[Federal Register Volume 78, Number 116 (Monday, June 17, 2013)]
[Rules and Regulations]
[Pages 36316-36368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13535]



[[Page 36315]]

Vol. 78

Monday,

No. 116

June 17, 2013

Part III





Department of Energy





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10 CFR Parts 429 and 430





Energy Conservation Program: Energy Conservation Standards for Standby 
Mode and Off Mode for Microwave Ovens; Final Rule

  Federal Register / Vol. 78 , No. 116 / Monday, June 17, 2013 / Rules 
and Regulations  

[[Page 36316]]


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DEPARTMENT OF ENERGY

10 CFR Parts 429 and 430

[Docket Number EERE-2011-BT-STD-0048]
RIN 1904-AC07


Energy Conservation Program: Energy Conservation Standards for 
Standby Mode and Off Mode for Microwave Ovens

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

ACTION: Final rule.

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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. Microwave 
ovens are covered products under EPCA, although there are no existing 
microwave oven standards. DOE has already previously determined that 
active mode standards are not warranted. The Energy Independence and 
Security Act of 2007 (EISA 2007) amended EPCA to require any final rule 
adopted after July 1, 2010 establishing or revising energy conservation 
standards for covered products, including microwave ovens, to address 
standby mode and off mode energy use. In this final rule, DOE is only 
adopting energy conservation standards for microwave oven standby mode 
and off mode. It has determined that the amended energy conservation 
standards for these products in standby mode and off mode would result 
in significant conservation of energy, and are technologically feasible 
and economically justified.

DATES: The effective date of this rule is August 16, 2013. Compliance 
with the amended standards established for microwave ovens in this 
final rule is June 17, 2016.

ADDRESSES: The docket for this rulemaking is available for review at 
www.regulations.gov, including Federal Register notices, framework 
documents, public meeting attendee lists and transcripts, comments, and 
other supporting documents/materials. All documents in the docket are 
listed in the regulations.gov index. 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;rpp=10;po=0;D=EERE-2011-BT-STD-0048. 
The regulations.gov Web page will contain simple instructions on how to 
access all documents, including public comments, in the docket.
    For further information on how to review the docket, contact Ms. 
Brenda Edwards at (202) 586-2945 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: 

    Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Program, EE-2J, 
1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: 
(202) 287-1692. Email: [email protected].
    Mr. Ari Altman, Esq., 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 Final Rule and Its Benefits
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Microwave Ovens
III. General Discussion
    A. Test Procedures
    B. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    C. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    D. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Life-Cycle Costs
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Revisions to the Analyses Employed in the 
February 2012 Proposed Rule
    A. Covered Products
    B. Product Classes
    C. Technology Assessment
    1. Cooking Sensors
    2. Display Technologies
    3. Power Supply and Control Boards
    4. Power-Down Options
    D. Engineering Analysis
    1. Energy Use Metric
    2. Standby Power Levels
    3. Manufacturing Costs
    E. Life Cycle Cost and Payback Period Analysis
    1. Product Costs
    2. Annual Energy Consumption
    3. Energy Prices
    4. Repair and Maintenance Costs
    5. Product Lifetime
    6. Discount Rates
    7. Compliance Date of New Standards
    8. Product Energy Efficiency in the Base Case
    9. Inputs to Payback Period Analysis
    10. Rebuttable-Presumption Payback Period
    F. National Impact Analysis--National Energy Savings and Net 
Present Value Analysis
    1. General
    2. Shipments
    a. New Construction Shipments
    b. Replacements and Non-Replacements
    3. Purchase Price, Operating Cost, and Income Impacts
    4. Other Inputs
    a. Forecasted Efficiencies
    b. Annual Energy Consumption
    c. Site-to-Source Energy Conversion
    d. Total Installed Costs and Operating Costs
    e. Discount Rates
    G. Consumer Subgroup Analysis
    H. Manufacturer Impact Analysis
    I. Employment Impact Analysis
    J. Utility Impact Analysis
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Discussion of Other Comments
    1. Significance of Energy Savings for the Built-In and Over-the-
Range Product Class
    2. Standard Levels
V. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable-Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash-Flow Analysis Results
    b. Employment Impacts
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Product
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    C. Conclusion

[[Page 36317]]

    1. Benefits and Burdens of TSLs Considered for Microwave Oven 
Standby Mode and Off Mode Energy Use
    2. Summary of Benefits and Costs (Annualized) of the Standards
VI. Additional Technical Corrections to 10 CFR 430.32
VII. Procedural Issues and Regulatory Review
    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
    M. Congressional Notification
VIII. Approval of the Office of the Secretary

I. Summary of the Final Rule and Its Benefits

    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), established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. Pursuant to EPCA, any new or amended 
energy conservation standard that DOE prescribes for certain products, 
such as microwave ovens, shall be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) In accordance with 
these and other statutory provisions discussed in this rulemaking, DOE 
is adopting amended energy conservation standards for microwave ovens 
to address standby mode and off mode energy use. The amended standards, 
which are the maximum allowable energy use when a product is in standby 
mode or off mode, are shown in Table I-1.\2\ These amended standards 
apply to all products listed in Table I-1 and manufactured in, or 
imported into, the United States on or after June 17, 2016.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \2\ DOE considered energy use in off mode for microwave ovens, 
but is not adopting a maximum allowable off mode power at this time 
because DOE is aware of less than 1 percent of microwave oven models 
in Product Class 1 and no models in Product Class 2 that are capable 
of operating in such a mode. DOE has already previously determined 
that active mode standards are not warranted. 74 FR 16040 (Apr. 8, 
2009).

                          Table I-1--Energy Conservation Standards for Microwave Ovens
                                       [Compliance Starting June 17, 2016]
----------------------------------------------------------------------------------------------------------------
                Product classes                                      Effective June 17, 2016
----------------------------------------------------------------------------------------------------------------
Microwave-Only Ovens and Countertop Convection  Maximum Standby Power = 1.0 watt.
 Microwave Ovens.
Built-In and Over-the-Range Convection          Maximum Standby Power = 2.2 watts.
 Microwave Ovens.
----------------------------------------------------------------------------------------------------------------

A. Benefits and Costs to Consumers

    Table I-2 presents DOE's evaluation of the economic impacts of 
today's standards on consumers of microwave ovens, as measured by the 
average life-cycle cost (LCC) savings and the median payback period. 
The average LCC savings are positive for 88 percent of consumers of 
microwave-only ovens and countertop convection microwave ovens and for 
all consumers of built-in and over-the-range convection microwave 
ovens.

 Table I-2--Impacts of Today's Standards on Consumers of Microwave Ovens
------------------------------------------------------------------------
                                       Average LCC       Median payback
           Product class             savings  (2011$)   period  (years)
------------------------------------------------------------------------
Microwave-Only Ovens and                           11                3.5
 Countertop Convection Microwave
 Ovens............................
Built-In and Over-the-Range                        12                3.3
 Convection Microwave Ovens.......
------------------------------------------------------------------------
Note: Average microwave oven lifetime is estimated at 10.9 years.

B. Impact on Manufacturers

    The industry net present value (INPV) is the sum of the discounted 
cash flows to the industry from the base year through the end of the 
analysis period (2013 to 2045). Using a real discount rate of 8.0 
percent, DOE estimates that the INPV for manufacturers of microwave 
ovens is $1.4 billion in 2011$. Under today's standards, DOE expects 
that manufacturers may lose up to 7.0 percent of their INPV, which is 
approximately $96.6 million. Additionally, based on DOE's interviews 
with the manufacturers of microwave ovens, DOE does not expect any 
plant closings or significant loss of employment.

C. National Benefits

    DOE's analyses indicate that today's standards would save a 
significant amount of energy. The lifetime savings for microwave ovens 
purchased in the 30-year period that begins in the year of compliance 
with amended standards (2016-2045) amount to 0.48 quads. The average 
annual primary energy savings in 2016-2045 is equivalent to the annual 
primary energy use of 70,000 households.
    The cumulative net present value (NPV) of total consumer costs and 
savings of today's standards in 2011$ ranges from $3.38 billion (at a 
3-percent discount rate) to $1.53 billion (at a 7-percent discount 
rate) for microwave ovens. This NPV expresses the estimated total value 
of future operating-cost savings minus the estimated increased product 
costs for products purchased in 2016-2045, discounted to 2013.
    In addition, today's standards would have significant environmental 
benefits. The energy savings would result in cumulative greenhouse gas 
emission reductions of approximately 38.11

[[Page 36318]]

million metric tons (Mt) \3\ of carbon dioxide (CO2), 27.14 
thousand tons of sulfur dioxide (SO2), 32.67 thousand tons 
of nitrogen oxides (NOX) and 0.095 tons of mercury (Hg).\4\
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    \3\ A metric ton is equivalent to 1.1 short tons. Results for 
NOX and Hg are presented in short tons.
    \4\ DOE calculated emissions reductions relative to the Annual 
Energy Outlook (AEO) 2012 Reference case, which generally represents 
current legislation and environmental regulations, including recent 
government actions, for which implementing regulations were 
available as of December 31, 2011.
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    The value of the CO2 reductions is calculated using a 
range of values per metric ton of CO2 (otherwise known as 
the Social Cost of Carbon, or SCC) developed by an interagency process. 
The derivation of the SCC values is discussed in section IV.L of this 
rulemaking. Using the most recent (2013) SCC values from the 
interagency group, DOE estimates that the present monetary value of the 
CO2 emissions reductions is between $255 million and $3,615 
million, expressed in 2011$ and discounted to 2013. DOE estimates that 
the present monetary value of the NOX emissions reductions, 
expressed in 2011$ and discounted to 2013, is $21.8 million at a 7-
percent discount rate, and $44.5 million at a 3-percent discount 
rate.\5\
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    \5\ DOE has not monetized SO2 and Hg emissions in 
this rulemaking.
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    Table I-3 summarizes the national economic costs and benefits 
expected to result from today's standards for microwave ovens. The 
monetary value of the CO2 emissions reductions using the 
previous (2010) SCC estimates, and the benefits using those estimates, 
are presented for information purposes. Using the updated 2013 social 
cost of carbon estimates, the net benefits from the microwave oven 
standby power rule, discounted at 3 percent, are projected to be $4.6 
billion (2011 dollars). For comparison purposes, the net benefits, 
discounted at 3 percent, are projected to be $4.2 billion using the 
2010 SCC estimates. When discounted at 7 percent, the net benefits of 
the rule are projected to be $2.7 billion using the 2013 SCC estimates, 
compared with $2.3 billion using the 2010 SCC estimates.

 Table I-3--Summary of National Economic Benefits and Costs of Microwave
                   Oven Energy Conservation Standards
------------------------------------------------------------------------
                                      Present value
             Category                (million 2011$)   Discount rate (%)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings............              2,306                  7
                                                4,717                  3
------------------------------------------------------------------------
                 Using 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                     255                  5
 ($12.6/t case) *.................
CO2 Reduction Monetized Value                   1,179                  3
 ($41.1/t case) *.................
CO2 Reduction Monetized Value                   1,876                2.5
 ($63.2/t case) *.................
CO2 Reduction Monetized Value                   3,615                  3
 ($119.1/t case) *................
                                   -------------------------------------
Total Benefits [dagger]...........              3,507                  7
                                                5,941                  3
------------------------------------------------------------------------
                 Using 2010 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                     150                  5
 ($6.2/t case) **.................
CO2 Reduction Monetized Value                     740                  3
 ($25.6/t case) **................
CO2 Reduction Monetized Value                   1,243                2.5
 ($41.1/t case) **................
CO2 Reduction Monetized Value                   2,257                  3
 ($78.4/t case) **................
NOX Reduction Monetized Value (at                21.8                  7
 $2,567/ton) **...................
                                                 44.5                  3
                                   -------------------------------------
Total Benefits [dagger][dagger]...              3,069                  7
                                                5,503                  3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs.......                776                  7
                                                1,341                  3
------------------------------------------------------------------------
                  Net Benefits (using 2013 SCC values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                 2,731                  7
 Monetized Value [dagger].........
                                                4,600                  3
------------------------------------------------------------------------
                  Net Benefits (using 2010 SCC values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                 2,293                  7
 Monetized Value [dagger][dagger].
                                                4,162                  3
------------------------------------------------------------------------
* The CO2 values represent global values (in 2011$) of the social cost
  of CO2 emissions in 2016 under several scenarios. The values of $12.6,
  $41.1, and $63.2 per ton are the averages of SCC distributions
  calculated using 5%, 3%, and 2.5% discount rates, respectively. The
  value of $119.1 per ton represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's
  analysis.

[[Page 36319]]

 
** The CO2 values represent global values (in 2011$) of the social cost
  of CO2 emissions in 2016 under several scenarios. The values of $6.2,
  $25.6, and $41.1 per ton are the averages of SCC distributions
  calculated using 5%, 3%, and 2.5% discount rates, respectively. The
  value of $78.4 per ton represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's
  analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to SCC value of $41.1/t in 2016 (derived from
  the 3% discount rate value for SCC).
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived
  using the series corresponding to SCC value of $25.6/t in 2016
  (derived from the 3% discount rate value for SCC).

    The benefits and costs of today's standards, for products sold in 
2016-2045, can also be expressed in terms of annualized values. The 
annualized monetary values are the sum of (1) the annualized national 
economic value of the benefits from operating the product (consisting 
primarily of operating cost savings from using less energy, minus 
increases in equipment purchase and installation costs, which is 
another way of representing consumer NPV), plus (2) the annualized 
monetary value of the benefits of emission reductions, including 
CO2 emission reductions.\6\
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    \6\ DOE used a two-step calculation process to convert the time-
series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2013, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of 3 and 7 percent for all 
costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table I-3. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period (2016 through 2045) that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined is a steady stream of 
payments.
---------------------------------------------------------------------------

    Although adding the value of consumer savings to the value of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
CO2 savings are performed with different methods that use 
different time frames for analysis. The national operating cost savings 
is measured for the lifetime of microwave ovens shipped in 2016-2045. 
The SCC values, on the other hand, reflect the present value of all 
future climate-related impacts resulting from the emission of one 
metric ton of carbon dioxide in each year. These impacts continue well 
beyond 2100.
    Estimates of annualized benefits and costs of today's standards are 
shown in Table I-4. (All monetary values below are expressed in 2011$). 
The results under the primary estimate, using the 2013 SCC values from 
the interagency group, are as follows. Using a 7-percent discount rate 
for benefits and costs other than CO2 reduction, for which 
DOE used a 3-percent discount rate along with the SCC series 
corresponding to a value of $41.1/ton in 2016, the cost of the 
standards in today's rule is $58.4 million per year in increased 
equipment costs, while the benefits are $174 million per year in 
reduced equipment operating costs, $58.4 million in CO2 
reductions, and $1.64 million in reduced NOX emissions. In 
this case, the net benefit amounts to $175 million per year. Using a 3-
percent discount rate for all benefits and costs and the SCC series 
corresponding to a value of $41.1/ton in 2016, the cost of the 
standards in today's rule is $66.4 million per year in increased 
equipment costs, while the benefits are $234 million per year in 
reduced operating costs, $58.4 million in CO2 reductions, 
and $2.20 million in reduced NOX emissions. In this case, 
the net benefit amounts to $228 million per year. The monetary value of 
the CO2 emissions reductions using the previous (2010) SCC 
estimates, and the benefits using those estimates, are presented for 
information purposes.

                Table I-4--Annualized Benefits and Costs of Amended Standards for Microwave Ovens
----------------------------------------------------------------------------------------------------------------
                                                                Million 2011$/year
                                --------------------------------------------------------------------------------
                                                                           Low net  benefits   High net benefits
                                    Discount rate     Primary estimate *       estimate            estimate
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.........  7%................  174................  162...............  191.
                                 3%................  234................  215...............  261.
----------------------------------------------------------------------------------------------------------------
                                     Using 2013 Social Cost of Carbon Values
----------------------------------------------------------------------------------------------------------------
CO2 Reduction ($12.6/t case) **  5%................  15.8...............  14.7..............  17.4.
CO2 Reduction ($41.1/t case) **  3%................  58.4...............  54.1..............  64.5.
CO2 Reduction ($63.2/t case) **  2.5%..............  87.4...............  80.9..............  96.7.
CO2 Reduction ($119/t case) **.  3%................  179................  166...............  198.
Total Benefits [dagger]........  7% plus CO2 range.  191 to 354.........  178 to 329........  210 to 391.
                                 7%................  234................  218...............  258.
                                 3%................  294................  271...............  328.
                                 3% plus CO2 range.  252 to 415.........  232 to 383........  281 to 462.
----------------------------------------------------------------------------------------------------------------
                                     Using 2010 Social Cost of Carbon Values
----------------------------------------------------------------------------------------------------------------
CO2 Reduction ($6.2/t case) ***  5%................  9.29...............  8.62..............  17.4.
CO2 Reduction ($25.6/t case)     3%................  36.7...............  34.0..............  40.6.
 ***.
CO2 Reduction ($41.1/t case)     2.5%..............  57.9...............  53.6..............  64.1.
 ***.
CO2 Reduction ($78.4/t case)     3%................  111.8..............  103.5.............  123.6.
 ***.
NOX Reduction at $2,567/ton **.  7%................  1.64...............  1.54..............  1.79.
                                 3%................  2.20...............  2.05..............  2.42.

[[Page 36320]]

 
Total Benefits [dagger]........  7% plus CO2 range.  185 to 287.........  172 to 267........  203 to 317.
                                 7%................  212................  198...............  234.
                                 3%................  273................  251...............  304.
                                 3% plus CO2 range.  245 to 348.........  226 to 321........  274 to 388.
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Installed Costs....  7%................  58.4...............  59.6..............  57.5.
                                 3%................  66.4...............  67.8..............  64.3.
----------------------------------------------------------------------------------------------------------------
                                      Net Benefits (using 2013 SCC values)
----------------------------------------------------------------------------------------------------------------
Total [dagger].................  7% plus CO2 range.  133 to 296.........  119 to 270........  153 to 334.
                                 7%................  175................  158...............  200.
                                 3%................  228................  203...............  264.
                                 3% plus CO2 range.  185 to 349.........  164 to 315........  217 to 398.
----------------------------------------------------------------------------------------------------------------
                                      Net Benefits (using 2010 SCC values)
----------------------------------------------------------------------------------------------------------------
Total [dagger][dagger].........  7% plus CO2 range.  126 to 229.........  113 to 208........  146 to 259.
                                 7%................  154................  138...............  176.
                                 3%................  206................  183...............  240.
                                 3% plus CO2 range.  179 to 281.........  158 to 253........  210 to 323.
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with microwave ovens shipped in 2016-2045.
  These results include benefits to consumers which accrue after 2016 from the microwave ovens purchased from
  2016-2045. Costs incurred by manufacturers, some of which may be incurred prior to 2016 in preparation for the
  rule, are not directly included, but are indirectly included as part of incremental equipment costs. The
  Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices and housing starts
  from the AEO 2012 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  product costs reflect a medium decline rate for product prices in the Primary Estimate, constant product price
  in the Low Benefits Estimate, and a high decline rate for product prices in the High Benefits Estimate. The
  methods used to derive projected price trends are explained in section 0 of this rulemaking.
** The CO2 values represent global monetized values of the SCC, in 2011$, in 2016 under several scenarios. The
  values of $12.6, $41.1, and $63.2 per metric ton are the averages of SCC distributions calculated using 5%,
  3%, and 2.5% discount rates, respectively. The value of $119/t represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The SCC time series increase over time. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's analysis.
*** The CO2 values represent global monetized values of the SCC, in 2011$, in 2016 under several scenarios. The
  values of $6.2, $25.6, and $41.1 per metric ton are the averages of SCC distributions calculated using 5%, 3%,
  and 2.5% discount rates, respectively. The value of $78.4/t represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The SCC time series increase over time. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  SCC value of $41.1/t in 2016. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the
  operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added to
  the full range of CO2 values.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series
  corresponding to SCC value of $25.6/t in 2016. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2
  range,'' the operating cost and NOX benefits are calculated using the labeled discount rate, and those values
  are added to the full range of CO2 values.

D. Conclusion

    Based on the analyses culminating in this final rule, DOE found the 
benefits to the nation of the standards (energy savings, consumer LCC 
savings, positive NPV of consumer benefit, and emission reductions) 
(see section V.B.1.a. of this rulemaking) outweigh the burdens (loss of 
INPV and LCC increases for a very small percentage of users of these 
products) (see section V.B.2.a and section V.B.1.a.). DOE has concluded 
that the standards in today's final rule represent the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified, and would result in significant conservation of 
energy.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's final rule, as well as some of the relevant 
historical background related to the establishment of standards for 
microwave ovens.

A. Authority

    Title III, Part B 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) 
established the Energy Conservation Program for Consumer Products Other 
Than Automobiles,\7\ a program covering most major household appliances 
(collectively referred to as ``covered products''), which includes the 
types of microwave ovens that are the subject of this rulemaking. (42 
U.S.C. 6292(a)(10)) The National Appliance Energy Conservation Act of 
1987 (NAECA), Public Law 100-12, amended EPCA to establish prescriptive 
standards for cooking products, specifically gas cooking products. No 
standards were established for microwave ovens. DOE notes that under 42 
U.S.C. 6295(m), the agency must periodically review its already 
established energy conservation standards for a covered product. Under 
this requirement, the next review that DOE would need to conduct must 
occur no later than 6 years from the issuance of a final rule 
establishing or amending a standard for a covered product.
---------------------------------------------------------------------------

    \7\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
---------------------------------------------------------------------------

    Pursuant to EPCA, DOE's energy conservation program for covered

[[Page 36321]]

products consists essentially of four parts: (1) Testing; (2) labeling; 
(3) the establishment of Federal energy conservation standards; and (4) 
certification and enforcement procedures. The Federal Trade Commission 
(FTC) is primarily responsible for labeling, 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 
microwave ovens currently appear at title 10 of the Code of Federal 
Regulations (CFR) part 430, subpart B, appendix I.
    DOE must follow specific statutory criteria for prescribing amended 
standards for covered products. As indicated above, any amended 
standard for a covered product must be designed to achieve the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, DOE may 
not adopt any standard that would not result in the significant 
conservation of energy. (42 U.S.C. 6295(o)(3)) Moreover, DOE may not 
prescribe a standard: (1) for certain products, including microwave 
ovens, if no test procedure has been established for the product, or 
(2) if DOE determines by rule that the amended standard is not 
technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)-(B)) In deciding whether an amended standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make 
this determination after receiving comments on the proposed standard, 
and by considering, to the greatest extent practicable, the following 
seven factors:
    1. The economic impact of the standard on manufacturers and 
consumers of the products subject to the standard;
    2. The savings in operating costs throughout the estimated average 
life of the covered products in the type (or class) compared to any 
increase in the price, initial charges, or maintenance expenses for the 
covered products that are likely to result from the imposition of the 
standard;
    3. The total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the standard;
    4. Any lessening of the utility or the performance of the covered 
products likely to result from the imposition of the standard;
    5. The impact of any lessening of competition, as determined in 
writing by the Attorney General, that is likely to result from the 
imposition of the standard;
    6. The need for national energy and water conservation; and
    7. Other factors the Secretary of Energy (Secretary) considers 
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    EPCA, as codified, also 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))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. See 42 U.S.C. 6295(o)(2)(B)(iii).
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating a standard for a type or class of covered product that has 
two or more subcategories. DOE must specify a different standard level 
than that which applies generally to such type or class of products for 
any group of covered products that have the same function or intended 
use if DOE determines that products within such group (A) consume a 
different kind of energy from that consumed by other covered products 
within such type (or class); or (B) have a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products, 
DOE must consider such factors as the utility to the consumer of such a 
feature and other factors DOE deems appropriate. Id. Any rule 
prescribing such a standard must include an explanation of the basis on 
which such higher or lower level was established. (42 U.S.C. 
6295(q)(2))
    Federal energy conservation requirements generally supersede State 
laws or regulations concerning energy conservation testing, labeling, 
and standards. (42 U.S.C. 6297(a)-(c)) DOE may, however, grant waivers 
of Federal preemption for particular State laws or regulations, in 
accordance with the procedures and other provisions set forth under 42 
U.S.C. 6297(d)).
    Finally, pursuant to the amendments contained in section 310(3) of 
EISA 2007, any final rule for new or amended energy conservation 
standards promulgated after July 1, 2010, are required to address 
standby mode and off mode energy use. (42 U.S.C. 6295(gg)(3)) 
Specifically, when DOE adopts a standard for a covered product after 
that date, it must, if justified by the criteria for adoption of 
standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode and 
off mode energy use into the standard, or, if that is not feasible, 
adopt a separate standard for such energy use for that product. (42 
U.S.C. 6295(gg)(3)(A)-(B)) DOE's current test procedure for microwave 
ovens addresses standby mode and off mode energy use, as do the amended 
standards adopted in this final rule.
    DOE has also reviewed this regulation pursuant to Executive Order 
13563, issued on January 18, 2011. 76 FR 3281 (Jan. 21, 2011). EO 13563 
is supplemental to and explicitly reaffirms the principles, structures, 
and definitions governing regulatory review established in Executive 
Order 12866. To the extent permitted by law, agencies are required by 
Executive Order 13563 to: (1) Propose or adopt a regulation 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

[[Page 36322]]

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 section I of 
this rulemaking, DOE determines that today's final rule is consistent 
with these principles, including the requirement that, to the extent 
permitted by law, benefits justify costs and that net benefits are 
maximized. Consistent with EO 13563, and the range of impacts analyzed 
in this rulemaking, the energy efficiency standard adopted herein by 
DOE achieves maximum net benefits.

B. Background

1. Current Standards
    Currently, there are no DOE energy conservation standards for 
microwave oven active mode, standby mode, or off mode energy 
consumption. Based on analyses and comments from interested parties, 
DOE decided in 2009 not to adopt energy conservation standards for 
microwave oven energy factor (microwave oven operation in active mode), 
but to develop a separate energy use metric for standby mode and off 
mode. 74 FR 16040 (Apr. 8, 2009).\8\ As discussed in section II.A of 
this rulemaking, if DOE adopts amended standards for microwave ovens 
after July 1, 2010, it must, if justified by the criteria for adoption 
of standards under EPCA (42 U.S.C. 6295(o)), incorporate standby mode 
and off mode energy use into the standard, or, if that is not feasible, 
adopt a separate standard for such energy use for that product. (42 
U.S.C. 6295(gg)(3)(A)-(B)) Because there is currently no test procedure 
or standard for microwave oven active mode, DOE has determined that 
proposing a combined metric for standby and active mode energy use is 
not feasible at this time. If DOE amends the test procedure to 
incorporate measurement of microwave oven active mode energy use, DOE 
will consider whether it is technically feasible to incorporate active 
mode, standby mode, and off mode energy use into a single metric for 
future energy conservation standards.
---------------------------------------------------------------------------

    \8\ DOE repealed the microwave oven active mode provisions from 
its test procedure on July 22, 2010, after determining that the 
active mode methodology did not produce repeatable and 
representative results. 75 FR 42579.
---------------------------------------------------------------------------

2. History of Standards Rulemaking for Microwave Ovens
    On March 15, 2006, DOE published on its Web site a document titled, 
``Rulemaking Framework for Commercial Clothes Washers and Residential 
Dishwashers, Dehumidifiers, and Cooking Products'' (Framework 
Document).\9\ 71 FR 15059. The Framework Document described the 
procedural and analytical approaches that DOE anticipated using to 
evaluate energy conservation standards for these products, and 
identified various issues to be resolved in conducting the rulemaking. 
On December 4, 2006, DOE posted on its Web site two spreadsheet tools 
for this rulemaking.\10\ The first tool calculates LCC and payback 
periods (PBPs). The second tool--the national impact analysis (NIA) 
spreadsheet--calculates the impacts on shipments and the national 
energy savings (NES) and NPV at various candidate standard levels. DOE 
subsequently published the advance notice of proposed rulemaking 
(ANOPR) for this rulemaking (72 FR 64432 (Nov. 15, 2007)), the November 
2007 ANOPR) and on December 13, 2007, held a public meeting to present 
and seek comment on the analytical methodology and results in the ANOPR 
(the December 2007 Public Meeting).
---------------------------------------------------------------------------

    \9\ This document is available on the DOE Web site at: http://www.regulations.gov/#!docketBrowser;rpp=25;po=0;D=EERE-2006-STD-
0127. (Last accessed December 2012.)
    \10\ These spreadsheets are available on the DOE Web site at: 
http://www.regulations.gov/#!docketBrowser;rpp=25;po=0;D=EERE-2006-
STD-0127. (Last accessed December 2012.)
---------------------------------------------------------------------------

    At the December 2007 Public Meeting, DOE invited comment in 
particular on the following issues concerning microwave ovens: (1) 
Incorporation of the International Electrotechnical Commission (IEC) 
test standard IEC Standard 62301 \11\ into DOE's microwave oven test 
procedure to measure standby mode and off mode power; (2) IEC Standard 
62301 test conditions; and (3) a requirement that if the measured 
standby mode power varies as a function of the time displayed, the 
standby mode power test would run for 12 hours, with an initial clock 
setting of 12:00.
---------------------------------------------------------------------------

    \11\ IEC standards are available for purchase at: http://www.iec.ch/.
---------------------------------------------------------------------------

    Interested parties' comments presented during the December 2007 
Public Meeting and submitted in response to the November 2007 ANOPR 
addressed the standby mode and off mode energy use of microwave ovens 
and the ability to combine that energy use into a single metric with 
cooking energy use. Those concerns lead DOE to thoroughly investigate 
standby mode, off mode, and active mode power consumption of microwave 
ovens.
    On October 17, 2008, DOE published a NOPR (the October 2008 NOPR) 
for cooking products and commercial clothes washers in the Federal 
Register proposing amended energy conservation standards. 73 FR 62034. 
In the October 2008 NOPR, DOE tentatively concluded that a standard for 
microwave oven standby mode and off mode energy use would be 
technologically feasible and economically justified. Id. at 62120. 
Therefore, concurrent with the standards NOPR, DOE published in the 
Federal Register a test procedure NOPR for microwave ovens to 
incorporate a measurement of standby mode and off mode power and to 
consider inclusion of such power as part of the energy conservation 
standards rulemaking. 73 FR 62134 (Oct. 17, 2008). DOE concluded, 
however, that, ``although it may be mathematically possible to combine 
energy consumption into a single metric encompassing active (cooking), 
standby, and off modes, it is not technically feasible to do so at this 
time . . . .'' 73 FR 62034, 62043 (Oct. 17, 2008). The separate 
prescriptive standby mode and off mode energy conservation standards 
proposed in the October 2008 NOPR for microwave ovens are shown in 
Table II-1.

Table II-1--October 2008 NOPR Proposed Energy Conservation Standards for
                Microwave Oven Standby Mode and Off Mode
------------------------------------------------------------------------
                                                   Proposed energy
               Product class                    conservation standard
------------------------------------------------------------------------
Microwave Ovens...........................  Maximum Standby Power = 1.0
                                             watt.
------------------------------------------------------------------------


[[Page 36323]]

    In the October 2008 NOPR, DOE described and sought further comment 
on the analytical framework, models, and tools (e.g., LCC and NIA 
spreadsheets) it was using to analyze the impacts of energy 
conservation standards for this product. DOE held a public meeting in 
Washington, DC, on November 13, 2008 (the November 2008 Public 
Meeting), to present the methodologies and results for the October 2008 
NOPR analyses.
    Multiple interested parties commented in response to the October 
2008 NOPR that insufficient data and information were available to 
complete this rulemaking, and requested that it be postponed to allow 
DOE to gather such inputs on which to base its analysis. DOE agreed 
with these commenters that additional information would improve its 
analysis and, in April 2009, it concluded that it should defer a 
decision regarding amended energy conservation standards that would 
address standby mode and off mode energy use for microwave ovens 
pending further rulemaking. 74 FR 16040, 16042 (Apr. 8, 2009). In the 
interim, DOE proceeded with consideration of energy conservation 
standards for microwave oven active mode energy use based on its 
proposals in the October 2008 NOPR, and its analysis determined that no 
new standards for microwave oven active mode (as to cooking efficiency) 
were technologically feasible and economically justified. Therefore, in 
a final rule published on April 8, 2009, DOE maintained the ``no 
standard'' standard for microwave oven active mode energy use. Id. at 
16087. The final rule is available on DOE's Web site at: 
www1.eere.energy.gov/buildings/appliance_standards/residential/pdfs/74fr16040.pdf.
    After continuing its analysis of microwave oven standby mode and 
off mode through additional testing, research, and consideration of an 
updated version of IEC Standard 62301, DOE published an SNOPR on 
February 14, 2012 (77 FR 8526) (hereafter referred to as the February 
2012 SNOPR) to enable interested parties to comment on revised product 
class definitions and standby power levels proposed for microwave oven 
standby mode and off mode energy use. As discussed further in section 
IV.B of this rulemaking, DOE determined that built-in and over-the 
range convection microwave ovens incorporate features required to 
handle the thermal loads associated with their installation and to 
provide consumer utility, thereby resulting in higher standby power 
consumption than for other microwave oven product types. DOE's product 
testing and reverse-engineering analysis additionally determined that 
over-the-range microwave-only ovens did not require features with 
higher standby power consumption than countertop microwave-only units, 
and thus DOE proposed the following two product classes and standby 
power levels for microwave oven energy conservation standards:

 Table II-2--February 2012 SNOPR Proposed Energy Conservation Standards for Microwave Oven Standby Mode and Off
                                                      Mode
----------------------------------------------------------------------------------------------------------------
                 Product class                               Proposed energy conservation  standard
----------------------------------------------------------------------------------------------------------------
Microwave-Only Ovens and Countertop             Maximum Standby Power = 1.0 watt.
 Convection* Microwave Ovens.
Built-In and Over-the-Range Convection*         Maximum Standby Power = 2.2 watts.
 Microwave Ovens.
----------------------------------------------------------------------------------------------------------------
* In earlier stages of this rulemaking, DOE referred to microwave ovens that incorporate convection features and
  any other means of cooking in a single compartment as ``combination microwave ovens''. In the final rule for
  DOE's microwave oven test procedure (78 FR 4015, 4017-4018 (Jan. 18, 2013), DOE defined such products as
  ``convection microwave ovens'', and DOE accordingly uses this terminology consistently in today's final rule
  rulemaking and amended microwave oven standards.

    The compliance date for the amended energy conservation standards 
for microwave ovens is June 17, 2016.

III. General Discussion

A. Test Procedures

    Section 310 of EISA 2007 amended EPCA to require DOE to amend the 
test procedures for covered products to address energy consumption of 
standby mode and off mode. If technically infeasible, DOE must 
prescribe a separate standby mode and off mode energy use test 
procedure. (42 U.S.C. 6295(gg)(2)(A))
    In the final rule published on January 18, 2013 (hereafter referred 
to as the January 2013 TP Final Rule), DOE amended the microwave oven 
test procedure to incorporate by reference certain provisions of IEC 
Standard 62301 Edition 2.0 2011-01 (IEC Standard 62301 (Second 
Edition)), along with clarifying language, for the measurement of 
standby mode and off mode energy use. In the narrow case of microwave 
ovens with power consumption that varies as a function of the time 
displayed, DOE maintained the existing use of IEC Standard 62301 (First 
Edition) for measuring standby mode power to minimize manufacturer 
burden. DOE also determined that microwave ovens combined with other 
appliance functionality are covered under the definition of ``microwave 
oven'' at 10 CFR 430.2, but due to a lack of data and information, did 
not adopt provisions in the microwave oven test procedure to measure 
the standby mode and off mode energy use of the microwave component. 78 
FR 4015 (Jan. 18, 2013).
    The Association of Home Appliance Manufacturers (AHAM) and GE 
Consumer & Industrial (GE) commented that they support incorporation by 
reference of IEC Standard 62301 (Second Edition) in the DOE microwave 
oven test procedure, but stated that DOE cannot determine appropriate 
standard levels in this rulemaking without testing based on the final 
test procedure to be used to determine compliance. (AHAM, No. 16 at p. 
4; \12\ GE, No. 19 at p. 1)
---------------------------------------------------------------------------

    \12\ A notation in the form ``AHAM, No. 16 at p. 4'' identifies 
a written comment that DOE has received and has included in the 
docket of the standards rulemaking for microwave ovens (Docket No. 
EERE-2011-BT-STD-0048). This particular notation refers to a comment 
(1) submitted by the Association of Home Appliance Manufacturers 
(AHAM), (2) recorded in document number 16 in the docket of this 
rulemaking, and (3) which appears on page 4 of document number 16.
---------------------------------------------------------------------------

    DOE reviewed its testing that it had conducted in support of 
various stages of the microwave oven test procedure rulemaking, and 
determined that there were six microwave oven models that had been 
tested according to both the First and Second Editions of IEC Standard 
62301. In order to supplement this sample, DOE additionally tested 
eight more microwave ovens as part of its final rule analysis so that a 
comparison could be made between the standby power consumption 
measurements obtained with the First Edition and Second Edition for 
various installation configurations, display types, and manufacturers/
brands. Table

[[Page 36324]]

III-1 presents the results of the comparison between testing to the 
First Edition and the Second Edition, which showed results for the two 
methodologies varying by no more than 5.5 percent, which DOE concludes 
demonstrates close enough agreement that manufacturers could apply the 
same design option pathways (see section IV.C.3 of this rulemaking) to 
achieve the varying standby power levels when measuring according to 
IEC Standard 62301 (Second Edition) as DOE's analysis identified based 
on testing to IEC Standard 62301 (First Edition).

  Table III-1--Comparison of Standby Power Measurements According to IEC Standard 62301 (First Edition) and IEC
                                         Standard 62301 (Second Edition)
----------------------------------------------------------------------------------------------------------------
                                                                   Standby power   Standby power
             Configuration                      Display *           (W), first      (W), second       Percent
                                                                      edition         edition       difference
----------------------------------------------------------------------------------------------------------------
Countertop Microwave-Only.............  Backlit LCD.............            3.84            3.66            -4.7
Countertop Microwave-Only.............  Backlit LCD.............            2.18            2.18            -0.3
Countertop Microwave-Only.............  Backlit LCD.............            3.81            3.78            -1.0
Countertop Microwave-Only.............  LED.....................            1.06            1.07             0.3
Countertop Microwave-Only.............  LED.....................            1.76            1.77             0.8
Countertop Microwave-Only.............  LED.....................            1.27            1.27            -0.4
Countertop Microwave-Only.............  VFD.....................            3.44            3.42            -0.6
Countertop Microwave-Only.............  VFD.....................            3.14            3.12            -0.7
Countertop Convection Microwave.......  LED.....................            1.20            1.24             3.2
Countertop Convection Microwave.......  VFD.....................            4.14            4.13            -0.1
Countertop Convection Microwave.......  VFD.....................            3.23            3.05            -5.5
Over-the-Range Microwave-Only.........  VFD.....................            1.66            1.67             0.4
Over-the-Range Microwave-Only.........  LED.....................            0.78            0.78             0.0
Over-the-Range Convection Microwave...  VFD.....................            4.50            4.48            -0.4
----------------------------------------------------------------------------------------------------------------
* LCD = Liquid Crystal Display, LED = Light Emitting Diode, VFD = Vacuum Fluorescent Display.

B. Technological Feasibility

1. General
    In each standards rulemaking, DOE conducts a screening analysis 
based on information gathered on all current technology options and 
prototype designs that could improve the efficiency of the products or 
equipment that are the subject of the rulemaking. As the first step in 
such an analysis, DOE develops a list of technology options for 
consideration in consultation with manufacturers, design engineers, and 
other interested parties. DOE then determines which of those means for 
improving efficiency are technologically feasible. DOE considers 
technologies incorporated in commercially available products or in 
working prototypes to be technologically feasible. 10 CFR part 430, 
subpart C, appendix A, section 4(a)(4)(i).
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
Practicability to manufacture, install, or service; (2) adverse impacts 
on product utility or availability; and (3) adverse impacts on health 
or safety. 10 CFR part 430, subpart C, appendix A, section 4(a)(3) and 
(4). All technologically feasible design options that pass the three 
additional screening criteria are candidates for further assessment in 
the engineering and subsequent analyses in the NOPR stage. DOE may 
amend the list of retained design options in SNOPR analyses based on 
comments received on the NOPR and on further research. Section 0 of 
this rulemaking discusses the results of the screening analysis for 
microwave ovens, particularly the designs DOE considered, those it 
screened out, and those that are the basis for the trial standard 
levels (TSLs) in this rulemaking. For further details on the screening 
analysis for this rulemaking, see chapter 4 of the final rule TSD.
    DOE published a list of evaluated microwave oven technologies in 
the November 2007 ANOPR. 72 FR 64432 (Nov. 15, 2007). DOE identified 
lower-power display technologies, improved power supplies and 
controllers, and alternative cooking sensor technologies as options to 
reduce standby power. DOE conducted this research when it became aware 
of the likelihood of EISA 2007 being signed, which DOE understood was 
to contain provisions pertaining to standby mode and off mode energy 
use. Therefore, DOE presented details of each design option to 
interested parties at the December 2007 Public Meeting even though the 
results were not available in time for publication in the November 2007 
ANOPR. DOE determined that all of these options were technologically 
feasible, and in the ANOPR invited comment on technology options that 
reduce standby power in microwave ovens. 72 FR 64432, 64513 (Nov. 15, 
2007).
    For the October 2008 NOPR, DOE conducted additional research on 
several microwave oven technologies that significantly affect standby 
power, including cooking sensors, display technologies, and control 
strategies and associated control boards. DOE determined that control 
strategies are available that enable manufacturers to make design 
tradeoffs between incorporating features that consume standby power 
(such as displays or cooking sensors) and including a function to turn 
power off to those components during standby mode. 73 FR 62034, 62052 
(Oct. 17, 2008).
    DOE received comments on each of these technology options in 
response to the October 2008 NOPR, and determined through additional 
research conducted for the February 2012 SNOPR and today's final rule 
that each of these technologies and control strategies are feasible 
means to reduce standby power for both product classes of microwave 
ovens. 77 FR 8526, 8537-40 (Feb. 14, 2012). For more details of these 
technology options and comments from interested parties, see chapter 3 
of the final rule TSD and section 0 of this rulemaking.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the

[[Page 36325]]

maximum improvement in energy efficiency or maximum reduction in energy 
use that is technologically feasible for such product. (42 U.S.C. 
6295(p)(1)) Using the design parameters that lead to creation of the 
highest available product efficiencies, in the engineering analysis DOE 
determined the maximum technologically feasible (``max-tech'') standby 
power levels \13\ for microwave ovens, as shown in Table III-2. The 
max-tech microwave oven standby power level corresponds to a unit 
equipped with a default automatic power-down function that disables 
certain power-consuming components after a specified period of user 
inactivity. The max-tech microwave oven standby power level was 
determined in the October 2008 NOPR to be 0.02 watts (W). 73 FR 62052 
(Oct. 17, 2008). Based upon additional analyses for the February 2012 
SNOPR, DOE determined that this max-tech level is applicable to the 
product class of microwave-only ovens and countertop convection 
microwave ovens. For built-in and over-the-range convection microwave 
ovens, DOE identified, based on its analysis, a max-tech standby power 
level of 0.04 W. 77 FR 8526, 8541-42 (Feb. 14, 2012). DOE has retained 
these max-tech levels for today's final rule. For more details of the 
max-tech levels, see chapter 5 of the final rule TSD and section IV.D.2 
of this rulemaking.
---------------------------------------------------------------------------

    \13\ As noted elsewhere in today's final rule, DOE is aware of 
fewer than 1 percent of microwave oven models currently available 
that can operate in off mode. Therefore, efficiency levels for the 
purposes of evaluating standby mode and off mode energy use in 
microwave ovens are defined on the basis of standby power only at 
this time.

        Table III-2--Max-tech Microwave Oven Standby Power Levels
------------------------------------------------------------------------
              Product class                 Max-tech standby power level
------------------------------------------------------------------------
Microwave-Only Ovens and Countertop        0.02 watts.
 Convection Microwave Ovens.
Built-In and Over-the-Range Convection     0.04 watts.
 Microwave Ovens.
------------------------------------------------------------------------

C. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from the products that 
are the subject of this rulemaking purchased in the 30-year period that 
begins in the year of compliance with amended standards (2016-2045). 
The savings are measured over the entire lifetime of products purchased 
in the 30-year period.\14\ DOE quantified the energy savings 
attributable to each TSL as the difference in energy consumption 
between each standards case and the base case. The base case represents 
a projection of energy consumption in the absence of amended mandatory 
efficiency standards, and considers market forces and policies that 
affect demand for more efficient products.
---------------------------------------------------------------------------

    \14\ In the past DOE presented energy savings results for only 
the 30-year period that begins in the year of compliance. In the 
calculation of economic impacts, however, DOE considered operating 
cost savings measured over the entire lifetime of products purchased 
in the 30-year period. DOE has chosen to modify its presentation of 
national energy savings to be consistent with the approach used for 
its national economic analysis.
---------------------------------------------------------------------------

    DOE used its NIA spreadsheet model to estimate energy savings from 
amended standards for the products that are the subject of this 
rulemaking. The NIA spreadsheet model (described in section IV.F of 
this rulemaking) calculates energy savings in site energy, which is the 
energy directly consumed by products at the locations where they are 
used. DOE reports national energy savings on an annual basis in terms 
of the source (primary) energy savings, which is the savings in the 
energy that is used to generate and transmit the site energy. To 
convert site energy to source energy, DOE derived annual conversion 
factors from the model used to prepare the Energy Information 
Administration's (EIA) Annual Energy Outlook 2012 (AEO 2012).
2. Significance of Savings
    As noted above, 42 U.S.C. 6295(o)(3)(B) prevents DOE from adopting 
a standard for a covered product unless such standard would result in 
``significant'' energy savings. Although the term ``significant'' is 
not defined in the Act, the U.S. Court of Appeals, in Natural Resources 
Defense Council v. Herrington, 768 F.2d 1355, 1373 (D.C. Cir. 1985), 
indicated that Congress intended ``significant'' energy savings in this 
context to be savings that were not ``genuinely trivial.'' The energy 
savings for all of the TSLs considered in this rulemaking (presented in 
section V.C of this rulemaking) are nontrivial, and, therefore, DOE 
considers them ``significant'' within the meaning of section 325 of 
EPCA.

D. Economic Justification

1. Specific Criteria
    EPCA provides seven factors to be evaluated in determining whether 
a potential energy conservation standard is economically justified. (42 
U.S.C. 6295(o)(2)(B)(i)) The following sections discuss how DOE has 
addressed each of those seven factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of an amended standard on manufacturers, 
DOE first uses an annual cash-flow approach to determine the 
quantitative impacts. This step includes both a short-term assessment--
based on the cost and capital requirements during the period between 
when a regulation is issued and when entities must comply with the 
regulation--and a long-term assessment over a 30-year period. The 
industry-wide impacts analyzed include the INPV, which values the 
industry on the basis of expected future cash flows; cash flows by 
year; changes in revenue and income; and other measures of impact, as 
appropriate. Second, DOE analyzes and reports the impacts on different 
types of manufacturers, including impacts on small manufacturers. 
Third, DOE considers the impact of standards on domestic manufacturer 
employment and manufacturing capacity, as well as the potential for 
standards to result in plant closures and loss of capital investment. 
Finally, DOE takes into account cumulative impacts of various DOE 
regulations and other regulatory requirements on manufacturers. For 
more details on the manufacturer impact analysis (MIA), see section 
IV.H of this rulemaking and chapter 12 of the final rule TSD.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. The 
LCC, which is specified separately in EPCA as one of the seven factors 
to be considered in determining the economic justification for a new or 
amended standard, 42 U.S.C. 6295(o)(2)(B)(i)(II), is discussed in the 
following section. For consumers in the aggregate, DOE also calculates 
the national net present value of the economic impacts applicable to a 
particular rulemaking.
b. Life-Cycle Costs
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating expense (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC savings for the considered efficiency levels are 
calculated relative to a base case that reflects projected market 
trends in the absence of amended standards. The LCC analysis requires a 
variety of inputs, such as product prices, product energy consumption, 
energy prices, maintenance and repair costs, product lifetime, and 
consumer

[[Page 36326]]

discount rates. For its analysis, DOE assumes that consumers will 
purchase the considered products in the first year of compliance with 
amended standards.
    To account for uncertainty and variability in specific inputs, such 
as product lifetime and discount rate, DOE uses a distribution of 
values, with probabilities attached to each value. DOE identifies the 
percentage of consumers estimated to receive LCC savings or experience 
an LCC increase, in addition to the average LCC savings associated with 
a particular standard level. DOE also evaluates the LCC impacts of 
potential standards on identifiable subgroups of consumers that may be 
affected disproportionately by a national standard. See section IV.E of 
this rulemaking for more details on the LCC and PBP analysis.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for imposing an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section IV.F of this rulemaking, DOE uses the NIA 
spreadsheet to project national energy savings. See chapter 10 of the 
final rule TSD for more details on this analysis.
d. Lessening of Utility or Performance of Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) The standards 
adopted in today's final rule will not reduce the utility or 
performance of the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider any lessening of competition that is 
likely to result from standards. It also directs the Attorney General 
of the United States (Attorney General) to determine the impact, if 
any, of any lessening of competition likely to result from a proposed 
standard and to transmit such determination to the Secretary within 60 
days of the publication of a direct final rule and simultaneously 
published proposed rule, together with an analysis of the nature and 
extent of the impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) DOE 
received the Attorney General's determination, dated December 16, 2008, 
on standards proposed in the October 2008 NOPR. The Attorney General's 
determination for October 2008 NOPR did not mention microwave oven 
standards. To assist the Attorney General in making a determination for 
microwave oven standards, DOE provided the Department of Justice (DOJ) 
with copies of the SNOPR and the TSD for review. DOJ concluded that the 
energy conservation standards for microwave standby power as proposed 
were unlikely to have a significant adverse impact on competition.
f. Need for National Energy Conservation
    The energy savings from amended standards are likely to provide 
improvements to the security and reliability of the nation's energy 
system. Reductions in the demand for electricity also may result in 
reduced costs for maintaining the reliability of the nation's 
electricity system. DOE conducts a utility impact analysis to estimate 
how standards may affect the nation's needed power generation capacity.
    The amended standards also are likely to result in environmental 
benefits in the form of reduced emissions of air pollutants and 
greenhouse gases associated with energy production. DOE reports the 
emissions impacts from today's standards, and from each TSL it 
considered, in chapter 15 of the final rule TSD. (42. U.S.C. 
6295(o)(2)(B)(i)(VI)) See section IV.K of this rulemaking for more 
details on this analysis. DOE also reports estimates of the economic 
value of emissions reductions resulting from the considered TSLs.
g. Other Factors
    EPCA allows the Secretary of Energy, in determining whether a 
standard is economically justified, to consider any other factors that 
the Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) 
In considering amended standards for today's rulemaking, the Secretary 
found no relevant factors other than those identified elsewhere in 
today's final rule.
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential amended 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.E.10 of this rulemaking and chapter 8 of the 
final rule TSD.

IV. Methodology and Revisions to the Analyses Employed in the February 
2012 Proposed Rule

    In weighing the benefits and burdens of amended standards for 
microwave oven standby mode and off mode energy use, DOE used economic 
models to estimate the impacts of each TSL. The LCC spreadsheet 
calculates the LCC impacts and payback periods for potential amended 
energy conservation standards. DOE used the engineering spreadsheet to 
develop the relationship between cost and efficiency and to calculate 
the simple payback period for purposes of addressing the rebuttable 
presumption that a standard with a payback period of less than 3 years 
is economically justified. The NIA spreadsheet provides shipments 
forecasts and then calculates NES and NPV impacts of potential amended 
energy conservation standards. DOE also assessed manufacturer impacts, 
largely through use of the Government Regulatory Impact Model (GRIM).
    Additionally, DOE estimated the impacts of potential amended energy 
conservation standards on utilities and the environment. DOE used a 
version of the EIA's National Energy Modeling System (NEMS) for the 
utility and environmental analyses. The EIA has developed the NEMS 
model, which simulates the energy economy of the United States, over 
several years primarily for the purpose of preparing the AEO. The NEMS 
produces forecasts for the United States energy situation that are 
available in the public domain. The version of NEMS used for appliance 
standards analysis is called NEMS-

[[Page 36327]]

BT.\15\ The NEMS-BT offers a sophisticated picture of the effect of 
standards, because it accounts for the interactions among the various 
energy supply and demand sectors and the economy as a whole.
---------------------------------------------------------------------------

    \15\ The EIA approves the use of the name NEMS to describe only 
an AEO version of the model without any modification to code or 
data. Because the present analysis entails some minor code 
modifications and runs the model under various policy scenarios that 
deviate from AEO assumptions, the model used here has been named 
NEMS-BT. (``BT'' stands for DOE's Building Technologies Program.) 
For more information on NEMS, refer to The National Energy Modeling 
System: An Overview, DOE/EIA-0581 (98) (Feb. 1998) (available at: 
http://tonto.eia.doe.gov/FTPROOT/forecasting/058198.pdf). (Last 
accessed November 10, 2012.)
---------------------------------------------------------------------------

A. Covered Products

    At the time of the October 2008 NOPR, DOE's regulations codified at 
10 CFR 430.2 defined a microwave oven as a class of kitchen ranges and 
ovens which is a household cooking appliance consisting of a 
compartment designed to cook or heat food by means of microwave energy. 
In the October 2008 NOPR, DOE proposed a single product class for 
microwave ovens that would encompass microwave ovens with and without 
browning (thermal) elements, but would not include microwave ovens that 
incorporate convection systems. 73 FR 62034, 62048 (Oct. 17, 2008).
    As part of its microwave oven test procedure rulemaking, DOE 
reassessed what products would be considered microwave ovens under the 
regulatory definition, and whether multiple product classes would be 
appropriate. As discussed in the test procedure interim final rule that 
published on March 9, 2011 (the March 2011 TP Interim Final Rule), DOE 
amended the definition of microwave oven in 10 CFR 430.2 to clarify 
that it includes microwave ovens with or without thermal elements 
designed for surface browning of food and combination ovens (which at 
the time was the term DOE used to designate convection microwave 
ovens). DOE also determined that all ovens equipped with microwave 
capability would be considered a covered product, regardless of which 
cooking mode (i.e., radiant heating or microwave energy) is primary. 
Based on the preliminary analysis it conducted, DOE observed that the 
typical standby mode and off mode operation for microwave ovens that 
also incorporate other means of cooking food does not differ from that 
of microwave-only units. As a result, DOE amended the microwave oven 
test procedure in the March 2011 TP Interim Final Rule to require that 
the same standby mode and off mode testing methods be used for all 
microwave ovens. 76 FR 12825, 12828-30 (Mar. 9, 2011).
    DOE received comments on the topic of covered products in response 
to the February 2012 SNOPR on microwave oven energy conservation 
standards. AHAM and GE stated that DOE should clarify the applicability 
of the proposed standards to products using both microwave energy and 
radiant heating. AHAM and GE also commented that the definition of 
``combination oven'' as established by the March 2011 TP Interim Final 
Rule and proposed to be maintained in the February 2012 SNOPR should be 
revised to be sufficiently broad to include, generally, ``other means 
of cooking'' in order to account for current and future cooking 
technologies. According to AHAM and GE, DOE's definition was too vague 
and would lead to confusion as to which products are covered. These 
commenters further stated that DOE's proposal that, for products with 
multiple oven compartments but no integral cooking top, the 
compartment(s) that cook by means of microwave energy in combination 
with any other cooking or heating means would be classified as 
microwave ovens while the compartment(s) that cook or heat food by 
means of a gas flame or electric resistance heating without the use of 
microwave energy would be classified as conventional ovens, is 
contradictory, adds complexity, and is confusing. AHAM and GE agreed 
with DOE that a free-standing range with microwave capability should be 
excluded from coverage as a microwave oven, but stated that a built-in 
range with microwave capability should not be classified as a microwave 
oven either because the installation configuration does not affect how 
the product is used. AHAM, GE, and Whirlpool Corporation (Whirlpool) 
commented that the primary use should determine how the product is 
characterized, such that a built-in product with two separate cavities, 
one that uses microwave energy and one that uses conventional thermal 
energy, should be classified as a conventional range, not a microwave 
oven. AHAM and GE stated that this would be consistent with the 
exclusion of free-standing ranges with microwave capability. These 
commenters, therefore, recommended that DOE define a combination oven 
as ``a microwave oven that incorporates means of cooking other than 
microwave energy, and does not mean free-standing or built-in 
conventional cooking tops, conventional ovens, or conventional ranges 
that include microwave ovens in separate cavities.'' (AHAM, No. 16 at 
pp. 1, 3-4; GE, No. 19 at p. 1; Whirlpool, No. 15 at p. 1) Whirlpool 
commented that not all manufacturers produce a built-in cooking product 
with two separate cavities, one which uses microwave energy and one 
which uses conventional thermal energy, and which are controlled by a 
single control panel. Some of Whirlpool's competitors have such built-
in products with two separate control panels. Whirlpool stated that if 
DOE maintains the definition of combination oven, Whirlpool and other 
product manufacturers with similar product lines will be placed at a 
competitive disadvantage to those with separate control panels. 
(Whirlpool, No. 15 at p. 1)
    DOE maintained in the January 2013 TP Final Rule that the 
definition of microwave oven also includes all products that combine a 
microwave oven with other appliance functionality. To aid in 
distinguishing such other ``combined products'' from the type of 
microwave oven that incorporates convection features and any other 
means of cooking, DOE adopted the term ``convection microwave oven'' to 
more accurately describe the latter, and provided a definition of 
convection microwave oven in 10 CFR 430.2. In this definition, DOE 
clarified that the microwave capability, convection features, and any 
other cooking means are incorporated in a single cavity. 78 FR 4015, 
4017-4018 (Jan. 18, 2013).
    In the January 2013 TP Final Rule, DOE further confirmed that all 
products that combine a microwave oven with other appliance 
functionality would be considered covered products, including 
microwave/conventional ranges, microwave/conventional ovens, microwave/
conventional cooking tops, and other combined products such as 
microwave/refrigerator-freezer/charging stations. Regarding microwave/
conventional ranges, DOE clarified that an appliance need not be free-
standing to be covered as a microwave/conventional range. DOE, 
therefore, added a definition of ``microwave/conventional cooking top'' 
in 10 CFR 430.2 to state that it is a class of kitchen ranges and ovens 
that is a household cooking appliance consisting of a microwave oven 
and a conventional cooking top. Similarly, DOE added a definition in 10 
CFR 430.2 of a ``microwave/conventional oven'' as a class of kitchen 
ranges and ovens which is a household cooking appliance consisting of a 
microwave oven and a conventional oven in separate compartments. DOE 
also clarified in the definition of microwave/conventional range that 
the microwave oven and

[[Page 36328]]

conventional oven are incorporated as separate compartments. 78 FR 
4015, 4018 (Jan. 18, 2013).
    DOE determined in the January 2013 TP Final Rule that the microwave 
oven component of these combined products would meet the statutory 
requirements as a covered product for the purposes of measuring standby 
mode and off mode energy use under EPCA. (42 U.S.C. 6295(gg)(2)(B)(vi)) 
DOE stated that it does not believe that the presence of additional 
appliance functionality would eliminate the statutory requirement to 
evaluate standby mode and off mode energy use in the microwave oven 
component. DOE also concluded in the January 2013 TP Final Rule that 
the provisions related to the measurement of standby mode and off mode 
energy use in the test procedure should only measure such energy use 
associated with the microwave oven portion of combined products, and 
for that reason the amendments from the January 2013 TP Final Rule do 
not require any determination as to which appliance function of a 
combined product with a microwave oven component represents the primary 
usage of the product. Id. DOE notes that there are currently no active 
mode provisions for microwave ovens in its test procedure, although it 
has initiated a separate rulemaking to consider such amendments.
    In the microwave oven standby mode and off mode test procedure 
rulemaking, DOE confirmed that the microwave oven portion of a combined 
product is covered under the definition of microwave oven, but due to a 
lack of data and information at the time, did not amend its test 
procedures in the January 2013 TP Final Rule to measure standby mode 
and off mode energy use for the microwave portion of combined products. 
Id. Therefore, DOE is not establishing amended energy conservation 
standards for standby mode and off mode energy use for these products 
in today's final rule. DOE may choose to initiate a separate rulemaking 
at a later date that would address standby and off mode energy use of 
combined products.

B. Product Classes

    In general, when evaluating and establishing energy conservation 
standards, DOE divides covered products into classes by the type of 
energy used, capacity, or other performance-related features that 
affect consumer utility and efficiency. (42 U.S.C. 6295(q); 6316(a)) 
Different energy conservation standards may apply to different product 
classes. Id.
    In order to determine whether specific types of microwave ovens 
should be separated into different product classes, DOE investigated 
whether there are any performance related features that would justify 
the establishment of a separate energy conservation standard. As 
discussed in the October 2008 NOPR, DOE tested a sample of 32 
countertop microwave-only units and measured standby mode power ranging 
from 1.2 W to 5.8 W. 73 FR 62034, 62042 (Oct. 17, 2008). None of these 
units were capable of operation in off mode, nor was DOE aware at that 
time of any other microwave ovens capable of such operation. In the 
February 2012 SNOPR, DOE noted that standby power consumption for 
microwave-only units largely depended on the presence of a cooking 
sensor, the display technology, the power supply and control board, and 
implementation of a power-down feature. With regards to display 
technologies, DOE noted that microwave-only units incorporated Light 
Emitting Diode (LED) displays, Liquid Crystal Displays (LCDs), and 
Vacuum Fluorescent Displays (VFDs).
    Based on comments received in response to the October 2008 NOPR, 
DOE conducted a survey of over-the-range microwave-only units available 
on the U.S. market. DOE determined that the display technologies used 
are similar to those used in countertop microwave-only units (i.e., LED 
displays, LCDs, and VFDs). DOE also conducted in-store standby mode 
testing on a limited sample of over-the-range microwave-only units 
which showed similar standby power consumption as countertop microwave-
only units. For these reasons, DOE tentatively concluded in the 
February 2012 SNOPR that over-the-range microwave-only units would not 
warrant a separate product class. DOE understands that over-the-range 
microwave-only units may have additional components that are energized 
during active mode operation (i.e., exhaust fan motors). However, DOE's 
testing showed that the presence of such features did not increase the 
standby power consumption to warrant establishing a separate product 
class. 77 FR 8526, 8536 (Feb. 14, 2012).
    DOE also conducted standby power testing on a sample of 13 
representative convection microwave ovens, including 5 countertop 
convection microwave ovens, 6 over-the-range convection microwave 
ovens, and 2 built-in convection microwave ovens. DOE's testing showed 
that the countertop convection microwave ovens use similar display 
technologies as countertop microwave-only units, and had standby power 
consumption ranging from 1.2 W to 4.7 W, which is similar to the 
standby power consumption for countertop microwave-only units. As a 
result, DOE tentatively concluded in the February 2012 SNOPR that 
countertop convection microwave ovens would not warrant a product class 
separate from microwave-only ovens. Id.
    DOE's testing of built-in and over-the-range convection microwave 
ovens for the February 2012 SNOPR showed that the standby power 
consumption for these products ranged from 4.1 W to 8.8 W, which was 
higher than the standby power consumption for other microwave oven 
product types (i.e., countertop microwave-only, over-the-range 
microwave-only, and countertop convection microwave ovens). DOE's 
reverse-engineering analysis suggested that the additional features in 
built-in and over-the-range convection microwave ovens required to 
handle the thermal loads associated with their installation and to 
provide consumer utility, such as additional exhaust fan motors, 
convection fan motors and heaters, and additional lights, require a 
significant number of additional relays on the control board, and thus 
require a larger power supply for the control of such relays. While the 
relays themselves do not consume power in standby mode, they increase 
the total power supply requirements of the control board and thus 
increase the standby losses of the power supply. As a result, DOE 
determined that a separate product class should be established for 
built-in and over-the-range convection microwave ovens. DOE recognized 
that built-in and over-the-range microwave-only units may similarly 
require some additional relays for exhaust fans and lights, and that 
countertop convection microwave ovens would require some additional 
relays for convection fans and heaters. However, DOE's product testing 
and reverse-engineering analyses indicated that these product types use 
similar-sized power supplies as those found in countertop microwave-
only units, and as a result would not warrant a separate product class 
from countertop microwave-only units. Id.
    Thus, for the February 2012 SNOPR, DOE determined that separate 
product classes for the purposes of setting energy conservation 
standards addressing standby mode and off mode energy use were 
warranted on the basis of different standby power performance. DOE did 
not evaluate whether the same product class distinction would also be 
appropriate for any active mode energy use standards because DOE 
eliminated the regulatory provisions establishing the cooking 
efficiency test procedure for

[[Page 36329]]

microwave ovens in the final rule published on July 22, 2010 (the July 
2010 TP Final Rule). 75 FR 42579. If DOE adopts amendments to the 
microwave oven test procedure to include provisions for measuring 
active mode cooking efficiency, DOE may reevaluate these product 
classes as part of a future microwave oven energy conservation 
standards rulemaking. At that time, DOE may consider dividing 
countertop convection microwave ovens and over-the-range/built-in 
microwave-only units into separate product classes to account for the 
energy performance of heating components other than the microwave 
portion. In the February 2012 SNOPR, DOE proposed to establish the 
following two product classes for microwave ovens (77 FR 8526, 8536 
(Feb. 14, 2012)):

 Table IV-1--February 2012 SNOPR Proposed Microwave Oven Product Classes
------------------------------------------------------------------------
                              Product class
-------------------------------------------------------------------------
1. Microwave-Only Ovens and Countertop Convection Microwave Ovens.
2. Built-in and Over-the-Range Convection Microwave Ovens.
------------------------------------------------------------------------

    The Appliance Standards Awareness Project, Natural Resources 
Defense Council, National Consumer Law Center, Northwest Energy 
Efficiency Alliance, and Northwest Power Conservation Council, 
(hereafter referred to as the Joint Commenters), jointly supported the 
inclusion of all microwave-only and countertop convection microwave 
ovens in a single product class, stating that over-the-range microwave-
only ovens do not have features that necessitate additional standby 
mode energy use. (Joint Comment, No. 17 at p. 2)
    AHAM, GE, and Whirlpool objected to the lack of product class 
differentiation between countertop and over-the-range microwave-only 
ovens in Product Class 1. According to these commenters, there are 
significant differences in energy consumption and consumer utility 
between countertop and over-the-range microwave ovens. They stated that 
a countertop microwave oven is typically designed to operate at room 
temperature, whereas an over-the-range microwave oven is subject to 
higher temperatures. AHAM, GE, and Whirlpool further stated that 
certain features of over-the-range microwave ovens, such as a VFD 
display that can reliably withstand higher temperatures while still 
providing consumer utility, consumes more energy in standby mode than a 
countertop microwave oven display, which can use lower-power LED and 
LCD technologies. Whirlpool also noted that electronic controls for 
over-the-range microwave ovens must be constructed of materials which 
can operate in this environment. (AHAM, No. 16 at pp. 1-2; GE, No. 19 
at p. 1; Whirlpool, No. 15 at p. 2)
    In addition to standby mode considerations, AHAM, GE, and Whirlpool 
commented that the proposed product classes failed to consider the 
effects of active mode differences on a future microwave oven active 
mode test procedure or standard. These commenters noted that over-the-
range units have energy consuming features such as air venting and 
circulation, forced cooling, and cooktop lighting that are not found in 
countertop units. (AHAM, No. 16 at p. 2; GE, No. 19 at p. 1; Whirlpool, 
No. 15 at pp. 2-3) AHAM and GE concluded that over-the-range microwave-
only ovens should be included in Product Class 2. (AHAM, No. 16 at p. 
2; GE, No. 19 at p. 1)
    DOE agrees with commenters that over-the-range microwave ovens must 
operate under conditions that are harsher than countertop microwave 
ovens are typically exposed to, in terms of elevated temperatures and 
humidity levels. For the components that are associated with standby 
mode and off mode energy use, these conditions have the most effect on 
the displays. Under long-term exposure, displays may degrade in 
illuminance over time, resulting in a consumer's perception of reduced 
brightness, a significant element of consumer utility. As discussed 
further in section IV.C.2 of this rulemaking, DOE conducted accelerated 
lifetime testing of different microwave oven display types by 
subjecting a limited sample of microwave ovens to high temperatures and 
humidity levels for an extended period of operation in standby mode. 
The results of this testing demonstrated that the illuminance of each 
display tended to decrease over time to varying degrees, but did not 
reveal any correlation between display type and rate of illuminance 
reduction. In addition, DOE observed in its test sample a unit with an 
LED display that exhibited illuminance that was comparable to that of 
the VFD on another unit. Based on this lifetime testing, and the 
existence of multiple over-the-range microwave oven models on the 
market with each type of display technology, DOE concludes that over-
the-range microwave ovens would not require certain display 
technologies (i.e., VFD) that have inherently higher power consumption 
than other display types that provide similar consumer utility. In 
addition, DOE is not aware of, nor did commenters provide information 
on, different standby power consumption that would be associated with 
controls that have the same functionality but different material 
selection.
    In its final rule engineering analysis, DOE also examined more 
closely whether combinations of design options are available that would 
allow over-the-range microwave-only ovens to meet the same standby 
power levels as countertop microwave ovens. These ``design pathways'' 
are discussed in more detail in section 0 of this rulemaking. From its 
analysis, DOE concluded that design pathways exist for all over-the-
range microwave-only ovens with LED displays and LCDs to meet a 1.0 W 
standard, so that none of these would warrant classification into 
Product Class 2 on the basis of energy use characteristics in standby 
mode. DOE further concludes that the range of these display 
technologies allows manufacturers to design over-the-range products 
with comparable consumer utility and durability of the display as for 
over-the-range microwave ovens with VFDs. Therefore, DOE is maintaining 
in today's final rule the two product classes that were proposed in the 
February 2012 SNOPR.
    As noted in the February 2012 SNOPR, DOE acknowledges that over-
the-range microwave ovens contain additional relays for components that 
are not found in countertop units, such as exhaust or cooling fans and 
cooktop lighting. However, these components were not found in DOE's 
analysis to require larger power supplies that would affect standby 
power consumption, and thus would not support the definition of a 
separate product class for over-the-range microwave-only ovens from 
countertop microwave ovens. In the future, if DOE establishes a test 
procedure that measures microwave oven active mode energy use and 
considers whether active mode energy conservation standards are 
warranted, it may consider redefining the product classes according to 
utility and energy use for both active mode and standby mode. Such 
revised product classes would not be precluded by the definition of 
product classes for standby mode considerations in today's final rule.

C. Technology Assessment

    Product teardowns performed by DOE for this and past rulemakings 
gave DOE an insight into the strategies a manufacturer could adopt to 
achieve higher energy conservation standards. In

[[Page 36330]]

the October 2008 NOPR, DOE presented information on several microwave 
oven technologies that significantly affect standby power, including 
cooking sensors, display technologies, and control strategies and 
associated control boards. 73 FR 62034, 62052 (Oct. 17, 2008). In the 
February 2012 SNOPR, DOE determined that the standby power 
characteristics for countertop convection microwave ovens and over-the-
range microwave-only units are similar to that of counter-top 
microwave-only units, and therefore, the same technology options would 
apply to these products. Additional testing on over-the-range 
convection microwave ovens conducted by DOE also showed that standby 
power in these products depends largely on the same factors. 77 FR 
8526, 8536-37 (Feb. 14, 2012). DOE determined in the screening analysis 
for the final rule that all of the technology options identified in the 
February 2012 SNOPR meet the screening criteria and thus were 
considered as design options in the engineering analysis. The following 
sections discuss these technology options and additional analysis 
conducted for today's final rule.
1. Cooking Sensors
    In the October 2008 NOPR, DOE reported that its teardown analysis 
had revealed one cooking sensor technology with no standby power 
consumption used in microwave ovens on the U.S. market: A piezoelectric 
steam sensor. DOE also found that infrared and weight sensors, which 
require little to no warm-up time or standby power, had been applied 
successfully in Japanese-market microwave ovens. Furthermore, DOE 
identified relative humidity sensors with no standby power consumption 
as a feasible microwave oven cooking sensor technology, but found no 
microwave ovens using these sensors at the time. Finally, DOE learned 
that a major microwave oven supplier to the U.S. market was preparing 
to introduce microwave ovens using a new type of absolute humidity 
sensor with no standby power requirement and no cost premium over that 
of a conventional absolute humidity sensor. 73 FR 62034, 62051 (Oct. 
17, 2008).
    In the February 2012 SNOPR, DOE noted that it was not aware of any 
intellectual property or patent infringement issues for infrared 
sensors, weight sensors, piezoelectric sensors, or relative humidity 
sensors. With respect to the accuracy and reliability of low- and zero-
standby power cooking sensors, DOE noted that a significant number of 
microwave oven models using the alternate cooking sensor technologies 
discussed above are available on the international market, and have 
been available for a number of years. As discussed above, DOE was also 
aware of one zero-standby power cooking sensor technology used in 
microwave ovens on the U.S. market. DOE noted in the February 2012 
SNOPR that it was not aware of any data indicating that the reliability 
and accuracy associated with these low- and zero-standby power cooking 
sensors significantly differs from that of the absolute humidity 
sensors currently employed in microwave ovens on the U.S. market. DOE 
was also unaware of data showing that fouling of infrared cooking 
sensors would significantly differ from that of absolute humidity 
sensors, or data on the decreased accuracy due to fouling as compared 
to the fouling of absolute humidity sensors. DOE stated that because it 
was not aware of any relative humidity cooking sensors used in 
microwave ovens currently on the market, it was also not aware of any 
data regarding the accuracy of these sensors for detecting the state of 
the cooking load to adjust the cooking time. However, DOE noted that 
multiple other cooking sensor technology options exist that have been 
employed in microwave ovens in place of an absolute humidity cooking 
sensor. Based on this information, DOE tentatively concluded in the 
February 2012 SNOPR that the low- and zero-standby-power cooking sensor 
technologies discussed above are viable design options. 77 FR 8526, 
8537 (Feb. 14, 2012).
    DOE requested data and information on the accuracy and reliability 
of low- and zero-standby power cooking sensors as compared to absolute 
humidity cooking sensors currently used in microwave ovens on the U.S. 
market, and whether these technologies would affect how consumers use 
their microwave ovens or their satisfaction in using them due to any 
lessening of the utility or the performance of microwaves imposed by 
the standard. DOE also sought information on the current commercial 
availability of this technology, the likelihood of future adoption, and 
the potential impact on the lessening of competition amongst 
manufacturers. DOE also requested comment on whether any intellectual 
property or patent infringement issues are associated with the cooking 
sensor technologies discussed above. 77 FR 8526, 8537-38 (Feb. 14, 
2012).
    The Joint Commenters stated that sensor cooking has previously 
relied on the use of absolute humidity sensors that require a warm-up 
time after a period in a lower-power state, which is typically avoided 
by maintaining constant power to the sensor. The Joint Commenters 
stated that placing this type of cooking sensor into a lower power 
state could affect the consumer experience as a result of the necessary 
warm-up time. Based on DOE's findings regarding the availability of 
zero or near-zero standby power cooking sensors without such warm-up 
times, the Joint Commenters supported DOE's conclusion that such 
technologies can be used without impacting consumer utility. (Joint 
Comment, No. 17 at pp. 1-2)
    GE stated that:
     Zero-standby power cooking sensors, while limited in use 
at that time, had not been fully tested and evaluated as appropriate 
alternatives;
     DOE should provide data on the availability, reliability, 
and functionality of these sensors;
     Absolute humidity sensors with standby power consumption 
offer greater resolution than relative humidity sensors with no standby 
power consumption and therefore offer consumer utility;
     Some of the sensor technologies, such as infrared and 
weight sensors, are not feasible alternatives to the absolute humidity 
sensors used today; and
     DOE should provide further information about absolute 
humidity sensors with no standby power consumption and no cost premium 
over that of a conventional absolute humidity sensor. (GE, No. 19 at p. 
3)
    GE further commented that industry's experience and research do not 
support considering the same sensor technologies for all microwave oven 
platforms, and that different technologies are required for a 
countertop versus over-the-range application. GE stated that if 
evidence to support this conclusion is not available, DOE should 
determine that absolute humidity sensors provide consumers with utility 
that cannot be matched by zero-standby power cooking sensors. (GE, No. 
19 at pp. 1-2) GE also commented that DOE should preserve the use of 
absolute humidity sensors for over-the-range microwave ovens. (GE, No. 
19 at p. 3)
    Whirlpool commented that most of its new microwave ovens use a 
humidity sensor that can be de-energized in standby mode and off mode. 
According to Whirlpool, these absolute humidity sensors use the same 
technology as older types of absolute humidity sensors and maintain 
similar performance. Whirlpool also stated that, unlike the older 
sensors that require a few minutes to stabilize after activation, the 
newer sensors are operational after a wake-up

[[Page 36331]]

time of approximately 10 seconds, which is not noticeable to the 
consumer. Whirlpool commented that its products with this type of 
sensor have been on the market in Europe for almost 3 years, and there 
have been no issues with them. However, Whirlpool also commented that 
there are limited suppliers of these absolute humidity sensors and 
capacity is currently limited due to flooding in late 2011 in Thailand 
that destroyed the equipment and factory that had been producing 
sensors for Whirlpool. Whirlpool stated that adequate lead time and 
access to capital will be required for these suppliers to add 
sufficient capacity if such sensors are mandated. (Whirlpool, No. 15 at 
pp. 3-4) Whirlpool commented that a simple circuit with several 
transistors to shut down a cooking sensor would cost approximately 
$0.10. (Whirlpool, No. 15 at p. 4)
    DOE contacted multiple cooking sensor manufacturers to further 
evaluate zero-standby power absolute humidity sensors. DOE identified 
one sensor manufacturer that supplies absolute humidity sensors to 
multiple microwave oven manufacturers that comprise a significant 
portion of the market (over 50 percent). This sensor manufacturer noted 
that all of its sensors are capable of short warm-up times (5-10 
seconds). This sensor manufacturer also noted that the control circuits 
would only need to be modified to add transistors to de-energize the 
cooking sensors while in standby mode. Because these zero-standby power 
absolute humidity sensors can be energized in a period of time that is 
small compared to the duration of a cooking cycle in which they would 
be used, these sensors provide the same utility to consumers as 
absolute humidity sensors that must remain energized in standby mode. 
This sensor manufacturer also indicated that there are no patents on 
these short warm-up time humidity sensors that would restrict other 
sensor manufacturers from supplying similar products to microwave oven 
manufacturers.
    The absolute humidity sensor manufacturer indicated that it has 
plans to expand manufacturing capacity and could expand further if 
market demands increase. DOE also determined, based on discussions with 
microwave oven manufacturers, that the cooking sensor manufacturing 
facility flooding issue discussed above has been resolved. As a result, 
DOE does not believe there are any issues limiting the supply of these 
zero-standby power absolute humidity sensors.
    Based on microwave oven manufacturer interviews, DOE determined 
that reliability of these zero-standby power absolute humidity sensors 
has not been an issue. One manufacturer noted that the reliability is 
expected to be improved compared to previous sensor types because the 
zero-standby power absolute humidity sensors are only energized during 
the cooking cycle, whereas the previous sensors are energized 
continuously for the lifetime of the product.
    Additionally, DOE's research confirms that multiple zero-standby 
power cooking sensors other than absolute humidity sensors are 
available at a similar cost to zero-standby power absolute humidity 
sensors. These include different methods for determining the state of 
the food load being cooked, using either piezoelectric steam, infrared, 
or weight sensors. As discussed above, DOE notes that piezoelectric 
steam sensors are currently used by one microwave oven manufacturer.
    Based on this information, DOE has determined that zero-standby 
power cooking sensors with equivalent reliability and accuracy as the 
existing absolute humidity cooking sensors will be available on the 
scale necessary to serve the U.S. microwave oven market at the time of 
new standards. DOE concludes, therefore, that zero-standby power 
cooking sensors are a viable design option for reducing microwave oven 
standby power consumption.
2. Display Technologies
    DOE stated in the October 2008 NOPR that it would consider three 
display technologies for reducing microwave oven standby power 
consumption: LED displays, LCDs with and without backlighting, and 
VFDs. DOE stated that LED displays and LCDs consume less power than 
VFDs. DOE also stated that each identified display technology provides 
acceptable consumer utility, including brightness, viewing angle, and 
ability to display complex characters. 73 FR 62034, 62051 (Oct. 17, 
2008).
    In response to comments received in the October 2008 NOPR, DOE 
researched microwave oven display technologies and found that multiple 
over-the-range microwave ovens with low-power displays, including the 
LED and LCD types, are currently available on the U.S. market. DOE also 
found that manufacturer temperature ratings for the three types of 
displays are comparable. Furthermore, DOE found that LED displays and 
LCDs in both countertop and over-the-range microwave ovens offer 
acceptable consumer utility features, including brightness, viewing 
angle, and ability to display complex characters. DOE found no 
microwave oven display technologies with intermittent backlighting or 
other features that impair consumer utility. As a result, DOE stated in 
the February 2012 SNOPR that LED displays and LCDs can be integrated 
into any countertop or over-the-range microwave oven, with proper heat 
shielding and without significant loss of consumer utility. 77 FR 8526, 
8538 (Feb. 14, 2012).
    AHAM and GE disagreed that LED displays and LCDs can be integrated 
into all countertop or over-the-range microwave ovens with proper heat 
shielding and without significant loss of consumer utility. (AHAM, No. 
16 at p. 4; GE, No. 19 at p. 1) GE commented that DOE should preserve 
the use of VFDs in over-the-range microwave ovens. GE stated that DOE 
did not consider the reliability of low-power displays. According to 
GE, non-VFD displays deteriorate when exposed to high heat by darkening 
and becoming unreadable. GE stated that this is a serious deficiency in 
components that must be included in millions of products that operate 
in the extreme heat environments found in most over-the-range 
applications. GE stated that DOE should provide data from life testing 
under high-heat conditions before adopting a standard that would 
require low-power displays. (GE, No. 19 at pp. 2, 3)
    Whirlpool commented that it uses LCD, VFD, and LED displays in 
microwave ovens, but that LCDs require more attention to cooling than 
the others. (Whirlpool, No. 15 at p. 4) Whirlpool also noted that the 
user appearance of LCD, VFD, and LED displays is different, and 
Whirlpool uses that to help brand appearance and differentiation. 
According to Whirlpool, VFDs allow for the display of bright text at a 
cost and performance level that is preferable to the other 
technologies. Whirlpool stated that the power used by VFDs is a 
function of the size of the display, and that a typical midrange over-
the-range microwave oven with a VFD with a graphical area of 2 inches 
by 1 inch could meet the 2.2 W standby level. Whirlpool commented that 
very large VFDs that can be found in some built-in products will have 
issues reaching these levels. Whirlpool noted that there is technology 
available for VFDs that allows part of the display area to be shut 
down, while leaving a small area (e.g., the clock) to remain on. 
However, Whirlpool also noted that use of this technology would place 
other design restrictions on the display, such as restrictions on 
pattern design. Whirlpool stated that these restrictions would increase 
costs beyond DOE's

[[Page 36332]]

estimate and/or reduce consumer functionality. (Whirlpool, No. 15 at p. 
4)
    Whirlpool commented that LCDs face more challenges in larger sizes, 
and the backlight intensity may need dimming or limiting of the 
available intensity setting. Whirlpool stated that the added functions 
needed to manage the power can range from a few cents to dollars, 
depending on the size and technology of the display. (Whirlpool, No. 15 
at p. 4)
    DOE conducted additional review of products available on the U.S. 
market and identified 25 over-the-range microwave oven models from 
multiple manufacturers that incorporated LCD or LED displays. To 
further evaluate the reliability and consumer utility of LED displays, 
LCDs, and VFDs in over-the-range environments, DOE contacted display 
manufacturers to discuss these issues. Display manufacturers indicated 
that most LED displays and VFDs have maximum operating temperatures of 
85 degrees Celsius ([deg]C), while most LCDs have maximum operating 
temperatures of 70 [deg]C. DOE also noted that display reliability 
testing is generally conducted at 90-percent relative humidity (RH). 
According to display manufacturers, the rated lifetime (i.e., the time 
at which the display brightness will have decreased by 50 percent) for 
most LED displays is approximately 50,000 hours, whereas the lifetime 
for VFDs is between 35,000 and 50,000 hours. Display manufacturers also 
noted that LED displays and VFDs can achieve similar levels of 
brightness. For LCDs with LED backlighting, display manufacturers 
stated that the lifetime of approximately 50,000 hours is based on the 
LED backlights, because the LED backlighting will fail before the LCD 
itself as long as the display is operated within the rated temperature 
and humidity conditions. According to display manufacturers, if LED 
displays, LCDs, and VFDs are operated below their maximum rated 
operating temperature and humidity, the lifetime would not be affected.
    To further investigate reliability under the conditions experienced 
in over-the-range installations, DOE conducted testing on a sample of 
over-the-range microwave ovens with different display types. DOE 
selected 2 LED, 2 LCD, and 3 VFD over-the-range microwave oven models 
for testing. For each model, DOE purchased two identical units to 
evaluate the reliability under two separate temperature and humidity 
conditions. Prior to the start of testing, the illuminance for each 
display was measured from a fixed distance under dark room conditions. 
In order to obtain consistent and comparable measurements, each clock 
display was set to 12:00 prior to the illuminance measurements. Because 
some displays may dim after a period of user inactivity, the 
illuminance for each unit was measured again after a period of 10 
minutes of inactivity.
    One set of the six microwave oven models were then operated in 
standby mode in an environmental chamber for twelve 20-hour periods at 
82.5  2.5 [deg]C and 90  5 percent RH, and the 
other set of six microwave ovens was operated in standby mode for 
twelve 20-hour periods at 67.5  2.5 [deg]C and 90  5 percent RH. The temperature conditions were selected based on 
the maximum rated operating conditions for the different display types. 
After each 20-hour period at elevated temperature and humidity, the 
environmental chamber and microwave ovens were cooled to ambient room 
temperature (23  5 [deg]C), at which point the illuminance 
of each display was measured before and after a 10-minute period of 
inactivity using the same method described above. Each set of microwave 
ovens was exposed to the elevated temperature and humidity conditions 
for a total of 240 hours. DOE selected this number of hours based on 
its review of available information on the duration of lifetime testing 
under similar ambient conditions that display manufacturers conduct. 
The number of hours manufacturers used ranged from 48 to 240, and DOE 
selected the maximum 240 hours for its testing. The illuminance was 
measured twice at ambient room conditions after each 20-hour cycle. In 
addition, power consumption and current were measured throughout each 
20-hour cycle and subsequent 10-minute illuminance measurement period 
for each test unit.
    The test results showed that display illuminance tended to degrade 
over time at these elevated conditions for most of the units tested, 
but the data did not reveal a correlation between the rate of 
degradation and display type. VFDs in DOE's test sample degraded both 
more and less rapidly than the LED displays under both temperature/
humidity conditions, including an LED display with illuminance 
comparable to the VFDs in the test sample. DOE notes that the test 
units for one of the models with a backlit LCD failed after 20 hours at 
82.5 [deg]C and after 60 hours at 67.5 [deg]C. Other backlit LCD model 
had similar illuminance levels as two of the VFD models and showed 
little to no degradation. Based on these test data, DOE concludes that 
all display types can be used in over-the-range microwave oven 
applications without a loss in consumer utility. For further details on 
the display reliability testing, see chapter 5 of the final rule TSD.
3. Power Supply and Control Boards
    In the October 2008 NOPR, DOE discussed several technologies 
available to increase power supply and control board efficiency that 
would reduce microwave oven standby power consumption. DOE found some 
microwave ovens on the U.S. market using switch-mode power supplies 
with up to 75-percent conversion efficiencies and 0.2 W or less no-load 
standby losses, though these models came with a higher cost, higher 
part count, and greater complexity. DOE stated that switch-mode power 
supplies were, at the time, unproven in long-term microwave oven 
applications, and the greater complexity of these power supplies could 
also lower overall reliability. DOE was also aware of options to 
improve the energy efficiency of linear power supplies, such as low-
loss transformers or unregulated voltages closer to the voltages used 
for logic and control, but these were not found on commercially 
available microwave ovens at the time. 73 FR 62034, 62051 (Oct. 17, 
2008).
    In response to the October 2008 NOPR, some commenters stated that 
certain switch-mode power supplies used in computers have efficiencies 
greater than 90 percent, while others questioned the reliability of 
switch-mode power supplies for use in microwave ovens, and that 
electromechanical controls will be needed to meet standby power 
requirements. In its analysis for the February 2012 SNOPR, DOE observed 
that switch-mode power supplies are found in products such as 
computers, battery chargers, clothes washers, and clothes dryers, 
suggesting that the reliability and durability of switch-mode power 
supplies has been proven in residential appliance applications. DOE 
also noted that microwave ovens incorporating switch-mode power 
supplies have been available for multiple years and are still used, as 
evidenced by such power supplies observed in DOE's most recent test 
sample of convection microwave ovens. DOE's research suggested that 
switch-mode power supplies for appliance applications in power 
capacities similar to those utilized in microwave ovens achieve no 
greater than 75-percent efficiency,\16\ and DOE was unaware of data 
indicating that the reliability of

[[Page 36333]]

switch-mode power supplies is significantly worse than conventional 
linear power supplies over the lifetime of the product. DOE was also 
not aware at that time of any microwave ovens on the market at that 
time with electromechanical controls. As a result, in the February 2012 
SNOPR, DOE proposed considering only microwave ovens with electronic 
controls in determining standby power levels, and determined that 
electromechanical controls would not be required to achieve any of the 
standby power levels proposed in the February 2012 SNOPR. 77 FR 8526, 
8538-39 (Feb. 14, 2012).
---------------------------------------------------------------------------

    \16\ Information on the design and efficiency of switch-mode 
power supplies can be found at http://www.powerint.com/en/applications/major-appliances. (Last accessed December 2012.)
---------------------------------------------------------------------------

    Whirlpool commented that it uses switch-mode power supplies in many 
of its microwave ovens. According to Whirlpool, such power supplies 
will cost more than conventional linear power supplies with traditional 
transformers, depending on the particular design and product features. 
For a new design optimized for low standby power consumption, Whirlpool 
believes that the cost increase would be in the range of DOE's SNOPR 
analysis for both countertop and built-in/over-the-range microwave 
ovens. Whirlpool also commented, however, that if an existing design 
needs to be modified, the incremental manufacturing cost will exceed 
DOE's estimates for both product classes. Whirlpool stated that DOE 
underestimates the impact on manufacturers, which will either incur 
greater costs in designing new control systems or added product cost to 
adapt existing control systems. Whirlpool further stated that although 
it has not investigated the use of solid state relays to reduce the 
power requirements for power supplies, it believes that the reduction 
in power consumption would be minimal. (Whirlpool, No. 15 at p. 5)
    In response to these comments, DOE expanded the scope of its 
microwave oven power supply analysis. First, DOE conducted an updated, 
comprehensive survey of microwave oven brands and models available on 
the U.S. market. The database contains 459 entries for Product Class 1 
and 81 for Product Class 2. The database categorizes each microwave 
oven by installation configuration (i.e., built-in, over-the-range, or 
counter-top), heating technology (i.e., microwave-only, microwave plus 
thermal heating elements, or microwave plus convection), magnetron 
power supply type (i.e., conventional or inverter), and display type 
(i.e., LED, LCD, backlit LCD, VFD, or none).
    As part of this research, DOE identified four countertop microwave-
only models produced by two manufacturers that have electromechanical 
rotary dial controls and no displays, and which, therefore, are capable 
of operation in off mode. Because these units represent less than 1 
percent of the models in Product Class 1 and because their power 
consumption is already low due to the lack of a display, any energy 
savings associated with off mode energy conservation standards for 
microwave ovens would be trivial. For these reasons, DOE is not 
adopting standards for microwave oven off mode at this time.
    DOE conducted further standby power testing on a representative 
sample of built-in and over-the-range units from both Product Class 1 
and Product Class 2 to supplement the existing inputs into the 
analysis. DOE determined the portion of overall product standby power 
consumption that is associated with baseline power supply and control 
board configurations for each product type based on these laboratory 
measurements.
    DOE then identified options for reducing power supply and control 
board power consumption, which include low-loss transformers, switch-
mode power supplies, and three different relay options of varying 
energy efficiency.\17\ Based on this new set of standby power and 
design option information, DOE identified 39 different power supply 
design pathways for the various microwave oven configurations that 
could be used to achieve the standby power levels analyzed in this 
final rule. Each pathway comprises the combination of power supply and 
control board design options that would decrease standby power 
requirements.
---------------------------------------------------------------------------

    \17\ Please see: http://orbit.dtu.dk/fedora/objects/orbit:56806/datastreams/file_4175071/content. (Last accessed November 28, 
2012).
---------------------------------------------------------------------------

    For each standby power level analyzed, DOE took into consideration 
the specific power consumption needs for the product type being 
analyzed. For example, DOE confirmed in each case that the power supply 
could power at least three 3 ampere (A)-rated relays and one 16 A-rated 
relay concurrently, in addition to the other microwave oven base loads. 
MWO control boards may contain more relays than that, but DOE research 
suggests that not all relays will be active at the same time. The 16 A-
rated relay is typically used to control the power input into the 
magnetron assembly, while the 3 A-rated relays are typically used for 
other functions, such as controlling a blower fan, turntable motor, or 
interior light.
    DOE research also suggests that power supplies inside microwave 
ovens typically feature multiple direct current (DC) voltages with 
varying levels of line regulation. The voltages used to drive relays 
are usually the highest and the least regulated, as relays do not need 
very stable voltages. In a microwave oven with a linear power supply, 
unregulated power is the result of the line voltage being converted to 
a lower voltage by a transformer, rectified via a bridge rectifier, and 
smoothed somewhat with a capacitor. On control boards with linear power 
supplies, a linear regulator and additional capacitors provide a very 
smooth power supply suitable for microprocessors at even lower voltages 
than the unregulated supply. Boards featuring switch-mode power 
supplies will produce the two DC voltages with similar regulation 
characteristics through the use of integrated circuits directly from 
rectified line power.
    Switch-mode power supplies differ from linear regulators in 
conversion efficiency. Linear regulators produce a constant output 
voltage by dissipating the difference between the target voltage and 
the input voltage times the current drawn into heat. Thus, the higher 
the input voltage or the lower the target voltage, the higher the power 
dissipation and the lower the power supply efficiency. Switch-mode 
power supplies, however, turn line power on and off as needed, thus 
avoiding a significant portion of the energy losses associated with 
linear power supplies. While switch-mode power supplies typically offer 
higher conversion efficiencies, they are more complicated and difficult 
to design, and still not widespread in microwave oven applications.
    DOE research suggests that inverter-based microwave ovens consume, 
on average, 0.9 W more in standby mode than non-inverter microwave 
ovens featuring the same display technology and installation 
configuration. All inverter-driven units that DOE reverse-engineered 
originated from one manufacturer and featured linear regulators 
supplied by an unregulated bus voltage of 18 volts (V). Based on the 
above discussion, one likely contributing factor to the higher standby 
power of these units is the high unregulated bus voltage. Additionally, 
the inverter board powering the magnetron contained a number of 
microprocessors and other components that appear to be powered 
continuously. DOE research suggests that the standby power requirements 
of these microwave ovens could be reduced substantially by reducing the 
unregulated bus voltage and fitting a disconnect relay/transistor for 
the inverter control board. For such systems, DOE's design pathways 
include a relay option to shut down the

[[Page 36334]]

power to the inverter board altogether when in standby mode. Similarly, 
the manufacturer could redesign the units to feature a lower 
unregulated bus voltage of 9 V or 12 V, potentially doubling the 
efficiency of the linear power supply.
    Since the sample of microwave ovens reverse-engineered by DOE 
research only included two units with a switch-mode power supply, DOE 
chose to use reference designs published by a major power supply 
manufacturer instead. The reference power supplies selected by DOE are 
intended to be drop-in replacements for the current linear power 
supplies assumed for the baseline. All switch-mode power supplies used 
in the analysis feature two typical output voltage options (12 V and 5 
V) to allow manufacturers to continue using the same relay and 
microprocessor families as in their present designs.
    DOE research suggests that a small percentage of microwave ovens 
would not be able to achieve baseline standby power levels without 
incorporating switch-mode power supplies. For example, DOE tore down 
two microwave ovens in Product Class 2 which featured switch-mode power 
supplies for which average standby power consumption ranged from 4.1-
4.3 W. DOE research suggests that the same microwave oven using a 
linear power supply would draw about twice as much standby power. For 
the purpose of the analysis and the potential design pathways, the 
standby requirements were adjusted accordingly, and the adjusted 
measurements became an input into the average for all standby 
measurements of this particular microwave oven sub-type (back-lit LCD, 
over-the-range, with cooking sensor).
    DOE also developed updated costs for power supply options that were 
based on additional review of past teardowns, inputs from subject 
matter experts, and analysis of reference designs by a major supplier 
of switch-mode power supplies. DOE research suggests that the component 
prices for switch-mode power supplies and traditional linear power 
supplies are currently nearly equivalent. However, DOE concludes that 
the industry will likely transition to switch-mode power supplies as it 
gains more experience with them, causing switching component prices to 
fall further as volumes increase. Additionally, the adoption of switch-
mode power supplies would facilitate standardized control boards for 
world-wide use, thereby reducing testing and development costs.
    For each design pathway for the different product types that can be 
used to achieve the various standby power levels, DOE determined the 
corresponding manufacturing cost based on the cost of the components 
and the typical markups that printed circuit board manufacturers charge 
for the manufacture and testing of the control boards. Details of the 
costs at each standby power level are presented in the engineering 
analysis in section 0 of this rulemaking, and in chapter 5 of the final 
rule TSD.
4. Power-Down Options
    In the October 2008 NOPR, DOE determined that control strategies 
are available to allow microwave oven manufacturers to make design 
tradeoffs between incorporating power-consuming features such as 
displays or cooking sensors and including a function to cut power to 
those components during standby mode. DOE found at that time that a 
large number of microwave ovens incorporating this automatic power-down 
feature were available in other markets such as Japan. 73 FR 62034, 
62051-52 (Oct. 17, 2008).
    In response to the October 2008 NOPR, interested parties commented 
that: (1) The industry lacks data on control board circuitry to allow 
for a function to cut off power during standby mode, (2) such features 
must be reliable in high-temperature environments, and (3) DOE had 
allowed no time for manufacturers to evaluate the viability or 
feasibility of the proposed technologies. In the February 2012 SNOPR, 
DOE noted that its research had not identified any technical barrier 
that would prevent microwave oven manufacturers from successfully 
integrating such control board circuitry with proper heat shielding and 
other design elements. DOE stated it was also aware of similar 
automatic power-down control technologies incorporated in products such 
as clothes washers and clothes dryers, which utilize an additional 
transformer-less power supply to provide just enough power to maintain 
the microcontroller chip while the unit is powered down, resulting in 
very low standby power levels. Therefore, DOE determined in the 
February 2012 SNOPR that an automatic power-down feature is technically 
feasible in microwave applications. 77 FR 8526, 8539 (Feb. 14, 2012).
    Commenters on the October 2008 NOPR also requested clarification on 
whether an on/off switch, particularly a consumer-activated one, would 
be considered a design option for the purpose of standby mode energy 
use. Under the mode definitions adopted by the amended microwave oven 
test procedure from the March 2011 TP Interim Final Rule (76 FR 12825, 
12834-37 (Mar. 9, 2011)), a product for which an on/off switch has 
turned off the display would be considered to be in off mode, unless 
other energy consuming features associated with standby mode remain 
energized (i.e., features to facilitate the activation of other modes 
by remote switch, internal sensor, or timer; or continuous functions, 
including other information or status displays or sensor-based 
features). In the latter case, the microwave oven would remain in 
standby mode even with the display turned off. DOE was not aware at the 
time of the February 2012 SNOPR of any products incorporating a user-
activated control to turn the display on or off, and did not have 
information to evaluate how often consumers might make use of such a 
feature. Therefore, DOE determined in the February 2012 SNOPR that it 
was unable to analyze such a control as a design option. DOE however 
agreed that such a feature, if provided, could result in decreased 
energy usage in standby mode or off mode, and noted that manufacturers 
would not be precluded from incorporating such a feature in their 
products under the proposed standards. 77 FR 8526, 8539-40 (Feb. 14, 
2012). As part of the latest market survey, DOE noted several microwave 
ovens which allow consumers to turn the display off. DOE notes, 
however, that the power savings are highly dependent on the type of 
display, the mechanism by which the display is turned off, and the 
power supply.
    Whirlpool commented that certain features for the microwave oven 
may not be available if a relay is used to turn off a secondary power 
supply. Whirlpool provided an example in which the oven cavity light 
may not turn on if the door is opened while the control is in standby 
mode. In this scenario, a user may have to press a button to wake up 
part of the control first or put food in with the light off. According 
to Whirlpool, consumers would likely find this unacceptable. Whirlpool 
commented that the cost of adding the relay is under $1 if it is added 
early in the design process, or as much as $4 if added to existing 
designs. Whirlpool also commented that monitoring only certain keys on 
the keypad or monitoring them at a slower rate, especially on glass 
touch interfaces, can reduce standby mode energy consumption, although 
a user may have to press an ``on'' key first before pressing other 
keys. Whirlpool stated that the additional cost for this feature is 
approximately $0.25. (Whirlpool, No. 15 at p. 5)

[[Page 36335]]

    For today's final rule, DOE further examined automatic power-down 
strategies. DOE notes that there are many design pathways available to 
implement automatic power-down and re-awakening feature. For example, 
the microwave oven could be designed to return to a fully-on state 
every time a consumer opens the door, as there are at least three 
micro-switches that monitor the state of the door. DOE determined that 
achieving the max-tech standby power levels would likely require a 
relay-driven disconnect between line power and the power filtration 
board typically incorporated in microwave ovens. The automatic power-
down module that DOE included for this design option features a 1.5 W 
switch-mode power supply that can respond to a simple switch signal to 
power up and enable microwave oven operation via a relay on the power 
filtration board.\18\ If the existing door switches do not suffice, an 
additional door switch could provide the necessary signal to enable 
this power supply, for which power consumption is otherwise nearly 0 W. 
Thus, the microwave oven would power up, enabling a light to be 
energized, with a delay short enough to be perceived as instantaneous 
when the consumer opens the door. For such an approach, the costs for 
automatic power-down increased slightly compared to the costs that were 
included in the analysis for the February 2012 SNOPR. Details of the 
costs for this design option are included in the engineering analysis 
in section 0 of this rulemaking and in chapter 5 of the final rule TSD.
---------------------------------------------------------------------------

    \18\ Please see: http://powerintegrations.com/sites/default/files/PDFFiles/der260.pdf.
---------------------------------------------------------------------------

D. Engineering Analysis

    The purpose of the engineering analysis is to characterize the 
relationship between the energy use and the cost of standby mode 
features of microwave ovens. DOE used this standby power/cost 
relationship as input to the payback period, LCC, and NIA analyses. The 
engineering analysis provides data that can be used to establish the 
manufacturer selling price of more efficient products. Those data 
include manufacturing costs and manufacturer markups.
    DOE has identified three basic methods for generating manufacturing 
costs: (1) The design-option approach, which provides the incremental 
costs of adding to a baseline model design options that will improve 
its efficiency (i.e., lower its energy use in standby mode and off 
mode); (2) the efficiency-level approach, which provides the 
incremental costs of moving to higher energy efficiency levels (in this 
case, levels of reduced standby power), without regard to the 
particular design option(s) used to achieve such increases; and (3) the 
cost-assessment (or reverse-engineering) approach, which provides 
``bottom-up'' manufacturing cost assessments for achieving various 
levels of increased efficiency, based on detailed data on costs for 
parts and material, labor, shipping/packaging, and investment for 
models that operate at particular efficiency levels. DOE conducted the 
engineering analysis for this rulemaking using the efficiency-level 
approach. For this analysis, DOE relied on laboratory testing of 
representative microwave ovens. DOE supplemented the standby power data 
with data gained through reverse-engineering analysis and primary and 
secondary research, as appropriate. To identify microwave oven design 
options, DOE performed a reverse-engineering analysis on a 
representative sample of microwave ovens, and presented the details of 
the engineering analysis in chapter 5 of the February 2012 SNOPR TSD. 
DOE updated this analysis for today's final rule through additional 
teardowns and testing that are detailed in chapter 5 of the final rule 
TSD.
1. Energy Use Metric
    In the October 2008 NOPR, DOE explored whether it would be 
technically feasible to combine the existing measure of energy 
efficiency during the cooking cycle per use (i.e., active mode) with 
standby mode and off mode energy use over time to form a single metric, 
as required by EISA 2007. (42 U.S.C. 6295(gg)(2)(A)) DOE tentatively 
concluded that, although it may be mathematically possible to combine 
energy consumption into a single metric encompassing active, standby, 
and off modes, it is not technically feasible to do so due to the high 
variability in the cooking efficiency measurement based on the 
microwave oven test procedure at that time and because of the 
significant contribution of standby power to overall microwave oven 
energy use. Therefore, DOE proposed a separate metric to measure 
standby power as provided by EISA 2007. 73 FR 62034, 62042-43 (Oct. 17, 
2008).
    Interested parties agreed with DOE's determination that it is not 
technically feasible to integrate standby mode and off mode energy use 
into a single efficiency metric with the active mode energy use for 
microwave ovens, or stated that it would not be practical to do so. One 
commenter questioned if there were any legal prohibition on 
establishing a prescriptive standby power standard for microwave ovens, 
especially since DOE was at that time also proposing a prescriptive 
standard for other cooking products (i.e., standing pilots in gas 
cooking products). DOE eliminated the active mode cooking efficiency 
provisions in the July 2010 TP Final Rule after it determined that 
those provisions did not produce accurate and repeatable results. 75 FR 
42579 (July 22, 2010). Therefore, in the February 2012 SNOPR, DOE 
determined that the absence of active mode provisions results in a de 
facto separate energy use descriptor for microwave oven standby mode 
and off mode energy use. 77 FR 8526, 8540 (Feb. 14, 2012).
    DOE did not receive any comments in response to the February 2012 
SNOPR regarding the use of a metric for measuring standby mode and off 
mode energy use separate from any active mode energy use metric for 
microwave ovens. For the reasons discussed above, DOE is adopting 
energy conservations based on maximum allowable standby power levels in 
today's final rule.
2. Standby Power Levels
    DOE considered standby mode and off mode standards based on a 
maximum allowable standby power, in W, for microwave ovens. For the 
reasons noted previously, the standards do not include off mode power. 
As discussed in section IV.A, in the October 2008 NOPR, DOE proposed a 
single product class for microwave ovens that would encompass microwave 
ovens with and without browning (thermal) elements, but would not 
include microwave ovens that incorporate convection systems. For the 
October 2008 NOPR, DOE's analysis estimated the incremental 
manufacturing cost for microwave ovens having standby power consumption 
less than the baseline level of 4 W. For the purposes of that analysis, 
a baseline microwave oven was considered to incorporate an absolute 
humidity cooking sensor. To analyze the cost-energy use relationship 
for microwave oven standby power, DOE defined standby power levels 
expressed as a maximum allowable standby power in W. To analyze the 
impacts of standards, DOE defined the following four standby power 
levels for analysis: (1) The Federal Energy Management Program (FEMP) 
procurement efficiency recommendation; (2) the International Energy 
Agency's (IEA's) 1-Watt Plan; (3) a standby power level as a gap-fill 
between the FEMP Procurement Efficiency Recommendation and IEA 1-Watt 
Plan; and (4) the current maximum microwave oven standby technology

[[Page 36336]]

(max-tech; i.e., lowest standby power) that DOE determines is or could 
be commercially available when the energy conservation standards become 
effective, based on a review of microwave ovens currently on the market 
worldwide. Table IV-2 provides the microwave oven standby power levels 
and the reference source for each level that DOE analyzed for the 
October 2008 NOPR. Due to the definition of only four standby power 
levels, a TSL was defined for each standby power level and thus standby 
power levels may also be referred to as TSLs.

   Table IV-2--October 2008 NOPR Proposed Microwave Oven Standby Power
                                 Levels
------------------------------------------------------------------------
                                                               Standby
    Standby power level (TSL)              Source            power  (W)
------------------------------------------------------------------------
Baseline........................  Baseline................          4.0
1...............................  FEMP Procurement                  2.0
                                   Efficiency
                                   Recommendation.
2...............................  Gap Fill................          1.5
3...............................  IEA 1-Watt Program......          1.0
4...............................  Max Tech................          0.02
------------------------------------------------------------------------

    In response to the October 2008 NOPR, interested parties commented 
that while the microwave oven standby power TSLs were appropriate, 
over-the-range microwave ovens that use VFDs would not be able to meet 
the 1.0 W standard (TSL 3) proposed in the October 2008 NOPR, and that 
use of other display technologies for over-the-range microwave ovens 
would reduce consumer utility. Commenters also stated that DOE should 
conduct additional testing of over-the-range microwave ovens with VFDs, 
and that manufacturers should be allowed a variety of pathways to 
reduce standby power consumption to each TSL. 77 FR 8526, 8541 (Feb. 
14, 2012).
    DOE research for the February 2012 SNOPR established that multiple 
over-the-range microwave ovens are currently available on the market 
that incorporate low-power display technologies, including LED displays 
and LCDs. DOE also determined that manufacturer temperature ratings for 
the three types of displays are comparable, and that LED displays and 
LCDs in both countertop and over-the-range microwave ovens offer 
acceptable consumer utility features, including brightness, viewing 
angle, and ability to display complex characters. Based on these 
findings, DOE determined for the February 2012 SNOPR that the TSLs and 
the associated analyses from the October 2008 NOPR were still valid and 
would apply to the revised product class encompassing microwave-only 
ovens (including countertop, built-in, and over-the-range units) and 
countertop convection microwave ovens. DOE also determined that 
multiple pathways exist to reach each TSL, based on the selection of 
the display technology, power supply/control boards, and cooking 
sensors, and the possible incorporation of algorithms to automatically 
reduce standby power after a period of inactivity, as stated in the 
October 2008 NOPR. Id.
    Based on the October 2008 NOPR, interested parties also requested 
additional information about the functionality associated with a 
microwave oven that meets the max-tech level, including response time 
from power-down, and whether such a model has as many display features 
and included all the features of the baseline models. In the February 
2012 SNOPR, DOE stated that the max-tech microwave oven standby power 
level of 0.02 W corresponds to a unit equipped with a default automatic 
power-down function that disables certain power-consuming components 
after a specified period of user inactivity. The standby power at max-
tech was obtained from a microwave oven on the market at that time in 
Korea, which incorporated such a feature. 73 FR 62034, 62045 (Oct. 17, 
2008). Although DOE did not have operational information on this 
specific model, DOE analyzed the components necessary to achieve an 
automatic power-down function, and determined that such a feature would 
not limit the selection of display technologies or other features that 
provide consumer utility. DOE analysis suggested that response times 
for startup would be short enough (less than 1 second) to be acceptable 
to consumers. 77 FR 8526, 8541 (Feb. 14, 2012).
    As noted previously, DOE proposed a separate product class for 
built-in and over-the-range convection microwave ovens in the February 
2012 SNOPR, and therefore also separately analyzed these microwave 
ovens in the engineering analysis. DOE's analysis estimated the 
incremental manufacturing cost for built-in and over-the-range 
convection microwave ovens having standby power consumption less than a 
baseline value of 4.5 W. To determine that baseline level, DOE measured 
the standby power consumption of a representative sample of built-in 
and over-the-range convection microwave ovens on the market at that 
time. For the purpose of that standby power analysis, a baseline built-
in/over-the-range convection microwave oven was considered to 
incorporate an absolute humidity cooking sensor. In order to analyze 
the cost-energy use relationship for this product class, DOE defined 
each standby power level as a maximum allowable standby power in watts. 
Id.
    To determine the maximum allowable standby power at each level in 
Product Class 2, DOE reverse-engineered a representative sample of 
built-in and over-the-range convection microwave ovens to analyze the 
various components that contributed to the standby power consumption of 
the unit. DOE also measured the standby power consumed by these 
components individually. In its analysis, DOE observed that the 
absolute humidity cooking sensors used in these convection microwave 
ovens on average consume 0.9 W of standby power. For Standby Power 
Level (SL) 1, DOE determined that standby power can be reduced by 
incorporating a zero-standby cooking sensor. For SL 2, DOE analyzed 
potential improvements to the power supply design. DOE noted that 
microwave ovens at the baseline standby energy use incorporate a linear 
power supply. DOE measured the standby power consumption of the power 
supply and found that the transformer used to step down the line input 
voltage contributes most significantly to the standby power 
consumption. DOE then performed a power budget analysis to determine 
the size of the transformer needed to operate a microwave at full load, 
and the results suggested that replacing the conventional linear power 
supply with a more efficient switch-mode power supply would reduce the 
standby power associated with the power supply. DOE

[[Page 36337]]

thus estimated the standby power for SL 2 based on the improvement 
associated with changing from a conventional linear power supply with 
an efficiency of 55 percent to a switch-mode power supply with an 
efficiency of 75 percent DOE developed this estimate for the efficiency 
of a switch-mode power supply based on research of such power supply 
designs for appliance applications. For SL 3, DOE analyzed the impact 
relays have in determining the size of a power supply. DOE compared the 
power budget of a control board with electromechanical relays to that 
with solid state relays, and observed that the power requirement of a 
control board, with similar input and load, was lower with solid state 
relays than with electromechanical relays. Therefore, DOE estimated the 
standby power at SL 3 based on design improvements associated with 
using more efficient components in a switch-mode power supply that 
incorporates solid state relays. For SL 4, DOE analyzed an automatic 
function that turns off power to standby power-consuming components 
after a certain period of inactivity and that uses a transformer-less 
power supply to maintain the microcontroller chip while the microwave 
oven is not powered on. DOE estimated the standby power at SL 4 based 
on the standby power requirements of the microcontroller chip. 77 FR 
8526, 8541-42 (Feb. 14, 2012).
    In light of the above analysis, DOE proposed in the February 2012 
SNOPR the standby power levels for the two product classes shown in 
Table IV-3.

  Table IV-3--February 2012 SNOPR Proposed Microwave Oven Standby Power
                                 Levels
------------------------------------------------------------------------
                                                  Standby power (W)
                                           -----------------------------
                                              Microwave-    Built-in and
            Standby power level                only and      over-the-
                                              countertop       range
                                              convection     convection
------------------------------------------------------------------------
Baseline..................................           4.0            4.5
1.........................................           2.0            3.7
2.........................................           1.5            2.7
3.........................................           1.0            2.2
4.........................................           0.02           0.04
------------------------------------------------------------------------

    DOE did not receive comments on these standby power levels in 
response to the February 2012 SNOPR. Whirlpool, however, submitted 
information regarding an off mode power level. Whirlpool stated that it 
is technically possible to achieve off mode power consumption below 0.1 
W, but that it would add significant cost, as well as restrict design 
choices and product functionality, both of which would be unacceptable 
to the consumer. Whirlpool commented that it has been complying with a 
1 W microwave oven off mode limit in Europe for several years, which 
will be reduced to 0.5 W in 2013. According to Whirlpool, most of its 
European built-in microwave ovens currently consume 0.6-0.9 W in off 
mode. Whirlpool expects to reduce this power consumption to 0.3-0.45 W 
by the end of 2012, noting the following contributors that prevent off 
mode power consumption from being 0 W:
     Certain circuitry must be powered at all times to ``wake 
up'' the product (power supply circuits, keyboard scanning, and micro 
controller(s)).
     A mains filter is required to comply with electromagnetic 
interference (EMI) regulations. Such filters include certain capacitors 
that must be discharged to prevent electric shock if the user touches 
the terminals of the mains plug after unplugging the appliance from the 
wall. There is normally a ``bleed resistor'' in the filter design to 
discharge the capacitors, which consumes power as soon as the appliance 
is connected to the mains.
     The filter itself has certain losses, and normally it is 
not possible to disconnect the filter in standby mode or off mode, as 
that would impact product function in active mode.

(Whirlpool, No. 15 at p. 3)

    DOE considered these comments, but noted that Whirlpool's inclusion 
of circuitry that is powered at all times to sense a user input and 
``wake up'' indicates that the product is operating in standby mode, as 
these components comprise a sensor to activate other mode(s). 
Furthermore, DOE concludes that this particular operating state is 
equivalent to the automatic power-down function associated with SL 4. 
DOE research suggests that the filter circuitry referenced by Whirlpool 
serves primarily to reduce the interference caused by the magnetron and 
its power supply, and that the power supply for at least some logic 
components inside a microwave oven do not necessarily have to be placed 
`behind' the filtration board. Instead, these logic components could 
derive their inputs directly from line power and disconnect the 
filtration board and the rest of the microwave oven from line power 
until a need arises. Additionally, DOE notes that at least one 
microchip manufacturer has commercialized a product to eliminate power 
losses associated with bleed resistors using a single component that 
isolates the bleed resistor(s) as long as line power is connected.
    Past reverse-engineering by DOE has uncovered several strategies to 
minimize standby power requirements. One option is to have a drop-
capacitor power supply feeding a low-power circuit whose sole function 
is to sense user interaction and to then activate the (much higher-
capacity) regular linear power supply for the logic components as 
needed. Thus, the transformer losses of the linear power supply are 
avoided. Another option is to have a switch-mode power supply that 
normally is `asleep' wake and activate the rest of the controls when 
the door is opened. The automatic power-down approach at SL 4 chosen by 
DOE consists of such a 1.5 W-capable power supply, a door switch, 
assorted wiring, and a relay that isolates the microwave filtration 
board (and hence the rest of the microwave oven) from line power 
whenever it is deep sleep mode.
    In addition, DOE's current research indicates that conventional 
linear power supplies have efficiencies of 40 percent or less, as 
compared to the 55-percent efficiency that was estimated for the 
February 2012 SNOPR. DOE accounted for this relative increase in 
efficiency improvement when changing to a switch-mode power supply by 
considering different design pathways to reach the standby power levels 
associated with this design option.
    Therefore, for the reasons discussed above for the standby power 
levels proposed in the February 2012 SNOPR, DOE has retained the same 
levels for the final rule analysis.
3. Manufacturing Costs
    In this rulemaking, DOE determined the estimated manufacturing cost 
for microwave ovens at each standby power level. The manufacturing 
costs are the basis of inputs for other analyses, including the LCC, 
national impact, and GRIM analyses.
    For microwave oven standby mode and off mode energy use, DOE 
estimated a cost-energy use relationship (or ``curve'') in the form of 
the incremental manufacturing costs associated with incremental 
reductions in baseline standby power. In the October 2008 NOPR, DOE 
determined that microwave oven standby power depends on, among other 
factors, the display technology used, the associated power supplies and 
controllers, and the presence or lack of a cooking sensor. From testing 
and reverse engineering, DOE observed correlations between (1) specific 
components and technologies, or combinations thereof, and (2) measured 
standby power. DOE obtained preliminary incremental manufacturing costs 
associated with standby power

[[Page 36338]]

levels by considering combinations of those components as well as other 
technology options identified to reduce standby power. In the October 
2008 NOPR, DOE presented manufacturing cost estimates based on quotes 
obtained from suppliers, interviews with manufacturers, interviews with 
subject matter experts, research and literature review, and numerical 
modeling. 73 FR 62034, 62055 (Oct. 17, 2008). They are shown in Table 
IV-4. As noted above, for the October 2008 NOPR, DOE analyzed a single 
product class for microwave ovens encompassing microwave ovens with and 
without browning (thermal) elements, but not including microwave ovens 
that incorporate convection systems.

   Table IV-4--October 2008 NOPR Proposed Microwave Oven Standby Power
                     Incremental Manufacturing Costs
------------------------------------------------------------------------
                                            Standby power   Incremental
            Standby power level                  (W)        cost (2007$)
------------------------------------------------------------------------
Baseline..................................           4.0           NA
1.........................................           2.0           $0.30
2.........................................           1.5            0.67
3.........................................           1.0            1.47
4.........................................           0.02           5.13
------------------------------------------------------------------------

    DOE noted that it had observed several different cooking sensor 
technologies. Follow-on testing after the December 2007 public meeting 
showed that some sensors were zero-standby (relative humidity) cooking 
sensors. During the MIA interview for the October 2008 NOPR, one 
manufacturer indicated that its supplier of cooking sensors had 
developed zero-standby absolute humidity cooking sensors that would 
have the same manufacturing cost as the higher-standby power devices 
they would replace. Based on the number of available approaches to 
zero-standby cooking sensors from which manufacturers can choose, DOE 
concluded at that time that all manufacturers can and likely would 
implement zero-standby cooking sensors by the effective date of standby 
mode and off mode energy conservation standards, and maintain the 
consumer utility of a cooking sensor without affecting unit cost. DOE 
also concluded that a standard at standby power levels of 1 or 2 W 
would not affect consumer utility, because all display types could 
continue to be used. At SL 3 for VFDs and SL 4 for all display 
technologies, DOE analysis suggested the need for a separate controller 
(automatic power-down) that automatically turns off all other power-
consuming components during standby mode. Such a feature would affect 
the consumer utility of having a clock display only if the consumer 
could not opt out of auto power-down. 73 FR 62034, 62055 (Oct. 17, 
2008).
    In response to the October 2008 NOPR, interested parties questioned 
the source of the incremental cost data associated with each standby 
power level, the need for incremental manufacturing costs to reflect 
both a one-time cost as well as the possibility of multiple paths to 
achieve each TSL, and questioned the cost associated with upgrading 
power supplies to reach TSL 3.
    In the February 2012 SNOPR, DOE noted that it had developed 
incremental cost estimates for each standby power level using the 
design-option approach, and that one-time costs are evaluated as part 
of the MIA. DOE estimated costs for each of the components and 
technologies based on quotes from component suppliers, interviews with 
manufacturers, interviews with subject matter experts, research and 
literature review, and numerical modeling. The incremental 
manufacturing costs for each standby power level were determined by 
considering different combinations of these components as well as other 
technology options identified to reduce standby power. DOE stated that 
it was aware that manufacturers may employ a number of strategies to 
achieve the different standby power levels. The estimated manufacturing 
costs for each standby power level represent the approach DOE 
determined manufacturers would most likely use to achieve the standby 
power at each level. For each level, DOE assumed manufacturers would 
implement design options with the lowest associated manufacturing cost. 
If DOE determined there were multiple paths with similar costs to reach 
a certain level, it assumed manufacturers would be equally likely to 
choose either strategy. 77 FR 8526, 8543 (Feb. 14, 2012).
    Interested parties also commented that the analysis did not 
consider consumer education costs on proper operation of microwave 
ovens with automatic power-down features, and that the manufacturing 
costs did not include cost implications on appliance manufacturers for 
including variables such as component readability and/or utility. DOE 
observed that it had considered the potential conversion costs 
associated with changes to consumer utility and reliability in the MIA. 
However, as previously discussed, DOE found no reliability or consumer 
utility concerns with switching from VFD to LCD or LED displays. 
Through discussions with manufacturers and OEMs, DOE determined that 
zero-standby cooking sensors could be implemented with no effect on 
consumer utility or reliability. DOE noted that an automatic power-down 
feature required at SL 3 for VFDs and at SL 4 for all display types 
could affect consumer utility, and considered these impacts in the 
selection of the proposed standards. Id.
    Therefore, in the February 2012 SNOPR, DOE determined that the 
standby power levels and corresponding incremental manufacturing costs 
presented in the October 2008 NOPR remained fundamentally valid for the 
microwave-only and countertop convection microwave oven product class. 
DOE was unaware of any technologies that became available after the 
October 2008 NOPR that would alter the incremental cost for any standby 
power level. However, the costs presented in the October 2008 NOPR were 
in 2008 dollars. DOE scaled these costs to 2010 dollars using the 
producer price index (PPI) to reflect more current values.\19\ The 
relevant PPI for microwave ovens is a subset of the household cooking 
appliance manufacturing industry, specifically for electric (including 
microwave) household ranges, ovens, surface cooking units, and 
equipment. Thus, DOE revised the incremental costs for each standby 
power level for Product Class 1, scaled to 2010 dollars, as presented 
in Table IV-5.
---------------------------------------------------------------------------

    \19\ Information on the PPI databases can be found at http://www.bls.gov/ppi/data.htm. (Last accessed December 2012.)

 Table IV-5--February 2012 SNOPR Proposed Microwave Oven Product Class 1
              Standby Power Incremental Manufacturing Costs
------------------------------------------------------------------------
                                            Standby power   Incremental
            Standby power level                  (W)        cost (2010$)
------------------------------------------------------------------------
Baseline..................................           4.0           NA
1.........................................           2.0           $0.27
2.........................................           1.5            0.60
3.........................................           1.0            1.31
4.........................................           0.02           4.58
------------------------------------------------------------------------

    DOE conducted additional analyses on a test sample of 13 convection 
microwave ovens for the February 2012 SNOPR to evaluate the built-in 
and over-the-range convection microwave oven product class. DOE again 
used the design-option approach to determine the incremental 
manufacturing costs of

[[Page 36339]]

convection microwave ovens for each standby power level.
    As discussed in the February 2012 SNOPR, DOE estimated the 
incremental cost associated with reductions in baseline standby power 
of built-in and over-the-range convection microwave ovens. DOE 
performed engineering teardowns and control board cost analyses to 
determine the cost of the baseline control board used in these units. 
DOE estimated the cost associated with each standby power level by 
using quotes from various component suppliers to determine the cost of 
the components used in each design option. 77 FR 8526, 8543 (Feb. 14, 
2012).
    For SL 1, DOE estimated that the manufacturing cost of a zero-
standby cooking sensor would be the same as that of the cooking sensor 
with high standby power. To estimate the manufacturing cost for SL 2, 
DOE used reverse engineering to determine the cost of the components 
used in a design of a switch-mode power supply capable of delivering 
the same output power as the baseline conventional linear power supply. 
In its analysis for the manufacturing cost of SL 3, DOE determined the 
cost of the components used to design a control board with a switch-
mode power supply and solid state relays capable of driving the same 
loads as the electromechanical relays. DOE estimated the manufacturing 
cost for SL 4 based on the cost of the components needed to design an 
automatic power-down function that uses a transformer-less power 
supply. The results of these analyses for the February 2012 SNOPR are 
presented in Table IV-6.

 Table IV-6--February 2012 SNOPR Proposed Microwave Oven Product Class 2
              Standby Power Incremental Manufacturing Costs
------------------------------------------------------------------------
                                            Standby power   Incremental
            Standby power level                  (W)        cost (2010$)
------------------------------------------------------------------------
Baseline..................................           4.5           NA
1.........................................           3.7           $0
2.........................................           2.7            2.29
3.........................................           2.2            9.44
4.........................................           0.04           5.18
------------------------------------------------------------------------

    Whirlpool stated that the incremental manufacturing costs for SL 3 
would consist only of component costs and would not require additional 
processing and labor costs. Whirlpool estimated the total incremental 
cost at SL 3 as the sum of the costs it provided for each of the design 
options it had commented on, and stated that the largest contributor 
would be the cost of changing to a switch-mode power supply for those 
microwave ovens that don't currently have them. (Whirlpool, No. 15 at 
pp. 5-6) DOE observes that Whirlpool did not provide estimated costs 
for a implementing a zero-standby power cooking sensor or a switch-mode 
power supply, although, as noted previously in section 0 of this 
rulemaking, Whirlpool agreed with DOE's estimate for the cost 
associated with a switch-mode power supply for a new product design but 
stated that the cost would be too low for existing designs. The sum of 
the upper range of estimated costs which Whirlpool did provide were 
approximately $5.00, which is greater than the costs DOE estimated at 
SL 3 for Product Class 1 and approximately half DOE's estimate for 
Product Class 2.
    DOE, therefore, expanded its evaluation of manufacturing costs to 
consider all of the design pathways it had identified for each product 
type and class. DOE aggregated and weighted the cost results from the 
design pathway studies using the distribution of features by stock-
keeping-units (SKUs). For example, about 22 percent of microwave oven 
SKUs in Product Class 1 incorporate a VFD and a cooking sensor. DOE 
also conducted additional research and interviews with suppliers to 
update the component costs for the individual design options. The 
resulting updated incremental manufacturing costs for both product 
classes are presented in Table IV-7 and Table IV-8. Because DOE's 
analysis for today's final rule was based on a more comprehensive model 
database, the greater sample size combined with the updated component 
cost estimates and significantly more design pathways affected the 
manufacturing cost results. For example, at the higher efficiency 
levels, the pathway for some product types requires automatic power-
down at SL 3 rather than SL 4. In addition, DOE determined that for 
several product types in Product Class 2, the baseline model already 
incorporates a switch-mode power supply. As a result, the weighted 
average cost at SL 3 is lower than proposed in the February 2012 SNOPR. 
For more details of the manufacturing costs developed as part of the 
engineering analysis, see chapter 5 of the final rule TSD.

   Table IV-7--Final Rule Microwave Oven Product Class 1 Standby Power
                     Incremental Manufacturing Costs
------------------------------------------------------------------------
                                            Standby power   Incremental
            Standby power level                  (W)        cost (2011$)
------------------------------------------------------------------------
Baseline..................................           4.0           NA
1.........................................           2.0           $0.26
2.........................................           1.5            0.38
3.........................................           1.0            3.28
4.........................................           0.02           6.23
------------------------------------------------------------------------


   Table IV-8--Final Rule Microwave Oven Product Class 2 Standby Power
                     Incremental Manufacturing Costs
------------------------------------------------------------------------
                                            Standby power   Incremental
            Standby power level                  (W)        cost (2011$)
------------------------------------------------------------------------
Baseline..................................           4.5           NA
1.........................................           3.7           $0.06
2.........................................           2.7            0.08
3.........................................           2.2            5.01
4.........................................           0.04           5.86
------------------------------------------------------------------------

E. Life Cycle Cost and Payback Period Analysis

    In response to the requirements of section 325(o)(2)(B)(i) of the 
Act, DOE conducted LCC and PBP analyses to evaluate the economic 
impacts of possible amended energy conservation standards for consumers 
of microwave ovens having standby mode and off mode features. (42 
U.S.C. 6295(o)(2)(B)(i)) DOE conducted the analyses using a spreadsheet 
model, which is described in chapter 8 of the final rule TSD.)
    The LCC represents the total consumer expense over the life of a 
product, including purchase and installation expenses and operating 
costs (energy expenditures, repair costs, and maintenance costs). The 
PBP is the number of years it would take for the consumer to recover 
the increased costs of a higher efficiency product through energy 
savings. To calculate the LCC, DOE discounts future operating costs to 
the time of purchase and sums them over the lifetime of the product. 
DOE forecasts the change in LCC and the change in PBP associated with a 
given efficiency level relative to the base-case product efficiency. 
The base-case forecast reflects the market in the absence of amended 
mandatory energy conservation standards. As part of the LCC and PBP 
analyses, DOE develops data that it uses to establish product prices, 
annual energy consumption, energy prices, maintenance and repair

[[Page 36340]]

costs, product lifetime, and discount rates.
    For the February 2012 SNOPR, DOE developed a consumer sample for 
microwave ovens having standby mode and off mode features from EIA's 
2005 Residential Energy Consumption Survey (RECS). For today's final 
rule, it developed a consumer sample from the 2009 RECS. It used this 
sample to establish the variability and uncertainty in microwave oven 
electricity use.
    The variability in electricity pricing was characterized by 
incorporating regional energy prices. DOE calculated the LCC associated 
with a baseline microwave oven having standby mode and off mode 
features. To calculate the LCC savings and PBP associated with products 
that could meet potential amended energy conservation standards, DOE 
substituted the baseline unit with more efficient designs.
    Table IV-9 summarizes the approaches and data DOE used to derive 
the inputs to the LCC and PBP calculations for the October 2008 NOPR, 
and the changes it made for today's final rule. DOE did not introduce 
changes to the LCC and PBP analysis methodology described in the 
October 2008 NOPR. As the following sections discuss in more detail, 
however, DOE revised some of the inputs to the analysis. Chapter 8 of 
the final rule TSD contains a detailed discussion of the methodology 
utilized for the LCC and PBP analysis as well as the inputs developed 
for the analysis.

                    Table IV-9--Summary of Inputs and Key Assumptions in LCC and PBP Analyses
----------------------------------------------------------------------------------------------------------------
                                                                                          Changes for the final
                Inputs                    October 2008 NOPR      Changes for the SNOPR             rule
----------------------------------------------------------------------------------------------------------------
                                            Affecting Installed Costs
----------------------------------------------------------------------------------------------------------------
Product Cost.........................  Derived by multiplying   Used experience curve    Increased the
                                        manufacturer cost by     fits to forecast a       geographic resolution
                                        manufacturer,            price scaling index to   of sales tax data.
                                        distributor markups      forecast product costs.
                                        and sales tax.
----------------------------------------------------------------------------------------------------------------
                                            Affecting Operating Costs
----------------------------------------------------------------------------------------------------------------
Annual Energy Use....................  Annual energy use        No change..............  No change.
                                        determined from the
                                        annual usage (average
                                        daily use cycles).
Energy Prices........................  Electricity: Updated     Electricity: Updated     Electricity: Updated
                                        using EIA's 2006 Form    using EIA's 2009 Form    using EIA's 2010 Form
                                        861 data.                861 data.                861 data.
                                       Variability: Regional    Variability: No change.  Variability: Energy
                                        energy prices                                     prices determined by
                                        determined for 13                                 RECS Reportable Domain
                                        regions.                                          (27 individual States
                                                                                          or State groupings).
Energy Price Trends..................  Energy: Forecasts        Reference Case, High     Reference Case, High
                                        updated with EIA's       Growth, and Low Growth   Growth, and Low Growth
                                        Annual Energy Outlook    forecasts updated with   forecasts updated with
                                        2008 (AEO 2008).         EIA's AEO 2010 May       EIA's AEO 2012 June
                                                                 Release.                 Release.
Repair and Maintenance Costs.........  Assumed no repair or     No change..............  No change.
                                        maintenance costs.
----------------------------------------------------------------------------------------------------------------
                            Affecting Present Value of Annual Operating Cost Savings
----------------------------------------------------------------------------------------------------------------
Product Lifetime.....................  Estimated using survey   No change..............  Updated LCC lifetime
                                        results from RECS                                 methodology to reflect
                                        (1990, 1993, 1997,                                methodology used in
                                        2001, 2005) and the                               the NIA.
                                        U.S. Census American
                                        Housing Survey (2005,
                                        2007), along with
                                        historic data on
                                        appliance shipments.
Discount Rates.......................  Variability:             No change..............  No change.
                                        Characterized using
                                        Weibull probability
                                        distributions.
----------------------------------------------------------------------------------------------------------------
                                     Affecting Installed and Operating Costs
----------------------------------------------------------------------------------------------------------------
Compliance Date of New Standard......  2012...................  2014...................  2016.
----------------------------------------------------------------------------------------------------------------

1. Product Costs
    To calculate the product costs paid by microwave oven purchasers, 
DOE multiplied the manufacturing product costs (MPCs) developed from 
the engineering analysis by industry markups to derive manufacturers' 
selling prices (MSPs). The MSPs in turn are multiplied by supply chain 
markups (along with sales taxes) to estimate the initial cost to the 
consumer. DOE used the same supply chain markups for today's final rule 
that were developed for the October 2008 NOPR. These include separate 
markups on the baseline MSP and the incremental cost of each higher 
efficiency level considered.
    AHAM submitted an attachment to its comment in which Shorey 
Consulting argues against using a lower incremental retail markup on 
the added costs of higher-efficiency products. (AHAM, No. 16, 
Attachment 1; GE, No. 19 at p. 1) Shorey Consulting claims that DOE 
ignores relevant, consistent and reliable data and attempts to apply 
pure, unconfirmed theory (whose validity and applicability Shorey 
Consulting questions). Shorey used retail industry data to measure 
competition in appliance retailing and argues that DOE's approach 
requires a level of competition that does not exist. Stating that 
several decades of experience provide information about what actually 
happens at the retail level, Shorey argues that DOE should base its 
analyses on actual practices rather than theory. It notes that 
retailers have experience with the markups on products in the post-
standards situation. It states that to the

[[Page 36341]]

extent that manufacturers are aware of the markup practices at the 
retail level, those practices seem consistent with the long-term 
pattern of stable gross margins.
    DOE continues to believe that microwave oven retail markets are 
reasonably competitive, so that an increase in the manufacturing cost 
of microwave ovens is not likely to contribute to a proportionate rise 
in retail profits, as would be expected to happen without incremental 
markups. DOE believes that Shorey's measure of competition is 
inaccurate for microwave ovens, primarily because it assumes that the 
market shares for major appliances adequately represent the market 
shares for microwave ovens. Microwave ovens are sold in some retail 
channels not included in Shorey's list of the major appliance retailers 
(e.g., drugstores), as well as on the Internet.
    In response to Shorey's comments regarding the lack of empirical 
evidence underlying DOE's markup analysis, DOE has previously examined 
historical retail price data for several appliances.\20\ The data do 
not support the use of a constant markup. DOE acknowledges that 
detailed information on actual retail practices would be helpful in 
evaluating markups on products after appliance standards take effect. 
DOE currently is collecting information that would shed more light on 
actual practices by retailers selling microwave ovens and other 
appliances. To date, the limited evidence DOE has collected provides no 
clear answer, but it does not support the idea that retail profits rise 
as a result of efficiency standards. Thus, DOE continues to use an 
approach to markups that is consistent with economic theory of firm 
behavior in competitive markets. See chapter 6 of the final rule TSD 
for additional information.
---------------------------------------------------------------------------

    \20\ Larry Dale, et al. ``Retrospective Evaluation of Appliance 
Price Trends,'' Energy Policy 37 (2009). pp. 597-605.
---------------------------------------------------------------------------

    In the February 2012 SNOPR, DOE examined historical PPIs for 
electric cooking equipment generally and microwave ovens specifically 
and found a consistent, long-term declining real price trend. 
Consistent with the method used in other rulemakings, DOE used 
experience curve fits to develop a price scaling index to project 
product costs for this rulemaking. For the LCC and PBP analysis, the 
experience rate (defined as the fractional reduction in price expected 
from each doubling of cumulative production) is based on historical PPI 
data for electric cooking products from the Bureau of Labor 
Statistics,\21\ along with a time-series of annual shipments for 1969-
2009 for electric household cooking products.
---------------------------------------------------------------------------

    \21\ Although electric cooking products represent a higher level 
of aggregation than microwave ovens only, because no PPI data 
specific to microwave ovens were available, DOE used PPI data for 
electric cooking products as representative of microwave ovens. 
Additionally, shipments of microwave ovens have become a significant 
part of total shipments of electric household cooking products since 
1975.
---------------------------------------------------------------------------

    AHAM and GE continue to oppose the use of experience curves. (AHAM, 
No. 16 at p. 4; GE, No. 19 at p. 1) AHAM submitted an attachment 
prepared by Shorey Consulting that presents arguments against using 
experience curves to project product costs. Shorey states that DOE has 
not rebutted the comments on the lack of theoretical foundation for its 
experience curve analysis made by Shorey Consulting and AHAM in 
response to DOE's Notice of Data Availability (NODA) and Request for 
Comment Regarding Equipment Price Forecasting in Energy Conservation 
Standards Analysis. 76 FR 9696 (Feb. 22, 2011). It claims that DOE has 
identified some data (whose reliability and relevance Shorey Consulting 
continues to question) and tries to apply it even though its own 
sources question the theoretical underpinnings of such usage. Shorey 
recommends that DOE substitute a sensitivity analysis for experience 
curve costing in the national impact analysis. (AHAM, No. 16, 
Attachment 1)
    DOE responded to the comments on the NODA by AHAM and other 
interested parties in the final rule for energy conservation standards 
for refrigerators, refrigerator-freezers, and freezers. 76 FR 57549 
(Sep. 15, 2011). There is an extensive literature, spanning several 
decades, supporting the use of experience curves for a broad range of 
products. As discussed in a recent publication by researchers at 
Lawrence Berkeley National Laboratory,\22\ the approach used by DOE is 
consistent with the experience curves that have been empirically 
demonstrated in numerous studies. In addition, well-known energy models 
such as NEMS already incorporate experience curves. DOE is not aware of 
the sources to which Shorey refers. DOE believes that the specific 
sensitivity analysis proposed by Shorey would be impractical. It also 
seems unnecessary because DOE incorporates sensitivity analysis in its 
current methodology.
---------------------------------------------------------------------------

    \22\ Desroches, L.-B., K. Garbesi, C. Kantner, R. Van Buskirk, 
H.-C. Yang (2012), ``Incorporating Experience Curves in Appliance 
Standards Analysis,'' accepted to Energy Policy. http://dx.doi.org/10.1016/j.enpol.2012.09.066.
---------------------------------------------------------------------------

    Shorey also suggests that DOE not use the experience effect for the 
period preceding the compliance date of standards because the 
engineering analysis uses cost projections that already have some 
effects of production cost reductions built into them. The costs DOE 
developed in the engineering analysis for microwave ovens through 
teardowns and cost modeling reflect the year of analysis, not the year 
of compliance. (AHAM, No. 16, Attachment 1) DOE estimated costs for 
each of the components and technologies that contribute to standby 
power based on quotes from suppliers, interviews with manufacturers, 
interviews with subject matter experts, review of research and 
literature, and numerical modeling. Preliminary incremental 
manufacturing costs associated with various standby levels then were 
obtained by considering combinations of those components as well as 
other technology options identified to reduce standby power. 
Manufacturer interviews were conducted also to obtain greater insight 
into design strategies and the associated costs for improving 
efficiency. Based on the incremental manufacturing costs at various 
standby power levels, DOE developed cost-efficiency curves. DOE did not 
specifically solicit information regarding manufacturing costs at the 
time of the compliance date of any standby power standards. 
Furthermore, the AHAM data requests and manufacturer interview guides 
used in recent energy conservation standards rulemakings for other 
residential products, such as dishwashers, dehumidifiers, clothes 
washers, clothes dryers, and room air conditioners, reveal that 
incremental costs were solicited from manufacturers in a manner 
consistent with the approach taken in the microwave oven standby power 
standards rulemaking. Because the costs estimated in the engineering 
analysis are based on the year of analysis, DOE believes it is 
appropriate to apply the derived experience rate beginning the 
following year, as was done for the February 2012 SNOPR and today's 
final rule.
    Shorey also questioned DOE's use of the PPI for electric cooking 
equipment in the experience curve derivation for microwave ovens. 
Shorey notes that the PPI for electric cooking equipment does not 
measure a significant number of microwave ovens, since microwave ovens 
represent only 2 to 3 percent of the shipments and value of electric 
cooking products. In addition, approximately 99 percent of microwave 
ovens are imported and thus excluded from the PPI. (AHAM, No. 16, 
Attachment 1)

[[Page 36342]]

    In response, DOE acknowledges that there is no PPI category 
specific to microwave ovens. DOE investigated an experience rate using 
price data specific to microwave ovens, but did not use that as the 
default case because the estimate is not particularly robust given the 
limited data. Instead, DOE used the most disaggregated category that 
includes microwave ovens, which is electric cooking equipment. Although 
this approach may introduce some inaccuracy, it more closely reflects 
real price trends (as indicated by the price data specific to microwave 
ovens) than an assumption of no price trend. The paper cited above 
explores the role of imports and how the PPI compares to retail prices 
have been explored for several appliances. It found that PPI data track 
retail prices in a manner that lends confidence to the use of PPI data 
when constructing experience curves. Although the PPI does not include 
imports, the trend does not appear to be systematically biased compared 
to retail prices (for either imports or domestically produced products) 
for the appliances analyzed.
    In summary, DOE believes that its use of the experience curve 
approach to estimate a future price trend for microwave ovens is 
reasonable and appropriate. For the final rule, DOE made minor changes 
to its calculation method to match the approach used in other recent 
rulemakings. A more detailed discussion of DOE's price trend modeling 
and the various sensitivity analyses is provided in appendix 8-C of the 
final rule TSD.
    For the October 2008 NOPR, DOE analyzed only countertop models of 
microwave ovens and considered installation costs to be zero. For 
today's final rule, DOE analyzed both countertop and over-the-range 
microwave ovens and considered both installation and incremental 
installation costs to be zero.
2. Annual Energy Consumption
    DOE determined the annual energy consumption of the standby mode 
and off mode of microwave ovens by estimating the number of hours of 
operation throughout the year and assuming that the unit would be in 
standby mode or off mode the rest of the time. In the October 2008 
NOPR, DOE determined the average hours of operation for microwaves to 
be 71 hours per year. DOE has no reason to believe that this number has 
changed.
    To estimate variability in microwave oven hours of operation for 
each household in the RECS sample, DOE calculated a relative usage 
factor (with an average of 1.0) for each household. DOE multiplied the 
reported number of hot meals by the frequency of microwave oven usage 
and then normalized the result as an index value. DOE then multiplied 
the relative usage factor for each household by the average of 71 hours 
per year.
    Finally, DOE subtracted the number of calculated operating hours 
from the total number of hours in a year and multiplied that difference 
by the standby mode and off mode power usage at each efficiency level 
to determine annual standby mode and off mode energy consumption.
    AHAM and GE continue to strongly oppose DOE's reliance on RECS for 
these analyses, noting that it is difficult to compare the results to 
the energy use measured in a controlled test procedure situation. 
(AHAM, No. 16 at p. 4; GE, No. 19 at p. 1) Whirlpool claimed that use 
of the RECS data in calculation of the LCC and PBP is highly suspect 
because the sample size would be too small to be statistically valid. 
(Whirlpool, No. 15 at p. 2)
    The purpose of the energy use analysis is to estimate the range of 
product energy use in the field, not the energy use in a controlled 
test procedure situation. By so doing, DOE is able to estimate how the 
energy savings would vary among households for each considered 
efficiency level. This allows DOE to develop a more accurate 
characterization of the impacts of potential standards on consumers, as 
required by EPCA. (42 U.S.C. 6295(o)(2)(B)(i)(I)) The sample that DOE 
used contained 11,616 records and is large enough to provide 
statistically valid results for microwave oven utilization.
3. Energy Prices
    DOE estimated residential electricity prices for each of the 27 
geographic areas used in RECS 2009 based on data from EIA Form 861, 
``Annual Electric Power Industry Report.'' DOE calculated an average 
residential electricity price by first estimating an average 
residential price for each utility, and then calculating an average 
price by weighting each utility having customers in a region by the 
number of residential customers served in that region. The calculations 
for today's final rule used the most recent available data (2010).
    To estimate trends in electricity prices for the supplemental 
notice, DOE used the price forecasts in EIA's AEO 2010. For today's 
final rule, DOE used the forecasts in AEO 2012. To arrive at prices in 
future years, DOE multiplied the average prices described above by the 
forecast of annual average price changes in AEO 2012. Because the AEO 
forecasts prices only to 2035, DOE followed past guidelines that EIA 
provided to the Federal Energy Management Program and used the average 
rate of change during 2020-2035 to estimate price trends beyond 
2035.\23\
---------------------------------------------------------------------------

    \23\ The spreadsheet tools used to conduct the LCC and PBP 
analysis allow users to select energy price forecasts for either the 
AEO's High economic growth case or Low economic growth case to 
estimate the sensitivity of the LCC and PBP to different energy 
price forecasts.
---------------------------------------------------------------------------

    AHAM, GE, and Whirlpool objected to the inclusion of cap-and-trade 
program impacts in the energy price forecasts in the February 2012 
SNOPR because there are no tangible facts upon which to base an 
analysis. (AHAM, No. 16 at p. 4; GE, No. 19 at p. 1; Whirlpool, No. 15, 
p. 2) The electric power sector module in the NEMS used for AEO 2012 
Reference Case accounts for estimated impacts of the Northeast Regional 
Greenhouse Gas Initiative and the cap-and-trade program being 
implemented in California as a result of California Assembly Bill 32. 
DOE believes that, given the known constraints on CO2 
emissions associated with these programs, the electric power sector 
module in NEMS provides a reasonable estimate of how electricity 
providers would behave with respect to power plant construction and 
dispatch, which in turn would affect electricity prices in a small way. 
Thus, DOE believes that the energy price forecasts used for the final 
rule are appropriate.
4. Repair and Maintenance Costs
    Repair costs are those associated with repairing or replacing 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. For the 
October 2008 NOPR, DOE did not include repair or maintenance costs in 
its analyses by assuming higher efficient products do not warrant 
increased costs for repair or maintenance. DOE maintained the same 
approach for this final rule.
5. Product Lifetime
    Because the lifetime of appliances varies depending on utilization 
and other factors, DOE develops a distribution of lifetimes from which 
specific values are assigned to the appliances in the samples. DOE 
conducted an analysis of microwave oven lifetimes in the field based on 
a combination of shipments data and RECS data on the ages of the 
microwave ovens reported in the household stock. The analysis yielded 
an estimate of mean age for microwave ovens of approximately 10.9 
years. It also yielded

[[Page 36343]]

a survival function that DOE incorporated as a probability distribution 
in its LCC analysis. See chapter 8 of the final rule TSD for further 
details on the method and sources DOE used to develop microwave oven 
lifetimes.
6. Discount Rates
    In the calculation of LCC, DOE applies discount rates to estimate 
the present value of future operating costs. DOE estimated a 
distribution of residential discount rates for microwave ovens. See 
chapter 8 in the final rule TSD for further details on the development 
of consumer discount rates.
    To establish residential discount rates for the LCC analysis in the 
October 2008 NOPR and today's final rule, DOE identified all debt or 
asset classes that consumers might use to purchase household 
appliances, including household assets that might be affected 
indirectly. It estimated average percentage shares of the various debt 
or asset classes for the average U.S. household using data from the 
Federal Reserve Board's ``Survey of Consumer Finances'' (SCF) for 1989, 
1992, 1995, 1998, 2001, 2004, and 2007. Using the SCF and other 
sources, DOE then developed a distribution of rates for each type of 
debt and asset to represent the rates that may apply in the year in 
which new standards would take effect. DOE assigned each sample 
household a specific discount rate drawn from one of the distributions. 
The average rate across all types of household debt and equity, 
weighted by the shares of each class, is 5.1 percent. DOE used the same 
approach for today's final rule.
7. Compliance Date of New Standards
    The compliance date is the future date when parties subject to the 
requirements of a new energy conservation standard must begin 
compliance. For the October 2008 NOPR, DOE assumed that any new 
standards adopted in this rulemaking would become effective in March 
2012, 3 years after the month when it expected the final rule would be 
published in the Federal Register. Today's final rule is being 
published with new standards requiring compliance 3 years later. Thus, 
DOE calculated the LCC for appliance consumers as if they would 
purchase new products in 2016.
8. Product Energy Efficiency in the Base Case
    For the LCC and PBP analysis, DOE analyzes higher efficiency levels 
relative to a base case (i.e., the case without new energy conservation 
standards). However, some consumers may already purchase products 
having efficiencies greater than the baseline product levels. Thus, to 
accurately estimate the percentage of consumers that would be affected 
by a particular standard level, DOE estimates the distribution of 
product efficiencies that consumers are expected to purchase under the 
base case. DOE refers to this distribution of product energy 
efficiencies as a base-case efficiency distribution. For the October 
2008 NOPR and today's final rule, DOE used recent shares of available 
models at specific standby power levels to establish the base-case 
efficiency distributions. Table IV-10 presents the market shares of the 
standby power levels in the base case for standby mode and off mode 
energy use of microwave ovens.

                        Table IV-10--Microwave Ovens: Base-Case Efficiency Market Shares
----------------------------------------------------------------------------------------------------------------
                                                          Product Class 1                 Product Class 2
                                                 ---------------------------------------------------------------
                      Level                        Standby power                   Standby power
                                                        (W)          Share (%)          (W)          Share (%)
----------------------------------------------------------------------------------------------------------------
Baseline........................................            4.00            46.2            4.50           100.0
TSL1*...........................................            2.00            34.6            3.70             0.0
TSL 2...........................................            1.50            19.2            2.70             0.0
TSL 3...........................................            1.00             0.0            2.20             0.0
TSL 4...........................................            0.02             0.0            0.04             0.0
----------------------------------------------------------------------------------------------------------------
* TSL = Trial Standard Level.

9. Inputs to Payback Period Analysis
    The PBP is the amount of time (expressed in years) it takes the 
consumer to recover the additional installed cost of a more efficient 
product through operating cost savings, compared to the baseline 
product. The simple payback period does not account for changes in 
operating expenses over time or the time value of money. The inputs to 
the PBP calculation are the total installed cost of the product to the 
consumer for each efficiency level and the annual (first-year) 
operating expenditures for each efficiency level. For the October 2008 
NOPR and today's final rule, the PBP calculation uses the same inputs 
as the LCC analysis, except that energy price trends and discount rates 
are not needed.
10. Rebuttable-Presumption Payback Period
    As noted above, EPCA, as amended (42 U.S.C. 6295(o)(2)(B)(iii)) 
establishes a rebuttable presumption that a standard is economically 
justified if the Secretary finds that the additional cost to the 
consumer of purchasing a product complying with an energy conservation 
standard level will be less than three times the value of the energy 
savings during the first year that the consumer will receive as a 
result of the standard, as calculated under the test procedure in place 
for that standard. For each TSL, DOE determined the value of the first 
year's energy savings by calculating the quantity of those savings in 
accordance with DOE's test procedure, and multiplying that amount by 
the average energy price projection for the year in which a new 
standard first would be effective--in this case, 2016.

F. National Impact Analysis--National Energy Savings and Net Present 
Value Analysis

1. General
    DOE's NIA assesses the national energy savings, as well as the 
national NPV, of total consumer costs and savings expected to result 
from new or amended standards at specific efficiency levels. DOE 
applied the NIA spreadsheet to calculate energy savings and NPV, using 
the annual energy consumption and total installed cost data from the 
LCC analysis. DOE forecasted the energy savings, energy cost savings, 
product costs, and NPV for the two product classes from 2016 to 2045. 
The forecasts provide annual and cumulative values for all four 
parameters. In addition, DOE incorporated into its NIA spreadsheet the 
capability to analyze sensitivity of the results to forecasted energy 
prices

[[Page 36344]]

and product efficiency trends. Table IV-11 summarizes the approach and 
data DOE used to derive the inputs to the NES and NPV analyses for the 
October 2008 NOPR, February 2012 SNOPR, and the changes made in the 
analyses for today's final rule. A discussion of the 2008 inputs and 
the changes follows. (See chapter 10 of the final rule TSD for further 
details.)

      Table IV-11--Approach and Data Used to Derive Inputs to the National Energy Savings and NPV Analyses
----------------------------------------------------------------------------------------------------------------
                                                                  Changes for the 2012    Changes for the Final
                Inputs                  2008 NOPR description            SNOPR                     Rule
----------------------------------------------------------------------------------------------------------------
Shipments............................  Annual shipments from    See Table IV.12........  See Table IV[dash]12.
                                        shipments model.
Compliance Date of Standard..........  2012...................  2014...................  2016.
Base-Case Forecasted Efficiencies....  Shipment-weighted        No change..............  No change.
                                        efficiency (SWEF)
                                        determined in 2005.
                                        SWEF held constant
                                        over forecast period.
Standards-Case Forecasted              Analyzed as one product  Analyzed as two product  No change.
 Efficiencies.                          class. Roll-up           classes. Roll-up
                                        scenario used for        scenario used for
                                        determining SWEF in      determining SWEF in
                                        the year that            the year that
                                        standards become         standards become
                                        effective for each       effective for each
                                        standards case. SWEF     standards case. SWEF
                                        held constant over       held constant over
                                        forecast period.         forecast period.
Annual Energy Consumption per Unit...  Annual weighted-average  No change..............  No change.
                                        values as a function
                                        of SWEF.
Total Installed Cost per Unit........  Annual weighted-average  Incorporated learning    Product price
                                        values as a function     rate to forecast         forecasting updated to
                                        of SWEF.                 product prices.          reflect most current
                                                                                          methodology.
Energy Cost per Unit.................  Annual weighted-average  No change..............  No change.
                                        values as a function
                                        of the annual energy
                                        consumption per unit
                                        and energy (and water)
                                        prices.
Repair Cost and Maintenance Cost per   Incorporated changes in  No change..............  No change.
 Unit.                                  repair costs as a
                                        function of standby
                                        power.
Escalation of Energy Prices..........  AEO 2008 forecasts (to   Updated to AEO 2010 May  Updated to AEO 2012
                                        2030); extrapolated to   release forecasts (to    June release forecasts
                                        2042.                    2035); extrapolated to   (to 2035);
                                                                 2043.                    extrapolated to 2045.
Energy Site-to-Source Conversion.....  Conversion varies        No change..............  No change.
                                        yearly and is
                                        generated by DOE/EIA's
                                        NEMS program (a time-
                                        series conversion
                                        factor; includes
                                        electric generation,
                                        transmission, and
                                        distribution losses).
Discount Rate........................  3 and 7 percent real...  No change..............  No change.
Present Year.........................  Future expenses          Future expenses          Future expenses
                                        discounted to 2007.      discounted to 2011.      discounted to 2013.
----------------------------------------------------------------------------------------------------------------

2. Shipments
    The shipments portion of the NIA spreadsheet is a model that uses 
historical data as a basis for projecting future shipments of the 
products that are the subject of this rulemaking. In projecting 
microwave oven shipments, DOE accounted for two market segments: (1) 
new construction; and (2) replacement of failed products. Because 
shipments for new construction and replacements were not enough to 
account for all product shipments, DOE developed another market segment 
to calibrate its shipments model. In addition to normal replacements, 
DOE's shipments model also assumed that a small fraction of the stock 
would be replaced early. It also considered retired units not replaced. 
DOE used the non-replacement market segment to calibrate the shipments 
model to historical shipments data.
    To estimate the impacts of prospective standards on product 
shipments (i.e., to forecast standards-case shipments), DOE considered 
the combined effects of changes in purchase price, annual operating 
cost, and household income on the magnitude of shipments.
    Table IV-12 summarizes the approach and data DOE used to derive the 
inputs to the shipments analysis for the October 2008 NOPR, the 
February 2012 SNOPR, and the changes it made for today's final rule. 
The general approach for forecasting microwave shipments for today's 
final rule remains unchanged from the October 2008 NOPR.

[[Page 36345]]



                 Table IV-12--Approach and Data Used To Derive Inputs to the Shipments Analysis
----------------------------------------------------------------------------------------------------------------
                                                                  Changes for the 2012    Changes for the final
                Inputs                  2008 NOPR description            SNOPR                     rule
----------------------------------------------------------------------------------------------------------------
Number of Product Classes............  One product class.       Two product classes:     No change.
                                        Market share data        (1) all microwave oven-
                                        provided by AHAM.        only and countertop
                                                                 convection microwave
                                                                 oven; (2) over-the-
                                                                 range convection
                                                                 microwave oven. Market
                                                                 share data provided by
                                                                 AHAM; 99% product
                                                                 class 1 and
                                                                 1% product class
                                                                 2. Product
                                                                 class market shares
                                                                 held constant over
                                                                 forecast period.
New Construction Shipments...........  Housing forecasts        No change in approach.   No change in approach.
                                        updated with EIA AEO     Housing forecasts        Housing forecasts
                                        2008 April release       updated with EIA AEO     updated with EIA AEO
                                        forecasts for the        2010 forecasts for the   2012 forecasts for the
                                        Reference case, High     Reference case, High     Reference case, High
                                        growth case, and Low     growth case, and Low     growth case, and Low
                                        growth case.             growth case.             growth case.
Replacements.........................  Determined by tracking   No change..............  No change.
                                        total product stock by
                                        vintage and
                                        establishing the
                                        failure of the stock
                                        using retirement
                                        functions from the LCC
                                        and PBP analysis.
                                        Retirement functions
                                        revised to be based on
                                        Weibull lifetime
                                        distributions.
Retired Units not Replaced (i.e., non- Used to calibrate        No change..............  No change.
 replacements).                         shipments model to
                                        historical shipments
                                        data.
Historical Shipments.................  Data sources include     No change..............  No change.
                                        AHAM data submittal
                                        and Appliance magazine.
Purchase Price, Operating Cost, and    Developed ``relative     No change..............  No change.
 Household Income Impacts due to        price'' elasticity,
 Efficiency Standards.                  which accounts for the
                                        purchase price and the
                                        present value of
                                        operating cost savings
                                        divided by household
                                        income. Used purchase
                                        price and efficiency
                                        data specific to
                                        residential
                                        refrigerators, clothes
                                        washers, and
                                        dishwashers between
                                        1980 and 2002 to
                                        determine a ``relative
                                        price'' elasticity of
                                        demand of -0.34.
Fuel Switching.......................  Not applicable.........  No change..............  No change.
----------------------------------------------------------------------------------------------------------------

a. New Construction Shipments
    To estimate shipments for new construction, DOE used forecasts of 
housing starts coupled with microwave oven saturation data. In other 
words, to forecast the shipments for new construction in any given 
year, DOE multiplied the housing forecast by the forecasted saturation 
of microwave ovens for new housing.
    New housing comprises single- and multi-family units (also referred 
to as ``new housing completions'') and mobile home placements. For the 
final rule, DOE forecasted new housing based on EIA's AEO 2012 for 
2009-2035. AEO 2012 provides three sets of forecasts: the Reference 
case, the High economic growth case, and the Low economic growth case. 
DOE used the forecasts from the Reference case for the NIA results 
reported in this rulemaking. For 2035-2045, DOE kept completions at the 
level in 2035.
b. Replacements and Non-replacements
    To determine shipments for the replacement market, DOE used an 
accounting method that tracks the total stock of units by vintage. DOE 
estimated a stock of microwave ovens by vintage by integrating 
historical shipments starting from 1972. Over time, some units are 
retired and removed from the stock, triggering the shipment of a 
replacement unit. Depending on the vintage, a certain percentage of 
each type of unit will fail and need to be replaced. To determine when 
a microwave oven fails, DOE used data from RECS and American Housing 
Survey (AHS) to estimate a product survival function. This function was 
modeled as a Weibull distribution. Based on this method, the average 
calculated microwave oven lifetime is 9.3 years. For a more complete 
discussion of microwave lifetimes, refer to chapter 8 of the final rule 
TSD.
3. Purchase Price, Operating Cost, and Income Impacts
    To estimate the combined effects of increases in product purchase 
price and decreases in product operating costs on microwave oven 
shipments, for the October 2008 NOPR DOE used a literature review and a 
statistical analysis on a limited set of appliance price, efficiency, 
and shipments data. DOE used purchase price and efficiency data 
specific to microwave ovens between 1980 and 2002 to conduct regression 
analyses. DOE's analysis suggested that the relative short-run price 
elasticity of demand is -0.34.
    Because DOE's forecast of shipments and national impacts 
attributable to standards spans more than 30 years, DOE also considered 
how the relative price elasticity is affected once a new standard takes 
effect. After the purchase price changes, price elasticity becomes more 
inelastic over the years until it reaches a terminal value. For the 
October 2008 NOPR and today's final rule, DOE incorporated a relative 
price elasticity change that resulted in a terminal value of 
approximately one-third of the short-run elasticity. In other words, 
DOE determined that consumer purchase decisions, in time, become less 
sensitive to the initial change in the

[[Page 36346]]

product's relative price. See chapter 9 of the final rule TSD for 
further discussion.
4. Other Inputs
a. Forecasted Efficiencies
    A key input to the calculations of NES and NPV are the energy 
efficiencies that DOE forecasts for the base case (without new 
standards). The forecasted efficiencies represent the annual shipment-
weighted energy efficiency (SWEF) of the product under consideration 
during the forecast period (i.e., from the estimated effective date of 
a new standard to 30 years after that date). Because DOE had no data to 
reasonably estimate how microwave oven standby power levels might 
change during the next 30 years, it assumed that forecasted 
efficiencies will stay at the 2016 standby power levels until the end 
of the forecast period.
    For its determination of the cases under alternative standard 
levels (``standards cases''), DOE used a ``roll-up'' scenario in the 
October 2008 NOPR to establish the SWEF for 2012. For today's final 
rule, DOE established the SWEF for 2016 and assumed that the market 
share of products in the base case that do not meet the standard level 
under consideration (i.e. are less efficient than the standard) would 
shift to products that meet the new standard level. DOE assumed that 
all product efficiencies in the base case that are above the standard 
level under consideration would remain the same in the standard case.
    DOE made the same assumption regarding forecasted standards-case 
efficiencies as for the base case; namely, that efficiencies will 
remain at the 2016 standby power level until the end of the forecast 
period. By maintaining the same rate of increase for forecasted 
efficiencies in the standards case as in the base case (i.e., no 
change), DOE retained a constant efficiency difference between the two 
cases throughout the forecast period. Although the no-change trends may 
not reflect what would happen to base-case and standards-case product 
efficiencies in the future, DOE believes that maintaining a constant 
efficiency difference between the base case and each standards case 
provides a reasonable estimate of the impact that standards would have 
on product efficiency. It is more important to accurately estimate the 
efficiency difference between the standards case and base case than to 
accurately estimate the actual product efficiencies in the standards 
and base cases. DOE retained the approach used in the October 2008 NOPR 
for today's final rule. Because the effective date of the standard is 
now assumed to be 2016, DOE applied the ``roll-up'' scenario in 2016 to 
establish the SWEF for each standards case.
b. Annual Energy Consumption
    The annual energy consumption per unit depends directly on product 
efficiency. For the October 2008 NOPR and today's final rule, DOE used 
the SWEFs associated with the base case and each standards case, in 
combination with the annual energy use data, to estimate the shipment-
weighted average annual per-unit energy consumption under the base case 
and standards cases. The national energy consumption is the product of 
the annual energy consumption per unit and the number of units of each 
vintage, which depends on shipments.
    As noted above, DOE used a relative price elasticity to estimate 
standards-case shipments for microwave ovens. To avoid the inclusion of 
energy savings from any reduction in shipments attributable to a 
standard, DOE used the standards-case shipments projection and the 
standards-case stock to calculate the annual energy consumption in the 
base case. For microwave ovens, DOE assumed that any drop in shipments 
caused by standards would result in the purchase of used machines. DOE 
retained the use of the base-case shipments to determine the annual 
energy consumption in the base case for today's final rule.
c. Site-to-Source Energy Conversion
    To estimate the national energy savings expected from appliance 
standards, DOE uses a multiplicative factor to convert site energy 
consumption (energy use at the location where the appliance is 
operated) into primary or source energy consumption (the energy 
required to deliver the site energy). For the October 2008 NOPR, DOE 
used annual site-to-source conversion factors based on the version of 
NEMS that corresponds to AEO 2008. For today's final rule, DOE used AEO 
2012. For electricity, the conversion factors vary over time because of 
projected changes in generation sources (i.e., the types of power 
plants projected to provide electricity to the country). Because the 
AEO does not provide energy forecasts beyond 2035, DOE used conversion 
factors that remain constant at the 2035 values throughout the rest of 
the forecast.
d. Total Installed Costs and Operating Costs
    The increase in total annual installed cost is equal to the 
difference in the per-unit total installed cost between the base case 
and standards case, multiplied by the shipments forecasted in the 
standards case.
    As discussed in section 0 of this rulemaking, DOE applied an 
experience rate to project the prices of microwave ovens sold in each 
year in the forecast period (2016-2045). The experience rate expresses 
the change in price associated with a doubling in cumulative 
production. The price in each year is a function of the learning rate 
and the cumulative production of microwave ovens forecast in each year. 
DOE applied the same values to forecast prices for each product class 
at each considered efficiency level.
    To evaluate the impact of the uncertainty of the price trend 
estimates, DOE performed price trend sensitivity calculations in the 
national impact analysis. DOE considered three experience rate 
sensitivities, which are described in appendix 8-C of the final rule 
TSD.
    The annual operating cost savings per unit include changes in 
energy, repair, and maintenance costs. DOE forecasted energy prices for 
the February 2012 SNOPR based on AEO 2010; it updated the forecasts for 
the final rule using data from AEO 2012. For the February 2012 SNOPR 
and today's final rule, DOE assumed no increases in repair and 
maintenance costs for more efficient standby mode and off mode features 
of microwave ovens.
e. Discount Rates
    DOE multiplies monetary values in future years by a discount factor 
to determine their present value. DOE estimated national impacts using 
both a 3-percent and a 7-percent real discount rate, in accordance with 
guidance provided by the Office of Management and Budget (OMB) to 
Federal agencies on the development of regulatory analysis (OMB 
Circular A-4 (Sept. 17, 2003), section E, ``Identifying and Measuring 
Benefits and Costs'').
    An individual commenter objected to DOE's use of 3-percent and a 7-
percent discount rates. The comment stated that, according to a holding 
in NRDC v. Herrington (NRDC v. Herrington, 768 F.2d 1355, 1367 (D.C. 
Cir. 1985)), DOE cannot rely on the OMB alone to justify its choice to 
use 3-percent and 7-percent discount rates. (Private Citizen, No. 10 at 
pp. 3-4) In response, DOE notes that the 7-percent discount rate is an 
estimate of the average before-tax rate of return to private capital in 
the U.S. economy. It approximates the opportunity cost of capital, and 
it is the appropriate discount rate whenever the main effect of a 
regulation is to displace or alter the use of capital in the private

[[Page 36347]]

sector. When regulation primarily and directly affects private 
consumption (e.g., through higher consumer prices for goods and 
services), a lower discount rate is appropriate. The alternative most 
often used is sometimes called societal rate of time preference, which 
is the rate at which society discounts future consumption flows to 
their present value. The real rate of return on long-term government 
debt may provide a fair approximation of the societal rate of time 
preference. Over the last 30 years, this rate has averaged around 3 
percent in real terms on a pre-tax basis.

G. Consumer Subgroup Analysis

    In analyzing the potential impact of new or amended standards on 
consumers, DOE evaluates the impact on identifiable subgroups of 
consumers that may be disproportionately affected by a national 
standard. In the October 2008 NOPR, DOE analyzed the potential effects 
of microwave oven standby mode and off mode standards on two subgroups: 
(1) Low-income consumers, and (2) consumers living in senior-only 
households. DOE used the same approach for today's final rule.

H. Manufacturer Impact Analysis

    In determining whether an amended energy conservation standard for 
microwave ovens subject to this rulemaking is economically justified, 
DOE is required to consider the economic impact of the standard on the 
manufacturers and consumers of the products subject to the standards. 
(42 U.S.C. 6295(o)(2)(B)(i)(I)) The statute also calls for an 
assessment of the impact of any lessening of competition as determined 
by the Attorney General that is likely to result from the adoption of a 
standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) DOE conducted the MIA to 
estimate the financial impact of standby mode and off mode energy 
conservation standards on microwave oven manufacturers, and to 
calculate the impact of such standards on domestic employment and 
manufacturing capacity.
    The MIA has both quantitative and qualitative aspects. The 
quantitative part of the MIA primarily relies on the GRIM--an industry-
cash-flow model customized for this rulemaking. The GRIM inputs are 
data characterizing the industry cost structure, shipments, and 
revenues. The key output is the INPV. Different sets of assumptions 
(scenarios) will produce different results. The qualitative part of the 
MIA addresses factors such as product characteristics, characteristics 
of particular firms, as well as market and product trends. It also 
includes an assessment of the impacts of standards on subgroups of 
manufacturers. DOE outlined its methodology for the MIA in the February 
2012 SNOPR. 77 FR 8526, 8550-52 (Feb. 14, 2012). The complete MIA is 
presented in chapter 12 of the final rule TSD.
    For today's final rule, DOE updated the MIA results in the February 
2012 SNOPR based on several changes to other analyses that impact the 
MIA. DOE revised the analysis to account for the impacts on 
manufacturers resulting from standby mode and off mode standards for 
Product Class 1 (Microwave-Only Ovens and Countertop Convection 
Microwave Ovens) and Product Class 2 (Built-In and Over-the-Range 
Convection Microwave Ovens). As discussed in section IV.D.3 of this 
rulemaking, based on additional research for the engineering analysis, 
DOE included updated MPCs in 2011$ for both Product Class 1 and Product 
Class 2. DOE also incorporated updated price trends into the analysis 
rather than assuming prices remain fixed in real terms throughout the 
analysis period. DOE used the same price trends in the NIA starting in 
the base year of the analysis (2013) and continuing through the end of 
the analysis period (2045). DOE also assumed that MPCs and MSPs were 
similarly impacted by price trends in both the base case and standards 
cases. See section IV.F of this rulemaking for a description of how DOE 
implemented price trends into the analysis.
    The total shipments and efficiency distributions were updated using 
the new estimates described in the final rule NIA. The MIA also uses 
the new analysis period in the NIA (2016-2045) and has updated the base 
year of analysis to 2013. See section IV.F of this rulemaking for a 
description of the changes to the NIA.
    As was done for the February 2012 SNOPR MIA, DOE considered product 
and capital conversion costs associated with the analyzed TSLs in 
today's final rule. Product conversion costs are one-time investments 
in research, development, testing, and marketing, focused on ensuring 
product designs comply with new energy conservation standards. DOE 
investigated available product information to update the estimated 
number of product platforms that would need to be altered at each TSL 
to determine conversion costs for the entire industry. DOE also used 
information provided in manufacturer interviews to verify the estimates 
used to determine product conversion costs. For each TSL, DOE assumed 
that most of the product conversion costs would be used for product 
development expenses. To account for the majority of the cost to 
upgrade the designs of product platforms that did not meet the standby 
power requirements at each TSL, DOE estimated a per-platform cost for 
engineering time, reliability testing, and product development that 
varied depending on the complexity of the design options.
    To allocate total product and capital conversion costs across 
Product Class 1 and Product Class 2 for the final rule MIA, DOE used 
the same ratio between these two product classes as used in the final 
rule NIA. DOE used the same per-platform costs at each standby power 
level for both product classes as developed in the February 2012 SNOPR, 
but converted these product and capital conversion costs to 2011$ using 
the PPI.
    DOE received comments pertaining to the manufacturer impact 
analysis in the February 2012 SNOPR from a private citizen, who 
commented that the loss in INPV would disproportionally and negatively 
impact small business microwave oven manufacturers around the world 
(Private Citizen, No.10 at pp. 2, 10). DOE did not identify any 
manufacturers classified as a small business selling microwave ovens in 
the United States. Additionally, the INPV figure in the February 2012 
SNOPR is industry-wide, and does not represent the impact on any one 
manufacturer.
    The private citizen also commented that small and medium-size 
businesses would have a difficult time complying with a standard with a 
compliance date in 2014 or 2015, and that some could go out of business 
(Private Citizen, No. 10 at p. 7). In addition to the fact that DOE 
identified no small microwave oven manufacturers, DOE points out that 
the compliance date is 3 years from the publication of today's final 
rule, which is consistent with other new standards. DOE also notes that 
no manufacturers objected to the compliance date as part of this 
rulemaking.

I. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts include 
direct and indirect impacts. Direct employment impacts are any changes 
in the number of employees of manufacturers of the products subject to 
standards, their suppliers, and related service firms. The MIA 
addresses those impacts. Indirect employment impacts from standards 
consist of the net jobs created or eliminated in the national economy, 
other than in the manufacturing sector being regulated, caused by: (1) 
Reduced spending by end users on energy; (2) reduced spending on new 
energy supply

[[Page 36348]]

by the utility industry; (3) increased spending on new products to 
which the new standards apply; and (4) the effects of those three 
factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (BLS).\24\ The BLS regularly publishes its estimates 
of the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\25\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, based 
on the BLS data alone, DOE believes net national employment will 
increase due to shifts in economic activity resulting from amended 
standards for microwave ovens.
---------------------------------------------------------------------------

    \24\ Data on industry employment, hours, labor compensation, 
value of production, and the implicit price deflator for output for 
these industries are available upon request by calling the Division 
of Industry Productivity Studies (202-691-5618) or by sending a 
request by email to [email protected]. Available at: www.bls.gov/news.release/prin1.nr0.htm. (Last accessed December 2012.)
    \25\ See Bureau of Economic Analysis, Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS 
II). Washington, DC. U.S. Department of Commerce, 1992.
---------------------------------------------------------------------------

    For the standard levels considered in today's direct final rule, 
DOE estimated indirect national employment impacts using an input/
output model of the U.S. economy called Impact of Sector Energy 
Technologies version 3.1.1 (ImSET).\26\ ImSET is a special-purpose 
version of the ``U.S. Benchmark National Input-Output'' (I-O) model, 
which was designed to estimate the national employment and income 
effects of energy-saving technologies. The ImSET software includes a 
computer-based I-O model having structural coefficients that 
characterize economic flows among 187 sectors most relevant to 
industrial, commercial, and residential building energy use.
---------------------------------------------------------------------------

    \26\ J. M. Roop, M. J. Scott, and R. W. Schultz, ImSET 3.1: 
Impact of Sector Energy Technologies, PNNL-18412, Pacific Northwest 
National Laboratory, 2009. Available at: www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf. (Last 
accessed December 2012.)
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and understands the uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Because ImSET does not incorporate price changes, the 
employment effects predicted by ImSET may overestimate actual job 
impacts over the long run for this rule. Because ImSET predicts small 
job impacts resulting from this rule, regardless of these 
uncertainties, the actual job impacts are likely to be negligible in 
the overall economy. DOE may consider the use of other modeling 
approaches for examining long run employment impacts. DOE also notes 
that the employment impacts estimated with ImSET for the entire economy 
differ from the employment impacts in the microwave oven manufacturing 
sector estimated using the GRIM in the MIA. The methodologies used and 
the sectors analyzed in the ImSET and GRIM models are different.
    For further details, see chapter 13 of the final rule TSD.

J. Utility Impact Analysis

    The utility impact analysis estimates the change in the forecasted 
power generation capacity for the Nation that would be expected to 
result from adoption of new or amended standards. The analysis 
determines the changes to electricity supply as a result of electricity 
consumption savings due to standards. For the October 2008 NOPR and 
today's final rule, DOE used the NEMS-BT computer model to calculate 
these changes. The analysis output provides a forecast for the needed 
generation capacities at each TSL. The estimated net benefit of a 
standard is the difference between the generation capacities forecasted 
by NEMS-BT and the AEO Reference case. DOE obtained the energy savings 
inputs from the NIA. Those inputs reflect the effects of standby mode 
and off mode energy use reduction on electricity consumption of 
microwave ovens. Chapter 14 of the final rule TSD presents results of 
the utility impact analysis.

K. Emissions Analysis

    In the emissions analysis, DOE estimated the reduction in power 
sector emissions of CO2, SO2, NOX, and 
Hg from amended energy conservation standards for microwave ovens. DOE 
conducted the emissions analysis using emissions factors that were 
derived from data in EIA's AEO 2012, supplemented by data from other 
sources. DOE developed separate emissions factors for power sector 
emissions and upstream emissions. The method that DOE used to derive 
emissions factors is described in chapter 15 of the final rule TSD.
    EIA prepares the Annual Energy Outlook using the National Energy 
Modeling System (NEMS). Each annual version of NEMS incorporates the 
projected impacts of existing air quality regulations on emissions. AEO 
2012 generally represents current legislation and environmental 
regulations, including recent government actions, for which 
implementing regulations were available as of December 31, 2011.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap and trading 
programs. Title IV of the Clean Air Act sets an annual emissions cap on 
SO2 for affected EGUs in the 48 contiguous States and the 
District of Columbia (D.C.). SO2 emissions from 28 eastern 
States and D.C. were also limited under the Clean Air Interstate Rule 
(CAIR), which created an allowance-based trading program that operates 
along with the Title IV program. 70 FR 25162 (May 12, 2005). CAIR was 
remanded to the U.S. Environmental Protection Agency (EPA) by the U.S. 
Court of Appeals for the District of Columbia Circuit, but it remained 
in effect. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008); 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008). On July 6, 2011 
EPA issued a replacement for CAIR, the Cross-State Air Pollution Rule 
(CSAPR). 76 FR 48208 (Aug. 8, 2011). The AEO 2012 emissions factors 
used for today's rule assume the implementation of CSAPR.\27\
---------------------------------------------------------------------------

    \27\ On December 30, 2011, the D.C. Circuit stayed the new rules 
while a panel of judges reviews them, and told EPA to continue 
enforcing CAIR. See EME Homer City Generation, LP v. EPA, Order, No. 
11-1302, Slip Op. at *2 (D.C. Cir. Dec. 30, 2011). On August 21, 
2012, the D.C. Circuit vacated CSAPR and related Federal 
Implementation Plans that would have superseded the State 
Implementation Plans that EPA typically approves for compliance with 
Clean Air Act stationary source regulations. See EME Homer City 
Generation, LP v. EPA, No. 11-1302, 2012 WL 3570721 at *24 (D.C. 
Cir. Aug. 21, 2012). The court required EPA to continue 
administering CAIR. See id. The AEO 2012, however, had been 
finalized prior to both these decisions. DOE understands, however, 
that CAIR and CSAPR are similar with respect to their effect on 
emissions impacts of energy efficiency standards.
---------------------------------------------------------------------------

    The attainment of emissions caps typically is flexible among EGUs 
and is enforced through the use of emissions

[[Page 36349]]

allowances and tradable permits. Under existing EPA regulations, any 
excess SO2 emissions allowances resulting from the lower 
electricity demand caused by the imposition of an efficiency standard 
could be used to permit offsetting increases in SO2 
emissions by any regulated EGU. In past rulemakings, DOE recognized 
that there was uncertainty about the effects of efficiency standards on 
SO2 emissions covered by the existing cap-and-trade system, 
but it concluded that no reductions in power sector emissions would 
occur for SO2 as a result of standards.
    Beginning in 2015, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants, 
which were announced by EPA on December 21, 2011. 77 FR 9304 (Feb. 16, 
2012). In the final MATS rule, EPA established a standard for hydrogen 
chloride as a surrogate for acid gas hazardous air pollutants (HAP), 
and also established a standard for SO2 (a non-HAP acid gas) 
as an alternative equivalent surrogate standard for acid gas HAP. The 
same controls are used to reduce HAP and non-HAP acid gas; thus, 
SO2 emissions will be reduced as a result of the control 
technologies installed on coal-fired power plants to comply with the 
MATS requirements for acid gas. AEO 2012 assumes that, in order to 
continue operating, coal plants must have either flue gas 
desulfurization or dry sorbent injection systems installed by 2015. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Under the MATS, NEMS shows a reduction 
in SO2 emissions when electricity demand decreases (e.g., as 
a result of energy efficiency standards). Emissions will be far below 
the cap that would be established by CSAPR, so it is unlikely that 
excess SO2 emissions allowances resulting from the lower 
electricity demand would be needed or used to permit offsetting 
increases in SO2 emissions by any regulated EGU. Therefore, 
DOE believes that efficiency standards will reduce SO2 
emissions in 2015 and beyond.
    Under CSAPR, there is a cap on NOX emissions in 28 
eastern States and the District of Columbia. Energy conservation 
standards are expected to have little effect on NOX 
emissions in those States covered by CSAPR because excess 
NOX emissions allowances resulting from the lower 
electricity demand could be used to permit offsetting increases in 
NOX emissions. However, standards would be expected to 
reduce NOX emissions in the States not affected by the caps, 
so DOE estimated NOX emissions reductions from the standards 
considered in today's rule for these States.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would likely reduce Hg emissions. For this rulemaking, DOE 
estimated mercury emissions reductions using the NEMS-BT based on AEO 
2012, which incorporates the MATS.
    Chapter 15 of the final rule TSD provides further information on 
the emissions analysis.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this final rule, DOE considered the 
estimated monetary benefits from the reduced emissions of 
CO2 and NOX that are expected to result from each 
of the TSLs considered. In order to make this calculation similar to 
the calculation of the NPV of customer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of products 
shipped in the forecast period for each TSL. This section summarizes 
the basis for the monetary values used for each of these emissions and 
presents the values considered in this rulemaking.
    For today's final rule, DOE is relying on sets of values for the 
social cost of carbon (SCC) that were developed by an interagency 
process. A summary of the basis for those values is provided below, and 
a more detailed description of the methodologies used is provided in 
appendix 16-A and appendix 16-B of the final rule TSD.
1. Social Cost of Carbon
    The SCC is an estimate of the monetized damages associated with an 
incremental increase in carbon emissions in a given year. It is 
intended to include (but is not limited to) changes in net agricultural 
productivity, human health, property damages from increased flood risk, 
and the value of ecosystem services. Estimates of the SCC are provided 
in dollars per metric ton of carbon dioxide. A domestic SCC value is 
meant to reflect the value of damages in the United States resulting 
from a unit change in carbon dioxide emissions, while a global SCC 
value is meant to reflect the value of damages worldwide.
    Under section 1(b)(6) of Executive Order 12866, ``Regulatory 
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), agencies must, to 
the extent permitted by law, assess both the costs and the benefits of 
the intended regulation and, recognizing that some costs and benefits 
are difficult to quantify, propose or adopt a regulation only upon a 
reasoned determination that the benefits of the intended regulation 
justify its costs. The purpose of the SCC estimates presented here is 
to allow agencies to incorporate the monetized social benefits of 
reducing CO2 emissions into cost-benefit analyses of 
regulatory actions that have small, or ``marginal,'' impacts on 
cumulative global emissions. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed the SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
carbon dioxide emissions, the analyst faces a number of serious 
challenges. A recent report from the National Research Council points 
out that any assessment will suffer from uncertainty, speculation, and 
lack of information about: (1) Future emissions of greenhouse gases; 
(2) the effects of past and future emissions on the climate system; (3) 
the impact of changes in climate on the physical and biological 
environment; and (4) the translation of these environmental impacts 
into economic damages. As a result, any effort to quantify and monetize 
the harms associated with climate change will raise serious questions 
of science, economics, and ethics and should be viewed as provisional.
    Despite the serious limits of both quantification and monetization, 
SCC estimates can be useful in estimating the social benefits of 
reducing carbon dioxide emissions. Most Federal regulatory actions can 
be expected to have marginal impacts on global emissions. For such 
policies, the agency can estimate the benefits from reduced emissions 
in any future year by multiplying the change in emissions in that year 
by the SCC value appropriate for that year. The net present value of

[[Page 36350]]

the benefits can then be calculated by multiplying the future benefits 
by an appropriate discount factor and summing across all affected 
years. This approach assumes that the marginal damages from increased 
emissions are constant for small departures from the baseline emissions 
path, an approximation that is reasonable for policies that have 
effects on emissions that are small relative to cumulative global 
carbon dioxide emissions. For policies that have a large (non-marginal) 
impact on global cumulative emissions, there is a separate question of 
whether the SCC is an appropriate tool for calculating the benefits of 
reduced emissions. This concern is not applicable to this rulemaking, 
however.
    It is important to emphasize that the interagency process is 
committed to updating these estimates as the science and economic 
understanding of climate change and its impacts on society improves 
over time. In the meantime, the interagency group will continue to 
explore the issues raised by this analysis and consider public comments 
as part of the ongoing interagency process.
b. Social Cost of Carbon Values Used in Past Regulatory Analyses
    Economic analyses for Federal regulations have used a wide range of 
values to estimate the benefits associated with reducing carbon dioxide 
emissions. In the final model year 2011 CAFE rule, the U.S. Department 
of Transportation (DOT) used both a ``domestic'' SCC value of $2 per 
metric ton of CO2 and a ``global'' SCC value of $33 per 
metric ton of CO2 for 2007 emission reductions (in 2007$), 
increasing both values at 2.4 percent per year. DOT also included a 
sensitivity analysis at $80 per metric ton of CO2.\28\ A 
2008 regulation proposed by DOT assumed a domestic SCC value of $7 per 
metric ton of CO2 (in 2006$) for 2011 emission reductions 
(with a range of $0-$14 for sensitivity analysis), also increasing at 
2.4 percent per year.\29\ A regulation for packaged terminal air 
conditioners and packaged terminal heat pumps finalized by DOE in 
October of 2008 used a domestic SCC range of $0 to $20 per metric ton 
CO2 for 2007 emission reductions (in 2007$). 73 FR 58772, 
58814 (Oct. 7, 2008). In addition, EPA's 2008 Advance Notice of 
Proposed Rulemaking on Regulating Greenhouse Gas Emissions Under the 
Clean Air Act identified what it described as ``very preliminary'' SCC 
estimates subject to revision. 73 FR 44354 (July 30, 2008). EPA's 
global mean values were $68 and $40 per metric ton CO2 for 
discount rates of approximately 2 percent and 3 percent, respectively 
(in 2006$ for 2007 emissions).
---------------------------------------------------------------------------

    \28\ See Average Fuel Economy Standards Passenger Cars and Light 
Trucks Model Year 2011, 74 FR 14196 (March 30, 2009) (Final Rule); 
Final Environmental Impact Statement Corporate Average Fuel Economy 
Standards, Passenger Cars and Light Trucks, Model Years 2011-2015 at 
3-90 (Oct. 2008) (Available at: http://www.nhtsa.gov/fuel-economy). 
(Last accessed December 2012.)
    \29\ See Average Fuel Economy Standards, Passenger Cars and 
Light Trucks, Model Years 2011-2015, 73 FR 24352 (May 2, 2008) 
(Proposed Rule); Draft Environmental Impact Statement Corporate 
Average Fuel Economy Standards, Passenger Cars and Light Trucks, 
Model Years 2011-2015 at 3-58 (June 2008) (Available at: http://www.nhtsa.gov/fuel-economy). (Last accessed December 2012).
---------------------------------------------------------------------------

    In 2009, an interagency process was initiated to offer a 
preliminary assessment of how best to quantify the benefits from 
reducing carbon dioxide emissions. To ensure consistency in how 
benefits are evaluated across agencies, the Administration sought to 
develop a transparent and defensible method, specifically designed for 
the rulemaking process, to quantify avoided climate change damages from 
reduced CO2 emissions. The interagency group did not 
undertake any original analysis. Instead, it combined SCC estimates 
from the existing literature to use as interim values until a more 
comprehensive analysis could be conducted. The outcome of the 
preliminary assessment by the interagency group was a set of five 
interim values: global SCC estimates for 2007 (in 2006$) of $55, $33, 
$19, $10, and $5 per metric ton of CO2. These interim values 
represented the first sustained interagency effort within the U.S. 
government to develop an SCC for use in regulatory analysis. The 
results of this preliminary effort were presented in several proposed 
and final rules.
c. Current Approach and Key Assumptions
    Since the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specifically, the group considered public comments and further explored 
the technical literature in relevant fields. The interagency group 
relied on three integrated assessment models commonly used to estimate 
the SCC: the FUND, DICE, and PAGE models. These models are frequently 
cited in the peer-reviewed literature and were used in the last 
assessment of the Intergovernmental Panel on Climate Change. Each model 
was given equal weight in the SCC values that were developed.
    Each model takes a slightly different approach to model how changes 
in emissions result in changes in economic damages. A key objective of 
the interagency process was to enable a consistent exploration of the 
three models while respecting the different approaches to quantifying 
damages taken by the key modelers in the field. An extensive review of 
the literature was conducted to select three sets of input parameters 
for these models: climate sensitivity, socio-economic and emissions 
trajectories, and discount rates. A probability distribution for 
climate sensitivity was specified as an input into all three models. In 
addition, the interagency group used a range of scenarios for the 
socio-economic parameters and a range of values for the discount rate. 
All other model features were left unchanged, relying on the model 
developers' best estimates and judgments.
    The interagency group selected four SCC values for use in 
regulatory analyses. Three values are based on the average SCC from 
three integrated assessment models, at discount rates of 2.5 percent, 3 
percent, and 5 percent. The fourth value, which represents the 95th-
percentile SCC estimate across all three models at a 3-percent discount 
rate, is included to represent higher-than-expected impacts from 
climate change further out in the tails of the SCC distribution. The 
values grow in real terms over time. Additionally, the interagency 
group determined that a range of values from 7 percent to 23 percent 
should be used to adjust the global SCC to calculate domestic effects, 
although preference is given to consideration of the global benefits of 
reducing CO2 emissions. Table IV-13 presents the values in 
the 2010 interagency group report,\30\ which is reproduced in appendix 
16-A of the final rule TSD.
---------------------------------------------------------------------------

    \30\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866. Interagency Working Group on Social Cost of 
Carbon, United States Government, 2010. URL

[[Page 36351]]



                     Table IV-13--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate %
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
2010............................................             4.7            21.4            35.1            64.9
2015............................................             5.7            23.8            38.4            72.8
2020............................................             6.8            26.3            41.7            80.7
2025............................................             8.2            29.6            45.9            90.4
2030............................................             9.7            32.8            50.0           100.0
2035............................................            11.2            36.0            54.2           109.7
2040............................................            12.7            39.2            58.4           119.3
2045............................................            14.2            42.1            61.7           127.8
2050............................................            15.7            44.9            65.0           136.2
----------------------------------------------------------------------------------------------------------------

    The SCC values used for today's notice were generated using the 
most recent versions of the three integrated assessment models that 
have been published in the peer-reviewed literature.\31\ Table IV-14 
shows the updated sets of SCC estimates in five year increments from 
2010 to 2050. The full set of annual SCC estimates between 2010 and 
2050 is reported in appendix 16-B of the final rule TSD. The central 
value that emerges is the average SCC across models at the 3 percent 
discount rate. However, for purposes of capturing the uncertainties 
involved in regulatory impact analysis, the interagency group 
emphasizes the importance of including all four sets of SCC values.
---------------------------------------------------------------------------

    \31\ Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order 12866. Interagency 
Working Group on Social Cost of Carbon, United States Government. 
April 2013. See appendix 16-B of the final rule TSD.

                     Table IV-14--Annual SCC Values From 2013 Interagency Update, 2010-2050
                                      [In 2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                          Discount rate %
                                                 ---------------------------------------------------------------
                                                         5               3              2.5              3
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
2010............................................              11              33              52              90
2015............................................              12              38              58             109
2020............................................              12              43              65             129
2025............................................              14              48              70             144
2030............................................              16              52              76             159
2035............................................              19              57              81             176
2040............................................              21              62              87             192
2045............................................              24              66              92             206
2050............................................              27              71              98             221
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable since they will evolve with improved scientific and 
economic understanding. The interagency group also recognizes that the 
existing models are imperfect and incomplete. The National Research 
Council report mentioned above points out that there is tension between 
the goal of producing quantified estimates of the economic damages from 
an incremental ton of carbon and the limits of existing efforts to 
model these effects. There are a number of concerns and problems that 
should be addressed by the research community, including research 
programs housed in many of the Federal agencies participating in the 
interagency process to estimate the SCC. The interagency group intends 
to periodically review and reconsider those estimates to reflect 
increasing knowledge of the science and economics of climate impacts, 
as well as improvements in modeling.
    In summary, in considering the potential global benefits resulting 
from reduced CO2 emissions, DOE used the values from the 
2013 interagency report, adjusted to 2011$ using the Gross Domestic 
Product price deflator. For each of the four cases specified, the 
values used for emissions in 2016 were $12.6, $41.1, $63.2, and $119 
per metric ton avoided (values expressed in 2011$). DOE derived values 
after 2050 using the growth rate for the 2040-2050 period in the 
interagency update.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SCC value for that year in each of the four cases. To 
calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the four cases using the specific 
discount rate that had been used to obtain the SCC values in each case.
2. Valuation of Other Emissions Reductions
    DOE investigated the potential monetary benefit of reduced 
NOX emissions from the potential standards it considered. As 
noted above, DOE has taken into account how amended energy conservation 
standards would reduce NOX emissions in those 22 States not 
affected by emissions caps. DOE estimated the monetized value of 
NOX emissions reductions resulting from each of the TSLs 
considered for today's

[[Page 36352]]

final rule based on estimates found in the relevant scientific 
literature. Available estimates suggest a very wide range of monetary 
values per ton of NOX from stationary sources, ranging from 
$455 to $4,679 per ton in 2011$).\32\ In accordance with OMB guidance, 
DOE calculated the monetary benefits using each of the economic values 
for NOX and real discount rates of 3 percent and 7 percent.
---------------------------------------------------------------------------

    \32\ For additional information, refer to U.S. Office of 
Management and Budget, Office of Information and Regulatory Affairs, 
2006 Report to Congress on the Costs and Benefits of Federal 
Regulations and Unfunded Mandates on State, Local, and Tribal 
Entities, Washington, DC.
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. It has not included monetization in the current analysis.

M. Discussion of Other Comments

1. Significance of Energy Savings for the Built-In and Over-the-Range 
Product Class
    In the February 2012 SNOPR, the total cumulative energy savings for 
the proposed standby power standard for the built-in and over-the-range 
convection microwave oven product class estimated for products shipped 
in 2016-2045 were 0.01 quad. AHAM, Whirlpool, and GE questioned whether 
that amount could be considered large enough to justify standards for 
that product class. They requested that DOE issue a ``no standard'' 
standard for the product class. (AHAM, No. 16 at p. 1; Whirlpool, No.15 
at p. 2; GE, No. 19 at p. 1)
    In the past, DOE has issued standards for a product class for which 
the total savings were 0.01 quad or less. For the 2010 standards on 
direct heating equipment (DHE), for example, the combined total energy 
savings from the standards were 0.23 quad, but the savings for several 
DHE product classes were each 0.01 quad or less. 75 FR 20185 (Apr. 16, 
2010). Using the interpretation of ``non-trivial'' energy savings that 
DOE has applied in previous rulemakings (see section 0 of this 
rulemaking), DOE concludes that the energy savings estimated for the 
standard for the built-in and over-the-range convection microwave oven 
product class are non-trivial and thus significant within the meaning 
of 42 U.S.C. 6295(o)(3)(B).
2. Standard Levels
    The Joint Commenters stated that they support the standards at TSL 
3. According to these commenters, such energy conservation standards 
will help harmonize the United States with standby mode and off mode 
power standards developed by the European Union in 2009. (Joint 
Comment, No. 17 at p. 1)
    Whirlpool stated that the payback period shown for built-in and 
over-the-range convection microwave ovens at the proposed standard 
level (TSL 3) is 6.3 years, which exceeds the timeframe consumers will 
accept to recoup the cost of a more efficient product. It stated that 
this excessive payback period calls into question whether TSL 3 is the 
proper level for built-in and over-the-range convection microwave 
ovens. (Whirlpool, No. 15 at p. 2)
    DOE is not aware of evidence for a specific payback period that 
consumers require to recoup the incremental cost of a more efficient 
product. As shown in Table 0-2 and Table 0-3 in section 0 of this 
rulemaking, the median payback period calculated for the final rule for 
built-in and over-the-range convection microwave ovens at TSL 3 is 3.5 
years. The payback period is lower than estimated for the February 2012 
SNOPR due to the aforementioned change in the estimated manufacturing 
cost of meeting higher efficiency levels. DOE believes that the 
majority of consumers would find such a payback acceptable.

V. Analytical Results

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of a number of TSLs for the 
microwave oven standby mode and off mode energy use that are the 
subject of today's final rule. For the October 2008 NOPR, DOE based the 
TSLs on standby power levels explored in the November 2007 ANOPR, and 
selected the TSLs on consideration of economic factors and current 
market conditions. As discussed previously in section IV.D.2 of this 
rulemaking, given the small number of standby power levels analyzed, 
DOE maintained all four of the standby power levels to consider as 
TSLs.
    Table V-1 shows the TSLs for microwave oven standby mode and off 
mode energy use. TSL 1 corresponds to the first candidate standard 
level from each product class and represents the standby power level 
for each class with the least significant design change. TSL 4 
corresponds to the max-tech efficiency levels. TSLs 2 and 3 are 
intermediate levels between TSL 1 and TSL 4.

Table V-1--Trial Standard Levels for Microwave Oven Standby Mode and Off
                             Mode Energy Use
------------------------------------------------------------------------
                                                 Standby power (W)
                                         -------------------------------
                                           Product class   Product class
                                           1: Microwave-    2: Built-in
          Trial standard level               only and      and over-the-
                                            countertop         range
                                            convection      convection
                                          microwave oven  microwave oven
------------------------------------------------------------------------
TSL 1...................................            2.00            3.70
TSL 2...................................            1.50            2.70
TSL 3...................................            1.00            2.20
TSL 4...................................            0.02            0.04
------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Consumers
a. Life-Cycle Cost and Payback Period
    To evaluate the net economic impact of standards on consumers, DOE 
conducted LCC and PBP analyses for each TSL. In general, a higher 
efficiency product would affect consumers in two ways: (1) Annual 
operating expense would decrease; and (2) purchase price would 
increase. Section V of this rulemaking discusses the inputs DOE used 
for calculating the LCC and PBP.
    The key outputs of the LCC analysis are a mean LCC savings relative 
to the base-case efficiency distribution, as well as a probability 
distribution or likelihood of LCC reduction or increase, for each TSL 
and product class. The LCC analysis also estimates the fraction of 
consumers for which the LCC will decrease (net benefit), increase (net 
cost), or exhibit no change (no impact) relative to the base-case 
product forecast. No impacts occur when the product efficiencies of the 
base-case forecast already equal or exceed the efficiency at a given 
TSL.
    Table V-2 and Table V-3 show the LCC and PBP results for both 
microwave oven product classes. Note that for built-in and over-the-
range convection microwave ovens, 100 percent of consumers of such 
products in 2016 are assumed to be using a convection microwave oven in 
the base case. Any decrease in standby power would affect 100 percent 
of the market.

[[Page 36353]]



                  Table V-2--Microwave-Only Ovens and Countertop Convection Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Life-Cycle cost ($)                         Life-Cycle cost savings
                                                 -------------------------------------------------------------------------------------------   Payback
                                       Standby                   Average                                        % Households with               period
                TSL                   power (W)     Average      standby                   Average   ---------------------------------------   (years)
                                                   installed    operating   Average LCC   savings $                                             median
                                                     price         cost                                 Net cost    No impact   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...........................         4.00          234           35          269           NA            0          100            0           NA
1..................................         2.00          234           18          252            8            0           54           46          0.2
2..................................         1.50          234           13          247           11            0           19           81          0.3
3..................................         1.00          239            9          248           11           12            0           88          3.5
4..................................         0.02          243            0          244           15            5            0           95          3.5
--------------------------------------------------------------------------------------------------------------------------------------------------------


                      Table V-3--Built-In and Over-the-Range Convection Microwave Ovens: Life-Cycle Cost and Payback Period Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Life-cycle cost ($)                         Life-Cycle cost savings
                                                 -------------------------------------------------------------------------------------------   Payback
                                       Standby                   Average                                        % Households with               period
                TSL                   power (W)     Average      standby                   Average   ---------------------------------------   (years)
                                                   installed    operating   Average LCC    savings                                              median
                                                     price         cost                                 Net cost    No impact   Net benefit
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline...........................         4.50          506           40          545           NA            0          100            0           NA
1..................................         3.70          506           33          538            7            0            0          100          0.1
2..................................         2.70          506           24          529           16            0            0          100          0.1
3..................................         2.20          513           19          533           12            0            0          100          3.3
4..................................         0.04          515            0          515           30            0            0          100          2.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

b. Consumer Subgroup Analysis
    Using the LCC spreadsheet model, DOE determined the impact of the 
standards on the following microwave oven consumer subgroups: senior-
only households and low-income households. Table V-4 and Table V-5 
compare the average LCC savings for senior-only households and low-
income households with those for all households. The LCC impacts for 
senior-only and low-income households are essentially the same as they 
are for the general population.

Table V-4--Microwave-Only Ovens and Countertop Convection Microwave Ovens: Comparison of Average LCC Savings for
                                      Consumer Subgroups and All Households
----------------------------------------------------------------------------------------------------------------
                                                   Standby power    Senior-only     Low-income
                       TSL                              (W)         households      households    All households
----------------------------------------------------------------------------------------------------------------
1...............................................            2.00              $8              $8              $8
2...............................................            1.50              11              11              11
3...............................................            1.00              11              11              11
4...............................................            0.02              14              14              15
----------------------------------------------------------------------------------------------------------------


    Table V-5--Built-In and Over-the-Range Convection Microwave Ovens: Comparison of Average LCC Savings for
                                      Consumer Subgroups and All Households
----------------------------------------------------------------------------------------------------------------
                                                   Standby power    Senior-only     Low-income
                       TSL                              (W)         households      households    All households
----------------------------------------------------------------------------------------------------------------
1...............................................              $6              $7              $7              $7
2...............................................              14              16              16              16
3...............................................              10              12              12              12
4...............................................              25              30              30              30
----------------------------------------------------------------------------------------------------------------

c. Rebuttable-Presumption Payback
    As discussed above, EPCA establishes a rebuttable presumption that, 
in essence, an energy conservation standard is economically justified 
if the increased purchase cost for a product that meets the standard is 
less than three times the value of the first-year energy savings 
resulting from the standard. (42 U.S.C. 6295(o)(2)(B)(iii)) DOE 
calculated a rebuttable-presumption payback period for each TSL to 
determine whether DOE could presume that a standard at that level is 
economically justified. Table V-6 shows the rebuttable-presumption 
payback periods for the microwave oven standby mode and off mode TSLs. 
Because only a single, average value is necessary for establishing the 
rebuttable-presumption payback period, rather than using distributions 
for input values, DOE used discrete values. As required by EPCA, DOE 
based the calculation on the assumptions in the DOE test procedures for 
microwave ovens. (42 U.S.C. 6295(o)(2)(B)(iii)) As a result, DOE

[[Page 36354]]

calculated a single rebuttable-presumption payback value, and not a 
distribution of payback periods, for each TSL.

  Table V-6--Rebuttable-Presumption Payback Periods for Microwave Oven
                        Standby Mode and Off Mode
------------------------------------------------------------------------
                                              Payback period (years)
                                         -------------------------------
                                          Microwave-only
                                             ovens and     Built-in and
                   TSL                      countertop    over-the-range
                                            convection      convection
                                             microwave       microwave
                                               ovens           ovens
------------------------------------------------------------------------
1.......................................             0.2             0.1
2.......................................             0.2             0.1
3.......................................             3.5             3.3
4.......................................             3.5             2.0
------------------------------------------------------------------------

    All the TSLs in the above tables have rebuttable-presumption 
payback periods of less than 4 years. DOE believes that the rebuttable-
presumption payback period criterion (i.e., a limited payback period) 
is not sufficient for determining economic justification. Therefore, 
DOE has considered a full range of impacts, including those to 
consumers, manufacturers, the Nation, and the environment. Section IV 
of this rulemaking provides a complete discussion of how DOE considered 
the range of impacts to select the standards in today's rule.
2. Economic Impacts on Manufacturers
    For today's final rule, DOE used INPV to compare the financial 
impacts of potential energy conservation standards on microwave oven 
manufacturers at different TSLs. The INPV is the sum of all net cash 
flows discounted by the industry's cost of capital (discount rate). DOE 
used the GRIM to compare the INPV of the base case (no new energy 
conservation standards) to that of each TSL for the microwave oven 
industry. To evaluate the range of cash-flow impacts on the microwave 
oven industry, DOE constructed different scenarios using different 
markups that correspond to the range of anticipated market responses. 
Each scenario results in a unique set of cash flows and corresponding 
industry value at each TSL. These steps allowed DOE to compare the 
potential impacts on the industry as a function of TSLs in the GRIM. 
The difference in INPV between the base case and the standards case is 
an estimate of the economic impacts that implementing that standard 
level would have on the entire industry. See chapter 12 of the final 
rule TSD for additional information on MIA methodology and results.
a. Industry Cash-Flow Analysis Results
    To assess the lower end of the range of potential impacts for the 
microwave oven industry, DOE considered the scenario reflecting the 
preservation of gross margin percentage. As production cost increases 
with efficiency, this scenario implies manufacturers will be able to 
maintain gross margins as a percentage of revenues. To assess the 
higher end of the range of potential impacts for the microwave oven 
industry, DOE considered the scenario reflecting preservation of gross 
margin in absolute dollars. Under this scenario, DOE assumed that the 
industry can maintain its gross margin in absolute dollars after the 
compliance date of the energy conservation standard by accepting lower 
gross margins as a percentage of revenue, but maintaining these margins 
in absolute dollars. Table V-7 through Table V-12 show MIA results for 
standby mode and off mode energy conservation standards using both 
markup scenarios described above for microwave oven manufacturers.

                Table V-7--Product Class 1 Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$         %       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................         1,356.8
TSL 1...................................................         1,341.9          (14.9)           (1.1)            16.7             3.9            20.6
TSL 2...................................................         1,332.5          (24.3)           (1.8)            30.0             4.3            34.3
TSL 3...................................................         1,317.3          (39.5)           (2.9)            38.0             4.7            42.7
TSL 4...................................................         1,281.4          (75.4)           (5.6)            73.4             7.8            81.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


           Table V-8--Product Class 1 Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$         %       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................         1,356.8
TSL 1...................................................         1,339.7          (17.1)           (1.3)            16.7             3.9            20.6
TSL 2...................................................         1,328.6          (28.2)           (2.1)            30.0             4.3            34.3
TSL 3...................................................         1,261.6          (95.2)           (7.0)            38.0             4.7            42.7
TSL 4...................................................         1,174.0         (182.8)          (13.5)            73.4             7.8            81.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


[[Page 36355]]


                Table V-9--Product Class 2 Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$         %       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................            29.7
TSL 1...................................................            29.5           (0.1)           (0.5)             0.2             0.0             0.2
TSL 2...................................................            29.4           (0.2)           (0.8)             0.3             0.0             0.3
TSL 3...................................................            29.2           (0.5)           (1.5)             0.4             0.0             0.4
TSL 4...................................................            28.9           (0.8)           (2.5)             0.7             0.1             0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


           Table V-10--Product Class 2 Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$         %       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................            29.7
TSL 1...................................................            29.5           (0.2)           (0.5)             0.2             0.0             0.2
TSL 2...................................................            29.4           (0.3)           (0.9)             0.3             0.0             0.3
TSL 3...................................................            28.3           (1.4)           (4.6)             0.4             0.0             0.4
TSL 4...................................................            27.8           (1.8)           (6.1)             0.7             0.1             0.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


           Table V-11--Combined Product Classes Manufacturer Impact Analysis Under the Preservation of Gross Margin Percentage Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$         %       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................         1,386.5
TSL 1...................................................         1,371.4          (15.1)           (1.1)            16.9             4.0            20.8
TSL 2...................................................         1,361.9          (24.6)           (1.8)            30.3             4.3            34.7
TSL 3...................................................         1,346.5          (40.0)           (2.9)            38.3             4.7            43.1
TSL 4...................................................         1,310.3          (76.1)           (5.5)            74.2             7.9            82.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


      Table V-12--Combined Product Classes Manufacturer Impact Analysis Under the Preservation of Gross Margin in Absolute Dollars Markup Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               INPV       Change in INPV  Change in INPV      Product         Capital          Total
                                                         ------------------------------------------------   Conversion      Conversion      Investment
                          Units                                                                                Costs           Costs         Required
                                                          Millions 2011$  Millions 2011$        $%       -----------------------------------------------
                                                                                                          Millions 2011$  Millions 2011$  Millions 2011$
--------------------------------------------------------------------------------------------------------------------------------------------------------
Base Case...............................................         1,386.5
TSL 1...................................................         1,369.2          (17.3)           (1.2)            16.9             4.0            20.8
TSL 2...................................................         1,358.0          (28.5)           (2.1)            30.3             4.3            34.7
TSL 3...................................................         1,289.9          (96.6)           (7.0)            38.3             4.7            43.1
TSL 4...................................................         1,201.9         (184.6)          (13.3)            74.2             7.9            82.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

    TSL 1 represents an improvement in standby power from the baseline 
level of 4.0 W to 2.0 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 3.7 W for Product 
Class 2. At TSL 1, the impact on INPV and cash flow varies depending on 
the manufacturers' ability to pass on increases in MPCs to their 
customers. DOE estimated the impacts in INPV at TSL 1 to range -$15.1 
million to -$17.3 million, or a change in INPV of -1.1 percent to -1.2 
percent. At this level, the industry cash flow decreases by 
approximately 6.0 percent, to $99.7 million, compared to the base-case 
value of $106.1 million in the year leading up to the standards.
    TSL 2 represents an improvement in standby power from the baseline 
level of 4.0 W to 1.5 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 2.7 W for Product 
Class 2. At TSL 2, the impact on INPV and cash flow would be similar to 
TSL 1 and depend on whether manufacturers can fully recover the 
increases in MPCs from their customers. DOE estimated the impacts in 
INPV at TSL 2 to range from -$24.6 million to

[[Page 36356]]

-$28.5 million, or a change in INPV of -1.8 percent to -2.1 percent. At 
this level, the industry cash flow decreases by approximately 9.7 
percent, to $95.8 million, compared to the base-case value of $106.1 
million in the year leading up to the standards.
    TSL 3 represents an improvement in standby power from the baseline 
level of 4.0 W to 1.0 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 2.2 W for Product 
Class 2. At TSL 3, the impact on INPV and cash flow continues to vary 
depending on the manufacturers and their ability to pass on increases 
in MPCs to their customers. DOE estimated the impacts in INPV at TSL 3 
to range from approximately -$40.0 million to -$96.6 million, or a 
change in INPV of -2.9 percent to -7.0 percent. At this level, the 
industry cash flow decreases by approximately 12.0 percent, to $93.4 
million, compared to the base-case value of $106.1 million in the year 
leading up to the standards.
    TSL 4 represents an improvement in standby power from the baseline 
level of 4.0 W to 0.02 W for Product Class 1 and an improvement in 
standby power from the baseline level of 4.5 W to 0.04 W for Product 
Class 2. At TSL 4, DOE estimated the impacts in INPV to range from 
approximately -$76.1 million to -$184.6 million, or a change in INPV of 
-5.5 percent to -13.3 percent. At this level, the industry cash flow 
decreases by approximately 22.7 percent, to $82.0 million, compared to 
the base-case value of $106.1 million in the year leading up to the 
standards. At higher TSLs, manufacturers have a harder time fully 
passing on larger increases in MPCs to their customers. At TSL 4, the 
conversion costs are higher than the other TSLs because the design of 
all microwave platforms must be altered more significantly.
    For new standby mode and off mode energy conservation standards, 
conversion costs increase at higher TSLs as the complexity of further 
lowering standby power increases, substantially driving up engineering, 
product development, and testing time. If the increased production 
costs are fully passed on to consumers (the preservation of gross 
margin percentage scenario), the operating revenue from higher prices 
is still not enough to overcome the negative impacts from the 
substantial conversion costs. The incremental costs are small for each 
TSL, meaning the positive impact on cash flow is small compared to the 
conversion costs required to achieve these efficiencies. As a result of 
the small incremental costs and large conversion expenses, INPV is 
negative for all TSLs under the preservation of gross margin percentage 
scenario. If the incremental costs are not fully passed along to 
customers (the preservation of gross margin in absolute dollars 
scenario), the negative impacts on INPV are amplified at each TSL.
b. Employment Impacts
    DOE discussed the domestic employment impacts on the microwave oven 
industry in the February 2012 SNOPR. DOE concluded that since more than 
98 percent of microwave ovens are already imported and the employment 
impacts in the GRIM are small, the actual impacts on domestic 
employment would depend on whether any U.S. manufacturer decided to 
shift remaining U.S. production to lower-cost countries. 77 8526, FR 
8561 (Feb.14, 2012). DOE maintains this conclusion for today's final 
rule.
c. Impacts on Manufacturing Capacity
    As stated in the October 2008 NOPR, minor tooling changes would be 
necessary at all TSLs for standby mode and off mode energy conservation 
standards. For all standby power levels, the most significant 
conversion costs are the research and development, testing, and 
certification of products with more-efficient components, which does 
not affect production line capacity. Thus, DOE determined that 
manufacturers will be able to maintain manufacturing capacity levels 
and continue to meet market demand under new energy conservation 
standards. 73 FR 62034, 62103 (Oct. 17, 2008). DOE reached the same 
conclusion in today's final rule.
d. Impacts on Subgroups of Manufacturers
    DOE used the results of the industry characterization to group 
manufacturers exhibiting similar characteristics. However, DOE did not 
identify any manufacturer subgroups for microwave ovens that would 
justify a separate manufacturer subgroup.
e. Cumulative Regulatory Burden
    During previous stages of this rulemaking DOE identified a number 
of requirements with which manufacturers of these microwave ovens must 
comply and which take effect within 3 years of the compliance date of 
the new standards. DOE discusses these and other requirements, and 
includes the full details of the cumulative regulatory burden, in 
chapter 12 of the final rule TSD.
3. National Impact Analysis
a. Significance of Energy Savings
    For each TSL, DOE projected energy savings for microwave ovens 
purchased in the 30-year period that begins in the year of compliance 
with amended standards (2016-2045). The savings are measured over the 
entire lifetime of products purchased in the 30-year period. DOE 
quantified the energy savings attributable to each TSL as the 
difference in energy consumption between each standards case and the 
base case. Table V-13 presents the estimated energy savings for each 
TSL. The savings were calculated using the approach described in 
section IV.E of this rulemaking.\33\
---------------------------------------------------------------------------

    \33\ Chapter 10 of the TSD presents tables that show the 
magnitude of the energy savings discounted at rates of 3 percent and 
7 percent. Discounted energy savings represent a policy perspective 
in which energy savings realized farther in the future are less 
significant than energy savings realized in the nearer term.

 Table V-13 Cumulative National Energy Savings for Microwave Oven Standby Mode and Off Mode Power for Units Sold
                                                  in 2016-2045
----------------------------------------------------------------------------------------------------------------
                                                                  Microwave-only   Built-in and
                                                                     ovens and    over-the-range
                               TSL                                  countertop      convection        Total *
                                                                    convection       microwave        (quads)
                                                                   ovens (quads)   ovens (quads)
----------------------------------------------------------------------------------------------------------------
1...............................................................            0.24            0.00            0.24
2...............................................................            0.35            0.00            0.35
3...............................................................            0.47            0.01            0.48
4...............................................................            0.72            0.01            0.73
----------------------------------------------------------------------------------------------------------------


[[Page 36357]]

    Circular A-4 requires agencies to present analytical results, 
including separate schedules of the monetized benefits and costs that 
show the type and timing of benefits and costs. Circular A-4 also 
directs agencies to consider the variability of key elements underlying 
the estimates of benefits and costs. DOE believes its standard 30-year 
analysis is fully compliant with the procedures outlined in Circular A-
4. For this rulemaking, DOE undertook an additional sensitivity 
analysis of its standard 30-year analysis, using a 9-year analytical 
period. The choice of a 9-year period is a proxy for the timeline in 
EPCA for the review of certain energy conservation standards and 
potential revision of and compliance with such revised standards.\34\ 
We would note that the review timeframe established in EPCA generally 
does not overlap with the product lifetime, product manufacturing 
cycles or other factors specific to microwave ovens. Thus, this 
information is presented for informational purposes only and is not 
indicative of any change in DOE's analytical methodology. The NES 
results based on a 9-year analytical period are presented in Table V-
14. The impacts are counted over the lifetime of products purchased in 
2016-2024. The sensitivity analysis results based on a 9-year 
analytical period are presented in Table V-14.
---------------------------------------------------------------------------

    \34\ EPCA requires DOE to review its standards at least once 
every 6 years, and requires, for certain products, a 3-year period 
after any new standard is promulgated before compliance is required, 
except that in no case may any new standards be required within 6 
years of the compliance date of the previous standards. While adding 
a 6-year review to the 3-year compliance period adds up to 9 years, 
DOE notes that it may undertake reviews at any time within the 6 
year period and that the 3-year compliance date may yield to the 6-
year backstop. A 9-year analysis period may not be appropriate given 
the variability that occurs in the timing of standards reviews and 
the fact that for some consumer products, the compliance period is 5 
years rather than 3 years.

Table V-14--Cumulative National Energy Savings for Microwave Oven Standby Mode and Off Mode Power for Units Sold
                                                  in 2016-2024
----------------------------------------------------------------------------------------------------------------
                                                                  Microwave-only
                                                                     ovens and     Built-in and
                                                                    countertop    over-the-range      Total *
                               TSL                                  convection      convection        (quads)
                                                                     microwave       microwave
                                                                   ovens (quads)   ovens (quads)
----------------------------------------------------------------------------------------------------------------
1...............................................................            0.07            0.00            0.07
2...............................................................            0.10            0.00            0.10
3...............................................................            0.14            0.00            0.14
4...............................................................            0.21            0.00            0.22
----------------------------------------------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV to the Nation of the total costs 
and savings for consumers that would result from particular standard 
levels for microwave oven standby mode and off mode. In accordance with 
the OMB's guidelines on regulatory analysis,\35\ DOE calculated NPV 
using both a 7-percent and a 3-percent real discount rate. The 7-
percent rate is an estimate of the average before-tax rate of return on 
private capital in the U.S. economy, and reflects the returns on real 
estate and small business capital as well as corporate capital. DOE 
used this discount rate to approximate the opportunity cost of capital 
in the private sector, because recent OMB analysis has found the 
average rate of return on capital to be near this rate. DOE used the 3-
percent rate to capture the potential effects of standards on private 
consumption (e.g., through higher prices for products and reduced 
purchases of energy). This rate represents the rate at which society 
discounts future consumption flows to their present value. This rate 
can be approximated by the real rate of return on long-term government 
debt (i.e., yield on Treasury notes minus annual rate of change in the 
Consumer Price Index), which has averaged about 3 percent on a pre-tax 
basis for the past 30 years.
---------------------------------------------------------------------------

    \35\ OMB Circular A-4, section E (Sept. 17, 2003). Available at: 
http://www.whitehouse.gov/omb/circulars_a004_a-4. (Last accessed 
December 2012.)
---------------------------------------------------------------------------

    Table V-15 shows the consumer NPV results for each TSL DOE 
considered for both product classes of microwave ovens, using both a 7-
percent and a 3-percent discount rate. In each case, the impacts cover 
the lifetime of products purchased in 2016-2045. See chapter 10 of the 
final rule TSD for more detailed NPV results.

         Table V-15--Cumulative Net Present Value of Consumer Benefits for Microwave Oven Standby Mode and Off Mode for Units Sold in 2016-2045
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Net Present Value (Billions 2011$)
                                                         -----------------------------------------------------------------------------------------------
                                                             Microwave-Only Ovens and       Built-In and Over-the-Range               Total *
                                                               Countertop Convection        Convection Microwave Ovens   -------------------------------
                           TSL                                    Microwave Ovens        --------------------------------
                                                         --------------------------------                                   7% Discount     3% Discount
                                                            7% Discount     3% Discount     7% Discount     3% Discount        Rate            Rate
                                                               Rate            Rate            Rate            Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................            1.13            2.32            0.01            0.02            1.14            2.34
2.......................................................            1.61            3.31            0.02            0.05            1.63            3.36
3.......................................................            1.51            3.34            0.02            0.04            1.53            3.38
4.......................................................            2.00            4.56            0.04            0.09            2.04            4.65
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The total values may differ from the sum of the product class sub-totals due to the rounding to two decimal places.


[[Page 36358]]

    The NPV results presented in Table V-15 are based on the default 
product price trend. As discussed in section IV.E.3 of this rulemaking, 
DOE developed several sensitivity cases with alternative forecasts of 
future prices of microwave ovens. The impact of these alternative 
forecasts on the NPV results is presented in appendix 10-C of the final 
rule TSD.
    The NPV results based on the afore-mentioned 9-year analytical 
period are presented in Table V-16. The impacts are counted over the 
lifetime of products purchased in 2016-2024. As mentioned previously, 
this information is presented for informational purposes only and is 
not indicative of any change in DOE's analytical methodology or 
decision criteria.

         Table V-16--Cumulative Net Present Value of Consumer Benefits for Microwave Oven Standby Mode and Off Mode for Units Sold in 2016-2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Net Present Value (Billions 2011$)
                                                         -----------------------------------------------------------------------------------------------
                                                             Microwave-Only Ovens and       Built-In and Over-the-Range               Total *
                                                               Countertop Convection        Convection Microwave Ovens   -------------------------------
                           TSL                                    Microwave Ovens        --------------------------------
                                                         --------------------------------                                   7% Discount     3% Discount
                                                            7% Discount     3% Discount     7% Discount     3% Discount        Rate            Rate
                                                               Rate            Rate            Rate            Rate
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................            0.55            0.84            0.00            0.01            0.56            0.85
2.......................................................            0.79            1.20            0.01            0.02            0.80            1.22
3.......................................................            0.73            1.19            0.01            0.01            0.74            1.20
4.......................................................            0.96            1.61            0.02            0.03            0.98            1.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The total values may differ from the sum of the product class sub-totals due to the rounding to two decimal places.

c. Indirect Impacts on Employment
    DOE develops estimates of the indirect employment impacts of 
proposed standards on the economy in general. As discussed above, DOE 
expects energy conservation standards for microwave ovens to reduce 
energy bills for consumers of those products, and the resulting net 
savings to be redirected to other forms of economic activity. Those 
shifts in spending and economic activity could affect the demand for 
labor. As described in section 0 of this rulemaking, to estimate those 
effects, DOE used an input/output model of the U.S. economy. Chapter 13 
of the final rule TSD presents the estimated net indirect employment 
impacts in the near term for the TSLs for both product classes of 
microwave ovens that DOE considered in this rulemaking. The results 
suggest that today's standards are likely to have a negligible impact 
on the net demand for labor in the economy. The net change in jobs is 
so small that it would be imperceptible in national labor statistics 
and might be offset by other, unanticipated effects on employment.
4. Impact on Utility or Performance of Product
    For the reasons stated in section III.D.1 of this rulemaking, DOE 
believes that for purposes of 42 U.S.C. 6295(o)(2)(B)(i)(IV), the 
standby power level considered in this rulemaking does not reduce the 
utility or performance of the microwave oven products under 
consideration in this rulemaking.
5. Impact of Any Lessening of Competition
    DOE has considered any lessening of competition that is likely to 
result from today's standards. The Attorney General determines the 
impact, if any, of any lessening of competition likely to result from a 
proposed standard, and transmits such determination to the Secretary of 
Energy, together with an analysis of the nature and extent of such 
impact. (42 U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii)) To assist the 
Attorney General in making such a determination, DOE provided the 
Department of Justice (DOJ) with copies of the proposed rule and the 
TSD for review. In a letter to DOE dated May 9, 2012, DOJ provided the 
following opinion: ``[T]he proposed energy conservation standards for 
microwave oven standby power are unlikely to have a significant adverse 
impact on competition.'' DOE considered DOJ's comments on the proposed 
rule in preparing the final rule.
6. Need of the Nation To Conserve Energy
    Improving the energy consumption of microwave oven standby mode and 
off mode, where economically justified, would likely improve the 
security of the Nation's energy system by reducing overall demand for 
energy. Reduced electricity demand may also improve the reliability of 
the electricity system. As a measure of this reduced demand, chapter 14 
in the final rule TSD presents the estimated reduction in national 
generating capacity for the TSLs that DOE considered in this 
rulemaking.
    Energy savings from more stringent microwave oven standby mode and 
off mode standards would also produce environmental benefits in the 
form of reduced emissions of air pollutants and greenhouse gases 
associated with electricity production. Table V-17 provides DOE's 
estimate of cumulative CO2 and NOX emissions 
reductions that would result from the TSLs considered in this 
rulemaking. DOE reports estimated annual changes in emissions 
attributable to each TSL in chapter 15 of the final rule TSD.

Table V-17--Cumulative Emissions Reductions Under Microwave Oven Standby Mode and Off Mode Trial Standard Levels
                                           for Units Sold in 2016-2045
----------------------------------------------------------------------------------------------------------------
                                                                    SO2 (1,000      NOX (1,000
                       TSL                           CO2 (Mt)          tons)           tons)         Hg (tons)
----------------------------------------------------------------------------------------------------------------
1...............................................           19.13           13.63           16.40           0.048
2...............................................           27.63           19.70           23.69           0.069
3...............................................           38.11           27.14           32.67           0.095

[[Page 36359]]

 
4...............................................           58.55           41.72           50.20           0.146
----------------------------------------------------------------------------------------------------------------
Mt = million metric tons. Values for other emissions reductions refer to short tons.

    DOE also estimated monetary benefits likely to result from the 
reduced emissions of CO2 and NOX that DOE 
estimated for each of the TSLs considered for microwave oven standby 
mode and off mode. In order to make this calculation similar to the 
calculation of the NPV of consumer benefit, DOE considered the reduced 
emissions expected to result over the lifetime of products shipped in 
2016-2045.
    As discussed in section IV.L.1 of this rulemaking, DOE used four 
sets of values for the SCC developed by an interagency process. For 
each of the four cases, DOE calculated a present value of the stream of 
annual values using the same discount rate as was used in the studies 
upon which the dollar-per-ton values are based. Table V-18 presents the 
global values of CO2 emissions reductions at each TSL. DOE 
calculated domestic values as a range from 7 percent to 23 percent of 
the global values, and these results are presented in chapter 16 of the 
final rule TSD.

  Table V-18--Estimates of Present Value of CO2 Emissions Reductions Under Microwave Oven Standby Mode and Off
                            Mode Trial Standard Levels for Products Sold in 2016-2045
----------------------------------------------------------------------------------------------------------------
                                                                             SCC Case
                                                 ---------------------------------------------------------------
                       TSL                          5% discount     3% discount    2.5% discount    3% discount
                                                   rate, average   rate, average   rate, average    rate, 95th
                                                         *               *               *         percentile *
----------------------------------------------------------------------------------------------------------------
                                                 (Million 2011$)
----------------------------------------------------------------------------------------------------------------
1...............................................            $128            $592            $942          $1,815
2...............................................             185             855           1,360           2,621
3...............................................             255           1,179           1,876           3,615
4...............................................             392           1,812           2,882           5,554
----------------------------------------------------------------------------------------------------------------
* Columns are labeled by the discount rate used to calculate the SCC and whether it is an average value or drawn
  from a different part of the distribution. The values in 2016 (in 2011$) are $12.6/ton, $41.1/ton, $63.2/ton,
  and $119/ton. The values increase over time.

    DOE is well aware that scientific and economic knowledge about the 
contribution of CO2 and other GHG emissions to changes in 
the future global climate and the potential resulting damages to the 
world economy continues to evolve rapidly. Thus, any value placed on 
reducing CO2 emissions is subject to change. DOE, together 
with other Federal agencies, will continue to review various 
methodologies for estimating the monetary value of reductions in 
CO2 and other GHG emissions. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this rule the most 
recent values resulting from the interagency review process.
    DOE also estimated a range for the cumulative monetary value of the 
economic benefits associated with NOX emissions reductions 
anticipated to result from new standby mode and off mode standards for 
microwave ovens. The dollar-per-ton values that DOE used are discussed 
in section IV.L.2 of this rulemaking. Table V-19 presents the 
cumulative present values for each TSL calculated using 7-percent and 
3-percent discount rates.

Table V-19--Estimates of Present Value of NOX Emissions Reductions Under
   Microwave Oven Standby Mode and Off Mode Trial Standard Levels for
                       Products Sold in 2016-2045
------------------------------------------------------------------------
                                     3% discount rate   7% discount rate
                TSL                  (Million 2011$)    (Million 2011$)
------------------------------------------------------------------------
1.................................              $22.3              $11.0
2.................................               32.3               15.8
3.................................               44.5               21.8
4.................................               68.4               33.6
------------------------------------------------------------------------

    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the consumer 
savings calculated for each TSL considered in this rulemaking. Table V-
20 and Table V-21 present the NPV values that result from adding the 
estimates of the potential economic benefits resulting from reduced 
CO2 and NOX emissions in each of four valuation 
scenarios to the NPV of consumer savings calculated for each TSL 
considered in this rulemaking, at both a 7-percent and 3-percent 
discount rate. The CO2 values used in the columns of each 
table correspond to the four scenarios for the valuation of 
CO2 emission reductions presented in section IV.L of this 
rulemaking.

[[Page 36360]]



 Table V-20--Results of Adding Net Present Value of Consumer Savings (at 7-Percent Discount Rate) to Net Present
 Value of Monetized Benefits from CO2 and NOX Emissions Reductions for Microwave Oven Standby Mode and Off Mode
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 7% Discount Rate added with:
                                     ---------------------------------------------------------------------------
                                         SCC Value of       SCC Value of       SCC Value of
                 TSL                  $12.6/t CO2 * and   $41.1/t CO2\ *\     $63.2/t CO2\*\   SCC Value of $119/
                                      Low Value for NOX   and Medium Value   and Medium Value  t CO2\*\ and High
                                         ** (Billion        for NOX\ **\       for NOX\**\     Value for NOX\**\
                                            2011$)        (Billion 2011$)    (Billion 2011$)    (Billion 2011$)
----------------------------------------------------------------------------------------------------------------
1...................................               1.26               1.73               2.08               2.96
2...................................               1.80               2.48               2.99               4.26
3...................................               1.77               2.71               3.41               5.17
4...................................               2.40               3.85               4.92               7.62
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2016, in 2011$. The present values have been calculated with
  scenario-consistent discount rates.
** Low Value corresponds to $455 per ton of NOX emissions. Medium Value corresponds to $2,567 per ton of NOX
  emissions. High Value corresponds to $4,679 per ton of NOX emissions.


 Table V-21--Results of Adding Net Present Value of Consumer Savings (at 3-Percent Discount Rate) to Net Present
 Value of Monetized Benefits From CO2 and NOX Emissions Reductions for Microwave Oven Standby Mode and Off Mode
----------------------------------------------------------------------------------------------------------------
                                                     Consumer NPV at 3% Discount Rate added with:
                                     ---------------------------------------------------------------------------
                                         SCC Value of       SCC Value of       SCC Value of
                 TSL                    $12.6/t CO2\*\     $41.1/t CO2\*\     $63.2/t CO2\*\   SCC Value of $119/
                                      and Low Value for   and Medium Value   and Medium Value  t CO2\*\ and High
                                       NOX\**\ (Billion     for NOX\**\        for NOX\**\     Value for NOX\**\
                                            2011$)        (Billion 2011$)    (Billion 2011$)    (Billion 2011$)
----------------------------------------------------------------------------------------------------------------
1...................................               2.45               2.93               3.28               4.17
2...................................               3.50               4.20               4.70               5.99
3...................................               3.60               4.56               5.26               7.03
4...................................               4.97               6.44               7.51              10.24
----------------------------------------------------------------------------------------------------------------
* These label values represent the global SCC in 2016, in 2011$. The present values have been calculated with
  scenario-consistent discount rates.
** Low Value corresponds to $455 per ton of NOX emissions. Medium Value corresponds to $2,567 per ton of NOX
  emissions. High Value corresponds to $4,679 per ton of NOX emissions.

    Although adding the value of consumer savings to the values of 
emission reductions provides a valuable perspective, two issues should 
be considered. First, the national operating cost savings are domestic 
U.S. consumer monetary savings that occur as a result of market 
transactions, while the value of CO2 reductions is based on 
a global value. Second, the assessments of operating cost savings and 
the SCC are performed with different methods that use quite different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of products shipped in 2016-2045. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one ton of 
CO2 in each year. These impacts continue well beyond 2100.
7. Other Factors
    The Secretary of Energy, in determining whether a standard is 
economically justified, may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) DOE 
has not considered other factors in development of the standards in 
this final rule.

C. Conclusion

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product shall be designed to achieve the maximum improvement in 
energy efficiency that the Secretary determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) In 
determining whether a standard is economically justified, the Secretary 
must determine whether the benefits of the standard exceed its burdens 
by, to the greatest extent practicable, considering the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or 
amended standard must also ``result in significant conservation of 
energy.'' (42 U.S.C. 6295(o)(3)(B))
    The Department considered the impacts of standards at each TSL, 
beginning with the maximum technologically feasible level, to determine 
whether that level was economically justified. Where the max-tech level 
was not justified, DOE then considered the next most efficient level 
and undertook the same evaluation until it reached the highest 
efficiency level that is both technologically feasible and economically 
justified and saves a significant amount of energy.
    To aid the reader in understanding the benefits and/or burdens of 
each TSL, Table V-22 summarizes the quantitative analytical results for 
each TSL, based on the assumptions and methodology discussed herein. In 
addition to the quantitative results presented in the table, DOE also 
considers other burdens and benefits that affect economic 
justification. These include the impacts on identifiable subgroups of 
consumers, such as low-income households and seniors, who may be 
disproportionately affected by a national standard. Section V.B.1.b of 
this rulemaking presents the estimated impacts of each TSL for these 
subgroups.

[[Page 36361]]



Table V-22--Summary of Results for Trial Standard Levels for Microwave Oven Standby Mode and Off Mode Energy Use
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
National Energy Savings (quads).................            0.24            0.35            0.48            0.73
NPV of Consumer Benefits (Billion 2011$):         ..............  ..............  ..............  ..............
    3% discount rate............................            2.34            3.36            3.38            4.65
    7% discount rate............................            1.14            1.63            1.53            2.04
Manufacturer Impacts:
    Industry NPV (Million 2011$)................       (15.1) to       (24.6) to       (40.0) to       (76.1) to
                                                          (17.3)          (28.5)          (96.6)         (184.6)
    Industry NPV (% change).....................  (1.1) to (1.2)  (1.8) to (2.1)  (2.9) to (7.0)        (5.5) to
                                                                                                          (13.3)
Cumulative Emissions Reduction:
CO2 (Mt)........................................           19.13           27.63           38.11           58.55
SO2 (thousand tons).............................           13.63           19.70           27.14           41.72
NOX (thousand tons).............................           16.40           23.69           32.67           50.20
Hg (tons).......................................           0.048           0.069           0.095           0.146
Value of Emissions Reductions CO2 (Million           128 to 1815     185 to 2621     255 to 3615     392 to 5554
 2011$) \*\.....................................
NOX--3% discount rate (Million 2011$)...........            22.3            32.3            44.5            68.4
NOX--7% discount rate (Million 2011$)...........            11.0            15.8            21.8            33.6
Consumer Mean LCC Savings (2011$):                ..............  ..............  ..............  ..............
    Product Class 1.............................               8              11              11              15
    Product Class 2.............................               7              16              12              30
Consumer Median PBP (years):
    Product Class 1.............................             0.2             0.3             3.5             3.5
    Product Class 2.............................             0.1             0.1             3.3             2.0
Distribution of Consumer LCC Impacts:
Product Class 1:
    Net Cost....................................               0               0              12               5
    No Impact...................................              54              19               0               0
    Net Benefit.................................              46              81              88              95
Product Class 2:
    Net Cost....................................               0               0               0               0
    No Impact...................................               0               0               0               0
    Net Benefit.................................             100             100             100             100
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values. For NPVs, a negative value means a decrease in NPV.
* Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2
  emissions.

    In addition to the quantitative results, DOE also considered 
harmonization of microwave oven standby mode and off mode standards 
with international standby power programs such as Korea's e-standby 
program,\36\ Australia's standby program,\37\ and Japan's Top Runner 
Program.\38\ Those programs seek to establish standby power ratings 
through the International Energy Agency's (IEA) 1-Watt Program, which 
seeks to lower standby power below 1 W for microwave ovens.\39\ Korea 
published a mandatory standby power standard of 1 W that became 
effective in 2010 and Australia will publish mandatory standby power 
standards of 1 W by 2013. In accordance with Japan's Top Runner 
Program, Japanese appliance manufacturers made a voluntary declaration 
to reduce standby power of microwave ovens that lack a timer to as 
close to zero as possible and that of microwave ovens that have a timer 
to 1 W or lower.
---------------------------------------------------------------------------

    \36\ Refer to: http://www.kemco.or.kr/new_eng/pg02/pg02100300.asp. (Last accessed December 2012.)
    \37\ Refer to: http://www.energyrating.gov.au/products-themes/standby-power/about/. (Last accessed December 2012.)
    \38\ Refer to: http://www.eccj.or.jp/top_runner/pdf/tr_microwaveoven.pdf. (Last accessed December 2012.)
    \39\ IEA Energy Information Centre. Standby Power Use and the 
IEA ``1-Watt Plan.'' Available at:  http://greenshorenstein.info/pdf/Standby%20Power%20Fact%20Sheet%20-%20IEA%20-%20April%202007.pdf. 
(Last accessed December 2012.)
---------------------------------------------------------------------------

    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. This undervaluation suggests that 
regulation that promotes energy efficiency can produce significant net 
private gains (as well as producing social gains by, for example, 
reducing pollution). There is evidence that consumers undervalue future 
energy savings as a result of (1) A lack of information; (2) a lack of 
sufficient salience of the long-term or aggregate benefits; (3) a lack 
of sufficient savings to warrant delaying or altering purchases; (4) 
excessive focus on the short term, in the form of inconsistent 
weighting of future energy cost savings relative to available returns 
on other investments; (5) computational or other difficulties 
associated with the evaluation of relevant tradeoffs; and (6) a 
divergence in incentives (that is, renter versus owner; builder vs. 
purchaser). Other literature indicates that with less than perfect 
foresight and a high degree of uncertainty about the future, consumers 
may trade off these types of investments at a higher than expected rate 
between current consumption and uncertain future energy cost savings.
    In its current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer 
purchasing decisions are included in two ways. First, if consumers 
forego a purchase of a product in the standards case, this decreases 
sales for product manufacturers and the cost to manufacturers is 
included in the MIA. Second, DOE accounts for energy savings 
attributable only to products actually used by consumers in the 
standards case; if a regulatory option decreases the number of products 
used by consumers, this decreases the potential energy savings from an 
energy conservation standard. DOE provides

[[Page 36362]]

detailed estimates of shipments and changes in the volume of product 
purchases in chapter 9 of the final rule TSD. DOE's current analysis 
does not explicitly control for heterogeneity in consumer preferences, 
preferences across subcategories of products or specific features, or 
consumer price sensitivity variation according to household income.\40\
---------------------------------------------------------------------------

    \40\ P.C. Reiss and M.W. White. Household Electricity Demand, 
Revisited. Review of Economic Studies (2005) 72, 853-883.
---------------------------------------------------------------------------

    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE is committed to developing a framework that can support empirical 
quantitative tools for improved assessment of the consumer welfare 
impacts of appliance standards. DOE has posted a paper that discusses 
the issue of consumer welfare impacts of appliance energy efficiency 
standards, and potential enhancements to the methodology by which these 
impacts are defined and estimated in the regulatory process.\41\
---------------------------------------------------------------------------

    \41\ Alan Sanstad, Notes on the Economics of Household Energy 
Consumption and Technology Choice. Lawrence Berkeley National 
Laboratory. 2010. Available online at: www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf. (Last 
accessed December 2012.)
---------------------------------------------------------------------------

1. Benefits and Burdens of TSLs Considered for Microwave Oven Standby 
Mode and Off Mode Energy Use
    First, DOE considered TSL 4, the max-tech level for microwave oven 
standby mode and off mode energy use. TSL 4 likely would save 0.73 
quads of energy through 2045, an amount DOE considers significant. 
Under TSL 4, the estimated NPV of consumer benefit is $2.04 billion, 
using a discount rate of 7 percent, and $4.65 billion, using a discount 
rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 58.55 Mt of 
CO2, 41.72 thousand tons of SO2, 50.20 thousand 
tons of NOX, and 0.146 tons of Hg. The estimated monetary 
value of the CO2 emissions reductions at TSL 4 ranges from 
$392 million to $5,554 million.
    DOE projects that at TSL 4 for microwave-only ovens and countertop 
convection microwave ovens (Product Class 1), the average microwave 
oven consumer would experience a savings in LCC of $15. DOE also 
estimates 95 percent of consumers who purchase these microwave ovens 
would realize some LCC savings. The median payback period at TSL 4 is 
projected to be 3.5 years, substantially shorter than the lifetime of 
the product. DOE projects that at TSL 4 for built-in and over-the-range 
convection microwave ovens (Product Class 2), the average microwave 
oven consumer would experience a savings in LCC of $30, and all 
consumers who purchase these microwave ovens would realize some LCC 
savings. The median payback period at TSL 4 is projected to be 2.0 
years, substantially shorter than the lifetime of the product.
    Although DOE estimates that all microwave oven consumers would 
benefit economically from TSL 4, the reduction in standby power 
consumption at TSL 4 would result in the loss of certain functions that 
provide utility to consumers, specifically the continuous clock 
display. Because it is uncertain how greatly consumers value this 
function, DOE is concerned that TSL 4 may result in significant loss of 
consumer utility.
    For manufacturers of microwave ovens, DOE estimated a decrease in 
INPV that ranges from $76.1 million to $184.6 million. DOE recognizes 
that TSL 4 poses the risk of large negative impacts if manufacturers' 
expectations about reduced profit margins are realized. In particular, 
if the high end of the range of impacts is reached, as DOE expects, TSL 
4 could result in a net loss of 13.3 percent in INPV to microwave oven 
manufacturers.
    After carefully considering the analysis and weighing the benefits 
and burdens of TSL 4, DOE has reached the following initial conclusion: 
At TSL 4, the benefits of energy savings, NPV of consumer benefit, 
positive consumer LCC impacts, and emissions reductions would be 
outweighed by the potential burden on consumers from loss of product 
utility and the large product conversion costs that could result in a 
reduction in INPV for manufacturers.
    DOE then considered TSL 3. Primary energy savings are estimated to 
be 0.48 quads of energy through 2045, which DOE considers significant. 
Under TSL 3, the estimated NPV of consumer benefit is $1.53 billion, 
using a discount rate of 7 percent, and $3.38 billion, using a discount 
rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 38.11 Mt of 
CO2, 27.14 thousand tons of SO2, 32.67 thousand 
tons of NOX, and 0.095 tons of Hg. The estimated monetary 
value of the CO2 emissions reductions at TSL 3 ranges from 
$255 million to $3,615 million.
    For microwave-only ovens and countertop convection microwave ovens, 
DOE projects that at TSL 3 the average consumer would experience a 
savings in LCC of $11, and 88 percent of consumers who purchase these 
microwave ovens would realize some LCC savings. At TSL 3 the median 
payback period is projected to be 3.5 years, substantially shorter than 
the lifetime of the product. In addition, DOE estimates that the 
reduction in standby power consumption under TSL 3 (to no greater than 
1.0 W) would not impact consumer utility. The continuous clock display 
that would be lost under TSL 4 would be retained at TSL 3.
    For built-in and over-the-range convection microwave ovens, DOE 
projects that at TSL 3 the average consumer would experience a savings 
in LCC of $12, and all consumers who purchase these microwave ovens 
would realize some LCC savings. At TSL 3, the median payback period is 
projected to be 3.3 years, significantly shorter than the lifetime of 
the product.
    For manufacturers of microwave ovens, DOE estimated that the 
projected decrease in INPV under TSL 3 would range from $40.0 million 
to $96.6 million. DOE recognizes the risk of large negative impacts at 
TSL 3 if manufacturers' expectations about reduced profit margins are 
realized. In particular, if the high end of the range of impacts is 
reached, as DOE expects, TSL 3 could result in a net loss of 7.0 
percent in INPV to microwave oven manufacturers.
    After considering the analysis and weighing the benefits and the 
burdens of TSL 3, the Secretary concludes that TSL 3 will offer the 
maximum improvement in efficiency that is technologically feasible and 
economically justified, and will result in the significant conservation 
of energy. Therefore, DOE adopts the energy conservation standards for 
microwave oven standby mode and off mode at TSL 3. The amended energy 
conservation standards, which are maximum allowable standby power 
consumption, are shown in Table V-23.

  Table V-23--Amended Energy Conservation Standards for Microwave Oven
                          Standby and Off Mode
------------------------------------------------------------------------
              Product classes                 Effective  June 17, 2016
------------------------------------------------------------------------
Microwave-Only Ovens and Countertop         Maximum Standby Power = 1.0
 Convection Microwave Ovens.                 watt.
Built-In and Over-the-Range Convection      Maximum Standby Power = 2.2
 Microwave Ovens.                            watts.
------------------------------------------------------------------------


[[Page 36363]]

2. Summary of Benefits and Costs (Annualized) of the Standards
    The benefits and costs of today's proposed standards can also be 
expressed in terms of annualized values. The annualized monetary values 
are the sum of (1) the annualized national economic value, expressed in 
2011$, of the benefits from operating products that meet the proposed 
standards (consisting primarily of operating cost savings from using 
less energy, minus increases in equipment purchase costs, which is 
another way of representing consumer NPV), and (2) the monetary value 
of the benefits of emission reductions, including CO2 
emission reductions.\42\ The value of the CO2 reductions is 
calculated using a range of values per metric ton of CO2 
developed by a recent interagency process. The monetary costs and 
benefits of cumulative emissions reductions are reported in 2011$ to 
permit comparisons with the other costs and benefits in the same dollar 
units.
---------------------------------------------------------------------------

    \42\ DOE used a two-step calculation process to convert the 
time-series of costs and benefits into annualized values. First, DOE 
calculated a present value in 2011, the year used for discounting 
the NPV of total consumer costs and savings, for the time-series of 
costs and benefits using discount rates of 3 and 7 percent for all 
costs and benefits except for the value of CO2 
reductions. For the latter, DOE used a range of discount rates, as 
shown in Table V-24. From the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in 2011 that 
yields the same present value. The fixed annual payment is the 
annualized value. Although DOE calculated annualized values, this 
does not imply that the time-series of cost and benefits from which 
the annualized values were determined would be a steady stream of 
payments.
---------------------------------------------------------------------------

    Although combining the values of operating savings and 
CO2 reductions provides a useful perspective, two issues 
should be considered. First, the national operating savings are 
domestic U.S. consumer monetary savings that occur as a result of 
market transactions while the value of CO2 reductions is 
based on a global value. Second, the assessments of operating cost 
savings and SCC are performed with different methods that use different 
time frames for analysis. The national operating cost savings is 
measured for the lifetime of products shipped in 2016-2045. The SCC 
values, on the other hand, reflect the present value of future climate-
related impacts resulting from the emission of one ton of 
CO2 in each year. These impacts continue well beyond 2100.
    Table V-24 shows the annualized values for the proposed standards 
for microwave oven standby mode and off mode energy use. The results 
for the primary estimate are as follows. Using a 7-percent discount 
rate for benefits and costs other than CO2 reductions, for 
which DOE used a 3-percent discount rate along with the SCC series 
corresponding to a value of $41.1/ton in 2011, the cost of the 
standards proposed in today's rule is $58.4 million per year in 
increased product costs, while the annualized benefits are $174 million 
in reduced product operating costs, $58.4 million in CO2 
reductions, and $1.64 million in reduced NOX emissions. In 
this case, the net benefit amounts to $175 million per year. Using a 3-
percent discount rate for all benefits and costs and the SCC series 
corresponding to a value of $41.1/ton in 2011, the cost of the 
standards proposed in today's rule is $66.4 million per year in 
increased product costs, while the annualized benefits are $234 million 
in reduced operating costs, $58.4 million in CO2 reductions, 
and $2.20 million in reduced NOX emissions. In this case, 
the net benefit amounts to $228 million per year. The monetary value of 
the CO2 emissions reductions using the previous (2010) SCC 
estimates, and the net benefits using those estimates, is presented for 
information purposes in Table V.24.

  Table V-24--Annualized Benefits and Costs of Amended Standards (TSL 3) for Microwave Ovens Sold in 2016-2045
----------------------------------------------------------------------------------------------------------------
                                                                      Primary         Low net        High net
                                                                    estimate *       benefits        benefits
                                                                 ----------------    estimate        estimate
                                                   Discount rate                 -------------------------------
                                                                     (Million        (Million        (Million
                                                                    2011$/year)     2011$/year)     2011$/year)
----------------------------------------------------------------------------------------------------------------
Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings..........................              7%             174             162             191
                                                              3%             234             215             261
----------------------------------------------------------------------------------------------------------------
                                     Using 2013 Social Cost of Carbon Values
----------------------------------------------------------------------------------------------------------------
CO2 Reduction ($12.6/t case) **.................              5%            15.8            14.7            17.4
CO2 Reduction ($41.1/t case) **.................              3%            58.4            54.1            64.5
CO2 Reduction ($63.2/t case) **.................            2.5%            87.4            80.9            96.7
CO2 Reduction ($119/t case) **..................              3%             179             166             198
Total Benefits[dagger]..........................         7% plus      191 to 354      178 to 329      210 to 391
                                                       CO2 range
                                                              7%             234             218             258
                                                              3%             294             271             328
                                                         3% plus      252 to 415      232 to 383      281 to 462
                                                       CO2 range
----------------------------------------------------------------------------------------------------------------
                                     Using 2010 Social Cost of Carbon Values
----------------------------------------------------------------------------------------------------------------
CO2 Reduction ($6.2/t case) ***.................              5%            9.29            8.62            17.4
CO2 Reduction ($25.6/t case) ***................              3%            36.7            34.0            40.6
CO2 Reduction ($41.1/t case) ***................            2.5%            57.9            53.6            64.1
CO2 Reduction ($78.4/t case) ***................              3%           111.8           103.5           123.6
NOX Reduction at $2,567/ton **..................              7%            1.64            1.54            1.79
                                                              3%            2.20            2.05            2.42
Total Benefits[dagger]..........................         7% plus      185 to 287      172 to 267      203 to 317
                                                       CO2 range

[[Page 36364]]

 
                                                              7%             212             198             234
                                                              3%             273             251             304
                                                         3% plus      245 to 348      226 to 321      274 to 388
                                                       CO2 range
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Incremental Installed Costs.....................              7%            58.4            59.6            57.5
                                                              3%            66.4            67.8            64.3
----------------------------------------------------------------------------------------------------------------
                                      Net Benefits (using 2013 SCC values)
----------------------------------------------------------------------------------------------------------------
Total[dagger]...................................         7% plus      133 to 296      119 to 270      153 to 334
                                                       CO2 range
                                                              7%             175             158             200
                                                              3%             228             203             264
                                                         3% plus      185 to 349      164 to 315      217 to 398
                                                       CO2 range
----------------------------------------------------------------------------------------------------------------
                                      Net Benefits (using 2010 SCC values)
----------------------------------------------------------------------------------------------------------------
Total[dagger][dagger]...........................         7% plus      126 to 229      113 to 208      146 to 259
                                                       CO2 range
                                                              7%             154             138             176
                                                              3%             206             183             240
                                                         3% plus      179 to 281      158 to 253      210 to 323
                                                       CO2 range
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with microwave ovens shipped in 2016-2045.
  These results include benefits to consumers which accrue after 2016 from the microwave ovens purchased from
  2016-2045. Costs incurred by manufacturers, some of which may be incurred prior to 2016 in preparation for the
  rule, are not directly included, but are indirectly included as part of incremental equipment costs. The
  Primary, Low Benefits, and High Benefits Estimates utilize projections of energy prices and housing starts
  from the AEO 2012 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental
  product costs reflect a medium decline rate for product prices in the Primary Estimate, constant product price
  in the Low Benefits Estimate, and a high decline rate for product prices in the High Benefits Estimate. The
  methods used to derive projected price trends are explained in section 0 of this rulemaking.
** The CO2 values represent global monetized values of the SCC, in 2011$, in 2016 under several scenarios. The
  values of $12.6, $41.1, and $63.2 per metric ton are the averages of SCC distributions calculated using 5%,
  3%, and 2.5% discount rates, respectively. The value of $119/t represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The SCC time series increase over time. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's analysis.
*** The CO2 values represent global monetized values of the SCC, in 2011$, in 2016 under several scenarios. The
  values of $6.2, $25.6, and $41.1 per metric ton are the averages of SCC distributions calculated using 5%, 3%,
  and 2.5% discount rates, respectively. The value of $78.4/t represents the 95th percentile of the SCC
  distribution calculated using a 3% discount rate. The SCC time series increase over time. The value for NOX
  (in 2011$) is the average of the low and high values used in DOE's analysis.
[dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series corresponding to
  SCC value of $41.1/t in 2016. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2 range,'' the
  operating cost and NOX benefits are calculated using the labeled discount rate, and those values are added to
  the full range of CO2 values.
[dagger][dagger] Total Benefits for both the 3-percent and 7-percent cases are derived using the series
  corresponding to SCC value of $25.6/t in 2016. In the rows labeled ``7% plus CO2 range'' and ``3% plus CO2
  range,'' the operating cost and NOX benefits are calculated using the labeled discount rate, and those values
  are added to the full range of CO2 values.

VI. Additional Technical Corrections to 10 CFR 430.32

    In the February 2012 SNOPR, DOE also proposed the following 
technical corrections to the language contained in 10 CFR 430.32. DOE 
noted that 10 CFR 430.32, ``Energy and water conservation standards and 
their effective dates'' contains dates required for compliance with 
energy and water conservation standards rather than the effective dates 
of such standards. As a result, DOE proposed in the February 2012 SNOPR 
to revise the title of 10 CFR 430.32 to read ``Energy and water 
conservation standards and their compliance dates.'' DOE also noted 
that the current energy conservation standards for cooking products 
found at 10 CFR 430.32(j)(1)-(2) should be revised to more accurately 
reflect the date required for compliance with energy conservation 
standards. DOE proposed to revise the language in 10 CFR 430.32(j)(1)-
(2) to state that products manufactured on or after the compliance date 
must meet the required energy conservation standard. 77 FR 8526, 8569 
(Feb. 14, 2012).
    AHAM and GE supported the proposed amendment to the title of 10 CFR 
430.32 to clarify that these are compliance dates rather than effective 
dates, and the proposed revision to 10 CFR 430.32(j)(1)-(2) to state 
that products manufactured on or after the compliance date must meet 
the required energy conservation standards. AHAM and GE further 
requested that DOE clarify that products manufactured before the 
compliance date may continue to be sold after the compliance date. 
(AHAM, No. 16 at p. 4; GE, No. 19 at p. 1) DOE also received a comment 
from a private citizen requesting that DOE clarify the compliance date 
for new microwave oven standby power

[[Page 36365]]

standards. (Private Citizen, No. 10 at p. 7)
    For clarity, DOE revises in today's final rule the title of 10 CFR 
430.32 and amends 10 CFR 430.32(j)(1)-(2) as proposed in the February 
2012 SNOPR. In the new energy conservation standards that will be 
codified at 10 CFR 430.32(j)(3), DOE specifies the maximum standby 
power consumption for microwave ovens manufactured on or after June 17, 
2016. These new standards do not apply to any microwave oven 
manufactured before that compliance date.

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that today's standards address are as follows:
    (1) There is a lack of consumer information and/or information 
processing capability about energy efficiency opportunities in 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 microwave ovens that are not captured by the users of 
such equipment. These benefits include externalities related to 
environmental protection and energy security that are not reflected in 
energy prices, such as reduced emissions of greenhouse gases.
    In addition, DOE has determined that today's regulatory action is 
an ``economically significant regulatory action'' under section 3(f)(1) 
of Executive Order 12866. Accordingly, section 6(a)(3) of the Executive 
Order requires that DOE prepare a regulatory impact analysis (RIA) on 
today's rule and that the Office of Information and Regulatory Affairs 
(OIRA) in the Office of Management and Budget (OMB) review this rule. 
DOE presented to OIRA for review the draft rule and other documents 
prepared for this rulemaking, including the RIA, and has included these 
documents in the rulemaking record. The assessments prepared pursuant 
to Executive Order 12866 can be found in the technical support document 
for this rulemaking.
    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 determines that today's final rule 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 (RFA) for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by Executive Order 13272, ``Proper Consideration of Small Entities in 
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published 
procedures and policies on February 19, 2003, to ensure that the 
potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (www.gc.doe.gov).
    For manufacturers of microwave ovens, the Small Business 
Administration (SBA) has set a size threshold, which defines those 
entities classified as ``small businesses'' for the purposes of the 
statute. DOE used the SBA's small business size standards to determine 
whether any small entities would be subject to the requirements of the 
rule. 65 FR 30836, 30848 (May 15, 2000), as amended at 65 FR 53533, 
53544 (Sept. 5, 2000) and codified at 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. 
Microwave oven manufacturing is classified under NAICS 335221, 
``Household Cooking Appliance Manufacturing.'' The SBA sets a threshold 
of 750 employees or less for an entity to be considered as a small 
business for this category.
    DOE surveyed the AHAM member directory to identify manufacturers of 
microwave ovens. In addition, DOE asked interested parties and AHAM 
representatives within the microwave oven industry if they were aware 
of any small business manufacturers. DOE consulted publicly available 
data, purchased company reports from sources such as Dun & Bradstreet, 
and contacted manufacturers, where needed, to determine if they meet 
the SBA's definition of a small business manufacturing facility and 
have their manufacturing facilities located within the United States. 
Based on this analysis, DOE determined that the microwave oven industry 
consists of seven manufacturers that have a market share greater than 3 
percent. Most are large, foreign companies that import microwave ovens 
into the United States. There are U.S. facilities that partly assemble 
microwave ovens, but none of these are small businesses. DOE estimates 
that there is one small business which manufactures a product which 
combines a microwave oven with other appliance functionality. However,

[[Page 36366]]

because DOE is not amending energy conservation standards at this time 
for the microwave oven portion of such combined products, DOE certifies 
that today's final rule would not have a significant economic impact on 
a substantial number of small entities. Accordingly, DOE has not 
prepared a regulatory flexibility analysis for this rulemaking. DOE 
will transmit the certification and supporting statement of factual 
basis to the Chief Counsel for Advocacy of the SBA for review under 5 
U.S.C. 605(b).

C. Review Under the Paperwork Reduction Act

    Manufacturers of microwave ovens must certify to DOE that their 
products comply with any applicable energy conservation standards. In 
certifying compliance, manufacturers must test their products according 
to the DOE test procedure for microwave ovens, 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 microwave ovens. 
(76 FR 12422 (Mar. 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). This 
requirement has been approved by OMB under OMB control number 1910-
1400. Public reporting burden for the certification is estimated to 
average 20 hours per response, including the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act (NEPA) of 1969, 
DOE has determined that the 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 rule fits within the 
category of actions because it is a rulemaking that establishes energy 
conservation standards for consumer products or industrial equipment, 
and for which 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 rule. DOE's CX determination for this 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 today's final 
rule. States can petition DOE for exemption from such preemption to the 
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297) No 
further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity; (2) write regulations to minimize litigation; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (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 final rule meets 
the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For an amended 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 ``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 www.gc.doe.gov.
    DOE has concluded that this final rule would likely require 
expenditures of $100 million or more on the private sector. Such 
expenditures may include: (1) investment in research and development 
and in capital expenditures by microwave oven manufacturers in the 
years between the final rule and the compliance date for the new 
standards, and (2) incremental additional expenditures by consumers

[[Page 36367]]

to purchase higher-efficiency microwave ovens, starting at the 
compliance date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the final rule. 2 U.S.C. 1532(c). The content requirements 
of section 202(b) of UMRA relevant to a private sector mandate 
substantially overlap the economic analysis requirements that apply 
under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the notice of final rulemaking and 
the ``Regulatory Impact Analysis'' section of the TSD for this final 
rule respond to those requirements.
    Under section 205 of UMRA, the Department is obligated to identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. 2 U.S.C. 1535(a). DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(h), 
today's final rule would establish energy conservation standards for 
microwave ovens that are designed to achieve the maximum improvement in 
energy efficiency that DOE has determined to be both technologically 
feasible and economically justified. A full discussion of the 
alternatives considered by DOE is presented in the ``Regulatory Impact 
Analysis'' section of the TSD for today's final rule.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
This rule would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Review Under Executive Order 12630

    DOE has determined, under Executive Order 12630, ``Governmental 
Actions and Interference with Constitutionally Protected Property 
Rights'' 53 FR 8859 (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 today's final rule 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 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 significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    DOE has concluded that today's regulatory action, which sets forth 
energy conservation standards for microwave oven standby mode and off 
mode, is not a significant energy action because the amended standards 
are not likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the final rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology 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.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is a ``major rule'' as 
defined by 5 U.S.C. 804(2).

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of today's final 
rule.

List of Subjects

10 CFR Part 429

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Reporting and 
recordkeeping requirements.

[[Page 36368]]

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 May 31, 2013.
David T. Danielson,
Assistant Secretary of Energy, Energy Efficiency and Renewable Energy.
    For the reasons stated in the preamble, DOE amends parts 429 and 
430, of Chapter II of title 10 of the Code of Federal Regulations, as 
set forth below.

PART 429--CERTIFICATION, COMPLIANCE, AND ENFORCEMENT FOR CONSUMER 
PRODUCTS AND COMMERCIAL AND INDUSTRIAL EQUIPMENT

0
1. The authority citation for part 429 continues to read as follows:

    Authority: 42 U.S.C. 6291-6317.

0
2. In Sec.  429.23 revise paragraph (b)(2) to read as follows:


Sec.  429.23  Conventional cooking tops, conventional ovens, microwave 
ovens.

* * * * *
    (b) * * *
    (2) Pursuant to Sec.  429.12(b)(13), a certification report shall 
include the following public product-specific information: For 
conventional cooking tops and conventional ovens: the type of pilot 
light and a declaration that the manufacturer has incorporated the 
applicable design requirements. For microwave ovens, the average 
standby power in watts.

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
3. 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
4. In Sec.  430.23 add paragraph (i)(3) to read as follows:


Sec.  430.23  Test procedures for the measurement of energy and water 
consumption.

* * * * *
    (i) * * *
    (3) The standby power for microwave ovens shall be determined 
according to 3.2.3 of appendix I to this subpart. The standby power 
shall be rounded off to the nearest 0.1 watt.
* * * * *

0
5. In Sec.  430.32 revise the section heading and paragraph (j) to read 
as follows:


Sec.  430.32  Energy and water conservation standards and their 
compliance dates.

* * * * *
    (j) Cooking Products (1) Gas cooking products with an electrical 
supply cord manufactured on or after January 1, 1990, shall not be 
equipped with a constant burning pilot light.
    (2) Gas cooking products without an electrical supply cord 
manufactured on or after April 9, 2012, shall not be equipped with a 
constant burning pilot light.
    (3) Microwave-only ovens and countertop convection microwave ovens 
manufactured on or after June 17, 2016 shall have an average standby 
power not more than 1.0 watt. Built-in and over-the-range convection 
microwave ovens manufactured on or after June 17, 2016 shall have an 
average standby power not more than 2.2 watts.
* * * * *
[FR Doc. 2013-13535 Filed 6-14-13; 8:45 am]
BILLING CODE 6450-01-P