[Federal Register Volume 80, Number 106 (Wednesday, June 3, 2015)]
[Proposed Rules]
[Pages 31646-31705]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12773]



[[Page 31645]]

Vol. 80

Wednesday,

No. 106

June 3, 2015

Part II





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Residential Dehumidifiers; Proposed Rule

  Federal Register / Vol. 80 , No. 106 / Wednesday, June 3, 2015 / 
Proposed Rules  

[[Page 31646]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[Docket Number EERE-2012-BT-STD-0027]
RIN 1904-AC81


Energy Conservation Program: Energy Conservation Standards for 
Residential Dehumidifiers

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

ACTION: Notice of Proposed Rulemaking and Announcement of Public 
Meeting.

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SUMMARY: The Energy Policy and Conservation Act of 1975 (EPCA), as 
amended, prescribes energy conservation standards for various consumer 
products and certain commercial and industrial equipment, including 
residential dehumidifiers. EPCA also requires the U.S. Department of 
Energy (DOE) to periodically determine whether more-stringent, amended 
standards would be technologically feasible and economically justified, 
and would save a significant amount of energy. In this document, DOE 
proposes amended energy conservation standards for different categories 
of residential dehumidifiers. This document also announces a public 
meeting to receive comment on these proposed standards and associated 
analyses and results.

DATES: Comments: DOE will accept comments, data, and information 
regarding this notice of proposed rulemaking (NOPR) before and after 
the public meeting, but no later than August 3, 2015. See section VII, 
``Public Participation,'' for details.
    Meeting: DOE will hold a public meeting on Tuesday, July 7, 2015, 
from 9 a.m. to 4 p.m., in Washington, DC. The meeting will also be 
broadcast as a webinar. See section VII, ``Public Participation'' for 
webinar registration information, participant instructions, and 
information about the capabilities available to webinar participants.

ADDRESSES: The meeting will also be broadcast as a webinar. See section 
VII, ``Public Participation'' for webinar registration information, 
participant instructions, and information about the capabilities 
available to webinar participants. The public meeting will be held at 
the U.S. Department of Energy, Forrestal Building, Room 8E-089, 1000 
Independence Avenue SW., Washington, DC 20585.
    Any comments submitted must identify the NOPR for Energy 
Conservation Standards for Residential Dehumidifiers, and provide 
docket number EERE-2012-BT-STD-0027 and/or regulatory information 
number (RIN) number 1904-AC81. Comments may be submitted using any of 
the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the 
instructions for submitting comments.
    2. Email: [email protected]. Include the docket 
number and/or RIN in the subject line of the message.
    3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, 
Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue 
SW., Washington, DC 20585-0121. If possible, please submit all items on 
a compact disc (CD), in which case it is not necessary to include 
printed copies.
    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of 
Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 
600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, 
please submit all items on a CD, in which case it is not necessary to 
include printed copies.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to Office of Energy Efficiency and 
Renewable Energy through the methods listed above and by email to 
[email protected].
    For detailed instructions on submitting comments and additional 
information on the rulemaking process, see section VII, ``Public 
Participation.''
    Docket: The docket, which includes Federal Register notices, public 
meeting attendee lists and transcripts, comments, and other supporting 
documents/materials, is available for review at www.regulations.gov. 
All documents in the docket are listed in the www.regulations.gov 
index. However, some documents listed in the index, such as those 
containing information that is exempt from public disclosure, may not 
be publicly available.
    A link to the docket Web page can be found at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/55. This Web page will contain a link to the docket for this 
notice on the www.regulations.gov site. The www.regulations.gov Web 
page contains simple instructions on how to access all documents, 
including public comments, in the docket. See section VII, ``Public 
Participation,'' for further information on how to submit comments 
through www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Mr. Bryan Berringer, U.S. Department of Energy, Office of Energy 
Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 
1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: 
(202) 586-0371. Email: [email protected].
    Mr. Peter Cochran, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-9496. Email: [email protected].
    For further information on how to submit a comment, review other 
public comments and the docket, or participate in the public meeting, 
contact Ms. Brenda Edwards at (202) 586-2945 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Proposed Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. History of Standards Rulemaking for Residential Dehumidifiers
III. General Discussion
    A. Product Classes and Scope of Coverage
    B. Test Procedure
    C. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    D. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    E. Economic Justification
    1. Specific Criteria
    a. Economic Impact on Manufacturers and Consumers
    b. Savings in Operating Costs Compared To Increase in Price
    c. Energy Savings
    d. Lessening of Utility or Performance of Products
    e. Impact of Any Lessening of Competition
    f. Need for National Energy Conservation
    g. Other Factors
    2. Rebuttable Presumption
IV. Methodology and Discussion
    A. Market and Technology Assessment
    1. Definition and Scope of Coverage
    2. Product Classes
    a. Preliminary Analysis Proposals
    b. Comments and Responses
    c. NOPR Proposals
    3. Technology Options
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Levels

[[Page 31647]]

    a. Baseline Efficiency Levels
    b. Higher Energy Efficiency Levels
    2. Manufacturer Production Cost Estimates
    D. Markups Analysis
    E. Energy Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy Consumption
    4. Energy Prices
    5. Maintenance and Repair Costs
    6. Product Lifetime
    7. Discount Rates
    8. Base-Case Efficiency Distribution
    9. Inputs to Payback Period Analysis
    10. Rebuttable Presumption Payback Period
    G. Shipments
    H. National Impact Analysis
    1. National Energy Savings
    a. Forecasted Efficiency in the Base Case and Standards Cases
    2. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model (GRIM)
    a. Government Regulatory Impact Model Key Inputs
    b. Government Regulatory Impact Model Scenarios
    3. Discussion of Comments
    4. Manufacturer Interviews
    K. Emissions Analysis
    L. Monetizing Carbon Dioxide and Other Emissions Impacts
    1. Social Cost of Carbon
    a. Monetizing Carbon Dioxide Emissions
    b. Development of Social Cost of Carbon Values
    c. Current Approach and Key Assumptions
    2. Valuation of Other Emissions Reductions
    M. Utility Impact Analysis
    N. Employment Impact Analysis
V. Analytical Results
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on 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. Impacts on Employment
    4. Impact on Utility or Performance of Products
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Summary of National Economic Impacts
    8. Other Factors
    C. Conclusion
    1. Benefits and Burdens of Trial Standard Levels Considered for 
Residential Dehumidifiers
    2. Summary of Benefits and Costs (Annualized) of the Standards
VI. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866 and 13563
    B. Review Under the Regulatory Flexibility Act
    1. Description and Estimated Number of Small Entities Regulated
    a. Methodology for Estimating the Number of Small Entities
    b. Manufacturer Participation
    c. Industry Structure
    d. Comparison of Large and Small Entities
    2. Description and Estimate of Compliance Requirements
    3. Duplication, Overlap, and Conflict With Other Rules and 
Regulations
    4. Significant Alternatives to the Rule
    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
VII. Public Participation
    A. Attendance at the Public Meeting
    B. Procedure for Submitting Prepared General Statements for 
Distribution
    C. Conduct of the Public Meeting
    D. Submission of Comments
    E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary

I. Synopsis of the Proposed Rule

    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.\2\ These products include residential 
dehumidifiers, the subject of this notice.
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    \1\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
    \2\ All references to EPCA in this document refer to the statute 
as amended through the American Energy Manufacturing Technical 
Corrections Act (AEMTCA), Public Law 112-210 (Dec. 18, 2012).
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    Pursuant to EPCA, any new or amended energy conservation standard 
must be designed to achieve the maximum improvement in energy 
efficiency that is technologically feasible and economically justified. 
(42 U.S.C. 6295(o)(2)(A)) Furthermore, the new or amended standard must 
result in a significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B)) EPCA also provides that not later than 6 years after 
issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
product do not need to be amended, or a notice of proposed rulemaking 
including new proposed energy conservation standards. (42 U.S.C. 
6295(m)(1)) Once complete, this rulemaking will satisfy this statutory 
provision.
    In accordance with these and other statutory provisions discussed 
in this notice, DOE proposes amended energy conservation standards for 
residential dehumidifiers. The proposed standards, which correspond to 
trial standard level 3 (described in section V.A), divide residential 
dehumidifiers into two categories: Portable and whole-home. The 
proposed minimum allowable integrated energy factor (IEF) standards, 
which are expressed in liters (L) of moisture removed per kilowatt-hour 
(kWh), are shown in Table I.1. These proposed standards, if adopted, 
would apply to all products listed in Table I.1 and manufactured in, or 
imported into, the United States on or after the date three years after 
the publication of the final rule for this rulemaking.\3\
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    \3\ The current energy conservation standards for residential 
dehumidifiers went into effect on October 1, 2012. EPCA, as amended, 
provides that a ``manufacturer shall not be required to apply new 
standards to a product with respect to which other new standards 
have been required during the prior 6-year period.'' (42 U.S.C. 
6295(m)(4)(B)) Thus, the proposed standards could not go into effect 
until October 1, 2018 at the earliest. DOE anticipates issuing a 
final rule on amended energy conservation standards for residential 
dehumidifiers in 2016. To ensure that the amended standards will not 
go into effect until after October 1, 2018, DOE is not requiring 
compliance with the new standards until three years after the 
publication of the final rule.

    Table I.1--Proposed Energy Conservation Standards for Residential
                              Dehumidifiers
------------------------------------------------------------------------
                                                                Minimum
    Portable dehumidifier product  capacity  (pints/day)       IEF  (L/
                                                                 kWh)
------------------------------------------------------------------------
30.00 or less...............................................        1.30
30.01-45.00.................................................        1.60
45.01 or more...............................................        2.80
------------------------------------------------------------------------
  Whole-home dehumidifier product case volume (cubic feet)    ..........
------------------------------------------------------------------------
8.0 or less.................................................        2.09
More than 8.0...............................................        3.52
------------------------------------------------------------------------

A. Benefits and Costs to Consumers

    Table I.2 presents DOE's evaluation of the economic impacts of the 
proposed standards on consumers of residential dehumidifiers, as 
measured by the average life-cycle cost (LCC) savings and the payback 
period (PBP). The average LCC savings are positive for all product 
classes and the PBP is significantly less than the average lifetimes 
for portable

[[Page 31648]]

and whole-home residential dehumidifiers, which are approximately 11 
and 19 years, respectively.\4\
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    \4\ Lifetimes are based on: 28th Annual Portrait of the U.S. 
Appliance Industry, Appliance Magazine, Sept. 2005, at 65; Toru 
Kubo, Harvey Sachs, and Steve Nadel, Opportunities for New Appliance 
and Equipment Efficiency Standards: Energy and Economic Savings 
Beyond Current Standards Programs, American Council for an Energy 
Efficient Economy (Sept. 2001); Northeast Energy Star Lighting and 
Appliance, Dehumidifiers, (Available at http://www.myenergystar.com/Dehumidifiers.aspx) (last visited Nov. 14, 2014).

     Table I.2--Impacts of Proposed Energy Conservation Standards on
                 Consumers of Residential Dehumidifiers
------------------------------------------------------------------------
                                         Average LCC     Payback period
            Product class             savings  (2013$)       (years)
------------------------------------------------------------------------
Portable Dehumidifier: <=30.00 pints/               64               0.2
 day................................
Portable Dehumidifier: 30.01-45.00                  99               0.2
 pints/day..........................
Portable Dehumidifier: >45.00 pints/               147               2.8
 day................................
Whole-home Dehumidifier: <=8ft \3\..               207               1.3
Whole-home Dehumidifier: >8ft \3\...               416               1.4
------------------------------------------------------------------------

    DOE's analysis of the impacts of the proposed standards on 
consumers is described in section IV.F of this NOPR.

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 (2015 to 2048). Using a real discount rate of 8.43 
percent,\5\ DOE estimates that the INPV for manufacturers of 
residential dehumidifiers is $186.5 million.\6\ Under the proposed 
standards, DOE expects that manufacturers may lose up to 18.7 percent 
of their INPV, which is approximately $34.9 million. Additionally, 
based on DOE's interviews with the manufacturers of residential 
dehumidifiers, DOE does not expect significant impacts on manufacturing 
capacity or loss of employment for the industry as a whole.
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    \5\ The real discount rate is the weighted-average cost of 
capital derived from industry financials and modified based on 
feedback received during confidential interviews with manufacturers.
    \6\ All monetary values in this section are expressed in 2013 
dollars; discounted values are discounted to 2014 unless explicitly 
stated otherwise.
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C. National Benefits and Costs

    DOE's analyses indicate that the proposed standards would save a 
significant amount of energy. The lifetime full-fuel-cycle (FFC) energy 
savings for residential dehumidifiers purchased in the 30-year period 
that begins in the first full year of compliance with the amended 
standards (2019-2048) amount to 0.32 quads.\7\
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    \7\ A quad is equal to 10\15\ British thermal units (Btu). FFC 
energy savings includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and thus presents a more complete picture of the 
impacts of energy efficiency standards. For more information on the 
FFC metric, see section IV.H.1
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    The cumulative net present value (NPV) of total consumer costs and 
savings for the proposed residential dehumidifier standards ranges from 
$1.04 billion (at a 7-percent discount rate) to $2.27 billion (at a 3-
percent discount rate). This NPV expresses the estimated total value of 
future operating-cost savings minus the estimated increased product 
costs for residential dehumidifiers purchased in 2019-2048.
    In addition, the proposed standards would have significant 
environmental benefits. The energy savings described above (for 
dehumidifiers purchased in the 2019-2048 period) are estimated to 
result in cumulative emission reductions of 19.3 million metric tons 
(Mt) \8\ of carbon dioxide (CO2), 85.9 thousand tons of 
methane (CH4), 16.0 thousand tons of sulfur dioxide 
(SO2), 28.8 thousand tons of nitrogen oxides 
(NOX), 0.3 thousand tons of nitrous oxide (N2O), 
and 0.05 ton of mercury (Hg).\9\ The cumulative reduction in 
CO2 emissions through 2030 amounts to 5.9 Mt, which is 
equivalent to the emissions resulting from the annual electricity use 
of 0.8 million homes.
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    \8\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \9\ DOE calculated emissions reductions relative to the Annual 
Energy Outlook 2014 (AEO 2014) Reference case, which generally 
represents current legislation and environmental regulations for 
which implementing regulations were available as of October 31, 
2013.
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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 a recent Federal 
interagency process.\10\ The derivation of the SCC values is discussed 
in section IV.L of this notice. Using discount rates appropriate for 
each set of SCC values, DOE estimates the present monetary value of the 
CO2 emissions reduction is between $0.14 billion and $1.93 
billion, DOE also estimates the present monetary value of the 
NOX emissions reduction, is $0.04 billion at a 7-percent 
discount rate and $0.10 billion at a 3-percent discount rate.\11\
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    \10\ 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 
(November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
    \11\ DOE is currently investigating valuation of avoided Hg and 
SO2 emissions.
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    Table I.3 summarizes the national economic costs and benefits 
expected to result from the proposed standards for residential 
dehumidifiers.

[[Page 31649]]



 Table I.3--Summary of National Economic Benefits and Costs of Proposed
      Energy Conservation Standards for Residential Dehumidifiers *
------------------------------------------------------------------------
                                        Present value     Discount rate
              Category                 (billion 2013$)         (%)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Consumer Operating Cost Savings.....              1.15                 7
                                                  2.49                 3
CO2 Reduction Monetized Value ($12.0/             0.14                 5
 t case) **.........................
CO2 Reduction Monetized Value ($40.5/             0.63                 3
 t case) **.........................
CO2 Reduction Monetized Value ($62.4/             0.99               2.5
 t case) **.........................
CO2 Reduction Monetized Value ($119/              1.93                 3
 t case) **.........................
NOX Reduction Monetized Value (at                 0.04                 7
 $2,684/ton) [dagger]...............              0.10                 3
                                     -----------------------------------
    Total Benefits [dagger][dagger].              1.82                 7
                                                  3.21                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Consumer Incremental Installed Costs              0.12                 7
                                                  0.22                 3
------------------------------------------------------------------------
                           Total Net Benefits
------------------------------------------------------------------------
Including Emissions Reduction                     1.70                 7
 Monetized Value [dagger][dagger]...              3.00                 3
------------------------------------------------------------------------
* This table presents the costs and benefits associated with residential
  dehumidifiers shipped in 2019-2048. These results include benefits to
  consumers which accrue after 2048 from the products purchased in 2019-
  2048. The incremental costs account for the incremental variable and
  fixed costs incurred by manufacturers due to the standard, some of
  which may be incurred in preparation for the rule.
** The CO2 values represent global monetized values of the SCC, in
  2013$, in 2015 under several scenarios of the updated SCC values. The
  first three cases use the averages of SCC distributions calculated
  using 5%, 3%, and 2.5% discount rates, respectively. The fourth case
  represents the 95th percentile of the SCC distribution calculated
  using a 3% discount rate. The SCC time series used by DOE incorporate
  an escalation factor.
[dagger] The $/ton values used for NOX are described in section IV.L.2.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived
  using the series corresponding to average SCC with 3-percent discount
  rate ($40.5/t in 2015).

    The benefits and costs of today's proposed standards, for products 
sold in 2019-2048, can also be expressed in terms of annualized values. 
The monetary values for the total annualized net benefits are the sum 
of: (1) The national economic value of the benefits in reduced 
operating costs, minus (2) the increase in product purchase and 
installation costs, plus (3) the value of the benefits of 
CO2 and NOX emission reductions, all 
annualized.\12\
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    \12\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2014, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2020 or 2030), and then discounted the present value from 
each year to 2014. The calculation uses discount rates of 3 and 7 
percent for all costs and benefits except for the value of 
CO2 reductions, for which DOE used case-specific discount 
rates, as shown in Table I.3. DOE then calculated the fixed annual 
payment over a 30-year period, starting in the compliance year, that 
yields the same present value.
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    Although DOE believes that the benefits of operating cost savings 
and CO2 emission reductions are both important, 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, whereas 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 residential dehumidifiers 
shipped in 2019-2048. Because CO2 emissions have a very long 
residence time in the atmosphere,\13\ the SCC values in future years 
reflect future CO2-emissions impacts that continue well 
beyond 2100.
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    \13\ The atmospheric lifetime of CO2 is estimated of 
the order of 30-95 years. Mark Z. Jacobson, Correction to ``Control 
of fossil-fuel particulate black carbon and organic matter, possibly 
the most effective method of slowing global warming,'' 110 J. 
Geophys. Res. D14105 (2005).
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    Estimates of annualized benefits and costs of the proposed 
standards are shown in Table I.4. The results under the primary 
estimate 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 average SCC series that has a 
value of $40.5/t in 2015),\14\ the estimated cost of the standards 
proposed in today's rule is $12.6 million per year in increased 
equipment costs, while the estimated benefits are $122.0 million per 
year in reduced equipment operating costs, $35.9 million per year in 
CO2 reductions, and $4.6 million per year in reduced 
NOX emissions. In this case, the net benefit amounts to $150 
million per year. Using a 3-percent discount rate for all benefits and 
costs and the average SCC series that has a value of $40.5/t in 2015, 
the estimated cost of the standards proposed in today's rule is $12.5 
million per year in increased equipment costs, while the estimated 
benefits are $142.7 million per year in reduced operating costs, $35.9 
million per year in CO2 reductions, and $6.0 million per 
year in reduced NOX emissions. In this case, the net benefit 
amounts to $172 million per year.
---------------------------------------------------------------------------

    \14\ DOE used a 3-percent discount rate because the SCC values 
for the series used in the calculation were derived using a 3-
percent discount rate (see section IV.L).

[[Page 31650]]



Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Residential Dehumidifiers
----------------------------------------------------------------------------------------------------------------
                                                                             Million 2013$/year
                                                          ------------------------------------------------------
                                      Discount rate                                Low net          High net
                                                           Primary  estimate      benefits          benefits
                                                                   *             estimate *        estimate *
----------------------------------------------------------------------------------------------------------------
                                                    Benefits
----------------------------------------------------------------------------------------------------------------
Operating Cost Savings.......  7%........................  122.0............  116.8...........  126.3
                               3%........................  142.7............  136.3...........  149.2
CO2 Reduction Monetized Value  5%........................  10.9.............  10.7............  11.1
 ($12.0/t case) **.
CO2 Reduction Monetized Value  3%........................  35.9.............  35.3............  36.7
 ($40.5/t case)**.
CO2 Reduction Monetized Value  2.5%......................  52.2.............  51.4............  53.4
 ($62.4/t case) **.
CO2 Reduction Monetized Value  3%........................  110.9............  109.2...........  113.4
 ($119/t case) **.
NOX Reduction Monetized Value  7%........................  4.65.............  4.59............  4.73
 [dagger].                     3%........................  5.96.............  5.86............  6.09
                              ----------------------------------------------------------------------------------
    Total Benefits             7% plus CO2 range.........  138 to 238.......  132 to 231......  142 to 244
     [dagger][dagger].
                               7%........................  163..............  157.............  168
                               3% plus CO2 range.........  160 to 260.......  153 to 251......  166 to 269
                               3%........................  185..............  177.............  192
----------------------------------------------------------------------------------------------------------------
                                                      Costs
----------------------------------------------------------------------------------------------------------------
Consumer Incremental Product   7%........................  12.6.............  12.3............  13.7
 Costs.                        3%........................  12.5.............  12.0............  13.9
----------------------------------------------------------------------------------------------------------------
                                                  Net Benefits
----------------------------------------------------------------------------------------------------------------
    Total [dagger][dagger]...  7% plus CO2 range.........  125 to 225.......  120 to 218......  128 to 231
                               7%........................  150..............  144.............  154
                               3% plus CO2 range.........  147 to 247.......  141 to 239......  152 to 255
                               3%........................  172..............  165.............  178
----------------------------------------------------------------------------------------------------------------
* This table presents the annualized costs and benefits associated with residential dehumidifiers shipped in
  2019-2048. These results include benefits to consumers which accrue after 2048 from the products purchased in
  2019-2048. The results account for the incremental variable and fixed costs incurred by manufacturers due to
  the standard, some of which may be incurred in preparation for the rule. The Primary, Low Benefits, and High
  Benefits Estimates utilize projections of energy prices from the AEO 2015 Reference case, Low Estimate, and
  High Estimate, respectively. In addition, incremental product costs reflect a medium decline rate in the
  Primary Estimate, a low decline rate in the Low Benefits Estimate, and a high decline rate in the High
  Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.1 of this
  notice.
** The CO2 values represent global monetized values of the SCC, in 2013$, in 2015 under several scenarios of the
  updated SCC values. The first three cases use the averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth case represents the 95th percentile of the SCC distribution
  calculated using a 3% discount rate. The SCC time series used by DOE incorporate an escalation factor.
[dagger] The $/ton values used for NOX are described in section IV.L.2.
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived using the series corresponding to the
  average SCC with 3-percent discount rate ($40.5/t in 2015). 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

    DOE has tentatively concluded that the proposed standards represent 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and would result in the 
significant conservation of energy. DOE further notes that products 
achieving these standard levels are already commercially available for 
all product classes covered by today's proposal. Based on the analyses 
described above, DOE has tentatively concluded that the benefits of the 
proposed standards to the Nation (energy savings, positive NPV of 
consumer benefits, consumer LCC savings, and emission reductions) would 
outweigh the burdens (loss of INPV for manufacturers and LCC increases 
for some consumers).
    DOE also considered more stringent energy efficiency levels as 
potential standards, and is still considering them in this rulemaking. 
However, DOE has tentatively concluded that the potential burdens of 
the more-stringent energy efficiency levels would outweigh the 
projected benefits. Based on consideration of the public comments DOE 
receives in response to this notice and related information collected 
and analyzed during the course of this rulemaking effort, DOE may adopt 
energy efficiency levels presented in this notice that are either 
higher or lower than the proposed standards, or some combination of 
level(s) that incorporate the proposed standards in part.

II. Introduction

    The following section briefly discusses the statutory authority 
underlying today's proposal, as well as some of the relevant historical 
background related to the establishment of standards for residential 
dehumidifiers.

A. Authority

    Title III, Part B of EPCA established the Energy Conservation 
Program for Consumer Products Other Than Automobiles, a program 
covering most major household appliances (collectively referred to as 
``covered products''), which includes the types of residential 
dehumidifiers that are the subject of this rulemaking. (42 U.S.C. 
2(a)(6295(cc))) EPCA, as amended, prescribes energy conservation

[[Page 31651]]

standards for residential dehumidifiers \15\ manufactured on or after 
October 1, 2007, and more stringent energy conservation standards for 
residential dehumidifiers manufactured on or after October 1, 2012. (42 
U.S.C. 6295(cc)) Under 42 U.S.C. 6295(m), the agency must periodically 
review established energy conservation standards for a covered product. 
Under this requirement, such review must be conducted no later than 6 
years from the issuance of a final rule establishing or amending a 
standard for a covered product.
---------------------------------------------------------------------------

    \15\ Dehumidifiers are defined as self-contained, electrically 
operated, and mechanically encased assemblies consisting of: (1) A 
refrigerated surface (evaporator) that condenses moisture from the 
atmosphere; (2) a refrigerating system, including an electric motor; 
(3) an air-circulating fan; and (4) a means for collecting or 
disposing of the condensate. (42 U.S.C. 6291(34))
---------------------------------------------------------------------------

    Pursuant to EPCA, DOE's energy conservation program for covered 
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(b)) 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. (42 U.S.C. 6295(s)) The DOE test 
procedures for residential dehumidifiers currently appear at title 10 
of the Code of Federal Regulations (CFR) part 430, subpart B, appendix 
X.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products. Any new or 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 residential 
dehumidifiers, if no test procedure has been established for the 
product, or (2) if DOE determines by rule that the proposed standard is 
not technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, and after receiving comments on the proposed 
standard, 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 by, to the greatest extent practicable, considering 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))
    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. (42 U.S.C. 6295(o)(2)(B)(iii))
    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 under this section if the Secretary finds 
(and publishes such finding) that interested persons have established 
by a preponderance of the evidence that the standard is likely to 
result in the unavailability in the United States in 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 at the time of the Secretary's finding.'' (42 U.S.C. 6295(o)(4))
    Additionally, 42 U.S.C. 6295(q)(1) specifies requirements when 
promulgating a standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of covered product that has 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. 6294(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 the 
feature and other factors DOE deems appropriate. Id. Any rule 
prescribing such a standard must include an explanation of the basis on 
which such higher or lower level was established. (42 U.S.C. 
6295(q)(2))
    Federal energy conservation requirements 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 the Energy 
Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, 
any final rule for new or amended energy conservation standards 
promulgated after July 1, 2010, is 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

[[Page 31652]]

off mode energy use into a single 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 procedures 
for residential dehumidifiers address standby mode and off mode energy 
use. In this rulemaking, DOE intends to adopt a single energy 
conservation standard that addresses active, off, and standby modes.

B. Background

1. Current Standards
    EPCA prescribes energy conservation standards for residential 
dehumidifiers manufactured on or after October 1, 2012. In a final rule 
published on March 23, 2009, DOE codified these standards at 10 CFR 
430.32(v)(2). 74 FR 12058. The current standards are set forth in Table 
II.1 below.

     Table II.1--Federal Energy Efficiency Standards for Residential
                             Dehumidifiers *
------------------------------------------------------------------------
                                                          Energy factor
              Product class *  (pints/day)                 (EF) **  (L/
                                                               kWh)
------------------------------------------------------------------------
Up to 35.00............................................             1.35
35.01-45.00............................................             1.50
45.01-54.00............................................             1.60
54.01-75.00............................................             1.70
75.00 or more..........................................              2.5
------------------------------------------------------------------------
* Capacity in pints/day is measured according to the current DOE test
  procedure.
** EF is a measure of the water removed from the air per unit of energy
  consumed by a dehumidifier and is calculated according to the current
  DOE test procedure.

2. History of Standards Rulemaking for Residential Dehumidifiers
    As amended by the Energy Policy Act of 2005 (EPACT 2005), EPCA 
established the first energy conservation standards for residential 
dehumidifiers manufactured as of October 1, 2007, based on the EF 
metric. EISA 2007 subsequently amended EPCA to prescribe new energy 
conservation standards for dehumidifiers manufactured on or after 
October 1, 2012. In a final rule published on March 23, 2009, DOE 
codified the standards at 10 CFR 430.32(v)(2). 74 FR 12058.
    DOE initiated today's rulemaking pursuant to 42 U.S.C. 6295(m)(1), 
which requires DOE, no later than 6 years after issuance of any final 
rule establishing or amending a standard, to publish either a notice of 
determination that standards for the product do not need to be amended, 
or a NOPR that includes new proposed energy conservation standards. As 
noted above, DOE issued the last final rule for residential 
dehumidifiers on March 23, 2009.
    DOE initiated this rulemaking by issuing an analytical Framework 
Document, ``Energy Conservation Standards Rulemaking Framework Document 
for Residential Dehumidifiers.'' 77 FR 49739 (Aug. 17, 2012). The 
Framework Document explained the issues, analyses, and process that DOE 
anticipated using to develop energy conservation standards for 
residential dehumidifiers.
    DOE held a public meeting on September 24, 2012, to solicit 
comments from interested parties regarding the Framework Document and 
DOE's proposed analytical approach. DOE sought feedback from interested 
parties on these subjects and provided information regarding the 
rulemaking process that DOE would follow. Interested parties discussed 
the following major issues at the public meeting: Rulemaking schedule; 
test procedure revisions; product classes; technology options; 
efficiency levels (ELs); and approaches for each of the analyses 
performed by DOE as part of the rulemaking process.
    Comments received following the publication of the framework 
document helped DOE identify and resolve issues related to the 
subsequent preliminary analysis. In the preliminary analysis, DOE 
conducted in-depth technical analyses in the following areas: (1) 
Engineering; (2) markups to determine product price; (3) energy use; 
(4) life-cycle cost and payback period; and (5) national impacts. The 
preliminary technical support document (TSD) that presented the 
methodology and results of each of these analyses is available at 
http://www.regulations.gov/#!documentDetail;D=EERE-2012-BT-STD-0027-
0015.
    DOE also conducted, and included in the preliminary TSD, several 
other analyses that supported the major analyses or were expanded upon 
for today's NOPR. These analyses included: (1) The market and 
technology assessment; (2) the screening analysis, which contributes to 
the engineering analysis; and (3) the shipments analysis,\16\ which 
contributes to the LCC and PBP analysis and national impact analysis 
(NIA). In addition to these analyses, DOE began preliminary work on the 
manufacturer impact analysis and identified the methods to be used for 
the consumer subgroup analysis, the emissions analysis, the employment 
impact analysis, the regulatory impact analysis, and the utility impact 
analysis.
---------------------------------------------------------------------------

    \16\ Industry data track shipments from manufacturers into the 
distribution chain. Data on national unit retail sales are lacking, 
but are presumed to be close to shipments under normal 
circumstances.
---------------------------------------------------------------------------

    DOE published a notice of public meeting and availability of the 
preliminary TSD on May 22, 2014. 79 FR 29380. DOE subsequently held a 
public meeting on June 13, 2014, to discuss and receive comments on the 
preliminary TSD. DOE received comments on topics including: Whole-home 
dehumidifier coverage and test procedures, product classes, design 
options, ELs, use of experience curves, shipments projections, social 
cost of carbon estimates and the associated monetization of carbon 
dioxide, and small business impacts. After reviewing these comments, 
DOE gathered additional information, held further discussions with 
manufacturers, performed product testing, and completed and revised the 
various analyses described in the preliminary analysis. The results of 
these analyses are presented in this NOPR.

III. General Discussion

    DOE developed this proposed rule after considering verbal and 
written comments, data, and information from interested parties that 
represent a variety of interests. The following discussion addresses 
issues raised by these commenters.

A. Product Classes and Scope of Coverage

    When evaluating and establishing energy conservation standards, DOE 
divides covered products into product classes by the type of energy 
used or by capacity or other performance-related features that justify 
differing standards. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility to the consumer of the feature and other factors 
DOE determines are appropriate. (42 U.S.C. 6295(q))
    Existing energy conservation standards divide residential 
dehumidifiers into five product classes based on the number of pints 
per day of moisture that the product removes from ambient air at test 
conditions, as measured by the current DOE test procedure. In this 
rulemaking, DOE is proposing new product classes that differentiate 
between portable and whole-home residential dehumidifiers. For portable 
residential dehumidifiers, DOE is proposing the following three product 
classes based on the product capacity in number of pints per day of 
moisture removed from ambient air at

[[Page 31653]]

test conditions \17\: (1) 30.00 pints/day or less; (2) 30.01 to 45.00 
pints/day; and (3) 45.01 pints/day or more. For whole-home residential 
dehumidifiers, DOE is proposing the following two product classes based 
on product case volume: \18\ (1) less than or equal to 8.0 ft\3\; and 
(2) greater than 8.0 ft\3\.
---------------------------------------------------------------------------

    \17\ Note that the test conditions for the proposed product 
classes are different from those for the existing product classes.
    \18\ Product case volume is the rectangular volume that the 
product case occupies, exclusive of any duct attachment collars or 
other external components.
---------------------------------------------------------------------------

    The product classes for portable residential dehumidifiers analyzed 
for today's NOPR are different from those examined in DOE's initial 
analysis, while the product classes for whole-home residential 
dehumidifiers are the same. DOE initially analyzed five product classes 
for portable residential dehumidifiers based on product capacity. Due, 
in part, to comments received on the preliminary TSD, DOE is proposing 
only the three product classes discussed above. Comments received 
relating to the scope of coverage and product classes are discussed in 
section IV.A of this proposed rule.

B. Test Procedure

    EPCA specifies that the dehumidifier test criteria used under the 
ENERGY STAR \19\ program in effect as of January 1, 2001,\20\ must 
serve as the basis for the DOE test procedure for dehumidifiers, unless 
revised by DOE. (42 U.S.C. 6293(b)(13)) The ENERGY STAR test criteria 
required that American National Standards Institute (ANSI)/Association 
of Home Appliance Manufacturers (AHAM) Standard DH-1, 
``Dehumidifiers,'' be used to measure capacity while the Canadian 
Standards Association (CAN/CSA) standard CAN/CSA-C749-1994 (R2005), 
``Performance of Dehumidifiers,'' be used to calculate the Energy 
Factor (EF). The version of AHAM Standard DH-1 in use at the time the 
ENERGY STAR test criteria were adopted was AHAM Standard DH-1-1992. In 
2006, DOE adopted these test criteria, along with related definitions 
and tolerances, as its test procedure for dehumidifiers at 10 CFR part 
430, subpart B, appendix X. 71 FR 71340, 71347, 71366-68 (Dec. 8, 
2006).
---------------------------------------------------------------------------

    \19\ For more information on the ENERGY STAR program, please 
visit www.energystar.gov.
    \20\ ``Energy Star Program Requirements for Dehumidifiers'', 
Version 1.0, U.S. Environmental Protection Agency (EPA), available 
online at: www.energystar.gov/products/specs/system/files/DehumProgReqV1.0.pdf.
---------------------------------------------------------------------------

    On October 31, 2012, DOE published a final rule to establish a new 
test procedure for dehumidifiers that references ANSI/AHAM Standard DH-
1-2008, ``Dehumidifiers,'' (ANSI/AHAM DH-1-2008) for both energy use 
and capacity measurements. 77 FR 65995 (Oct. 31, 2012). The final rule 
also adopted standby and off mode provisions that satisfy the 
requirement in EPCA for DOE to include measures of standby mode and off 
mode energy consumption in its test procedures for residential 
products, if technically feasible. (42 U.S.C. 6295(gg)(2)(A)) This new 
DOE test procedure, codified at that time at 10 CFR part 430, subpart 
B, appendix X1, established a new metric, IEF, which incorporates 
measures of active, standby, and off mode energy use.
    DOE subsequently removed the existing test procedures at appendix X 
and redesignated the test procedures at appendix X1 as appendix X. 79 
FR 7366 (Feb. 7, 2014). Any representations of energy use, including 
standby mode or off mode energy consumption, or efficiency of portable 
dehumidifiers must be made in accordance with the results of testing 
pursuant to the redesignated appendix X.
    On May 21, 2014, DOE published a NOPR proposing further amendments 
to residential dehumidifier test procedures. 79 FR 29272. In addition 
to making clarifications and corrections, the proposed amendments would 
create a new appendix, appendix X1, which would: (1) Require certain 
active mode testing at a lower ambient temperature; (2) add a measure 
of fan-only mode energy consumption in the IEF metric; and (3) include 
testing methodology and measures of performance for whole-home 
dehumidifiers.
    On February 4, 2015, DOE published a supplemental notice of 
proposed rulemaking (SNOPR). 80 FR 5994. In the SNOPR, DOE maintained 
its proposals from the NOPR, except that DOE proposed: (1) Various 
adjustments and clarifications to the whole-home dehumidifier test 
setup and conduct; (2) a method to determine whole-home dehumidifier 
case volume; (3) a revision to the method for measuring energy use in 
fan-only operation; (4) a clarification to the relative humidity and 
capacity equations; and (5) additional technical corrections and 
clarifications.
    In response to the May 2014 Notice, June 2014 public meeting, and 
February 2015 SNOPR, DOE received comments from interested parties 
related to the test procedure. DOE addressed these issues in the test 
procedure final rule to establish appendix X1, and based its analysis 
in this notice on capacities and efficiencies determined according to 
the appendix X1 test procedure.

C. Technological Feasibility

1. General
    In each energy conservation 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, and 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)(4)(ii)-(iv)) Section IV.B of this proposed rule discusses the 
results of the screening analysis for residential dehumidifiers, 
particularly the designs DOE considered, those it screened out, and 
those that are the basis for the standards considered in this 
rulemaking. For further details on the screening analysis for this 
rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
    When DOE proposes to adopt an amended standard for a type or class 
of covered product, it must determine the maximum improvement in energy 
efficiency or maximum reduction in energy use that is technologically 
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the 
engineering analysis, DOE determined the maximum technologically 
feasible (max-tech) improvements in energy efficiency for residential 
dehumidifiers, using the design parameters for the most efficient 
products available on the market or in working prototypes. The max-tech 
levels that DOE determined for this rulemaking are described in section 
IV.C.1.b of this proposed rule and in chapter 5, section 5.3.2 of the 
NOPR TSD.

[[Page 31654]]

D. Energy Savings

1. Determination of Savings
    For each trial standard level (TSL), DOE projected energy savings 
from application of the TSL to residential dehumidifiers purchased in 
the 30-year period that begins in the first full year of compliance 
with the proposed standards (2019-2048).\21\ The savings are measured 
over the entire lifetime of residential dehumidifiers purchased in the 
30-year analysis period.\22\ 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 that reflects how the market for a 
product would likely evolve in the absence of amended mandatory 
efficiency standards.
---------------------------------------------------------------------------

    \21\ Each TSL is comprised of specific efficiency levels for 
each product class. The TSLs considered for this NOPR are described 
in section V.A. DOE also conducted a sensitivity analysis that 
considers impacts for products shipped in a 9-year period.
    \22\ 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 uses its NIA spreadsheet models to estimate energy savings from 
potential amended standards. The NIA spreadsheet model (described in 
section IV.H of this notice) calculates savings in site energy, which 
is the energy directly consumed by products at the locations where they 
are used. Based on the site energy, DOE calculates national energy 
savings (NES) in terms of primary energy savings at the site or at 
power plants, and also in terms of full-fuel-cycle (FFC) energy 
savings. The FFC metric includes the energy consumed in extracting, 
processing, and transporting primary fuels (i.e., coal, natural gas, 
petroleum fuels), and thus presents a more complete picture of the 
impacts of energy efficiency standards.\23\ DOE's approach is based on 
the calculation of an FFC multiplier for each of the energy types used 
by covered products or equipment. For more information on FFC energy 
savings, see section IV.H.1 of this proposed rule.
---------------------------------------------------------------------------

    \23\ The FFC metric is discussed in DOE's statement of policy 
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as 
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

2. Significance of Savings
    To adopt any new or amended standard for a covered product, DOE 
must determine that such action would result in ``significant'' energy 
savings. (42 U.S.C. 6295(o)(3)(B)) Although the term ``significant'' is 
not defined in the Act, the U.S. Court of Appeals for the District of 
Columbia Circuit, in Natural Resources Defense Council v. Herrington, 
768 F.2d 1355, 1373 (D.C. Cir. 1985), opined that Congress intended 
``significant'' energy savings in the context of EPCA to be savings 
that were not ``genuinely trivial.'' The energy savings for all of the 
TSLs considered in this rulemaking, including the proposed standards, 
are nontrivial, and, therefore, DOE considers them ``significant'' 
within the meaning of section 325 of EPCA.

E. Economic Justification

1. Specific Criteria
    As noted above, 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 a potential amended standard on 
manufacturers, DOE conducts a manufacturer impact analysis (MIA), as 
discussed in section IV.J of this proposed rule. 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: (1) Industry net present value (INPV), which values 
the industry on the basis of expected future cash flows; (2) cash flows 
by year; (3) changes in revenue and income; and (4) 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 individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national NPV of the economic 
impacts applicable to a particular rulemaking. DOE also evaluates the 
LCC impacts of potential standards on identifiable subgroups of 
consumers that may be affected disproportionately by a national 
standard.
b. Savings in Operating Costs Compared to Increase in Price
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from the standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    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 analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. 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. For 
its analysis, DOE assumes that consumers will purchase the covered 
products in the first full year of compliance with amended standards.
    The LCC savings for the considered ELs are calculated relative to a 
base case that reflects projected market trends in the absence of 
amended standards. 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's LCC and PBP analyses are discussed in further detail in section 
IV.F.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting 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.H.1, DOE

[[Page 31655]]

uses the NIA spreadsheet to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing classes of products, and in evaluating design 
options and the impact of potential standard levels, DOE evaluates 
potential standards that would not lessen the utility or performance of 
the considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards proposed in this proposed rule would 
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 the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a proposed standard. (42 U.S.C. 
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine 
the impact, if any, of any lessening of competition likely to result 
from a proposed standard and to transmit such determination to the 
Secretary within 60 days of the publication of a proposed rule, 
together with an analysis of the nature and extent of the impact. (42 
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed 
rule to the Attorney General with a request that the Department of 
Justice (DOJ) provide its determination on this issue. DOE will publish 
and respond to the Attorney General's determination in the final rule.
f. Need for National Energy Conservation
    DOE also considers the need for national energy conservation in 
determining whether a new or amended standard is economically 
justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy savings from the 
proposed 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, as discussed in section IV.M.
    The proposed 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 the proposed standards, and from each TSL it 
considered, in section IV.K of this proposed rule. DOE also reports 
estimates of the economic value of emissions reductions resulting from 
the considered TSLs, as discussed in section IV.L.
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)) 
To the extent interested parties submit any relevant information 
regarding economic justification that does not fit into the other 
categories described above, DOE could consider such information under 
``other factors.''
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 effects that proposed 
energy conservation standards would have on the PBP 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.F.10 of this proposed rule.

IV. Methodology and Discussion

    DOE used three spreadsheet tools to estimate the impact of today's 
proposed standards. The first spreadsheet calculates LCCs and PBPs of 
potential standards. The second provides shipments forecasts, and then 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential standards. 
Finally, DOE assessed manufacturer impacts, largely through use of the 
Government Regulatory Impact Model (GRIM).
    Additionally, DOE estimated the impacts on utilities and the 
environment that would be likely to result from potential amended 
standards for residential dehumidifiers. DOE used a version of EIA's 
National Energy Modeling System (NEMS) for the utility and 
environmental analyses. The NEMS simulates the energy sector of the 
U.S. economy. EIA uses NEMS to prepare its AEO, a widely-known energy 
forecast for the United States. NEMS offers a sophisticated picture of 
the effect of standards, because it accounts for the interactions 
between the various energy supply and demand sectors and the economy as 
a whole.

A. Market and Technology Assessment

    DOE develops information that provides an overall picture of the 
market for the products concerned, including the purpose of the 
products, the industry structure, manufacturers, market 
characteristics, and technologies used in the products. DOE's market 
and technology analysis activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this residential dehumidifier rulemaking include: (1) A 
determination of the scope of the rulemaking and product classes; (2) 
manufacturers and industry structure; (3) existing efficiency programs; 
(4) product shipments; (5) market and industry trends; and (6) 
technologies that could improve the energy efficiency of residential 
dehumidifiers. The key findings of DOE's market assessment are 
summarized below. See chapter 3 of the NOPR TSD for further discussion 
of the market and technology assessment.
1. Definition and Scope of Coverage
    EPCA defines a dehumidifier as product that is self-contained, 
electrically operated, mechanically encased, and a product that 
incorporates a refrigerated surface to condense moisture from the 
atmosphere. It further defines it as a refrigerating system with an 
electric motor; a fan for air circulation; and a means for collecting 
or disposing of the condensate. (42 U.S.C. 6291(34)) In the concurrent 
test procedure rulemaking, DOE is clarifying that this definition of a 
dehumidifier, codified at 10 CFR 430.2, does not apply to portable air 
conditioners, room air conditioners, or packaged terminal air 
conditioners.
    Aprilaire Inc. (Aprilaire) commented to suggest that the EPCA 
definition for

[[Page 31656]]

a dehumidifier is too broad, and believes that it would include all 
products that provide means of dehumidification, including portable, 
window, and central air conditioners. Aprilaire further suggested that 
products such as a refrigerator could meet the EPCA definition even 
though refrigerators are not intended to dehumidify the living space. 
Therefore, Aprilaire requested that DOE provide a more specific 
definition for dehumidifiers. (Aprilaire, No. 20 at p. 3) DOE notes 
that the definition for dehumidifier established in the concurrent test 
procedure rulemaking specifically excludes portable air conditioners, 
room air conditioners, and packaged terminal air conditioners because 
these products also deliver conditioned air to a space such as a room 
similar to a dehumidifier, in contrast to a refrigerator which provides 
cooling to a cabinet. DOE has already established energy conservation 
standards for room air conditioners and refrigerators separately under 
EPCA (42 U.S.C. 6295(b) and (cc)), and is currently considering new 
standards for portable air conditioners in a separate rulemaking. The 
energy conservation standards for these products address energy use in 
active, standby, and off modes.
    In the concurrent test procedure rulemaking, DOE is also adding 
definitions to 10 CFR 430.2 for portable dehumidifiers and whole-home 
dehumidifiers. Portable dehumidifiers are designed to operate within 
the dehumidified space without ducting attached, although ducting may 
be attached optionally. Whole-home dehumidifiers are designed to be 
installed with inlet ducting for return process air and outlet ducting 
that supplies dehumidified process air to one or more locations in the 
dehumidified space.
    Therma-Stor LLC (Therma-Stor) expressed concern that DOE is 
proposing to subdivide dehumidifiers into ``portable'' and ``whole-
home'' dehumidifiers, as defined by their intended application or 
installation. According to Therma-Stor, this approach may not provide 
clear differentiation among products, and therefore DOE should revise 
the proposed definitions of each product type to accurately define 
specific attributes to avoid confusion in the marketplace. (Therma-
Stor, No. 21 at p. 1) Due to the many similarities between certain 
portable and whole-home dehumidifiers and the inability to determine 
their intended use through examination of the product, DOE determined 
that design features associated with installation, namely the 
attachment of ducts, are the most reliable method for differentiation. 
The definitions established in the concurrent test procedure rulemaking 
separate the product types based on this differentiation. For those 
dehumidifiers that may be optionally configured in either manner, DOE 
would require that each configuration of these products be certified 
under corresponding portable and whole-home dehumidifier energy 
conservation standards.
2. Product Classes
    When evaluating and establishing energy conservation standards, DOE 
divides covered products into product classes by the type of energy 
used or by capacity or other performance-related features that justify 
a different standard. In making a determination whether a performance-
related feature justifies a different standard, DOE must consider such 
factors as the utility to the consumer of the feature and other factors 
DOE determines are appropriate. (42 U.S.C. 6295(q))
    Under 42 U.S.C. 6295(cc)(2), residential dehumidifiers, 
manufactured on or after October 1, 2012, are divided into five product 
classes based on the capacity of the unit in pints of water extracted 
per day:

            Table IV.1--Current Dehumidifier Product Classes
------------------------------------------------------------------------
                          Capacity  (pints/day)
-------------------------------------------------------------------------
Up to 35.00.
35.01-45.00.
45.01-54.00.
54.01-75.00.
75.00 or more.
------------------------------------------------------------------------

a. Preliminary Analysis Proposals
    In the preliminary analysis conducted for this rulemaking, DOE 
considered the following portable dehumidifier product classes that 
were based on the existing product classes, but with capacities 
adjusted for the lower ambient temperature proposed in the May 2014 
test procedure NOPR:

 Table IV.2--Preliminary Analysis Portable Dehumidifier Product Classes
------------------------------------------------------------------------
                          Capacity  (pints/day)
-------------------------------------------------------------------------
20.00 or less.
20.01 to 30.00.
30.01 to 35.00.
35.01 to 45.00.
45.01 or more.
------------------------------------------------------------------------

    In the preliminary analysis, DOE also considered two product 
classes for whole-home dehumidifiers, differentiated by product case 
volume.

Table IV.3--Preliminary Analysis Whole-Home Dehumidifier Product Classes
------------------------------------------------------------------------
                Product Class  (case volume, cubic feet)
-------------------------------------------------------------------------
less than or equal to 8.0.
greater than 8.0.
------------------------------------------------------------------------

b. Comments and Responses
    Aprilaire commented that portable and whole-home dehumidifiers are 
two different classes of product, in their construction as well as 
their intended application and function. Aprilaire commented that the 
National Renewable Energy Laboratory (NREL) technical report, NREL/TP-
5500-61076, highlights the difference between portables and whole-home 
dehumidifiers, not only in application, size, and capacity, but also in 
performance. Aprilaire expressed concern that due to these many 
differences in the two types of dehumidifier products, the inclusion of 
both into one rule and test procedure may not be appropriate. 
Therefore, Aprilaire suggested that DOE not consider whole-home 
dehumidifiers in the rulemaking and test procedures at this time. 
(Aprilaire No. 20 at pp. 1-3)
    Pacific Gas and Electric Company, Southern California Gas Company, 
San Diego Gas and Electric, and Southern California Edison (California 
Investor-Owned Utilities (IOUs)) supported extending coverage to whole-
home dehumidifiers and regulating them as a separate product class from 
portable dehumidifiers, as they are designed and installed differently 
in order to properly take advantage of ducted configurations. According 
to the California IOUs, whole-home dehumidifiers require more energy 
than portable units, and the difference in energy use between high and 
low efficiency products is significant. The California IOUs further 
stated that whole-home dehumidifiers have a longer lifetime than 
portable dehumidifiers, and that due to the longer lifetime and large 
difference in energy use between whole-home dehumidifiers of varying 
efficiency, it is important to ensure that these products are efficient 
to realize savings for the duration of the expected lifetime. 
(California IOUs, No. 24 at pp. 1-2)
    DOE notes that although portable and whole-home dehumidifiers have 
different applications and overall performance, they both: (1) Fall 
under

[[Page 31657]]

the statutory definition of a dehumidifier; (2) provide the same 
dehumidification function: and (3) can be characterized with the same 
energy efficiency performance metric. Therefore, DOE believes it is 
appropriate to address both portable and whole-home dehumidifiers in 
the same rulemaking. DOE, however, is considering separate proposed 
efficiency standards levels for each product type. The considered 
product classes are split between portable and whole-home 
dehumidifiers, as defined according to the definitions provided in 
section IV.A.1 of this notice, with further divisions based on product 
capacity or volume. In addition, DOE established, in a separate test 
procedure rulemaking, unique testing setups and methodology for the two 
product types.
    The California IOUs commented that there are a group of products in 
the 65 to 75 pint/day capacity range with significantly higher 
efficiencies than other dehumidifiers with capacities under 75 pints/
day. The California IOUs suggested that DOE analyze these products to 
understand their technology options and whether or not lower-capacity 
units can achieve similar efficiencies, or whether a separate product 
class is necessary to develop more appropriate energy conservation 
standards for those products. (California IOUs No. 24 at pp. 3-4) DOE 
investigated the models with higher efficiencies near 75 pints/day 
rated capacity (as measured according to the current test procedure in 
10 CFR part 430, subpart B, appendix X). DOE notes that these products 
typically have construction similar to whole-home dehumidifiers, but in 
a portable configuration. They include larger heat exchangers (and for 
some units, an inlet air-to-air heat exchanger), higher-volumetric flow 
rate blowers, and higher-capacity compressors. These units are 
currently rated at capacities between 65 and 75 pints/day, and although 
these capacities would decrease under the appendix X1 test procedure, 
DOE expects, based on its investigative testing, that the units would 
likely be classified in the proposed 45.01 pints/day or more product 
class. Accordingly, DOE considered higher efficiencies for this product 
class in this NOPR analysis than for the lower-capacity portable 
product classes (see section IV.C.1 of this proposed rule).
    Appliance Standards Awareness Project (ASAP) asked why DOE proposed 
multiple product classes for portable dehumidifiers with capacities 
less than 45 pints/day. (ASAP, Public Meeting Transcript, No. 25 at p. 
16) \24\ ASAP also asked if there is consumer utility associated with 
either smaller capacities or smaller chassis. (ASAP, Public Meeting 
Transcript, No. 25 at p. 18) In a joint comment, ASAP, Alliance to Save 
Energy, American Council for an Energy-Efficient Economy, Consumers 
Union, National Consumer Law Center, Natural Resources Defense Council, 
and Northwest Energy Efficiency Alliance (hereinafter the ``Joint 
Commenters''), as well as the California IOUs, supported a single 
product class for all portable dehumidifiers with capacities less than 
45 pints/day because they claimed that DOE had not demonstrated that 
dehumidification capacity is a feature that justifies a lower standard 
level. They also noted the availability of dehumidifiers over a range 
of capacities that meet or exceed the current ENERGY STAR specification 
(EF of 1.85 for all dehumidifiers up to 75 pints/day), which, according 
to the Joint Commenters, suggests that lower-capacity dehumidifiers may 
achieve the same efficiencies as higher-capacity models. (California 
IOUs, No. 24 at p. 2; Joint Commenters, No. 23 at pp. 1-2) The 
California IOUs noted that many commercially available lower-capacity 
products are able to meet the ENERGY STAR performance levels, but that 
non-qualified products are typically clustered right at the Federal 
standard level, resulting in a significant gap in performance. 
According to the California IOUs, this large gap is not apparent for 
higher capacity units, and highlights the increased energy savings 
potential of requiring lower-capacity units to meet the same energy 
conservation standards as higher-capacity units. (California IOUs, No. 
24 at p. 3)
---------------------------------------------------------------------------

    \24\ A notation in the form ``ASAP, Public Meeting Transcript, 
No. 25 at p. 16'' identifies an oral comment that DOE received 
during the June 13, 2014, residential dehumidifier energy 
conservation standards preliminary analysis public meeting. Oral 
comments were recorded in the public meeting transcript and are 
available the residential dehumidifier energy conservation standards 
rulemaking docket (Docket No. EERE-2012-BT-STD-0027). This 
particular notation refers to a comment: (1) Made by Appliance 
Standards Awareness Project during the public meeting; (2) recorded 
in document number 25, which is the public meeting transcript that 
is filed in the docket of this energy conservation standards 
rulemaking; and (3) which appears on page 16 of document number 25.
---------------------------------------------------------------------------

    The Joint Commenters also stated that DOE determined there is no 
inherent relationship between capacity and efficiency, and that 
efficiency is instead primarily a function of chassis size. The Joint 
Commenters further stated that the possibility that some manufacturers' 
current chassis components may make it difficult for them to meet 
higher ELs at certain capacities does not justify the use of separate 
product classes to shield those manufacturers from more stringent 
standards. The Joint Commenters further stated that, at most, the cost 
(not the ability) to meet a standard level is different from 
manufacturer to manufacturer. (Joint Commenters, No 23 at p. 2) The 
California IOUs commented that by ``right-sizing'' the chassis, 
manufacturers can produce high-efficiency dehumidifiers of any 
capacity. Thus, all product classes below 75 pints/day (based on the 
current test procedure in appendix X) should be consolidated into a 
single class. (California IOUs, No. 24 at p. 3)
    AHAM supported maintaining several product classes for portable 
dehumidifiers, and agreed that DOE should not collapse portable 
dehumidifier product classes into two product classes (less than 75 
pints/day and greater than 75 pints/day according to the current test 
conditions). AHAM also agreed that maintaining several product classes 
would allow DOE to individually consider appropriate ELs in each class 
that would take into account unique performance factors and costs. 
(AHAM, No. 22 at pp. 1-2) AHAM commented that it was concerned that the 
65 degrees Fahrenheit ([deg]F) ambient temperature test condition in 
the proposed test procedure for residential dehumidifiers, as opposed 
to the current 80[emsp14][deg]F ambient temperature, would increase 
test-to-test variation and make it more difficult to establish product 
classes based on capacity thresholds. Therefore, AHAM stated that it 
may be necessary to combine two of the lower-capacity product classes, 
for a total of four portable dehumidifier product classes. (AHAM, No. 
22 at p. 2) Therma-Stor commented that the number of product classes 
may need to be reduced or increased to reflect the (relative) range of 
ratings. (Therma-Stor, No. 21 at p. 1)
    While all current product classes are able to reach similar maximum 
efficiencies under current test procedures, DOE observed that the two 
lowest capacity portable product classes considered for the preliminary 
analysis (20.00 pints/day or less and 20.01 to 30.00 pints/day) could 
not reach the same maximum IEF as the other product classes when tested 
under the appendix X1 test procedure. This suggested that there may be 
an inherent trend between capacity and efficiency at lower ambient test 
temperatures.
    DOE also notes that product sizes and weights vary between products 
currently available on the market.

[[Page 31658]]

Lower-capacity units typically use a smaller chassis that limits the 
sizes of internal components such as heat exchangers. In the sample of 
units DOE selected for the engineering analysis, DOE observed that 
portable dehumidifiers with rated capacities below 45 pints/day 
typically had smaller chassis and had an average weight of 33 pounds. 
Portable dehumidifiers currently rated with capacities between 45 
pints/day and 75 pints/day typically had larger chassis and had an 
average weight of 45 pounds. DOE believes the 12-pound average increase 
in product weight in moving to a larger case would reduce portability 
(i.e., increase difficulty moving the unit within the home), which 
would negatively impact consumer utility.
    DOE also observed that there was no key difference in product 
characteristics for the two product classes analyzed for the 
preliminary analysis that DOE proposes to combine into a single product 
class in this NOPR. The 20.00 pints/day or less and 20.01 to 30.00 
pints/day product classes had similar product characteristics and were 
able to achieve similar ELs under both the current and appendix X1 test 
procedures. Similarly, the 30.01 to 35.00 pints/day and 35.01 to 45.00 
pints/day product classes had similar construction and measured 
efficiencies. For this NOPR analysis, DOE proposes combing the four 
lowest-capacity portable product classes analyzed in the preliminary 
analysis into two: 30.00 pints/day or less and 30.01 to 45.00 pints/
day. DOE proposes maintaining the 45.01 pints/day or more product class 
as considered in the preliminary analysis because the larger chassis 
size and weight typically associated with these products would allow 
for consideration of certain design options, such as inlet pre-cooling 
heat exchangers, that would be infeasible in lower-capacity portable 
dehumidifiers.
    AHAM stated that because dehumidifiers are typically rated at even 
number capacities, DOE should use odd number boundaries for the product 
classes, especially as standards become more stringent. AHAM commented 
that DOE's proposal to define product class boundaries at even numbers 
may cause findings of noncompliance simply due to test procedure 
variation. (AHAM, Test Procedure NOPR, No. 7 at p, 6) Based on a review 
of the products certified in DOE's Compliance Certification Database, 
DOE observed that approximately 75 percent of certified units are rated 
at a capacity that is a multiple of 10.\25\ However, these capacity 
ratings are based on the current test procedures, and the certified 
capacities would change under the appendix X1 test procedures. 
Therefore, DOE concludes that an a priori selection of either an even 
or odd product class capacity threshold would not be warranted, and 
instead proposes to define product class boundaries based on the 
capacities associated with chassis sizes and weights that provide 
different consumer utility.
---------------------------------------------------------------------------

    \25\ The Compliance Certification Database is available at: 
http://www.regulations.doe.gov/certification-data/.
---------------------------------------------------------------------------

    Therma-Stor commented that the current product classes, which are 
based on water removal capacity at 80[emsp14][deg]F and 60-percent 
relative humidity, should be revised to reflect new capacity values if 
different ambient rating test conditions are chosen. (Therma-Stor, No. 
21 at p. 1) As discussed previously, DOE adjusted its portable product 
classes to account for the updated test conditions at 65[emsp14][deg]F 
ambient temperature.
    Aprilaire agreed with using the volume of whole-home dehumidifiers 
as a product class differentiator, because installed location is one of 
the restrictions on these units rather than their capacity. However, 
Aprilaire requested clarification on the selection of 8.0 cubic feet as 
the threshold between product classes, and whether there was any 
relationship between this threshold and product capacity. Aprilaire 
commented that the differentiation of whole-home product classes based 
on case volume less than or greater than 8.0 cubic feet appears to be 
arbitrary and only based on products on the market today, and that 
product sizes exist today due to application and size constraints 
incurred during or after installation. Aprilaire noted its concern that 
the market for whole-home dehumidifiers and potential applications were 
not totally understood, and placing an arbitrary threshold may limit 
innovation and new product applications. Aprilaire stated that doing so 
would negatively impact the ability to obtain whole-home energy-
efficient humidity control. (Aprilaire, Public Meeting Transcript, No. 
25 at pp. 14-15; Aprilaire, No. 20 at p. 3) Therma-Stor also commented 
that basing whole-home dehumidifier product classes on case volume is 
arbitrary, and would be confusing in the marketplace. Therma-Stor 
suggested that whole-home product classes be based upon the same 
capacity metric as portable dehumidifiers. (Therma-Stor, No. 21 at p.1)
    DOE considered whole-home product class differentiation based on 
those products that are installed in space-constrained locations. Many 
of the design options associated with improving efficiencies for these 
products, such as larger heat exchangers or an inlet pre-cooling heat 
exchanger, require making the unit physically larger. Whole-home units 
that are not space constrained may incorporate all of these design 
options and reach higher efficiencies. DOE observed that products 
available on the market with case volumes greater than 8.0 cubic feet 
are able to incorporate additional design options and reach higher 
efficiencies than products with volumes at or less than 8.0 cubic feet. 
DOE also expects that products with volumes of 8.0 cubic feet or less 
would be able to meet consumers' needs for space-constrained 
installations. DOE notes that switching to a capacity-based product 
class differentiation, as proposed for portable dehumidifier product 
classes, would not ensure products would maintain the smaller case 
sizes. Whole-home units at lower capacities could increase case size to 
incorporate all available design options and maximize heat exchanger 
sizes to reach high efficiencies, but the increased case size would 
also limit consumer applications. For these reasons, DOE proposes to 
maintain the two whole-home dehumidifier product classes based on case 
volume: Less than or equal to 8.0 cubic feet and greater than 8.0 cubic 
feet.
c. NOPR Proposals
    In summary, DOE proposes classifying portable products into three 
product classes, by merging two of the current five portable product 
classes into the other three, and classifying whole-home dehumidifiers 
in two product classes based on case volume, resulting in the following 
product classes:

                Table IV.4--Dehumidifier Product Classes
------------------------------------------------------------------------
                          Portable (pints/day)
-------------------------------------------------------------------------
30.00 or less.
30.01 to 45.00.
45.01 or more.
------------------------------------------------------------------------
                  Whole-home (case volume, cubic feet)
------------------------------------------------------------------------
less than or equal to 8.0.
greater than 8.0.
------------------------------------------------------------------------

    In the remaining sections of this NOPR, presented product 
capacities and efficiencies are consistent with the appendix X1 test 
procedures.

[[Page 31659]]

3. Technology Options
    In the preliminary market analysis and technology assessment, DOE 
identified 14 technology options that would be expected to improve the 
efficiency of residential dehumidifiers:

               IV.5--Technology Options for Dehumidifiers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Built-in hygrometer/humidistat.
2. Improved compressor efficiency.
3. Improved condenser and evaporator performance.
4. Improved controls.
5. Improved defrost methods.
6. Improved demand-defrost controls.
7. Improved fan and fan-motor efficiency.
8. Improved flow-control devices.
9. Low-standby-loss electronic controls.
10. Washable air filters.
11. Pre-cooling air-to-air heat exchanger.
12. Heat pipes.
13. Improved refrigeration system insulation.
14. Refrigerant-desiccant systems.
------------------------------------------------------------------------

    In response to the preliminary analysis, two commenters suggested 
additional technology options that DOE should consider, but the agency 
has determined that neither option merits further consideration. First, 
the Joint Commenters and California IOUs stated that DOE should include 
chassis size as a technology option for improving efficiency in the 
engineering analysis if it maintains separate portable dehumidifier 
product classes. (California IOUs, No. 24 at p. 2; Joint Commenters, 
No. 23 at p. 2) DOE notes that increasing chassis size does not itself 
increase product efficiency, but it allows the product to house larger 
heat exchangers, which does improve efficiency. DOE included larger 
heat exchangers as a design option, and considered any necessary 
chassis changes associated with the larger components in the 
engineering analysis.
    Second, the California IOUs commented that DOE should consider the 
potential benefits from networked smart controls, which would allow 
dehumidifiers to benefit from time-of-use metering and other demand 
management schemes to maximize the time-value of energy production in 
participating utilities. They noted that as an added benefit, advanced 
sensors with more sophisticated reporting capabilities would alert the 
user when the unit begins to degrade significantly, requiring 
maintenance or replacement. (California IOUs, No. 24 at p. 5) The 
current and recently established DOE test procedures for dehumidifiers 
measure the site energy consumption in typical operation and do not 
reflect potential overall benefits related to demand management enabled 
by smart controls. Products incorporating smart controls would have the 
same (or lower) measured efficiencies according to the DOE test 
procedure because such controls consume additional energy to provide 
those features that are not directly related to energy efficiency. 
Additionally, DOE is not aware of any dehumidifiers currently available 
on the market or any working prototypes that incorporate a demand 
response function via smart controls. Accordingly, DOE did not consider 
smart controls as a design option to reach higher ELs in this analysis. 
DOE requests comment on any information or data about the availability 
of dehumidifiers with smart controls, including those currently 
available on the market or any working prototypes.
    After identifying all potential technology options for improving 
the efficiency of residential dehumidifiers, DOE performed a screening 
analysis (see section IV.B of this proposed rule and chapter 4 of the 
NOPR TSD) to determine which technologies merited further 
consideration.

B. Screening Analysis

    DOE uses the following four screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    1. Technological feasibility. Technologies that are not 
incorporated in commercial products or in working prototypes will not 
be considered further.
    2. Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the effective date of the standard, then that technology will 
not be considered further.
    3. Impacts on product utility to consumers. If a technology is 
determined to have significant adverse impact on the utility of the 
product to significant subgroups of consumers, or result in the 
unavailability of any covered product type with performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes that are substantially the same as products generally 
available in the U.S. at the time, it will not be considered further.
    4. Safety of technologies. If it is determined that a technology 
will have significant adverse impacts on health or safety, it will not 
be considered further. (10 CFR part 430, subpart C, appendix A, 5(b))
    In sum, if DOE determines that a technology, or a combination of 
technologies, fails to meet one or more of the above four criteria, it 
will be excluded from further consideration in the engineering 
analysis. The reasons for eliminating any technology are discussed 
below.
    The subsequent sections include comments from interested parties 
pertinent to the screening criteria, DOE's evaluation of each 
technology option against the screening analysis criteria, and whether 
DOE determined that a technology option should be excluded (``screened 
out'') based on the screening criteria.
1. Screened-Out Technologies
Pre-Cooling Air-to-Air Heat Exchangers (for Portable Dehumidifiers Up 
to 45 Pints/Day)
    Based on teardowns and research, DOE determined that portable 
dehumidifiers with capacities up to 45 pints/day have little room to 
incorporate additional components within the product case (see chapter 
4, section 4.2.1 of the NOPR TSD). DOE estimated that the addition of 
an effective pre-cooling air-to-air heat exchanger would require case 
sizes to, at a minimum, double. Because of the increased size and 
weight, DOE determined that incorporating a pre-cooling air-to-air heat 
exchanger in portable dehumidifiers with capacities up to 45 pints/day 
would have an adverse impact on product utility to consumers. Because 
this design option would result in the unavailability of products with 
the same size and volume as products currently available on the market, 
DOE screened out pre-cooling air-to-air heat exchangers as a design 
option for portable dehumidifiers with capacities up to 45 pints/day.
    AHAM supported screening out pre-cooling air-to-air heat exchangers 
for smaller-capacity dehumidifiers. They noted that the pre-cooling 
heat exchangers would make larger-capacity products even bigger, 
because the enclosure would need to be bigger, which could impact 
portability and consumer utility. (AHAM, No. 22 at p. 6) DOE maintains 
its proposal to eliminate pre-cooling inlet air-to-air heat exchangers 
from further consideration for portable products with capacity less 
than 45 pints/day. For portable products with capacities greater than 
45 pints/day, DOE notes that certain products available on the market 
already incorporate this technology option. Thus, DOE has maintained it 
as a potential design

[[Page 31660]]

option for this larger-capacity product class.
Heat Pipes (for Portable Dehumidifiers Up to 45 Pints/Day)
    In the preliminary analysis, DOE also identified heat pipes as a 
potential technology to increase dehumidifier efficiency. Heat pipes 
perform a similar function as pre-cooling air-to-air heat exchangers, 
lowering the inlet air temperature to increase the efficiency of the 
refrigeration system, except that heat pipes use a phase-change fluid 
to transfer heat between the two air streams. DOE estimated that the 
additional heat exchangers and fluid tubing for heat pipes would likely 
require significant increases in case size and overall weight for 
portable dehumidifiers with capacities of up to 45 pints/day, resulting 
in an adverse impact on product utility to consumers. Because this 
design option would result in the unavailability of products with the 
same weight and volume as products currently available on the market, 
DOE screened out heat pipes as a design option for portable 
dehumidifiers with capacities up to 45 pints/day. AHAM agreed that heat 
pipes should be screened out for smaller-capacity portable 
dehumidifiers due to their consumer utility impacts. (AHAM, No 22 at p. 
6)
    However, in the preliminary analysis, DOE retained heat pipes as a 
design option for whole-home dehumidifiers and portable dehumidifiers 
with capacities greater than 45 pints/day. DOE noted that many of these 
products already use larger case sizes to accommodate pre-cooling air-
to-air heat exchangers. Products incorporating heat pipes would likely 
require similar case volumes as the products available on the market 
that include pre-cooling air-to-air heat exchangers, and would not 
likely impact consumer utility for whole-home dehumidifiers and 
portable dehumidifiers with capacities greater than 45 pints/day.
    Regarding improved condenser and evaporator performance, AHAM 
commented that adjusting the cross-sectional area of the heat exchanger 
to increase heat transfer is feasible, but it will likely involve a 
change in enclosure size. AHAM suggested that DOE consider screening 
out this option for smaller capacities. (AHAM, No. 22 at p. 4) DOE 
agrees that increased heat exchanger areas may require an increase in 
enclosure size. However, larger coils requiring a larger case and 
chassis do not necessarily require moving to a product case as large as 
is needed for higher-capacity portable units (due to smaller heat 
exchangers as well as compressors, blowers, and condensate buckets). 
Accordingly, while there may be some increase in product sizes with 
increased heat exchanger area, DOE did not eliminate this technology 
option from further consideration because consumer utility could be 
maintained.
2. Remaining Technologies
    After a review of each technology, DOE found that all of the 
identified technologies, with the restrictions for pre-cooling air-to-
air heat exchangers and heat pipes discussed above, met all four 
screening criteria and are suitable for further examination in DOE's 
analysis.

         Table IV.6--Remaining Design Options for Dehumidifiers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. Built-in hygrometer/humidistat.
2. Improved compressor efficiency.
3. Improved condenser and evaporator performance.
4. Improved controls.
5. Improved defrost methods.
6. Improved demand-defrost controls.
7. Improved fan and fan-motor efficiency.
8. Improved flow-control devices.
9. Low-standby-loss electronic controls.
10. Washable air filters.
11. Pre-cooling air-to-air heat exchanger (high-capacity portable and
 whole-home dehumidifiers).
12. Heat pipes (high-capacity portable and whole-home dehumidifiers).
13. Improved refrigeration system insulation.
14. Refrigerant-desiccant systems.
------------------------------------------------------------------------

    DOE determined that these technology options are technologically 
feasible because they are being used or have previously been used in 
commercially available products or working prototypes. DOE also finds 
that all of the remaining technology options meet the other screening 
criteria (i.e., practicable to manufacture, install, and service and do 
not result in adverse impacts on consumer utility, product 
availability, health, or safety). For additional details, see chapter 4 
of the NOPR TSD.

C. Engineering Analysis

    In the engineering analysis DOE establishes the relationship 
between the manufacturer production cost (MPC) and improved residential 
dehumidifier efficiency. This relationship serves as the basis for 
cost-benefit calculations for individual consumers, manufacturers, and 
the nation. DOE typically structures the engineering analysis using one 
of three approaches: (1) Design option; (2) efficiency level; or (3) 
reverse engineering (or cost assessment). The design-option approach 
involves adding the estimated cost and associated efficiency of various 
efficiency-improving design changes to the baseline to model different 
levels of efficiency. The efficiency-level approach uses estimates of 
costs and efficiencies of products available on the market at distinct 
efficiency levels to develop the cost-efficiency relationship. The 
reverse-engineering approach involves testing products for efficiency 
and determining cost from a detailed bill of materials (BOM) derived 
from reverse engineering representative products.
    In the preliminary engineering analysis, DOE used a hybrid approach 
combining aspects of all three analytic methods described above. The 
efficiency-level approach for residential dehumidifiers, combined with 
the cost-assessment approach, allowed DOE to develop a cost for each 
product analyzed. DOE estimated that the costs for these products 
reflected the costs for typical units at their respective efficiency 
levels. This approach involved physically disassembling commercially 
available products, consulting with outside experts, reviewing publicly 
available cost and performance information, and modeling equipment 
cost. To ensure that DOE's analysis covered the entire range of 
capacities and efficiencies available on the market, DOE relied on the 
design-option approach to determine what changes would be needed for a 
particular unit to meet each incrementally higher EL.
    For this NOPR, DOE followed the same general approach as for the 
preliminary engineering analysis, but modified the analysis based on 
comments from interested parties and to reflect the most current 
available information. This section provides more detail on how DOE 
selected the ELs used for its analysis and developed the MPC at each 
EL. Chapter 5 of the NOPR TSD contains further description of the 
engineering analysis.
1. Efficiency Levels
a. Baseline Efficiency Levels
    A baseline unit is a product that just meets current Federal energy 
conservation standards and provides basic consumer utility. DOE uses 
the baseline unit for comparison in several phases of the NOPR 
analyses, including the engineering analysis, LCC analysis, PBP 
analysis, and NIA. To determine energy savings that will result from an 
amended energy conservation standard, DOE compares energy use at each 
of the higher energy ELs to the energy consumption of the baseline 
unit. Similarly, to determine the changes in price to the consumer that 
will result

[[Page 31661]]

from an amended energy conservation standard, DOE compares the price of 
a unit at each higher EL to the price of a unit at the baseline.
    As discussed in section IV.A.2 of this notice, DOE adjusted the 
existing dehumidifier product classes for the preliminary analysis to 
reflect capacities measured according to the test procedures proposed 
in the May 2014 Test Procedure NOPR. Similarly, DOE established 
baseline ELs in the preliminary engineering analysis by adjusting the 
existing baseline EFs to IEFs as would be measured under the proposed 
testing requirements. For the portable product classes, the most 
significant adjustments accounted for the lower ambient test 
temperature, and energy consumption in standby mode, off mode, and fan-
only mode. DOE also established separate baseline efficiencies for the 
two proposed whole-home dehumidifier product classes. Table IV.7 and 
Table IV.8 present the baseline ELs developed for the preliminary 
analysis. Additional information on the development of these baseline 
ELs is included in chapter 5, section 5.3.1 of the preliminary TSD.

     Table IV.7--Preliminary Analysis Portable Dehumidifier Baseline
                            Efficiency Levels
------------------------------------------------------------------------
                                                               IEF  (L/
                    Capacity  (pints/day)                        kWh)
------------------------------------------------------------------------
20.00 or less...............................................        0.77
20.01--30.00................................................        0.80
30.01--35.00................................................        0.94
35.01--45.00................................................        1.00
45.01 or more...............................................        2.07
------------------------------------------------------------------------


    Table IV.8--Preliminary Analysis Whole-Home Dehumidifier Baseline
                            Efficiency Levels
------------------------------------------------------------------------
                                                               IEF  (L/
          Product class  (case volume, cubic feet)               kWh)
------------------------------------------------------------------------
less than or equal to 8.0...................................        1.10
greater than 8.0............................................        1.68
------------------------------------------------------------------------

    In response to the preliminary analysis, AHAM commented that if the 
test procedure includes a measure of fan-only mode energy use, AHAM 
would support the proposed baseline IEF based on units with fan-only 
mode. (AHAM, No. 22 at p. 3) DOE notes that the appendix X1 test 
procedure incorporates energy consumption in fan-only mode into the 
calculation of IEF, and DOE considered units with fan-only mode to 
determine the proposed baseline IEF in this analysis.
    Aprilaire commented that it was not aware of any whole-home units 
that have a fan-only mode. According to Aprilaire, whole-home 
dehumidifiers use the HVAC air handler instead of the dehumidifier fan 
to circulate air inside the home. (Aprilaire, Public Meeting 
Transcript, No. 25 at pp. 23-24) Aprilaire's comment is consistent with 
what DOE observed during investigative testing. No whole-home units in 
DOE's test sample operated in fan-only mode. Accordingly, DOE has not 
adjusted the whole-home dehumidifier baseline levels to account for 
operation in this mode.
    For this NOPR, DOE maintained the baseline efficiencies determined 
for the preliminary analysis, with updates to reflect the combined 
product classes as discussed in section IV.A.1 of this notice. DOE set 
the baseline efficiency level for the combined product classes at the 
lower of the two baseline IEF levels considered in the preliminary 
analysis for the two previously separate product classes, because that 
IEF would be based on the minimum energy conservation standard 
currently applicable for any product within the combined product 
classes. Table IV.9 and Table IV.10 present the baseline efficiency 
levels used in this NOPR analysis.

      Table IV.9--Portable Dehumidifier Baseline Efficiency Levels
------------------------------------------------------------------------
                                                               IEF  (L/
                    Capacity  (pints/day)                        kWh)
------------------------------------------------------------------------
30.00 or less...............................................        0.77
30.01--45.00................................................        0.94
45.01 or more...............................................        2.07
------------------------------------------------------------------------


     Table IV.10--Whole-Home Dehumidifier Baseline Efficiency Levels
------------------------------------------------------------------------
                                                               IEF  (L/
          Product Class  (case volume, cubic feet)               kWh)
------------------------------------------------------------------------
8.0 or less.................................................        1.77
more than 8.0...............................................        2.41
------------------------------------------------------------------------

    Additional details on the selection of baseline units may be found 
in chapter 5, section 5.3.1 of the NOPR TSD.
b. Higher Energy Efficiency Levels
    For the preliminary analysis, DOE considered incremental efficiency 
levels beyond the baseline that were based on existing efficiency 
levels (e.g., the ENERGY STAR level) available in the market and 
observed during investigative testing. Similar to the baseline 
efficiency levels discussed above, DOE adjusted these efficiency levels 
to reflect values that would be obtained when using the test procedure 
proposed in the May 2014 Test Procedure NOPR. In addition, DOE proposed 
that the first incremental efficiency level beyond the baseline for 
each product class be achieved by the elimination of fan-only mode. 
Table IV.11 and Table IV.12 present the efficiency levels DOE 
considered in the preliminary analysis. Additional information on the 
development of incremental efficiency levels is included in chapter 5, 
section 5.3.2 of the preliminary TSD.

                                        Table IV.11--Preliminary Analysis Portable Dehumidifier Efficiency Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Integrated energy factor efficiency levels  (L/kWh)
                                                                    ------------------------------------------------------------------------------------
         Efficiency level               Efficiency level source       20.00  pints/     20.01-30.00      30.01-35.00      35.01-45.00     45.01  pints/
                                                                       day  or less      pints/day        pints/day        pints/day       day  or more
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.........................  Baseline with Fan-only Mode.....             0.77             0.80             0.94             1.00             2.07
1................................  Baseline with no Fan-only Mode..             1.10             1.10             1.20             1.30             2.40
2................................  Gap Fill 1......................             1.20             1.20           * 1.40           * 1.40             2.80
3................................  Gap Fill 2/Maximum Available....           * 1.30           * 1.30             1.60             1.60             3.52

[[Page 31662]]

 
4................................  Maximum Available...............             1.42             1.52             1.75             1.75  ...............
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These IEF levels represent a translation of the ENERGY STAR efficiency level of 1.85 L/kWh based on the current test conditions to the proposed test
  condition of 65 [deg]F for the given product class.


  Table IV.12--Preliminary Analysis Whole-Home Dehumidifier Efficiency
                                 Levels
------------------------------------------------------------------------
                                            Integrated energy factor
                                           efficiency levels  (L/kWh)
                      Efficiency level ---------------------------------
  Efficiency level         source        8.0 ft\3\  or    8.0 ft\3\  or
                                          less  (case      more  (case
                                            volume)          volume)
------------------------------------------------------------------------
Baseline...........  Minimum Available             1.10             1.68
1..................  Gap Fill 1.......             1.40             1.90
2..................  Gap Fill 2/                   1.59             2.80
                      Maximum
                      Available.
3..................  Maximum Available  ...............             3.41
------------------------------------------------------------------------

    In response to the preliminary analysis, AHAM commented that its 
members were conducting testing to compare performance at 
80[emsp14][deg]F and 65[emsp14][deg]F ambient conditions, and if 
possible, AHAM would provide this aggregated data to DOE. (AHAM, No. 22 
at p. 4) DOE has not received additional test data from AHAM at the 
time of this NOPR, and has therefore relied on its internal test data 
to establish appropriate IEF values for the incremental efficiency 
levels beyond the baseline.
    Aprilaire noted that there was only about an 11-percent difference 
between the current DOE energy conservation standards and ENERGY STAR 
qualification criteria. Aprilaire stated that if the purpose of ENERGY 
STAR is to promote the best technology at the best value, the current 
DOE and ENERGY STAR requirements may not provide sufficient consumer 
choices and differentiation to promote using the latest technology. 
(Aprilaire, Public Meeting Transcript, No. 25 at pp. 48, 50) Although 
the U.S. Environmental Protection Agency (EPA), rather than DOE, 
establishes the ENERGY STAR qualification criteria, DOE selected the 
current ENERGY STAR level as the basis for an efficiency level in each 
portable product dehumidifier product class because many products 
available on the market are rated at that level. While the ENERGY STAR 
level does not represent a large jump in efficiency from the current 
DOE standards, on a percentage basis, the range of dehumidifier 
efficiencies on the market is not large, and the increase in efficiency 
from baseline to ENERGY STAR represents a significant increase in 
efficiency over this range. DOE also evaluated higher ELs than the 
ENERGY STAR level.
    Aprilaire asked why there was such a large difference between the 
highest efficiency levels for the two whole-home product classes. 
(Aprilaire, Public Meeting Transcript, No. 25 at p. 33) DOE notes that 
the smaller case volume for the less than 8.0 ft\3\ product class 
limits the available technology options that may be incorporated into 
these units. For example, the smaller case limits the size of the 
condenser and evaporator heat exchangers and the ability to incorporate 
a pre-cooling heat exchanger. Units with larger case volumes are able 
to more easily incorporate these design options and thus can achieve a 
higher max-tech efficiency.
    For the preliminary analysis, DOE used the maximum available 
efficiencies as the highest efficiency levels for its analysis, and 
requested feedback on whether these levels were appropriate. ASAP asked 
whether the max-tech levels should be higher than the current maximum 
available efficiency levels. ASAP also asked whether the max-tech level 
is independent of what level might be appropriate for a standard. 
(ASAP, Public Meeting Transcript, No. 25 at pp. 34-35) The Joint 
Commenters stated that DOE should evaluate potential efficiency 
improvements beyond the maximum available level, and should not use the 
maximum available level as a proxy for the max-tech levels. They stated 
that, for example, modest increases in chassis size, permanent-magnet 
fan motors, and additional heat exchanger improvements may provide 
further efficiency gains, and that the max-tech levels would likely be 
higher than the efficiency levels of the most-efficient currently 
available products. (Joint Commenters, No. 23 at pp. 2-3) The 
California IOUs commented that the max-tech efficiency level should be 
based on modeled efficiencies, as opposed to products currently 
available in the market. They stated that it is important for DOE to 
either physically test or model a true max-tech level of dehumidifier 
efficiency, and this level need not be constrained by cost or other 
factors that are present in normal commercial product development. The 
California IOUs stated that this max-tech option should incorporate 
every known measure to maximize efficiency (e.g., inlet air pre-
cooling, improved compressor efficiency, and improved condenser and 
evaporator heat transfer rate). They stated that in addition to 
capturing the full energy savings potential, existing dehumidifiers 
could be compared to this benchmark to determine effective timeframes 
for when the commercial market could meet the max-tech level. 
(California IOUs, No. 24 at p. 4)
    DOE establishes the max-tech level as the maximum efficiency that 
is technologically feasible for the covered product. In analyzing 
potential standards, DOE is not constrained to selecting max-tech 
levels as the proposed standards levels. DOE agrees that dehumidifiers 
commercially

[[Page 31663]]

available at this time may not incorporate all design options that are 
technologically feasible, and therefore revised the max-tech efficiency 
levels to incorporate additional design options beyond those observed 
in its test sample. DOE then modeled the increased efficiency 
associated with these new max-tech levels.
    For the NOPR analysis, another key change to the efficiency levels 
considered for the preliminary analysis was to combine the previous 
four lowest capacity portable product classes into two, as discussed in 
section IV.A.1 of this proposed rule. The two portable product classes 
from the preliminary analysis with capacities less than 30.00 pints/day 
each have three identical intermediate efficiency levels. For the 
combined 30.01 to 45.00 pints/day product class, DOE used an IEF of 
1.20 L/kWh for Efficiency Level 1. The previous Efficiency Level 1 for 
the 35.01 to 45.00 product class in the preliminary analysis was at an 
IEF of 1.30 L/kWh. DOE chose an IEF of 1.20 L/kWh as the appropriate 
level for the combined product class because this represents the 
baseline IEF with no fan-only mode; therefore, DOE concluded it would 
be appropriate to maintain the lower of the two IEFs at this level for 
the combined product class.
    DOE also updated the efficiency levels for the whole-home 
dehumidifier classes based on the appendix X1 test procedures, which 
require a different ambient dry-bulb temperature (73 [deg]F instead of 
65 [deg]F) from that proposed in the May 2014 Test Procedure NOPR and a 
different external static pressure (0.20 inches of water column instead 
of 0.5 and 0.25 inches of water column) from those proposed in the May 
2014 Test Procedure NOPR and the February 2015 Test Procedure SNOPR).
    Table IV.13 and Table IV.14 present the revised efficiency levels 
DOE considered in this NOPR analysis.

                       Table IV.13--NOPR Analysis Portable Dehumidifier Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                                                Integrated energy factor efficiency levels  (L/
                                                                                      kWh)
       Efficiency level            Efficiency level source    --------------------------------------------------
                                                                30.00  pints/     30.01-45.00     45.01  pints/
                                                                 day  or less      pints/day       day  or more
----------------------------------------------------------------------------------------------------------------
Baseline......................  Current Baseline with Fan-                0.77             0.94             2.07
                                 only Mode.
1.............................  Current Baseline with no Fan-             1.10             1.20             2.40
                                 only Mode.
2.............................  Gap Fill 1...................             1.20             1.40             2.80
3.............................  Gap Fill 2/Max Tech..........             1.30             1.60             3.66
4.............................  Max Tech.....................             1.57             1.80  ...............
----------------------------------------------------------------------------------------------------------------


  Table IV.14--NOPR Analysis Whole-Home Dehumidifier Efficiency Levels
------------------------------------------------------------------------
                                            Integrated energy factor
                                           efficiency levels  (L/kWh)
                      Efficiency level ---------------------------------
  Efficiency level         source        8.0 ft\3\  or    More than  8.0
                                          less  (case      ft\3\  (case
                                            volume)          volume)
------------------------------------------------------------------------
Baseline...........  Minimum Available             1.77             2.41
1..................  Gap Fill 1.......             2.09             2.70
2..................  Gap Fill 2/Max                2.53             3.52
                      Tech.
3..................  Max Tech.........  ...............             4.50
------------------------------------------------------------------------

    Additional details on the selection of incremental efficiency 
levels may be found in chapter 5, section 5.3.2 of the NOPR TSD.
2. Manufacturer Production Cost Estimates
    Based on product teardowns and cost modeling conducted in the 
preliminary analysis, DOE developed overall cost-efficiency 
relationships for each product class considered in that analysis. DOE 
selected products covering the range of efficiencies available on the 
market for the teardown analysis. During the teardown process, DOE 
created detailed bills of materials (BOMs) that included all components 
and processes used to manufacture the products. DOE used the BOMs from 
the teardowns as an input to a cost model, which was used to calculate 
the MPC for products covering the range of efficiencies available on 
the market. The MPC accounts for labor, material, overhead, and 
depreciation costs that a manufacturer would incur in producing a 
specific dehumidifier. DOE also developed BOMS and MPCs for theoretical 
units that could implement the current max-tech for dehumidifier 
components.
    For the preliminary analysis, DOE estimated that the costs for 
these products reflected the costs for typical units at their 
respective efficiency levels, consistent with the efficiency-level 
approach. DOE then used the design-option approach to determine what 
changes would be needed for a particular unit to meet each 
incrementally higher efficiency level. DOE constructed cost-efficiency 
curves for multiple manufacturers to reflect the incremental MPC 
corresponding to each manufacturer's product line and available 
platforms. DOE combined the individual cost-efficiency curves based on 
estimates of each manufacturer's market share to develop an overall 
cost-efficiency curve representative of the entire industry. Table IV. 
15 shows the incremental MPCs developed in the preliminary analysis for 
each product class at each of the analyzed efficiency levels compared 
to the baseline MPC. The incremental MPCs are presented in 2012 dollars 
(2012$), which reflects the year in which the preliminary analysis 
teardowns and modeling were performed.

[[Page 31664]]



                                Table IV.15--Preliminary Analysis Dehumidifier Incremental Manufacturer Production Costs
                                                                         [2012$]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Portable product class capacities  (pints/day)                   Whole-home product class case
-------------------------------------------------------------------------------------------------------------------------      volume  (cubic feet)
                                                                                                                         -------------------------------
            Efficiency level                  <=20.00       20.01-30.00     30.01-35.00     35.01-45.00       >45.00           <=8.0           >8.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
EL1.....................................             $--             $--             $--             $--          $38.40          $15.22           $6.14
EL2.....................................            1.56            1.85            2.94            1.98           49.16           76.18           37.05
EL3.....................................            4.64            3.78            8.72            7.56          100.13             N/A          112.01
EL4.....................................            7.77           10.82           13.40           11.24             N/A             N/A             N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 5.5 of Chapter 5 of the preliminary TSD contains additional 
details on the analysis conducted in support of developing these MPC 
estimates.
    DOE received multiple comments from interested parties on the 
engineering analysis and MPC estimates developed for the preliminary 
analysis. GE Appliances (GE) commented that it is very low cost to get 
to Efficiency Level 1 by eliminating fan-only mode because it only 
requires software changes. (GE, Public Meeting Transcript, No. 25 at p. 
43) AHAM and GE commented that removing fan-only mode reduces consumer 
utility with longer defrost times at lower temperatures, less stability 
of the humidity in the environment, and stagnation of the air. AHAM 
also stated that for manufacturers that would not want to make these 
tradeoffs, Efficiency Level 1 would be nearly impossible to meet by 
combining other technology options. (AHAM, No. 22 at p. 3; GE, Public 
Meeting Transcript, No. 25 at p. 43) DOE continues to expect 
manufacturers would remove fan-only mode in products as a first step to 
improving efficiency because of the low cost and ease of 
implementation. Many units available on the market already do not 
incorporate fan-only mode. In manufacturer interviews, manufacturers 
typically stated that there would be no impact on consumer utility to 
remove fan-only mode. DOE also notes that although it asserts that 
manufacturers would remove fan-only mode to reach Efficiency Level 1, 
manufacturers may elect to incorporate other design options to improve 
efficiency to that level.
    Aprilaire asked whether DOE considered in its analysis the limited 
availability of compressor technologies for the larger dehumidifiers. 
Aprilaire noted that compressors in larger dehumidifiers do not have a 
lot of new technologies and sizes available to them. Manufacturers 
would have to increase efficiency by increasing coil sizes or 
incorporating features such as air-to-air heat exchangers or wrap-
around coils, which would be very expensive for the manufacturer. 
(Aprilaire, Public Meeting Transcript, No. 25 at pp. 23-24) AHAM 
commented that compressor efficiency has not been increasing 
significantly. Manufacturers may be seeking to incorporate higher 
efficiency compressors, but it is possible that compressors are 
reaching close to max-tech levels such that selecting a higher 
efficiency compressor may be cost prohibitive. (AHAM, No. 22 at p. 4)
    For the preliminary engineering analysis, DOE identified the range 
of compressor capacities observed in dehumidifiers available on the 
market. DOE then identified the range of efficiencies for all available 
compressors within that capacity range. When evaluating higher 
compressor efficiencies, DOE considered the most efficient rotary R-
410A compressor available in the required range of capacities, without 
requiring a switch to a different compressor technology. Additionally, 
DOE factored in the compressor efficiencies observed in products in its 
teardown sample when determining the overall efficiency gains that may 
be achieved through compressor improvements. If a dehumidifier already 
incorporated an efficient compressor, DOE relied on other design 
options such as increasing heat exchanger sizes to improve 
efficiencies.
    In AHAM's comments on the preliminary engineering analysis cost 
estimates, it asked for more information on how a 3,000 Btu/h 
compressor would be estimated to cost less than $7. (AHAM, Public 
Meeting Transcript, No. 25 at p. 38) GE commented that because there 
are very few room air conditioner compressors rated as low as 5,000 
Btu/h, the curve used to determine compressor prices is probably valid 
only down to 5,000 Btu/h. (GE, Public Meeting Transcript, No. 25 at p. 
39) DOE notes that in the preliminary analysis, it relied on the room 
air conditioner compressor cost curve only over the range of capacities 
for which it was developed, 5,000 to 24,000 Btu/h. DOE used the $7 cost 
for a 3,000 Btu/h compressor as an example of an inappropriately low 
cost from extrapolating the cost curve below its lower limit (5,000 
Btu/h). DOE did not use this cost estimate in the preliminary analysis 
or in this NOPR. In both the preliminary analysis and this NOPR, DOE 
estimated that compressor costs would continue to decrease for 
compressor capacities less than 5,000 Btu/h, but estimated a more 
conservative linear decrease in costs compared to extrapolating the 
room air conditioner curve. (For additional information, see chapter 5, 
section 5.5.5 of the preliminary TSD.)
    ASAP asked if DOE had evaluated heat exchanger improvements other 
than increasing the cross-sectional area, and if so, which improvement 
had the largest impact. (ASAP, Public Meeting Transcript, No. 25 at p. 
46) AHAM commented that manufacturers might choose to rely on heat 
exchanger sizes to improve condenser and evaporator performance, but 
larger coils mean more static pressure, thus adding more costly motors. 
(AHAM, No. 22 at pp. 3-4)
    As part of the preliminary analysis, DOE considered additional heat 
exchanger design changes, including increasing the number of tube 
passes and heat exchanger depth in the direction of the air flow. DOE 
modeled the efficiency improvements of these changes, as well as an 
increase in cross-sectional area, and found that increasing the heat 
exchanger cross-sectional area resulted in the greatest efficiency 
improvement. As noted in section 5.5.1 and throughout chapter 5 of the 
preliminary TSD, DOE asserted that manufacturers would rely on this 
heat exchanger design change to reach higher efficiency levels. 
Manufacturers confirmed during interviews that they would typically 
rely on increased cross-sectional area rather than other heat exchanger 
design changes to reach higher efficiencies. In considering larger 
cross-sectional areas, DOE also did not assume a corresponding increase 
in motor power. DOE expects that the

[[Page 31665]]

static pressure over the heat exchanger would not increase with larger 
cross-sectional area because of the lower relative air velocity through 
the coil.
    ASAP asked whether a fixed standby power level is incorporated into 
each IEF level. ASAP noted that the preliminary analysis does not 
include reduced standby power as a design option, which is reasonable 
as long as the standby power levels at each efficiency level are low. 
ASAP further commented that the energy study that DOE cited in the 
preliminary TSD found standby power levels for some products to be as 
high as 12 watts (W), and requested confirmation that high standby 
power levels are not incorporated in the IEFs. (ASAP, Public Meeting 
Transcript, No. 25 at pp. 44-45) AHAM agreed with DOE's determination 
in the preliminary analysis that manufacturers would rely on changes 
other than low-standby-loss electronic controls to achieve the 
relatively large increments in efficiency levels. (AHAM, No. 22 at p. 
5)
    In section 5.5.3.2 of the preliminary TSD, DOE noted that while the 
average low-power mode power draw for units in its test sample was 
lower for a switch-mode power supply compared to a linear power supply 
(0.4 W compared to 1.2 W), these values, incorporated into the same 
unit, would have a negligible effect on the final rounded IEF. 
Accordingly, DOE did not consider improving low-power mode energy 
consumption at any efficiency level. If a unit did indeed have a 12 W 
low-power mode power draw, DOE expects that the manufacturer would 
switch to low-standby-power controls to improve IEF. However, DOE notes 
that the 12 W level was observed in the field, and does not necessarily 
reflect the control settings and operation of the unit as tested 
according to the low-power mode testing provisions in the appendix X1 
test procedures. DOE did not observe any standby mode or off mode power 
levels higher than 4.5 W in its testing of a large sample of 
dehumidifiers from manufacturers representing over 80 percent of the 
market.
    GE and AHAM commented that Underwriters Laboratories (UL) has a new 
standard, UL 474, which requires Arc Fault Circuit Interrupter (AFCI) 
protection to be added to all cord-connected dehumidifiers manufactured 
on or after February 6, 2017. Adding AFCI protection to dehumidifiers 
will increase standby power. According to GE, the increase in standby 
power would be about 0.5 W. (AHAM, No. 22 at p. 7; GE, Public Meeting 
Transcript, No. 25 at pp. 47-48) This estimated increase in low-power 
mode power draw is similar to the range in low-power mode power 
consumption that DOE observed among the units in its test sample, and 
which DOE determined had little or no effect on the final rounded IEF 
value. Accordingly, DOE determined that the new UL 474 standard would 
not require adjusting the IEF values considered for each efficiency 
level.
    In chapter 5, section 5.5.3.2 of the preliminary TSD, DOE provided 
discussion on a number of design options that were not directly 
considered in the engineering analysis. These design options were 
described in chapter 3, section 3.14.2 of the preliminary TSD. AHAM 
agreed that:
    1. A built-in hygrometer/humidistat would not result in efficiency 
gains.
    2. Because the test procedure requires continuous unit operation at 
constant ambient conditions, it would not reflect improved control 
schemes and thus these should not be further considered in the 
analysis.
    3. If DOE adopts the 65 [deg]F ambient condition, manufacturers 
would likely adjust their units to avoid defrosts when operating at 
that condition, and thus improved defrost methods should not be 
considered further in the analysis.
    4. Demand-defrost controls should not be considered because units 
on the market already feature sensor-based defrost control and because 
the test procedure would not capture efficiency improvements from it.
    5. Any benefit associated with the unit's ability to adjust to 
varying ambient conditions would not be captured by the test procedure, 
and thus improved flow-control devices should not be further considered 
in the analysis.
    6. Washable air filters are not a design option because all units 
DOE analyzed include this feature.
    7. Improved refrigeration system insulation should not be 
considered as a design option because DOE did not observe a 
relationship between efficiency and insulation. (AHAM, No. 22 at pp. 4-
6)
    The California IOUs commented that measures that were rejected 
because their impact would not be directly observable under the current 
DOE test procedure--variable-speed compressors, permanent-magnet fan 
motors, improved controls (standby power consumption, relative humidity 
set-point accuracy, refrigerant flow controls, improved defrost 
controls), and improved insulation in the refrigeration system--all 
have the potential for significant energy use reduction and therefore 
should be considered as design options. The California IOUs stated that 
a number of areas for improving the accuracy and range of controls 
could greatly enhance overall dehumidifier efficiency, and although the 
majority of these measures would not significantly affect the rated 
active mode efficiency of dehumidifiers under the current test 
procedure, they should be considered as design options because future 
updates to the test procedure may properly account for these efficiency 
gains. (California IOUs, No. 24 at pp. 4 and 5) The California IOUs 
also commented that DOE should consider requiring dehumidifiers to 
contain hygrometers, which would reduce overall energy use by 
automatically controlling active mode operation based on ambient 
temperature and humidity conditions. They stated that more advanced 
controls are capable of using data from hygrometers to optimize 
compressor and fan usage by utilizing a pre-programmed compressor and 
fan schedule over a range of dry-bulb and wet-bulb temperature 
combinations. They also stated that because some hygrometers can be 
inaccurate, which could cause units to run much longer duty cycles than 
the user intends, DOE should consider requiring a certain hygrometer 
accuracy and should modify the test procedure to accommodate this 
measurement. (California IOUs, No. 24 at p. 5)
    DOE identified these design options in the market and technology 
assessment because of their potential to increase dehumidifier 
efficiencies in real-world applications. However, because the benefits 
of these design options would likely not be measured under the appendix 
X1 test procedure, DOE determined that manufacturers would not likely 
incorporate the design options to existing products to reach higher 
efficiency levels. The appendix X1 test procedure determines 
dehumidifier performance under constant ambient conditions, and 
therefore would not reflect potential energy impacts of design options 
that improve controls to adjust unit operation to respond to ambient 
conditions. Accordingly, DOE requests comment on whether to promote 
installation of any of the design options identified by the California 
IOUs, even though the resulting efficiency gains would not be 
measurable with the existing test protocol.
    ASAP and the Joint Commenters stated that DOE should include the 
efficiency improvements associated with permanent-magnet fan motors 
unless the savings are trivial. (ASAP, Public Meeting Transcript, No. 
25 at pp. 45-46; Joint Commenters, No. 23 at pp. 2-3) The Joint 
Commenters also stated

[[Page 31666]]

that while costs to both consumers and manufacturers are important 
considerations in determining appropriate standard levels, costs can't 
be considered in establishing the max-tech levels. They also noted that 
DOE analyzed permanent-magnet fan motors in several recent rulemakings 
(furnace fans, walk-in coolers and freezers, commercial refrigeration 
equipment). (Joint Commenters, No. 23 at pp. 2-3) AHAM commented in 
agreement with DOE's determination in the preliminary analysis that 
improved fan and fan-motor efficiency should not be considered because 
DOE found no significant changes to blowers and fan motors at different 
efficiencies. (AHAM, No. 22 at p. 5)
    In improving the max-tech efficiencies beyond the maximum 
available, as discussed in section IV.C.1.b of this proposed rule, DOE 
included a change to permanent-magnet fan motors. While manufacturers 
do not currently incorporate permanent-magnet fan motors in products 
available on the market, DOE determined that this is a technologically 
feasible change that would improve product efficiencies. The revised 
MPCs for the NOPR analysis reflect this design change, as well as 
others, at the max-tech efficiency level.
    For the NOPR analysis, DOE also updated the incremental MPC 
estimates from the preliminary analysis to combine the four lower 
capacity portable product classes into two, as discussed in section 
IV.A.1 of this proposed rule. To combine the cost estimates from the 
previous separate portable product classes, DOE used the market shares 
discussed in the preliminary analysis (see chapter 9, section 9.3.3 of 
the preliminary TSD) to determine a weighted average of the previous 
cost estimates. Additionally, DOE updated the MPCs to 2013$, the most 
recent year for which full-year data was available at the time of this 
analysis. DOE notes that the whole-home test procedure revisions did 
not impact the MPC cost estimates for those product classes. DOE 
assumed products would maintain the same construction as considered for 
the preliminary analysis, with updated IEFs to reflect the proposed, 
revised test conditions. Table IV.16 presents the updated MPC estimates 
DOE developed for this NOPR.

                Table IV.16--NOPR Analysis Dehumidifier Incremental Manufacturer Production Costs
                                                     [2013$]
----------------------------------------------------------------------------------------------------------------
                                  Portable product class capacities  (pints/day)   Whole-home product class case
                                 ------------------------------------------------         volume  (ft\3\)
        Efficiency level                                                         -------------------------------
                                      <=30.00       30.01-45.00       >45.00           <=8.0           >8.0
----------------------------------------------------------------------------------------------------------------
EL1.............................             $--             $--          $42.81          $15.30           $6.20
EL2.............................            1.69            2.39           53.66          129.22           37.20
EL3.............................            4.27            8.07          120.33             N/A          161.39
EL4.............................           19.38           22.42             N/A             N/A             N/A
----------------------------------------------------------------------------------------------------------------

    Additional details on the development of the incremental cost 
estimates may be found in chapter 5 of the NOPR TSD.

D. Markups Analysis

    The markups analysis develops appropriate markups in the 
distribution chain to convert the MPC estimates derived in the 
engineering analysis to consumer prices. At each step in the 
distribution channel, companies mark up the price of the product to 
cover business costs and profit margin. For residential dehumidifiers, 
the main parties in the distribution chain are manufacturers and 
retailers.
    The manufacturer markup converts MPC to manufacturer selling price 
(MSP). DOE developed an average manufacturer markup by examining the 
annual Securities and Exchange Commission (SEC) 10-K reports filed by 
publicly traded manufacturers primarily engaged in appliance 
manufacturing and whose combined product range includes residential 
dehumidifiers.
    For retailers, DOE developed separate markups for baseline products 
(baseline markups) and for the incremental cost of more efficient 
products (incremental markups). Incremental markups are coefficients 
that relate the change in the MSP of higher-efficiency models to the 
change in the retailer sales price. DOE relied on economic data from 
the U.S. Census Bureau to estimate average baseline and incremental 
markups.\26\
---------------------------------------------------------------------------

    \26\ U.S. Census, 2007 Annual Retail Trade Survey (ARTS), 
Electronics and Appliance Stores sectors.
---------------------------------------------------------------------------

    Chapter 6 of the NOPR TSD provides details on DOE's development of 
markups for residential dehumidifiers.

E. Energy Use Analysis

    DOE's energy use analysis estimated the range of energy use of 
residential dehumidifiers in the field, i.e., as they are actually used 
by consumers. The energy use analysis provided the basis for other 
analyses DOE performed, particularly assessments of the energy savings 
and the savings in consumer operating costs that could result from 
adoption of amended standards.
    A dehumidifier uses energy when the compressor is operating to 
remove moisture from the air. When the compressor is not operating, the 
dehumidifier may use energy for a fan-only mode that circulates air 
through the unit to sample the ambient relative humidity and to defrost 
the condenser coils. When neither the fan nor the compressor is 
operating, energy is used in standby mode or off mode to supply power 
for functions such as keeping a user panel lit.
    DOE determined the annual energy consumption of residential 
dehumidifiers by multiplying the capacity (liters per day) by the hours 
of operation in dehumidification mode, dividing that quantity by the 
product efficiency, and adding the energy use for the fan mode and the 
standby and off mode.
    The efficiency and capacity values were measured using a 
temperature of 80[emsp14][deg]F and humidity set point of 60 percent, 
as stipulated in the current test procedure for dehumidifiers.
    To estimate hours of operation in each mode, DOE used two recent 
field studies that measured daily hours of use in each operating mode 
for both portable and whole-home dehumidifiers.\27\ DOE paired these 
data with estimates of the number of months that dehumidifiers are used 
in a representative sample of U.S.

[[Page 31667]]

households. DOE used data from the EIA's 2009 Residential Energy 
Consumption Survey (RECS 2009), which was the most recent such survey 
available at the time of DOE's analysis.\28\ RECS is a national sample 
survey of housing units that collects statistical information on the 
consumption of and expenditures for energy in housing units along with 
data on energy-related characteristics of the housing units and 
occupants. RECS 2009 questioned each household on two aspects of 
dehumidifier use: (1) Ownership and (2) number of months of 
dehumidifier use. DOE estimated that consumers leave the dehumidifier 
to cycle on and off for the entire month or months of the 
dehumidification season.
---------------------------------------------------------------------------

    \27\ Willem, H., et al., Using Field-Metered Data to Quantify 
Annual Energy Use of Residential Portable Unit Dehumidifiers, 
Lawrence Berkeley National Laboratory (Nov. 2013); Willem, H., et 
al., Field-Monitoring of Whole-Home Dehumidifiers: Initial Results 
of a Pilot Study, Lawrence Berkeley National Laboratory (Nov. 2013).
    \28\ U.S. Department of Energy: Energy Information 
Administration, Residential Energy Consumption Survey: 2009 RECS 
Survey Data (2013) (Available at: http://www.eia.gov/consumption/residential/data/2009/).
---------------------------------------------------------------------------

    DOE estimated the energy use for the fan mode and the standby and 
off mode using the hours of operation described above, along with data 
on average power in fan and standby modes from the field studies.
    Chapter 7 of the NOPR TSD provides details on DOE's energy use 
analysis for residential dehumidifiers.

F. Life-Cycle Cost and Payback Period Analysis

    In determining whether an energy conservation standard is 
economically justified, DOE considers the economic impact of potential 
standards on consumers. The effect of new or amended energy 
conservation standards on individual consumers usually involves a 
reduction in operating cost and an increase in purchase cost. DOE used 
the following two metrics to measure consumer impacts:
     LCC (life-cycle cost) is the total consumer cost of an 
appliance or product, generally over the life of the appliance or 
product. The LCC calculation includes total installed cost (equipment 
manufacturer selling price, distribution chain markups, sales tax, and 
installation costs), operating costs (energy, repair, and maintenance 
costs), equipment lifetime, and discount rate. Future operating costs 
are discounted to the time of purchase and summed over the lifetime of 
the appliance or product.
     PBP (payback period) measures the amount of time it takes 
consumers to recover the estimated higher purchase price of a more 
energy-efficient product through reduced operating costs. Inputs to the 
payback period calculation include the installed cost to the consumer 
and first-year operating costs.
    For any given EL, DOE measures the change in LCC relative to the 
LCC in the base case, which reflects the market in the absence of new 
or amended energy conservation standards, and includes baseline 
products as well as products with higher efficiency. In contrast, the 
PBP for a given EL is measured relative to the baseline product only.
    For each product class efficiency level, DOE calculated the LCC and 
PBP for a nationally representative set of housing units. As stated 
previously, DOE developed household samples with RECS 2009 data. For 
each sample household, DOE determined the energy consumption for the 
residential dehumidifier and the appropriate electricity price. By 
developing a representative sample of households, the analysis captured 
the variability in energy consumption and energy prices associated with 
the use of residential dehumidifiers.
    AHAM continues to oppose DOE's reliance on RECS 2009 for the LCC 
and PBP analysis. AHAM considers it difficult, if not impossible, to 
compare the results to the energy use measured in a controlled test 
procedure situation. (AHAM, No. 22 at p. 6)
    The LCC and PBP analyses are designed to support DOE's 
consideration of the economic impact of potential standards on 
consumers of the products subject to the standard, as required by EPCA. 
(42 U.S.C. 6295(o)(2)(B)(i)(I)) The use of RECS 2009 to develop a 
consumer sample and to provide data for estimation of product energy 
use allows DOE to characterize the range of conditions in which covered 
appliances are operated. As a result, DOE is able to estimate how the 
energy savings would vary among households for each considered EL. 
Measurement of energy use in a controlled test procedure situation has 
a different purpose, which is to provide accurate and comparable 
measures of energy efficiency for particular covered products.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 
consumption, energy prices and price projections, repair and 
maintenance costs, product lifetimes, and discount rates. DOE created 
distributions of values for product lifetime, discount rates, and sales 
taxes, with probabilities attached to each value, to account for their 
uncertainty and variability.
    The computer model DOE uses to calculate the LCC and PBP, which 
incorporates Crystal Ball\TM\ (a commercially available software 
program), relies on a Monte Carlo simulation to incorporate uncertainty 
and variability into the analysis. The Monte Carlo simulations randomly 
sample input values from the probability distributions and residential 
dehumidifier user samples. The model calculated the LCC and PBP for 
products at each efficiency level for 10,000 housing units per 
simulation run.
    DOE calculated the LCC and PBP for all customers as if each were to 
purchase a new product in the expected year of compliance with amended 
standards. The amended standards would apply to residential 
dehumidifiers manufactured 3 years after the date on which the amended 
standards for residential dehumidifiers are published. At this time, 
DOE estimates publication of a final rule in 2016. Therefore, for 
purposes of its analysis, DOE used 2019 as the first year of compliance 
with any amended standards.
    Table IV.17 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the NOPR TSD and its appendices.

 Table IV.17--Summary of Inputs and Methods for the LCC and PBP Analysis
                                    *
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Product Cost......................  Derived by multiplying MPCs by
                                     manufacturer and retailer markups
                                     and sales tax, as appropriate. Used
                                     historical data to derive a price
                                     scaling index to forecast product
                                     costs.
Installation Costs................  Baseline installation cost
                                     determined with data from RS Means.
                                     Assumed no change with efficiency
                                     level.

[[Page 31668]]

 
Annual Energy Use.................  The total annual energy use
                                     multiplied by the hours per year.
                                     Average number of hours based on
                                     field data.
                                    Variability: Based on the 2009 RECS.
Energy Prices.....................  Electricity: Based on EIA's Form 861
                                     data for 2012.
                                    Variability: Regional energy prices
                                     determined for 27 regions.
                                    Variability: By census region.
Energy Price Trends...............  Energy: Forecasted using AEO 2015
                                     price forecasts.
Repair and Maintenance Costs......  Assumed no change with efficiency
                                     level.
Product Lifetime..................  Portable dehumidifiers: used
                                     lifetime from the previous DOE
                                     rulemaking for dehumidifiers.
                                    Whole-home dehumidifiers: applied
                                     the lifetime parameters derived for
                                     room air conditioners.
Discount Rates....................  Approach involves identifying all
                                     possible debt or asset classes that
                                     might be used to purchase the
                                     considered appliances, or might be
                                     affected indirectly. Primary data
                                     source was the Federal Reserve
                                     Board's SCF ** for 1989, 1992,
                                     1995, 1998, 2001, 2004, 2007, and
                                     2010.
Projected Compliance Date.........  2019
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
  in the sections following the table or in chapter 8 of the NOPR TSD.
** Survey of Consumer Finances.

1. Product Cost
    To calculate consumer product costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described above 
(along with sales taxes). DOE used different markups for baseline 
products and higher-efficiency products, because DOE applies an 
incremental markup to the increase in MSP associated with higher-
efficiency products.
    In the preliminary analysis, DOE projected future dehumidifier 
prices using a trend based on the appropriate Producer Price Index 
(PPI) series. AHAM submitted a comment on the preliminary analysis 
opposing the use of experience curves to project future product prices. 
(AHAM, No. 22 at pp. 6-7)
    There is extensive literature supporting the use of experience 
curves (also known as learning curves) for a broad range of products. 
The approach that DOE has used in some rulemakings to derive an 
experience rate (defined as the fractional reduction in price expected 
from each doubling of cumulative production) is consistent with the 
methods used in numerous studies.\29\ However, the historical shipment 
data for dehumidifiers are too limited to construct a robust cumulative 
production estimation for these products. Instead, DOE retained the 
approach using an exponential fit of historic PPI data. PPI data 
specific to residential dehumidifiers were not available, so DOE used 
the Small Electric Household Appliances PPI (1983 to 2012) from the 
Bureau of Labor Statistics for portable dehumidifiers, and the Room Air 
Conditioners and Dehumidifiers PPI (1990 to 2009) for whole-home 
dehumidifiers.\30\ The average annual rate of price decline, adjusted 
for inflation, in the default case is 2.02 percent for portable 
dehumidifiers and 2.23 percent for whole-home dehumidifiers.
---------------------------------------------------------------------------

    \29\ Margaret Taylor and K. Sydny Fujita, Accounting for 
Technological Change in Regulatory Impact Analyses: The Learning 
Curve Technique, Lawrence Berkeley National Laboratory (Apr. 30, 
2013); P.B. Kantor and W. I. Zangwill, Theoretical Foundation for a 
Learning Rate Budget, Management Science, Mar. 1, 1991, at 315; L. 
Argote and D. Epple, Learning Curves in Manufacturing, Science, Feb. 
1990, at 920; J.M. Dutton and A. Thomas, Treating Progress Functions 
as a Managerial Opportunity, The Academy of Management Review, Apr. 
1984, at 235.
    \30\ PPI Series ID for Small Electric Household Appliance: 
PCU33521033521014; PPI Series ID for Room Air Conditioner and 
Dehumidifiers: PCU3334153334156. (Available at: http://www.bls.gov/ppi/).
---------------------------------------------------------------------------

2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE used data from 
the 2013 RSMeans Residential Cost Data book to estimate the baseline 
installation cost for whole-home dehumidifiers. DOE found no evidence 
that installation costs would be impacted with increased efficiency 
levels.
3. Annual Energy Consumption
    For each sampled household, DOE determined the energy consumption 
for a residential dehumidifier at different efficiency levels using the 
approach described above in section IV.E of this notice.
4. Energy Prices
    DOE derived average annual residential electricity prices for 27 
geographic regions using data from EIA's Form EIA-861 database.\31\ DOE 
calculated an average annual regional residential price by: (1) 
Estimating an average residential price for each utility in the region 
(by dividing the residential revenues by residential sales); and (2) 
weighting each utility by the number of residential consumers it served 
in that region. The NOPR analysis used data from 2012.
---------------------------------------------------------------------------

    \31\ Available at: www.eia.doe.gov/cneaf/electricity/page/eia861.html.
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the forecast of annual change in 
national-average residential energy price in the reference case from 
AEO 2015, which has an end year of 2040.\32\ To estimate price trends 
after 2040, DOE used the average annual rate of change in prices from 
2020 to 2040.
---------------------------------------------------------------------------

    \32\ DOE-EIA, Annual Energy Outlook 2013 with Projections to 
2040 (Available at: http://www.eia.gov/forecasts/aeo/).
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. Typically, 
small incremental increases in product efficiency produce no, or only 
minor, changes in repair and maintenance costs.
    During the 2013 preliminary analysis phase of the rulemaking, DOE 
requested information as to whether maintenance and repair costs are a 
function of efficiency level and product class. Manufacturers responded 
that these costs would not increase with efficiency. As a result, DOE 
assumed that repair and maintenance costs do not scale with the 
efficiency of residential dehumidifiers.
6. Product Lifetime
    For portable dehumidifiers, DOE used lifetime estimates from the 
previous

[[Page 31669]]

DOE rulemaking for dehumidifiers.\33\ DOE assumed whole-home 
dehumidifiers have the same life span as residential room air 
conditioners and applied the lifetime parameters derived for room air 
conditioners in the 2011 rulemaking to whole-home dehumidifiers.\34\ 
The analysis yielded an estimate of mean lifetime of approximately 11 
years for portable dehumidifiers and approximately 19 years for whole-
home dehumidifiers. DOE also used the data to develop a survival 
function that was incorporated as a probability distribution in the LCC 
analysis. See chapter 8, section 8.2.2.8 of the NOPR TSD for further 
details on the method and sources DOE used to develop product 
lifetimes.
---------------------------------------------------------------------------

    \33\ DOE-Energy Efficiency and Renewable Energy, Energy 
Conservation Program for Consumer Products, Technical Support 
Document: Energy Efficiency Program for Consumer Products and 
Commercial and Industrial Equipment, Residential Dishwashers, 
Dehumidifiers, and Cooking Products, and Commercial Clothes Washers 
(2009) (Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2006-STD-0127-0097).
    \34\ DOE-Energy Efficiency and Renewable Energy, Energy 
Conservation Program for Consumer Products, Technical Support 
Document: Energy Efficiency Program for Consumer Products and 
Commercial and Industrial Equipment, Residential Clothes Dryers and 
Room Air Conditioners (2011) (Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2007-BT-STD-0010-0053).
---------------------------------------------------------------------------

7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to households to estimate the present value of future operating costs. 
DOE estimated a distribution of residential discount rates for 
dehumidifiers based on consumer financing costs and opportunity cost of 
funds related to appliance energy cost savings and maintenance costs.
    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings and maintenance costs. DOE then estimated the 
average percentage shares of the various types of debt and equity by 
household income group using data from the Federal Reserve Board's 
Survey of Consumer Finances (SCF) for 1995, 1998, 2001, 2004, 2007, and 
2010.\35\ Using the SCF and other sources, DOE then developed a 
distribution of rates for each type of debt and asset by income group 
to represent the rates that may apply in the year in which amended 
standards would take effect. DOE assigned each sample household a 
specific discount rate drawn from one of the distributions. The average 
rate across all types of household debt and equity and income groups, 
weighted by the shares of each class, is 5.0 percent. See chapter 8, 
section 8.2.3 of the NOPR TSD for further details on the development of 
consumer discount rates.
---------------------------------------------------------------------------

    \35\ Two older versions of the SCF are also available, 1989 and 
1992, but these surveys are not used in this analysis because they 
do not provide all of the necessary types of data (e.g., credit card 
interest rates). DOE concludes that the 15-year span covered by the 
six surveys included is sufficiently representative of recent debt 
and equity shares and interest rates.
---------------------------------------------------------------------------

8. Base-Case Efficiency Distribution
    To accurately estimate the share of consumers that would be 
affected by a standard at a particular efficiency level, DOE's LCC 
analysis considered the projected distribution of product efficiencies 
in the base case (i.e., the case without new energy efficiency 
standards). DOE refers to this distribution of product efficiencies as 
a base-case efficiency distribution.
    To estimate the efficiency distribution of standard residential 
dehumidifiers for 2014, DOE analyzed its Compliance Certification 
Database for residential dehumidifiers. To project the efficiency trend 
between 2014 and 2019, DOE used a 0.25 percent annual increase in 
shipment-weighted efficiency, as discussed in section IV.H. The 
estimated shares for the base-case efficiency distribution for 
residential dehumidifiers are shown in Table IV.18. See chapter 8, 
section 8.2.5 of the NOPR TSD for further information on the derivation 
of the base-case efficiency distributions.

                            Table IV.18--Residential Dehumidifier Base-Case Efficiency Distribution by Product Class in 2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
                       PC1                                   PC2                       PC3                       PC4                       PC5
--------------------------------------------------------------------------------------------------------------------------------------------------------
                <=30.00 pints/day                   30.01-45.00 pints/day       >45.00 pints/day            <=8.0 ft \3\               >8.0 ft \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 EL                   Share  (%)       EL       Share  (%)       EL       Share  (%)       EL       Share  (%)       EL       Share  (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0..................................           11            0            0            0           57            0           75            0           31
1..................................           23            1            0            1           20            1           25            1           46
2..................................            0            2           94            2           23            2            0            2           23
3..................................           66            3            2            3            0  ...........  ...........            3            0
4..................................            0            4            4  ...........  ...........  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------

9. Inputs to Payback Period Analysis
    The PBP is the amount of time it takes the consumer to recover the 
additional installed cost of more efficient products, compared to 
baseline products, through energy cost savings. PBPs are expressed in 
years. PBPs that exceed the life of the product mean that the increased 
total installed cost is not recovered in reduced operating expenses.
    The inputs to the PBP calculation for each EL are the change in 
total installed cost of the product and the change in the first-year 
annual operating expenditures relative to the baseline. The PBP 
calculation uses the same inputs as the LCC analysis, except that 
discount rates are not needed.
10. Rebuttable Presumption Payback Period
    As noted above, EPCA, as amended, establishes a rebuttable 
presumption that a standard is economically justified if the Secretary 
finds that the additional cost to the consumer of purchasing a product 
complying with an energy conservation standard level will be less than 
three times the value of the first year's energy savings resulting from 
the standard, as calculated under the applicable test procedure. (42 
U.S.C. 6295(o)(2)(B)(iii)) For each considered EL, DOE determined the 
value of the first year's energy savings by multiplying the energy 
savings by the average energy price forecast for the year in which 
compliance with the amended standard would be required. The results of 
the rebuttable presumption PBP analysis are summarized in section 
V.B.1.c of this proposed rule.

[[Page 31670]]

G. Shipments

    DOE uses forecasts of annual product shipments to calculate the 
national impacts of potential amended energy conservation standards on 
energy use, NPV, and future manufacturer cash flows.\36\ The shipments 
model takes an accounting approach, tracking market shares of each 
product class and the vintage of units in the stock. Stock accounting 
uses product shipments as inputs to estimate the age distribution of 
in-service product stocks for all years. The age distribution of in-
service product stocks is a key input to calculations of both the NES 
and NPV, because operating costs for any year depend on the age 
distribution of the stock.
---------------------------------------------------------------------------

    \36\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    To determine shipments to the replacement market, DOE estimated a 
stock of dehumidifiers 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. DOE based the retirement function on a probability 
distribution for the product lifetime that was developed in the LCC 
analysis. The shipments model assumes that no units are retired below a 
minimum product lifetime and that all units are retired before 
exceeding a maximum product lifetime.
    To calibrate the estimated shipments with the historical data, DOE 
introduced into the model a market segment identified as existing 
households without dehumidifiers, also referred to as first-time 
owners. Based on the calibration, DOE estimated that 0.35 percent of 
existing households without a dehumidifier would annually purchase this 
product over the analysis period, 2019-2048.
    Because the incremental cost of products meeting the considered 
standard levels is very low relative to the operating cost savings (see 
section V.B.1.a), DOE assumed that shipments would not be affected by 
the proposed standards. For details on the shipments analysis, see 
chapter 9 of the NOPR TSD.
    AHAM stated that the historical shipments and the projected 
shipments do not seem to be logically connected--the historical 
shipments are jagged, going up and down, sometimes dramatically, while 
the future shipments show a relatively smooth, upward curve. (AHAM, No. 
22 at p. 7) DOE used the average trend of historical shipments to 
forecast shipments for all dehumidifier product classes. The smoothed-
line forecast is a product of this approach.

H. National Impact Analysis

    The NIA assesses the NES and the national NPV of total consumer 
costs and savings that would be expected to result from new or amended 
standards at specific efficiency levels. DOE calculates the NES and NPV 
based on projections of annual appliance shipments, along with the 
annual energy consumption and total installed cost data from the energy 
use and LCC analyses.\37\ For the present analysis, DOE forecasted the 
energy savings, operating cost savings, product costs, and NPV of 
consumer benefits over the lifetime of dehumidifiers sold from 2019 
through 2048.
---------------------------------------------------------------------------

    \37\ For the NIA, DOE adjusts the installed cost data from the 
LCC analysis to exclude sales tax, which is a transfer.
---------------------------------------------------------------------------

    DOE evaluates the impacts of new and amended standards by comparing 
base-case projections with standards-case projections. The base-case 
projection characterizes energy use and consumer costs for each product 
class in the absence of new or amended energy conservation standards. 
DOE compares these projections with projections characterizing the 
market for each product class if DOE adopted new or amended standards 
at specific energy ELs (i.e., the TSLs or standards cases) for that 
class. For the base-case forecast, DOE considers historical trends in 
efficiency and various forces that are likely to affect the mix of 
efficiencies over time. For the standards cases, DOE also considers how 
a given standard would likely affect the market shares for products 
with efficiencies greater than the standard.
    DOE uses a spreadsheet model to calculate the energy savings and 
the national consumer costs and savings from each TSL. Interested 
parties can review DOE's analyses by changing various input quantities 
within the spreadsheet. The NIA spreadsheet model uses typical values 
(as opposed to probability distributions) as inputs.
    Table IV.19 summarizes the inputs and methods DOE used for the NIA 
analysis for the NOPR. Discussion of these inputs and methods follows 
the table. See chapter 10 of the NOPR TSD for further details.

   Table IV.19--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments from shipments
                                     model.
Projected Compliance Date of        2019
 Standard.
Base-Case Forecasted Efficiencies.  Shipment-Weighted Integrated Energy
                                     Factor (SWIEF) determined in 2014
                                     for each of the considered products
                                     classes. Annual growth rate of 0.25
                                     percent assumed for determining
                                     SWIEF between 2014 and 2048.
Standards-Case Forecasted           Roll-up scenario for 2019;
 Efficiencies.                       efficiency improvement after 2019
                                     based on 0.25 percent.
Annual Energy Consumption per Unit  Annual weighted-average values are a
                                     function of energy use at each TSL.
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of cost at each TSL.
                                     Incorporates forecast of future
                                     product prices based on historical
                                     data.
Annual Energy Cost per Unit.......  Annual weighted-average values as a
                                     function of the annual energy
                                     consumption per unit and energy
                                     prices.
Repair and Maintenance Cost per     Annual values do not change with
 Unit.                               efficiency level.
Energy Prices.....................  AEO 2015 forecasts (to 2040) and
                                     extrapolation through 2048.
Energy site-to-power plant          A time-series conversion factor
 conversion.                         derived from AEO 2014.
Discount Rate.....................  Three and seven percent real.

[[Page 31671]]

 
Present Year......................  Future costs and savings are
                                     discounted to 2014.
------------------------------------------------------------------------

1. National Energy Savings
    The NES analysis involves a comparison of national energy 
consumption of the considered products in each potential standards case 
(TSL) with consumption in the base case with no new or amended energy 
conservation standards. DOE calculated the national energy consumption 
by multiplying the number of units (stock) of each product (by vintage 
or age) by the unit energy consumption (also by vintage). Vintage 
represents the age of the product. DOE calculated annual NES based on 
the difference in national energy consumption for the base case 
(without amended efficiency standards) and for each higher efficiency 
standard. DOE estimated energy consumption and savings based on site 
energy and converted the electricity consumption and savings to primary 
energy (i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from the AEO 2015 
version of NEMS. Cumulative energy savings are the sum of the NES for 
each year over the timeframe of the analysis.
    In response to the recommendations of a committee on ``Point-of-Use 
and Full-Fuel-Cycle Measurement Approaches to Energy Efficiency 
Standards,'' appointed by the National Academy of Sciences, DOE 
announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the NIA and emissions analyses 
included in future energy conservation standards rulemakings. 76 FR 
51281 (Aug. 18, 2011). After evaluating the approaches discussed in the 
August 18, 2011 notice, DOE published a statement of amended policy in 
the Federal Register in which DOE explained its determination that NEMS 
is the most appropriate tool for its FFC analysis and its intention to 
use NEMS for that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a 
public domain, multi-sector, partial equilibrium model of the U.S. 
energy sector \38\ that EIA uses to prepare its Annual Energy Outlook. 
The approach used for deriving FFC measures of energy use and emissions 
is described in appendix 10C of the NOPR TSD.
---------------------------------------------------------------------------

    \38\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview, DOE/EIA-0581 (98) (Feb. 1998) 
(Available at: http://www.eia.gov/oiaf/aeo/overview/).
---------------------------------------------------------------------------

a. Forecasted Efficiency in the Base Case and Standards Cases
    A key component of the NIA is the trend in energy efficiency 
forecasted for the base case (without new or amended standards) and 
each of the standards cases. Section IV.F.8 of this notice describes 
how DOE developed a base-case energy efficiency distribution (which 
yields a shipment-weighted average efficiency) for each of the 
considered product classes for the first year of the forecast period. 
To project the trend in efficiency for residential dehumidifiers over 
the entire forecast period, DOE used a 0.25 percent annual increase 
based on the rate that was used for room air conditioners in DOE's 2011 
rule making.\39\ This trend is described in chapter 10, section 10.2 of 
the NOPR TSD.
---------------------------------------------------------------------------

    \39\ DOE-Energy Efficiency and Renewable Energy, Technical 
Support Document: Energy Efficiency Program for Consumer Products 
and Commercial and Industrial Equipment, Residential Clothes Dryers 
and Room Air Conditioners (2011) (Available at: http://www.regulations.gov/#!documentDetail;D=EERE-2007-BT-STD-0010-0053).
---------------------------------------------------------------------------

    DOE used a ``roll-up'' scenario to establish the shipment-weighted 
efficiency for the year that standards are assumed to become effective 
(2019). In this scenario, product efficiencies in the base case that do 
not meet the standard under consideration would ``roll up'' to meet the 
new standard level, and the market share of products above the standard 
would remain unchanged.
    To develop standards-case efficiency trends, DOE used an approach 
that assumes that the rate of adoption of more efficient products under 
the standards case occurs at a rate that ensures that the average total 
installed cost difference between the standards case and base case is 
constant over the entire forecast period. Because the total installed 
cost versus efficiency relationship for each product class demonstrates 
an increasing cost rate for more efficient products, the efficiency 
growth rate for each standards case is lower than the growth rate for 
the base case. For more information, see chapter 10, section 10.2 of 
the NOPR TSD.
2. Net Present Value Analysis
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are: (1) Total annual installed cost, (2) 
total annual savings in operating costs, and (3) a discount factor to 
calculate the present value of costs and savings. DOE calculates net 
savings each year as the difference between the base case and each 
standards case in total savings in operating costs and total increases 
in installed costs. DOE calculates operating cost savings over the life 
of each product shipped during the forecast period.
    As discussed in section IV.F.1 of this proposed rule, DOE developed 
residential dehumidifier price trends based on historical PPI data. 
Within the portable and whole-house product groups, DOE applied the 
same trends to forecast prices for each product class at each 
considered EL. By 2048, which is the end date of the forecast period, 
the average dehumidifier price is forecasted to drop 37 percent 
relative to 2013. DOE's projection of product prices for residential 
dehumidifiers is described in further detail in appendix 10C of the 
NOPR TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
forecasts on the consumer NPV for the considered TSLs for residential 
dehumidifiers. In addition to the default price trend, DOE considered 
two product price sensitivity cases: (1) A high price decline case 
based on an exponential fit using PPI data for 1988 to 2013; and (2) a 
low price decline case based on an experience rate derived using PPI 
and shipments data for 1991 to 2000. The derivation of these price 
trends and the results of these sensitivity cases are described in 
appendix 10C of the NOPR TSD.
    The operating cost savings are energy cost savings, which are 
calculated using the estimated energy savings in each year and the 
projected price of the appropriate form of energy. To estimate energy 
prices in future years, DOE multiplied the average regional energy 
prices by the forecast of annual national-average residential energy 
price changes in the reference case from AEO 2015, which has an end 
year of 2040. To estimate price trends after 2040, DOE used the average 
annual rate of change in prices from 2020 to 2040. As part of the NIA, 
DOE also analyzed scenarios that used inputs from the AEO 2015 Low 
Economic Growth and High

[[Page 31672]]

Economic Growth cases. Those cases have higher and lower energy price 
trends compared to the Reference case. NIA results based on these cases 
are presented in appendix 10C of the NOPR TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For 
today's NOPR, DOE estimated the NPV of consumer benefits using both a 
3-percent and a 7-percent real discount rate. DOE uses these discount 
rates in accordance with guidance provided by the Office of Management 
and Budget (OMB) to Federal agencies on the development of regulatory 
analysis.\40\ The discount rates for the determination of NPV are in 
contrast to the discount rates used in the LCC analysis, which are 
designed to reflect a consumer's perspective. The 7-percent real value 
is an estimate of the average before-tax rate of return to private 
capital in the U.S. economy. The 3-percent real value represents the 
``social rate of time preference,'' which is the rate at which society 
discounts future consumption flows to their present value.
---------------------------------------------------------------------------

    \40\ United States Office of Management and Budget, ``Circular 
A-4: Regulatory Analysis,'' Section E (Sept. 17, 2003) (Available 
at: www.whitehouse.gov/omb/memoranda/m03-21.html.http://www.whitehouse.gov/omb/circulars_a004_a-4/).
---------------------------------------------------------------------------

I. 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. DOE evaluates impacts on particular subgroups of consumers by 
analyzing the LCC impacts and PBP for those particular consumers from 
alternative standard levels. For this NOPR, DOE analyzed the impacts of 
the considered standard levels on low-income households and senior-only 
households. Chapter 11 in the NOPR TSD describes the consumer subgroup 
analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the impacts of amended energy 
conservation standards on manufacturers of residential dehumidifiers. 
The MIA has both quantitative and qualitative aspects and includes 
analyses of forecasted industry cash flows, the industry net present 
value (INPV), investments in research and development (R&D) and 
manufacturing capital, and domestic manufacturing employment. 
Additionally, the MIA seeks to determine how amended energy 
conservation standards might affect manufacturing employment, capacity, 
and competition, as well as how standards contribute to overall 
regulatory burden. Finally, the MIA serves to identify any 
disproportionate impacts on manufacturer subgroups, including small 
business manufacturers.
    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (GRIM), an industry cash flow model with inputs 
specific to this rulemaking. The key GRIM inputs include data on the 
industry cost structure, unit production costs, product shipments, 
manufacturer markups, and investments in R&D and manufacturing capital 
required to produce compliant products. The key GRIM outputs are the 
INPV and the impact to domestic manufacturing employment. The model 
estimates the impacts of more stringent energy conservation standards 
on a given industry by comparing changes in INPV and domestic 
manufacturing employment between the base case and the various TSLs in 
the standards case. To capture the uncertainty relating to manufacturer 
pricing strategy following amended standards, the GRIM estimates a 
range of possible impacts under different markup scenarios.
    The qualitative part of the MIA addresses manufacturer 
characteristics and market trends. Specifically, the MIA considers such 
factors as manufacturing capacity, competition within the industry, the 
cumulative impact of other DOE and non-DOE regulations, and impacts on 
manufacturer subgroups. The complete MIA is outlined in chapter 12, 
sections 12.1 and 12.2 of the NOPR TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the residential dehumidifier 
manufacturing industry. This included a top-down analysis of 
residential dehumidifier manufacturers that DOE used to derive 
preliminary financial inputs for the GRIM (e.g., revenues; materials, 
labor, overhead, and depreciation expenses; selling, general, and 
administrative expenses (SG&A); and R&D expenses). DOE also used public 
sources of information, including SEC 10-K filings, corporate annual 
reports, the U.S. Census Bureau's Economic Census, and reports from 
Dunn & Bradstreet, to conduct the analysis.
    In Phase 2 of the MIA, DOE prepared a framework industry cash flow 
analysis to quantify the impacts of new and amended energy conservation 
standards. The GRIM uses several factors to determine a series of 
annual cash flows starting with the announcement of the standard and 
extending over a 30-year period following the effective date of the 
standard. These factors include annual expected revenues, costs of 
sales, SG&A and R&D expenses, taxes, and capital expenditures. In 
general, energy conservation standards can affect manufacturer cash 
flow in three distinct ways: (1) Create a need for increased 
investment; (2) raise production costs per unit; and (3) alter revenue 
due to higher per-unit prices and changes in sales volumes.
    In addition, during Phase 2, DOE developed interview guides to 
distribute to manufacturers of residential dehumidifiers in order to 
develop other key GRIM inputs, including product and capital conversion 
costs, and to gather additional information on the anticipated effects 
of energy conservation standards on revenues, direct employment, 
capital assets, industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. See section IV.J.4 for a description of the key 
issues raised by manufacturers during the interviews. As part of Phase 
3, DOE also evaluated subgroups of manufacturers that may be 
disproportionately impacted by amended standards or that may not be 
accurately represented by the average cost assumptions used to develop 
the industry cash flow analysis. Such manufacturer subgroups may 
include small business manufacturers, low-volume manufacturers (LVMs), 
niche players, or manufacturers exhibiting a cost structure that 
largely differs from the industry average. DOE identified one 
dehumidifier manufacturer subgroup (small businesses) for which average 
cost assumptions may not hold.
    Based on the size standards published by the Small Business 
Administration (SBA),\41\ to be categorized as a small business 
manufacturer of residential dehumidifiers under North American Industry 
Classification System (NAICS) codes 333415 (``Air-Conditioning and Warm 
Air Heating Equipment and Commercial and Industrial Refrigeration

[[Page 31673]]

Equipment Manufacturing'') or 335210 (``Small Electrical Appliance 
Manufacturing''), a dehumidifier manufacturer and its affiliates may 
not employ more than 750 employees. The 750-employee threshold includes 
all employees in a business' parent company and any subsidiaries. Using 
this classification in conjunction with a search of industry databases 
and the SBA member directory, DOE identified five manufacturers of 
residential dehumidifiers that qualify as small businesses, the 
majority of which are manufacturers of whole-home and high-capacity 
portable dehumidifiers.
---------------------------------------------------------------------------

    \41\ 65 FR 30836 (May 15, 2000), as amended at 65 FR 53533, 
53544 (Sept. 5, 2000).
---------------------------------------------------------------------------

    The manufacturer subgroup analysis is discussed in greater detail 
in chapter 12, section 12.6 of the NOPR TSD and in section V.B.2.d of 
this proposed rule.
2. Government Regulatory Impact Model (GRIM)
    DOE uses the GRIM to quantify the changes in industry cash flows 
resulting from amended energy conservation standards. The GRIM uses 
manufacturer costs, markups, shipments, and industry financial 
information to arrive at a series of base-case annual cash flows absent 
new or amended standards, beginning with the present year, 2014, and 
continuing through 2048. The GRIM then models changes in costs, 
investments, shipments, and manufacturer margins that may result from 
new or amended energy conservation standards and compares these results 
against those in the base-case forecast of annual cash flows. The 
primary quantitative output of the GRIM is the INPV, which DOE 
calculates by summing the stream of annual discounted cash flows over 
the full analysis period. For manufacturers of residential 
dehumidifiers, DOE used a real discount rate of 8.43 percent, the 
weighted-average cost of capital derived from industry financials and 
modified based on feedback received during confidential interviews with 
manufacturers.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the base case and the various 
TSLs. The difference in INPV between the base case and a standards case 
represents the financial impact of the amended standard on 
manufacturers at that particular TSL. As discussed previously, DOE 
collected the necessary information to develop key GRIM inputs from a 
number of sources, including publicly available data and interviews 
with manufacturers (described in the next section). The GRIM results 
are shown in section V.B.2.a of this notice. Additional details about 
the GRIM can be found in chapter 12, sections 12.4 and 12.5 of the NOPR 
TSD.
a. Government Regulatory Impact Model Key Inputs
Manufacturer Production Costs
    Manufacturing a higher efficiency product is typically more 
expensive than manufacturing a baseline product due to the use of more 
complex and typically more costly components. The changes in the MPCs 
of the analyzed products can affect the revenues, gross margins, and 
cash flow of the industry, making product cost data key GRIM inputs for 
DOE's analysis. For each EL for each product class, DOE used the MPCs 
developed in the engineering analysis, as described in section IV.C.2 
of this proposed rule and further detailed in chapter 5 of the NOPR 
TSD. Additionally, DOE used information from its teardown analysis, 
described in section IV.C of this proposed rule, to disaggregate the 
MPCs into material and labor costs. These cost breakdowns and equipment 
markups were validated with manufacturers during interviews.
Base-Case Shipments Forecast
    The GRIM estimates manufacturer revenues based on total unit 
shipment forecasts and the distribution of shipments by efficiency 
level. Changes in sales volumes and efficiency mix over time can 
significantly affect manufacturer finances. For this analysis, the GRIM 
used the NIA's annual shipment forecasts derived from the shipments 
analysis from 2015 (the base year) to 2048 (the end of the analysis 
period). See chapter 9 of the NOPR TSD for additional details on the 
shipments analysis.
Standards-Case Shipments Forecast
    For each standards case, the GRIM assumes a small, constant 
percentage shift in shipments to higher efficiency levels, reflecting 
the idea that some efficiency improvements will occur independent of 
amended standards. The GRIM also assumes all remaining shipments of 
products below the projected minimum standard levels would roll up 
(i.e., be added) to the standard efficiency levels in response to an 
increase in energy conservation standards. The GRIM also assumes that 
demand for higher-efficiency equipment (that is above the minimally 
compliant level) is a function of price, and is independent of the 
standard level.
Product and Capital Conversion Costs
    Amended energy conservation standards may cause manufacturers to 
incur one-time conversion costs to bring their production facilities 
and product designs into compliance with the new standards. For the 
purpose of the MIA, DOE classified these one-time conversion costs into 
two major groups: (1) Product conversion costs and (2) capital 
conversion costs. Product conversion costs are one-time investments in 
research, development, testing, and marketing, focused on making 
product designs comply with the new energy conservation standard. 
Capital conversion expenditures are one-time investments in property, 
plant, and equipment to adapt or change existing production facilities 
so that new product designs can be fabricated and assembled.
Stranded Assets
    If new or amended energy conservation standards require investment 
in new manufacturing capital, there also exists the possibility that 
they will render existing manufacturing capital obsolete. If the 
obsolete manufacturing capital is not fully depreciated at the time new 
or amended standards go into effect, these assets would be stranded and 
the manufacturer would have to write-down the residual value that had 
not yet been depreciated.
    DOE used multiple sources of data to evaluate the level of product 
and capital conversion costs and stranded assets manufacturers would 
likely face to comply with amended energy conservation standards. DOE 
used manufacturer interviews to gather data on the level of investment 
anticipated at each proposed efficiency level and validated these 
assumptions using estimates of capital requirements derived from the 
product teardown analysis and engineering model described in section 
IV.C of this proposed rule. These estimates were then aggregated and 
scaled to derive total industry estimates of product and capital 
conversion costs and to protect confidential information.
    In general, DOE assumes that all conversion-related investments 
occur between the year the final rule is published and the year by 
which manufacturers must comply with the new or amended standards. The 
investment figures used in the GRIM can be found in section V.B.2 of 
this proposed rule. For additional information on the estimated product 
conversion and capital conversion costs, see chapter 12, sections 
12.4.7 and 12.4.8 of the NOPR TSD.

[[Page 31674]]

b. Government Regulatory Impact Model Scenarios
Base-Case Markup
    As discussed in section IV.D of this notice, MSPs include direct 
manufacturing production costs (i.e., labor, material, overhead, and 
depreciation estimated in DOE's MPCs) and all non-production costs 
(i.e., SG&A, R&D, and interest), along with profit. To calculate the 
MSPs in the GRIM, DOE applied manufacturer markups to the MPCs 
estimated in the engineering analysis. Based on publicly available 
financial information for manufacturers of residential dehumidifiers 
and comments from manufacturer interviews, DOE assumed the industry 
average base-case markup on production costs to be 1.45. This markup 
takes into account the two-tiered sourcing structure of the small 
portable dehumidifier segment, detailed below, in addition to the 
traditional one-tiered structure of the high-capacity portable and 
whole-home dehumidifier segment. The majority of the market for the 
lower-capacity portable product classes (product classes 1 and 2) are 
manufactured under contract by an overseas original equipment 
manufacturer (OEM). The engineering analysis, as detailed in chapter 5 
of the NOPR TSD, estimates the cost of manufacturing at the OEM. This 
production cost is marked up once by the OEM to the company contracting 
its manufacturer and again by the contracting company who imports the 
product and sells it to retailers. For the small portable dehumidifier 
segment, the industry average baseline markup breaks down as follows:

             Table IV.20--Industry-Average Baseline Markups
------------------------------------------------------------------------
 
------------------------------------------------------------------------
OEM to Contracting Company Markup...............................    1.20
Contracting Company to First Customer Markup....................    1.21
Overall OEM to First Customer Markup............................    1.45
------------------------------------------------------------------------

Markup Scenarios
    Modifying the aforementioned base-case markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case markup scenarios to represent the 
uncertainty regarding the potential impacts on prices and profitability 
for manufacturers following the implementation of amended energy 
conservation standards: (1) A preservation of gross margin \42\ 
(percentage) scenario; and (2) a preservation of per-unit operating 
profits scenario. These scenarios lead to different markups values 
that, when applied to the MPCs, result in varying revenue and cash flow 
impacts.
---------------------------------------------------------------------------

    \42\ ``Gross margin'' is defined as revenues minus cost of goods 
sold. On a unit basis, gross margin is selling price minus 
manufacturer production cost. In the GRIMs, markups determine the 
gross margin because various markups are applied to the manufacturer 
production costs to reach manufacturer selling price.
---------------------------------------------------------------------------

    The preservation of gross margin as a percentage of revenues markup 
scenario assumes that the baseline markup of 1.45 is maintained for all 
products in the standards case. Typically, this scenario represents the 
upper bound of industry profitability as manufacturers are able to 
fully pass through additional costs due to standards to their customers 
under this scenario.
    The preservation of per-unit operating profits markup scenario is 
similar to the preservation of gross margin as a percentage of revenues 
markup scenario with the exception that in the standards case, 
minimally compliant products lose a fraction of the baseline markup. 
Typically, this scenario represents the lower bound profitability and a 
more substantial impact on the industry as manufacturers accept a lower 
margin in an attempt to offer price competitive entry level products 
while maintaining the same level of absolute operating profits, on a 
per-unit basis, that they saw prior to amended standards. Under this 
scenario, gross margin as a percentage decreases in the standards case.
3. Discussion of Comments
    During the public comment period following the preliminary analysis 
public meeting, trade associations and small business manufacturers of 
residential dehumidifiers provided several comments on the potential 
impact of amended energy conservation standards on manufacturers.
    In response to the May 2014 Notice, AHAM suggested that Canada's 
Energy Efficiency Regulations mandate standards for dehumidifiers that 
are harmonized with the existing standards in the United States. For 
other products, AHAM stated that the Canadian standards currently or 
soon will lag behind the U.S. standards, even though Canada has 
expressed its desire for harmonization. AHAM believes that this 
disharmony will result in added burden for manufacturers and confusion 
to consumers. AHAM encouraged DOE to work closely with Natural 
Resources Canada (NRCan) as it promulgates revised dehumidifier 
standards so that NRCan can publish harmonized Canadian standards with 
the same projected compliance date as in the United States. AHAM stated 
that it will work with NRCan and DOE to accomplish this goal. (AHAM, 
No. 22 at pp. 2-3)
    Therma-Stor commented that changes to the testing and rating 
procedures may lead to confusion in the marketplace as the public has 
become accustomed to the current dehumidifier rating scheme. Therma-
Stor also commented that it will be necessary to educate dealers and 
consumers about a revised rating scheme which substantially changes the 
capacity and efficiency ratings of each dehumidifier model. As a small 
manufacturer, Therma-Stor stated that it has limited engineering 
design, manufacturing, and marketing resources at its disposal. Therma-
Stor typically maintains and manufactures a given dehumidifier model 
design for several years. According to Therma-Stor, a substantial 
change in the test procedure may require it to re-engineer its current 
product designs and revise related literature. Due to their small size 
and limited resources, this re-engineering may require more time for 
small manufacturers than larger entities with larger resource pools 
(Therma-Stor, No. 21 at p. 2) and may place a larger burden on small 
manufacturers.
    Therma-Stor also expressed concern about the divergence of rating 
test procedures between DOE and EPA ENERGY STAR programs. Therma-Stor 
believes that DOE and EPA should work together to harmonize the rating 
test procedures to minimize the cost, time, and complexity of 
compliance for manufacturers. Therma-Stor further requested that if the 
rating test procedures are significantly revised, a reasonable ``grace 
period'' between the publication of the final rule and enforcement of 
the rule should be provided to allow small manufacturers to make 
necessary revisions to their products and literature to achieve 
compliance. Id.
    DOE acknowledges that the new test procedure will result in a new 
rating system that will need to be properly conveyed to consumers via 
updated sizing recommendations in manufacturer product literature and 
Web sites. DOE notes that all manufacturers will be subject to the same 
shift in rating system.
    While DOE also acknowledges that the presence of multiple standards 
and test procedures may place a disproportionate burden on small 
business manufacturers, DOE notes that EPA typically adopts the most 
recent

[[Page 31675]]

DOE test procedure for the ENERGY STAR program. See sections V.B.2.d 
and VI.B of this proposed rule for a discussion of the impacts on small 
business manufacturers. Feedback from manufacturers also suggests that 
a 3-year period for compliance after the final rule is published is 
reasonable.
    Aprilaire noted that energy conservation standards for whole-home 
dehumidifier products could negatively impact the development of this 
segment of the dehumidifier industry. Aprilaire explained that, as the 
whole-home dehumidifier segment is a relatively new industry, 
innovative products are being developed to help control whole-home 
latent conditions with minimal energy use. According to Aprilaire, this 
is achieved through combinations of application, latent removal 
techniques, and control methods and algorithms. Aprilaire believes that 
prematurely placing rules and tests that cannot anticipate some of 
these product designs and applications could limit the number of 
products on the market and hinder innovation. (Aprilaire, No. 20 at p. 
2)
    DOE understands that amended conservation standards will require 
manufacturers to divert at least a portion of R&D and/or capital 
expenditure resources to standards compliance in the years leading up 
to the projected compliance date, effectively taking these resources 
away from other projects. The effect of these investments on 
manufacturer cash flows is discussed further in section V.B.2.a of this 
proposed rule.
    Aprilaire also commented that it believes DOE is singling out 
whole-home dehumidifiers for this rule, and ignoring other products 
which have functions built into them to obtain whole-home 
dehumidification, such as air conditioners. According to Aprilaire, 
separating one product from a larger category places an undue and 
unfair burden on whole-home dehumidifier manufacturers. Aprilaire 
referenced EPA document 402-F-13053, saying that EPA recognizes that 
there are multiple methods of controlling humidity, but the proposed 
standard only restricts the stand-alone whole-home dehumidification 
method. (Aprilaire, No. 20 at p. 2)
    DOE regulations already cover central air conditioners and room air 
conditioners, and manufacturers of these products must demonstrate 
compliance with current energy conservation standards codified in 10 
CFR 430.32(c) and (b), respectively.
4. Manufacturer Interviews
    To inform the MIA, DOE interviewed manufacturers with an estimated 
combined market share of approximately 70 percent. The information 
gathered during these interviews enabled DOE to tailor the GRIM to 
reflect the unique financial characteristics of the residential 
dehumidifier industry. These confidential interviews provided 
information that DOE used to evaluate the impacts of amended energy 
conservation standards on manufacturer cash flows, manufacturing 
capacities, and employment levels.
    During the interviews, DOE asked manufacturers to describe the 
major issues they anticipate to result from the energy conservation 
standards proposed in this rulemaking. The following sections describe 
the most significant issues identified by manufacturers. DOE also 
includes additional concerns in chapter 12, section 12.3 of the NOPR 
TSD.
Consumer Confusion
    The majority of manufacturers interviewed emphasized concerns over 
the impact of new test conditions in the DOE dehumidifier test 
procedure on the rated capacity of their products. One manufacturer 
noted a 60-percent to 70-percent decrease in capacity and efficiency 
due to lower ambient temperatures for testing. Some manufacturers fear 
that a shift in rated capacity resulting from a change in test 
procedure will lead to confusion in the market, as consumers find it 
important to have the same apparent capacity in a replacement 
residential dehumidifier, even if it is simply a larger unit at a lower 
rating condition. Also, dehumidifiers with smaller capacities cannot 
reach the same efficiency as higher-capacity units due to limitations 
of the vapor-compression cycle, because the parasitic losses (i.e., the 
power draw not associated with running the compressor during 
dehumidification mode) make it harder to maintain efficiency with 
smaller compressors. One manufacturer estimated that a multi-million 
dollar investment would be necessary to redesign products that would 
maintain customer perception of rated capacities. That manufacturer 
went on to note that if it is unable to produce comparable products at 
the same effective capacity, it would consider exiting the market.
    Other manufacturers indicated that as product ratings are modified 
to reflect the test results at the lower ambient temperature, the whole 
product classification system will need to be revisited, which will 
require a substantial investment in consumer education.
Consumer Utility
    Multiple manufacturers interviewed expressed concerns that an 
amended energy conservation standard for residential dehumidifiers 
would have an adverse impact on price, noise level, and size, and would 
thus compromise consumer utility. Manufacturers are concerned that 
residential dehumidifiers would need to become physically larger to 
deliver the same moisture removal capacity to comply with new amended 
testing and energy conservation standards. For customers with space 
constraints, finding a product that best fits their needs may be more 
difficult under an amended standard. For example, some whole-home 
dehumidifiers must fit into a small attic or crawl space. If amended 
energy conservation standards for whole-home products cannot be met 
within the size constraints associated with this type of installation, 
part of the whole-home market segment may move to portable products, 
reducing consumer utility by forcing the unit into the living space. 
Additionally, larger portable dehumidifiers are already cumbersome to 
move around, making them close to the limit of what is considered 
portable. As such, consumers may be forced to purchase a lower-capacity 
dehumidifier or alternative product.
Impacts on Profitability
    During interviews, many manufacturers stated that an industry-wide 
price increase of 25 percent would have major negative impacts on the 
portable dehumidifier market. Manufacturers went on to note that a 
price increase of 50 percent or more would cause the market to collapse 
entirely. A whole-home dehumidifier manufacturer stated that a 10-
percent cost increase would have a significant impact on the whole-home 
market because any increases in manufacturer production costs are 
magnified due to the two-tiered distribution channel that is 
characteristic of the whole-home market (i.e., OEM to distributor to 
dealer). Among manufacturers, it was agreed that consumers find a 
product's price to be the most important aspect when considering 
dehumidifier purchases. Relatedly, one manufacturer suggested that as 
prices increase, consumers may opt to rent units as-needed, instead of 
buying one. Accordingly, manufacturers expect a negative impact on 
profitability as revenues decline following any amended energy 
conservation standard which would raise prices for residential 
dehumidifiers. Similar impacts on profitability are expected if

[[Page 31676]]

manufacturers maintain current prices while absorbing the higher costs 
associated with the design and manufacture of higher efficiency 
products.
Impacts on Small Businesses
    One small manufacturer noted that it and its competitors in the 
whole-home segment would be disproportionately impacted by an amended 
energy conservation standard. Small business manufacturers have fewer 
human and capital resources than larger, more diversified portable unit 
manufacturers. Additionally, due to the low-volume nature of the 
residential whole-home dehumidifier market, small business 
manufacturers of whole-home products are disadvantaged in achieving the 
scale needed to exert purchasing power in sourcing components from 
vendors. One small business manufacturer noted that its lack of 
influence on suppliers ultimately impacts its ability to compete with 
larger manufacturers.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions to emissions of all species 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion. The associated emissions are referred 
to as upstream emissions.
    The analysis of power sector emissions uses marginal emissions 
factors calculated using a methodology based on results published for 
the AEO 2014 reference case and a set of side cases that implement a 
variety of efficiency-related policies.\43\ The methodology is 
described in chapter 15 of the NOPR TSD.
---------------------------------------------------------------------------

    \43\ DOE did not use AEO 2015 for the emissions analysis because 
it does not provide the side cases that DOE uses to derive marginal 
emissions factors.
---------------------------------------------------------------------------

    Combustion emissions of CH4 and N2O are 
estimated using emissions intensity factors published by the EPA, GHG 
Emissions Factors Hub.\44\ The FFC upstream emissions are estimated 
based on the methodology described in chapter 15. The upstream 
emissions include both emissions from fuel combustion during 
extraction, processing and transportation of fuel, and ``fugitive'' 
emissions (direct leakage to the atmosphere) of CH4 and 
CO2.
---------------------------------------------------------------------------

    \44\ Available at: http://www.epa.gov/climateleadership/inventory/ghg-emissions.html.
---------------------------------------------------------------------------

    The emissions intensity factors are expressed in terms of physical 
units per MWh or MMBtu of site energy savings. Total emissions 
reductions are estimated using the energy savings calculated in the 
national impact analysis.
    For CH4 and N2O, DOE calculated emissions 
reduction in tons and also in terms of units of carbon dioxide 
equivalent (CO2eq). Gases are converted to CO2eq 
by multiplying each ton of gas by the gas' global warming potential 
(GWP) over a 100 year time horizon. Based on the Fifth Assessment 
Report of the Intergovernmental Panel on Climate Change,\45\ DOE used 
GWP values of 28 for CH4 and 265 for N2O.
---------------------------------------------------------------------------

    \45\ Intergovernmental Panel on Climate Change (IPCC), 2013: 
Climate Change 2013: The Physical Science Basis. Contribution of 
Working Group I to the Fifth Assessment Report of the 
Intergovernmental Panel on Climate Change [Stocker, T.F., D. Qin, 
G.-K. Plattner, M. Tignor, S.K. Allen, J. Boschung, A. Nauels, Y. 
Xia, V. Bex and P.M. Midgley (eds.)]. Cambridge University Press, 
Cambridge, United Kingdom and New York, NY, USA. Chapter 8.
---------------------------------------------------------------------------

    The AEO 2014 projections incorporate the projected impacts of 
existing air quality regulations on emissions. AEO 2014 generally 
represents current legislation and environmental regulations, including 
recent government actions, for which implementing regulations were 
available as of October 31, 2013. DOE's estimation of impacts accounts 
for the presence of the emissions control programs discussed in the 
following paragraphs.
    SO2 emissions from affected electric generating units 
(EGUs) are subject to nationwide and regional emissions cap-and-trade 
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 (DC). (42 U.S.C. 7651 et seq.) SO2 
emissions from 28 eastern states and DC were also limited under the 
Clean Air Interstate Rule (CAIR; 70 FR 25162 (May 12, 2005)), which 
created an allowance-based trading program that operates along with the 
Title IV program. CAIR was remanded to the EPA by the U.S. Court of 
Appeals for the District of Columbia Circuit but it remained in 
effect.\46\ In 2011 EPA issued a replacement for CAIR, the Cross-State 
Air Pollution Rule (CSAPR). 76 FR 48208 (Aug. 8, 2011). On August 21, 
2012, the DC Circuit issued a decision to vacate CSAPR \47\ and ordered 
EPA to continue administering CAIR.\48\ On April 29, 2014, the U.S. 
Supreme Court reversed the judgment of the DC Circuit and remanded the 
case for further proceedings consistent with the Supreme Court's 
opinion.\49\ On October 23, 2014, the DC Circuit lifted the stay of 
CSAPR.\50\ Pursuant to this action, CSAPR went into effect (and CAIR 
ceased to be in effect) as of January 1, 2015.
---------------------------------------------------------------------------

    \46\ 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).
    \47\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 
(D.C. Cir. 2012).2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 
3696, 81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
    \48\ See EME Homer City Generation, LP v. EPA, 696 F.3d 7, 38 
(D.C. Cir. 2012).2012), cert. granted, 81 U.S.L.W. 3567, 81 U.S.L.W. 
3696, 81 U.S.L.W. 3702 (U.S. June 24, 2013) (No. 12-1182).
    \49\ See EPA v. EME Homer City Generation, 134 S. Ct. 1584, 1610 
(U.S. 2014). The Supreme Court held in part that EPA's methodology 
for quantifying emissions that must be eliminated in certain States 
due to their impacts in other downwind States was based on a 
permissible, workable, and equitable interpretation of the Clean Air 
Act provision that provides statutory authority for CSAPR.
    \50\ See Georgia v. EPA, Order (D.C. Cir. filed October 23, 
2014) (No. 11-1302).
---------------------------------------------------------------------------

    Because AEO 2014 was prepared prior to the Supreme Court's opinion, 
it assumed that CAIR remains a binding regulation through 2040. Thus, 
DOE's analysis used emissions factors that assume that CAIR, not CSAPR, 
is the regulation in force. However, the difference between CAIR and 
CSAPR is not relevant for the purpose of DOE's analysis of emissions 
impacts from energy conservation standards.
    The attainment of emissions caps is typically flexible among EGUs 
and is enforced through the use of emissions allowances and tradable 
permits. Under existing EPA regulations, any excess SO2 
emissions allowances resulting from the lower electricity demand caused 
by the adoption 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 negligible 
reductions in power sector SO2 emissions would occur as a 
result of standards.
    Beginning in 2016, however, SO2 emissions will fall as a 
result of the Mercury and Air Toxics Standards (MATS) for power plants. 
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

[[Page 31677]]

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 2014 assumes that, in 
order to continue operating, coal plants must have either flue gas 
desulfurization or dry sorbent injection systems installed by 2016. 
Both technologies, which are used to reduce acid gas emissions, also 
reduce SO2 emissions. Under the MATS, emissions will be far 
below the cap established by CAIR, 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 energy efficiency standards will reduce 
SO2 emissions in 2016 and beyond.
    CAIR established a cap on NOX emissions in 28 eastern 
States and the District of Columbia.\51\ Energy conservation standards 
are expected to have little effect on NOX emissions in those 
States covered by CAIR because excess NOX emissions 
allowances resulting from the lower electricity demand could be used to 
permit offsetting increases in NOX emissions from other 
facilities. 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 NOPR for these States.
---------------------------------------------------------------------------

    \51\ CSAPR also applies to NOX and it would supersede 
the regulation of NOX under CAIR. As stated previously, 
the current analysis assumes that CAIR, not CSAPR, is the regulation 
in force. The difference between CAIR and CSAPR with regard to DOE's 
analysis of NOX emissions is slight.
---------------------------------------------------------------------------

    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. DOE estimated mercury 
emissions reduction using emissions factors based on AEO 2014, which 
incorporates the MATS.

L. Monetizing Carbon Dioxide and Other Emissions Impacts

    As part of the development of this proposed 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 analogous to 
the calculation of the NPV of consumer benefit, DOE considered the 
reduced emissions expected to result over the lifetime of equipment 
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 NOPR.
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) climate-change-related 
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 
CO2. A domestic SCC value is meant to reflect the value of 
damages in the United States resulting from a unit change in 
CO2 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. 5, 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. The estimates are presented with an 
acknowledgement of the many uncertainties involved and with a clear 
understanding that they should be updated over time to reflect 
increasing knowledge of the science and economics of climate impacts.
    As part of the interagency process that developed these SCC 
estimates, technical experts from numerous agencies met on a regular 
basis to consider public comments, explore the technical literature in 
relevant fields, and discuss key model inputs and assumptions. The main 
objective of this process was to develop a range of SCC values using a 
defensible set of input assumptions grounded in the existing scientific 
and economic literatures. In this way, key uncertainties and model 
differences transparently and consistently inform the range of SCC 
estimates used in the rulemaking process.
a. Monetizing Carbon Dioxide Emissions
    When attempting to assess the incremental economic impacts of 
CO2 emissions, the analyst faces a number of challenges. A 
report from the National Research Council \52\ points out that any 
assessment will suffer from uncertainty, speculation, and lack of 
information about: (1) Future emissions of GHGs; (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 questions of science, economics, and 
ethics and should be viewed as provisional.
---------------------------------------------------------------------------

    \52\ National Research Council, Hidden Costs of Energy: Unpriced 
Consequences of Energy Production and Use, National Academies Press 
(2009).
---------------------------------------------------------------------------

    Despite the limits of both quantification and monetization, SCC 
estimates can be useful in estimating the social benefits of reducing 
CO2 emissions. The agency can estimate the benefits from 
reduced (or costs from increased) emissions in any future year by 
multiplying the change in emissions in that year by the SCC values 
appropriate for that year. The NPV of the benefits can then be 
calculated by multiplying each of these future benefits by an 
appropriate discount factor and summing across all affected years.
    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. Development of Social Cost of Carbon Values
    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 Federal 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

[[Page 31678]]

estimates for 2007 (in 2006$) of $55, $33, $19, $10, and $5 per metric 
ton of CO2. These interim values represent the first 
sustained interagency effort within the U.S. government to develop an 
SCC for use in regulatory analysis. The results of this preliminary 
effort were presented in several proposed and final rules.
c. Current Approach and Key Assumptions
    After the release of the interim values, the interagency group 
reconvened on a regular basis to generate improved SCC estimates. 
Specially, 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 (IPCC). 
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 sets of SCC values for use in 
regulatory analyses. Three sets of values are based on the average SCC 
from the three integrated assessment models, at discount rates of 2.5, 
3, and 5 percent. The fourth set, which represents the 95th percentile 
SCC estimate across all three models at a 3-percent discount rate, was 
included to represent higher-than-expected impacts from temperature 
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,\53\ 
although preference is given to consideration of the global benefits of 
reducing CO2 emissions. Table IV.21 presents the values in 
the 2010 interagency group report,\54\ which is reproduced in appendix 
14A of the NOPR TSD.
---------------------------------------------------------------------------

    \53\ It is recognized that this calculation for domestic values 
is approximate, provisional, and highly speculative. There is no a 
priori reason why domestic benefits should be a constant fraction of 
net global damages over time.
    \54\ Social Cost of Carbon for Regulatory Impact Analysis Under 
Executive Order 12866, Interagency Working Group on Social Cost of 
Carbon, United States Government (February 2010) (Available at: 
www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-for-RIA.pdf).

                     Table IV.21--Annual SCC Values From 2010 Interagency Report, 2010-2050
                                           [2007$ 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.\55\
---------------------------------------------------------------------------

    \55\ 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 
(May 2013; revised November 2013) (Available at: http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).
---------------------------------------------------------------------------

    Table IV.22 shows the updated sets of SCC estimates in 5-year 
increments from 2010 to 2050. The full set of annual SCC estimates 
between 2010 and 2050 is reported in appendix 14B of the NOPR 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.

[[Page 31679]]



                      Table IV.22 Annual SCC Values From 2013 Interagency Report, 2010-2050
                                           [2007$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                                 Discount rate
                                                             ---------------------------------------------------
                                                                   5%           3%          2.5%          3%
                            Year                             ---------------------------------------------------
                                                                                                         95th
                                                                Average      Average      Average     percentile
----------------------------------------------------------------------------------------------------------------
2010........................................................           11           32           51           89
2015........................................................           11           37           57          109
2020........................................................           12           43           64          128
2025........................................................           14           47           69          143
2030........................................................           16           52           75          159
2035........................................................           19           56           80          175
2040........................................................           21           61           86          191
2045........................................................           24           66           92          206
2050........................................................           26           71           97          220
----------------------------------------------------------------------------------------------------------------

    It is important to recognize that a number of key uncertainties 
remain, and that current SCC estimates should be treated as provisional 
and revisable because 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 analytical challenges that 
are being 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 2013$ using the implicit price 
deflator for gross domestic product (GDP) from the Bureau of Economic 
Analysis. For each of the four sets of SCC values, the values for 
emissions in 2015 were $12.0, $40.5, $62.4, and $119 per metric ton 
avoided (values expressed in 2013$). DOE derived values after 2050 
using the relevant growth rates 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. Social Cost of Other Air Pollutants
    As noted above, DOE has taken into account how amended energy 
conservation standards would reduce site NOX emissions 
nationwide and decrease power sector NOX emissions in those 
22 States not affected by the CAIR. DOE estimated the monetized value 
of net NOX emissions reductions resulting from each of the 
TSLs considered for today's NOPR based on estimates developed by EPA 
for 2016, 2020, 2025, and 2030.\56\ The values reflect estimated 
mortality and morbidity per ton of directly emitted NOX 
reduced by electricity generating units. EPA developed estimates using 
a 3-percent and a 7-percent discount rate to discount future emissions-
related costs. The values in 2016 are $5,483/ton using a 3-percent 
discount rate and $4,850/ton using a 7-percent discount rate (2013$). 
DOE extrapolated values after 2030 using the average annual rate of 
growth in 2016-2030. DOE multiplied the emissions reduction (tons) in 
each year by the associated $/ton values, and then discounted each 
series using discount rates of 3 percent and 7 percent as appropriate.
---------------------------------------------------------------------------

    \56\ http://www2.epa.gov/benmap/sector-based-pm25-benefit-ton-estimates
---------------------------------------------------------------------------

    DOE is evaluating appropriate monetization of avoided 
SO2 and Hg emissions in energy conservation standards 
rulemakings. DOE has not included monetization of those emissions in 
the current analysis.
    AHAM continues to believe that monetization of avoided 
CO2 emissions should include a more comprehensive analysis 
to understand the total environmental impact. It stated that any 
CO2 analysis should include CO2 emissions that 
are caused indirectly, as well as directly, from a standards change, 
such as increased carbon emissions required to manufacture a given 
standard level, the increased transportation and related emissions 
required for a given standard level, and reduced carbon emissions from 
peak load reductions. (AHAM, No. 22 at p. 7)
    In response, DOE notes that EPCA directs DOE to consider the total 
projected amount of energy, or as applicable, water, savings likely to 
result directly from the imposition of the standard when determining 
whether a standard is economically justified. (42 U.S.C. 
6295(o)(2)(B)(i)(III)) DOE interprets this to include energy used in 
the generation, transmission, and distribution of fuels used by 
appliances or equipment. In addition, DOE is using the FFC measure, 
which includes the energy consumed in extracting, processing, and 
transporting primary fuels. DOE's current accounting of primary energy 
savings and the FFC measure are directly linked to the energy used by 
appliances or equipment. DOE believes that energy used in manufacturing 
or transporting appliances or equipment falls outside the boundaries of 
``directly'' as intended by EPCA. Thus, DOE did not consider such 
energy use and air emissions in the NIA or in the emissions analysis. 
DOE's analysis does account for impacts on CO2 emissions 
from electricity load reduction.
    AHAM stated that DOE should wait for comments on the 2013 
interagency report to be resolved before it relies on the 2013 
estimates, and, until that time DOE should rely on the 2010 estimates 
as it has done in rulemakings prior to May 2013. (AHAM, No. 22 at p. 7)
    The 2013 report provides an update of the SCC estimates based 
solely on the latest peer-reviewed version of the models, replacing 
model versions that were developed up to ten years ago in

[[Page 31680]]

a rapidly evolving field. It does not revisit other assumptions with 
regard to the discount rate, reference case socioeconomic and emission 
scenarios, or equilibrium climate sensitivity. Improvements in the way 
damages are modeled are confined to those that have been incorporated 
into the latest versions of the models by the developers themselves in 
the peer-reviewed literature. Given the above, using the 2010 estimates 
would be inconsistent with DOE's objective of using the best available 
information in its analyses.

M. Utility Impact Analysis

    The utility impact analysis estimates several effects on the power 
generation industry that would result from the adoption of new or 
amended energy conservation standards. In the utility impact analysis, 
DOE analyzes the changes in installed electrical capacity and 
generation that would result for each TSL. The analysis is based on 
published output from the NEMS associated with AEO 2014. NEMS produce 
the AEO reference case as well as a number of other cases that estimate 
the economy-wide impacts of changes to energy supply and demand. DOE 
uses those other cases that incorporate efficiency-related policies to 
estimate the marginal impacts of reduced energy demand on the utility 
sector.\57\ The output of this analysis is a set of time-dependent 
coefficients that capture the change in electricity generation, primary 
fuel consumption, installed capacity and power sector emissions due to 
a unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of new or amended 
energy conservation standards. Chapter 15 of the NOPR TSD describes the 
utility impact analysis in further detail.
---------------------------------------------------------------------------

    \57\ DOE did not use AEO 2015 for the analysis because it does 
not provide the side cases that DOE uses to derive marginal impact 
factors.
---------------------------------------------------------------------------

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a proposed standard. Employment impacts include 
both 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 by the utility industry; (3) increased consumer 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).\58\ 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.\59\ 
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 may 
increase due to shifts in economic activity resulting from amended 
standards for residential dehumidifiers.
---------------------------------------------------------------------------

    \58\ 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].
    \59\ See Bureau of Economic Analysis, Regional Multipliers: A 
User Handbook for the Regional Input-Output Modeling System (RIMS 
II), U.S. Department of Commerce (1992).
---------------------------------------------------------------------------

    For the standard levels considered in today's NOPR, 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).\60\ 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 the 187 
sectors most relevant to industrial, commercial, and residential 
building energy use.
---------------------------------------------------------------------------

    \60\ J. M. Roop, M. J. Scott, O.V. Livingston, P.J. Balducci, 
J.M. Roop, and R. W. Schultz, ImSET 3.1: Impact of Sector Energy 
Technologies, Pacific Northwest National Laboratory (2009) 
(Available at: www.pnl.gov/main/publications/external/technical_reports/PNNL-18412.pdf).
---------------------------------------------------------------------------

    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 over-estimate 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. For more details on the employment impact 
analysis, see chapter 16 of the NOPR TSD.

V. Analytical Results

    The following section addresses the results from DOE's analyses 
with respect to potential energy conservation standards for residential 
dehumidifiers. It addresses the TSLs examined by DOE and the projected 
impacts of each of these levels if adopted as energy conservation 
standards for residential dehumidifiers. Additional details regarding 
DOE's analyses are contained in the NOPR TSD supporting this notice.

A. Trial Standard Levels

    DOE analyzed the benefits and burdens of four TSLs for residential 
dehumidifiers. These TSLs were developed by combining specific ELs for 
each of the five product classes analyzed by DOE. DOE presents the 
results for the TSLs in this document, while the results for all ELs 
that DOE analyzed are in the NOPR TSD. Table V.1 presents the TSLs and 
the corresponding efficiency levels for residential dehumidifiers. TSL 
4 represents the max-tech energy efficiency for all product classes. 
TSL 3 consists of the ELs below the max-tech level. TSL 2 consists of 
the gap-fill ELs below TSL 3 and above the baseline and EL 1 for 
product classes 1 and 2, while product class 3 through product class 5 
repeat the same efficiency level as TSL 3. TSL 1 consists of the first 
EL above the baseline.

[[Page 31681]]



                                             Table V.1--Trial Standard Levels for Residential Dehumidifiers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         PC1                  PC2                  PC3                  PC4                  PC5
                                                --------------------------------------------------------------------------------------------------------
                                                  <=30.00 pints/day    30.01-45.00 pints/    >45.00 pints/day       <=8.0 ft \3\         >8.0 ft \3\
                      TSL                       ---------------------         day         --------------------------------------------------------------
                                                                     ---------------------
                                                   EL     AEU  (kWh/           AEU  (kWh/    EL     AEU  (kWh/    EL     AEU  (kWh/    EL     AEU  (kWh/
                                                             yr)        EL        yr)                  yr)                  yr)                  yr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--.............................................       0          720       0        1,030       0          905       0          951       0        1,137
1..............................................       1          505       1          808       1          781       1          809       1        1,016
2..............................................       2          463       2          693       2          670       1          809       2          784
3..............................................       3          428       3          607       2          670       1          809       2          784
4..............................................       4          355       4          540       3          513       2          671       3          617
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on residential dehumidifier 
consumers by looking at the effects potential amended standards would 
have on the LCC and PBP. DOE also examined the impacts of potential 
standards on consumer subgroups. These analyses are discussed below.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products would affect consumers in 
two ways: (1) Purchase prices would increase, and (2) annual operating 
costs would decrease. Inputs used for calculating the LCC and PBP 
include total installed costs (i.e., product price plus installation 
costs), operating costs (i.e., annual energy savings, energy prices, 
energy price trends, repair costs, and maintenance costs), product 
lifetime, and discount rates. Chapter 8 of the NOPR TSD provides 
detailed information on the LCC and PBP analyses.
    Table V.2 through Table V.11 show the LCC and PBP results for the 
ELs considered for each residential dehumidifier product class. In the 
first of each pair of tables, the simple payback period is measured 
relative to the baseline product. In the second table, the LCC savings 
are measured relative to the average LCC in the base case, which 
represents what consumers would purchase in the absence of amended 
standards (see section IV.F.8 of this proposed rule). Because some 
consumers purchase products with higher ELs in the base case, the 
average savings are less than the difference between the average LCC of 
EL 0 and the average LCC at each TSL.

                                     Table V.2--Average LCC and PBP Results by Efficiency Level for Dehumidifier PC1
                                                                   [<=30.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs  (2013$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
                       TSL                          EL                     First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--..............................................       0             212             101             952           1,163  ..............              11
1...............................................       1             212              71             668             879             0.0              11
2...............................................       2             214              65             612             826             0.1              11
3...............................................       3             218              60             566             784             0.2              11
4...............................................       4             241              50             469             710             0.6              11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline (EL 0) product.


      Table V.3--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Dehumidifier PC1
                                               [<=30.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                              % of Consumers   Average savings *
                                TSL                                   EL     that experience  ------------------
                                                                           -------------------
                                                                                 Net cost            2013$
----------------------------------------------------------------------------------------------------------------
1.................................................................       1                  0                 31
2.................................................................       2                  0                 49
3.................................................................       3                  0                 64
4.................................................................       4               10.3                137
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).


[[Page 31682]]


                                     Table V.4--Average LCC and PBP Results by Efficiency Level for Dehumidifier PC2
                                                                 [30.01-45.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs  (2013$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
                       TSL                          EL                     First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--..............................................     256             145           1,361           1,617  ..............              11  ..............
1...............................................       1             256             114           1,067           1,323             0.0              11
2...............................................       2             259              97             915           1,175             0.1              11
3...............................................       3             268              85             802           1,069             0.2              11
4...............................................       4             290              76             713           1,003             0.5              11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.5--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Dehumidifier PC2
                                             [30.01-45.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                              % of consumers   Average savings *
                                TSL                                   EL     that experience  ------------------
                                                                           -------------------
                                                                                 Net cost            2013$
----------------------------------------------------------------------------------------------------------------
1.................................................................       1                  0                  0
2.................................................................       2                  0                  0
3.................................................................       3                0.5                 99
4.................................................................       4                5.4                164
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).


                                     Table V.6--Average LCC and PBP Results by Efficiency Level for Dehumidifier PC3
                                                                   [>45.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs  (2013$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
                       TSL                          EL                     First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--..............................................       0             915             127           1,195           2,110  ..............              11
1...............................................       1             989             110           1,032           2,021             4.3              11
2, 3............................................       2           1,008              94             885           1,893             2.8              11
4...............................................       3           1,124              72             678           1,802             3.8              11
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.7--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Dehumidifier PC3
                                               [>45.00 pints/day]
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                              % of consumers   Average savings *
                                TSL                                   EL     that experience  ------------------
                                                                           -------------------
                                                                                 Net cost            2013$
----------------------------------------------------------------------------------------------------------------
1.................................................................       1               18.9                 50
2, 3..............................................................       2               11.7                147
4.................................................................       3               31.4                239
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).


[[Page 31683]]


                                     Table V.8--Average LCC and PBP Results by Efficiency Level for Dehumidifier PC4
                                                                      [<=8.0 ft\3\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs  (2013$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
                       TSL                          EL                     First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--..............................................       0           1,662             139           2,048           3,710  ..............              19
1, 2, 3.........................................       1           1,689             118           1,740           3,429             1.3              19
4...............................................       2           1,890              98           1,444           3,334             5.5              19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


      Table V.9--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Dehumidifier PC4
                                                  [<=8.0 ft\3\]
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                              % of consumers   Average savings *
                                TSL                                   EL     that experience  ------------------
                                                                           -------------------
                                                                                 Net cost            2013$
----------------------------------------------------------------------------------------------------------------
1, 2, 3...........................................................       1                8.4                207
4.................................................................       2               44.4                302
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).


                                    Table V.10--Average LCC and PBP Results by Efficiency Level for Dehumidifier PC5
                                                                      [>8.0 ft\3\]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Average costs  (2013$)
                                                         ----------------------------------------------------------------   Simple PBP        Average
                TSL                          EL                            First year's      Lifetime                         (years)        lifetime
                                                          Installed cost  operating cost  operating cost        LCC                           (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
--................................                     0           2,142             166           2,446           4,589  ..............              19
1.................................                     1           2,154             149           2,188           4,342             0.7              19
2, 3..............................                     2           2,212             115           1,687           3,899             1.4              19
4.................................                     3           2,445              90           1,328           3,773             4.0              19
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.


     Table V.11--Average LCC Savings Relative to the Base-Case Efficiency Distribution for Dehumidifier PC5
                                                  [>8.0 ft\3\]
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                              % of consumers   Average savings *
                                TSL                                   EL     that experience  ------------------
                                                                           -------------------
                                                                                 Net cost            2013$
----------------------------------------------------------------------------------------------------------------
1.................................................................       1                1.4                 75
2, 3..............................................................       2               10.7                416
4.................................................................       3               39.9                542
----------------------------------------------------------------------------------------------------------------
* The calculation includes households with zero LCC savings (no impact).

b. Consumer Subgroup Analysis
    As described in section IV.I of this proposed rule, DOE estimated 
the impact of the considered TSLs on low-income households and senior-
only households.\61\ Table V.12 through Table V.16 compare the average 
LCC savings at each efficiency level for the two consumer subgroups, 
along with the average LCC savings for the entire sample. In most 
cases, the average LCC savings and PBP for low-income households and 
senior-only households at the considered ELs are not substantially 
different from the average for all households. Chapter 11 of the NOPR 
TSD presents the complete LCC and PBP results for the two subgroups.
---------------------------------------------------------------------------

    \61\ DOE did not analyze subgroup impacts for compact 
dehumidifiers because the saturation of these products is extremely 
small.

[[Page 31684]]



              Table V.12--Dehumidifier PC1 (<=30.00 pints/day): Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average life-cycle cost savings  (2013$)                Simple payback period  (years)
                                                   -----------------------------------------------------------------------------------------------------
                        TSL                            Low-income      Senior-only                        Low-income      Senior-only
                                                       households       households     All households     households       households     All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................               28               24               31              0.0              0.0              0.0
2.................................................               45               39               49              0.1              0.1              0.1
3.................................................               58               51               64              0.2              0.2              0.2
4.................................................              125              107              137              0.6              0.7              0.6
--------------------------------------------------------------------------------------------------------------------------------------------------------


            Table V.13--Dehumidifier PC2 (30.01-45.00 pints/day): Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average life-cycle cost savings  (2013$)                Simple payback period  (years)
                                                   -----------------------------------------------------------------------------------------------------
                        TSL                            Low-income      Senior-only                        Low-income      Senior-only
                                                       households       households     All households     households       households     All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................                0                0                0              0.0              0.0              0.0
2.................................................                0                0                0              0.1              0.1              0.1
3.................................................               92               81               99              0.2              0.2              0.2
4.................................................              150              130              164              0.5              0.6              0.5
--------------------------------------------------------------------------------------------------------------------------------------------------------


              Table V.14--Dehumidifier PC3 (>45.00 pints/day): Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average life-cycle cost savings  (2013$)                Simple payback period  (years)
                                                   -----------------------------------------------------------------------------------------------------
                        TSL                            Low-income      Senior-only                        Low-income      Senior-only
                                                       households       households     All households     households       households     All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................               43               36               50              4.5              5.2              4.3
2, 3..............................................              133              114              147              3.0              3.4              2.8
4.................................................              209              169              239              4.0              4.6              3.8
--------------------------------------------------------------------------------------------------------------------------------------------------------


                 Table V.15--Dehumidifier PC4 (<=8.0 ft\3\): Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average life-cycle cost savings  (2013$)                Simple payback period  (years)
                                                   -----------------------------------------------------------------------------------------------------
                        TSL                            Low-income      Senior-only                        Low-income      Senior-only
                                                       households       households     All households     households       households     All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 2, 3...........................................              113              182              207              1.9              1.4              1.3
4.................................................               89              248              302              8.3              6.0              5.5
--------------------------------------------------------------------------------------------------------------------------------------------------------


                 Table V.16--Dehumidifier PC5 (>8.0 ft\3\): Comparison of Average LCC Savings for Consumer Subgroups and All Households
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Average life-cycle cost savings  (2013$)                Simple payback period  (years)
                                                   -----------------------------------------------------------------------------------------------------
                        TSL                            Low-income      Senior-only                        Low-income      Senior-only
                                                       households       households     All households     households       households     All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.................................................               43               67               75              1.0              0.7              0.7
2, 3..............................................              224              367              416              2.0              1.5              1.4
4.................................................              204              457              542              6.0              4.4              4.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Rebuttable Presumption Payback
    As discussed above, EPCA provides a rebuttable presumption that an 
energy conservation standard is economically justified if the increased 
purchase cost for a product that meets the standard is less than three 
times the value of the first-year energy savings resulting from the 
standard. In calculating a rebuttable presumption PBP for the 
considered standard levels, DOE used discrete values and, as required 
by EPCA, based

[[Page 31685]]

the energy use calculation on the current DOE test procedure for 
residential dehumidifiers. In contrast, the PBPs presented in section 
V.B.1.a were calculated using distributions for input values, with 
energy use based on field studies and RECS data.
    Table V.17 presents the rebuttable-presumption PBPs for the 
considered TSLs.\62\ While DOE examined the rebuttable-presumption 
criterion, it further considered whether the standard levels considered 
for the NOPR are economically justified through a more detailed 
analysis of the economic impacts of those levels pursuant to 42 U.S.C. 
6295(o)(2)(B)(i). The results of that analysis serve as the basis for 
DOE to evaluate the economic justification for a potential standard 
level (thereby supporting or rebutting the results of any preliminary 
determination of economic justification).
---------------------------------------------------------------------------

    \62\ The PBPs in Table V.17 differ from those shown in Tables 
V.2, V.4, V.6, V.8 and V.10 because the rebuttable PBPs are 
calculated with energy use based on the DOE test procedure, whereas 
the PBPs in the earlier tables are calculated with energy use based 
on field studies and RECS data.

                        Table V.17--Residential Dehumidifiers: Rebuttable Payback Period
                                                     [Years]
----------------------------------------------------------------------------------------------------------------
                                                                     Trial standard level
                Product class                -------------------------------------------------------------------
                                                     1                2                3                4
----------------------------------------------------------------------------------------------------------------
PC1.........................................              0.0              0.1              0.2              0.8
(<=30.00 pints/day).........................
PC2.........................................              0.0              0.1              0.3              0.7
(30.00--45.00 pints/day)....................
PC3.........................................              5.6              3.7              3.7              5.0
(>45.00 pints/day)..........................
PC4.........................................              2.0              2.0              2.0              8.6
(<=8.0 ft\3\)...............................
PC5.........................................              1.0              2.1              2.1              6.2
(>8.0 ft\3\)................................
----------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of residential dehumidifiers. 
The section below describes the expected impacts on manufacturers at 
each TSL. Chapter 12 of the NOPR TSD explains the analysis in further 
detail.
a. Industry Cash Flow Analysis Results
    The following tables illustrate the financial impacts (represented 
by changes in INPV) of amended energy conservation standards on 
manufacturers of residential dehumidifiers as well as the conversion 
costs that DOE estimates manufacturers would incur for all product 
classes at each TSL. To evaluate the range of cash-flow impacts on the 
residential dehumidifier manufacturing industry, DOE used two different 
markup scenarios to model the range of anticipated market responses to 
amended energy conservation standards.
    To assess the lower (less severe) end of the range of potential 
impacts, DOE modeled a preservation of gross margin percentage markup 
scenario, in which a flat markup of 1.45 (i.e., the baseline 
manufacturer markup) is applied across all efficiency levels. In this 
scenario, DOE assumed that a manufacturer's absolute dollar markup 
would increase as production costs increase in the amended energy 
conservation standards case. Manufacturers have indicated that it is 
optimistic to assume that they would be able to maintain the same gross 
margin markup as their production costs increase in response to a new 
or amended energy conservation standard, particularly at higher TSLs.
    To assess the higher (more severe) end of the range of potential 
impacts, DOE modeled the preservation of per-unit operating profit 
markup scenario, which assumes that manufacturers would not be able to 
preserve the same overall gross margin, but instead would cut their 
markup for minimally compliant products to maintain a cost competitive 
product offering while maintaining the same overall level of operating 
profit in absolute dollars as in the base case. The two tables below 
show the range of potential INPV impacts for manufacturers of 
residential dehumidifiers. Table V.18 reflects the lower bound of 
impacts (higher profitability) and Table V.19 represents the upper 
bound of impacts (lower profitability).
    Each scenario results in a unique set of cash flows and 
corresponding industry values at each TSL. In the following discussion, 
the INPV results refer to the sum of discounted cash flows through 
2048, the difference in INPV between the base case and each standards 
case, and the total industry conversion costs required for each 
standards case.

             Table V.18--Manufacturer Impact Analysis under the Preservation of Gross Margin Percentage Markup Scenario for Analysis Period
                                                                       [2015-2048]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Trial standard level
                                                   Units                 Base case   -------------------------------------------------------------------
                                                                                             1                2                3                4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2013$ Millions................           186.5         184.0            183.4            155.2            146.3
Change in INPV......................  2013$ Millions................  ..............          (2.5)            (3.1)           (31.3)           (40.2)
                                      (%)...........................  ..............          (1.4%)           (1.6%)          (16.8%)          (21.6%)
Free Cash Flow (2018)...............  2013$ Millions................            15.8          14.1             13.6             (2.5)           (13.7)

[[Page 31686]]

 
Change in Free Cash Flow (2018).....  (%)...........................  ..............         (11.2%)          (14.4%)         (116.1%)         (186.4%)
Product Conversion Costs............  2013$ Millions................  ..............           3.9              5.1             30.2             48.1
Capital Conversion Costs............  2013$ Millions................  ..............           1.3              1.7             20.5             33.1
                                     -------------------------------------------------------------------------------------------------------------------
    Total Conversion Costs..........  2013$ Millions................  ..............           5.2              6.7             50.7             81.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.


            Table V.19--Manufacturer Impact Analysis under the Preservation of Per-Unit Operating Profit Markup Scenario for Analysis Period
                                                                      [2015--2048]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Trial standard level
                                                   Units                 Base case   -------------------------------------------------------------------
                                                                                             1                2                3                4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV................................  2013$ Millions................           186.5         183.5            182.1            151.6            126.8
Change in INPV......................  2013$ Millions................  ..............          (3.0)            (4.4)           (34.9)           (59.7)
                                      (%)...........................  ..............          (1.6%)           (2.4%)          (18.7%)          (32.0%)
Free Cash Flow (2018)...............  2013$ Millions................            15.8          14.1             13.6             (2.5)           (13.7)
Decrease in Free Cash Flow (2018)...  (%)...........................  ..............         (11.2%)          (14.4%)         (116.1%)         (186.4%)
Product Conversion Costs............  2013$ Millions................  ..............           3.9              5.1             30.2             48.1
Capital Conversion Costs............  2013$ Millions................  ..............           1.3              1.7             20.5             33.1
                                     -------------------------------------------------------------------------------------------------------------------
    Total Conversion Costs..........  2013$ Millions................  ..............           5.2              6.7             50.7             81.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

    Beyond impacts on INPV, DOE includes a comparison of free cash flow 
between the base case and the standards case at each TSL in the year 
before amended standards take effect to provide perspective on the 
short-run cash flow impacts in the discussion of the results below.
    At TSL 1, DOE estimates the impact on INPV for manufacturers of 
residential dehumidifiers to range from -$2.5 million to -$3.0 million, 
or a decrease in INPV of 1.4 percent to 1.6 percent under the 
preservation of gross margin percentage markup scenario and the 
preservation of per-unit operating profit markup scenario, 
respectively. At this TSL, industry free cash flow is estimated to 
decrease by approximately 11.2 percent to $14.1 million, compared to 
the base-case value of $15.8 million in 2018, the year before the 
projected compliance date.
    At TSL 1, the industry as a whole is expected to incur $3.9 million 
in product conversion costs attributed to upfront research, 
development, testing, and certification; as well as $1.3 million in 
one-time investments in property, plant and equipment (PP&E) necessary 
to manufacture redesigned platforms. The majority of industry 
conversion cost burden at TSL 1 would be felt by manufacturers of high-
capacity portable and whole-home dehumidifiers, as more of these 
products are currently at the baseline than is the case for lower-
capacity portable products. These baseline products may necessitate 
complete platform redesigns, which involve moving to a new case size to 
accommodate larger heat exchangers. These changes require upfront 
capital investments for new tooling to manufacturing production lines, 
among other changes. Additionally, it is assumed that manufacturers of 
high-capacity portable and whole-home dehumidifiers, the majority of 
which are small business manufacturers, will have to outsource testing 
of their products to third-party testing facilities, contributing to 
greater product conversion costs. In contrast, the large manufacturers 
of small portable dehumidifiers are assumed to have in-house testing 
capabilities which significantly reduce the cost of testing. DOE 
confirmed these assumptions regarding testing burdens during 
manufacturer interviews.
    At TSL 2, DOE estimates the impact on INPV for manufacturers of 
residential dehumidifiers to range from -$3.1 million to -$4.4 million, 
or a decrease in INPV of 1.6 percent to 2.4 percent under the 
preservation of gross margin percentage markup scenario and the 
preservation of per-unit operating profit markup scenario, 
respectively. At this TSL, industry free cash flow is estimated to 
decrease by approximately 14.4 percent to $13.6 million, compared to 
the base-case value of $15.8 million in 2018, the year before the 
projected compliance date.
    At TSL 2, the industry as a whole is expected to incur $5.1 million 
in product conversion costs associated with the upfront research, 
development, testing, and certification; as well as $1.7 million in 
one-time investments in PP&E to manufacturer products requiring 
platform redesigns. Similar to TSL 1, the majority of industry 
conversion cost burden at TSL 2 will be felt by manufacturers of high-
capacity portable and whole-home dehumidifiers, as more products of 
these types are at the baseline than is the case for lower-capacity 
portable products, and will require complete

[[Page 31687]]

platform redesigns. Platform redesigns at TSL 2 will require moving to 
a new case size to accommodate larger heat exchangers, and will 
necessitate upfront capital investments for new tooling. Similar to TSL 
1, because manufacturers of high-capacity portable and whole-home 
dehumidifiers are largely small businesses, it is assumed that these 
manufacturers will be required to outsource testing of their products 
to third-party testing facilities. In contrast, the large manufacturers 
of small portable dehumidifiers are assumed to have in-house testing 
capabilities, which significantly reduce the cost of testing. DOE 
confirmed these assumptions regarding testing burdens during 
manufacturer interviews.
    At TSL 3, DOE estimates the impact on INPV for manufacturers of 
residential dehumidifiers to range from -$31.3 million to -$34.9 
million, or a decrease in INPV of 16.8 percent to 18.7 percent under 
the preservation of gross margin percentage markup scenario and the 
preservation of per-unit operating profit markup scenario, 
respectively. At this TSL, industry free cash flow is estimated to 
decrease by approximately 116.1 percent to -$2.5 million, compared to 
the base-case value of $15.8 million in 2018, the year before the 
projected compliance date.
    At TSL 3, the industry as a whole is expected to spend $30.2 
million in product conversion costs associated with the research and 
development and testing and certification, as well as $20.5 million in 
one-time investments in PP&E to manufacture redesigned platforms. While 
conversion costs remain relatively constant for manufacturers of high-
capacity portable and whole-home dehumidifiers between TSLs 1, 2 and 3, 
the conversion costs for manufacturers of lower-capacity portable 
products increase substantially at TSL 3, as a greater portion of these 
products will require total platform redesigns. As with the high-
capacity portable and whole-home dehumidifier market segment, platform 
redesigns for lower-capacity portable units will consist of moving 
products to a new case size to accommodate larger heat exchangers, and 
in turn will require capital investments in new tooling for larger 
cases. This upfront investment is in addition to higher R&D and testing 
expenditures. Because lower-capacity portable units represent 
approximately 97 percent of the market, conversion costs associated 
with this segment have a significant impact on total industry 
conversion costs for TSL 3.
    At TSL 4, DOE estimates the impact on INPV for manufacturers of 
residential dehumidifiers to range from -$40.2 million to -$59.7 
million, or a decrease in INPV of 21.6 percent to 32.0 percent under 
the preservation of gross margin percentage markup scenario and the 
preservation of per-unit operating profit markup scenario, 
respectively. At this TSL, industry free cash flow is estimated to 
decrease by approximately 186.4 percent to -$13.7 million, compared to 
the base-case value of $15.8 million in 2018, the year before the 
projected compliance date.
    At TSL 4, the industry as a whole is expected to spend $48.1 
million in product conversion costs associated with the research and 
development and testing and certification, as well as $33.1 million in 
one-time investments in PP&E for platform redesigns. Again, conversion 
costs remain relatively constant for manufacturers of high-capacity 
portable and whole-home dehumidifiers across TSLs 1, 2, 3, and 4. In 
contrast, the conversion cost burden for manufacturers of lower-
capacity portable products increases substantially at TSL 4, as an 
increasingly larger portion of smaller portable products will require 
platform redesigns. Again, since lower-capacity portable units 
represent approximately 97 percent of the market, conversion costs 
associated with this segment have a significant impact on total 
industry conversion costs for TSL 4.
b. Impacts on Employment
    DOE used the GRIM to estimate the domestic labor expenditures and 
number of domestic production workers in the base case and at each TSL 
from 2015 to 2048. DOE used statistical data from the U.S Census 
Bureau's 2011 Annual Survey of Manufactures, the results of the 
engineering analysis, and interviews with manufacturers to determine 
the inputs necessary to calculate industry-wide labor expenditures and 
domestic employment levels at each TSL. Labor expenditures for the 
manufacture of a product are a function of the labor intensity of the 
product, the sales volume, and an assumption that wages in real terms 
remain constant.
    DOE notes that the MIA assessment of impacts on manufacturing 
employment focuses specifically on the production workers manufacturing 
the covered products in question, rather than a manufacturer's broader 
operations. Thus, the estimated number of impacted employees in the MIA 
is separate and distinct from the total number of employees used to 
determine whether a manufacturer is a small business for purposes of 
analysis under the Regulatory Flexibility Act.
    The estimates of production workers in this section only cover 
those up to and including the line-supervisor level that are directly 
involved in fabricating and assembling a product within the OEM 
facility. In addition, workers that perform services that are closely 
associated with production operations are included. Employees above the 
working-supervisor level are excluded from the count of production 
workers. Thus, the labor associated with non-production functions 
(e.g., factory supervision, advertisement, sales) is explicitly not 
covered.\63\ In addition, DOE's estimates only account for production 
workers that manufacture the specific products covered by this 
rulemaking. Finally, because DOE does not expect that this standard 
will impact shipments for any product class, this analysis also does 
not factor in the dependence by some manufacturers on production volume 
to make their operations viable. Alternative employment impact 
scenarios specific to the small business manufacturer subgroup are 
considered at the end of this section.
---------------------------------------------------------------------------

    \63\ The U.S. Census Bureau's 2011 Annual Survey of Manufactures 
provides the following definition: ``The `production workers' number 
includes workers (up through the line-supervisor level) engaged in 
fabricating, processing, assembling, inspecting, receiving, storing, 
handling, packing, warehousing, shipping (but not delivering), 
maintenance, repair, janitorial and guard services, product 
development, auxiliary production for plant's own use (e.g., power 
plant), recordkeeping, and other services closely associated with 
these production operations at the establishment covered by the 
report. Employees above the working-supervisor level are excluded 
from this item.''
---------------------------------------------------------------------------

    In the GRIM, DOE used the labor content of each product and the 
manufacturing production costs from the engineering analysis to 
estimate the annual labor expenditures in the residential dehumidifier 
manufacturing industry. DOE used information gained through interviews 
with manufacturers to estimate the portion of the total labor 
expenditures that can be attributed to domestic production labor.
    The employment impacts shown in Table V.20 represent the potential 
production employment that could result following amended energy 
conservation standards. These are independent of the employment impacts 
from the broader U.S. economy, which are documented in chapter 16 of 
the NOPR TSD.
    DOE estimates that in the absence of amended energy conservation 
standards, there would be 214 domestic production workers for all 
manufacturers involved in manufacturing residential dehumidifiers in 
2019. Using the 2011 Annual Survey

[[Page 31688]]

of Manufactures and interviews with manufacturers, DOE estimates that 
approximately 3 percent of residential dehumidifiers sold in the United 
States are manufactured domestically. Table V.20 shows the range of the 
impacts of potential amended energy conservation standards on U.S. 
production workers in the residential dehumidifier manufacturing 
industry.

   Table V.20--Change in Total Number of Domestic Production Employees in 2019 in the Residential Dehumidifier
                                                    Industry
----------------------------------------------------------------------------------------------------------------
                                                  Base case      TSL 1        TSL 2        TSL 3        TSL 4
----------------------------------------------------------------------------------------------------------------
Total Number of Domestic Production Workers in           214          219          222          222          261
 2019..........................................
Change in Total Number of Domestic Production    ...........         2.3%         3.7%         3.7%        21.9%
 Workers in 2019 (%)...........................
----------------------------------------------------------------------------------------------------------------

    Because production employment expenditures are assumed to be a 
fixed percentage of cost of goods sold and the MPCs typically increase 
with more efficient products, labor tracks the increased prices in the 
GRIM. As efficiency of dehumidifiers increases, so does the complexity 
of the products, generally requiring more labor to produce the product. 
However, because only 3 percent of residential dehumidifier 
manufacturing takes place domestically, employment impacts are expected 
to be minimal. DOE expects that there would be minimal employment 
impacts among domestic residential dehumidifier manufacturers for TSLs 
1, 2, and 3. For TSL 4, the GRIM predicts a 21.9 percent increase in 
total domestic production employment following amended standards based 
on the increase in complexity and relative price of the high-capacity 
portable and whole-home dehumidifier segment.
    During manufacturer interviews, some small businesses stated that, 
contrary to the above findings, domestic production and non-production 
employment in the industry may decrease as a result of amended 
standards for residential dehumidifiers, due to reduced shipments 
volumes and/or reduced margins.
    Similarly, the above analysis does not account for the possible 
relocation of domestic jobs to lower-labor-cost countries because the 
potential relocation of U.S. jobs is uncertain and highly speculative. 
As mentioned above, the vast majority of residential dehumidifiers sold 
in the United States are manufactured abroad. However, almost all of 
the high-capacity portable and whole-home dehumidifiers are 
manufactured domestically. Feedback from manufacturers during NOPR 
interviews reveals that some domestic small businesses in the 
residential dehumidifier industry may be forced to make employment cuts 
or to shift production to new locations, including locations outside of 
the United States, as a result of amended energy conservation 
standards.
c. Impacts on Manufacturing Capacity
    As noted previously, the majority of residential dehumidifiers sold 
in the United States are not produced domestically. However, feedback 
from domestic manufacturers of high-capacity portable products and 
whole-home dehumidifiers suggested that production of these products 
could shift abroad as a result of amended energy conservation 
standards. This could lead to a permanently lower production capacity 
within the residential dehumidifier industry.
d. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop an industry cash flow 
estimate is not adequate for assessing differential impacts among 
subgroups of manufacturers. Small manufacturers, niche players, or 
manufacturers exhibiting a cost structure that differs significantly 
from the industry average could be affected differently. DOE used the 
results of the industry characterization to group manufacturers 
exhibiting similar characteristics.
    As previously mentioned, DOE identified five domestic small 
business manufacturers that may be disproportionately affected by the 
proposed energy conservation standards for residential dehumidifiers. 
These manufacturers are focused on one specific market segment (high-
capacity portable and whole-home dehumidifiers) and, in terms of annual 
revenue, are at least one order of magnitude smaller than their 
diversified competitors (tens of millions compared to hundreds of 
millions). Due to this combination of market concentration and size, 
these small businesses are at risk of high, disproportionate impacts, 
depending on the TSL chosen.
    DOE received feedback from small business manufacturers and OEM 
contractors through public comments and confidential interviews (see 
sections IV.J.3 and IV.J.4 of this proposed rule for a discussion of 
public comments and feedback received from dehumidifier manufacturers 
during the NOPR phase). These manufacturers expressed a high degree of 
concern relating to the magnitude of burdens and the disproportionate 
impacts that they believe will result from amended energy conservation 
standards for residential dehumidifiers.
    Today's standards for residential dehumidifiers could cause small 
manufacturers to be at a disadvantage relative to large manufacturers. 
One way in which small manufacturers could be at a disadvantage is that 
they may be disproportionately affected by product and capital 
conversion costs. Product redesign, testing, and certification costs 
tend to be fixed per basic model and do not scale with sales volume. 
For each model, small businesses must make investments in research and 
development to redesign their products, but because they have lower 
sales volumes, they must spread these costs across fewer units. In 
addition, because small manufacturers have fewer engineers than large 
manufacturers, they need to allocate a greater portion of their 
available resources to meet a standard. Because engineers may need to 
spend more time redesigning and testing existing models as a result of 
the new standard, they may have less time to develop new products. 
Similarly, upfront capital investments in new manufacturing capital for 
platform redesigns, as well as depreciated manufacturing capital, can 
only be spread across a lower volume of shipments.
    Furthermore, smaller manufacturers may lack the purchasing power of 
larger manufacturers. For example, since fan motor suppliers give 
discounts to manufacturers based on the number of motors they purchase, 
larger manufacturers may have a pricing advantage because they have 
higher volume purchases. This purchasing power differential between 
small and large manufacturers applies to other residential dehumidifier 
components as well, including compressors and heat exchangers. Some 
larger manufacturers of lower-capacity portable dehumidifiers may even 
manufacture

[[Page 31689]]

heat exchangers in-house. Additionally, because small business 
manufacturers produce larger units, they require larger/custom 
components (e.g. larger compressors) compared to large manufacturers 
who produce lower-capacity portable products and who account for the 
majority of the dehumidifier market. Because of the low-volume nature 
of the high-capacity portable and whole-home dehumidifier market, 
certain technological improvements to components may only be developed 
for small portable products, or with significant lag time for large 
dehumidifier products.
    To access the capital required to cover the conversion costs 
associated with reaching the proposed standards, small business 
manufacturers would likely be forced to take on additional debt, 
whereas larger manufacturers of small portable products would be better 
equipped to fund purchases with existing cash flow from operations.
    In terms of impacts to small business manufacturers associated with 
the specific TSLs outlined in this notice, as discussed in section 
V.B.2.d, disproportionate impacts will be greatest at TSLs 1 and 2, 
where relatively more high-capacity portable and home-whole 
dehumidifiers are at or below the baseline than is the case for the 
lower-capacity portable products. Additionally, it is assumed that 
small business manufacturers will be required to outsource the testing 
of their products to third-party testing facilities. In contrast, the 
large manufacturers of small portable dehumidifiers are assumed to have 
in-house testing capabilities, which significantly reduce the cost of 
testing. While the magnitude of the conversion cost burden increases 
slightly for small business manufacturers at TSLs 3 and 4, 
disproportionate impacts decrease substantially, as relatively more 
lower-capacity portable product platforms will require substantial 
redesign. Between TSLs 3 and 4, TSL 3 minimizes standards compliance 
burdens for small business manufacturers relative to the burdens of 
high-volume portable dehumidifier manufacturers.
    Further detail and separate analysis of impacts on small business 
high-capacity portable and whole-home dehumidifier manufacturers are 
found in chapter 12, section 12.6 of the NOPR TSD, as well as in 
sections IV.J.3, IV.J.4, and V.B.2.d of this notice.
e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden is the cumulative 
impact of multiple DOE standards and the regulatory actions of other 
Federal agencies and States that affect the manufacturers of a covered 
product or equipment. While any one regulation may not impose a 
significant burden on manufacturers, the combined effects of several 
existing or impending regulations may have serious consequences for 
some manufacturers, groups of manufacturers, or an entire industry.
    Companies that produce a wider range of regulated products may be 
faced with more capital and product development expenditures than their 
competitors. This can prompt those companies to exit the market or 
reduce their product offerings, potentially reducing competition. 
Smaller companies can be especially affected, since they have lower 
sales volumes over which to amortize the costs of compliance with new 
regulations.
    In addition to DOE's energy conservation regulations for 
residential dehumidifiers, several other existing and pending 
regulations apply to these products and other equipment produced by the 
same manufacturers. The most significant of these additional 
regulations include several additional Federal energy conservation 
standards, and third-party certification programs (e.g., UL safety 
standards certification for dehumidifiers). For more details, see 
chapter 12, section 12.7.3 of the NOPR TSD.
3. National Impact Analysis
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential standards 
for residential dehumidifiers, DOE compared the energy consumption of 
those products under the base case to their anticipated energy 
consumption under each TSL. Table V.21 presents DOE's projections of 
the national energy savings for each TSL considered for residential 
dehumidifiers shipped in the 2019-2048 period. The savings were 
calculated using the approach described in section IV.H.1 of this 
notice.

    Table V.21--Residential Dehumidifiers: Cumulative National Energy
                                 Savings
                        [Shipments in 2019-2048]
------------------------------------------------------------------------
                                                 Trial standard level
                   Savings                   ---------------------------
                                                1      2      3      4
------------------------------------------------------------------------
Primary Energy Savings (quads)..............   0.07   0.11   0.31   0.75
FFC Energy Savings (quads)..................   0.07   0.11   0.32   0.79
------------------------------------------------------------------------

    OMB Circular A-4 \64\ 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. For this rulemaking, 
DOE undertook a sensitivity analysis using 9, rather than 30, years of 
product shipments. 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.\65\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to residential dehumidifiers. Thus, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology. The NES 
sensitivity analysis results based on a 9-year analytical period are 
presented in Table V.22. The impacts are counted over the lifetime of 
residential dehumidifiers purchased in 2019-2027.
---------------------------------------------------------------------------

    \64\ U.S. Office of Management and Budget, ``Circular A-4: 
Regulatory Analysis'' (Sept. 17, 2003) (Available at: http://www.whitehouse.gov/omb/circulars_a004_a-4/).
    \65\ Under 42 U.S.C. 6295(m)(1), and no later than 6 years after 
DOE issues a final rule establishing or amending an energy 
conservation standard, DOE must publish a notice of determination 
that standards for the product do not need to be amended or a NOPR 
that includes new proposed standards. The 9-year analytical period 
includes this 6-year period and an additional 3 years to issue the 
final rule and allow time for industry compliance.

    Table V.22--Residential Dehumidifiers: Cumulative National Energy
                Savings for Products Shipped in 2019-2027
------------------------------------------------------------------------
                                                 Trial standard level
                   Savings                   ---------------------------
                                                1      2      3      4
------------------------------------------------------------------------
Primary Energy Savings (quads)..............   0.03   0.04   0.11   0.23
FFC Energy Savings (quads)..................   0.03   0.04   0.11   0.24
------------------------------------------------------------------------

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the standard levels considered for 
residential dehumidifiers. In accordance with the OMB's guidelines on 
regulatory

[[Page 31690]]

analysis,\66\ DOE calculated NPV using both a 7-percent and a 3-percent 
real discount rate.
---------------------------------------------------------------------------

    \66\ U.S. Office of Management and Budget, ``Circular A-4: 
Regulatory Analysis,'' Section E, (September 17, 2003) (Available 
at: http://www.whitehouse.gov/omb/circulars_a004_a-4/).
---------------------------------------------------------------------------

    Table V.23 shows the consumer NPV results for each TSL DOE 
considered for residential dehumidifiers. The impacts are counted over 
the lifetime of products purchased in 2019-2048.

 Table V.23--Residential Dehumidifiers: Cumulative Net Present Value of
           Consumer Benefits for Products Shipped in 2019-2048
------------------------------------------------------------------------
                                                     Billion 2013$
                                             ---------------------------
                Discount rate                    Trial standard level
                                             ---------------------------
                                                1      2      3      4
------------------------------------------------------------------------
 
3 percent...................................   0.50   0.78   2.27   4.96
7 percent...................................   0.24   0.37   1.04   2.13
------------------------------------------------------------------------

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.24. The impacts are counted over the 
lifetime of products purchased in 2019-2027. As mentioned previously, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology or decision 
criteria.

 Table V.24--Residential Dehumidifiers: Cumulative Net Present Value of
           Consumer Benefits for Products Shipped in 2019-2027
------------------------------------------------------------------------
                                                     Billion 2013$
                                             ---------------------------
                Discount rate                    Trial standard level
                                             ---------------------------
                                                1      2      3      4
------------------------------------------------------------------------
3 percent...................................   0.24   0.36   0.93   1.78
7 percent...................................   0.14   0.22   0.56   1.03
------------------------------------------------------------------------

    The above results reflect the use of a default trend to estimate 
the change in price for residential dehumidifiers over the analysis 
period (see section IV.F.1 of this notice). DOE also conducted a 
sensitivity analysis that considered one scenario with a lower rate of 
price decline than the reference case and one scenario with a higher 
rate of price decline than the reference case. The results of these 
alternative cases are presented in appendix 10C of the NOPR TSD. In the 
high price decline case, the NPV of consumer benefits is higher than in 
the default case. In the low price decline case, the NPV of consumer 
benefits is lower than in the default case.
c. Impacts on Employment
    As discussed above, DOE expects energy conservation standards for 
residential dehumidifiers to reduce energy bills for consumers of those 
products, and the resulting net savings to be redirected to other forms 
of economic activity. These expected shifts in spending and economic 
activity could affect the demand for labor. As described in section 
IV.N of this notice, DOE used an input/output model of the U.S. economy 
to estimate indirect employment impacts of the TSLs that DOE considered 
in this rulemaking. DOE understands that there are uncertainties 
involved in projecting employment impacts, especially changes in the 
later years of the analysis. Therefore, DOE generated results for near-
term timeframe, where these uncertainties are reduced.
    The results suggest that today's standards are likely to have 
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. Chapter 16 of the NOPR TSD presents detailed results.
4. Impact on Utility or Performance of Products
    Based on testing conducted in support of this proposed rule, 
discussed in section IV.C.1.b of this notice, DOE has concluded that 
the TSL proposed in this NOPR would not reduce the utility or 
performance of the residential dehumidifiers under consideration in 
this rulemaking. Manufacturers of these products currently offer units 
that meet or exceed today's standards.
5. Impact of Any Lessening of Competition
    As discussed in section III.E.e, the Attorney General determines 
the impact, if any, of any lessening of competition likely to result 
from a proposed standard, and transmits such determination to DOE, 
together with an analysis of the nature and extent of such impact. (42 
U.S.C. 6295(o)(2)(B)(i)(V) and (B)(ii))
    DOE will transmit a copy of this NOPR and the accompanying NOPR TSD 
to the Attorney General, requesting that the DOJ provide its 
determination on this issue. DOE will consider DOJ's comments on the 
proposed rule in determining whether to proceed with the proposed 
energy conservation standards. DOE will also publish and respond to 
DOJ's comments in the Federal Register in a separate notice.
6. Need of the Nation To Conserve Energy
    Enhanced energy efficiency, where economically justified, improves 
the nation's energy security, strengthens the economy, and reduces the 
environmental impacts or costs of energy production. Reduced 
electricity demand due to energy conservation standards is also likely 
to reduce the cost of maintaining the reliability of the electricity 
system, particularly during peak-load periods. As a measure of this 
reduced demand, chapter 15, section 15.3 in the NOPR TSD presents the 
estimated reduction in generating capacity for the TSLs that DOE 
considered in this rulemaking.
    Energy savings from amended standards for residential dehumidifiers 
could also produce environmental benefits in the form of reduced 
emissions of air pollutants and greenhouse gases associated with 
electricity production. Table V.25 provides DOE's estimate of 
cumulative emissions reductions to result from the TSLs considered in 
this rulemaking. DOE reports annual CO2, NOX, and 
Hg emissions reductions for each TSL in chapter 13, section 13.5 of the 
NOPR TSD.

   Table V.25--Cumulative Emissions Reduction Estimated for Residential Dehumidifier Trial Standard Levels for
                                          Products Shipped in 2019-2048
----------------------------------------------------------------------------------------------------------------
                                                                             Trial standard level
                                                             ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
                                             Power sector emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................         4.05         6.40        18.29        44.55

[[Page 31691]]

 
SO2 (thousand tons).........................................         3.52         5.55        15.77        38.16
NOX (thousand tons).........................................         3.18         5.03        14.34        34.83
Hg (tons)...................................................         0.01         0.02         0.05         0.12
N2O (thousand tons).........................................         0.05         0.09         0.25         0.61
CH4 (thousand tons).........................................         0.38         0.61         1.75         4.28
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................         0.22         0.35         1.01         2.50
SO2 (thousand tons).........................................         0.04         0.06         0.18         0.44
NOX (thousand tons).........................................         3.14         5.00        14.44        35.57
Hg (tons)...................................................         0.00         0.00         0.00         0.00
N2O (thousand tons).........................................         0.00         0.00         0.01         0.02
CH4 (thousand tons).........................................        18.32        29.15        84.13       207.16
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)...................................         4.27         6.75        19.31        47.05
SO2 (thousand tons).........................................         3.56         5.61        15.95        38.60
NOX (thousand tons).........................................         6.33        10.03        28.79        70.40
Hg (tons)...................................................         0.01         0.02         0.05         0.12
N2O (thousand tons).........................................         0.06         0.09         0.26         0.63
N2O (thousand tons CO2eq) *.................................        15.02        23.84        68.57       168.12
CH4 (thousand tons).........................................        18.70        29.75        85.88       211.44
CH4 (thousand tons CO2eq) *.................................       523.57       833.12     2,404.57     5,920.22
----------------------------------------------------------------------------------------------------------------
* CO2eq is the quantity of CO2 that would have the same GWP.

    As part of the analysis for this proposed rule, DOE estimated 
monetary benefits likely to result from the reduced emissions of 
CO2 and NOX that DOE estimated for each of the 
TSLs considered for residential dehumidifiers. As discussed in section 
IV.L of this notice, for CO2, DOE used the most recent 
values for the SCC developed by an interagency process. The four sets 
of SCC values for CO2 emissions reductions in 2015 resulting 
from that process (expressed in 2013$) are represented by $12.0/metric 
ton (the average value from a distribution that uses a 5-percent 
discount rate), $40.5/metric ton (the average value from a distribution 
that uses a 3-percent discount rate), $62.4/metric ton (the average 
value from a distribution that uses a 2.5-percent discount rate), and 
$119/metric ton (the 95th-percentile value from a distribution that 
uses a 3-percent discount rate). The values for later years are higher 
due to increasing damages (emissions-related costs) as the projected 
magnitude of climate change increases.
    Table V.26 presents the global value of CO2 emissions 
reductions at each TSL. 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. DOE calculated domestic values as a range from 7 percent to 
23 percent of the global values, and these results are presented in 
chapter 14 of the NOPR TSD.

   Table V.26--Estimates of Global Present Value of CO2 Emissions Reduction for Residential Dehumidifier Trial
                                                 Standard Levels
----------------------------------------------------------------------------------------------------------------
                                                                 Million 2013$
                             -----------------------------------------------------------------------------------
                                                                  SCC Case *
             TSL             -----------------------------------------------------------------------------------
                               5% Discount rate,    3% Discount rate,   2.5% Discount rate,   3% Discount rate,
                                    average              average              average          95th percentile
----------------------------------------------------------------------------------------------------------------
                                             Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
1...........................                 29.5                132.8                210.0                409.9
2...........................                 46.2                208.7                330.3                644.4
3...........................                130.3                592.6                938.9              1,831.0
4...........................                310.8              1,426.6              2,264.4              4,411.2
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
1...........................                  1.6                  7.2                 11.3                 22.1
2...........................                  2.5                 11.3                 18.0                 35.0
3...........................                  7.1                 32.4                 51.5                100.4
4...........................                 17.0                 78.9                125.6                244.4
----------------------------------------------------------------------------------------------------------------

[[Page 31692]]

 
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
1...........................                 31.1                140.0                221.4                432.0
2...........................                 48.6                220.1                348.3                679.4
3...........................                137.3                625.0                990.5              1,931.3
4...........................                327.8              1,505.6              2,390.0              4,655.6
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4, and $119
  per metric ton (2013$).

    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 used to 
represent the reduction of CO2 emissions in this rulemaking 
is subject to change. DOE, together with other Federal agencies, will 
continue to review various methodologies for estimating the monetary 
value of reductions in CO2 and other GHG emissions. This 
ongoing review will consider the comments on this subject that are part 
of the public record for this and other rulemakings, as well as other 
methodological assumptions and issues. However, consistent with DOE's 
legal obligations, and taking into account the uncertainty involved 
with this particular issue, DOE has included in this proposed rule the 
most recent values and analyses resulting from the interagency process.
    DOE also estimated the cumulative monetary value of the economic 
benefits associated with NOX emissions reductions 
anticipated to result from amended standards for residential 
dehumidifiers. The dollar-per-ton values that DOE used are discussed in 
section IV.L of this notice. Table V.27 presents the cumulative present 
values for each TSL calculated using 7-percent and 3-percent discount 
rates.

 Table V.27--Estimates of Present Value of NOX Emissions Reduction under
             Residential Dehumidifiers Trial Standard Levels
------------------------------------------------------------------------
                                                        Million 2013$
                                                   ---------------------
                        TSL                             3%         7%
                                                     Discount   Discount
                                                       rate       rate
------------------------------------------------------------------------
                         Power Sector Emissions
------------------------------------------------------------------------
1.................................................       11.9        5.4
2.................................................       18.6        8.3
3.................................................       52.4       22.8
4.................................................      125.0       52.9
------------------------------------------------------------------------
                           Upstream Emissions
------------------------------------------------------------------------
1.................................................       11.4        4.9
2.................................................       18.0        7.6
3.................................................       51.4       21.2
4.................................................      124.5       49.9
------------------------------------------------------------------------
                           Total FFC Emissions
------------------------------------------------------------------------
1.................................................       23.3       10.2
2.................................................       36.5       15.9
3.................................................      103.7       44.0
4.................................................      249.5      102.7
------------------------------------------------------------------------

7. Summary of National Economic Impacts
    The NPV of the monetized benefits associated with emissions 
reductions can be viewed as a complement to the NPV of the customer 
savings calculated for each TSL considered in this rulemaking. Table 
V.28 presents 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 customer 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 sets of SCC values discussed above.

Table V.28--Net Present Value of Customer Savings Combined With Present Value of Monetized Benefits From CO2 and
                                            NOX Emissions Reductions
----------------------------------------------------------------------------------------------------------------
                                                     Customer NPV at 3% discount rate added with:
                                     ---------------------------------------------------------------------------
                                       SCC Case  $12.0/   SCC Case  $40.5/   SCC Case  $62.4/   SCC Case  $119/
                 TSL                   metric ton  CO2*   metric ton  CO2*   metric ton  CO2*   metric ton  CO2*
                                      and  medium value  and  medium value  and  medium value  and  medium value
                                           for  NOX           for  NOX           for  NOX           for  NOX
----------------------------------------------------------------------------------------------------------------
                                        Billion 2013$
----------------------------------------------------------------------------------------------------------------
1...................................                0.6                0.7                0.7                1.0
2...................................                0.9                1.0                1.2                1.5
3...................................                2.5                3.0                3.4                4.3
4...................................                5.5                6.7                7.6                9.9
----------------------------------------------------------------------------------------------------------------

[[Page 31693]]

 
                                      Customer NPV at 7% discount rate added with:
                                     ---------------------------------------------------------------------------
                                           SCC Case           SCC Case           SCC Case           SCC Case
                                       $12.0/metric ton   $40.5/metric ton   $62.4/metric ton   $119/metric ton
                 TSL                       CO2* and           CO2* and           CO2* and           CO2* and
                                         medium value       medium value       medium value       medium value
                                           for NOX            for NOX            for NOX            for NOX
----------------------------------------------------------------------------------------------------------------
                                        Billion 2013$
----------------------------------------------------------------------------------------------------------------
1...................................                0.3                0.4                0.5                0.7
2...................................                0.4                0.6                0.7                1.1
3...................................                1.2                1.7                2.1                3.0
4...................................                2.6                3.7                4.6                6.9
----------------------------------------------------------------------------------------------------------------
* For each of the four cases, the corresponding SCC value for emissions in 2015 is $12.0, $40.5, $62.4, and $119
  per metric ton (2013$).

    Although adding the value of customer savings to the values of 
projected emission reductions provides a valuable perspective, two 
issues should be considered. First, the national operating cost savings 
are domestic U.S. customer 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 
different time frames for analysis. The national operating cost savings 
is measured for the lifetime of equipment shipped in 2019 to 2048. The 
SCC values, on the other hand, reflect the present value of future 
climate-related impacts resulting from the emission of one metric ton 
of CO2 in each year. These impacts continue well beyond 
2100.
8. 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)(VII)) DOE 
did not consider any other factors for this NOPR.

C. Conclusion

    When considering proposed standards, the new or amended energy 
conservation standard that DOE adopts for any type (or class) of 
covered product must 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, 
considering to the greatest extent practicable 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))
    DOE considered the impacts of standards at each TSL, beginning with 
a 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 as DOE discusses the benefits and/or burdens of 
each TSL, tables present a summary of the results of DOE's quantitative 
analysis for each TSL. In addition to the quantitative results 
presented in the tables, DOE also considers other burdens and benefits 
that affect economic justification. These include the impacts on 
identifiable subgroups of consumers, such as low-income households and 
seniors, who may be disproportionately affected by a national standard 
(see section V.B.1.b).
    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. 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 versus 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. 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).
    In DOE's current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer purchase 
decisions are included in two ways. First, if consumers forego a 
purchase of a product in the standards case, this decreases sales for 
product manufacturers and the impact on manufacturers attributed to 
lost revenue is included in the MIA. Second, DOE accounts for energy 
savings attributable only to products actually used by

[[Page 31694]]

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. However, DOE's 
current analysis does not explicitly control for heterogeneity in 
consumer preferences, preferences across subcategories of products or 
specific features, or consumer price sensitivity variation according to 
household income.\67\
---------------------------------------------------------------------------

    \67\ 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.\68\ DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------

    \68\ Alan Sanstad, Notes on the Economics of Household Energy 
Consumption and Technology Choice, Lawrence Berkeley National 
Laboratory (2010) (Available at: https://www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf).
---------------------------------------------------------------------------

1. Benefits and Burdens of Trial Standard Levels Considered for 
Residential Dehumidifiers
    Table V.29 and Table V.30 summarize the quantitative impacts 
estimated for each TSL for residential dehumidifiers. The efficiency 
levels contained in each TSL are described in section IV.A of this 
this.

                                      Table V.29--Residential Dehumidifier Trial Standard Levels: National Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Category                          TSL 1                         TSL 2                         TSL 3                         TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Cumulative FFC Energy Savings (quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  0.07........................  0.11........................  0.32........................  0.79
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        NPV of Customer Benefits (2013$ billion)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3% discount rate................  0.50........................  0.78........................  2.27........................  4.96
7% discount rate................  0.24........................  0.37........................  1.04........................  2.13
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Cumulative FFC Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......  4.27........................  6.75........................  19.31.......................  47.05
NOX (thousand tons).............  6.33........................  10.03.......................  28.79.......................  70.40
Hg (tons).......................  0.01........................  0.02........................  0.05........................  0.12
N2O (thousand tons).............  0.06........................  0.09........................  0.26........................  0.63
N2O (thousand tons CO2eq) *.....  15.02.......................  23.84.......................  68.57.......................  168.12
CH4 (thousand tons).............  18.70.......................  29.75.......................  85.88.......................  211.44
CH4 (thousand tons CO2eq) *.....  523.57......................  833.12......................  2,404.57....................  5,920.22
SO2 (thousand tons).............  3.56........................  5.61........................  15.95.......................  38.60
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Value of Emissions Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (2013$ million) **..........  31 to 432...................  49 to 679...................  137 to 1,931................  328 to 4,656
NOX--3% discount rate (2013$      23.3........................  36.5........................  103.7.......................  249.5
 million).
NOX--7% discount rate (2013$      10.2........................  15.9........................  44.0........................  102.7
 million).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* CO2eq is the quantity of CO2 that would have the same GWP.
** Range of the economic value of CO2 reductions is based on estimates of the global benefit of reduced CO2 emissions.


                              Table V.30--Residential Dehumidifier Trial Standard Levels: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Category                          TSL 1                         TSL 2                         TSL 3                         TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (2013$ millions)     184.0 to 183.5..............  183.4 to 182.1..............  155.2 to 151.6..............  146.3 to 126.8
 (Base Case INPV = 186.5).
Industry NPV (% change).........  (1.4%) to (1.6%)............  (1.6%) to (2.4%)............  (16.8%) to (18.7%)..........  (21.6%) to (32.0%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Consumer Average LCC Savings (2013$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC1 (<=30.00 pints/day).........  31..........................  49..........................  64..........................  137
PC2 (30.01-45.00 pints/day).....  0...........................  0...........................  99..........................  164
PC3 (>45.00 pints/day)..........  50..........................  147.........................  147.........................  239
PC4 (<=8.0 ft\3\)...............  207.........................  207.........................  207.........................  302
PC5 (>8.0 ft\3\)................  75..........................  416.........................  416.........................  542
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC1 (<=30.00 pints/day).........  0.0.........................  0.1.........................  0.2.........................  0.6

[[Page 31695]]

 
PC2 (30.01-45.00 pints/day).....  0.0.........................  0.1.........................  0.2.........................  0.5
PC3 (>45.00 pints/day)..........  4.3.........................  2.8.........................  2.8.........................  3.8
PC4 (<=8.0 ft\3\)...............  1.3.........................  1.3.........................  1.3.........................  5.5
PC5 (>8.0 ft\3\)................  0.7.........................  1.4.........................  1.4.........................  4.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         % of Consumers That Experience Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC1 (<=30.00 pints/day).........  0%..........................  0%..........................  0%..........................  10.3%
PC2 (30.01-45.00 pints/day).....  0%..........................  0%..........................  0.5%........................  5.4%
PC3 (>45.00 pints/day)..........  18.9%.......................  11.7%.......................  11.7%.......................  31.4%
PC4 (<=8.0 ft\3\)...............  8.4%........................  8.4%........................  8.4%........................  44.4%
PC5 (>8.0 ft\3\)................  1.4%........................  10.7%.......................  10.7%.......................  39.9%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.

    DOE first considered TSL 4, which represents the max-tech 
efficiency levels. TSL 4 would save 0.79 quads of energy, an amount DOE 
considers significant. Under TSL 4, the NPV of consumer benefit would 
be $2.13 billion using a discount rate of 7 percent, and $4.96 billion 
using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 47.1 Mt of 
CO2, 70.4 thousand tons of NOX, 38.6 thousand 
tons of SO2, 0.12 ton of Hg, 0.6 thousand tons of 
N2O, and 211.4 thousand tons of CH4. The 
estimated monetary value of the CO2 emissions reductions at 
TSL 4 ranges from $328 million to $4,656 million.
    At TSL 4, the average LCC impact is a savings of $137 for PC1, $134 
for PC2, $239 for PC3, $302 for PC4, and $542 for PC5. The simple PBP 
is 0.6 years for PC1, 0.5 years for PC2, 3.8 years for PC3, 5.5 years 
for PC4, and 4.0 years for PC5. The fraction of consumers experiencing 
a net LCC cost is 10.3 percent for PC1, 5.4 percent for PC2, 31.4 
percent for PC3, 44.4 percent for PC4, and 39.9 percent for PC5.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$40.2 million to a decrease of $59.7 million, which correspond to 
decreases of 21.6 percent and 32.0 percent, respectively. Products that 
meet the efficiency standards specified by this TSL are forecast to 
represent less than 2 percent of shipments. As such, manufacturers 
would have to redesign nearly all products by the expected 2019 
projected compliance date to meet demand. Redesigning all units to meet 
the current max-tech efficiency levels would require considerable 
capital and product conversion expenditures. At TSL 4, the capital 
conversion costs total as much as $33.1 million, 3.0 times the industry 
annual ordinary capital expenditure in 2018 (the year leading up to 
amended standards). DOE estimates that complete platform redesigns 
would cost the industry $48.1 million in product conversion costs. 
These conversion costs largely relate to the extensive research 
programs required to develop new products that meet the efficiency 
standards at TSL 4. These costs are equivalent to 8.9 times the 
industry annual budget for research and development. As such, the 
conversion costs associated with the changes in products and 
manufacturing facilities required at TSL 4 would require significant 
use of manufacturers' financial reserves (manufacturer capital pools), 
impacting other areas of business that compete for these resources and 
significantly reducing INPV. In addition, manufacturers could face a 
substantial impact on profitability at TSL 4. Because manufacturers are 
more likely to reduce their margins to maintain a price-competitive 
product at higher TSLs, especially in the lower-capacity portable 
segment, DOE expects that TSL 4 would yield impacts closer to the high 
end of the range of INPV impacts. If the high end of the range of 
impacts is reached, as DOE expects, TSL 4 could result in a net loss to 
manufacturers of 32.0 percent of INPV.
    Beyond the direct financial impact on manufacturers, TSL 4 may also 
contribute to the potential unavailability of products at certain 
capacities across the five product classes. The efficiencies at TSL 4 
are theoretical levels that DOE determined dehumidifiers could achieve 
by incorporating the most efficient type of each component. DOE is not 
aware of any dehumidifiers currently available on the market that 
achieve the TSL 4 efficiencies. To meet TSL 4, all products would be 
required to incorporate the highest efficiency compressors; however, 
manufacturers indicated that few such compressors are available in the 
range of compressor capacities suitable for residential dehumidifiers, 
and it is unlikely that substantially more would become available if 
standards at TSL 4 were adopted. In addition, the specific compressor 
capacities available at any given time are driven largely by the 
markets for other products with higher shipments (e.g., room air 
conditioners), and thus dehumidifier manufacturers may be constrained 
in their design choices. Because DOE assumed manufacturers would 
optimize all components at TSL 4, including the use of larger heat 
exchangers and permanent-magnet blower motors, manufacturers would not 
have alternative design pathways to achieve the max-tech efficiency 
level in the absence of high efficiency compressors. Therefore, DOE 
expects that those dehumidifier platforms for which a suitable high 
efficiency compressor is not available would be unable to meet the max-
tech efficiency level associated with TSL 4. While this would likely 
not eliminate entire product classes from the market, it has the 
potential to eliminate dehumidifiers of certain capacities within a 
given product class. The potential for this impact on manufacturers of 
high-capacity portable and whole-home dehumidifiers is exacerbated by 
this segment's low production volumes, which limits manufacturers' 
ability to influence the availability of higher efficiency components 
from their vendors.
    The Secretary tentatively concludes that at TSL 4 for residential 
dehumidifiers, the benefits of energy savings, positive NPV of consumer 
benefits, emission reductions, and the estimated monetary value of the 
CO2 emissions reductions would be outweighed by the economic 
burden on some consumers, the potential impact on product availability, 
and the impacts on manufacturers, including the conversion costs and 
profit margin

[[Page 31696]]

impacts that could result in a large reduction in INPV. Consequently, 
the Secretary has tentatively concluded that TSL 4 is not economically 
justified. However, if this situation were to change in the future, 
such that components could be made available in sufficient quantities 
to sustain higher production volumes across the range of product 
classes, DOE would consider TSL 4.
    DOE then considered TSL 3, which would save an estimated 0.32 quads 
of energy, an amount DOE considers significant. Under TSL 3, the NPV of 
consumer benefit would be $1.04 billion using a discount rate of 7 
percent, and $2.27 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 3 are 19.3 Mt of 
CO2, 28.8 thousand tons of NOX, 16.0 thousand 
tons of SO2, 0.05 tons of Hg, 0.3 thousand tons of 
N2O, and 85.9 thousand tons of CH4. The estimated 
monetary value of the CO2 emissions reductions at TSL 3 
ranges from $137 million to $1,931 million.
    At TSL 3, the average LCC impact is a savings of $64 for PC1, $99 
for PC2, $147 for PC3, $207 for PC4, and $416 for PC5. The simple PBP 
is 0.2 years for PC1 and PC2, 2.8 years for PC3, 1.3 years for PC4, and 
1.4 years for PC5. The fraction of consumers experiencing a net LCC 
cost is zero percent for PC1, 0.5 percent for PC2, 11.7 percent for 
PC3, 8.4 percent for PC4, and 10.7 percent for PC5.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$31.3 million to a decrease of $34.9 million, which correspond to 
decreases of 16.8 percent and 18.7 percent, respectively. Products that 
meet the efficiency standards specified at this TSL level represent 37 
percent of shipments in 2018 (the year leading up to amended 
standards). As such, manufacturers would have to overhaul a significant 
fraction of products by the 2019 projected compliance date to meet 
demand. Redesigning significant component systems or developing 
entirely new platforms to meet the efficiency levels specified by this 
TSL would require considerable capital and product conversion 
expenditures. At TSL 3, the estimated capital conversion costs total as 
much as $20.5 million, which is 1.8 times the industry annual capital 
expenditure in 2018 (the year leading up to the amended standards). DOE 
estimates that the redesigns necessary to meet these standards would 
cost the industry $30.2 million in product conversion costs. These 
conversion costs largely relate to the research programs and re-testing 
required to develop products that meet the efficiency standards set 
forth by TSL 3, and are 5.6 times the industry annual budget for 
research and development in 2018, the year leading up to amended 
standards. As such, the conversion costs associated with the changes in 
products and manufacturing facilities required at TSL 3 would still 
require significant use of manufacturers' financial reserves 
(manufacturer capital pools), impacting other areas of business that 
compete for these resources and significantly reducing INPV. Because 
manufacturers are more likely to reduce their margins to maintain a 
price-competitive product at higher TSLs, DOE expects that TSL 3 would 
yield impacts closer to the high end of the range of INPV impacts as 
indicated by the preservation of per-unit operating profit markup 
scenario. If this is the case, TSL 3 could result in a net loss of 18.7 
percent in INPV to manufacturers of residential dehumidifiers.
    Although some dehumidifiers may require higher efficiency 
compressors, the preservation of per-unit operating profit markup 
scenario efficiency levels specified at TSL 3 offer manufacturers 
multiple design pathways to meet the standard. This in turn offers 
manufacturers flexibility in meeting standards at this level and 
maintaining product offerings at certain capacities should a high 
efficiency compressor be unavailable at a given compressor capacity. To 
this end, units are already available that meet the efficiency levels 
specified at TSL 3.
    The Secretary tentatively concludes that at TSL 3 for residential 
dehumidifiers, the benefits of energy savings, positive NPV of consumer 
benefits, emission reductions, estimated monetary value of the 
CO2 emissions reductions, and positive average LCC savings 
would outweigh the negative impacts on some consumers and on 
manufacturers, including the conversion costs that could result in a 
reduction in INPV for manufacturers.
    After considering the analysis and the benefits and burdens of TSL 
3, the Secretary tentatively concludes that this TSL will offer the 
maximum improvement in energy efficiency that is technologically 
feasible and economically justified, and will result in significant 
conservation of energy without eliminating or making unavailable any 
product classes or portions of product classes. Therefore, DOE today 
proposes to adopt TSL 3 for residential dehumidifiers. The proposed 
amended energy conservation standards for residential dehumidifiers, 
which are expressed as a minimum allowable IEF, are shown in Table 
V.31.

     Table V.31--Proposed Amended Energy Conservation Standards for
                        Residential Dehumidifiers
------------------------------------------------------------------------
                                                               Minimum
                                                              integrated
    Portable dehumidifier product capacity  (pints/day)         energy
                                                             factor  (L/
                                                                 kWh)
------------------------------------------------------------------------
30.00 or less..............................................         1.30
30.01-45.00................................................         1.60
45.01 or more..............................................         2.80
------------------------------------------------------------------------
        Whole-Home Dehumidifier Product Case Volume (cubic feet)
------------------------------------------------------------------------
8.0 or less................................................         2.09
More than 8.0..............................................         3.52
------------------------------------------------------------------------

    DOE requests comments on the proposed standards as well as any 
information or data that the agency should consider in adopting either 
a lower or higher TSL.
2. Summary of Benefits and Costs (Annualized) of the Standards
    The benefits and costs of the proposed standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
the sum of: (1) The annualized national economic value of the benefits 
from operating products that meet the proposed standards (consisting 
primarily of operating cost savings from using less energy, minus 
increases in product purchase costs, which is another way of 
representing consumer NPV), and (2) the monetary value of the benefits 
of CO2 and NOX emission reductions.\69\
---------------------------------------------------------------------------

    \69\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2014, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(2020, 2030, etc.), and then discounted the present value from each 
year to 2014. The calculation uses discount rates of 3 and 7 percent 
for all costs and benefits except for the value of CO2 
reductions, for which DOE used case-specific discount rates, as 
shown in Table V.22. Using the present value, DOE then calculated 
the fixed annual payment over a 30-year period, starting in the 
compliance year that yields the same present value.
---------------------------------------------------------------------------

    Table V.32 shows the annualized values for residential 
dehumidifiers under TSL 3, expressed in 2013$. The results under 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 $40.5/ton in 2015 (in 2013$), the estimated cost of the 
proposed standards for residential dehumidifiers is $12.6 million per 
year in increased equipment costs, while the estimated annualized 
benefits are $122 million per

[[Page 31697]]

year in reduced equipment operating costs, $35.9 million per year in 
CO2 reductions, and $4.6 million per year in reduced 
NOX emissions. In this case, the net benefit amounts to $150 
million per year.
    Using a 3-percent discount rate for all benefits and costs and the 
SCC series corresponding to a value of $40.5/ton in 2015 (in 2013$), 
the estimated cost of the proposed standards for residential 
dehumidifiers in today's rule is $12.5 million per year in increased 
equipment costs, while the benefits are $142.7 million per year in 
reduced operating costs, $35.9 million per year in CO2 
reductions, and $6.0 million per year in reduced NOX 
emissions. In this case, the net benefit amounts to $172 million per 
year.

             Table V.32--Annualized Benefits and Costs of Proposed Amended Standards (TSL 3) for Residential Dehumidifiers Sold in 2019-2048
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Million 2013$/year
                                                                         -------------------------------------------------------------------------------
                                                 Discount rate                                           Low net  benefits         High net  benefits
                                                                             Primary  estimate *             estimate *                estimate *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.....  7%................................  122.0....................  116.8....................  126.3
                                      3%................................  142.7....................  136.3....................  149.2
CO2 Reduction at $12.0/t **.........  5%................................  10.9.....................  10.7.....................  11.1
CO2 Reduction at $40.5/t **.........  3%................................  35.9.....................  35.3.....................  36.7
CO2 Reduction at $62.4/t **.........  2.5%..............................  52.2.....................  51.4.....................  53.4
CO2 Reduction at $119/t **..........  3%................................  110.9....................  109.2....................  113.4
NOX Reduction [dagger]..............  7%................................  4.65.....................  4.59.....................  4.73
                                      3%................................  5.96.....................  5.86.....................  6.09
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Benefits [dagger][dagger].  7% plus CO2 range.................  138 to 238...............  132 to 231...............  142 to 244
                                      7%................................  163......................  157......................  168
                                      3% plus CO2 range.................  160 to 260...............  153 to 251...............  166 to 269
                                      3%................................  185......................  177......................  192
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Incremental Product Costs..  7%................................  12.6.....................  12.3.....................  13.7
                                      3%................................  12.5.....................  12.0.....................  13.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Total Net Benefits
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total [dagger][dagger]..........  7% plus CO2 range.................  125 to 225...............  120 to 218...............  128 to 231
                                      7%................................  150......................  144......................  154
                                      3% plus CO2 range.................  147 to 247...............  141 to 239...............  152 to 255
                                      3%................................  172......................  165......................  178
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The results include benefits to consumers which accrue after 2048 from the dehumidifiers purchased from 2019 through 2048. Costs incurred by
  manufacturers, some of which may be incurred prior to 2019 in preparation for the rule, are not directly included, but are indirectly included as part
  of incremental equipment costs. The extent of the costs and benefits will depend on the projected price trends of dehumidifiers, as the consumer
  demand for dehumidifiers is a function of dehumidifier prices. The Primary, Low Benefits, and High Benefits Estimates utilize forecasts of energy
  prices and housing starts from the AEO 2015 Reference case, Low Estimate, and High Estimate, respectively. In addition, incremental product costs
  reflect a medium decline rate for projected product price trends in the Primary Estimate, a low decline rate in the Low Benefits Estimate, and a high
  decline rate in the High Benefits Estimate. The methods used to derive projected price trends are explained in section IV.F.1 of this notice.
 
** The CO2 values represent global values (in 2013$) of the social cost of CO2 emissions in 2013 under several scenarios. The values of $12.0, $40.5,
  and $62.4 per ton are the averages of SCC distributions calculated using 5%, 3%, and 2.5% discount rates, respectively. The value of $119 per ton
  represents the 95th percentile of the SCC distribution calculated using a 3% discount rate.
 
[dagger] The $/ton values used for NOX are described in section IV.L.2.
 
[dagger][dagger] Total Benefits for both the 3% and 7% cases are derived using the SCC value calculated at a 3% discount rate, which is $40.5/ton in
  2015 (in 2013$). In the rows labeled as ``7% plus CO2 range'' and ``3% plus CO2 range,'' the operating cost and NOX benefits are calculated using the
  labeled discount rate, and those values are added to the full range of CO2 values.
 

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Section 1(b)(1) of Executive Order 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), requires each agency to identify 
the problem that it intends to address, including, where applicable, 
the failures of private markets or public institutions that warrant new 
agency action, as well as to assess the significance of that problem. 
The problems that this proposed standards address are as follows:
    (1) Insufficient information and the high costs of gathering and 
analyzing relevant information leads some consumers to miss 
opportunities to make cost-effective investments in energy efficiency.
    (2) In some cases the benefits of more efficient equipment are not 
realized due to misaligned incentives between purchasers and users. An 
example of such a case is when the equipment purchase decision is made 
by a building contractor or building owner who does not pay the energy 
costs.

[[Page 31698]]

    (3) There are external benefits resulting from improved energy 
efficiency of residential dehumidifiers that are not captured by the 
users of such equipment. These benefits include externalities related 
to public health, environmental protection, and national security that 
are not reflected in energy prices, such as reduced emissions of air 
pollutants and greenhouse gases that impact human health and global 
warming.
    In addition, DOE has determined that today's regulatory action is a 
``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 this 
rule and that OIRA in 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. 76 FR 3281 (Jan. 21, 2011). Executive Order 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, OIRA has emphasized that such techniques may include 
identifying changing future compliance costs that might result from 
technological innovation or anticipated behavioral changes. For the 
reasons stated in the preamble, DOE believes that this NOPR 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 an initial regulatory flexibility analysis (IRFA) for 
any rule that by law must be proposed for public comment, unless the 
agency certifies that the rule, if promulgated, will not have a 
significant economic impact on a substantial number of small entities. 
As required by Executive Order 13272, ``Proper Consideration of Small 
Entities in Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE 
published procedures and policies on February 19, 2003, to ensure that 
the potential impacts of its rules on small entities are properly 
considered during the rulemaking process. 68 FR 7990. DOE has made its 
procedures and policies available on the Office of the General 
Counsel's Web site (http://energy.gov/gc/office-general-counsel). DOE 
has prepared the following IRFA for the products that are the subject 
of this rulemaking.
1. Description and Estimated Number of Small Entities Regulated
a. Methodology for Estimating the Number of Small Entities
    For the manufacturers of residential dehumidifiers, the 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 NAICS code and 
industry description and are available at: www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. Manufacturing of whole-home 
residential dehumidifiers is classified under NAICS codes 333415: Air-
Conditioning and Warm Air Heating Equipment and Commercial and 
Industrial Refrigeration Equipment Manufacturing, whereas manufacturing 
of portable residential dehumidifiers is classified under 335210: Small 
Electrical Appliance Manufacturing. The SBA sets a threshold of 750 
employees or less for an entity to be considered as a small business 
for either of these categories.
    To estimate the number of companies that could be small business 
manufacturers of products covered by this rulemaking, DOE conducted a 
market survey using available public information to identify potential 
small manufacturers. DOE's research included searches of public 
databases (e.g., DOE's Compliance Certification Database,\70\ the SBA 
Database \71\), individual company Web sites, and market research tools 
(e.g., Hoovers Web site \72\) to create a list of companies that 
manufacture or sell products covered by this rulemaking. DOE also asked 
stakeholders and industry representatives if they were aware of any 
other small manufacturers during manufacturer interviews and at DOE 
public meetings. DOE reviewed publicly-available data and contacted 
select companies on its list, as necessary, to determine whether they 
met the SBA's definition of a small business manufacturer of covered 
residential dehumidifiers. DOE screened out companies that do not 
manufacture products covered by this rulemaking, do not meet the 
definition of a ``small business,'' or are foreign owned and operated.
---------------------------------------------------------------------------

    \70\ See http://www.regulations.doe.gov/certification-data/.
    \71\ See http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm.
    \72\ See http://www.hoovers.com/.
---------------------------------------------------------------------------

    DOE initially identified 25 manufacturers of residential 
dehumidifier products sold in the U.S. DOE then determined that of the 
25 companies, 20 were either large manufacturers, exclusively import 
products manufactured overseas, or are foreign owned and operated. DOE 
identified the remaining five manufacturers as domestic manufacturers 
that meet the SBA's definition of a ``small business'' and manufacture 
products covered by this rulemaking.
b. Manufacturer Participation
    Before issuing this Notice, DOE attempted to contact all the small 
business manufacturers of residential dehumidifiers identified. DOE was 
only able to establish contact with two small business manufacturers, 
both of which

[[Page 31699]]

consented to being interviewed as part of the manufacturing impact 
analysis. DOE also obtained information about small business impacts 
while interviewing large manufacturers.
c. Industry Structure
    The five domestic small business manufacturers of residential 
dehumidifiers identified account for a small fraction of total industry 
shipments. In 2014, 96.8 percent of residential dehumidifiers sold in 
the U.S. are small portable units (belonging to product classes 1 and 
2) and are made by large, diversified manufacturers. The remaining 3.2 
percent of the market consists of high-capacity portable and whole-home 
dehumidifiers, which are primarily manufactured by small business 
manufacturers.
d. Comparison of Large and Small Entities
    Several factors may contribute to a disproportionate burden on 
small business manufacturers from amended energy conservation standards 
for residential dehumidifiers relative to their larger counterparts. 
One way in which small manufacturers could be at a disadvantage is that 
they may be disproportionately affected by product and capital 
conversion costs. Product redesign, testing, and certification costs 
tend to be fixed per basic model and do not scale with sales volume. 
Both large and small business manufacturers must make investments in 
R&D to redesign their products, but small businesses lack the sales 
volumes to sufficiently recoup these upfront investments without 
substantially marking up their products. Similarly, upfront capital 
investments in new manufacturing capital for platform redesigns, as 
well as depreciated manufacturing capital, can only be spread across a 
lower volume of shipments for small business manufacturers.
    In addition, because small business manufacturers typically have 
fewer engineers than large manufacturers, they must allocate a greater 
portion of their available human resources to meet an amended 
regulatory standard. Because engineers may need to spend more time 
redesigning and testing existing models as a result of the amended 
standard, they may have less time to develop new products.
    Furthermore, smaller manufacturers may lack the purchasing power of 
larger manufacturers. For example, because fan motor suppliers give 
volume discounts to manufacturers based on the number of motors they 
purchase, larger manufacturers may have a pricing advantage because 
they make higher volume purchases. This purchasing power difference 
between high-volume and low-volume orders applies to other residential 
dehumidifier components as well, including compressors and heat 
exchangers. DOE expects that certain larger manufacturers of lower-
capacity portable dehumidifiers may even manufacture heat exchangers 
in-house. Additionally, because small business manufacturers produce 
higher-capacity units, they require larger/custom components (e.g., 
larger compressors and heat exchangers), than do the lower-capacity 
portable product manufacturers who account for the majority of the 
dehumidifier market. Because of the low-volume nature of the high-
capacity portable and whole-home dehumidifier market, certain 
technological improvements to components may only be developed for 
lower-capacity portable products, or with significant lag time for 
application in high-capacity portable and whole-home dehumidifier 
products.
    In terms of access to the capital required to cover the conversion 
costs associated with reaching the proposed standards, small business 
manufacturers would likely be forced to take on additional debt, 
whereas larger diversified manufacturers of small portable products 
would be better equipped to fund purchases with existing cash flow from 
operations. Additionally, since the recession of 2007 and 2008, small 
business lending has dropped substantially due to a combination of 
tightened lending standards, increasing collateral requirements and 
reduced focus on small business credit markets. Thus, small businesses 
generally have access to less capital than do larger companies.
2. Description and Estimate of Compliance Requirements
    Since the standards in today's proposed rule for residential 
dehumidifiers could cause small manufacturers to be at a disadvantage 
relative to large manufacturers, DOE cannot certify that the proposed 
standards would not have a significant impact on a significant number 
of small businesses, and consequently, DOE has prepared this IRFA.
    DOE estimates that the impacts on small business manufacturers are 
significantly disproportionate at TSLs 1 and 2, and relatively 
proportionate at TSLs 3 and 4. At TSL 3, the level proposed in today's 
notice, DOE estimates capital conversion costs of $1.7 million and 
product conversion costs of $5.0 million in the years leading up to the 
standard year for a typical small manufacturer. This is compared to 
capital conversion costs of $18.8 and product conversion costs of $25.2 
million in the years leading up to the standard year for a typical 
large manufacturer. These costs and their impacts are described in 
detail below.
    To estimate the potential impact on small business manufacturers, 
DOE used the GRIM results for high-capacity portables and whole-home 
dehumidifiers (product classes 3-5) to estimate the annual revenue, 
EBIT, capital expenditure, and R&D expense for a typical small 
manufacturer. DOE then compared these costs to the required product 
conversion costs at each TSL for both an average small manufacturer and 
an average large manufacturer. Table VI.1 and Table VI.2 show the 
capital and product conversion costs for a typical small manufacturer 
versus those of a typical large manufacturer. Table VI.3 and Table VI.4 
report the total conversion costs as a percentage of annual R&D 
expense, annual revenue, and EBIT for a typical small and large 
manufacturer, respectively. In the following tables, TSL 3 represents 
the proposed standard.

            Table VI.1--Comparison of Typical Small and Large Manufacturer's Capital Conversion Costs
----------------------------------------------------------------------------------------------------------------
                                                        Capital conversion costs      Capital conversion costs
                                                            for typical small             for typical large
                Trial standard level                      manufacturer  (2013$          manufacturer  (2013$
                                                                millions)                     millions)
----------------------------------------------------------------------------------------------------------------
TSL 1...............................................                          $1.3                           $--
TSL 2...............................................                           1.7  ............................
TSL 3...............................................                           1.7                          18.8
TSL 4...............................................                           2.2                          30.9
----------------------------------------------------------------------------------------------------------------


[[Page 31700]]


            Table VI.2--Comparison of Typical Small and Large Manufacturer's Product Conversion Costs
----------------------------------------------------------------------------------------------------------------
                                                        Product conversion costs      Product conversion costs
                                                            for typical small             for typical large
                Trial standard level                      manufacturer  (2013$          manufacturer  (2013$
                                                                millions)                     millions)
----------------------------------------------------------------------------------------------------------------
TSL 1...............................................                          $3.9                         $0.04
TSL 2...............................................                           5.0                          0.05
TSL 3...............................................                           5.0                          25.2
TSL 4...............................................                           6.6                          41.5
----------------------------------------------------------------------------------------------------------------


                                         Table VI.3--Impacts of Conversion Costs on a Typical Small Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Capital conversion
                                                        cost as a percentage      Product conversion     Total conversion  cost   Total conversion  cost
                Trial standard level                     of annual capital       cost as a percentage     as a percentage  of      as a percentage  of
                                                            expenditures        of annual R&D  expense       annual revenue            annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                      130                      774                       14                      235
TSL 2...............................................                      167                     1002                       18                      304
TSL 3...............................................                      167                     1002                       18                      304
TSL 4...............................................                      222                     1328                       23                      403
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Note: Annual Capex, R&D, Revenues, and EBIT figures are for 2014.


                                         Table VI.4--Impacts of Conversion Costs on a Typical Large Manufacturer
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Capital conversion
                                                        cost as a percentage      Product conversion     Total conversion  cost   Total conversion  cost
                Trial standard level                     of annual capital       cost as a percentage     as a percentage  of      as a percentage  of
                                                            expenditures        of annual R&D  expense       annual revenue            annual EBIT
--------------------------------------------------------------------------------------------------------------------------------------------------------
TSL 1...............................................                        0                        1                        0                        0
TSL 2...............................................                        0                        1                        0                        0
TSL 3...............................................                      219                      600                       14                      229
TSL 4...............................................                      359                      988                       22                      377
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Note: Annual Capex, R&D, Revenues, and EBIT figures are for 2014.

    Based on the above results for TSL 3, DOE understands that the 
potential conversions costs faced by small manufacturers may be greater 
than those faced by larger manufacturers. However, the 
disproportionality of these impacts would be much greater at TSLs 1 and 
2. Small manufacturers have less engineering staff and lower R&D 
budgets. They also have lower capital expenditures annually. As a 
result, the conversion costs incurred by a small manufacturer would 
likely be a larger percentage of its annual capital expenditures, R&D 
expenses, revenue, and EBIT, than would be for a large manufacturer.
3. Duplication, Overlap, and Conflict With Other Rules and Regulations
    DOE is not aware of any rules or regulations that duplicate, 
overlap, or conflict with the rule being proposed today.
4. Significant Alternatives to the Rule
    The discussion above analyzes the disproportionality of impacts on 
small businesses that would result from the other TSLs DOE considered. 
TSLs lower than the proposed TSL would not be expected to significantly 
reduce the impacts on small businesses, and would actually result in 
higher disproportionate impacts on small businesses. As a result, and 
given that DOE is required by EPCA to establish standards that achieve 
the maximum improvement in energy efficiency that is technologically 
feasible and economically justified, DOE rejected the lower TSLs.
    In addition to the other TSLs being considered, the NOPR TSD 
includes a regulatory impact analysis in chapter 17. For residential 
dehumidifiers, this report discusses the following policy alternatives: 
(1) No standard, (2) consumer rebates, (3) consumer tax credits, (4) 
manufacturer tax credits, and (5) early replacement. While these 
alternatives may mitigate to some varying extent the economic impacts 
on small entities compared to the standards, DOE determined that the 
energy savings of these alternatives are significantly smaller than 
those that would be expected to result from adoption of the proposed 
standard levels. Accordingly, DOE is declining to adopt any of these 
alternatives and is proposing the standards set forth in this 
rulemaking. (See chapter 17 of the NOPR TSD for further detail on the 
policy alternatives DOE considered.)
    Additional compliance flexibilities may be available through other 
means. For example, individual manufacturers may petition for a waiver 
of the applicable test procedure. Further, EPCA provides that a 
manufacturer whose annual gross revenue from all of its operations does 
not exceed $8,000,000 may apply for an exemption from all or part of an 
energy conservation standard for a period not longer than 24 months 
after the effective date of a final rule establishing the standard. 
Additionally, Section 504 of the Department of Energy Organization Act, 
42 U.S.C. 7194, provides authority for the Secretary to adjust a rule 
issued under EPCA in order to prevent ``special hardship, inequity, or 
unfair distribution of burdens'' that may be imposed on that 
manufacturer as a result of such rule. Manufacturers should refer to 10 
CFR part 430, subpart E, and part 1003 for additional details.

C. Review Under the Paperwork Reduction Act

    Manufacturers of residential dehumidifiers must certify to DOE that 
their products comply with any

[[Page 31701]]

applicable energy conservation standards. In certifying compliance, 
manufacturers must test their products according to the DOE test 
procedures for residential dehumidifiers, including any amendments 
adopted for those test procedures. DOE has established regulations for 
the certification and recordkeeping requirements for all covered 
consumer products and commercial equipment, including residential 
dehumidifiers. 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 proposed rule fits within the category of 
actions included in Categorical Exclusion (CX) B5.1 and otherwise meets 
the requirements for application of a CX. See 10 CFR part 1021, App. B, 
B5.1(b); 1021.410(b) and App. B, B(1)-(5). The proposed rule fits 
within this 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 proposed rule. 
DOE's CX determination for this proposed rule is available at http://cxnepa.energy.gov/.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), 
imposes certain requirements on Federal agencies formulating and 
implementing policies or regulations that preempt State law or that 
have Federalism implications. The Executive Order requires agencies to 
examine the constitutional and statutory authority supporting any 
action that would limit the policymaking discretion of the States and 
to carefully assess the necessity for such actions. The Executive Order 
also requires agencies to have an accountable process to ensure 
meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications. 
On March 14, 2000, DOE published a statement of policy describing the 
intergovernmental consultation process it will follow in the 
development of such regulations. 65 FR 13735. DOE has examined this 
proposed rule and has tentatively determined that it would not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. EPCA 
governs and prescribes Federal preemption of State regulations as to 
energy conservation for the products that are the subject of this 
proposed rule. States can petition DOE for exemption from such 
preemption to the extent, and based on criteria, set forth in EPCA. (42 
U.S.C. 6297) No further action is required by Executive Order 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' imposes on Federal agencies the general duty 
to adhere to the following requirements: (1) Eliminate drafting errors 
and ambiguity; (2) write regulations to minimize litigation; and (3) 
provide a clear legal standard for affected conduct rather than a 
general standard and promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Section 3(b) of Executive Order 12988 specifically 
requires that Executive agencies make every reasonable effort to ensure 
that the regulation: (1) Clearly specifies the preemptive effect, if 
any; (2) clearly specifies any effect on existing Federal law or 
regulation; (3) provides a clear legal standard for affected conduct 
while promoting simplification and burden reduction; (4) specifies the 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires Executive agencies to 
review regulations in light of applicable standards in section 3(a) and 
section 3(b) to determine whether they are met or it is unreasonable to 
meet one or more of them. DOE has completed the required review and 
determined that, to the extent permitted by law, this proposed rule 
meets the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531) 
For a proposed regulatory action likely to result in a rule that may 
cause the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector of $100 million or more in any one 
year (adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a proposed ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect small governments. On March 18, 1997, 
DOE published a statement of policy on its process for 
intergovernmental consultation under UMRA. 62 FR 12820. DOE's policy 
statement is also available at http://energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    Although today's proposed rule does not contain a Federal 
intergovernmental mandate, it may require expenditures of $100 million 
or more by the private sector. Specifically, the proposed rule will 
likely result in a final rule that could require expenditures of $100 
million or more. Such expenditures may include: (1) investment in 
research and development and in capital expenditures by residential 
dehumidifiers manufacturers in the years between the final rule and the 
projected compliance date for the new standards, and (2) incremental 
additional expenditures by consumers to purchase higher-efficiency 
residential dehumidifiers, starting at the projected compliance date 
for the applicable standard.

[[Page 31702]]

    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 proposed rule. (2 U.S.C. 1532(c)) The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of the NOPR and the ``Regulatory 
Impact Analysis'' section of the NOPR TSD for this proposed 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 proposed 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(o), 
today's proposed rule would establish energy conservation standards for 
residential dehumidifiers 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 NOPR TSD for today's proposed 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

    Under Executive Order 12630, ``Governmental Actions and 
Interference with Constitutionally Protected Property Rights'' 53 FR 
8859 (Mar. 18, 1988), DOE has determined 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 NOPR under the OMB and DOE guidelines 
and has concluded that it is consistent with applicable policies in 
those guidelines.

K. Review Under Executive Order 13211

    Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' 66 FR 28355 
(May 22, 2001), requires Federal agencies to prepare and submit to OIRA 
at OMB, a Statement of Energy Effects for any proposed significant 
energy action. A ``significant energy action'' is defined as any action 
by an agency that promulgates or is expected to lead to promulgation of 
a final rule, and that: (1) Is a significant regulatory action under 
Executive Order 12866, or any successor order; and (2) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any proposed significant energy action, 
the agency must give a detailed statement of any adverse effects on 
energy supply, distribution, or use should the proposal be implemented, 
and of reasonable alternatives to the action and their expected 
benefits on energy supply, distribution, and use.
    DOE has tentatively concluded that today's regulatory action, which 
sets forth energy conservation standards for residential dehumidifiers, 
is not a significant energy action because the proposed standards are 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy, nor has it been designated as such by 
the Administrator at OIRA. Accordingly, DOE has not prepared a 
Statement of Energy Effects on the proposed rule.

L. Review Under the Information Quality Bulletin for Peer Review

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (OSTP), issued its Final Information 
Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 
2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as scientific information the 
agency reasonably can determine will have, or does have, a clear and 
substantial impact on important public policies or private sector 
decisions. Id. at 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: http://energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0.

VII. Public Participation

A. Attendance at the Public Meeting

    The time, date, and location of the public meeting are listed in 
the DATES and ADDRESSES sections at the beginning of this notice. If 
you plan to attend the public meeting, please notify Ms. Brenda Edwards 
at (202) 586-2945 or [email protected].
    Please note that foreign nationals participating in the public 
meeting are subject to advance security screening procedures which 
require advance notice prior to attendance at the public meeting. If a 
foreign national wishes to participate in the public meeting, please 
inform DOE of this fact as soon as possible by contacting Ms. Regina 
Washington at (202) 586-1214 or by email: [email protected]

[[Page 31703]]

so that the necessary procedures can be completed.
    DOE requires visitors to with laptop computers and other devices, 
such as tablets, to be checked upon entry into the building. Any person 
wishing to bring these devices into the Forrestal Building will be 
required to obtain a property pass. Visitors should avoid bringing 
these devices, or allow an extra 45 minutes to check in. Please report 
to the visitor's desk to have devices checked before proceeding through 
security.
    Due to the REAL ID Act implemented by the Department of Homeland 
Security (DHS), there have been recent changes regarding ID 
requirements for individuals wishing to enter Federal buildings from 
specific states and U.S. territories. Driver's licenses from the 
following states or territory will not be accepted for building entry 
and one of the alternate forms of ID listed below will be required. DHS 
has determined that regular driver's licenses (and ID cards) from the 
following jurisdictions are not acceptable for entry into DOE 
facilities: Alaska, American Samoa, Arizona, Louisiana, Maine, 
Massachusetts, Minnesota, New York, Oklahoma, and Washington. 
Acceptable alternate forms of Photo-ID include: U.S. Passport or 
Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued 
by the states of Minnesota, New York or Washington (Enhanced licenses 
issued by these states are clearly marked Enhanced or Enhanced Driver's 
License); a military ID or other Federal government issued Photo-ID 
card.
    In addition, you can attend the public meeting via webinar. Webinar 
registration information, participant instructions, and information 
about the capabilities available to webinar participants will be 
published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/55. Participants are 
responsible for ensuring their systems are compatible with the webinar 
software.

B. Procedure for Submitting Prepared General Statements for 
Distribution

    Any person who has plans to present a prepared general statement 
may request that copies of his or her statement be made available at 
the public meeting. Such persons may submit requests, along with an 
advance electronic copy of their statement in PDF (preferred), 
Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to 
the appropriate address shown in the ADDRESSES section at the beginning 
of this notice. The request and advance copy of statements must be 
received at least one week before the public meeting and may be 
emailed, hand-delivered, or sent by mail. DOE prefers to receive 
requests and advance copies via email. Please include a telephone 
number to enable DOE staff to make follow-up contact, if needed.

C. Conduct of the Public Meeting

    DOE will designate a DOE official to preside at the public meeting 
and may also use a professional facilitator to aid discussion. The 
meeting will not be a judicial or evidentiary-type public hearing, but 
DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 
6306). A court reporter will be present to record the proceedings and 
prepare a transcript. DOE reserves the right to schedule the order of 
presentations and to establish the procedures governing the conduct of 
the public meeting. After the public meeting, interested parties may 
submit further comments on the proceedings as well as on any aspect of 
the rulemaking until the end of the comment period.
    The public meeting will be conducted in an informal, conference 
style. DOE will present summaries of comments received before the 
public meeting, allow time for prepared general statements by 
participants, and encourage all interested parties to share their views 
on issues affecting this rulemaking. Each participant will be allowed 
to make a general statement (within time limits determined by DOE), 
before the discussion of specific topics. DOE will allow, as time 
permits, other participants to comment briefly on any general 
statements.
    At the end of all prepared statements on a topic, DOE will permit 
participants to clarify their statements briefly and comment on 
statements made by others. Participants should be prepared to answer 
questions by DOE and by other participants concerning these issues. DOE 
representatives may also ask questions of participants concerning other 
matters relevant to this rulemaking. The official conducting the public 
meeting will accept additional comments or questions from those 
attending, as time permits. The presiding official will announce any 
further procedural rules or modification of the above procedures that 
may be needed for the proper conduct of the public meeting.
    A transcript of the public meeting will be included in the docket, 
which can be viewed as described in the Docket section at the beginning 
of this notice. In addition, any person may buy a copy of the 
transcript from the transcribing reporter.

D. Submission of Comments

    DOE will accept comments, data, and information regarding this 
proposed rule before or after the public meeting, but no later than the 
date provided in the DATES section at the beginning of this proposed 
rule. Interested parties may submit comments, data, and other 
information using any of the methods described in the ADDRESSES section 
at the beginning of this notice.
    Submitting comments via www.regulations.gov. The 
www.regulations.gov Web page will require you to provide your name and 
contact information. Your contact information will be viewable to DOE 
Building Technologies staff only. Your contact information will not be 
publicly viewable except for your first and last names, organization 
name (if any), and submitter representative name (if any). If your 
comment is not processed properly because of technical difficulties, 
DOE will use this information to contact you. If DOE cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, DOE may not be able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment itself or in any documents attached to your 
comment. Any information that you do not want to be publicly viewable 
should not be included in your comment, nor in any document attached to 
your comment. Otherwise, persons viewing comments will see only first 
and last names, organization names, correspondence containing comments, 
and any documents submitted with the comments.
    Do not submit to www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
regulations.gov cannot be claimed as CBI. Comments received through the 
Web site will waive any CBI claims for the information submitted. For 
information on submitting CBI, see the Confidential Business 
Information section below.
    DOE processes submissions made through www.regulations.gov before 
posting. Normally, comments will be posted within a few days of being 
submitted. However, if large volumes of comments are being processed 
simultaneously, your comment may not be viewable for up to several 
weeks. Please keep the comment tracking number that www.regulations.gov

[[Page 31704]]

provides after you have successfully uploaded your comment.
    Submitting comments via email, hand delivery/courier, or mail. 
Comments and documents submitted via email, hand delivery, or mail also 
will be posted to www.regulations.gov. If you do not want your personal 
contact information to be publicly viewable, do not include it in your 
comment or any accompanying documents. Instead, provide your contact 
information in a cover letter. Include your first and last names, email 
address, telephone number, and optional mailing address. The cover 
letter will not be publicly viewable as long as it does not include any 
comments.
    Include contact information each time you submit comments, data, 
documents, and other information to DOE. If you submit via mail or hand 
delivery/courier, please provide all items on a CD, if feasible. It is 
not necessary to submit printed copies. No facsimiles (faxes) will be 
accepted.
    Comments, data, and other information submitted to DOE 
electronically should be provided in PDF (preferred), Microsoft Word or 
Excel, WordPerfect, or text (ASCII) file format. Provide documents that 
are not secured, that are written in English, and that are free of any 
defects or viruses. Documents should not contain special characters or 
any form of encryption and, if possible, they should carry the 
electronic signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. According to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery/courier two well-marked copies: 
one copy of the document marked confidential including all the 
information believed to be confidential, and one copy of the document 
marked non-confidential with the information believed to be 
confidential deleted. Submit these documents via email or on a CD, if 
feasible. DOE will make its own determination about the confidential 
status of the information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person that would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time; and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).

E. Issues on Which DOE Seeks Comment

    Although DOE welcomes comments on any aspect of this proposal, DOE 
is particularly interested in receiving comments and views of 
interested parties concerning the following issues:
    1. The proposed product classes for residential dehumidifiers: (1) 
Portable, less than 30.00 pints/day; (2) portable, 30.01 to 45.00 
pints/day; (3) portable, 45.01 or more pints/day; (4) whole-home, case 
volume less than or equal to 8.0 cubic feet; and (5) whole-home, case 
volume greater than 8.0 cubic feet (see section IV.A.2 of this notice 
or chapter 3 of the NOPR TSD).
    2. Information or data about the availability of dehumidifiers with 
smart controls, including those currently available on the market or 
any working prototypes (see section IV.A.3 of this notice or chapter 3 
of the NOPR TSD).
    3. The efficiency levels considered for this analysis. DOE 
specifically seeks information from interested parties on whether the 
revised max-tech levels, which incorporate savings associated with 
permanent-magnet fan motors, are technologically feasible, and on 
whether the updated whole-home dehumidifier efficiency levels, which 
account for the updated test conditions, are appropriate. DOE also 
seeks comment on potential utility impacts at any of the analyzed 
efficiency levels (see section IV.C.1 of this notice or chapter 5 of 
the NOPR TSD).
    4. Whether to promote installation of any of the design options, 
including variable-speed compressors, improved controls, and 
hygrometers, even though the resulting efficiency gains would not be 
measurable with the existing test procedure (see section IV.C.2 of this 
notice of chapter 5 of the NOPR TSD).
    5. The determination that manufacturers would likely rely on 
improved compressor efficiency and increased heat exchanger sizes to 
achieve efficiencies below the max-tech level, and may incorporate 
permanent-magnet motors to further improve efficiency. DOE also 
requests feedback on the incremental manufacturer production costs DOE 
estimated at each efficiency level (see section IV.C.2 of this notice 
or chapter 5 of the NOPR TSD).
    6. The inputs to the energy use determination for portable and 
whole-home dehumidifiers, especially the operating hours by mode for 
each product type (see section IV.E of this notice or chapter 7 of the 
NOPR TSD).
    7. The base-case efficiency distribution for each product class 
(see section IV.F.8 of this notice or chapter 8 of the NOPR TSD).
    8. Whether the annual efficiency improvement (i.e., 0.25%) that DOE 
estimated is appropriate for the base-case analysis and if not, a more 
appropriate approach for DOE to project the base-case and standards-
case efficiency distributions for the analysis period (see section 
IV.F.8 of this notice or chapter 8 of the NOPR TSD).
    9. The inputs to the shipments model, particularly historical 
shipments of whole-home dehumidifiers, and the market share of portable 
dehumidifiers and whole-home dehumidifiers (see section IV.G of this 
notice or chapter 9 of the NOPR TSD).
    10. Dehumidifier manufacturers that would be considered small 
businesses and the potential impacts of energy conservation standards 
on these manufacturers (see sections IV.J and V.B.2.d of this notice or 
chapter 12 of the NOPR TSD).
    11. The proposed standards as well as any information or data that 
the agency should consider in adopting either a lower or higher TSL.

VIII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this proposed 
rule.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Intergovernmental relations, Reporting and recordkeeping requirements, 
and Small businesses.

    Issued in Washington, DC, on May 14, 2015.
David T. Danielson,
Assistant Secretary, Energy Efficiency and Renewable Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
part

[[Page 31705]]

430 of chapter II, subpart C, of title 10 of the Code of Federal 
Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority:  42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. In Sec.  430.32, add paragraph (v)(3) to read as follows:

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

* * * * *
    (v) * * *
    (3) Dehumidifiers manufactured on or after [date 3 years after the 
publication of the final rule] shall have an integrated energy 
efficiency ratio that meets or exceeds the following values:

------------------------------------------------------------------------
                                                              Minimum
                                                            integrated
                                                              energy
   Portable dehumidifier product capacity  (pints/day)      efficiency
                                                              factor
                                                           (liters/kWh)
------------------------------------------------------------------------
30.00 or less...........................................            1.30
30.01-45.00.............................................            1.60
45.01 or more...........................................            2.80
------------------------------------------------------------------------
Whole-home dehumidifier product case volume (cubic feet)  ..............
------------------------------------------------------------------------
8.0 or less.............................................            2.09
More than 8.0...........................................            3.52
------------------------------------------------------------------------

* * * * *
[FR Doc. 2015-12773 Filed 6-2-15; 8:45 am]
 BILLING CODE 6450-01-P