
trends is not necessary and would involve a great deal of uncertainty. 
Therefore, for all extrapolations beyond 2030, DOE intends to use 
simple replications of year 2030 results. While these may seem 
unreasonable in some instances, in this way results are guaranteed to 
be consistent. As with the AEO reference case in general, the implicit 
premise is that the regulatory environment does not deviate from the 
current known situation during the extrapolation period. Only changes 
that have been announced with date-certain introduction are included in 
NEMS-BT.
    Both EEI and SPU stated that DOE should factor impacts to water and 
wastewater utilities into the utility impact analysis. SPU claimed 
that, in some areas of the country, water is becoming a limited 
commodity and should be assessed in the context of a utility impact 
analysis. (EEI, No. 7 at p. 6; Public Meeting Transcript, No. 5 at p. 
263) Although NEMS-BT provides estimates of changes in electrical 
utility infrastructure requirements as a function of end-use energy 
savings, it does not currently have the capability of calculating 
similar results for water and wastewater utilities. The water utility 
sector is more complicated than either the electric utility or gas 
utility sectors, with a high degree of geographic variability produced 
by a large diversity of water resource availability, institutional 
history, and regulatory context. DOE currently does not have access to 
tools that analyze water utility impacts. There are activites being 
conducted or initiated by the USGS, EPA, and DOE to study water and 
wastewater issues. However, these activites have yet to provide the 
necessary sources of data or tools to enable a water utility impact 
analysis comparable to what can be done on electric and gas utilities 
using NEMS. Therefore, conducting a credible water and wastewater 
utility analysis is beyond DOE's existing analysis capabilities.

M. Employment Impact Analysis

    The Process Rule includes employment impacts among the factors to 
be considered in selecting a proposed standard, and it provides 
guidance for consideration of the impact (both direct and indirect) of 
candidate standard levels on employment. The Process Rule states a 
general presumption against any candidate standard level that would 
directly cause plant closures or significant loss of domestic 
employment, unless specifically identified expected benefits of the 
standard would outweigh the adverse effects. See the Process Rule, 10 
CFR Part 430, Subpart C, Appendix A, sections 4(d)(7)(ii) and (vi), and 
5(e)(3)(i)(B).
    DOE estimates the impacts of standards on employment for equipment 
manufacturers, relevant service industries, energy suppliers, and the 
economy in general. Both indirect and direct employment impacts are 
covered. Direct employment impacts would result if standards led to a 
change in the number of employees at the factories that produce the 
four appliance products and related supply and service firms. Direct 
impact estimates are covered in the MIA.
    Indirect employment impacts are impacts on the national economy 
other than in the manufacturing sector being regulated. Indirect 
impacts may result both from expenditures shifting among goods 
(substitution effect) and changes in income that lead to a change in 
overall expenditure levels (income effect). DOE defines indirect 
employment impacts from standards as net jobs created or eliminated in 
the general economy as a result of increased spending driven by the 
increased equipment prices and reduced spending on energy.
    DOE expects new standards for the four appliance products to 
increase the total installed cost of equipment, which includes 
manufacturer selling price, sales taxes, distribution chain markups, 
and installation cost. DOE also expects the new standards to decrease 
energy consumption, and thus expenditures on energy. Over time, 
increased total installed cost is paid back through energy savings. The 
savings in energy expenditures may be spent on new commercial 
investment and other items.
    Using an input/output model of the U.S. economy, this analysis 
seeks to estimate the effects on different sectors and the net impact 
on jobs. DOE will estimate national employment impacts for major 
sectors of the U.S. economy in the NOPR, using public and commercially 
available data sources and software. DOE will make all methods and 
documentation available for review in the TSD for the NOPR.
    In overview, DOE developed Impact of Sector Energy Technologies 
(ImSET), a spreadsheet model of the U.S. economy that focuses on 188 
sectors most relevant to industrial, commercial, and residential 
building energy use.\59\ ImSET is a special-purpose version of the U.S. 
Benchmark National Input-Output (I-O) model, which has been designed to 
estimate the national employment and income effects of energy saving 
technologies that are deployed by DOE's Office of Energy Efficiency and 
Renewable Energy. In comparison with the previous versions of the model 
used in earlier rulemakings, this version allows for more complete and 
automated analysis of the essential features of energy efficiency 
investments in buildings, industry, transportation, and the electric 
power sectors. The ImSET software includes a computer-based I-O model 
with structural coefficients to characterize economic flows among the 
188 sectors. ImSET's national economic I-O structure is based on the 
1997 Benchmark U.S. table (Lawson, et al. 2002),\60\ specially 
aggregated to 188 sectors.
---------------------------------------------------------------------------

    \59\ Roop, J.M., M.J. Scott, and R.W. Schultz. 2005. ImSET: 
Impact of Sector Energy Technologies. PNNL-15273. Pacific Northwest 
National Laboratory, Richland, WA.
    \60\ Lawson, Ann M., Kurt S. Bersani, Mahnaz Fahim-Nader, and 
Jiemin Guo. 2002. ``Benchmark Input-Output Accounts of the U. S. 
Economy, 1997,'' Survey of Current Business, December, pp. 19-117.
---------------------------------------------------------------------------

    Standards for the four appliance products may reduce energy

[[Page 64509]]

expenditures and increase equipment prices in the commercial sector. 
These expenditure changes are likely to reduce commercial and energy 
sector employment. At the same time, these equipment standards may 
increase commercial sector investment, and increase employment in other 
sectors of the economy. DOE designed the employment impact analysis to 
estimate the year-to-year net employment effect of these different 
expenditure flows.
    Although DOE intends to use ImSET for its analysis of employment 
impacts, it welcomes input on other tools and factors it might 
consider. For more information on the employment impact analysis, refer 
to Chapter 14 of the TSD.

N. Environmental Assessment

    The primary environmental effect of energy conservation standards 
for the four appliance products would be reduced power plant emissions 
resulting from reduced consumption of electricity. DOE will assess 
these environmental effects by using NEMS-BT to provide key inputs to 
its analysis. The environmental assessment produces results in a manner 
similar to those provided in the AEO. In addition to electrical power, 
the operation of three of the four appliance products--CCWs, 
dishwashers, and cooking products--also requires use of fossil fuels, 
and results in emissions of carbon dioxide (CO2), nitrogen 
oxides (NOX), and sulfur dioxide (SO2) at the 
sites where the appliances are installed. Southern California Gas 
Company (SoCal Gas) and PG&E questioned how DOE will evaluate the 
emissions from gas-fired appliances. (Public Meeting Transcript, No. 5 
at pp. 271-272) In response, we note that NEMS-BT provides no means for 
estimating such site emissions. Therefore, DOE will calculate, and the 
environmental assessment will include, separate estimates of the effect 
of the proposed standard on site emissions of CO2, 
NOX, and SO2, based on simple emissions factors 
derived from the literature.\61\
---------------------------------------------------------------------------

    \61\ U.S. Environmental Protection Agency. Compilation of Air 
Pollutant Emission Factors, AP-42, Fifth Edition, Volume 1: 
Stationary Point and Area Sources. 1998. Available online at: http:/
/www. epa.gov/ttn/chief/ap42.html.
---------------------------------------------------------------------------

    The intent of the environmental assessment is to provide emissions 
results estimates and to properly quantify and consider the 
environmental effects of all new Federal rules. The portion of the 
environmental assessment that will be produced by NEMS-BT considers 
only three pollutants, SO2, NOX, and mercury, and 
one other emission (carbon). The only form of carbon the NEMS-BT model 
tracks is CO2. Therefore, the carbon discussed in this 
analysis is only in the form of CO2. For each of the trial 
standard levels, DOE will calculate total undiscounted and discounted 
power plant emissions using NEMS-BT, and will use other methods to 
calculate site emissions.
    Although DOE plans to consider only SO2, NOX, 
mercury, and CO2 in its environmental assessment, there are 
other air pollutants which are of concern. Specifically, the Clean Air 
Act requires EPA to set National Ambient Air Quality Standards for the 
following six common air pollutants, also know as ``criteria 
pollutants'': (1) Ozone, (2) particulate matter (PM), (3) carbon 
monoxide (CO), (4) nitrogen dioxide, (5) SO2, and (6) lead. 
\62\ EPA recently added mercury to this list. But none of the 
``criteria pollutants'' not considered in the environmental assessment 
(i.e., ozone, PM, CO, and lead) are driven significantly by either 
electric utility power plants or fuel-fired appliances. Therefore, DOE 
does not intend on addressing them in the environmental assessment. In 
the case of ozone and PM, other pollutants are precursors to their 
formation, and atmospheric conditions are the driver behind their 
formation. Also, SO2 and NOX, are the primary 
precursors to ozone and PM, respectively, and will already be addressed 
by the environmental assessment. In the case of CO, electric utilities 
and fuel-fired appliances are not significant sources. For electric 
power plants, almost all carbon emissions come out in the form of CO2 
as the combustion process is lean enough not to yield CO in significant 
amounts. For fuel-fired appliances, proper appliance maintenance, 
installation, and use can prevent dangerous levels of CO. A well-
designed and properly functioning heating or cooking appliance should 
not produce toxic or lethal levels of CO, as, most often, CO poisoning 
occurs in the home as a result of malfunctioning appliances. Finally, 
with regard to lead, the ban on the use of leaded gasoline has resulted 
in a dramatic decrease in lead emissions since the mid-1970s. Today, 
industrial processes (not electric utilities), particularly primary and 
secondary lead smelters and battery manufacturers, are responsible for 
most of lead emissions and all violations of the lead air quality 
standards.
---------------------------------------------------------------------------

    \62\ U.S. Environmental Protection Agency. Six Common Air 
Pollutants. Washington, DC. Available online at: http://www.epa.gov/air/urbanair/.
---------------------------------------------------------------------------

    As to power plant emissions, DOE will conduct each environmental 
assessment performed as part of this rulemaking as an incremental 
policy impact (i.e., a standard for the product under evaluation) on 
the AEO 2007 forecast, applying the same basic set of assumptions used 
in AEO 2007. For example, the emissions characteristics of an 
electricity generating plant will be exactly those used in AEO 2007. 
Also, forecasts conducted with NEMS-BT consider the supply-side and 
demand-side effects on the electric utility industry. Thus, DOE's 
analysis will account for any factors affecting the type of electricity 
generation and, in turn, the type and amount of airborne emissions 
generated by the utility industry.
    The NEMS-BT model tracks carbon emissions with a specialized carbon 
emissions estimation subroutine, producing reasonably accurate results 
due to the broad coverage of all sectors and inclusion of interactive 
effects. Past experience with carbon results from NEMS suggests that 
emissions estimates are somewhat lower than emissions based on simple 
average factors. One of the reasons for this divergence is that NEMS 
tends to predict that conservation displaces generating capacity in 
future years. On the whole, NEMS-BT provides carbon emissions results 
of reasonable accuracy, at a level consistent with other Federal 
published results.
    NEMS-BT also reports SO2, NOX, and mercury, 
which DOE has reported in past analyses. The Clean Air Act Amendments 
of 1990 set an SO2 emissions cap on all power 
generation.\63\ The attainment of this aggregate limit, however, is 
flexible among generators of emissions, due to the availability of 
emissions allowances and tradable permits. Although NEMS includes a 
module for SO2 allowance trading and delivers a forecast of 
SO2 allowance prices, accurate simulation of SO2 
trading implies that the effect of efficiency standards on physical 
emissions will be zero because emissions will always be at or near the 
ceiling. However, there may be an SO2 benefit from energy 
conservation, in the form of a lower SO2 allowance price. 
Since the impact of any one standard on the allowance price is likely 
small and highly uncertain, DOE does not plan to monetize any potential 
SO2 benefit.
---------------------------------------------------------------------------

    \63\ See 40 CFR part 50. (See also U.S. Environmental Protection 
Agency Web site at: http://www.epa.gov/air/caa/).
---------------------------------------------------------------------------

    NEMS-BT also has an algorithm for estimating NOX 
emissions from power generation. The impact of these emissions, 
however, will be affected by the Clean Air Interstate Rule (CAIR), 
which the EPA published on May 12, 2005. CAIR will permanently cap

[[Page 64510]]

emissions of NOX in 28 eastern States and the District of 
Columbia. 70 FR 25162 (May 12, 2005). As with SO2 emissions, 
a cap on NOX emissions means that equipment efficiency 
standards may have no physical effect on these emissions. When 
NOX emissions are subject to emissions caps, DOE's emissions 
reduction estimate corresponds to incremental changes in the prices of 
emissions allowances in cap-and-trade emissions markets rather than 
physical emissions reductions. Therefore, while the emissions cap may 
mean that physical emissions reductions will not result from standards, 
standards could produce an economic benefit in the form of lower prices 
for emissions allowance credits. However, as with SO2 
allowance prices, DOE does not plan to monetize this benefit because 
the impact on the NOX allowance price from any single energy 
conservation standard is likely small and highly uncertain.
    EEI stated that new rules pertaining to power plant SO2 
and NOX emissions will limit the impact that standards can 
have on reducing these emissions. (EEI, No. 7 at p. 4) As noted above, 
NEMS-BT accounts for the most recent regulations pertaining to power 
plant SO2 and NOX emissions and expects that 
appliance efficiency standards will not have any physical effect on 
these emissions.
    With regard to mercury emissions, NEMS has an algorithm for 
estimating these emissions from power generation. However, the impact 
on mercury emissions will be affected by the Clean Air Mercury Rule 
(CAMR), which the EPA published on May 18, 2005. 70 FR 28606. CAMR will 
permanently cap emissions of mercury for new and existing coal-fired 
plants in all States. As with SO2 and NOX 
emissions, a cap on mercury emissions means that appliance efficiency 
standards may have no physical effect on these emissions. When mercury 
emissions are subject to emissions caps, DOE's emissions reduction 
estimate corresponds to incremental changes in the prices of emissions 
allowances in cap-and-trade emissions markets rather than physical 
emissions reductions. Therefore, while the emissions cap may mean that 
physical emissions reductions will not result from standards, standards 
could produce an economic benefit in the form of lower prices for 
emissions allowance credits. However, as with SO2 and 
NOX allowance prices, DOE does not plan to monetize this 
benefit because the impact on the mercury allowance price from any 
single energy conservation standard is likely small and highly 
uncertain.
    The Joint Comment stated that DOE should evaluate mercury and 
particulate emissions as part of the environmental assessment due to 
their impact on public health. (Joint Comment, No. 9 at p. 3) In 
response, as noted above, NEMS-BT accounts for the most recent 
regulations pertaining to power plant mercury emissions and expects 
that standards will not have any physical effect on the level of these 
emissions. With regard to particulates, these emissions are a special 
case because they arise not only from direct emissions, but also from 
complex atmospheric chemical reactions that result from NOX 
and SO2 emissions. Because of the highly complex and 
uncertain relationship between particulate emissions and particulate 
concentrations that impact air quality, DOE does not plan on reporting 
particulate emissions.
    Potomac and SPU urged DOE to evaluate wastewater discharge impacts 
due to increased efficiency standards. (Public Meeting Transcript, No. 
5 at p. 269) DOE plans to conduct a separate analysis of wastewater 
discharge impacts as part of the environmental assessment. DOE intends 
to derive a simple national aggregate estimate of wastewater discharge 
impacts from proposed energy conservation standards, based on estimates 
of consumer water savings. It will first provide a simple estimate of 
the fraction of water savings that result in decreased wastewater 
discharges. Then, by applying this discharge fraction to the water 
savings estimate, DOE can provide an approximate wastewater discharge 
savings estimate.
    The results for the environmental assessment are similar to a 
complete NEMS run as published in the AEO 2007. These results include 
power sector emissions for SO2, NOX, and carbon 
in five-year forecasted increments extrapolated to 2042. The outcome of 
the analysis for each candidate standard level is reported as a 
deviation from the AEO 2007 reference (base) case.
    For more detail on the environmental assessment, refer to the 
environmental assessment report in the TSD.

O. Regulatory Impact Analysis

    DOE will prepare a draft regulatory impact analysis in compliance 
with Executive Order 12866, ``Regulatory Planning and Review,'' which 
will be subject to review by OMB's Office of Information and Regulatory 
Affairs (OIRA). 58 FR 51735 (October 4, 1993).
    As part of the regulatory impact analysis, and as discussed in 
section II.K, ``Manufacturer Impact Analysis,'' DOE will identify and 
seek to mitigate the overlapping effects on manufacturers of new or 
revised DOE standards and other regulatory actions affecting the same 
products. Through manufacturer interviews and literature searches, DOE 
will compile information on burdens from existing and impending 
regulations affecting the four appliance products covered under this 
rulemaking. DOE also seeks input from stakeholders about relevant 
regulations whose impacts it should consider.
    The regulatory impact analysis also will address the potential for 
non-regulatory approaches to supplant or augment energy conservation 
standards to improve the efficiency of the four appliance products. One 
such potential non-regulatory program is tax credits. In assessing the 
potential impacts from tax credits, EEI suggested that DOE should 
evaluate the long-term effects on market transformation to more-
efficient products from short-term (e.g., two-year) tax credits. 
(Public Meeting Transcript, No. 5 at p. 278) AHAM stated that recent 
Federal tax credits for dishwashers will have an effect on improving 
overall product efficiency and that DOE should consider such effect as 
part of analyzing the impact of tax credits. (Public Meeting 
Transcript, No. 5 at p. 277) In response, we noted that the NOPR will 
include a complete quantitative analysis of alternatives to the 
proposed energy conservation standards (including tax credits), and DOE 
will use the most recent information available to make its assessments. 
DOE will use the NES spreadsheet model (as discussed in section II.I, 
``National Impact Analysis'') to calculate the NES and NPV for the 
alternatives to the proposed conservation standards. For more 
information on the regulatory impact analysis, refer to the regulatory 
impact analysis report in the TSD.

III. Candidate Energy Conservation Standard Levels

    The Process Rule states that DOE will specify candidate standard 
levels in the ANOPR, but will not propose a particular standard. 10 CFR 
Part 430, Subpart C, Appendix A, section 4(c)(1)(i). Section II.I.4, 
``National Impact Analysis Results'' identifies the candidate standard 
levels for each of the four appliance products. Tables III.1 through 
III.4 repeat the candidate standard levels for each of the four 
appliance products.

[[Page 64511]]



      Table III.1.--Standard Dishwashers: Candidate Standard Levels
------------------------------------------------------------------------
                Candidate standard level                   Energy factor
------------------------------------------------------------------------
1.......................................................            0.46
2.......................................................            0.58
3.......................................................            0.62
4.......................................................            0.65
5.......................................................            0.72
6.......................................................            0.80
7.......................................................            1.11
------------------------------------------------------------------------


                                                 table III.2.--Dehumidifiers: Candidate Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              <=25.00       25.01-35.00     35.01-45.00     45.01-54.00     54.01-74.99       >=75.00
                Candidate standard level                 -----------------------------------------------------------------------------------------------
                                                                EF              EF              EF              EF              EF              EF
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................            1.10            1.25            1.35            1.45            1.55            2.38
2.......................................................            1.20            1.30            1.40            1.50            1.60            2.50
3.......................................................            1.25            1.35            1.45            1.55            1.65            2.55
4.......................................................            1.30            1.40            1.50            1.60            1.70            2.60
5.......................................................            1.38            1.45            1.74            2.02            1.80            2.75
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                                Table III.3.--Cooking Products: Candidate Standard Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Cooktops                                       Ovens                         Microwave
                                                 -------------------------------------------------------------------------------------------    ovens
                                                   Elec coil   Elec smooth      Gas          Elec      Elec self-      Gas       Gas self-  ------------
            Candidate standard level             ---------------------------------------   standard      clean       standard      clean
                                                                                        ----------------------------------------------------      EF
                                                       EF           EF           EF           EF           EF           EF           EF
--------------------------------------------------------------------------------------------------------------------------------------------------------
1\*\............................................        0.769        0.752        0.399       0.1113       0.1102       0.0536       0.0625        0.586
2...............................................  ...........  ...........        0.420       0.1163       0.1123       0.0566       0.0627        0.588
3...............................................  ...........  ...........  ...........       0.1181  ...........       0.0572       0.0632        0.597
4...............................................  ...........  ...........  ...........       0.1206  ...........       0.0593  ...........        0.602
5...............................................  ...........  ...........  ...........       0.1209  ...........       0.0596  ...........  ...........
6...............................................  ...........  ...........  ...........  ...........  ...........       0.0600  ...........  ...........
1a\*\...........................................  ...........  ...........  ...........  ...........  ...........       0.0583  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\*\ For gas standard ovens, candidate standard levels 1 and 1a correspond to designs that are utilized for the same purpose--eliminate the need for a
  standing pilot-but the technologies for each design are different. Candidate standard level 1 is a hot surface ignition device while candidate
  standard level 1a is a spark ignition device. Candidate standard level 1a is presented at the end of the table because candidate standard levels 2
  through 6 are derived from candidate standard level 1.


   Table III.4.--Commercial Clothes Washers: Candidate Standard Levels
------------------------------------------------------------------------
                                                             Modified
                Candidate standard level                  energy factor/
                                                           water factor
------------------------------------------------------------------------
1.......................................................       1.42/9.50
2.......................................................       1.60/8.50
3.......................................................       1.72/8.00
4.......................................................       1.80/7.50
5.......................................................       2.00/5.50
6.......................................................       2.20/5.10
------------------------------------------------------------------------

    DOE will review the public input it receives in response to this 
ANOPR and will update the analyses appropriately for each product class 
before issuing the NOPR. In addition, DOE will consider any comments it 
receives on the candidate standard levels set forth above for the four 
appliance products, and on whether alternative levels would satisfy 
EPCA criteria for DOE adoption of standards, for example:
     A moderate increase in the efficiency level at an earlier 
effective date (e.g., an effective date two years after the publication 
of the final rule); or
     A larger increase in the efficiency level at a later 
effective date.
    For the NOPR, DOE will develop trial standard levels (TSL) from the 
above candidate standard levels for each of the four appliance 
products. DOE will consider several criteria in developing the TSLs, 
including, but not limited to, which candidate standard level has the 
minimum LCC, maximum NPV, and maximum technologically feasible 
efficiency. From the list of TSLs developed, DOE will select one as its 
proposed standard for the NOPR, while explaining the other TSLs 
considered and the reasons for their elimination in deciding upon the 
level ultimately proposed.
    For a given product consisting of several product classes (e.g., 
dehumidifiers and cooking products), DOE will develop each TSL so that 
it is comprised of candidate standard levels from each class that 
exhibit similar characteristics. For example, in the case of 
dehumidifiers, one of the TSLs will likely consist of the candidate 
standard level from each of the six classes that has the minimum LCC.
    DOE will also attempt to limit the number of TSLs considered for 
the NOPR by dropping from consideration candidate standard levels that 
do not exhibit significantly different economic and/or engineering 
characteristics from candidate standard levels already selected as a 
TSL. For example, in the case of dishwashers, the candidate standard 
level with the minimum LCC is candidate standard level 3 with an EF of 
0.65. If the sole consideration for selecting TSLs was LCC, DOE would 
likely drop candidate standard level 4 with an EF of 0.68 as its LCC 
savings are lower and not significantly different than the value for 
candidate standard level 3.
    DOE specifically seeks feedback on the criteria it should use for 
basing the selection of TSLs. This is identified as Issue 16 under 
``Issues on Which DOE Seeks Comment'' in section IV.E of this ANOPR.

[[Page 64512]]

IV. Public Participation

A. Attendance at Public Meeting

    The time, date, and location of the public meeting are set forth in 
the DATES and ADDRESSES sections at the beginning of this document. 
Anyone who wishes to attend the public meeting must notify Ms. Brenda 
Edwards-Jones at (202) 586-2945.

B. Procedure for Submitting Requests to Speak

    Any person who has an interest in today's notice, or who is a 
representative of a group or class of persons that has an interest in 
these issues, may request an opportunity to make an oral presentation 
at the public meeting. Please hand-deliver requests to speak to the 
address shown under the heading ``Hand Delivery/Courier'' in the 
ADDRESSES section of this notice, between 9 a.m. and 4 p.m., Monday 
through Friday, except Federal holidays. Requests also may be sent by 
mail, to the address shown under the heading ``Postal Mail'' in the 
ADDRESSES section of this notice, or by e-mail to [email protected].
    Persons requesting to speak should briefly describe the nature of 
their interest in this rulemaking and provide a telephone number for 
contact. DOE asks each person selected to be heard to submit a copy of 
his or her statement at least two weeks before the public meeting, 
either by hand delivery, mail, or e-mail as described in the preceding 
paragraph. Please include an electronic copy of your statement, on a 
computer diskette or CD when delivery is by mail or hand delivery. 
Electronic copies must be in WordPerfect, Microsoft Word, Portable 
Document Format (PDF), or text in American Standard Code for 
Information Interchange (ASCII) file format. At its discretion, DOE may 
permit any person who cannot supply an advance copy of his or her 
statement to participate, if that person has made alternative 
arrangements with the Building Technologies Program. In such 
situations, the request to give an oral presentation should ask for 
alternative arrangements.

C. Conduct of Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with 5 U.S.C. 553 and section 336 of 
EPCA. (42 U.S.C. 6306) A court reporter will be present to record the 
transcript of the proceedings. DOE reserves the right to schedule the 
order of presentations and to establish the procedures governing the 
conduct of the public meeting. After the public meeting, interested 
parties may submit further comments on the proceedings and any other 
aspect of the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for presentations by participants, and 
encourage all interested parties to share their views on issues 
affecting this rulemaking. Each participant will be allowed to make a 
prepared general statement (within time limits determined by DOE) 
before the discussion of specific topics. DOE will permit other 
participants to comment briefly on any general statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to the public meeting. The official conducting the 
public meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for proper conduct of the public meeting.
    DOE will make the entire record of this proposed rulemaking, 
including the transcript from the public meeting, available for 
inspection at the U.S. Department of Energy, Forrestal Building, Room 
1J-018 (Resource Room of the Building Technologies Program), 1000 
Independence Avenue, SW, Washington, DC, (202) 586-9127, between 9 a.m. 
and 4 p.m., Monday through Friday, except Federal holidays. Any person 
may buy a copy of the transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding all 
aspects of this ANOPR before or after the public meeting, but no later 
than January 29, 2008. Please submit comments, data, and information 
electronically to the following e-mail address: [email protected]. Submit electronic comments in 
WordPerfect, Microsoft Word, PDF, or text (ASCII) file format and avoid 
the use of special characters or any form of encryption. Comments in 
electronic format should be identified by the docket number EE-2006-
STD-0127 and/or RIN 1904-AB49, and whenever possible carry the 
electronic signature of the author. Absent an electronic signature, 
comments submitted electronically must be followed and authenticated by 
submitting the signed original paper document. DOE will not accept any 
telefacsimiles (faxes).
    Under 10 CFR 1004.11, any person submitting information that he or 
she believes to be confidential and exempt by law from public 
disclosure should submit two copies. One copy of the document shall 
include all the information believed to be confidential, and the other 
copy of the document shall have the information believed to be 
confidential deleted. DOE will make its own determination about the 
confidential status of the information and treat it according to its 
determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by, or available from, other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.

E. Issues on Which the Department of Energy Seeks Comment

    DOE is interested in receiving comments on all aspects of this 
ANOPR. DOE especially invites comments or data to improve DOE's 
analysis, including data or information that will respond to the 
following questions or concerns addressed in this ANOPR:
1. Microwave Oven Standby Power
    For the NOPR, DOE is considering purchasing, testing, and analyzing 
microwave ovens to better understand the utility, cost, and cost 
implications of reducing standby power consumption. Addition of a 
standby power test to the existing test procedure would be necessary 
before standby power could be included in an efficiency standard. DOE 
is considering this approach for microwave ovens because data provided 
by AHAM suggests that there is an opportunity for significant energy

[[Page 64513]]

savings via the reduction of standby power levels. Therefore, DOE 
requests data and stakeholder feedback on how to conduct an analysis of 
standby power for microwave ovens. (See section I.D.4.b of this ANOPR 
for further details.)
2. Product Classes
    In accordance with EPCA section 325(p)(1)(A), DOE identified the 
equipment classes covered under this rulemaking. (42 U.S.C. 
6295(p)(1)(A)) Pursuant to EPCA section 325(p)(1)(B), DOE requests 
comments on these equipment classes and invites interested persons to 
submit written presentations of data, views, and arguments. (42 U.S.C. 
6295(p)(1)(B)) (See section II.A.1 of this ANOPR for further details.)
3. Commercial Clothes Washer Horizontal-Axis Designs
    The information available for CCWs suggests that an efficiency of 
1.6 MEF and 8.5 WF will be based on horizontal-axis technology. As 
such, it appears that the incremental costs between 1.60 MEF/8.5 WF and 
2.2 MEF/5.1 WF will be constant at the same value as those provided by 
AHAM for the level 2.0 MEF/5.5 WF. DOE particularly seeks comment on 
the validity of such an approach. DOE also seeks information about 
lower-cost alternatives to horizontal-axis designs for levels greater 
than 1.42 MEF/9.5 WF and lower than 2.0 MEF/5.5 WF. Additionally, DOE 
seeks information that would allow it to change the energy and water 
features of the 2.0 MEF/5.5 WF level to allow for manufacturer cost 
differentiation at the lower (and the higher) levels. Furthermore, DOE 
seeks comment on how to evaluate potential shifts from vertical-axis 
technologies to horizontal-axis. (See section II.C.4.d of this ANOPR 
for further details.)
4. Compact Dishwashers
    DOE was unable to obtain incremental manufacturing cost information 
for compact dishwashers. Therefore, DOE did not analyze compact 
dishwashers for this ANOPR but expects to set standards for them. DOE 
requests feedback on how it can extend the results of the analysis for 
the standard class to compact dishwashers. (See section II.C.4 of this 
ANOPR for further details.)
5. Microwave Oven Design Options
    For microwave ovens, the design options and efficiency levels that 
DOE analyzed are those identified in the previous rulemaking's 
analysis, with incremental manufacturing costs scaled by the PPI. DOE 
requests stakeholder feedback on the approach of analyzing additional 
design options that would result in a lowering of the energy 
consumption of non-cooking features (e.g., standby power), even though 
the existing test procedure currently does not account for such usage 
in EF. (See section II.C.3 of this ANOPR for further details.)
6. Technologies Unable to be Analyzed and Exempted Product Classes
    There are a number of technologies which DOE was unable to analyze 
for this ANOPR. Design options associated with these technologies for 
dehumidifiers, cooking products, and CCWs, while passing the screening 
analysis, were eliminated from further consideration prior to the ANOPR 
engineering analysis. In addition, certain product classes were 
exempted on a similar lack of efficiency data. DOE requests stakeholder 
input on (1) energy efficiency data for technologies and product 
classes for which such data does not exist; and (2) potential 
limitations of existing test procedures. The latter may include such 
issues as representative usage patterns, ambient conditions, and test 
equipment. (See sections II.A.1 and II.C.2 of this ANOPR for further 
details.)
7. Dishwasher Efficiency and its Impact on Cleaning Performance
    DOE was not able to identify sources of data showing whether the 
amount of pre-washing is impacted by dishwasher efficiency. Therefore, 
DOE believes that, to date, hand-washing or pre-washing habits have not 
been affected by product efficiency. Because increased diswasher energy 
efficiency may require future designs to utlize less water, DOE 
recognizes the possibility that more efficient dishwashers may degrade 
wash performance. Therefore, DOE seeks feedback on whether more 
efficient dishwasher designs will affect cleaning performance, leading 
to increased hand-washing or pre-washing and, if so, what increase in 
energy and water use can be expected. (See section II.D.1 of this ANOPR 
for further details.)
8. Dehumidifier Use
    DOE identified several sources of data for estimating the annual 
use of dehumidifiers. However, DOE gave more weight to data that AHAM 
provided because they were developed based on the experience of 
manufacturers. It appears that AHAM's average estimate of 1,095 
operating hours per year is the most representative of actual use. DOE 
requests feedback on whether 1,095 hours per year best represents the 
use of dehumidifiers. (See section II.D.2 of this ANOPR for further 
details.)
9. Commercial Clothes Washer Per-Cycle Energy Consumption
    DOE determined the per-cycle clothes drying energy use and the per-
cycle machine energy use for CCWs from data in its 2000 TSD for 
residential clothes washers. DOE requests feedback on whether these 
per-cycle energy use characteristics for residential clothes washers 
are also representative of CCW energy use. (See section II.D.4 of this 
ANOPR for further details.)
10. Commercial Clothes Washer Consumer Prices
    DOE identified two distribution channels for CCWs to establish 
their price to consumers. One channel involved distributors that 
typically sell to Laundromats, and the other channel involved route 
operators that typically sell or lease to multi-family building 
property owners. For purposes of developing the markups and consumer 
equipment prices for CCWs, DOE based its calculations solely on a 
distribution channel that involves distributors. DOE believed that the 
markups and the resulting consumer equipment prices determined for this 
distribution channel also would be representative of the prices paid by 
consumers acquiring their equipment from route operators. DOE requests 
feedback on its views regarding its development of consumer prices for 
CCWs. (See section II.E.1 of this ANOPR for further details.)
11. Repair and Maintenance Costs
    Primarily because it did not receive any specific data on the 
impacts that standards might have on repair and maintenance costs, DOE 
did not include any changes in repair and maintenance costs due to 
standards for any of the four appliance products. DOE requests feedback 
on its understanding of repair and maintenance costs. (See section 
II.G.2.b of this ANOPR for further details.)
12. Efficiency Distributions in the Base Case
    To accurately estimate the percentage of consumers that would be 
affected by a particular energy conservation standard level, DOE took 
into account the distribution of product efficiencies currently in the 
marketplace. In other words, DOE conducted its LCC and PBP analyses by 
considering the full breadth of product efficiencies that consumers 
purchase under the base case (i.e., the case without new energy 
efficiency standards) to account for those consumers who already 
purchase more

[[Page 64514]]

efficient products. DOE developed base case efficiency distributions 
for each of the four appliance products based on a combination of data 
sources and estimates. DOE requests feedback on the data sources and 
estimates it used for developing its base case product efficiency 
distributions. (See section II.G.2.d of this ANOPR for further 
details.)
13. Commercial Clothes Washer Shipments Forecasts
    Based on historical data, CCW shipments dropped significantly 
between 1998 and 2005. Because DOE tied forecasted shipments to the 
growth in new multi-family construction, DOE forecasted a continued 
increase in clothes washer shipments over the analysis period (i.e., 
2012-2042). However, due to the dramatic drop in shipments seen in the 
historical data, DOE is uncertain as to whether shipments will continue 
to increase and requests feedback on the bases for its shipments 
forecasts for CCWs. (See section II.H.1 of this ANOPR for further 
details.)
14. Base-Case and Standards-Case Forecasted Efficiencies
    Because key inputs to the calculation of the NES and NPV are 
dependent on the estimated efficiencies under the base case (without 
standards) and the standards case (with standards), forecasted 
efficiencies are of great importance to the analysis. DOE forecasted 
base-case and standards-case efficiencies, believing they remained 
frozen throughout the analysis period (i.e., 2012-2042). DOE used a 
``roll-up'' scenario to establish the shipment-weighted efficiency for 
the year that standards are estimated to become effective (i.e., 2012). 
Under a roll-up scenario, DOE believed that product efficiencies in the 
base case that did not meet the standard level under consideration 
would roll up to meet the new standard level. DOE requests feedback on 
its methodologies for both forecasting efficiencies and estimating the 
impact that standards have on product efficiencies. (See section II.I.2 
of this ANOPR for further details.)
15. Dehumidifier Cost and Efficiency Relationships
    DOE defined total installed cost and efficiency relationships for a 
subset of the six dehumidifier product classes, For purposes of 
conducting its NIA, DOE applied the cost-efficiency data that were 
developed for these product classes to those classes for which DOE was 
unable to develop cost-efficiency relationships due to lack of data. 
Specifically, DOE applied the costs developed for the combined 0-35.00 
pints/day class to the two individual classes that comprised the 
combined class--25.00 pints/day and less and 25.01-35.00 pints/day. 
Further, DOE applied the costs developed for the 35.01-45.00 pints/day 
and 54.01-74.99 pints/day product classes to the 45.01-54.00 pints/day 
and 75.00 pints/day and greater product classes, respectively. In its 
application of total installed costs to those product classes where no 
cost data were developed, DOE did not interpolate or extrapolate the 
cost data to account for product efficiency differences between the 
classes. For example, DOE utilized the exact same total installed costs 
that were developed for the baseline and standard levels for the 35.01-
45.00 pints/day product class to characterize the baseline and standard 
level total installed costs for the 45.01-54.00 pints/day product 
class. DOE requests feedback on its approach for characterizing the 
total installed costs for those dehumidifier product classes in which 
it was not able to develop cost-efficiency relationships. (See section 
II.I.3 of this ANOPR for further details.)
16. Trial Standard Levels
    For the NOPR, DOE will develop trial standard levels (TSL) from the 
candidate standard levels for each of the four appliance products. DOE 
will consider several criteria in developing the TSLs, including, but 
not limited to, which candidate standard level has the minimum LCC, 
maximum NPV, and maximum technologically feasible efficiency. From the 
list of TSLs developed, DOE will select one as its proposed standard 
for the NOPR. DOE requests feedback on the criteria it should use for 
basing the selection of TSLs. (See section III of this ANOPR for 
further details.)

V. Regulatory Review and Procedural Requirements

    DOE submitted this ANOPR for review to OMB under Executive Order 
12866, ``Regulatory Planning and Review.'' 58 FR 51735 (October 4, 
1993). If DOE later proposes energy conservation standards for any of 
the four appliance products, and if the proposed rule constitutes a 
significant regulatory action, DOE would prepare and submit to OMB for 
review the assessment of costs and benefits required by section 6(a)(3) 
of the Executive Order. The Executive Order requires agencies to 
identify the specific market failure or other specific problem that it 
intends to address that warrants new agency action, as well as assess 
the significance of that problem, to enable assessment of whether any 
new regulation is warranted. (Executive Order 12866, section 1(b)(1)). 
DOE presumes that a perfectly functioning market would result in 
efficiency levels that maximize benefits to all affected persons. 
Consequently, without a market failure or other specific problem, a 
regulation would not be expected to result in net benefits to consumers 
and the nation. However, DOE also notes that whether it establishes 
standards for these products is determined by the statutory criteria 
expressed in EPCA. Even in the absence of a market failure or other 
specific problem, DOE nonetheless may be required to establish 
standards under existing law.
    DOE's preliminary analysis for dishwashers, dehumidifiers, some gas 
cooking products, and commercial clothes washers explicitly accounts 
for the percentage of consumers that already purchase more efficient 
equipment and takes these consumers into account when determining the 
national energy savings associated with various candidate standard 
levels. The preliminary analysis suggests that accounting for the 
market value of energy savings alone (i.e., excluding any possible 
``externality'' benefits such as those noted below) would produce 
enough benefits to yield net benefits across a wide array of products 
and circumstances. With the exception of electric and some gas cooking 
products, these results quantify the percentage of consumers that do 
purchase more efficient products. DOE requests additional data 
(including the percentage of consumers purchasing more efficient 
cooking products and the extent to which consumers of all product types 
will continue to purchase more efficient equipment), for testing the 
existence and extent of these consumer actions.
    DOE believes that there is a lack of consumer information and/or 
information processing capability about energy efficiency opportunities 
in the home appliance market. If this is in fact the case, DOE would 
expect the energy efficiency for home appliances to be randomly 
distributed across key variables such as energy prices and usage 
levels. Although, with the exception of cooking products, DOE has 
already identified the percentage of consumers that already purchase 
more efficient products, DOE does not correlate the consumer's usage 
pattern and energy price with the efficiency of the purchased product. 
Therefore, DOE seeks data on the efficiency levels of existing home 
appliances in use by how often it is utilized (e.g., how many times

[[Page 64515]]

or hours the product is used) and its associated energy price (and/or 
geographic region of the country). DOE plans to use these data to test 
the extent to which purchasers of this equipment behave as if they are 
unaware of the costs associated with their energy consumption. Also, 
DOE seeks comment on additional knowledge of the Federal Energy Star 
program, and the program's potential as a resource for increasing 
knowledge of the availability and benefits of energy efficient 
appliances in the home appliance consumer market.
    A related issue is the problem of asymmetric information (one party 
to a transaction has more and better information than the other) and/or 
high transactions costs (costs of gathering information and effecting 
exchanges of goods and services). In the case of appliances, in many 
instances the party responsible for the appliance purchase may not be 
the one who pays the cost to operate it. For example, home builders in 
large-scale developments often make decisions about appliances without 
input from home buyers, nor do they offer options to upgrade them. 
Also, apartment owners normally make decisions about appliances, but it 
may be the renters who pay the utility bills. If there were no 
transactions costs, it would be in the home builders' and apartment 
owners' interest to install appliances the buyers and renters would 
choose on their own. For example, a renter who knowingly faces higher 
utility bills from low-efficiency appliances would be willing to pay 
less in rent, and the apartment owner would indirectly bear the higher 
utility cost. However, this information is not costless, and it may not 
be in the interest of the renter to take the time to develop it, or, in 
the case of the landlord who installs a high-efficiency appliance, to 
convey that information to the renter.
    To the extent that asymmetric information and/or high transactions 
costs are problems, one would expect to find certain outcomes with 
respect to appliance energy efficiency. For example, other things 
equal, one would not expect to see higher rents for apartments with 
high-efficiency appliances. Conversely, if there were symmetric 
information, one would expect appliances with higher energy efficiency 
in rental units where the rent includes utilities compared to those 
where the renter pays the utility bills separately. Similarly, for 
single-family homes, one would expect higher energy efficiency levels 
for replacement units than appliances installed in new construction. 
Within the new construction market, one would expect to see appliances 
with higher energy efficiency levels in custom-built homes (where the 
buyer has more say in appliance choices) than in comparable homes built 
in large-scale developments.
    Of course, there are likely to be certain ``external'' benefits 
resulting from the improved efficiency of units that are not captured 
by the users of such equipment. These include both environmental and 
energy security-related externalities that are not already reflected in 
energy prices, such as reduced emissions of greenhouse gases and 
reduced use of natural gas and oil for electricity generation. DOE 
invites comments on the weight that should be given to these factors in 
DOE's determination of the maximum efficiency level at which the total 
benefits are likely to exceed the total costs resulting from a DOE 
standard.
    As previously stated, DOE generally seeks data that might enable it 
to conduct tests of market failure for products under consideration for 
standard-setting. For example, given adequate data, there are ways to 
test for the extent of market failure for commercial clothes washers. 
One would expect the owners of commercial clothes washers who also pay 
for their energy and water consumption to purchase machines that 
exhibit higher energy efficiency and lower water usage compared to 
machines whose owners do not pay for the energy and water usage, other 
things equal. To test for this form of market failure, DOE needs data 
on energy efficiency and water consumption of such units and whether 
the owner of the equipment is also the operator. DOE is also interested 
in other potential tests of market failure and data that would enable 
such tests.
    In addition, various other analyses and procedures may apply to 
such future rulemaking action, including those required by the National 
Environmental Policy Act (Pub. L. 91-190, 42 U.S.C. 4321 et seq.); the 
Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4); the Paperwork 
Reduction Act (44 U.S.C. 3501 et seq.); the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.); and certain Executive Orders.
    The draft of today's action and any other documents submitted to 
OMB for review are part of the rulemaking record and are available for 
public review at the U.S. Department of Energy, Forrestal Building, 
Room 1J-018, (Resource Room of the Building Technologies Program), 1000 
Independence Avenue, SW., Washington, DC, (202) 586-9127, between 9 
a.m. and 4 p.m., Monday through Friday, except Federal holidays.

VI. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's ANOPR.

    Issued in Washington, DC, on September 17, 2007.
Alexander A. Karsner,
Assistant Secretary, Energy Efficiency and Renewable Energy.
 [FR Doc. E7-22040 Filed 11-14-07; 8:45 am]
BILLING CODE 6450-01-P