[Federal Register Volume 81, Number 69 (Monday, April 11, 2016)]
[Proposed Rules]
[Pages 21276-21284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08121]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 81, No. 69 / Monday, April 11, 2016 /
Proposed Rules
[[Page 21276]]
DEPARTMENT OF ENERGY
10 CFR Part 430
[Docket Number EERE-2016-BT-STD-0007]
RIN 1904-AD65
Energy Conservation Program: Energy Conservation Standards for
Direct Heating Equipment
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed determination (NOPD).
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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
direct heating equipment (DHE). 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 has tentatively determined that more stringent DHE
standards would not be economically justified, and, thus, proposes not
to amend its energy conservation standards for DHE.
DATES: DOE will accept comments, data, and information regarding this
NOPD no later than June 10, 2016. See section V, ``Public
Participation,'' for details.
ADDRESSES: Any comments submitted must identify the NOPD on Energy
Conservation Standards for Direct Heating Equipment, and provide docket
number EERE-2016-BT-STD-0007 and/or regulatory information number (RIN)
1904-AD65. 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. Submit electronic comments
in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid
the use of special characters or any form of encryption.
3. 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., Room
6094, 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.
No telefacsimilies (faxes) will be accepted. For detailed
instructions on submitting comments and additional information on the
rulemaking process, see section V of this document (``Public
Participation'').
Docket: The docket, which includes Federal Register notices,
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 may not be publicly available, such as those containing
information that is exempt from public disclosure.
A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2016-BT-STD-0007. This Web
page contains 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 V, ``Public Participation,'' for
further information on how to submit comments through
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: John Cymbalsky, 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) 287-1692. Email:
[email protected].
Ms. Sarah Butler, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-
0121. Telephone: (202) 586-1777. 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. Summary of the Proposed Determination
A. Authority
B. Background
1. Current Standards
2. History of Rulemakings for Direct Heating Equipment
II. Rationale
III. Proposed Determination
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Review Under the Information Quality Bulletin for Peer Review
V. Public Participation
A. Public Meeting Requests
B. Submission of Comments
C. Issues on Which DOE Seeks Comment
VI. Approval of the Office of the Secretary
I. Summary of the Proposed Determination
DOE proposes to determine that energy conservation standards should
not be amended for direct heating equipment (DHE). DOE has tentatively
determined that the DHE market characteristics are largely similar to
those analyzed in the previous rulemaking and the technologies
available for improving DHE energy efficiency have not advanced
significantly since the previous
[[Page 21277]]
rulemaking analyses \1\ (concluding with the publication of a final
rule on April 16, 2010, hereafter ``April 2010 Final Rule''). 75 FR
20112. In addition, DOE believes the conclusions reached in the April
2010 Final Rule regarding the benefits and burdens of more stringent
standards for DHE are still relevant to the DHE market today.
Therefore, DOE has tentatively determined that amended energy
conservation standards would not be economically justified.
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\1\ With the exception of condensing technology for fan-type
wall furnaces, discussed in section II.
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A. Authority
Title III, Part B \2\ of the Energy Policy and Conservation Act of
1975 (``EPCA'' or ``the Act''), Public Law 94-163 (codified at 42
U.S.C. 6291-6309) established the Energy Conservation Program for
Consumer Products Other Than Automobiles.\3\ This program covers most
major household appliances (collectively referred to as ``covered
products'') including the DHE, which are the subject of this document.
(42 U.S.C. 6292 (a)(9)) EPCA prescribed initial energy conservation
standards for DHE and directs DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6295(e)(3) and
(4)) DOE is issuing this notice pursuant to that requirement, in
addition to the requirement under 42 U.S.C. 6295(m), which states that
DOE must periodically review its already established energy
conservation standards for a covered product not later than six years
after issuance of any final rule establishing or amending such
standards. As a result of such review, DOE must either publish a notice
of proposed rulemaking to amend the standards or publish a notice of
determination indicating that the existing standards do not need to be
amended. (42 U.S.C. 6295(m)(1)(A) and (B))
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\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated as Part A.
\3\ All references to EPCA in this document refer to the statute
as amended through the Energy Efficiency Improvement Act, Public Law
114-11 (April 30, 2015).
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Pursuant to the requirements set forth under EPCA, 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)(B))
Moreover, DOE may not prescribe a standard: (1) For certain products,
including DHE, if no test procedure has been established for the
product,\4\ or (2) if DOE determines by rule that the 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, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after considering, to the greatest extent
practicable, the following seven statutory factors:
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\4\ The DOE test procedures for DHE appear at title 10 of the
Code of Federal Regulations (CFR) part 430, subpart B, appendix O
and 10 CFR 430, subpart B, appendix G (Appendix G).
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(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 standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from 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
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 if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States 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. (42 U.S.C.
6295(o)(4))
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, 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
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 vented home heating equipment address standby mode fossil-fuel
energy use.
B. Background
1. Current Standards
In the April 2010 Final Rule, DOE prescribed the current energy
conservation standards for DHE manufactured on and after April 16,
2013. 75 FR 20112. These standards are set forth in DOE's regulations
at 10 CFR 430.32(i)(2) and are shown in Table I-1.\5\
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\5\ DOE notes that DHE is defined at 10 CFR 430.2 as vented home
heating equipment and unvented home heating equipment; however, the
existing energy conservation standards apply only to product classes
of vented home heating equipment. There are no existing energy
conservation standards for unvented home heating equipment.
[[Page 21278]]
Table I-1--Federal Energy Conservation Standards for DHE (10 CFR
430.32(i)(2))
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Annual fuel
utilization
Product class efficiency,
April 16, 2013
(percent)
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Gas wall fan type up to 42,000 Btu/h.................... 75
Gas wall fan type over 42,000 Btu/h..................... 76
Gas wall gravity type up to 27,000 Btu/h................ 65
Gas wall gravity type over 27,000 Btu/h up to 46,000 Btu/ 66
h......................................................
Gas wall gravity type over 46,000 Btu/h................. 67
Gas floor up to 37,000 Btu/h............................ 57
Gas floor over 37,000 Btu/h............................. 58
Gas room up to 20,000 Btu/h............................. 61
Gas room over 20,000 Btu/h up to 27,000 Btu/h........... 66
Gas room over 27,000 Btu/h up to 46,000 Btu/h........... 67
Gas room over 46,000 Btu/h.............................. 68
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2. History of Rulemakings for Direct Heating Equipment
EPCA, as codified, initially set forth energy conservation
standards for certain DHE product classes that are the subject of this
document and directed DOE to conduct two subsequent rulemakings to
determine whether the existing standards should be amended. (42 U.S.C.
6295(e)(3) and (4)) The first of these two rulemakings included both
DHE and pool heaters and concluded with the April 2010 Final Rule
(codified at 10 CFR 430.32(i) and (k)). 75 FR 20112. With respect to
DHE, the first rulemaking amended the energy conservation standards for
vented home heating equipment, a subset of DHE, and consolidated some
of the product classes from the previous standards established by EPCA.
Compliance with the amended standards was required beginning on April
16, 2013. Id. DOE did not issue standards for unvented home heating
equipment, a subset of DHE, finding that such standards would produce
insignificant energy savings. 75 FR 20112, 20130.
This rulemaking satisfies the statutory requirement under EPCA to
(1) conduct a second round of review of the DHE standards (42 U.S.C.
6295(e)(4)(B)) and (2) publish either a notice of determination that
standards for DHE do not need to be amended or a notice of proposed
rulemaking proposing to amend the DHE energy conservation standards (42
U.S.C. 6295(m)(1)). To initiate this rulemaking, DOE issued a Request
for Information (RFI) in the Federal Register on March 26, 2015
(hereafter ``March 2015 RFI''). 80 FR 15922. Through that RFI, DOE
requested data and information pertaining to its planned technical and
economic analyses for DHE and pool heaters. Although the March 2015 RFI
and the previous energy conservation standards rulemaking included both
DHE and pool heaters, going forward DOE has elected to conduct separate
rulemakings for each of these products. This rulemaking pertains solely
to the energy conservation standards for DHE. As such, a new docket has
been created that pertains solely to this DHE rulemaking, which has
been populated with relevant comments from the March 2015 RFI (the
docket is available http://www.regulations.gov/#!docketDetail;D=EERE-
2016-BT-STD-0007).
April 2010 Final Rule
In the most recent DOE rulemaking for DHE energy conservation
standards, DOE initially proposed standards for vented home heating
products in a NOPR published on December 11, 2009 (``December 2009
NOPR'') that represented a six AFUE percentage point (weighted-average
across all product classes) increase over the standards initially
established by EPCA and codified at 42 U.S.C. 6295(e)(3). 74 FR 65852
(December 11, 2009). The December 2009 NOPR proposed standard level,
TSL 3, represented an improvement in efficiency from the previous
baseline level of 74-percent AFUE to 77-percent for gas wall fan DHE,
an improvement in efficiency from the previous baseline level of 64-
percent AFUE to 71-percent AFUE for gas wall gravity units, an
improvement in efficiency from the previous baseline level of 57-
percent AFUE to 58-percent AFUE for gas floor DHE (the max-tech level),
and an improvement in efficiency from the previous baseline level of
64-percent AFUE to 68-percent for gas room DHE at the representative
input rating ranges. 74 FR 65852, 65943 (December 11, 2009).
DOE's initial analysis in the December 2009 NOPR showed that TSL 3
could result in as much as a $6.0 million (33.54%) decrease in the
Industry Net Present Value, or INPV, with total conversion costs (costs
for redesigning and retooling product lines not already meeting the
amended standards) potentially amounting to $6.39 million. 74 FR 65852,
65942 (December 11, 2009).
In response to the December 2009 NOPR several commenters
recommended that DOE not adopt amended standards for DHE due to
significant impact on manufacturers and low shipments of DHE (and
therefore low energy savings potential). Commenters indicated that the
manufacturer investments needed to comply with standards set at TSL 3
would not be justified due to the large investment needed to upgrade
product lines and the declining shipments through which DHE
manufacturers would need to recoup their expenditures. Various comments
also suggested that product offerings would be reduced or manufacturers
would leave the market entirely if TSL 3 were selected. The U.S.
Department of Justice commented that there was significant risk of
reducing competition resulting from businesses leaving the market and
requested that DOE consider the possible impact on competition in
determining standards for the final rule. DOE agreed that TSL 3 posed
the risk of reduced product lines or manufacturers exiting the market.
Commenters also expressed concern that employment in the DHE industry
would be negatively affected by amended energy conservation standards.
Several manufacturers of DHE believed that the proposed standard would
harm employment due to elimination of non-compliant product lines and/
or insufficient return on the investment necessary to meet new
standards.
[[Page 21279]]
After considering these comments responding to the proposed TSL 3
in the December 2009 NOPR, DOE ultimately rejected TSL 3 and all higher
TSLs in the final rule, on the grounds that capital conversion costs
would lead to a large reduction in INPV and that small businesses would
be disproportionately impacted. In the analysis for the April 2010
Final Rule, DOE updated its estimate for the maximum decrease in INPV
to 42.4% (or $7.0 million) from the 33.54% maximum decrease estimated
in the December 2009 NOPR. 75 FR 20112, 20218-20219 (April 16, 2010).
DOE also notes that the life-cycle cost (LCC) and payback period
analyses (PBP) for TSL 4 and higher suggested that benefits to
consumers were outweighed by initial costs. 75 FR 20112, 20215-20218
(April 16, 2010).
In the previous DHE rulemaking, DOE found that the DHE industry had
undergone significant consolidation, with three manufacturers,
including two small businesses, controlling the vast majority of the
market. DOE determined that a steady decline in shipments drove
industry consolidation and found that the remaining DHE manufacturers
maintained a variety of legacy brands and product lines in order to
meet the needs of consumers replacing their existing DHE products,
rather than product lines for new construction. DOE determined in the
April 2010 Final Rule that a standard above TSL 2 would have required
manufacturers to undertake significant investments in order to upgrade
a series of product lines intended primarily for replacement
applications. Because the DHE market is a low-volume market,
manufacturers would have to spread their product development costs and
capital investments over relatively few shipments. At levels above TSL
2, DOE determined that there would be limited opportunity for
manufacturers to recoup these costs, leading to significant declines in
industry profitability. Furthermore, DOE found that small business
manufacturers could be disproportionately disadvantaged by a more
stringent standard based on a combination of low shipment volumes and a
high ratio of anticipated investment costs to annual earnings. As a
result, DOE concluded that TSLs higher than TSL 2 would likely induce
small business manufacturers to reduce their product offerings or to
exit the market entirely. 75 FR 20112, 20217-20219 (April 16, 2010).
DOE, therefore, adopted standards at TSL 2 for vented home heating
equipment. Compliance with the adopted standards (codified at 10 CFR
430.32(i)(2)) was required for all vented home heating equipment
manufactured on or after April 16, 2013.
II. Rationale
For this rulemaking DOE conducted a review of the current DHE
market, including product literature and product listings in the DOE
Compliance Certification Management System (CCMS) database and Air-
Conditioning, Heating, and Refrigeration Institute (AHRI) product
directory.\6\ DOE contractors also analyzed current products through
product teardowns and engaged in manufacturer interviews to obtain
further information in support of its analysis. Through this analysis,
DOE has determined that few changes to the industry and product
offerings have occurred since the April 2010 Final Rule. As such, DOE
has tentatively determined that the conclusions presented in the April
2010 Final Rule are still valid. Furthermore, in response to the March
2015 RFI, DOE received seven comment submissions. Only one submission,
submitted by AHRI,\7\ contained comments pertaining to DHE.\8\ (Docket
EERE-2016-BT-STD-0007: AHRI, No. 1 at p. 5-8) \9\ The following
discussion addresses the status of the current DHE market as well as
issues raised in the comments submitted by AHRI and during manufacturer
interviews.
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\6\ The AHRI directory for DHE can be found at: https://www.ahridirectory.org/ahridirectory/pages/dht/defaultSearch.aspx.
The DOE CCMS database can be found at: http://www.regulations.doe.gov/certification-data/.
\7\ AHRI's comment submission in response to the March 2015 RFI
contained comments pertaining to DOE's standards NOPR rulemaking
analyses, including the shipments analysis, life cycle cost (LCC)
and payback period (PBP) analyses, and energy use analysis. DOE is
not responding to these particular comments at this time because DOE
is proposing not to amend its standards for DHE, and therefore is
not conducting the analyses to which these comments apply. If, in
response to feedback regarding this document, DOE elects to conduct
a rulemaking that would amend DHE standards, DOE will respond to
these comments at that time.
\8\ The remaining six submissions contained comments only
relevant to pool heaters.
\9\ A notation in this form provides a reference for information
that is in the docket of DOE's rulemaking to develop energy
conservation standards for DHE (Docket No. EERE-2016-BT-STD-0007),
which is maintained at www.regulations.gov. This notation indicates
that the statement preceding the reference was made by AHRI, is from
document number 1 in the docket, and appears at pages 5-8 of that
document.
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As part of the analysis for this proposed determination, DOE
reviewed the products offered on the market by analyzing the DOE CCMS
database \10\ and AHRI product directory \11\ for DHE. DOE found that
the number of models offered in each of the DHE product classes has
decreased overall since the previous rulemaking. Table II-1 presents
the number of models for each product class in the current DOE CCMS
database along with the number of models identified for the April 2010
Final Rule.
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\10\ This database can be found at: http://www.regulations.doe.gov/certification-data/.
\11\ This database can be found at: https://www.ahridirectory.org/ahridirectory/pages/home.aspx.
Table II-1--DHE Model Counts by Product Class for Current and Previous Rulemakings
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Product class 2015 model count * 2010 rulemaking model count
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Gas floor type with an input capacity over 37,000 Btu/h.. 15 15
Gas floor type with an input capacity up to 37,000 Btu/h
Gas room type with an input capacity over 20,000 Btu/h up 28 ** 29
to 27,000 Btu/h.........................................
Gas room type with an input capacity over 27,000 Btu/h up
to 46,000 Btu/h
Gas room type with an input capacity over 46,000 Btu/h
Gas room type with an input capacity up to 20,000 Btu/h
Gas wall fan type with an input capacity over 42,000 Btu/ 68 82
h.......................................................
Gas wall fan type with an input capacity up to 42,000 Btu/
h
Gas wall gravity type with an input capacity over 27,000 56 52
Btu/h up to 46,000 Btu/h................................
Gas wall gravity type with an input capacity over 46,000
Btu/h
Gas wall gravity type with an input capacity up to 27,000
Btu/h
----------------------------------------------------------------------------------------------------------------
* Using DOE CCMS database.
** The total room heater model count for the 2010 Final Rule was 123 models, however 94 of those models would no
longer be considered DHE and, as such, have been excluded from this count.
[[Page 21280]]
DOE also examined available technologies used to improve the
efficiency of DHE. In the previous DHE rulemaking, DOE considered the
following technology options in the engineering analysis for improving
the efficiency of vented home heating equipment.
Improved heat exchanger
Two-speed blower (fan-type wall furnaces)
Induced draft
Electronic ignition
74 FR 65852, 65887 (December 11, 2009).
AHRI commented in response to the March 2015 RFI that the current
energy conservation standards are close to if not at the maximum
technology level for most product classes of DHE. (Docket EERE-2016-BT-
STD-0007: AHRI, No. 1 at p. 4) During confidential manufacturer
interviews, DOE received similar feedback regarding the small potential
for improving efficiency over current standards for most product
classes. Manufacturers suggested that the efficiency of these products
is at or near the maximum attainable by improving the heat exchanger.
Manufacturers indicated that because DHE are primarily sold as
replacement units they are constrained by the footprint of the DHE unit
which they are replacing, and so the opportunity to increase the heat
exchanger size (and therefore size of the unit) is limited. They
indicated that blowers and induced draft technologies requiring
electricity are not currently found on the market or in any prototypes
for gravity-type floor furnaces, room heaters, and floor furnaces
because these products are designed to function entirely without
electricity. Moreover, they suggested that because these units are
primarily sold as replacement units, new designs or prototypes are
generally not being pursued. DOE notes that the same technology options
were considered as part of the previous DHE rulemaking analysis, and
agrees that the technology options available for DHE likely have
limited potential for achieving energy savings.\12\
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\12\ DOE notes that for room heaters with input capacity up to
20,000 Btu/h, the maximum AFUE available on the market increased
from 59% in 2009 (only one unit at this input capacity was available
on the market at that time) to 71% in 2015. DOE anticipates that
this due to heat exchanger improvements only because these units do
not use electricity. Due to the small input capacity, DOE does not
believe that this increase in AFUE (based on heat exchanger
improvements relative to input capacity) is representative of or
feasible for other room heater product classes.
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Furthermore, the costs of these technology options are anticipated
to be similar or higher than in the previous rulemaking analysis. As
shipments have continued to decrease, DOE anticipates that the
purchasing power of DHE manufacturers may have decreased because
purchasing quantities for materials or parts (e.g. blower motors,
electronic ignition components) have likely decreased. Therefore the
incremental costs of manufacturing DHE units at higher efficiency
levels may be similar or higher as compared to the previous rulemaking.
DOE seeks comment on its conclusion that the DHE market and
technology options (except for condensing technology, discussed below)
are similar to the previous rulemaking. This is identified as Issue 1
in section V.C.
In addition to these technology options, DOE notes that a
condensing fan-type wall furnace has become available since the last
rulemaking. Two input capacities are available: 17,500 Btu/h with a
90.2% AFUE rating, and 35,000 Btu/h with a 91.8% AFUE rating. DOE
considers this basic model the maximum technology (``max-tech'') option
for fan-type wall furnaces. By statute, DOE must set amended standards
that result in the maximum improvement in efficiency that is
technologically feasible (42 U.S.C. 6295(p)(1)) and economically
justified. (42 U.S.C. 6295(o)(2)(A)) DOE generally considers
technologies available in the market or in prototype products in its
list of technologies for improving efficiency. Therefore, DOE considers
91% AFUE the max-tech efficiency level for fan-type wall furnaces for
this rulemaking. DOE notes that the max-tech efficiency level for fan-
type wall furnaces in the April 2010 Final Rule was 80% AFUE.
With respect to the condensing max-tech efficiency level for fan-
type wall furnaces, DOE received feedback during manufacturer
interviews regarding the manufacturer production cost for the unit, as
well as information regarding shipments, which indicated that
condensing models are significantly more expensive to manufacture than
non-condensing models and that shipments are currently negligible
compared to overall DHE shipments. DOE conducted a teardown analysis
(``reverse engineering'') of the condensing fan-type wall furnace to
confirm the manufacturer production cost. As anticipated, the
manufacturer production cost for a condensing unit with 91% AFUE is the
highest among fan-type wall furnaces, and represents a 23% incremental
cost increase over a unit at 80% AFUE.\13\ Manufacturer feedback
indicated that shipments of these units are so low as to be negligible,
as consumers are not willing to pay the high initial cost for such
products. Furthermore, only one manufacturer currently makes a
condensing fan-type wall furnace and others would need to make
substantial investments in order to produce these units on a scale
large enough to support a Federal minimum standard. Therefore, DOE has
tentatively concluded that this technology option, which was not
considered in the analysis for the April 2010 Final Rule, would not be
economically justified today when analyzed for the Nation as a whole.
DOE believes that severe manufacturer impacts would be expected if an
energy conservation standard were adopted at this level. DOE seeks
feedback on its determination that adopting a condensing efficiency
level for fan-type wall furnaces would not be economically justified.
This is identified in Issue 2 in section V.C.
---------------------------------------------------------------------------
\13\ Manufacturer production costs assumes production volumes in
the case that 91% AFUE is the energy conservation standard for this
product class.
---------------------------------------------------------------------------
Since the April 2010 Final Rule, the DHE industry has seen further
consolidation, with the total number of manufacturers declining from
six to four. Furthermore, according to manufacturers,\14\ shipments
have further decreased since the April 2010 Final Rule, and therefore
it would be more difficult for manufacturers to recover capital
expenditures resulting from increased standards. DOE acknowledges that
DHE units continue to be produced primarily as replacements and that
the market is small. DOE expects that shipments will continue to
decrease and amended standards would likely accelerate the trend of
declining shipments. Moreover, DOE anticipates small business impacts
may be significant, as two of the four remaining manufacturers subject
to DHE standards are small businesses. DOE believes that its
conclusions regarding small businesses from the April 2010 Final Rule
(i.e., that small businesses would be likely to reduce product
offerings or leave the DHE market
[[Page 21281]]
entirely if the standard was set above the level adopted in that
rulemaking) are still valid concerns. In addition, DOE continues to
believe that an energy conservation standard for unvented home heating
equipment would produce negligible energy savings, as DOE concluded in
the April 2010 Final Rule.
---------------------------------------------------------------------------
\14\ Information obtained during confidential manufacturer
interviews.
---------------------------------------------------------------------------
Shipments of DHE have continued to decrease since the last DHE
energy conservation standards rulemaking. Low and decreasing shipments
were cited by several commenters in response to the December 2009 NOPR
as a reason that manufacturers would be unlikely to recoup investments
after redeveloping product lines to meet more stringent standards. In
the shipments analysis published in the April 2010 Final Rule, DOE
forecasted DHE shipments would decrease 30% over the analysis period
(30 years) from the 2005 level (see Chapter 9 of the TSD for the April
2010 Final Rule \15\). This analysis predicted total DHE shipments of
approximately 150,000 units in 2014. Based on feedback obtained during
confidential manufacturer interviews in 2015, DOE believes actual
shipments in 2014 were closer to 120,000. DOE notes that low and
decreasing shipment volume is primarily due to these products being
sold predominantly as replacements. AHRI commented in response to the
March 2015 RFI that the DHE market is already shrinking due to DHE
being a replacement product, and that less than 5 percent of industry
sales are for new construction. (Docket EERE-2016-BT-STD-0007: AHRI,
No. 1 at p. 4) DOE has tentatively concluded that low shipment volumes
remains a primary concern for manufacturers in light of potentially
amended energy conservation standards. DOE seeks information and data
related to shipments for DHE and this identified as Issue 3 in section
V.C.
---------------------------------------------------------------------------
\15\ This document is available at regulations.gov, docket
number EERE-2006-STD-0129.
---------------------------------------------------------------------------
III. Proposed Determination
Due to the lack of advancement in the DHE industry since the April
2010 final rule in terms of product offerings, available technology
options and associated costs, and declining shipment volumes, DOE
believes that amending the DHE energy conservation standards would
impose a substantial burden on manufacturers of DHE, particularly to
small manufacturers. DOE rejected higher TSLs during the previous DHE
rulemaking due to significant impacts on industry profitability, risks
of accelerated industry consolidation, and the likelihood that small
manufacturers would experience disproportionate impacts that could lead
them to discontinue product lines or exit the market altogether. DOE
believes that the market and the manufacturers' circumstances are
similar to those found when DOE last evaluated amended energy
conservation standards for DHE for the April 2010 Final Rule. As such,
DOE believes that amended energy conservation standards for DHE would
not be economically justified at any level above the current standard
level because benefits of more stringent standards would not outweigh
the burdens. Therefore, DOE has tentatively determined not to amend the
DHE energy conservation standards. DOE seeks comment on its tentative
determination not to amend its energy conservation standards for DHE
and this is identified as Issue 4 in section V.C.
As discussed in section I.A, EPCA requires DOE to incorporate
standby mode and off mode energy use into a single amended or new
standard (if feasible) or prescribe a separate standard for standby
mode and off mode energy consumption in any final rule establishing or
revising a standard for a covered product, adopted after July 1, 2010.
(42 U.S.C. 6295(gg)(3)(A)-(B)) Because DOE does not propose to amend
standards for DHE in this document, DOE is not required to propose
amended standards that include standby and off mode energy use. DOE
notes that fossil fuel energy use in standby mode and off mode is
already included in the AFUE metric, and DOE anticipates that electric
standby and off mode energy use is small in comparison to fossil fuel
energy use. DOE seeks comment on its proposal not to amend its
standards for DHE to include electric standby and off mode energy use.
This is identified as Issue 5 in section V.C.
IV. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
This proposed determination is not subject to review under
Executive Order (E.O.) 12866, ``Regulatory Planning and Review.'' 58 FR
51735 (October 4, 1993).
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 (August 16, 2002), DOE
published procedures and policies on February 19, 2003, to ensure that
the potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's Web site (http://energy.gov/gc/office-general-counsel).
DOE reviewed this proposed determination under the provisions of
the Regulatory Flexibility Act and the policies and procedures
published on February 19, 2003. In this proposed determination, DOE
finds that amended energy conservation standards for DHE would not be
economically justified at any level above the current standard level
because benefits of more stringent standards would not outweigh the
burdens. If finalized, the determination would not establish amended
energy conservation standards for DHE. On the basis of the foregoing,
DOE certifies that the proposed determination, if adopted, would have
no significant economic impact on a substantial number of small
entities. Accordingly, DOE has not prepared an IRFA for this proposed
determination. DOE will transmit this certification and supporting
statement of factual basis to the Chief Counsel for Advocacy of the
Small Business Administration for review under 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
This proposed determination, which proposes to determine that
amended energy conservation standards for DHE would not be economically
justified at any level above the current standard level because
benefits of more stringent standards would not outweigh the burdens,
would impose no new information or record keeping requirements.
Accordingly, the Office of Management and Budget (OMB) clearance is not
required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq.)
D. Review Under the National Environmental Policy Act of 1969
In this NOPD, DOE tentatively determines that amended energy
conservation standards for DHE would not be economically justified at
any level above the current standard level because benefits of more
stringent standards would not outweigh the burdens. DOE has determined
that review under the National
[[Page 21282]]
Environmental Policy Act of 1969 (NEPA), Public Law 91-190, codified at
42 U.S.C. 4321 et seq. is not required at this time because standards
are not being proposed.
E. Review Under Executive Order 13132
Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 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. As this NOPD determines
that amended standards are not likely to be warranted for DHE, there is
no impact on the policymaking discretion of the states. Therefore, no
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; (3)
provide a clear legal standard for affected conduct rather than a
general standard; and (4) promote simplification and burden reduction.
61 FR 4729 (Feb. 7, 1996). Regarding the review required by section
3(a), 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 determination 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 them. 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. This
proposed determination contains neither an intergovernmental mandate
nor a mandate that may result in the expenditure of $100 million or
more in any year, so these UMRA requirements do not apply.
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 proposed determination 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
Pursuant to Executive Order 12630, ``Governmental Actions and
Interference with Constitutionally Protected Property Rights,'' 53 FR
8859 (March 15, 1988), DOE has determined that this proposed
determination 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 information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). DOE has reviewed this NOPD 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.
Because the NOPD tentatively determines that amended standards for
DHE are not warranted, it is not a significant energy action, nor has
it been designated as such by the Administrator
[[Page 21283]]
at OIRA. Accordingly, DOE has not prepared a Statement of Energy
Effects.
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 FR 2667.
In response to OMB's Bulletin, DOE conducted formal in-progress
peer reviews of the energy conservation standards development process
and analyses and has prepared a Peer Review Report pertaining to the
energy conservation standards rulemaking analyses. Generation of this
report involved a rigorous, formal, and documented evaluation using
objective criteria and qualified and independent reviewers to make a
judgment as to the technical/scientific/business merit, the actual or
anticipated results, and the productivity and management effectiveness
of programs and/or projects. The ``Energy Conservation Standards
Rulemaking Peer Review Report'' dated February 2007 has been
disseminated and is available at the following Web site:
www1.eere.energy.gov/buildings/appliance_standards/peer_review.html.
V. Public Participation
A. Public Meeting Requests
Interested parties may submit comments requesting that a public
meeting discussing this NOPD be held at DOE Headquarters. DOE will
accept such requests no later than the date provided in the DATES
section at the beginning of this document. As with other comments
regarding this determination, interested parties may submit requests
using any of the methods described in the ADDRESSES section at the
beginning of this document.
B. 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 document.
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
www.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
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/courier, 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, in
which case it is not necessary to submit printed copies. No
telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
one copy of the document marked ``confidential'' including all the
information believed to be confidential, and one copy of the document
marked ``non-confidential'' with the information believed to be
confidential deleted. Submit these documents via email or on a CD, if
feasible. DOE will make its own determination about the confidential
status of the information and treat it according to its determination.
Factors of interest to DOE when evaluating requests to treat
submitted information as confidential include: (1)
[[Page 21284]]
A description of the items; (2) whether and why such items are
customarily treated as confidential within the industry; (3) whether
the information is generally known by or available from other sources;
(4) whether the information has previously been made available to
others without obligation concerning its confidentiality; (5) an
explanation of the competitive injury to the submitting person 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).
C. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
1. DOE seeks comment on its assumptions that only minor changes to
the DHE market have occurred since the last DOE rulemaking and that
overall shipments of DHE have continued to decrease. See section II.
2. DOE seeks comment on its determination that adopting a
condensing efficiency level for fan-type wall furnaces would not be
economically justified. See section II.
3. DOE seeks data and information pertaining to DHE shipments. See
section II.
4. DOE seeks comment on its proposal not to amend energy
conservation standards for DHE because more stringent standards would
not be economically justified. See section III.
5. DOE seeks comment on its proposal not to amend its standards for
DHE to include standby and off mode electrical consumption. See section
III.
VI. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Incorporation by reference, Intergovernmental relations, Small
businesses.
Issued in Washington, DC, on March 25, 2016.
David Friedman,
Principal Deputy Assistant Secretary, Energy Efficiency and Renewable
Energy.
[FR Doc. 2016-08121 Filed 4-8-16; 8:45 am]
BILLING CODE 6450-01-P