[Federal Register Volume 78, Number 38 (Tuesday, February 26, 2013)]
[Proposed Rules]
[Pages 12969-12988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-04099]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 78, No. 38 / Tuesday, February 26, 2013 /
Proposed Rules
[[Page 12969]]
DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EERE-2012-BT-STD-0022]
RIN 1904-AC78
Energy Conservation Program for Consumer Products: Energy
Conservation Standards for Residential Water Heaters
AGENCY: Office of Energy Efficiency and Renewable Energy, DOE.
ACTION: Notice of proposed rulemaking and announcement of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as
amended, prescribes energy conservation standards for various consumer
products and certain commercial and industrial equipment, including
residential water heaters. EPCA also requires the U.S. Department of
Energy (DOE) to determine whether more stringent amended standards
would be technologically feasible and economically justified, and would
save a significant amount of energy. Accordingly, DOE established
amended energy conservation standards for several classes of
residential water heaters in an April 2010 final rule. Subsequent to
the publication of that final rule, a number of utility companies
brought forth concerns regarding the amended energy conservation
standard levels for electric storage water heaters and the impact of
these standards on electric thermal storage programs that utility
companies administer to manage peak load. In this document, DOE
proposes to establish a waiver process that will mitigate the concerns
of utility companies regarding the implementation of the April 2010
standard levels by allowing for the manufacture of certain large-volume
electric storage water heaters provided that they meet a set of
conditions discussed in this proposed rule. The document also announces
a public meeting to receive comment on the proposed waiver process and
criteria for obtaining a waiver.
DATES:
Meeting: DOE will hold a public meeting on Friday, March 15, 2013,
from 9:00 a.m. to 1:00 p.m., in Washington, DC. The meeting will also
be broadcast as a Webinar. For information about the public meeting and
Webinar, see section 0, ``Public Participation.''
Comments: DOE will accept comments, data, and information regarding
this notice of proposed rulemaking (NPRM) before and after the public
meeting, but no later than April 29, 2013. See section 0, ``Public
Participation,'' for details.
ADDRESSES: The public meeting will be held at the U.S. Department of
Energy, Forrestal Building, Room 8E-089, 1000 Independence Avenue SW.,
Washington, DC 20585. To attend, please notify Ms. Brenda Edwards at
(202) 586-2945. For more information, refer to section 0, ``Public
Participation.''
Interested persons are encouraged to submit comments using the
Federal eRulemaking Portal at www.regulations.gov. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by docket number EERE-2012-BT-STD-0022
and/or RIN 1904-AC78, by any of the following methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: [email protected]. Include the
docket number and/or RIN in the subject line of the message. Submit
electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file
format, and avoid the use of special characters or any form of
encryption.
3. Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building
Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW.,
Washington, DC, 20585-0121. If possible, please submit all items on a
compact disc (CD), in which case it is not necessary to include printed
copies.
4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of
Energy, Building Technologies Program, 950 L'Enfant Plaza SW., Suite
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible,
please submit all items on a CD, in which case it is not necessary to
include printed copies.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy through the methods listed above and by email to
[email protected].
Instructions: All submissions received must include the agency name
and docket number and/or RIN for this rulemaking. No telefacsimilies
(faxes) will be accepted. For detailed instructions on submitting
comments and additional information on the rulemaking process, see
section 0 of this document (Public Participation).
Docket: The docket is available for review at http://www.regulations.gov, including Federal Register notices, public meeting
attendee lists and transcripts, comments, and other supporting
documents/materials. All documents in the docket are listed in the
http://www.regulations.gov index. However, not all documents listed in
the index may be publicly available, such as information that is exempt
from public disclosure. A link to the docket Web page can be found at:
http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0022. See
section 0, ``Public Participation,'' for further information on how to
submit comments through www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Ms. Ashley Armstrong, U.S. Department
of Energy, Office of Energy Efficiency and Renewable Energy, Building
Technologies, EE-2J, 1000 Independence Avenue SW., Washington, DC
20585-0121. Telephone: (202) 586-6590. Email:
[email protected].
Mr. Ari Altman, U.S. Department of Energy, Office of the General
Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 287-6307. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposed Rule
II. Introduction
A. Authority
B. Background
[[Page 12970]]
1. Current Standards
2. Utility Concerns with the April 2010 Final Rule for Electric
Storage Water Heaters
3. June 2012 Request for Information
III. Discussion
A. Comments Received in Response to June 2012 RFI
1. Whether DOE Should Take Action
2. Alternatives to Large-Volume Electric Resistance Water
Heaters to Serve the Needs of ETS Programs
3. Potential for a Separate Product Class for ``Grid-
Interactive'' Electric Storage Water Heaters
4. Potential for Establishing a Waiver Process
B. Waiver Process
1. Criteria for Obtaining a Waiver
2. Requirements and Method for Obtaining Waiver
3. Periodic Review of Waiver Mechanism
IV. Procedural Requirements
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
V. Public Participation
A. Attendance at the Public Meeting
B. Procedure for Submitting Requests to Speak and Prepared
General Statements for Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VI. Approval of the Office of the Secretary
Summary of the Proposed Rule
DOE believes that electric thermal storage (ETS) programs involving
water heaters provide numerous benefits to consumers, utilities, and
the Nation, and that an alternative approach to energy conservation
standards for certain, limited electric water heaters appears to be
warranted in order to ensure the viability of these programs. After
considering several options, DOE determined that a waiver process is
the most appropriate, and thus, is proposing to adopt such a process in
this notice of proposed rulemaking (NPRM). The proposed process would
allow any manufacturer of electric water heaters, any electric utility
company, or a combination of the two, to request a waiver granting
exemption from the energy conservation standards established in an
April 16, 2010 final rule (75 FR 20112; referred to hereinafter as the
``April 2010 final rule'') for certain electric water heaters with
rated storage volumes greater than 55 gallons. Each waiver granted by
the U.S. Department of Energy (DOE), would allow, for a one-year
period, manufacturers to produce limited numbers of electric water
heaters with rated storage volumes above 55 gallons exclusively for the
purpose of installation in residences enrolled in a specific utility
company ETS program. Parties would be allowed to apply for additional
one-year waivers in subsequent years. This proposed rule, if adopted,
or the granting of a waiver under this rule, would not amend the energy
conservation standard otherwise applicable to electric water heaters
with rated storage volumes above 55 gallons.
The following sections include: (1) A description of DOE's
statutory authority for setting energy conservation standards for
residential water heaters; (2) a discussion of the standards
promulgated in the April 2010 final rule and concerns of utility
companies regarding those standards; (3) a summary of the comments
received in response to DOE's June 13, 2012 request for information
(RFI) on this topic (77 FR 35299; hereinafter referred to as the ``June
2012 RFI'') and DOE's responses to those comments, including a
discussion of the appropriate mechanism to address the concerns of
utility companies; and (4) a description of the waiver process that DOE
proposes to establish.
Introduction
The following section briefly discusses the statutory authority
underlying DOE's standards for residential water heaters and this NPRM,
as well as some of the relevant historical background regarding the
establishment of standards for residential water heaters.
A. Authority
Title III, Part B \1\ of the Energy Policy and Conservation Act of
1975 (``EPCA'' or ``the Act''), Public Law 94-163 (42 U.S.C. 6291-6309,
as codified) sets forth a variety of provisions designed to improve
energy efficiency and establishes the Energy Conservation Program for
Consumer Products Other Than Automobiles,\2\ a program covering most
major household appliances (collectively referred to as ``covered
products''), which includes the types of residential water heaters that
are the subject of this NPRM. (42 U.S.C. 6292(a)(4))
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated as Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the Energy Independence and Security Act of 2007,
Public Law 110-140 (Dec. 19, 2007).
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Under EPCA, this program generally consists of four parts: (1)
Testing; (2) labeling; (3) establishing Federal energy conservation
standards; and (4) certification and enforcement procedures. The
Federal Trade Commission (FTC) is primarily responsible for labeling
consumer products, and DOE implements the remainder of the program.
Subject to certain criteria and conditions, DOE is required to develop
test procedures to measure the energy efficiency, energy use, or
estimated annual operating cost of each covered product. (42 U.S.C.
6293) Manufacturers of covered products must use the prescribed DOE
test procedure as the basis for certifying to DOE that their products
comply with the applicable energy conservation standards adopted under
EPCA and when making representations to the public regarding the energy
use or efficiency of those products. (42 U.S.C. 6293(c) and 6295(s))
Similarly, DOE must use these test procedures to determine whether the
products comply with standards adopted pursuant to EPCA. Id. The DOE
test procedures for residential water heaters currently appear at Title
10 of the Code of Federal Regulations (CFR) part 430, Subpart B,
Appendix E.
EPCA, as codified, contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing
any amended standard that either increases the maximum allowable energy
use or decreases the minimum required energy efficiency of a covered
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe
an amended or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States of any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4)).
B. Background
1. Current Standards
Before being amended by the National Appliance Energy Conservation
Act of 1987 (NAECA; Pub. L. 100-12), Title III of EPCA included
residential water heaters as covered products. NAECA's amendments to
EPCA established energy conservation standards for
[[Page 12971]]
residential water heaters. (42 U.S.C. 6295(e)(1); 42 U.S.C. 6295(e)(4))
DOE initially amended the statutorily-prescribed standards for water
heaters in 2001 (66 FR 4474 (Jan. 17, 2001)) and amended standards for
water heaters for a second time in the April 2010 Final Rule.
The energy conservation standards for residential water heaters in
the April 2010 Final Rule will apply to products manufactured on or
after April 16, 2015. 75 FR 20112. The amended energy conservation
standards consist of minimum energy factors \3\ (EF) that vary based on
the rated storage volume of the water heater, the type of energy it
uses (i.e., gas, oil, or electricity), and whether it is a storage,
instantaneous, or tabletop model. 10 CFR 430.32(d). The currently
applicable water heater energy conservation standards, as well as those
that will be applicable starting April 16, 2015, are set forth in Table
II.1 below. Of particular relevance for this NPRM, on April 16, 2015,
electric water heaters with a rated storage volume above 55 gallons
will be required to have an energy factor of at least 2.057 - (0.00113
x Rated Storage Volume in gallons). Such a level is currently
achievable only by using heat pump water heater technology and cannot
be achieved in electric water heaters that rely solely on electric
resistance elements.
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\3\ Energy factor is a measure of overall water heater
efficiency that accounts for efficiency during active, standby, and
cyclical operation.
Table II.1--Energy Conservation Standards for Residential Water Heaters
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Energy factor as of Energy factor as of
Product class January 20, 2004 April 16, 2015
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Gas-fired Water Heater...... 0.67 - (0.0019 x For tanks with a
Rated Storage Rated Storage
Volume in gallons). Volume at or below
55 gallons: EF =
0.675 - (0.0015 x
Rated Storage
Volume in gallons).
For tanks with a
Rated Storage
Volume above 55
gallons:
EF = 0.8012 -
(0.00078 x Rated
Storage Volume in
gallons).
Oil-fired Water Heater...... 0.59 - (0.0019 x EF = 0.68 - (0.0019
Rated Storage x Rated Storage
Volume in gallons). Volume in gallons).
Electric Water Heater....... 0.97 - (0.00132 x For tanks with a
Rated Storage Rated Storage
Volume in gallons). Volume at or below
55 gallons: EF =
0.960 - (0.0003 x
Rated Storage
Volume in gallons).
For tanks with a
Rated Storage
Volume above 55
gallons:
EF = 2.057 -
(0.00113 x Rated
Storage Volume in
gallons).
Tabletop Water Heater....... 0.93 - (0.00132 x EF = 0.93 - (0.00132
Rated Storage x Rated Storage
Volume in gallons). Volume in gallons).
Instantaneous Gas-fired 0.62 - (0.0019 x EF = 0.82 - (0.0019
Water Heater. Rated Storage x Rated Storage
Volume in gallons). Volume in gallons).
Instantaneous Electric Water 0.93 - (0.00132 x EF = 0.93 - (0.00132
Heater. Rated Storage x Rated Storage
Volume in gallons). Volume in gallons).
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2. Utility Concerns With the April 2010 Final Rule for Electric Storage
Water Heaters
Subsequent to the publication of the April 2010 Final Rule, several
stakeholders (i.e., National Rural Electric Cooperative Association
(NRECA), PJM Interconnection (PJM), American Public Power Association
(APPA), and Steffes Corporation) indicated to DOE their concerns about
the interaction of the amended standards in the April 2010 final rule
and the use of electric storage water heaters with tanks having greater
than 55 gallons of rated storage volume (referred to hereinafter as
``large-volume'' electric storage water heaters) used in ETS programs.
Utilities use ETS programs, sometimes also known as load shifting or
demand response programs, to manage peak demand load by limiting the
times when certain appliances are operated. ETS programs typically
allow the utility to control the appliance remotely to allow operation
of the appliance only during off-peak hours. During off-peak operation,
the electricity consumed is stored by the appliance as thermal energy
for use during peak hours when it is not allowed to operate. Large-
volume electric storage water heaters are a key component of utility
ETS programs that target electric water heaters because these larger-
volume products allow for the storage of enough hot water to meet
consumer usage during peak demand times when the water heater would not
be allowed to turn on.
As shown in Table II.1 and noted above, the April 2010 Final Rule
established an energy conservation standard that would effectively
require the use of heat pump technology to meet the minimum energy
conservation standard for large-volume electric storage water heaters.
Utility companies presented concerns about the feasibility of
continuing ETS programs without the use of large-volume electric
resistance water heaters (ERWHs). Utilities believe the practicability
of heat pump water heaters (HPWHs) are such that HPWHs may not be able
to fill the same role as large-volume ERWHs in ETS programs. (The
capability of HPWHs or multiple small-volume (i.e., storage volume of
55 gallons or less) water heaters to serve the needs of ETS programs is
discussed further in section 0.) In light of the perceived lack of
viable alternatives to large volume ERWHs for ETS programs, utility
companies are concerned that participation in ETS programs may be
reduced or eliminated after the standards take effect in 2015, which
would eliminate the numerous benefits to consumers, utilities, and the
Nation resulting from ETS programs. (See section 0 for discussion of
the benefits from ETS programs.) Because of their concerns, utilities
requested that DOE consider allowing for the manufacture of large-
volume ERWHs solely for ETS applications.
[[Page 12972]]
3. June 2012 Request for Information
To seek feedback from interested parties related to the issues
raised by utility companies, DOE published the June 2012 RFI. 77 FR
35299, June 13, 2012. The RFI described utility ETS programs for water
heaters and the utility's concerns over the amended standard levels for
electric storage water heaters with storage volumes above 55 gallons,
and sought comment on these topics as well as a number of related
issues. Specifically, DOE requested comment on (1) the penetration of
ETS programs and the impacts of such programs on consumers and the
Nation; (2) the impacts of the April 2010 standard levels on utility
ETS programs; (3) information on any feature or features for
residential water heaters used in ETS programs that are unique to those
water heaters and whether such feature(s) would justify a separate
standard from other residential water heaters; and (4) information on
potential solutions that would resolve the concerns of utilities that
administer ETS programs for residential water heaters and require the
use of large-volume electric storage water heaters, including several
potential approaches identified in the RFI. 77 FR 35304.
DOE received 127 \4\ comments from interested parties, including
109 from individual utility companies or utility associations
(including the electric power research institute (EPRI)), 6 from
manufacturers, 1 from an individual efficiency advocate, 1 comment from
a trade association, 4 comments from U.S. Congressmen, and 3 joint
comments--2 joint comments from multiple utilities, one of which also
included a manufacturer of ETS controls (referred to as the ``Joint
Utilities comment'') and one of which did not (referred to as the
``Joint Utilities Supplemental comment''), 1 joint comment from several
efficiency advocates (referred to as the ``Joint Efficiency Advocates
comment''), and 1 joint comment from efficiency advocates and a utility
company located in the northwestern U.S. (referred to as the
``Northwest Advocates comment'').\5\ The utilities who responded to the
June 2012 RFI serve approximately 5.3 million \6\ customers, of which
approximately 1.7 million \7\ currently utilize electric resistance
water heaters, and approximately 630,000 \8\ currently participate in
ETS programs. The responses generally centered on recommendations for
DOE's path forward and whether heat pump water heaters are a viable
alternative to electric resistance water heaters for ETS programs. The
comments helped DOE to formulate the proposals in this NPRM and are
discussed in section A.
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\4\ In total there were 155 filings, but 26 comments were either
exact duplicates or data supplements, so they are not included in
the final count. Additionally two commenters submitted multiple
filings with generally the same ideas expressed in each filing, and
were only counted once in the final count.
\5\ One joint comment was received from four utilities/
associations--PJM, NRECA, APPA, Edison Electric Institute (EEI)--as
well as Steffes Corporation (Steffes), which manufactures thermal
storage water heater controls. This is referred to as the ``Joint
Utilities comment'' in this document. A supplemental comment to this
joint comment was received from the four utilities only (i.e., PJM,
NRECA, APPA, and EEI), which is referred to as the ``Joint Utilities
Supplemental Comment.'' One joint comment was from three efficiency
advocates, the American Council for an Energy Efficient Economy
(ACEEE), Natural Resources Defense Council (NRDC), and Appliance
Standards Awareness Project (ASAP). This comment is referred to as
the ``Joint Efficiency Advocates comment'' in this document. One
joint comment was from three stakeholders--Northwest Energy
Efficiency Alliance (NEEA) and the Northwest Power and Conservation
Council (NPCC), and the Bonneville Power Administration (BPA)
utility. This comment is referred to as the ``Northwest Advocates
comment'' in this document.
\6\ In instances where both a group of cooperatives and its
individual cooperative members gave figures, only the figures from
the group of cooperatives were counted to avoid double counting.
This includes figures provided by: Corn Belt, Dairyland, East River,
ECSC, Dakota Electric Association, East Central, Federated, Goodhue,
Kandiyohi, McLeod, Minnesota Valley, Nobles, Stearns Wright-
Hennepin, Northwest Iowa Power, Buckeye Power, Rappahannock,
PowerSouth, Lower Valley, Wabash, Cass County, Powell Valley, Tri-
State, NOVEC, Black Hills, Verendrye, Lake Country, Mountain
Electric, Leavenworth-Jefferson, Thumb Electric, SCIREC, Jackson
County, Duck River, Shenandoah Valley, Adams, Tri-County Rural,
Habersham Electric, Flint, Dakota Valley, Northern Plains, Aurelia,
United Electric.
\7\ In instances where both a group of cooperatives and its
individual cooperative members gave figures, only the figures from
the group of cooperatives were counted to avoid double counting.
This total includes figures provided by: Farmers Electric, Midland,
Dairyland, East River, ECSC, Great River, NIPCO, PowerSouth, Lower
Valley, Bristol, Central Georgia EMC, Jackson County, Duck River,
Shenandoah Valley, Adams, Shelby Electric, Flint, Aurelia.
\8\ In instances where both the distribution cooperative and its
individual cooperative members gave figures, only the distribution
cooperatives figures were counted to avoid double counting. This
number includes figures from: Farmers Electric Cooperative, Corn
Belt, Dairyland, East River, ECSC, Connexus, Dakota Electric
Association, East Central, Federated, Goodhue, Itasca-Mantrap,
Kandiyohi, McLeod, Minnesota Valley, Nobles, Stearns, Wright-
Hennepin, NIPCO, Buckeye, Rappahannock, PowerSouth, Lower Valley,
Wabash, Cass County, Bristol Tennessee Essential Services, Powell
Valley Electric Cooperative, Central Georgia EMC, Otter Tail, Black
Hills, Verendrye, Mountain Electric, Leavenworth-Jefferson, Thumb,
SCIREC, Jackson County, Duck River, Shenandoah Valley, Adams, Shelby
Electric, Habersham, Flint, Dakota Valley, Northern Plains, Aurelia,
United Electric.
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Discussion
A. Comments Received in Response to June 2012 RFI
As noted, DOE received 127 unique comments in response to the June
2012 RFI. The comments focused on four main issues: (1) whether DOE
should take action to address the utility company concerns and the
benefits of ETS programs; (2) the technological capability of
alternatives to large-volume ERWHs to be utilized in ETS programs; (3)
the potential for implementing a waiver program to allow the
manufacture of certain water heaters specifically for use in ETS
programs; and 4) the potential for implementing a separate product
class for water heaters used in ETS programs (i.e., ``grid-
interactive'' water heaters). The comments and DOE responses related to
these four topics are summarized in sections 0 through 0 immediately
below.
1. Whether DOE Should Take Action
Of the 127 comments received by DOE, 120 recommended that DOE
should take some action to mitigate the issue that the April 2010
standard would potentially cause for utility ETS programs. (See section
2 for a brief description of the utility concerns.) (Buckeye Power,
Inc. (Buckeye), No. 3 at p. 1; Codington-Clark Electric Cooperative
(Codington-Clark), No. 4 at pp. 1-3; Rappahannock Electric Cooperative
(Rappahannock), No. 5 at pp. 1-3; Northern Plains Electric Cooperative
(Northern Plains), No. 6 at p. 1; Itasca-Mantrap Cooperative Electrical
Association (Itasca-Mantrap), No. 7 at pp. 1-2; Northwest Iowa Power
Cooperative (Northwest Iowa Power), No. 8 at p. 1; PowerSouth Energy
Cooperative (Powersouth), No. 10 at pp. 1-3; Barron Electric
Cooperative (Barron), No. 11 at p. 2; Clark Electric Cooperative
(Clark), No. 13 at p. 1; Woodbury County Rural Electric Cooperative
(Woodbury), No. 14 at p. 1; North West Rural Electric Cooperative
(North West), No. 15 at p. 1; Bayfield Electric Cooperative (Bayfield),
No. 16 at p. 2; Union County Electric Cooperative (Union County), Inc.,
No. 17 at p. 1; Allamakee-Clayton Electric Cooperative (Allamakee-
Clayton), No. 18 at p. 1; Lower Valley Energy, No. 19 at p. 1; AO
Smith, No. 20 at p. 1; Wabash Valley Power (Wabash), No. 21 at p. 1;
Heartland Power Cooperative (Heartland), No. 22 at p. 1; South Central
Electric Association (South Central), No. 23 at p. 1; Cass County
Electric Cooperative (Cass County), No. 24 at p. 1; East River Electric
Power Cooperative (East River), No. 25 at p. 1;
[[Page 12973]]
Richland Electric Cooperative (Richland), No. 26 at p. 1; Lyon-Lincoln
Electric Cooperative, No. 27 at pp. 1-3; Central Electric Power
Cooperative (Central), No. 28 at p. 1; Tri-County Electric Cooperative
(Tri-County), No. 29 at pp. 1-4; Price Electric Cooperative (Price),
No. 30 at p. 1; Bristol Tennessee Essential Services (Bristol), No. 31
at pp. 1-2; FEM Electric (FEM), No. 32 at p. 1; The Berkeley Electric
Cooperative (BEC), Inc., No. 33 at p. 1; Powell Valley Electric
Cooperative (Powell Valley), No. 34 at p. 1; Humboldt County Rural
Electric Cooperative (Humboldt), No. 35 at p. 1; Dakota Electric, No.
36 at p. 4; Nishnabotna Valley Rural Electric Cooperative (Nishnabotna
Valley REC), No. 37 at p. 1; Corn Belt Power Cooperative (Corn Belt),
No. 39 at p. 1; Clay-Union Electric Corporation (Clay-Union), No. 40 at
p. 1; Great River Energy (Great River), No. 41 at p. 1; Central Georgia
Electric Membership Corporation (Central Georgia EMC), No. 42 at p. 1;
Otter Tail Power Company (Otter Tail), No. 44 at p. 1; Electric
Cooperatives of South Carolina (ECSC), No. 45 at p. 1; Aiken Electric
Cooperative (Aiken), Inc., No. 46 at p. 1; Connexus Energy (Connexus),
No. 47 at p. 1; Dairyland Power Cooperative (Dairyland), No. 48 at p.
1; Pee Dee Electric Cooperative (Pee Dee), No. 49 at p. 1; Oconto
Electric Cooperative (Oconto), No. 50 at p. 1; Wright-Hennepin
Cooperative Electric Association (Wright-Hennepin), No. 51 at p. 1;
Midland Power Cooperative (Midland), No. 52 at p. 1; Lynches River
Electric Cooperative, Inc. (Lynches), No. 53 at p. 1; Pierce Pepin
Cooperative Services (Pierce Pepin), No. 54 at p. 1; Dunn Energy
Cooperative (Dunn), No. 55 at p. 1; Palmetto Electric Cooperative, Inc.
(Palmetto), No. 56 at p. 1; Horry Electric Cooperative (Horry), No. 57
at p. 1; Joint Utilities, No. 58 at p. 4; Fairfield Electric
Cooperative (Fairfield), No. 59 at p. 1; National Electrical
Manufacturers Association (NEMA), No. 60 at p. 4; Tri-State Generation
and Transmission Association (Tri-State), No. 61 at p. 1; Santee
Electric Cooperative (Santee), No. 62 at p. 1; Cuyahoga Falls Electric
Department (Cuyahoga Falls), No.63 at p. 1; Newberry Electric
Cooperative, Inc. (Newberry), No. 64 at p. 1; Giant Factories, Inc.
(Giant Factories), No. 65 at p. 2; People's Energy Cooperative
(People's Energy), No. 66 at p. 1; Michigan Electric Cooperative
Association (MECA), No. 67 at p. 1; Joint Efficiency Advocates, No. 68
at p. 1; Eau Claire Energy Cooperative (Eau Clair), No. 69 at p. 1;
Edisto Electric Cooperative (Edisto), No. 70 at p. 1; Coastal Electric
Cooperative (Coastal), No. 71 at p. 1; Vaughn Thermal Corporation
(Vaughn), No. 72 at p. 1; York Electric Cooperative (York), No. 73 at
p. 1; Black River Electric Cooperative, Inc. (Black River), No. 76 at
p. 1; Mid-Carolina Electric Cooperative, Inc. (MCEC), No. 77 at p. 1;
Prairie Energy Cooperative (Prairie), No. 78 at p. 1; Alexandria Light
and Power (ALP), No. 79 at p. 1; Alliance to Save Energy, No. 80 at p.
1; Blue Ridge Electric Cooperative (Blue Ridge), No. 82 at p. 1;
Freeborn-Mower Cooperative Services (Freeborn-Mower), No. 83 at p. 2;
American Public Power Association (APPA), No. 84 at p. 3; Rheem
Manufacturing Company (Rheem), No. 86 at p. 2; Heat Transfer Products,
Inc. (HTP), No. 87 at p. 1; Nebraska Public Power District (Nebraska
Public Power), No. 88 at p. 1; Clark Public Utilities, No. 90 at p. 1;
Northern Virginia Electric Cooperative (NOVEC), No. 91 at p. 1;
Congressman Todd Rokita, No. 93 at p. 1; Black Hills Electric
Cooperative (Black Hills), No. 96 at p. 1; Verendrye Electric
Cooperative (Verendrye), No. 97 at p. 1; Dakota Energy Cooperative
(Dakota Energy), No. 98 at p. 1; Minnesota Rural Electric Association
(Minnesota Rural), No. 99 at p. 1; Minnesota Valley Electric
Cooperative (Minnesota Valley), No.101 at p. 1; McLeod Cooperative
Power (McLeod), No.102 at p. 1; Lake Country Power (Lake Country),
No.108 at p. 1; Mountain Electric Cooperative (Mountain Electric),
No.109 at p. 1; Leavenworth-Jefferson Electric Cooperative
(Leavenworth-Jefferson), No. 110 at p. 1; Riverland Energy Cooperative
(Riverland), No. 111 at p. 1; Meeker Cooperative Light & Power
(Meeker), No.112 at p. 1; Federated Rural Electric (Federated), No.113
at p. 1; Iowa Lakes Electric Cooperative (Iowa Lakes), No. 114 at p. 1;
Thumb Electric Cooperative (Thumb), No. 115 at p. 1; South Central
Indiana Rural Electric Cooperative (South Central Indiana REC), No. 117
at p. 1; Tri-County Electric Cooperative (Tri-County Electric), No. 118
at p. 1; Nobles Cooperative Electric (Nobles), No. 119 at p. 1; Lake
Region Electric Cooperative (Lake Region), No. 120 at p. 1; Congressman
Dan Burton, No. 122 at p. 1; Sioux Valley Energy (Sioux Valley), No.
123 at p. 1; East Central Energy (East Central), No. 124 at p. 1;
Jackson County Rural Electric Membership Corporation (Jackson County),
No. 126 at p. 1; Duck River Electric Membership Corporation (Duck
River), No. 127 at p. 1; Shenandoah Valley Electric Cooperative
(Shenandoah Valley), No. 128 at p. 1; Adams Electric Cooperative
(Adams), No.129 at p. 1; Goodhue County Cooperative (Goodhue), No.130
at p. 1; Adams-Columbia Electric Cooperative (Adams-Columbia), No.132
at p. 1; Stearns Electric Association (Stearns), No.134 at p. 1;
Senator John Thune, No. 137 at p. 1; Kandiyohi Power Cooperative
(Kandiyohi), No.138 at p. 1; Shelby Electric Cooperative (Shelby), No.
143 at p. 1; Tri-County Rural Electric Cooperative, Inc. (Tri-County
REC), No. 144 at p. 1; Beltrami Electric Cooperative, No. 145 at p. 1
(Beltrami); Habersham Electric Membership Cooperative (Habersham),
No.146 at p. 1; Flint Energy Membership Corporation (Flint), No. 147 at
p. 1; Dakota Valley and Northern Plains, No.149 at p. 1; Aurelia
Municipal Electric (Aurelia), No. 151 at p. 1; United Electric
Cooperative (United Electric), No. 153 at p. 1)
The Northwest Advocates stated that action should be taken, but
only if analysis concludes that the net benefits of resistance-only
water heaters including load shifting and ancillary service benefits
are greater than those of HPWHs. (Northwest Advocates, No. 89 at p. 2)
Only two commenters--one manufacturer, General Electric (GE), and
one utility company, Farmers Electric Cooperative--recommended that DOE
take no action to address the utility company concerns regarding the
April 2010 final rule energy conservation standard for large-volume
electric water heaters. (GE, No. 85 at pp. 1-4; Farmers Electric
Cooperative, No. 2 at p. 1) Farmers Electric Cooperative cited the
considerable energy conservation benefits and cost savings to consumers
from heat pump water heaters as a reason for supporting the April 2010
standard. Farmers Electric Cooperative emphasized that HPWHs reduce
electricity demand up to three times. GE argued that viable
alternatives are available (including heat pump water heaters) to meet
the needs of ETS programs (see additional discussion of alternatives in
section 0 below). GE also stated that there is no basis for creating a
new product class for grid interactive water heaters and that doing so
would impede the development of the market for HPWHs (see additional
discussion of the potential for a new product class in section 3). GE
contended that such an approach would also create a loophole that would
erase some of the consumer and national benefits achieved by the April
2010 standards, which would be contrary to DOE's goals. (GE, No. 85 at
p. 2)
EPRI took no position on whether DOE should take action, but rather
noted that large-volume grid interactive
[[Page 12974]]
ERWH appear to provide value to both utilities and consumers and stated
its intent to conduct further research to quantify the value of overall
system efficiencies of grid-interactive water heaters. (EPRI, No. 74 at
p. 4) EPRI expressed concerns that without the continued availability
of large volume electric water heaters beyond April 2015, the industry
may permanently forego a potential resource to provide grid support,
especially in light of the integration of renewable electricity
sources. (EPRI, No. 74 at p. 5)
The majority of the comments received in support of DOE action
described the benefits of ETS programs for consumers, utilities, and
the Nation as the main reason that DOE should take action to preserve
utility ETS programs. Generally these commenters believe that DOE
should take some action (generally either establishing a new product
class or establishing a waiver program) to preserve the ability of
manufacturers to produce and utility companies to use large-volume
electric resistance storage water heaters. These stakeholders supported
action due to the considerable benefits that they believe ETS programs
provide to consumers, utilities and the electric grid, and due to the
perceived lack of alternative products capable of meeting the needs of
ETS programs for electric water heaters. In total, the utility
respondents indicated that they realize a combined peak load reduction
of approximately 145 MW,\9\ and a cost savings of approximately 60
million dollars \10\ in annual savings from being able to utilize more
efficient, less expensive energy sources. Many utility companies stated
that participation in ETS programs allows consumers to benefit from
discounted energy rates and financial incentives such as rebates,
financing, or free and reduced cost repair and maintenance. (Buckeye,
No. 3 at p. 2; Codington-Clark, No. 4 at p. 2; Rappahannock, No. 5 at
p. 2; Northern Plains No. 6 at p. 1; Itasca-Mantrap, No. 7 at p. 1;
Northwest Iowa Power, No. 8 at p. 2; Barron, No. 11 at p. 1; Clark, No.
13 at p. 2; Woodbury, No. 14 at p. 2; North West, No. 15 at p. 2;
Bayfield, No. 16 at p. 2; Union County, No. 17 at p. 3; Allamakee-
Clayton, No. 18 at p. 2; Lower Valley Energy, No. 19 at p. 2; Wabash,
No. 21 at p. 2; Heartland, No. 22 at p. 2; South Central, No. 23 at p.
2; Cass County, No. 24 at p. 2; East River, No. 25 at p. 2; Richland,
No. 26 at p. 2; Lyon-Lincoln, No. 27 at p. 2; Price, No. 30 at p. 2;
FEM, No. 32 at p. 2; BEC, No. 33 at p. 2; Powell Valley, No. 34 at p.
2; Dakota Electric, No. 36 at p. 2; Nishnabotna Valley REC, No. 37 at
p. 2; Iowa Lakes, No. 114 at p. 2; Corn Belt, No. 39 at p. 2; Clay-
Union, No. 40 at p. 2; Great River, No. 41 at p. 2; Central Georgia
EMC, No. 42 at p. 2; Otter Tail, No. 44 at p. 2; ECSC, No. 45 at p. 2;
Aiken, No. 46 at p. 1; Connexus, No. 47 at p. 1; Dairyland, No. 48 at
p. 2; Pee Dee, No. 49 at p. 1; Oconto, No. 50 at p. 2; Wright-Hennepin,
No. 51 at p. 1; Lynches, No. 53 at p. 2; Horry, No. 57 at p. 2; Pierce
Pepin, No. 54 at p. 2; Palmetto, No. 56 at p. 2; Fairfield, No. 59 at
p. 2; Tri-State, No. 61 at p. 2; Santee, No. 62 at p. 2; Newberry, No.
64 at p. 2; People's Energy, No. 66 at p. 2; Eau Claire, No. 69 at p.
2; Edisto, No. 70 at p. 2; Coastal, No. 71 at p. 2; Black River, No. 76
at p. 1; MCEC, No. 77 at p. 2; Blue Ridge, No. 82 at p. 2; NOVEC, No.
91 at p. 1; Black Hills, No. 96 at p. 2; Verendrye, No. 97 at p. 1;
Minnesota Valley, No. 101 at p. 1; McLeod, No. 102 at p. 2; Mountain
Electric, No. 109 at p. 1; Leavenworth-Jefferson, No. 110 at p. 2;
Meeker, No. 112 at p. 3; Federated, No. 113 at p. 2; Thumb Electric,
No. 115 at p. 2; South Central Indiana REC, No. 117 at p. 2; Tri-County
Electric, No. 118 at p. 2; Nobles, No. 119 at p. 2; Lake Region, No.
120 at p. 2; Sioux Valley, No. 123 at p. 1; East Central, No. 124 at p.
2; Jackson County, No. 126 at p. 2; Shenandoah Valley, No. 128 at p. 2;
Adams Electric, No. 129 at p. 1; Adams-Columbia, No. 132 at p. 1;
Stearns, No. 134 at p. 1; Kandiyohi, No. 138 at p. 1; Habersham, No.
146 at p. 2; Flint, No. 147 at p. 3; Dakota Valley and Northern Plains,
No. 149 at p. 2; Aurelia, No. 151 at p. 2; United Electric, No. 153 at
p. 2).
---------------------------------------------------------------------------
\9\ In instances where both a group of cooperatives and its
individual members gave figures, only the figures from the group of
cooperatives were counted to avoid double counting. This total
includes figures provided by: Humboldt, Heartland, Dairyland, FEM,
South Central, Federated, Itasca-Mantrap, Northern Plains,
PowerSouth, Bristol, Otter Tail, Shelby, Habersham, and Flint.
\10\ In instances where both a group of cooperatives and its
individual members gave figures, only the figures from the group of
cooperatives were counted to avoid double counting. This total
includes figures provided by: Humbolt, Dairyland, East River, ECSC,
Dakota Electric, ECE, Federated, Goodhue, Mcleod, NIPCO, Buckeye,
PowerSouth, Wabash, NOVEC, Lower Valley, Cass County, Bristol, Power
Valley, Central Georgia EMC, Pierce Pepin, Eau Claire, Black Hills,
Verendrye, Thumb Electric, SCIREMC, Tri-County, Shenandoah Valley,
Adams, Tri-County, Flint, Dakota Valley and Northern Plains, United
Electric, Iowa Lakes, Itasca-Mantrap, Kandiyohi, and Minnesota
Valley Electric.
---------------------------------------------------------------------------
The joint utility commenters cited a survey conducted by NRECA of
its cooperatively owned utility members which found that the average
bill credit for participating customers per water heater is $58 a year.
In addition to the bill credit, customers are often eligible to receive
an upfront rebate to offset a portion of the purchase cost of certain
eligible types of electric water heaters when the customer agrees to
participate in the direct load control program. The average rebate
among survey respondents that also offered the bill credits is $230.
(Joint Utilities, No. 58 at p. 8)
Through ETS programs for electric water heaters, utilities can
require customers to heat and store hot water in times when overall
electric demand and power-supply costs are low, thus lowering peak
demand when costs are highest. Utilities contended that eliminating
large volume electric resistance water heaters would reduce or
eliminate ETS programs and would in turn result in higher electricity
prices to consumers. (Buckeye, No. 3 at p. 2; Codington-Clark, No. 4 at
p. 2; Rappahannock, No. 5 at p. 1; Itasca-Mantrap, No. 7 at p. 1;
Northwest Iowa Power, No. 8 at p. 1; PowerSouth, No. 10 at p. 1;
Barron, No. 11 at p. 1; Clark, No. 13 at p. 1; Woodbury, No. 14 at p.
2; North West, No. 15 at p. 1; Bayfield, No. 16 at p. 2; Union County,
No. 17 at p. 1; Allamakee-Clayton, No. 18 at p. 1; Lower Valley Energy,
No. 19 at p. 2; AO Smith, No. 20 at p. 1; Wabash, No. 21 at pp.1-2;
Heartland, No. 22 at p. 1; South Central, No. 23 at p. 2; Cass County,
No. 24 at p. 1; East River, No. 25 at p. 1; Richland, No. 26 at p. 3;
Lyon-Lincoln Electric Cooperative, No. 27 at pp. 1-3; Central, No. 28
at p. 1; Tri-County, No. 29 at p. 1; Price, No. 30 at pp. 1-2; Bristol,
No. 31 at p. 2; FEM, No. 32 at p. 1; BEC, No. 33 at p. 1; Powell
Valley, No. 34 at p. 2; Humboldt, No. 35 at p. 1; Dakota Electric, No.
36 at p. 1; Nishnabotna Valley REC, No. 37 at p. 1; Corn Belt, No. 39
at p. 1; Clay-Union, No. 40 at p. 1; Great River, No. 41 at p. 1;
Central Georgia EMC, No. 42 at p. 1; Otter Tail, No. 44 at p. 1; ECSC,
No. 45 at p. 1; Aiken, No. 46 at p. 1; Connexus, No. 47 at p. 1;
Dairyland, No. 48 at p. 1; Pee Dee, No. 49 at p. 1; Oconto, No. 50 at
p. 1; Wright-Hennepin, No. 51 at p. 1; Midland, No. 52 at p. 1;
Lynches, No. 53 at p. 1; Pierce Pepin, No. 54 at p. 2; Dunn, No. 55 at
p. 1; Palmetto, No. 56 at p. 1; Horry, No. 57 at p. 1; Joint Utility
Commenters, No. 58 at p. 4; Fairfield, No. 59 at p. 1; Tri-State, No.
61 at p. 1; Santee, No. 62 at p. 1; Newberry, No. 64 at p. 1; People's
Energy, No. 66 at p. 2; MECA, No. 67 at p. 1; Eau Claire, No. 69 at p.
2; Edisto, No. 70 at p. 1; Coastal, No. 71 at p. 1; York, No. 73 at p.
1; Black River, No. 76 at p. 1; MCEC, No. 77 at p. 1; Prairie, No. 78
at p. 1; Blue Ridge, No. 82 at p. 1; Freeborn-Mower, No. 83 at p. 2;
APPA, No. 84 at p. 3; Nebraska Public Power, No. 88 at p. 1; Clark
Public Utilities, No. 90 at p. 1; NOVEC, No. 91 at p. 1; Black Hills,
No. 96 at p. 1;
[[Page 12975]]
Verendrye, No. 97 at p. 1; Dakota Energy, No. 98 at p. 1; Minnesota
Rural, No. 99 at p. 1; Minnesota Valley, No. 101 at p. 1; McLeod, No.
102 at p. 1; Lake Country, No. 108 at p. 1; Mountain Electric, No. 109
at p. 1; Leavenworth-Jefferson, No. 110 at p. 1; Riverland, No. 111 at
p. 1; Meeker, No. 112 at p. 1; Federated, No. 113 at p. 1; Iowa Lakes,
No. 114 at p. 1; Thumb Electric, No. 115 at p. 1; South Central Indiana
REC, No. 117 at p. 1; Tri-County Electric, No. 118 at p. 1; Nobles, No.
119 at p. 1; Lake Region, No. 120 at p. 1; Sioux Valley, No. 123 at p.
1; East Central, No. 124 at p. 1; Jackson County, No. 126 at p. 1; Duck
River, No. 127 at p. 1; Shenandoah Valley, No. 128 at p. 1; Adams, No.
129 at p. 1; Goodhue, No. 130 at p. 1; Adams-Columbia, No. 132 at p. 1;
Stearns, No. 134 at p. 1; Kandiyohi, No. 138 at p. 1; Shelby, No. 143
at p. 1; Beltrami, No. 145 at p. 1: Habersham, No. 146 at p. 1; Flint,
No. 147 at p. 2; Dakota Valley and Northern Plains, No. 149 at p. 1;
Aurelia, No. 151 at p. 2; United Electric, No. 153 at p. 1)
Many utilities stated that ETS water heating programs have become a
popular low-cost option for their members who do not have access to
natural gas, as it allows them to heat water using electricity at lower
cost. (Itasca-Mantrap, No. 7 at p. 2; Northwest Iowa Power, No. 8 at p.
2; Barron, No. 11 at p. 1; Clark, No. 13 at p. 2; Woodbury, No. 14 at
p. 2; North West, No. 15 at p. 1; Bayfield, No. 16 at p. 2; Cass
County, No. 24 at p. 2. Price, No. 30 at p. 2; Dakota Electric, No. 36
at p. 5; Nishnabotna Valley REC, No. 37 at p. 2; Great River, No. 41 at
p. 2; Otter Tail, No. 44 at p. 2; Dairyland, No. 48 at p. 2; Wright-
Hennepin, No. 51 at p. 2; Pierce Pepin, No. 54 at p. 2; Dunn, No. 55 at
p. 2; People's Energy, No. 66 at p. 2; Eau Claire, No. 69 at p. 1;
Freeborn-Mower, No. 83 at p. 2; Minnesota Rural, No. 99 at p. 1;
Minnesota Valley, No. 101 at p. 1; McLeod, No. 102 at p. 1; Riverland,
No. 111 at p. 2; Meeker, No. 112 at p. 2; Federated, No. 113 at p. 2;
Lake Region, No. 120 at p. 1; Goodhue, No. 130 at p. 1; Stearns, No.
134 at p. 1; Kandiyohi, No. 138 at p. 1)
Some utilities also stated that their ETS programs provide energy
savings benefits because they serve as a tool to educate their members
to help them understand and participate in programs that save energy
and money for all members. (Union County, No. 17 at p. 1; Humboldt, No.
35 at p. 1; Dakota Electric, No. 36 at p. 2; Corn Belt, No. 39 at p. 2;
Oconto, No. 50 at p. 2; Lake Country, No. 108 at p. 1; Jackson County,
No. 126 at p. 2; Duck River, No. 127 at p. 2) Utilities stated that
their ETS programs promote energy conservation because the amount of
energy used for domestic hot water needs is determined more by the
amount of water used than by the efficiency of the water heater, and
customers who know they have limits on their hot water capacity tend to
conserve hot water. (Rappahannock, No. 5 at p. 2; Northwest Iowa Power,
No. 8 at p. 2; Woodbury, No. 14 at p. 2; North West, No. 15 at p. 1;
Dakota Electric, No. 36 at p. 2; Nishnabotna Valley REC, No. 37 at p.
2;Otter Tail, No. 44 at p. 3; Dairyland, No. 48 at p. 6, Minnesota
Valley, No. 101 at p. 2; McLeod, No. 102 at p. 2; Meeker, No. 112 at p.
1; South Central Indiana REC, No. 117 at p. 1; Lake Region, No. 120 at
p. 2; Goodhue, No. 130 at p. 1; Stearns, No. 134 at p. 2; Kandiyohi,
No. 138 at p. 2; Aurelia, No. 151 at p. 2)
Dairyland commented that studies indicate that participation in
certain demand response programs can also result in an energy
conservation effect. Specifically, Dairyland cited a 2005 study \11\ of
more than 200 demand response programs which found that dynamic pricing
programs resulted in average total energy savings of four percent. The
study also found that programs that combine dynamic pricing with
automated control of consumer devices produce an even greater energy
conservation effect, because according to the study, dynamic pricing
programs cause participants to have a higher awareness of how they use
energy, which, in turn, results in lower consumption. (Dairyland, No.
48 at p. 6)
---------------------------------------------------------------------------
\11\ Chris King and Dan Delurey, Efficiency and Demand Response:
Twins, Siblings, or Cousins? Analyzing the conservation effects of
demand response programs. Public Utilities Fortnightly, March 2005.
Available at: http://www.demandresponsecommittee.org/resource-1009/efficiency%20and%20demand%20response%20puf%2005%2003.pdf.
---------------------------------------------------------------------------
Utilities also described how the utilities themselves benefit from
an increased ability to manage peak load. Many utility companies
indicated that the reduction or elimination of ETS programs would force
utilities to spend more money on meeting increased peak generation
needs. (Rappahannock, No. 5 at p. 2; PowerSouth, No. 10 at p. 1; Clark,
No. 13 at p. 2; Bayfield, No. 16 at p. 2; Union County, No. 17 at p. 3;
Lower Valley Energy, No. 19 at p. 2; Wabash, No. 21 at p. 2; Heartland,
No. 22 at p. 2; Cass County, No. 24 at p. 3; East River, No. 25 at p.
1; Central, No. 28 at p. 2; Tri-County, No. 29 at p. 2; Price, No. 30
at p. 2; Bristol, No. 31 at p. 2; FEM, No. 32 at p. 2; BEC, No. 33 at
p. 2; Central Georgia EMC, No. 42 at p. 2; ECSC, No. 45 at p. 2; Aiken,
No. 46 at p. 2; Dairyland, No. 48 at pp. 2-3; Oconto, No. 50 at p. 2;
Wright-Hennepin, No. 51 at p. 2; Lynches, No. 53 at p. 2; Pierce Pepin,
No. 54 at p. 2; Dunn, No. 55 at p. 2; Palmetto, No. 56 at p. 2; Horry,
No. 57 at p. 1; Fairfield, No. 59 at p. 2; Tri-State, No. 61 at p. 5;
Santee, No. 62 at p. 2; Newberry, No. 64 at p. 2; People's Energy, No.
66 at p. 2; Eau Claire, No. 69 at p. 2; Edisto, No. 70 at p. 2;
Coastal, No. 71 at p. 2; York, No. 73 at p. 2; Black River, No. 76 at
p. 2; MCEC, No. 77 at p. 2; Blue Ridge, No. 82 at p. 2; Freeborn-Mower,
No. 83 at p. 2; APPA, No. 84 at p. 2; Clark Public Utilities, No. 90 at
p. 1; Mountain Electric, No. 109 at p. 1; Tri-County Electric, No. 118
at p. 2; Sioux Valley, No. 123 at p. 2; East Central, No. 124 at p. 1;
Jackson County, No. 126 at p. 2; Habersham, No. 146 at p. 1; Flint, No.
147 at p. 3)
A number of utility companies also argued that ETS programs benefit
the electric grid by improving reliability and reducing system losses.
Commenters stated that these effects are the result of improved
utilization of the generation and transmission system infrastructure
and improved system load factors. (Buckeye, No. 3 at pp. 1-3;
Codington-Clark, No. 4 at p. 1; Itasca-Mantrap, No. 7 at p. 1;
PowerSouth, No. 10 at p. 2; Union County, No. 17 at p. 3; Allamakee-
Clayton, No. 18 at p. 2, Lower Valley Energy, No. 19 at p. 1-2; Wabash,
No. 21 at p. 2; Heartland, No. 22 at p. 1; South Central, No. 23 at p.
1; Cass County, No. 24 at p. 2; East River, No. 25 at p. 2; Lyon-
Lincoln, No. 27 at p. 1-2; Central, No. 28 at p. 1; Tri-County, No. 29
at p. 2; Bristol, No. 31 at p. 2; FEM, No. 32 at p. 1; BEC, No. 33 at
p. 1; Powell Valley, No. 34 at p. 2; Dakota Electric, No. 36 at p. 3;
Corn Belt, No. 39 at p. 2; Dairyland, No. 48 at p. 2; Clay-Union, No.
40 at p. 1; Great River, No. 41 at p. 1; No. 48 at p. 3; Central
Georgia EMC, No. 42 at p. 1; Otter Tail, No. 44 at p. 2; ECSC, No. 45
at p. 1; Aiken, No. 46 at p. 1; Connexus, No. 47 at p. 2; Pee Dee, No.
49 at p. 1; Oconto, No. 50 at p. 2; Lynches, No. 53 at p. 1; Palmetto,
No. 56 at p. 2; Horry, No. 57 at p. 1; Joint Utility Commenters, No. 58
at p. 17; Fairfield, No. 59 at p. 2; NEMA, No. 60 at p. 2; Tri-State,
No. 61 at p. 5; Santee, No. 62 at p. 2; Newberry, No. 64 at p. 1; MECA,
No. 67 at p. 1; Edisto, No. 70 at p. 1; Coastal, No. 71 at p. 1; York,
No. 73 at p. 1; Black River, No. 76 at p. 1; MCEC, No. 77 at p. 2;
Prairie, No. 78 at p. 1; ALP, No. 79 at p. 1; Blue Ridge, No. 82 at p.
2; NOVEC, No. 91 at p. 1; Wright-Hennepin, No. 51 at p. 2; Black Hills,
No. 96 at p. 1; Verendrye, No. 97 at p. 1; Dakota Energy, No. 98 at p.
1; Lake Country, No. 108 at p. 1; Mountain
[[Page 12976]]
Electric, No. 109 at p. 1; Meeker, No. 112 at p. 1; Federated, No. 113
at p. 1; Iowa Lakes, No. 114 at p. 1; Thumb Electric, No. 115 at p. 1;
South Central Indiana REC, No. 117 at p. 1; Tri-County Electric, No.
118 at p. 1; Nobles, No. 119 at p. 1; Lake Region, No. 120 at p. 1;
Sioux Valley, No. 123 at p. 1; Jackson County, No. 126 at p. 2; Duck
River, No. 127 at p. 2; Shenandoah Valley, No. 128 at p. 1; Adams, No.
129 at p. 1; Senator John Thune, No. 137 at p. 1; Shelby, No. 143 at p.
1; Habersham, No. 146 at p. 1; Flint, No. 147 at p. 3; Dakota Valley
and Northern Plains, No. 149 at p. 1; United Electric, No. 153 at p. 1)
Several utilities also mentioned that their load control program can
help facilitate the restoration of electric service during extreme
weather emergencies. (Powell Valley, No. 34 at p. 2; Blue Ridge, No. 82
at p. 1; NOVEC, No. 91 at p. 2; United Electric, No. 153 at p. 1)
According to utility companies, the reduction in energy usage
during peak times from ETS programs allows the utilities to increase
utilization of more efficient generation facilities while
simultaneously providing a method of integrating intermittent renewable
energy sources into the electric grid. (Central Georgia EMC, No. 42 at
p. 2; Codington-Clark, No. 4 at p. 2; Itasca-Mantrap, No. 7 at p. 1;
Northwest Iowa Power, No. 8 at p. 2; Barron, No. 11 at p. 1; Clark, No.
13 at p. 1; Woodbury, No. 14 at p. 2; North West, No. 15 at p. 2;
Bayfield, No. 16 at p. 1; Allamakee-Clayton, No. 18 at p. 2; Lower
Valley Energy, No. 19 at p. 2; AO Smith, No. 20 at p. 1; Wabash, No. 21
at p. 2; South Central, No. 23 at p. 2; East River, No. 25 at p. 2;
Richland, No. 26 at p. 3; Lyon-Lincoln Electric Cooperative, No. 27 at
p. 2; Price, No. 30 at p. 1; BEC, No. 33 at p. 3; Humboldt, No. 35 at
p. 1; Dakota Electric, No. 36 at p. 2; Nishnabotna Valley REC, No. 37
at p. 2; Great River, No. 41 at p. 3; Otter Tail, No. 44 at p. 3;
Connexus, No. 47 at p. 1; Dairyland, No. 48 at p. 3; Midland, No. 52 at
p. 2; Pierce Pepin, No. 54 at p. 2; Dunn, No. 55 at p. 2; Tri-State,
No. 61 at p. 2; People's Energy, No. 66 at p. 2; MECA, No. 67 at p. 1;
Eau Claire, No. 69 at p. 1; EPRI, No. 74 at p 2-4; Prairie, No. 78 at
p. 2; Freeborn-Mower, No. 83 at p. 2; Nebraska Public Power, No. 88 at
p. 1; Corn Belt, No. 39 at p. 2; Clay-Union, No. 40 at p. 2; Wright-
Hennepin, No. 51 at p. 2; HTP, No. 87 at p. 1; NOVEC, No. 91 at p. 4;
Black Hills, No. 96 at p. 2; Minnesota Rural, No. 99 at p. 1; Minnesota
Valley, No. 101 at p. 1; McLeod, No. 102 at p. 1; Lake Country, No. 108
at p. 1; Riverland, No. 111 at p. 1; Meeker, No. 112 at p. 2;
Federated, No. 113 at p. 2; Nobles, No. 119 at p. 1; Lake Region, No.
120 at p. 1; Congressman Dan Burton, No. 122 at p. 1; East Central, No.
124 at p. 2; Goodhue, No. 130 at p. 2; Stearns, No. 134 at p. 2;
Senator John Thune, No. 137 at p. 1; Beltrami, No. 145 at p. 1;
Habersham, No. 146 at p. 3; Aurelia, No. 151 at p. 2)
After considering the information presented by stakeholders
regarding the benefits of ETS programs to consumers, utilities, and the
Nation, DOE is persuaded by the information submitted by the utility
companies given their expertise in administering demand response
programs, regarding the benefits of ETS programs. DOE believes that the
evidence presented indicates that these programs provide a number of
valuable benefits to consumers, utilities, and the Nation. As a result,
DOE agrees with the majority of commenters that action should be taken
to mitigate the impacts of the April 2010 final rule standard levels on
utility ETS programs in order to help preserve these benefits, if no
practical alternatives exist to allow for the continuation of ETS
programs in the absence of large-volume ERWHs. Accordingly, DOE
considered whether practical alternatives exist that would allow the
existing ETS programs to continue to be effective despite the potential
unavailability of large volume ERWHs. DOE's consideration of this
issue, as well as comments received, are discussed in section 0.
2. Alternatives to Large-Volume Electric Resistance Water Heaters To
Serve the Needs of ETS Programs
DOE recognizes that participants in ETS programs need more hot
water storage capacity than they would require absent their
participation in such programs. However, as noted in the June 2012 RFI,
DOE believes that there are potential alternatives that may be able to
provide a comparable amount of water storage capacity required for
these programs. These potential alternatives include large-volume HPWHs
and multiple (two or more) small-volume ERWHs. A number of stakeholders
argued that heat pump water heaters and multiple small-volume water
heaters are not well-suited for ETS programs and would not be a viable
replacement for large-volume ERWHs in these applications. The points
that the commenters raised are discussed below.
Many utility company commenters emphasized that managing a load
control program is a balance of controlling load while maintaining
customer satisfaction. Utilities stated that large volume ERWHs are
required to ensure ETS program participants have enough hot water and
remain satisfied with the program. These commenters asserted that
smaller tanks reduce the amount of storage capacity and thus require
more recharge time between control periods to ensure customers have
enough hot water. Conversely, large capacity water heaters allow
consumers to have enough hot water during control periods. (Buckeye,
Inc. No. 3 at p. 1; Codington-Clark, No. 4 at p. 2; Northwest Iowa
Power, No. 8 at p. 2; PowerSouth, No. 10 at p. 2; Barron, No. 11 at p.
1; Clark, No. 13 at p. 1; Woodbury, No. 14 at p. 1; North West, No. 15
at p. 2; Bayfield, No. 16 at p. 2; Union County, No. 17 at p. 1; South
Central, No. 23 at p. 1; Cass County, No. 24 at p. 3; East River, No.
25 at p. 2; Richland, No. 26 at p. 1; Lyon-Lincoln Electric
Cooperative, No. 27 at p. 2; Price, No. 30 at p. 1; Bristol, No. 31 at
p. 2; FEM, No. 32 at p. 2; Nishnabotna Valley REC, No. 37 at p. 2; Corn
Belt, No. 39 at pp. 2-3; Clay-Union, No. 40 at p. 2; Great River, No.
41 at p. 1; Central Georgia EMC, No. 42 at p. 2; Otter Tail, No. 44 at
p. 2; Wright-Hennepin, No. 51 at p. 1; Pierce Pepin, No. 54 at p. 2;
Dunn, No. 55 at p. 1; Horry, No. 57 at p. 2; Fairfield, No. 59 at p. 2;
Tri-State, No. 61 at p. 3; People's Energy, No. 66 at p. 2; Eau Claire,
No. 69 at p. 1; Prairie, No. 78 at p. 2; Freeborn-Mower, No. 83 at p.
2; Black Hills, No. 96 at p. 2; Riverland, No. 111 at p. 1; Meeker, No.
112 at p. 1; Tri-County Electric, No. 118 at p. 2; Nobles, No. 119 at
p. 2; Sioux Valley, No. 123 at p. 2; East Central, No. 124 at p. 2;
Jackson County, No. 126 at p. 1; Goodhue, No. 130 at p. 1;Aurelia, No.
151 at p. 2; United Electric, No. 153 at p. 2)
A number of parties stated that the heat pump unit is, by itself,
incapable of heating water to the temperatures needed for ETS programs.
(PowerSouth, No. 10 at p. 3; Barron, No. 11 at p. 2; Clark, No. 13 at
p. 2; Bayfield, No. 16 at p. 2; Allamakee-Clayton, No. 18 at p. 2; A.
O. Smith, No. 20 at p. 2; Richland, No. 26 at p. 3; Price, No. 30 at p.
2; Bristol, No. 31 at p. 1; Great River, No. 41 at p. 4; Dairyland, No.
48 at p. 4; Pierce Pepin, No. 54 at p. 2; Dunn, No. 55 at p. 2; Joint
Utilities, No. 58 at p. 13; People's Energy, No. 66 at p. 2; Eau
Claire, No. 69 at p. 2; Vaughn, No. 72 at p. 6; ALP, No. 79 at p. 1;
Freeborn-Mower, No. 83 at p. 2; APPA, No. 84 at p. 2; Clark Public
Utilities, No. 90 at p. 1; NOVEC, No. 91 at p. 4; Riverland, No. 111 at
p. 2; Adams-Columbia, No. 132 at p. 2; Habersham, No. 146 at p. 3)
GE and the Northwest Advocates comment noted that using the
electric resistance elements of an HPWH, it is possible to reach higher
temperatures as
[[Page 12977]]
well as heat the water faster. (GE, No. 85 at p. 3; Northwest
Advocates, No. 89, at p. 4) AO Smith commented that not all HPWHs have
electric resistance elements that are large enough to allow them to
achieve the necessary temperatures for ETS programs. But AO Smith also
stated that even for HPWHs that do have a resistance element that is
large enough to achieve the needed tank temperature, the unit would be
operating like a very expensive ERWH. (Rappahannock, No. 5 at p. 2; A.
O. Smith, No. 20 at p. 2; Great River, No. 41 at p. 4; Dairyland, No.
48 at p. 4; Joint Utilities, No. 58 at p. 16; NEMA, No. 60 at p. 4;
EPRI, No. 74 at p. 3; NOVEC, No. 91 at p. 4; Adams-Columbia, No. 132 at
p. 2; Habersham, No. 146 at p. 3; Dakota Valley and Northern Plains,
No. 149 at p. 1; ECE, No. 124 at p. 3)
DOE believes that most HPWHs are technically capable of heating
water to the temperatures needed for ETS programs, but would need to
use the electric resistance elements in order to heat the tank to
temperatures above the maximum temperature limits of current HPWH
refrigerants. The need to use the electric resistance element would
lower overall efficiency and reduce the energy and cost savings that
would otherwise result from the use of a HPWH. DOE has not attempted to
quantify such energy and cost savings differences in this NPRM, but
could do so in evaluating specific waiver requests.
Several interested parties noted that use of HPWHs in ETS programs
would lead to deterioration of the compressor due to frequent on/off
cycling for demand response purposes, and the frequent on/off cycle
would also reduce the efficiency of the HPWH. (PowerSouth, No. 10 at p.
3; Barron, No. 11 at p. 2; Clark, No. 13 at p. 2; Bayfield, No. 16 at
p. 2; Allamakee-Clayton, No. 18 at p. 2; Richland, No. 26 at p. 3; Tri-
Country, No. 29 at p. 2; Price, No. 30 at p. 2; Powell Valley, No. 34
at p. 3; Great River, No. 41 at p. 3; Dairyland, No. 48 at p. 4; Pierce
Pepin, No. 54 at p. 2; Dunn, No. 55 at p. 2; Joint Utilities, No. 58 at
p. 14; NEMA, No. 60 at p. 3; People's Energy, No. 66 at p. 2; Eau
Claire, No. 69 at p. 2; EPRI, No. 74 at p. 3; ALP, No. 79 at p. 1;
Freeborn-Mower, No. 83 at p. 2; APPA, No. 84 at p. 2; Clark Public
Utilities, No. 90 at p. 1; NOVEC, No. 91 at p. 4; Riverland, No. 111 at
p. 2; Federated, No. 113 at p. 2; Habersham, No. 146 at p. 3) EPRI
stated that using variable speed compressors in HPWHs is a solution to
the start-stop operation problem, but additional research is needed in
order to understand whether this HPWH design can yield efficiency gains
and emerge as a cost-effective solution for customers and the grid.
(EPRI, No. 74 at p. 3)
DOE understands that while a HPWH might cycle frequently in some
ETS applications, the minimum run times for existing HPWHs are
sufficiently long (30 minutes) that on/off cycling is unlikely to lead
to deterioration of the compressor. DOE agrees that variable speed
compressors may be useful, but notes that the benefits of this
technology have not yet been demonstrated and the cost of this option
is still uncertain.
Several stakeholders stated that using a vapor-compression cycle to
heat water increases operating time compared to electric resistance
heating, so there would be a smaller time window for load reduction and
less opportunity for load shifting. (Buckeye, No. 3 at p. 2; Codington-
Clark, No. 4 at p. 2; Bayfield, No. 16 at p. 2; Union County, No. 17 at
p. 3; A. O. Smith, No. 20 at p. 4; Cass County, No. 24 at p. 4; East
River, No. 25 at p. 2; Richland, No. 26 at p. 3; Lyon-Lincoln, No. 27
at p. 2; Corn Belt, No. 39 at p. 3; Clay-Union, No. 40 at p. 2; Great
River, No. 41 at p. 3; ECSC, No. 45 at p. 3; Dairyland, No. 48 at p. 4;
Pee Dee, No. 49 at p. 2; Lynches, No. 53 at p. 3; Pierce Pepin, No. 54
at p. 2; Palmetto, No. 56 at p. 2; Joint Utilities, No. 58 at p. 16;
Fairfield, No. 59 at p. 3; NEMA, No. 60 at p. 3; York, No. 73 at p. 4;
EPRI, No. 74 at p. 4; Black River, No. 76 at p. 2; Prairie, No. 78 at
p. 2; ALP, No. 79 at p. 1; Blue Ridge, No. 82 at p. 2; Freeborn-Mower,
No. 83 at p. 2; APPA, No. 84 at p. 2; Clark Public Utilities, No. 90 at
p. 1; NOVEC, No. 91 at p. 4; Nobles, No. 119 at p. 2; Adams-Columbia,
No. 132 at p. 2; Habersham, No. 146 at p. 3; ECE, No. 124 at p. 2; FEM,
No. 32 at p. 2; Iowa Lakes, No. 114 at p. 3; Aiken, No. 46 at p. 2;
Itasca-Mantrap, No. 7 at p. 2)
DOE agrees that HPWHs have slower recovery when operating in heat
pump only mode, but believes that this issue could be overcome by
utilizing the backup electric resistance elements or by using water
heaters with even larger rated volumes than currently used in ETS
programs. However, DOE notes that if prolonged operation using electric
resistance elements is required, the overall efficiency of the water
heater will be lowered.
Several parties stated that HPWHs have additional total installed
cost, which makes them less economically feasible for ETS programs.
(PowerSouth, No. 10 at p. 3; Bayfield, No. 16 at p. 2; Cass County, No.
24 at p. 5; East River, No. 25 at p. 2; Richland, No. 26 at p. 2; Tri-
Country, No. 29 at p. 3; BEC, No. 33 at p. 3; Dakota Electric, No. 36
at p. 4; Otter Tail, No. 44 at p. 3; ECSC, No. 45 at p. 3; Connexus,
No. 47 at p. 1; Dairyland, No. 48 at p. 5; Pee Dee, No. 49 at p. 2;
Wright-Hennepin, No. 51 at p. 1; Lynches, No. 53 at p. 3; Palmetto, No.
56 at p. 2; Horry, No. 57 at p. 4; Joint Utilities, No. 58 at p. 14;
Fairfield, No. 59 at p. 3; Newberry, No. 64 at p. 3; Edisto, No. 70 at
p. 3; Coastal, No.71 at p. 3; Vaughn, No. 72 at p. 2 to 3; York, No. 73
at p. 2; Black River, No.76 at p. 3; MCEC, No. 77 at p. 2; Blue Ridge,
No. 82 at p. 2; Clark Public Utilities, No. 90 at p. 1; NOVEC, No. 91
at p. 4; Verendrye, No. 97 at p. 1; Dakota Energy, No. 98 at p. 1;
Minnesota Rural, No. 99 at p. 1; Mountain Electric, No. 109 at p. 1;
Leavenworth-Jefferson, No. 110 at p. 1; Meeker, No. 112 at p. 2; Iowa
Lakes, No. 114 at p. 2; Federated, No. 115 at p. 2; Thumb Electric, No.
115 at p. 1; SCI REMC, No. 117 at p. 1; Tri-County, No. 118 at p. 1;
Nobles, No. 119 at p. 1; LREC, No. 120 at p. 1; Sioux Valley, No. 123
at p. 1; Jackson County, No. 126 at p. 2; Adams-Columbia, No. 132 at p.
2; People's Energy, No. 142 at p. 1; Beltrami, No. 145 at p. 1;
Habersham, No. 146 at p. 3; Flint, No. 147 at p. 1; Aurelia, No. 151 at
p. 1; United Electric, No. 153 at p. 1; ECE, No. 124 at p. 2; Iowa
Lakes, No. 114 at p. 3; Aiken, No. 46 at p. 2; Santee, No. 62 at p. 1)
DOE agrees that a large HPWH would have much higher installed cost
than a large ERWH. The extent to which this would be balanced by lower
operating costs would vary among ETS programs. DOE notes this increase
in first installed cost could have an adverse impact on utility ETS
programs, in which customer participation is voluntary, because a
utility customer may be less willing to take on the additional
installed cost of a HPWH to participate in the program.
Several of the interested parties stated that HPWHs require larger
installation space and larger surrounding air volume. Some of the
parties also stated that such requirements could force the consumer to
switch to two smaller ERWHs, which would lead to increased costs for
purchase and maintenance (as compared to a large-volume ERWH) and lower
efficiency. (Rappahannock, No. 5 at p. 2; PowerSouth, No. 10 at p. 3;
Woodbury, No. 14 at p. 1; North West, No. 15 at p. 1; Bayfield, No. 16
at p. 2; Union County, No. 17 at p. 3; Cass County, No. 24 at p. 3;
Lyon-Lincoln, No. 27 at p. 2; Tri-Country, No. 29 at p. 4; Price, No.
30 at p. 2; Bristol, No. 31 at p. 1; BEC, No. 33 at p. 2; Dakota
Electric, No. 36 at p. 2; Corn Belt, No. 39 at p. 3; Clay-Union, No. 40
at p. 2; Otter Tail, No. 44 at p. 3; ECSC, No. 45 at p. 3; Connexus,
No. 47 at p. 1; Pee Dee, No. 49 at p. 2; Lynches, No. 53 at p. 3; Dunn,
No. 55 at p. 2; Palmetto, No.
[[Page 12978]]
56 at p. 2; Horry, No. 57 at p. 4; Joint Utilities, No. 58 at p. 19;
Fairfield, No. 59 at p. 3; NEMA, No. 60 at p. 4; Newberry, No. 64 at p.
2; Eau Claire, No. 69 at p. 3; Edisto, No. 70 at p. 3; Coastal, No. 71
at p. 3; Vaughn, No. 72 at p. 5; York, No. 73 at p. 2; Black River, No.
76 at p. 3; MCEC, No. 77 at p. 2; Blue Ridge, No. 82 at p. 2; Freeborn-
Mower, No. 83 at p. 2; APPA, No. 84 at p. 2; Clark Public Utilities,
No. 90 at p. 1; NOVEC, No. 91 at p. 5; Minnesota Valley, No. 101 at p.
1; Federated, No. 113 at p. 2; Tri-County, No. 118 at p. 2; Nobles, No.
119 at p. 2; Shenandoah Valley, No. 128 at p. 2; Goodhue, No. 130 at p.
1; Adams-Columbia, No. 132 at p. 2; Stearns, No. 134 at p. 1;
Habersham, No. 146 at p. 3; Flint, No. 147 at p. 1; Aurelia, No. 151 at
p. 1; McLeod, No. 102 at p. 1; ECE, No. 124 at p. 2; Kandiyohi, No.
138-141 at p. 1; FEM, No. 32 at p. 2; Nishnabotna Valley REC, No. 37 at
p. 1; Iowa Lakes, No. 114 at p. 3; Aiken, No. 46 at p. 2; Santee, No.
62 at p. 2) AO Smith stated that using two smaller water heaters in
place of one large water heater for ETS programs is technologically
achievable, but it would increase the complexity and cost of the
control scheme and installation. (AO Smith, No. 20 at p. 3) Several
utilities noted that a large portion of consumers enrolled in their ETS
programs live in mobile homes, which are particularly challenging to
retrofit with HPWHs due to space constraints. (Tri-Country, No. 29 at
p. 2; BEC, No. 33 at p. 3; ECSC, No. 45 at p. 3; Pee Dee, No. 49 at p.
2; Lynches, No. 53 at p. 3; Palmetto, No. 56 at p. 2; Fairfield, No. 59
at p. 3; Newberry, No. 64 at p. 3; Edisto, No. 70 at p. 3; Coastal, No.
71 at p. 3; York, No. 73 at p. 2; Black River, No. 76 at p. 3; MCEC,
No. 77 at p. 3; Blue Ridge, No. 82 at p. 2; Adams-Columbia, No. 132 at
p. 2; Aiken, No. 46 at p. 2; Santee, No. 62 at p. 3)
DOE believes that the use of two smaller water heaters in place of
one large water heater for ETS programs could be a viable option in
some cases. However, DOE agrees that there are situations where a
consumer in an ETS program would have difficulty physically
accommodating a HPWH or multiple smaller water heaters, resulting in
higher installation expenses.
The Northwest Advocates commented that HPWHs can provide the same
load shifting and ancillary services (load following and regulation)
and benefits that are provided by ERWHs. They also stated that with
additional programming (and no additional material costs) the HPWH
controls can be adapted to provide ETS capabilities and the same
functionality as resistance-only grid-interactive water heaters.
(Northwest Advocates, No. 89, at p. 2) Similarly, GE argued that
because all HPWHs use electronic controls as opposed to the
electromechanical controls found on most standard electric water
heaters, these products can much more easily interact with the grid and
provide simpler ETS capability. (GE, No. 85 at p. 2) GE stated that the
concerns that HPWHs will not be able to fill the same role as large
volume resistance water heaters are not technologically justified. GE
added that new larger capacity HPWH models may need to be produced, but
there is no inherent reason why that cannot be done. (GE, No. 85 at p.
3)
DOE believes that from a technical perspective HPWHs could
substitute for ERWHs in ETS programs. Future improvements in HPWH
design such as variable speed compressors, use of higher temperature
refrigerants and refinements to controls may improve HPWHs' suitability
for use in ETS programs. DOE also believes that multiple smaller ERWHs
are a feasible alternative to a large-volume ERWH, but may lower the
system efficiency of the water heating process and may not be an option
in space constrained installations. Additionally, DOE believes that the
installed cost of currently available HPWH models or multiple small-
volume ERWHs instead of a single large-volume ERWH and the need to
often operate HPWHs in electric resistance mode to serve the demands of
ETS programs could limit the attractiveness of participation in ETS
programs. Additional analysis and data would be needed to determine the
precise effect of unavailability of large-volume ERWHs on participation
in ETS programs.
Based on the above considerations, DOE concludes that products that
are currently available on the market that meet the April 2010 standard
levels may not be practical to fulfill the needs of utility ETS
programs. Therefore, as discussed immediately below, DOE considered two
approaches--establishing a separate product class and establishing a
waiver process. See sections 3 and 0, respectively.
3. Potential for a Separate Product Class for ``Grid-Interactive''
Electric Storage Water Heaters
Twenty-three utility companies and associations, four
manufacturers, one trade association (NEMA), and three U.S. Congressmen
recommended that DOE establish a separate product class for grid
interactive water heaters. (Itasca-Mantrap No. 7 at p. 2; Barron, No.
11 at p. 2; Clark, No. 13 at p. 2; Bayfield, No. 16 at p. 2; East
River, No. 25 at p. 3; Richland, No. 26 at p. 3; Lyon-Lincoln Electric
Cooperative, No. 27 at p. 3; Price, No. 30 at p. 2; Dakota Electric,
No. 36 at p. 5; Corn Belt, No. 39 at p. 3; Otter Tail, No. 44 at p. 4;
Dairyland, No. 48 at p. 6; Pierce Pepin, No. 54 at p. 2; Dunn, No. 55
at p. 2; Joint Utilities, No. 58 at p. 4; People's Energy, No. 66 at p.
2; MECA, No. 67 at p. 1; Eau Claire, No. 69 at p. 3; ALP, No. 79 at p.
1; Freeborn-Mower, No. 83 at pp. 2-3; APPA, No. 84 at p. 3; HTP, No. 87
at p. 1; Nebraska Public Power, No. 88 at p. 1; Rheem, No. 86 at p. 2;
Giant Factories, No. 65 at p. 2; AO Smith \12\, No. 20 at p. 2; NEMA,
No. 60 at p. 4; Congressman Todd Rokita, No. 93 at p. 1; Riverland, No.
111 at p. 2; Congressman Dan Burton, No. 122 at p. 1; Senator John
Thune, No. 137 at p. 1)
---------------------------------------------------------------------------
\12\ AO Smith's comment stated that they ``would not object to''
a new product class. DOE interprets this as implying support for
this approach because AO Smith also indicated that it supports the
continued existence of electric resistance storage water heaters
with storage volumes above 55 gallons, disagreed with all of the
other options listed, and did not offer an alternative.
---------------------------------------------------------------------------
The Joint Utilities urged the Secretary to use the authority
granted pursuant to 42 U.S.C. 6295(o)(2)(A) to develop a new standard
for large-volume electric resistance water heaters that interact with
the grid. Specifically, the Joint Utilities believe that the grid
connectivity feature of certain large volume ERWHs differentiates them
from the broader ERWH product class and warrants a separate
classification and standard. (Joint Utilities, No. 58 at p. 4) The
Joint Utilities further argued that grid-interactive water heaters are
clearly distinguishable from water heaters that are not responsive to
grid signals, and proposed a definition (discussed below) that would
distinguish those products from other water heaters. The Joint
Utilities also stated that grid-interactive water heaters provide
uninterrupted hot water to consumers, large amounts of energy storage
during times when there is an excess of unused, available renewable
energy, the ability to reduce load on the grid to enhance reliability
or reduce congestion on the transmission grid, and reliability services
in the form of frequency regulation or other grid ancillary services,
all of which make this specific group of water heaters different from
the general class of electric water heaters, and thus deserving of a
new classification pursuant to Section 6295 (o)(2)(A). (Joint
Utilities, No. 58 at p. 17)
The Joint Utilities proposed that a ``Grid-Interactive Water
Heater'' be defined as a separate product class consisting of products
with the following characteristics: (1) A storage
[[Page 12979]]
tank greater than 55 gallons; (2) a control device capable of receiving
communication from a grid operator, electric utility, or other energy
services company that provides real-time control of the heating
element; (3) evidence that the appliance owner is enrolled in a grid
operator, electric utility, or other energy services company program to
provide demand response or related interactive electric grid services;
(4) a thermostatic mixing valve if the water heater is capable of
heating water greater than 120 degrees Fahrenheit. (Joint Utilities,
No. 58 at pp. 17-18)
Further, the Joint Utilities supplemental comment suggested that if
``grid interactive water heaters'' were established as a separate
product class and required ongoing reporting from utilities in order to
track manufacturer sales versus utility installations, this should be
done through the addition of a single question onto the Energy
Information Administration (EIA) forms EIA-861 and EIA-861S in order to
minimize burdens on utilities and DOE/EIA. The Joint Utility commenters
proposed adding the following question: ``If you have a demand side
management (DSM) program for grid-interactive water heaters (as defined
by DOE), how many grid-interactive water heaters were added to your
program this/last year?'' The Joint Utilities commented that the
information collected by EIA could be made available to DOE for
tracking purposes. (Joint Utilities Supplemental, No. 156 at pp. 1-2)
Rheem commented on the four criteria of the proposed product class
for ``grid-interactive water heater.'' Rheem expressed support for the
first requirement proposed by the Joint Utilities in the definition of
``grid-interactive water heater'' requiring such water heaters to have
a storage volume of greater than 55 gallons, but noted this requirement
may have a limiting effect on the potential application and associated
benefits in the field. Rheem also supported the second criterion
proposed by the Joint Utilities that a control device must be present
with the understanding that these control devices are provided in the
field by the utility to the consumer in support of their ETS program,
giving the utility the ability to turn the water heater on or off.
Rheem also agreed with the third criterion proposed by utilities (i.e.,
agreement to be enrolled in a grid operator, electric utility, or other
energy services company program to provide demand response or other
electric grid services) with the additional clarification that the
agreement is a contractual arrangement between utility and consumer,
not part of a product definition. Lastly, Rheem did not support the
requirement of a mixing valve at 120[emsp14][deg]F, noting that almost
all ERWHs can be adjusted to heat water to 170[emsp14][deg]F and most
if not all manufacturers encourage use of a mixing valve. Rheem stated
that requiring a mixing valve at 120[emsp14][deg]F for this product
class only would be inconsistent given that other product classes and
the majority of residential electric storage water heaters do not
require such a device. (Rheem, No. 86 at p. 3)
AO Smith also commented on the four criteria for defining a ``grid-
interactive water heater'' product class, as proposed by the Joint
Utilities. AO Smith supported the first and third criteria listed above
(i.e., that the water heater must have a storage volume greater than 55
gallons, and that the water heater must be enrolled in a utility grid-
interactive program). However, AO Smith expressed concern with the
criterion that the unit must be equipped with a communication-capable
control device due to the large number of different devices currently
in use with differing operating characteristics and communication
protocols. AO Smith stated that unless there was a standardized
communication protocol and operational algorithm, it would be difficult
for water heater manufacturers to justify making a small number of
water heaters for ETS programs with each customer (utility) requiring a
different control device in an even smaller number of heaters. AO Smith
stated that it would support the criterion if it were altered to
provide as an option that the water heater may be without a control
device if it has a provision for connection to a utility-provided
communication device that would interact with the water heater control
to provide equivalent grid communication. Regarding the fourth proposed
criterion, AO Smith stated that it does not object to the inclusion of
thermostatic mixing valve in the definition, but noted that almost all
ERWHs can be adjusted to 170 [deg]F and commented that 120 [deg]F is
too low for many purposes. AO Smith expressed preference for a criteria
that specifies that since the heater will be heated to a high water
temperature during off-peak periods, a means (such as a thermostatic
mixing valve) should be provided to adjust the outlet water to the
desired delivery temperature, which in most cases will be less than
storage temperature. (AO Smith, No. 20 at p. 2)
Contrary to the Joint Utilities' and manufacturers' position, the
Joint Efficiency Advocates stated that a separate product class for
grid-interactive water heaters is not appropriate. (Joint Efficiency
Advocates, No. 68 at p. 1) The Joint Efficiency Advocates stated that
given the novelty of grid-interactive water heaters, the variety of
possible applications, and the variety of possible product designs and
features, it would be unclear how to meaningfully define such a product
class to enable the benefits while reducing risk and minimizing costs.
(Joint Efficiency Advocates, No. 68 at p. 3) The Joint Efficiency
Advocates were also concerned that there would be a significant risk
that a new product class may be abused as a loophole to bypass the
efficiency standards, rather than to deliver grid benefits. The Joint
Efficiency Advocates pointed out that the benefits remain unquantified
and generally unassessed, making it impossible to consider whether the
benefits outweigh the risks and costs. Lastly, the Joint Efficiency
Advocates stated that creating a new product class would likely run
afoul of the ``anti-backsliding'' provision. The Joint Efficiency
Advocates argued that all water heaters, including those that include
grid interactive controls, are now subject to the 2010 standards, which
prevents DOE from creating a new class with lower standards for a grid
interactive water heater. (Joint Efficiency Advocates, No. 68 at p. 3)
GE also argued against the creation of a product class for grid
interactive water heaters, stating that it is not justified under DOE's
criteria for establishing product classes since it would not preserve a
utility that would otherwise be eliminated by the standard. (GE, No. 85
at p. 3) GE stated that even if a certain consumer utility is at risk,
that concern should have been raised during the rulemaking when it
could have been thoroughly evaluated by DOE and all interested parties.
(GE, No. 85 at p. 3) Further, GE commented that grid interactive water
heaters do not have capacity or other performance related features that
HPWHs do not, or could not, have, and opined that creating a separate
product class would impede development of the market for high-
performing HPWH products. (GE, No. 85 at p. 3) GE also argued that DOE
is prevented under the ``anti-backsliding'' provision at 42 U.S.C.
6295(o)(1) from amending the standard to waive its requirements as
applicable to a subset of covered products, especially if doing so
increases maximum allowable energy use or decreases minimum energy
efficiency. (GE, No. 85 at pp. 4)
After considering the comments regarding the potential for
establishing a separate product class for ``grid-
[[Page 12980]]
interactive water heaters'' as proposed by the Joint Utilities, DOE has
tentatively concluded not to propose such an approach. In particular,
DOE agrees with the Joint Efficiency Advocates and GE that under 42
U.S.C. 6295(o)(1), DOE is prohibited from promulgating any standard
that increases the maximum allowable energy use or decreases minimum
energy efficiency of a covered product. The standards established for
electric water heaters in the April 2010 final rule apply to all
electric water heaters meeting the applicable regulatory definitions.
Therefore, establishing a separate product class for a segment of
electric storage water heaters and setting a lower energy conservation
standard level than the required energy efficiency of such products
would be prohibited under the ``anti-backsliding'' provision contained
in 42 U.S.C. 6295(o)(1). Accordingly, DOE has tentatively concluded
that it will not propose to establish a separate product class for
``grid-interactive'' water heaters with energy conservation standards
that are less stringent than those promulgated in the April 2010 final
rule. However, DOE does agree with the suggestion by the Joint
Utilities that the number of water heaters in ETS programs should be
tracked, and that adding a question to the EIA-861 and EIA-861S forms
are an appropriate way to achieve this goal while minimizing burdens on
all parties. DOE's proposal in this regard is discussed further in
section 0 below.
4. Potential for Establishing a Waiver Process
In the June 2012 RFI, DOE also requested comment on the potential
for establishing a waiver process that would allow for production of
limited number of large-volume ERWHs solely for ETS programs. Both the
joint comment received from Joint Efficiency Advocates, ACEEE, NRDC,
and ASAP, and the joint comment received from the Northwest Advocates,
NEEA, NPCC, and BPA, generally supported a waiver system. (Joint
Efficiency Advocates, No. 68 at p. 1; Northwest Advocates, No. 89 at p.
2) Several utility companies also indicated that the waiver option
could potentially be a viable alternative, but most of the utility
company commenters preferred the product class approach discussed
above. (East River, No. 25 at p. 3; Lyon-Lincoln, No. 27 at p. 3;
Bristol, No. 31 at p. 2; Corn Belt, No. 39 at p. 3; Otter Tail, No. 44
at p. 5)
The Joint Efficiency Advocates argued that a waiver approach is
legal under 42 U.S.C. 7194(a) and could allow manufacturers to produce
small quantities of large-volume ERWHs and sell them directly to
utilities that operate such programs. (Joint Efficiency Advocates, No.
68 at p. 4) The Joint Efficiency Advocates stated that a waiver program
has precedent and cited the waivers granted for small-duct, high-
velocity central air conditioners from the standards for residential
central air conditioners as an example. The Joint Efficiency Advocates
stated that a waiver system would add flexibility and reduce the
likelihood of loopholes, and would facilitate ongoing creativity and
dynamism from the utility and manufacturing industries, given the
ability to revisit waiver conditions. The Joint Efficiency Advocates
argued that a waiver system would also encourage and facilitate ongoing
assessment by DOE, industry, and other stakeholders, leading to greatly
improved understanding of the benefits and costs of grid-interactive
water heaters, and form the basis for well-informed future decisions of
a more permanent nature. (Joint Efficiency Advocates, No. 68 at p. 4)
The Joint Efficiency Advocates stated that any waiver would need to
be limited to cover units sold to utilities that actually have demand
response programs, and the utilities must be required to sell or
provide grid-interactive water heaters only to customers who agree to
participate in the demand response program. In addition, the Joint
Efficiency Advocates suggested that any application for waiver should
have to demonstrate that it is impossible to operate a demand response
program with water heaters that meet the standard. The Joint Efficiency
Advocates also argued that waiver applications should be made jointly
by a manufacturer and a utility. (Joint Efficiency Advocates, No. 68 at
p. 4)
The Northwest Advocates stated that prior to determining whether to
grant a waiver, DOE should determine the net economic benefits of such
an action. (Northwest Advocates, No. 89 at p. 2) The Northwest
Advocates also stated that the mechanism enforcing the conditions of
any program waiver that may be established should be given very careful
consideration because binding new homeowners to agreements made by
previous homeowners has significant legal complications. The commenters
also noted that the required level of program oversight and cost of
enforcement should be considered. (Northwest Advocates, No. 89 at pp.
4-5) Similarly, Otter Tail stated that when customers move the water
heater stays with the home, but the new homeowner may or may not want
to have a controlled water heater that is part of an ETS program.
(Otter Tail, No. 44 at p. 5)
The Joint Utilities, Rheem, and AO Smith generally opposed the
option of establishing a waiver process. Opposition was primarily due
to concerns about how distribution would be affected if the waiver were
to require some control or direct distribution from a manufacturer to a
utility program. AO Smith stated that not all water heater
manufacturers sell directly to utilities, meaning the level of control
DOE assumes the manufacturers possess may not exist. (AO Smith, No. 20
at p.3) Similarly, Rheem stated that a waiver type system concept
cannot be managed effectively by a manufacturer, since a manufacturer
has little to no distribution control over the intended application of
its product. (Rheem, No. 86 at p. 3) Further, AO Smith argued that
using a waiver system would introduce a very high degree of uncertainty
to the manufacturer (and the utility) as to their business planning for
such water heaters and has the potential to slow down the manufacturing
process if a waiver must be granted each time a water heater is to be
manufactured. AO Smith added that if the intent is to allow a ``blanket
waiver,'' DOE should establish a standing program instead as both
actions achieve the same end. (AO Smith, No. 20 at p.3)
The Joint Utilities comment pointed out that a number of regulatory
proceedings at the state level led to utilities being required under
state regulation to terminate programs where the utility was active in
the sale of an appliance to the consumer. (Joint Utilities, No. 58 at
p. 18) The Joint Utilities comment stated that if DOE appears to be
reinstating utility appliance programs, it would be running afoul of
years of state regulations and legislation, which would inevitably lead
to litigation. (Joint Utilities, No. 58 at p. 18)
As noted above, several utility company commenters, while
preferring the product class approach discussed in section III.A.3,
indicated that the waiver option could potentially be a viable
solution. (East River, No. 25 at p. 3; Lyon-Lincoln, No. 27 at p. 3;
Bristol, No. 31 at p. 2; Corn Belt, No. 39 at p. 3; Otter Tail, No. 44
at p. 5) Otter Tail stated that although they are open to the concept
of the waiver option, not all utilities' business models support the
business of selling appliances and for the most part utilities do not
compete with other retail businesses. (Otter Tail, No. 44 at p. 3) Two
utilities stated that they sell water heaters directly to their
participants. (Eau Claire, No. 69 at p. 2; Bristol, No. 31 at p. 2)
Dakota Electric commented
[[Page 12981]]
that after unsuccessfully trying to sell small numbers of Rheem
``Marathon'' water heaters, Dakota Electric partnered with an
independent small business water heater distributor that handles all of
their member-owners' water heater supply needs. Dakota Electric stated
that returning to small volume sales and the associated internal
overhead costs, delivery and warranty problems would drive up the price
to member-owners. (Dakota Electric, No. 36 at p. 4)
After considering the comments on the waiver process, DOE has
tentatively concluded that a waiver system would achieve DOE's goal of
mitigating the impacts of the April 2010 final rule on utility ETS
programs, while also being allowable under EPCA. A waiver process will
address the concerns raised by utility companies and has the added
benefit of having the potential for frequent evaluation. Thus, DOE is
proposing in this NPRM to establish a waiver system for large-volume
electric storage water heaters. The waiver, if granted, would allow,
for a one-year period, manufacturers to produce limited numbers of
electric water heaters with storage volumes above 55 gallons
exclusively for the purpose of installation in residences enrolled in a
utility company electric thermal storage (ETS) program. Parties would
be allowed to apply for additional one-year waivers in subsequent
years. The proposed criteria and method for petitioning for a waiver,
and the proposed requirements that any granted waivers will impose are
discussed in section 0.
DOE recognizes the concerns of certain stakeholders with regard to
the establishment of a waiver program. In particular, DOE believes that
manufacturers, the Joint Utilities, and other utility companies made
compelling arguments regarding the lack of control of the distribution
chain, as well as local regulations that may prevent certain utilities
from selling water heaters directly to consumers. For these reasons,
DOE's proposed waiver program will not include any requirements that
the manufacturer sell directly to the utility, or that the utility sell
the units covered under waiver directly to the consumer. Also,
recognizing that situations may occur where new homeowners move into a
residence with a grid-interactive water heater installed but do not
wish to participate in an ETS program or where a consumer purchases a
water heater for use an ETS program but later decides not to
participate, DOE is not including in its waiver program any criterion
that the homeowner have an agreement to be enrolled in a utility ETS
program. Rather, DOE is including other requirements to ensure that the
waiver program is targeted, including an annual limit on the number of
units to which the waiver will apply and a requirement that the water
heater be shipped with the control device that will be used for the ETS
program. These requirements are discussed further in section III.B.2.
In response to the comment from NEEA, NPCC, and BPA stating that
DOE must consider the economic impacts of any waiver that is granted,
DOE agrees that an economic analysis may provide helpful information in
determining whether to grant a waiver, but also believes it may be
infeasible to individually calculate the economic benefits for every
waiver request received depending on the volume of requests.
B. Waiver Process
Any waiver process established by DOE must include a clear
procedure for obtaining a waiver, with guidelines for circumstances
under which the waiver will be granted, instructions regarding how to
apply for and document the waiver, and a description of conditions that
must be met for the waiver to be granted. The following sections
describe the waiver process that DOE proposes to establish, including
the criteria necessary to obtain a waiver, the requirements that must
be met to comply with the waiver, and a process for reviewing the
waiver to ensure its effectiveness in addressing the issue at hand.
1. Criteria for Obtaining a Waiver
In order to obtain a waiver that would allow for the manufacture
and sale of limited numbers of electric water heaters with storage
volumes above 55 gallons for a one year period exclusively for the
purpose of installation in residences enrolled in a utility company ETS
program, DOE proposes that manufacturers and/or utility companies, or a
utility company and a manufacturer jointly, must request such a waiver
from DOE. Further, the request must come from a manufacturer of water
heaters and/or a utility company that administers an electric thermal
storage program utilizing large-volume electric water heaters. No other
parties may apply for a waiver. If the request is made individually by
a manufacturer, it must identify each of the utility ETS programs for
which the water heaters are intended to participate. Similarly, if the
request is made by a utility, it must identify the manufacturer that
would be responsible for producing the units.
To request an exception from the DOE energy conservation standards
for residential water heaters, a manufacturer and/or utility company
must submit a letter to the Assistant Secretary for Energy Efficiency
and Renewable Energy detailing the waiver request. Descriptions of how
to petition for the waiver, the information that should be contained in
the request, and additional requirements that must be met if the waiver
is granted are discussed in section 0.
2. Requirements and Method for Obtaining Waiver
DOE proposes that, if a manufacturer and/or utility company
believes that it (they) can meet these requirements, in order to
receive a waiver it (they) must first submit a letter to the Assistant
Secretary for Energy Efficiency and Renewable Energy requesting that a
waiver be granted. The waiver request should include the petitioning
company contact information. If the application is filed jointly, it
must contain contact information for all parties. If not filed jointly,
the request must contain information about any additional entity (i.e.,
manufacturer or utility) that will be a party to the waiver.
Second, the waiver should include the model information
(manufacturer, brand, basic model number, rated storage volumes and
energy factor for each basic model that the manufacturer plans to
produce and the utility plans to use in an ETS program coinciding with
the DOE certification record). In addition, the application must
include a list of the utility names that administer each of the ETS
programs for which the basic models subject to the waiver application
will be utilized and the specific number of units for each ETS program
which exemption from the standards is requested. The utility company
that is a party to the request must submit information on the current
stock of ERWHs in their ETS programs and any planned expansion of the
programs that would justify the number of units requested to be covered
by waiver. DOE proposes to limit the number of units for which the
waiver would apply annually to reduce the likelihood of significant
numbers of large-volume ERWHs being used in applications without ETS
programs.
The waiver request must also include a description of the control
device that will be used to control any potentially waiver-covered
water heaters for the ETS program. The control device must be capable
of receiving communication from a grid operator, electric utility, or
other energy services company that provides real-time control of the
heating element.
[[Page 12982]]
Upon reviewing the application, DOE will determine whether to grant
the waiver. If such determination is positive, DOE will specify the
residential water heater basic model (or models) that the waiver
applies to and the number of units that are covered under the waiver,
as well as the expiration date of that waiver. DOE will also specify an
alternative minimum energy conservation standard that would apply to
any models covered under waiver. DOE will notify the petitioner(s) in
writing and the public through publication of a Federal Register notice
once a decision is made regarding the status of a waiver request. DOE
proposes the waiver would expire one calendar year after it is granted,
after which time it will not be applicable. Consequently, if a
manufacturer and/or utility company would like to continue the waiver
for a longer period, DOE proposes that a new waiver application would
need to be submitted each year to ensure a continued evaluation of the
waivers.
In addition, DOE believes that in order to effectively enforce this
waiver program, DOE must have some means of physically distinguishing
between water heaters for ETS programs and other electric resistance
water heaters. In order to ensure that water heaters manufactured under
a waiver are intended for use in ETS programs and encourage their use
in ETS programs, DOE proposes to require that the units for which a
waiver is granted are shipped from the manufacturer with the ETS
control device installed on the water heater or packaged with the water
heater. DOE is aware that currently the control mechanism is typically
provided by a third party manufacturer (i.e., a manufacturer other than
the water heater manufacturer) and is often installed by the utility
company or a contractor to the utility company rather than the water
heater original equipment manufacturer. In addition, DOE recognizes the
concerns stated earlier in this document that there are a number of
different control devices available, which may present difficulties to
water heater manufacturers in installing these devices at the factory.
However, DOE believes that without the control device being installed
at the point of water heater manufacture, it would be difficult to
ensure that the unit is intended for use in an ETS program. In order to
enforce the provisions of the waiver, DOE believes that the control
device must be present on all units subject to the waiver when they
leave the water heater manufacturer, and thus proposes to include this
requirement as a condition of any waivers that may be granted under
this process. No consideration will be given to add-on control devices
for ETS programs that are to be installed in the field as an addition
to a traditional ERWH. DOE requests comment on this proposal, and this
is identified as issue 1 in section V.E, ``Issues on Which DOE Seeks
Comment.''
In summary, to apply for a waiver, DOE proposes that a manufacturer
and/or utility must submit a request to DOE that includes the following
information: (1) Contact and company information for all parties
involved in the waiver request (including both the manufacturer of the
water heaters and the utilities administering the ETS program); (2)
number of units of a given basic model broken down by utility for which
the waiver is requested; (3) specific information about the water
heaters, including manufacturer, brand, basic model number, rated
storage volume, and energy factor; and (4) a description of the control
device to be used on the water heaters and documentation of the
integration of that control device into the water heater design if the
waiver is granted. If DOE grants the waiver, as a condition of the
waiver, DOE proposes that the covered water heaters leave the
manufacturer with the ETS control device installed on the water heater
or packaged with the water heater.
3. Periodic Review of Waiver Mechanism
DOE believes that a critical component of the waiver process
proposed in this NPRM will be periodic reviews of the waiver mechanism
to ensure that it is achieving its goals of serving its intended
purpose while limiting the potential for circumvention of the April
2010 energy conservation standards for products not used in ETS
programs. Periodic reviews will allow DOE to assess any new
technologies that are available on the market and to evaluate whether
the concerns of utility companies are still valid in light of any new
information or products on the market that may become available. In
addition, periodic reviews would account for any new technologies that
make products meeting DOE's energy conservation standards appropriate
for use in ETS programs.
DOE believes that its proposal that each granted waiver will be
applicable for only one year creates a de facto review period. As
waivers expire and manufacturers and/or utility companies must apply
for new waivers, DOE will re-evaluate any previous decisions made under
this process. DOE also plans to review the waiver process each year. In
order to conduct these evaluations, DOE is proposing to implement the
suggestion contained in the Joint Utilities supplemental comment
(discussed previously in section 3) that a question be added to forms
EIA-861 and EIA-861S that tracks the number of models that are actually
installed in utility ETS applications. (Joint Utilities Supplemental,
No.156 at p.1) This information would allow DOE to compare the number
of units for which a waiver is granted to the number actually installed
in ETS applications each year to ensure that this process achieves its
goals. DOE proposes to include with minor modifications the additional
question on forms EIA-861 and EIA-861S suggested by the Joint
Utilities. Rather than ask how many grid-interactive water heaters were
added to each program this/last year, as proposed by the Joint
Utilities, DOE proposes to include a question that asks for the total
number of water heaters enrolled in a given ETS program. The question
DOE proposes to add would read as follows: ``If you have a demand side
management (DSM) program for electric storage water heaters, how many
electric storage water heaters with storage volumes above 55 gallons
were utilized in your program this/last year?'' DOE seeks comment on
its proposal to add this question to forms EIA-861 and EIA-861S, and
this is identified as issue 2 in section V.E, ``Issues on Which DOE
Seeks Comment.''
At the time of each review, DOE can update the waiver process, if
necessary, through a notice and comment rulemaking to amend the
criteria and requirements to comply with the waiver. Similarly, if new
technologies come to market or new information comes to light that
mitigate the concerns raised by utility companies to date (e.g., a
product that meets DOE minimum energy conservation standards and is
suitable for utility ETS programs), DOE could discontinue the granting
of waivers if justified.
Procedural Requirements
A. Review Under Executive Orders 12866 and 13563
Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify
the problem that it intends to address, including, where applicable,
the failures of private markets or public institutions that warrant new
agency action, as well as to assess the significance of that
[[Page 12983]]
problem. The problems that today's standards address are as follows:
(1) There is a lack of consumer information and/or information
processing capability about energy efficiency opportunities in the home
appliance market.
(2) There is asymmetric information (one party to a transaction has
more and better information than the other) and/or high transactions
costs (costs of gathering information and effecting exchanges of goods
and services).
(3) There are external benefits resulting from improved energy
efficiency of residential water heaters that are not captured by the
users of such equipment. These benefits include externalities related
to environmental protection and energy security that are not reflected
in energy prices, such as reduced emissions of greenhouse gases.
In addition, this regulatory action is not an ``economically
significant regulatory action'' under section 3(f)(1) of Executive
Order 12866. Accordingly, DOE is not required under section 6(a)(3) of
the Executive Order to prepare a regulatory impact analysis (RIA) on
this NPRM and the Office of Information and Regulatory Affairs (OIRA)
in the Office of Management and Budget (OMB) is not required to review
this rule.
DOE has also reviewed this regulation pursuant to Executive Order
13563, issued on January 18, 2011 (76 FR 3281, Jan. 21, 2011). EO 13563
is supplemental to and explicitly reaffirms the principles, structures,
and definitions governing regulatory review established in Executive
Order 12866. To the extent permitted by law, agencies are required by
Executive Order 13563 to: (1) Propose or adopt a regulation only upon a
reasoned determination that its benefits justify its costs (recognizing
that some benefits and costs are difficult to quantify); (2) tailor
regulations to impose the least burden on society, consistent with
obtaining regulatory objectives, taking into account, among other
things, and to the extent practicable, the costs of cumulative
regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits (including
potential economic, environmental, public health and safety, and other
advantages; distributive impacts; and equity); (4) to the extent
feasible, specify performance objectives, rather than specifying the
behavior or manner of compliance that regulated entities must adopt;
and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public.
DOE emphasizes as well that Executive Order 13563 requires agencies
to use the best available techniques to quantify anticipated present
and future benefits and costs as accurately as possible. In its
guidance, the Office of Information and Regulatory Affairs has
emphasized that such techniques may include identifying changing future
compliance costs that might result from technological innovation or
anticipated behavioral changes. For the reasons stated in the preamble,
DOE believes that this NPRM is consistent with these principles,
including the requirement that, to the extent permitted by law,
benefits justify costs and that net benefits are maximized.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of a regulatory flexibility analysis for any rule that by
law must be proposed for public comment, unless the agency certifies
that the rule, if promulgated, will not have a significant economic
impact on a substantial number of small entities. As required by
Executive Order 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (August 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (http://energy.gov/gc/office-general-counsel).
In this notice, DOE is not proposing to amend the existing energy
conservation standards for residential water heaters to adopt more
stringent levels, but rather is proposing a waiver process that would
allow, for a one-year period, manufacturers to produce limited numbers
of electric water heaters with storage volumes above 55 gallons
exclusively for the purpose of installation in residences enrolled in a
utility company electric thermal storage (ETS) program.
For manufacturers of residential water heaters, the Small Business
Administration (SBA) has set a size threshold, which defines those
entities classified as ``small businesses'' for the purposes of the
statute. DOE used the SBA's small business size standards to determine
whether any small entities would be subject to the requirements of the
rule. 13 CFR part 121.The size standards are listed by North American
Industry Classification System (NAICS) code and industry description
and are available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. Residential water heater manufacturing is
classified under NAICS 335228--``Other Major Household Appliance
Manufacturing.'' The SBA sets a threshold of 500 employees or less for
an entity to be considered as a small business for this category. DOE
has identified one small business manufacturer of electric storage
water heaters.
DOE does not expect that this proposed rule, if adopted, would have
a significant impact on any small business manufacturers. The proposed
waiver process does impose several requirements, including that
manufacturers may have to apply for the waiver (unless they are part of
a joint application in which a utility company is submitting the
application), and will be responsible for ensuring that the control
device is installed on any water heaters that are manufactured under a
waiver. DOE expects the impact of both of these requirements to be
minimal for all manufacturers. In addition, DOE believes it is
reasonable to assume that because the waiver process is optional, these
potential benefits outweigh the small burdens of obtaining a waiver, as
manufacturers would otherwise not opt to participate in the waiver
process. Thus, DOE certifies that waiver process set forth in this
proposed rule, if promulgated, would not have a significant economic
impact on a substantial number of small entities. Accordingly, DOE has
not prepared a regulatory flexibility analysis for this rulemaking. DOE
will transmit the certification and supporting statement of factual
basis to the Chief Counsel for Advocacy of the Small Business
Administration for review under 5 U.S.C. 605(b).
DOE requests comment on its above conclusions, as well as any
information concerning small businesses that could be impacted by this
rulemaking and the nature and extent of those potential impacts of the
proposed waiver process on small residential water heater
manufacturers. This is identified as issue 3 in section V.E, ``Issues
on Which DOE Seeks Comment.''
C. Review Under the Paperwork Reduction Act
Manufacturers of residential water heaters must certify to DOE that
their products comply with any applicable energy conservation
standards. In certifying compliance, manufacturers must test their
products according to the
[[Page 12984]]
DOE test procedures for residential water heaters, including any
amendments adopted for those test procedures. DOE has established
regulations for the certification and recordkeeping requirements for
all covered consumer products and commercial equipment, including
residential water heaters. 76 FR 12422 (March 7, 2011). The collection-
of-information requirement for the certification and recordkeeping is
subject to review and approval by OMB under the Paperwork Reduction Act
(PRA). Public reporting burden for the certification is estimated to
average 4 hours per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969,
DOE has determined that the proposed rule fits within the category of
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets
the requirements for application of a CX. See 10 CFR Part 1021, App. B,
B5.1(b); 1021.410(b) and Appendix B, B(1)-(5). The proposed rule fits
within the category of actions because it is a rulemaking that
establishes a waiver process that would allow, for a one-year period,
manufacturers to produce limited numbers of electric water heaters with
storage volumes above 55 gallons exclusively for the purpose of
installation in residences enrolled in a utility company electric
thermal storage (ETS) program. DOE has determined that none of the
exceptions identified in CX B5.1(b) apply. Therefore, DOE has made a CX
determination for this rulemaking, and DOE does not need to prepare an
Environmental Assessment or Environmental Impact Statement for this
proposed rule. DOE's CX determination for this proposed rule is
available at http://cxnepa.energy.gov/.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism.'' 64 FR 43255 (Aug. 10, 1999)
imposes certain requirements on Federal agencies formulating and
implementing policies or regulations that preempt State law or that
have Federalism implications. The Executive Order requires agencies to
examine the constitutional and statutory authority supporting any
action that would limit the policymaking discretion of the States and
to carefully assess the necessity for such actions. The Executive Order
also requires agencies to have an accountable process to ensure
meaningful and timely input by State and local officials in the
development of regulatory policies that have Federalism implications.
On March 14, 2000, DOE published a statement of policy describing the
intergovernmental consultation process it will follow in the
development of such regulations. 65 FR 13735. EPCA governs and
prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No
further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' imposes on Federal agencies the general duty
to adhere to the following requirements: (1) Eliminate drafting errors
and ambiguity; (2) write regulations to minimize litigation; and (3)
provide a clear legal standard for affected conduct rather than a
general standard and promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically
requires that Executive agencies make every reasonable effort to ensure
that the regulation: (1) Clearly specifies the preemptive effect, if
any; (2) clearly specifies any effect on existing Federal law or
regulation; (3) provides a clear legal standard for affected conduct
while promoting simplification and burden reduction; (4) specifies the
retroactive effect, if any; (5) adequately defines key terms; and (6)
addresses other important issues affecting clarity and general
draftsmanship under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this proposed rule
meets the relevant standards of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect small governments. On March 18, 1997,
DOE published a statement of policy on its process for
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy
statement is also available at http://energy.gov/gc/office-general-counsel.
This proposed rule does not contain a Federal intergovernmental
mandate, and it will not require expenditures of $100 million or more
by State, local, and Tribal governments, in the aggregate, or by the
private sector. Accordingly, no further action is required under the
UMRA.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
DOE has determined, under Executive Order 12630, ``Governmental
Actions
[[Page 12985]]
and Interference with Constitutionally Protected Property Rights'' 53
FR 8859 (Mar. 18, 1988), that this regulation would not result in any
takings that might require compensation under the Fifth Amendment to
the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
guidelines established by each agency pursuant to general guidelines
issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22,
2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7,
2002). DOE has reviewed this NPRM under the OMB and DOE guidelines and
has concluded that it is consistent with applicable policies in those
guidelines.
K. Review Under Executive Order 13211
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA
at OMB, a Statement of Energy Effects for any proposed significant
energy action. A ``significant energy action'' is defined as any action
by an agency that promulgates or is expected to lead to promulgation of
a final rule, and that: (1) Is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
sets forth a waiver process for energy conservation standards for
residential water heaters, is not a significant energy action because
the proposed waiver process is not likely to have a significant adverse
effect on the supply, distribution, or use of energy, nor has it been
designated as such by the Administrator at OIRA. Accordingly, DOE has
not prepared a Statement of Energy Effects on the proposed rule.
L. Review Under the Information Quality Bulletin for Peer Review
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (OSTP), issued its Final Information
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14,
2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as scientific information the
agency reasonably can determine will have, or does have, a clear and
substantial impact on important public policies or private sector
decisions. 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site:
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
Public Participation
A. Attendance at the Public Meeting
The time, date, and location of the public meeting are listed in
the DATES and ADDRESSES sections at the beginning of this notice. If
you plan to attend the public meeting, please notify Ms. Brenda Edwards
at (202) 586-2945 or [email protected]. As explained in the
ADDRESSES section, foreign nationals visiting DOE Headquarters are
subject to advance security screening procedures. Any foreign national
wishing to participate in the meeting should advise DOE of this fact as
soon as possible by contacting Ms. Brenda Edwards to initiate the
necessary procedures.
In addition, you can attend the public meeting via webinar. Webinar
registration information, participant instructions, and information
about the capabilities available to webinar participants will be
published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/residential/waterheaters.html. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Requests To Speak and Prepared General
Statements for Distribution
Any person who has an interest in the topics addressed in this
notice, or who is 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. Such persons may hand-deliver
requests to speak to the address shown in the ADDRESSES section at the
beginning of this notice between 9:00 a.m. and 4:00 p.m., Monday
through Friday, except Federal holidays. Requests may also be sent by
mail or email to: Ms. Brenda Edwards, U.S. Department of Energy,
Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue
SW., Washington, DC 20585-0121, or [email protected]. Persons
who wish to speak should include with their request a computer diskette
or CD-ROM in WordPerfect, Microsoft Word, PDF, or text (ASCII) file
format that briefly describes the nature of their interest in this
rulemaking and the topics they wish to discuss. Such persons should
also provide a daytime telephone number where they can be reached.
DOE requests persons scheduled to make an oral presentation to
submit an advance copy of their statements at least one week before the
public meeting. DOE may permit persons who cannot supply an advance
copy of their statement to participate, if those persons have made
advance alternative arrangements with the Building Technologies
Program. As necessary, requests to give an oral presentation should ask
for such alternative arrangements.
C. Conduct of the 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
[[Page 12986]]
accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter
will be present to record the proceedings and prepare a transcript. DOE
reserves the right to schedule the order of presentations and to
establish the procedures governing the conduct of the public meeting.
There shall not be discussion of proprietary information, costs or
prices, market share, or other commercial matters regulated by U.S.
anti-trust laws. After the public meeting, interested parties may
submit further comments on the proceedings as well as on any 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 prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this rulemaking. Each participant will be allowed
to make a general statement (within time limits determined by DOE),
before the discussion of specific topics. DOE will allow, as time
permits, 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 this rulemaking. 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 the proper conduct of the public meeting.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this NPRM and will be accessible on the DOE Web site. In addition,
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 this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this NPRM.
Submitting comments via regulations.gov. The regulations.gov web
page will require you to provide your name and contact information.
Your contact information will be viewable to DOE Building Technologies
staff only. Your contact information will not be publicly viewable
except for your first and last names, organization name (if any), and
submitter representative name (if any). If your comment is not
processed properly because of technical difficulties, DOE will use this
information to contact you. If DOE cannot read your comment due to
technical difficulties and cannot contact you for clarification, DOE
may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to regulations.gov information for which disclosure
is restricted by statute, such as trade secrets and commercial or
financial information (hereinafter referred to as Confidential Business
Information (CBI)). Comments submitted through regulations.gov cannot
be claimed as CBI. Comments received through the Web site will waive
any CBI claims for the information submitted. For information on
submitting CBI, see the Confidential Business Information section
below.
DOE processes submissions made through regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or mail.
Comments and documents submitted via email, hand delivery, or mail also
will be posted to regulations.gov. If you do not want your personal
contact information to be publicly viewable, do not include it in your
comment or any accompanying documents. Instead, provide your contact
information in a cover letter. Include your first and last names, email
address, telephone number, and optional mailing address. The cover
letter will not be publicly viewable as long as it does not include any
comments
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via mail or hand
delivery/courier, please provide all items on a CD, if feasible, in
which case it is not necessary to submit printed copies. No
telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
one copy of the document marked confidential including all the
information believed to be confidential, and one copy of the document
marked non-confidential with the information believed to be
confidential deleted. Submit these documents via email or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1) A description of the
items; (2) whether and why such items are customarily treated as
confidential within the industry; (3) whether the information is
generally known by or available from other sources; (4) whether the
information has previously been made available to others without
obligation concerning its confidentiality; (5) an explanation of the
competitive injury to the submitting person which would result from
public disclosure; (6) when such information might lose its
confidential character due to the
[[Page 12987]]
passage of time; and (7) why disclosure of the information would be
contrary to the public interest.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE's proposal to require that the units for which a waiver is
granted are shipped from the manufacturer with the ETS control device
installed on the water heater.
2. DOE's proposal to add a question to forms EIA-861 and EIA-861S
that would read as follows: ``If you have a demand side management
(DSM) program for electric storage water heaters, how many electric
storage water heaters with storage volumes above 55 gallons were
utilized in your program this/last year?''
3. DOE's conclusion that the proposed waiver process will not have
significant adverse impacts on a substantial number of small business
manufacturers. DOE also seeks any information concerning small
businesses that could be impacted by this rulemaking and the nature and
extent of those potential impacts of the proposed waiver process on
small residential water heater manufacturers.
Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Reporting and recordkeeping requirements,
and Small businesses.
Issued in Washington, DC, on February 15, 2013.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.
0
For the reasons set forth in the preamble, DOE proposes to amend part
430 of chapter II, subchapter D, of title 10 of the Code of Federal
Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Add Sec. 430.36 to read as follows:
Sec. 430.36 Petitions for waiver for electric water heaters used in
electric thermal storage programs.
(a) Any manufacturer of residential water heaters or utility
company that administers an electric thermal storage program for
electric water heaters, or combination of these two, may submit a
petition to allow, for a one-year period, manufacturers to produce
limited numbers of electric water heaters with rated storage volumes
above 55 gallons exclusively for the purpose of installation in
residences enrolled in a utility company electric thermal storage (ETS)
program.
(b) A petition for waiver shall be submitted to the Assistant
Secretary for Energy Efficiency and Renewable Energy, United States
Department of Energy by email. Each petition for waiver shall:
(1) Identify the company or companies, whether manufacturer or
utility company or combination of the two, requesting the waiver, and
provide contact information (i.e., name of company official, address
for the applicant, phone number, and email address) for those entities.
Note, if the manufacturer is applying for the waiver, it should include
a list of all utility companies administering the ETS programs to which
it plans to sell the basic models. If the utility is applying for the
waiver, the utility should include a list of all of the manufacturers
from which it plans to purchase electric water heaters with rated
storage volumes above 55 gallons exclusively for the purpose of
installation in residences enrolled in a utility company electric
thermal storage (ETS) program.
(2) Identify the particular manufacturer, brand, basic model(s),
rated storage volume, and energy factor for which a waiver is
requested.
(3) Identify the number of units per utility program on an annual
basis for each of the basic models for which a waiver is requested
(i.e., total number of units per year of a given basic model that will
be participating in an ETS program for a specific utility).
(4) Provide information from the utility company regarding the
current stock of electric water heaters used in the electric thermal
storage programs at the time the waiver is submitted and any planned
expansion of the programs for the annual period the waiver will cover
that would justify the number of units requested to be covered by
waiver.
(5) Identify and describe the control device that will be installed
on the unit. The control device must be capable of receiving
communication from a grid operator, electric utility, or other energy
services company that provides real-time control of the heating
element. Provide documentation that the control device is integrated
into the water heater design at the point of manufacture, including but
not limited to any marketing and labeling material from the
manufacturer describing the basic model(s) for which the waiver is
requested.
(6) Be signed by a company official. In accordance with the
provisions set forth in 10 CFR 1004.11, any request for confidential
treatment of any information contained in a petition for waiver or in
supporting documentation must be accompanied by a copy of the petition,
application or supporting documentation from which the information
claimed to be confidential has been deleted. DOE shall publish in the
Federal Register the petition and supporting documents from which
confidential information, as determined by DOE, has been deleted in
accordance with 10 CFR 1004.11.
(c) The Assistant Secretary for Energy Efficiency and Renewable
Energy shall issue a decision on the petition as soon as is practicable
following receipt and review of the petition for waiver and other
applicable documents. The Assistant Secretary for Energy Efficiency and
Renewable Energy will grant a waiver upon determining that the basic
model for which the waiver was requested is particularly well suited
for use in the electric thermal storage program, the requester or
combination of requesters is an appropriate party to be granted such a
waiver, the quantity of units to be manufactured under the waiver is
sufficiently limited, and that an appropriate control device will be
present on any water heaters manufactured and shipped pursuant to a
waiver. Manufacture of units authorized by a waiver granted under this
section will not constitute violations of an applicable energy
conservation standard, provided that the units are distributed and
installed in accordance with the terms of the waiver.
(d) Any granted waiver will specify the manufacturer, utilities,
brand, basic model number, number of units of a particular basic model
and the applicable energy conservation standard for units authorized by
the waiver. Any
[[Page 12988]]
granted waiver will terminate 365 days after issuance.
(e) Any basic model for which a waiver has been granted shall be
shipped from the water heater original equipment manufacturer with a
control device that is compatible with the utility company administered
electric thermal storage program. Any changes to the basic model design
which results in the unit consuming more energy or alters the control
device from which the waiver was granted shall require a new waiver
application. The control device must be installed on the water heater
before it leaves the original equipment manufacturer. The control
device must be capable of receiving communication from a grid operator,
electric utility, or other energy services company that provides real-
time control of the heating element. The water heater must be clearly
labeled and marketed for use exclusively in ETS programs, including a
description of the control device integrated into the water heater,
before it leaves the original equipment manufacturer.
[FR Doc. 2013-04099 Filed 2-25-13; 8:45 am]
BILLING CODE 6450-01-P