[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Proposed Rules]
[Pages 30853-30878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10564]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 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. 85, No. 99 / Thursday, May 21, 2020 / 
Proposed Rules  

[[Page 30853]]



DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0019]
RIN 1904-AD91


Energy Conservation Program: Energy Conservation Standards for 
Consumer Water Heaters

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

ACTION: Request for information.

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

SUMMARY: The U.S. Department of Energy (``DOE'') is initiating an 
effort to determine whether to amend the current energy conservation 
standards for consumer water heaters. This request for information 
(``RFI'') solicits information from the public to help DOE determine 
whether amended standards for consumer water heaters would result in 
significant energy savings and whether such standards would be 
technologically feasible and economically justified. DOE welcomes 
written comments from the public on any subject within the scope of 
this document (including topics not raised in this RFI).

DATES: Written comments and information are requested and will be 
accepted on or before July 6, 2020.

ADDRESSES: Interested persons are encouraged to submit comments using 
the Federal eRulemaking Portal at http://www.regulations.gov. Follow 
the instructions for submitting comments. Alternatively, interested 
persons may submit comments, identified by docket number EERE-2017-BT-
STD-0019, by any of the following methods:
    1. Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the instructions for submitting comments.
    2. Email: [email protected]. Include the 
docket number EERE-2017-BT-STD-0019 in the subject line of the message.
    3. Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone: 
(202) 287-1445. 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: Appliance and Equipment Standards 
Program, U.S. Department of Energy, Building Technologies Office, 950 
L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202) 
287-1445. 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 this 
process, see section III of this document.
    Docket: The docket for this activity, which includes Federal 
Register notices, comments, and other supporting documents/materials, 
is available for review at http://www.regulations.gov. All documents in 
the docket are listed in the http://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.
    The docket web page can be found at: https://www.regulations.gov/docket?D=EERE-2017-BT-STD-0019. The docket web page contains 
instructions on how to access all documents, including public comments, 
in the docket. See section III for information on how to submit 
comments through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: 
    Ms. Catherine Rivest, 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) 586-7335. Email: [email protected].
    Mr. Eric Stas, U.S. Department of Energy, Office of the General 
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121. 
Telephone: (202) 586-5827. Email: [email protected].
    For further information on how to submit a comment, or review other 
public comments and the docket contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
    A. Authority and Background
    B. Rulemaking Process
II. Request for Information and Comments
    A. Products Covered by This Analysis
    B. Test Procedure
    C. Market and Technology Assessment
    1. Product Classes
    2. Technology Assessment
    D. Screening Analysis
    E. Engineering Analysis
    1. Representative Product Characteristics
    2. Efficiency Levels
    a. Baseline Efficiency Levels
    b. Intermediate Energy Efficiency Levels
    c. Maximum Technologically Feasible Efficiency Levels
    3. Technology Pathway
    a. Gas-Fired Storage Water Heaters
    b. Electric Storage Water Heaters
    c. Oil-Fired Storage Water Heaters
    d. Tabletop Water Heaters
    e. Gas-Fired Instantaneous Water Heaters
    f. Electric Instantaneous Water Heaters
    g. Oil-Fired Instantaneous Water Heaters
    h. Grid-Enabled Water Heaters
    4. Manufacturer Production Costs and Manufacturer Selling Prices
    F. Markups Analysis
    1. Distribution Channels
    a. Replacement and New Owner
    b. New Construction
    2. Markups
    G. Energy Use Analysis
    1. Building Sample
    2. Hot Water Use
    3. Determination of Consumer Water Heating Energy Use
    H. Life-Cycle Cost and Payback Period Analysis
    1. Total Installed Cost
    2. Operating Costs
    I. Shipments Analysis
    J. National Impact Analysis
    K. Manufacturer Impact Analysis
    L. Other Energy Conservation Standards Topics
    1. Market Failures
    2. Market-Based Approaches to Energy Conservation Standards
III. Submission of Comments

I. Introduction

    Consumer water heaters are included in the list of ``covered 
products'' for which DOE is authorized to establish and amend energy 
conservation standards and test procedures. (42

[[Page 30854]]

U.S.C. 6292(a)(4)) DOE's energy conservation standards for consumer 
water heaters are prescribed in title 10 of the Code of Federal 
Regulations (``CFR'') part 430, section 32(d). The following sections 
discuss DOE's authority to establish and amend energy conservation 
standards for consumer water heaters, as well as relevant background 
information regarding DOE's evaluation of energy conservation standards 
for this product.

A. Authority and Background

    The Energy Policy and Conservation Act, as amended (``EPCA''),\1\ 
Public Law 94-163 (42 U.S.C. 6291-6317, as codified), among other 
things, authorizes DOE to regulate the energy efficiency of a number of 
consumer products and industrial equipment. Title III, Part B \2\ of 
EPCA established the Energy Conservation Program for Consumer Products 
Other Than Automobiles. These products include consumer water heaters, 
the subject of this document. (42 U.S.C. 6292(a)(4)) EPCA prescribed 
energy conservation standards for these products and directed DOE to 
conduct two cycles of rulemakings to determine whether to amend these 
standards. (42 U.S.C. 6295(e)(1) and (4))
---------------------------------------------------------------------------

    \1\ All references to EPCA in this document refer to the statute 
as amended through America's Water Infrastructure Act of 2018, 
Public Law 115-270 (Oct. 23, 2018).
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
---------------------------------------------------------------------------

    Under EPCA, DOE's energy conservation program consists essentially 
of four parts: (1) Testing, (2) labeling, (3) Federal energy 
conservation standards, and (4) certification and enforcement 
procedures. Relevant provisions of EPCA specifically include 
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), 
labeling provisions (42 U.S.C. 6294), energy conservation standards (42 
U.S.C. 6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption in limited instances for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under 42 U.S.C. 6297(d).
    DOE completed the first of these rulemaking cycles on January 17, 
2001 by publishing amended performance standards for consumer water 
heaters. 66 FR 4474 (establishing amended standards to apply starting 
on January 20, 2004) (``January 2001 Final Rule''). Additionally, DOE 
completed a second rulemaking cycle to amend the standards for consumer 
water heaters by publishing a final rule on April 16, 2010. 75 FR 20112 
(establishing amended standards to apply starting on April 16, 2015) 
(``April 2010 Final Rule''). As directed by EPCA (42 U.S.C. 
6295(e)(4)(E)), on July 11, 2014, DOE published a final rule amending 
the test procedure for consumer water heaters to change the efficiency 
metric from energy factor (``EF'') to uniform energy factor (``UEF''). 
79 FR 40542. The existing EF-based energy conservation standards were 
then translated from EF to UEF in a separate DOE conversion factor 
final rule that established a method for converting EF to UEF for water 
heater basic models that were previously in existence. 81 FR 96204 
(Dec. 29, 2016) (``December 2016 Conversion Factor Final Rule''). The 
current energy conservation standards are located at 10 CFR 430.32(d). 
The currently applicable DOE test procedures for consumer water heaters 
appear at 10 CFR part 430, subpart B, appendix E (``Appendix E'').
    EPCA also requires that, not later than 6 years after the issuance 
of any final rule establishing or amending a standard, DOE evaluate the 
energy conservation standards for each type of covered product, 
including those at issue here, and publish either a notice of 
determination that the standards do not need to be amended, or a NOPR 
including new proposed energy conservation standards (proceeding to a 
final rule, as appropriate). (42 U.S.C. 6295(m)(1)) EPCA further 
provides that, not later than 3 years after the issuance of a final 
determination not to amend standards, DOE must publish either a notice 
of determination that standards for the product do not need to be 
amended, or a NOPR including new proposed energy conservation standards 
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B)) 
DOE must make the analysis on which the determination is based publicly 
available and provide an opportunity for written comment. (42 U.S.C. 
6295(m)(2)) In making a determination, DOE must evaluate whether more-
stringent standards would: (1) Yield a significant savings in energy 
use; (2) be technologically feasible; and (3) be cost-effective under 
42 U.S.C. 6295(o)(2)(B)(i)(II). (42 U.S.C. 6295(m)(1)(A))
    DOE is publishing this RFI to collect data and information to 
inform its decision consistent with its obligations under EPCA.

B. Rulemaking Process

    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products. EPCA requires that any new or 
amended energy conservation standard be designed to achieve the maximum 
improvement in energy or water efficiency that is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) To 
determine whether a standard is economically justified, EPCA requires 
that DOE determine whether the benefits of the standard exceed its 
burdens by considering, to the greatest extent practicable, the 
following seven factors:
    (1) The economic impact of the standard on the manufacturers and 
consumers of the affected products;
    (2) The savings in operating costs throughout the estimated average 
life of the product compared to any increases in the initial cost, or 
maintenance expenses;
    (3) The total projected amount of energy and water (if applicable) 
savings likely to result directly from the standard;
    (4) Any lessening of the utility or the performance of the 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))
    DOE fulfills these and other applicable requirements by conducting 
a series of analyses throughout the rulemaking process. Table I.1 shows 
the individual analyses that are performed to satisfy each of the 
requirements within EPCA.

[[Page 30855]]



       Table I.1--EPCA Requirements and Corresponding DOE Analysis
------------------------------------------------------------------------
            EPCA requirement                Corresponding DOE analysis
------------------------------------------------------------------------
Significant Energy Savings..............   Shipments Analysis.
                                           National Impact
                                           Analysis.
                                           Energy and Water Use
                                           Determination.
Technological Feasibility...............   Market and Technology
                                           Assessment.
                                           Screening Analysis.
                                           Engineering Analysis.
Economic Justification:
    1. Economic impact on manufacturers    Manufacturer Impact
     and consumers.                        Analysis.
                                           Life-Cycle Cost and
                                           Payback Period Analysis.
                                           Life-Cycle Cost
                                           Subgroup Analysis.
                                           Shipments Analysis.
    2. Lifetime operating cost savings     Mark-ups for Product
     compared to increased cost for the    Price Determination.
     product.
                                           Energy and Water Use
                                           Determination.
                                           Life-Cycle Cost and
                                           Payback Period Analysis.
    3. Total projected energy savings...   Shipments Analysis.
                                           National Impact
                                           Analysis.
    4. Impact on utility or performance.   Screening Analysis.
                                           Engineering Analysis.
    5. Impact of any lessening of          Manufacturer Impact
     competition.                          Analysis.
    6. Need for national energy and        Shipments Analysis.
     water conservation.
                                           National Impact
                                           Analysis.
    7. Other factors the Secretary         Employment Impact
     considers relevant.                   Analysis.
                                           Utility Impact
                                           Analysis.
                                           Emissions Analysis.
                                           Monetization of
                                           Emission Reductions Benefits.
                                           Regulatory Impact
                                           Analysis.
------------------------------------------------------------------------

    As detailed throughout this RFI, DOE is publishing this document 
seeking input and data from interested parties to aid in the 
development of the technical analyses on which DOE will ultimately rely 
to determine whether (and if so, how) to amend the standards for 
consumer water heaters.

II. Request for Information and Comments

    In the following sections, DOE has identified a variety of issues 
on which it seeks input to aid in the development of the technical and 
economic analyses regarding whether amended standards for consumer 
water heaters may be warranted. Additionally, DOE welcomes comments on 
other issues relevant to the conduct of this rulemaking that may not 
specifically be identified in this document. In particular, DOE notes 
that under Executive Order 13771, ``Reducing Regulation and Controlling 
Regulatory Costs,'' Executive Branch agencies such as DOE are directed 
to manage the costs associated with the imposition of expenditures 
required to comply with Federal regulations. See 82 FR 9339 (Feb. 3, 
2017). Consistent with that Executive Order, DOE encourages the public 
to provide input on measures DOE could take to lower the cost of its 
energy conservation standard rulemakings, recordkeeping and reporting 
requirements, and compliance and certification requirements applicable 
to consumer water heaters while remaining consistent with the 
requirements of EPCA.
    In addition, DOE seeks comment on whether there have been 
sufficient technological or market changes since the most recent 
standards update that may justify a new rulemaking to consider more-
stringent standards. Specifically, DOE seeks data and information that 
could enable the agency to determine whether DOE should propose a ``no 
new standard'' determination because a more-stringent standard: (1) 
Would not result in a significant savings of energy; (2) is not 
technologically feasible; (3) is not economically justified, or (4) any 
combination of the foregoing.
    Finally, DOE notes that it recently published an RFI on the 
emerging smart technology appliance and equipment market. 83 FR 46886 
(Sept. 17, 2018). In that RFI, DOE sought information to better 
understand market trends and issues in the emerging market for 
appliances and commercial equipment that incorporate smart technology. 
DOE's intent in issuing the RFI was to ensure that DOE did not 
inadvertently impede such innovation in fulfilling its statutory 
obligations in setting efficiency standards for covered products and 
equipment. DOE seeks comments, data, and information on the issues 
presented in that RFI as they may be applicable to consumer water 
heaters.

A. Products Covered by This Analysis

    This RFI covers those products that meet the definitions for 
consumer water heaters, as codified at 10 CFR 430.2. The definitions 
for consumer water heaters were most recently amended in a standards 
final rule that defined the term ``grid-enabled water heater.'' 80 FR 
48004 (August 11, 2015).
    Generally, DOE defines a ``water heater,'' consistent with EPCA's 
definition, as a product which utilizes oil, gas, or electricity to 
heat potable water for use outside the heater upon demand, including--
    (a) Storage type units which heat and store water at a 
thermostatically controlled temperature, including gas storage water 
heaters with an input of 75,000 Btu per hour or less, oil storage water 
heaters with an input of 105,000 Btu per hour or less, and electric 
storage water heaters with an input of 12 kilowatts or less;
    (b) Instantaneous type units which heat water but contain no more 
than one gallon of water per 4,000 Btu per hour of input, including gas 
instantaneous water heaters with an input of 200,000 Btu per hour or 
less, oil instantaneous water heaters with an input of 210,000 Btu per 
hour or less, and electric instantaneous water heaters with an input of 
12 kilowatts or less; and
    (c) Heat pump type units, with a maximum current rating of 24 
amperes at a voltage no greater than 250 volts, which are products 
designed to transfer thermal energy from one temperature

[[Page 30856]]

level to a higher temperature level for the purpose of heating water, 
including all ancillary equipment such as fans, storage tanks, pumps, 
or controls necessary for the device to perform its function.

10 CFR 430.2; (42 U.S.C. 6291(27))

    In addition, at 10 CFR 430.2, DOE further defines several specific 
categories of consumer water heaters, as follows:
    (1) ``Electric instantaneous water heater'' means a water heater 
that uses electricity as the energy source, has a nameplate input 
rating of 12 kW or less, and contains no more than one gallon of water 
per 4,000 Btu per hour of input.
    (2) ``Electric storage water heater'' means a water heater that 
uses electricity as the energy source, has a nameplate input rating of 
12 kW or less, and contains more than one gallon of water per 4,000 Btu 
per hour of input.
    (3) ``Gas-fired instantaneous water heater'' means a water heater 
that uses gas as the main energy source, has a nameplate input rating 
less than 200,000 Btu/h, and contains no more than one gallon of water 
per 4,000 Btu per hour of input.
    (4) ``Gas-fired storage water heater'' means a water heater that 
uses gas as the main energy source, has a nameplate input rating of 
75,000 Btu/h or less, and contains more than one gallon of water per 
4,000 Btu per hour of input.
    (5) ``Grid-enabled water heater'' means an electric resistance 
water heater that--
    (a) Has a rated storage tank volume of more than 75 gallons;
    (b) Is manufactured on or after April 16, 2015;
    (c) Is equipped at the point of manufacture with an activation lock 
and;
    (d) Bears a permanent label applied by the manufacturer that--
    (i) Is made of material not adversely affected by water;
    (ii) Is attached by means of non-water-soluble adhesive; and
    (iii) Advises purchasers and end-users of the intended and 
appropriate use of the product with the following notice printed in 
16.5 point Arial Narrow Bold font: ``IMPORTANT INFORMATION: This water 
heater is intended only for use as part of an electric thermal storage 
or demand response program. It will not provide adequate hot water 
unless enrolled in such a program and activated by your utility company 
or another program operator. Confirm the availability of a program in 
your local area before purchasing or installing this product.''
    (6) ``Oil-fired instantaneous water heater'' means a water heater 
that uses oil as the main energy source, has a nameplate input rating 
of 210,000 Btu/h or less, and contains no more than one gallon of water 
per 4,000 Btu per hour of input.
    (7) ``Oil-fired storage water heater'' means a water heater that 
uses oil as the main energy source, has a nameplate input rating of 
105,000 Btu/h or less, and contains more than one gallon of water per 
4,000 Btu per hour of input.
    As stated in section I of this RFI, EPCA prescribed energy 
conservation standards for all consumer water heaters (i.e., those that 
meet the definition of ``water heater'' above). For the purpose of this 
RFI and the evaluation of potential amended energy conservation 
standards, DOE is considering all consumer water heaters, as defined by 
EPCA.
    DOE previously established a separate product class and definition 
for ``tabletop water heaters,'' which required such products to be in a 
rectangular box enclosure designed to slide into a kitchen countertop 
space with typical dimensions of 36 inches high, 25 inches deep, and 24 
inches wide. 66 FR 4474, 4497 (Jan. 17, 2001) The definition of 
``tabletop water heater'' was established in appendix E, but a 
subsequent relocation of definitions removed that definition from 
appendix E without re-establishing it in 10 CFR 430.2.
    Issue A.1 DOE requests feedback on whether the previous definition 
for ``tabletop water heater'' is still appropriate, whether such 
products should continue to be considered separately from other classes 
of consumer water heaters, and whether such definition should be added 
to the list of definitions in 10 CFR 430.2.

B. Test Procedure

    DOE's existing test procedures for consumer water heaters are set 
forth at 10 CFR part 430, subpart B, Appendix E--Uniform Test Method 
for Measuring the Energy Consumption of Water Heaters. DOE's consumer 
water heater test procedure provides methods for determining the first-
hour rating (``FHR''), maximum gallons per minute (``max GPM''), and 
UEF for consumer gas-fired, oil-fired, and electric storage and 
instantaneous water heaters. As stated in section I.A of this document, 
the test procedure for consumer water heaters was updated in July 2014 
to transition from the EF metric to the UEF metric, and to expand the 
scope of the test method to cover all covered consumer water heaters, 
as well as certain commercial water heaters (i.e., those meeting the 
definition of a ``residential-duty commercial water heater''). 79 FR 
40542 (July 11, 2014). The major difference between the EF and UEF 
metrics is that the EF test consists of six hot water draws of equal 
volume and flow rate followed by a standby period for all water 
heaters, while the UEF test procedure consists of varying draw patterns 
depending on the delivery capacity of the consumer water heater, which 
include between 9 and 14 draws of varying volumes and flow rates. Due 
to the difference in draw pattern as well as other differences 
established in the UEF test method (e.g., changes to the set point 
temperature and method for setting the thermostat) the EF and UEF 
values are not directly comparable. For this evaluation of potential 
amended energy conservation standards, DOE will use UEF as the basis 
for its analysis.

C. Market and Technology Assessment

    The market and technology assessment that DOE routinely conducts 
when analyzing the impacts of a potential new or amended energy 
conservation standard provides information about the consumer water 
heater industry that will be used in DOE's analysis throughout the 
rulemaking process. DOE uses qualitative and quantitative information 
to characterize the structure of the industry and market. DOE 
identifies manufacturers, estimates market shares and trends, addresses 
regulatory and non-regulatory initiatives intended to improve energy 
efficiency or reduce energy consumption, and explores the potential for 
efficiency improvements in the design and manufacturing of consumer 
water heaters. DOE also reviews product literature, industry 
publications, and company websites. Additionally, DOE considers 
conducting interviews with manufacturers to improve its assessment of 
the market and available technologies for consumer water heaters.
1. Product Classes
    When evaluating and establishing energy conservation standards, DOE 
may divide covered products into product classes by the type of energy 
used, or by capacity or other performance-related features that justify 
a different standard. (42 U.S.C. 6295(q)) In making a determination 
whether capacity or another performance-related feature justifies a 
different standard, DOE must consider such factors as the utility of 
the feature to the consumer and other factors DOE deems appropriate. 
(Id.)
    For consumer water heaters, the current energy conservation 
standards specified at 10 CFR 430.32(d) vary based

[[Page 30857]]

on fuel type (gas-fired, oil-fired, or electric), product category 
(storage, instantaneous, tabletop, grid-enabled), stored volume, and 
capacity (draw pattern).
    The December 2016 Conversion Factor Final Rule converted the EF-
based energy conservation standards established in the January 2001 and 
April 2010 Final Rules to ratings based on the UEF metric. 81 FR 96204 
(Dec. 29, 2016). Table II.1 describes the product classes and which 
standards apply to each range of rated storage volume and input rate.

                       Table II.1--Description of Applicable Energy Conservation Standards
----------------------------------------------------------------------------------------------------------------
                                                                                            Energy conservation
            Product class               Rated storage volume         Draw pattern *             standard **
----------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater......  <20 gal................  .........................  EF = 0.6200-0.0019 x
                                                                                           Vr.
                                      >=20 gal and <=55 gal..  Very Small...............  UEF = 0.3456-0.0020 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.5982-0.0019 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.6483-0.0017 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.6920-0.0013 x
                                                                                           Vr.
                                      >55 gal and <=100 gal..  Very Small...............  UEF = 0.6470-0.0006 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.7689-0.0005 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.7897-0.0004 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.8072-0.0003 x
                                                                                           Vr.
                                      >100 gal...............  .........................  EF = 0.6200-0.0019 x
                                                                                           Vr.
Oil-fired Storage Water Heater......  <=50 gal...............  Very Small...............  UEF = 0.2509-0.0012 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.5330-0.0016 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.6078-0.0016 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.6815-0.0014 x
                                                                                           Vr.
                                      >50 gal................  .........................  EF = 0.5900-0.0019 x
                                                                                           Vr.
Electric Storage Water Heater.......  <20 gal................  .........................  EF = 0.9300-0.00132 x
                                                                                           Vr.[dagger]
                                      >=20 gal and <=55 gal..  Very Small...............  UEF = 0.8808-0.0008 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.9254-0.0003 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.9307-0.0002 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.9349-0.0001 x
                                                                                           Vr.
                                      >55 gal and <=120 gal..  Very Small...............  UEF = 1.9236-0.0011 x
                                                                                           Vr.
                                                               Low......................  UEF = 2.0440-0.0011 x
                                                                                           Vr.
                                                               Medium...................  UEF = 2.1171-0.0011 x
                                                                                           Vr.
                                                               High.....................  UEF = 2.2418-0.0011 x
                                                                                           Vr.
                                      >120 gal...............  .........................  EF = 0.9300-0.00132 x
                                                                                           Vr.[dagger]
Tabletop Storage....................  <20 gal................  .........................  EF = 0.9300-0.00132 x
                                                                                           Vr.[dagger]
                                      >=20 gal and <=120 gal.  Very Small...............  UEF = 0.6323-0.0058 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.9188-0.0031 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.9577-0.0023 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.9884-0.0016 x
                                                                                           Vr.
                                      >120 gal...............  .........................  EF = 0.9300-0.00132 x
                                                                                           Vr.[dagger]
Gas-fired Instantaneous Water Heater  <2 gal and >50,000 Btu/  Very Small...............  UEF = 0.80.
                                       h.
                                                               Low......................  UEF = 0.81.
                                                               Medium...................  UEF = 0.81.
                                                               High.....................  UEF = 0.81.
                                      >=2 gal or <=50,000 Btu/ .........................  EF = 0.6200-0.0019 x
                                       h.                                                  Vr.
Oil-fired Instantaneous Water Heater  All....................  .........................  EF = 0.5900-0.0019 x
                                                                                           Vr.
Electric Instantaneous Water Heater.  <2 gal.................  Very Small...............  UEF = 0.91.
                                                               Low......................  UEF = 0.91.
                                                               Medium...................  UEF = 0.91.
                                                               High.....................  UEF = 0.92.
                                      >=2 gal................  .........................  EF = 0.9300-0.00132 x
                                                                                           Vr.
Grid-Enabled Water Heater...........  >75 gal................  Very Small...............  UEF = 1.0136-0.0028 x
                                                                                           Vr.
                                                               Low......................  UEF = 0.9984-0.0014 x
                                                                                           Vr.
                                                               Medium...................  UEF = 0.9853-0.0010 x
                                                                                           Vr.
                                                               High.....................  UEF = 0.9720-0.0007 x
                                                                                           Vr.
----------------------------------------------------------------------------------------------------------------
* Draw patterns vary based on hot water delivery capacity in the UEF test procedure, while the EF test procedure
  relies on a single draw pattern for all water heaters. As a result, UEF values and UEF energy conservation
  standards are different based on the draw pattern, while EF values and energy conservation standards are not.
** Energy conservation standards based on EF were established by EPCA. Energy conservation standards based on
  UEF were established in the April 2010 Final Rule (75 FR 20112 (April 16, 2010)) and translated to equivalent
  UEF standards in the December 2016 Conversion Factor Final Rule (81 FR 96204 (Dec. 29, 2016)).
[dagger] EPCA initially established an energy conservation standard at 0.95-.00132 x Vr for electric storage
  water heaters. In the test procedure and energy conservation standards final rule that adopted the EF metric,
  DOE changed the standard to 0.93-.00132 x Vr to account for the changes to the test method for electric
  storage water heaters. 55 FR 42162, 42177 (Oct. 17, 1990).

    Relevant to the establishment of product classes, EPCA provides 
that the Secretary may not prescribe an amended or new standard for 
covered products 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) Where the Secretary finds such ``performance 
characteristics (including reliability), features, sizes, capacities, 
and volumes'' (collectively referred to hereafter as ``features'') to

[[Page 30858]]

exist, the statute provides for the potential of establishing separate 
product classes. (42 U.S.C. 6295(q)(1))
    On November 1, 2018, DOE published for comment a petition for 
rulemaking submitted by Spire, Inc., the National Gas Supply 
Association, the National Propane Gas Association, the American Public 
Gas Association, and the American Gas Association (``Gas Industry 
Petition''), which in part, raised the question of whether for 
residential furnaces and commercial water heating equipment (and 
similarly situated covered products and equipment) non-condensing 
technology and associated venting constitutes a performance-related 
``feature'' under 42 U.S.C. 6295(o)(4), as would support a separate 
product/equipment class under 42 U.S.C. 6295(q)(1). 83 FR 54883. The 
comment period on the notice of petition for rulemaking was originally 
set to end on January 30, 2019, but DOE received two requests from 
interested parties seeking an extension of the comment period in order 
to develop additional data relevant to the petition. DOE granted these 
requests in a notice published in the Federal Register on January 29, 
2019, which extended the comment period until March 1, 2019.
    On July 11, 2019, following consideration of the Gas Industry 
Petition, public comments, and other information received on the 
petition, DOE published a notice of proposed interpretative rule 
(``NOPIR''), proposing to revise its interpretation of EPCA's 
``features'' provision in the context of condensing and non-condensing 
technology used in furnaces, commercial water heating equipment, and 
similarly situated appliances (where permitted by EPCA). 84 FR 33011, 
33020. DOE stated that as compared to products that rely on non-
condensing technology, products that use condensing technology may 
result in more complicated/costly installations, require physical 
changes to a home that impact aesthetics (e.g., by adding new venting 
into the living space or decreasing closet or other storage space), and 
may result in some enhanced level of fuel switching. Id. DOE also 
acknowledged that although energy efficiency improvements may pay for 
themselves over time, there is a significant increase in first-cost 
associated with residential furnaces and commercial water heaters using 
condensing technology, and for consumers with difficult installation 
situations (e.g., inner-city row houses) there would be the added cost 
of potentially extensive venting modifications. Id. DOE proposed in the 
July 2019 NOPIR to interpret the statute to provide that adoption of 
energy conservation standards that would limit the market to natural 
gas and/or propane furnaces, water heaters, or similarly situated 
products/equipment (where permitted by EPCA) that use condensing 
combustion technology would result in the unavailability of a 
performance related feature within the meaning of 42 U.S.C. 6295(o)(4). 
84 FR 33011, 33021 (July 11, 2019). DOE is currently considering the 
comments received on the July 2019 NOPIR, after which the Department 
will determine whether and how to proceed with the interpretive rule in 
response to the Gas Industry Petition.
    DOE is evaluating all the product classes for consumer water 
heaters presented in Table II.1 of this RFI. DOE may also consider 
additional product classes based on any performance-related features 
that justify the establishment of a different energy conservation 
standard, or it may consider consolidating product classes in 
appropriate cases. (42 U.S.C. 6295(q)) In light of the July 2019 NOPIR, 
DOE plans to evaluate the effects of treating non-condensing technology 
and associated venting as a performance-related ``feature'' under 42 
U.S.C. 6295(o)(4), as would support a separate product class for 
consumer water heaters under 42 U.S.C. 6295(q)(1).
    Issue C.1 DOE requests feedback on the current consumer water 
heater product classes and whether changes to these individual product 
classes and their descriptions should be made or whether certain 
classes should be separated or merged. Specifically, with regard to 
consumer water heaters that use condensing technology and the related 
venting, DOE requests information and data on potential impacts as 
compared to consumer water heaters that use non-condensing technology, 
such as, but not limited to, the complexity/cost of installation, 
changes to a home's aesthetics, and the potential for fuel switching. 
DOE also requests comment on other instances where it may be 
appropriate to separate any of the existing product classes and whether 
it might reduce any compliance burdens. DOE further requests feedback 
on whether combining certain classes could impact product utility by 
eliminating any performance-related features or impact the stringency 
of the current energy conservation standard for these products.
    Issue C.2 DOE seeks information regarding any other new product 
classes it should consider for inclusion in its analysis. Specifically, 
DOE requests information on the performance-related features that 
provide unique consumer utility and data detailing the corresponding 
impacts on energy use that would justify separate product classes 
(i.e., explanation for why the presence of these performance-related 
features would increase energy consumption).
2. Technology Assessment
    In analyzing the feasibility of potential new or amended energy 
conservation standards, DOE uses information about existing and past 
technology options and prototype designs to help identify technologies 
that manufacturers could use to meet and/or exceed a given set of 
energy conservation standards under consideration. In consultation with 
interested parties, DOE intends to develop a list of technologies to 
consider in its analysis. That analysis will initially include a number 
of the technology options DOE previously considered during its most 
recent rulemaking for consumer water heaters (i.e., the April 2010 
Final Rule). 75 FR 20112, 20136-20145 (April 16, 2010). In addition, 
DOE conducted preliminary market research by examining manufacturer 
product literature and published technical literature (e.g., reports, 
journal articles, or presentations) which identified specific 
technologies and design options, and DOE will consider these along with 
any others identified during the rulemaking process, should it 
determine that a rulemaking is necessary. The technologies DOE has 
identified to date, including several technology options from the 
previous rulemaking, are presented in Table II.2 of this RFI. DOE notes 
that while this list includes all technology options that DOE is aware 
of with the potential to reduce energy consumption, a number of the 
technology options would not affect the UEF (i.e., the regulatory 
metric) as measured by the DOE test procedure even though they may 
reduce actual energy consumption when installed. DOE has included such 
technologies in this list for informational purposes only, as 
technologies that do not affect UEF would not necessarily be 
implemented to comply with potential amended energy conservation 
standards. While some of the technology options that do not increase 
UEF could still benefit consumers by reducing field energy consumption 
and/or improving performance, technologies that do not increase UEF 
would not be considered in an engineering analysis for a rulemaking, 
should one be initiated. In addition, some technologies may be screened 
out in the screening analysis, as discussed in section II.D of this 
RFI.

[[Page 30859]]



      Table II.2--Potential Technologies for Increasing Efficiency
------------------------------------------------------------------------
                                          Technologies
                                         considered in     Technologies
              Description                the April 2010    that do not
                                           final rule       affect UEF
------------------------------------------------------------------------
Heat traps............................               X
Improved insulation:
    Increased thickness...............               X
    Insulation on tank bottom.........               X
    Less conductive tank materials                   X
     (e.g., plastic)..................
    Foam insulation...................               X
    Pipe and fitting insulation.......
Advanced insulation types:
        Aerogel.......................               X
        Vacuum panels.................               X
        Inert gas-filled panels.......               X
Electronic ignition systems:
    Direct spark ignition.............               X
    Intermittent pilot ignition.......               X
    Hot surface ignition..............               X
Improved burners:
    Pulse combustion..................               X
    Pressurized combustion............
    Side-arm heating..................               X
    Two-phase thermosiphon technology.               X
    Modulating burners................               X
    Reduced burner size (slow                        X
     recovery)........................
Heat exchanger improvements:
    Increased heat exchanger surface                 X
     area.............................
    Enhanced flue baffle..............               X
    Submerged combustion chamber......               X
    Multiple flues....................               X
    Alternative flue geometry                        X
     (Helical)........................
    U-Tube............................               X
    Condensing technology.............               X
    Direct-fired heat exchange........               X
Improved venting:
    Flue damper:......................
        Powered (external supply).....               X
        Powered (thermopile) Buoyancy.               X
    Direct vent.......................                                X
    Concentric direct venting.........               X
    Power vent........................               X
    Power-direct vent.................                                X
Improved heat pump water heater
 components:
    Advanced compressors..............
    Centrifugal fans..................
    Increased heat exchanger surface
     area.............................
    Improved fan motors...............
Absorption heat pump water heaters....
Adsorption heat pump water heaters....
Carbon dioxide heat pump water heaters               X
Thermophotovoltaic and thermoelectric                X
 generators...........................
Solar thermal.........................
Improved controls:
    Timer controls....................               X                X
    Modulating controls...............               X
    Intelligent and wireless controls                X                X
     and communication................
    Grid interactive capabilities.....
Self-cleaning.........................               X                X
------------------------------------------------------------------------

    Issue C.3 DOE seeks information related to these technologies 
regarding their applicability to the current market and how these 
technologies may impact the efficiency of consumer water heaters as 
measured according to the DOE test procedure. DOE also seeks 
information on how these technologies may have changed since they were 
considered in the April 2010 Final Rule analysis. Specifically, DOE 
seeks information on the range of efficiencies or performance 
characteristics for products that are currently equipped with each 
technology option.
    Issue C.4  DOE seeks information on the technologies listed in 
Table II.2 regarding their market adoption, costs, and any concerns 
with incorporating them into products (e.g., impacts on consumer 
utility, potential safety concerns, manufacturing/production/
implementation issues).
    Issue C.5  DOE seeks comment on other technology options that it 
should consider for inclusion in its analysis and whether these 
technologies may impact product features or consumer utility.

[[Page 30860]]

D. Screening Analysis

    The purpose of the screening analysis is to evaluate the 
technologies that improve equipment efficiency to determine which 
technologies will be eliminated from further consideration and which 
will be passed to the engineering analysis for further consideration.
    DOE determines whether to eliminate certain technology options from 
further consideration based on the following criteria:
    (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 compliance date of the standard, then that technology will 
not be considered further.
    (3) Impacts on product utility or product availability. If a 
technology is determined to have significant adverse impact on the 
utility of the product for significant subgroups of consumers, or 
result in the unavailability of any covered product category or class 
with performance characteristics (including reliability), features, 
sizes, capacities, and volumes that are substantially the same as 
equipment generally available in the United States at the time, it will 
not be considered further.\3\
---------------------------------------------------------------------------

    \3\ For example, in the previous rulemaking for consumer water 
heaters, DOE did not consider reduced burner size due to the 
associated utility impact. See Chapter 4 of the technical support 
document for the April 2010 Final Rule (Available at: https://www.regulations.gov/document?D=EERE-2006-STD-0129-0170).
---------------------------------------------------------------------------

    (4) Adverse impacts on health or safety. 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, sections 4(a)(4) and 5(b).
    Technology options identified in the technology assessment are 
evaluated against these criteria using DOE analyses and inputs from 
interested parties (e.g., manufacturers, trade organizations, and 
energy efficiency advocates). Technologies that pass through the 
screening analysis are referred to as ``design options'' in the 
engineering analysis. Technology options that fail to meet one or more 
of the four criteria are eliminated from consideration.
    Table II.3 summarizes the technology options that DOE screened out 
in the April 2010 Final Rule, as well as the applicable screening 
criteria.

              Table II.3--Previously Screened Out Technology Options From the April 2010 Final Rule
----------------------------------------------------------------------------------------------------------------
                                                    EPCA criteria (X = basis for screening out)
                                 -------------------------------------------------------------------------------
                                                       Practicability to
   Screened technology option        Technological       manufacture,      Adverse impact on  Adverse impacts on
                                      Feasibility        install, and       product utility    health and safety
                                                            service
----------------------------------------------------------------------------------------------------------------
Side-Arm Heater.................                  X                   X
Flue Damper (Buoyancy Operated).                                                                              X
Directly Fired..................                                                                              X
Condensing Pulse Combustion.....                  X                   X
Advanced Insulation Types.......                  X                   X
Thermophotovoltaic and                            X                   X
 Thermoelectric Generators......
U-Tube Flue.....................                                      X
Reduced Burner Size.............                                                          X
Two-Phase Thermosiphon..........                                      X
Carbon Dioxide (``CO2'') Heat                                         X
 Pump Water Heater..............
----------------------------------------------------------------------------------------------------------------

    Issue D.1  DOE requests feedback on what impact, if any, the four 
screening criteria described in this section would have on 
consideration of each of the technology options listed with respect to 
consumer water heaters. Similarly, DOE seeks information regarding how 
these same criteria would affect consideration of any other technology 
options not already identified in this document with respect to their 
potential use in consumer water heaters.
    Issue D.2  With respect to the screened out technology options 
listed in Table II.3, DOE seeks information on whether these options 
would, based on current and projected assessments regarding each of 
them, remain screened out under the four screening criteria described 
in section II.D of this RFI. With respect to each of these technology 
options, what steps, if any, could be (or have already been) taken to 
facilitate the introduction of each option as a means to improve the 
energy performance of consumer water heaters and the potential to 
impact consumer utility of the consumer water heaters.
    Finally, DOE notes that the four screening criteria do not directly 
address the propriety status of design options. DOE only considers 
potential efficiency levels achieved through the use of proprietary 
designs in the engineering analysis if they are not part of a unique 
pathway to achieve that efficiency level (i.e., if there are other non-
proprietary technologies capable of achieving the same efficiency 
level).

E. Engineering Analysis

    The engineering analysis estimates the cost-efficiency relationship 
of products at different levels of increased energy efficiency 
(``efficiency levels''). This relationship serves as the basis for the 
cost-benefit calculations for consumers, manufacturers, and the Nation. 
In determining the cost-efficiency relationship, DOE estimates the 
increase in manufacturer production cost (``MPC'') associated with 
increasing the efficiency of products above the baseline, up to the 
maximum technologically feasible (``max-tech'') efficiency level for 
each product class.
    DOE historically has used the following three methodologies to 
generate incremental manufacturing costs and establish efficiency 
levels (``ELs'') for analysis: (1) The design-option approach, which 
provides the incremental costs of adding to a baseline model design 
options that will improve its efficiency; (2) the efficiency-level 
approach, which provides the relative

[[Page 30861]]

costs of achieving increases in energy efficiency levels, without 
regard to the particular design options used to achieve such increases; 
and (3) the cost-assessment (or reverse engineering) approach, which 
provides ``bottom-up'' manufacturing cost assessments for achieving 
various levels of increased efficiency, based on detailed data as to 
costs for parts and materials, labor, shipping/packaging, and 
investment for models that operate at particular efficiency levels.
1. Representative Product Characteristics
    DOE intends to perform a teardown analysis on a set of models with 
``representative'' characteristics to estimate the cost-efficiency 
relationship for consumer water heaters. For consumer storage-type 
water heaters, the tank volume significantly affects the energy 
consumed. That is, it takes more energy to heat a larger volume of 
water from a given temperature to a higher temperature. Additionally, 
the tank surface area increases as tank volume increases and, among 
other factors, the heat transfer rate is a function of surface area. 
Therefore, increased surface area increases the rate of heat transfer 
to the ambient air, which increases standby losses. This is reflected 
in the existing Federal energy conservation standards, as UEF is a 
function of the tank storage volume for storage water heaters.
    DOE plans to conduct teardowns at specific storage volumes 
(referred to as representative storage volumes) that are the most 
common on the market, and extrapolate those results for the entire 
market. Based on information from the previous consumer water heater 
rulemaking and a survey of models currently on the market, DOE has 
preliminarily determined the characteristics of representative units 
for each product class. In particular, DOE examined the number of 
models available at distinct rated storage volumes and intends to use 
the most common storage volume as a representative characteristic in 
each product class. Storage volume typically does not vary for gas-
fired and electric instantaneous water heaters, so DOE conducted a 
similar review of the available input rates of these instantaneous 
water heaters. Table II.4 presents the preliminary representative 
storage volumes and input rates for existing product classes of 
consumer water heaters.

  Table II.4--Preliminary Representative Values by Product Class for Consumer Water Heaters With UEF Standards
----------------------------------------------------------------------------------------------------------------
                                            Distinguishing
                                        characteristics (rated     Currently planned         Other potential
            Product class                 storage volume and    representative value(s)   representative values
                                           input rating *)                 **              under consideration
----------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater.......  >=20 gal and <=55 gal..  38 gal, Medium Draw      48 gal, High Draw
                                                                 Pattern.                 Pattern.
                                       >55 gal and <=100 gal..  80 gal,[dagger] High     67 gal, High Draw
                                                                 Draw Pattern.            Pattern.
Oil-fired Storage Water Heater.......  <=50 gal...............  30 gal, High Draw        48 gal, High Draw
                                                                 Pattern.                 Pattern.
Electric Storage Water Heater........  >=20 gal and <=55 gal..  46 gal, Medium Draw      27 gal, Low Draw
                                                                 Pattern.                 Pattern or 36 gal,
                                                                                          Medium Draw Pattern.
                                       >55 gal and <=120 gal..  80 gal, High Draw        67 gal, High Draw
                                                                 Pattern.                 Pattern.
Tabletop Water Heater................  >=20 gal and <=120 gal.  36 gal, Low Draw         35 gal, Medium Draw
                                                                 Pattern.                 Pattern.
Gas-fired Instantaneous Water Heater.  <2 gal and >50,000 Btu/  0 gal and 199,000 Btu/   0 gal and 180,000 Btu/
                                        h.                       h, High Draw Pattern.    h, High Draw Pattern.
Electric Instantaneous Water Heater..  <2 gal.................  0 gal and 3.5            None.
                                                                 kW,[Dagger] Very Small
                                                                 Draw Pattern.
Grid-Enabled Water Heater............  >75 gal................  80 gal, High Draw        100 gal, High Draw
                                                                 Pattern.                 Pattern.
----------------------------------------------------------------------------------------------------------------
* Input rating is only used as a distinguishing characteristic for consumer gas-fired instantaneous water
  heaters. Models with input rates greater than 50,000 Btu/h currently have UEF standards.
** Storage volumes listed are the rated storage volume as determined under 10 CFR 429.17.
[dagger] DOE did not identify any consumer gas-fired storage water heater models with rated storage volume >55
  gal and <=100 gal on the market.
[Dagger] The spread of input rates is evenly distributed across range of available inputs (i.e., 0 kW to 12 kW).

    Issue E.1 DOE requests feedback on the appropriate representative 
storage volumes and input capacities for each product class of consumer 
water heaters. DOE also requests feedback on whether there are 
additional representative characteristics that should be considered.
    The energy conservation standards prescribed by EPCA apply more 
broadly than those listed in 10 CFR 430.32(d) and do not exclude water 
heaters based on storage volume or minimum input rate (in the case of 
consumer gas-fired instantaneous water heaters). (42 U.S.C. 6295(e)(1)) 
Furthermore, DOE's previous EF test procedure did not cover water 
heaters listed in Table II.5; however, DOE's updated UEF test procedure 
does cover these products. Because these products now have an 
applicable test procedure and are covered products, DOE is considering 
them in its analysis. Table II.5 presents these classes and their 
tentative representative characteristics. For many of these product 
classes, DOE has been unable to identify any models on the market, and, 
therefore, no representative values are provided in the table. For 
these classes, DOE has tentatively concluded that a lack of models 
indicates there are also no shipments. Thus, there is no potential for 
energy savings from amended standards for these classes at this time. 
If DOE ultimately confirms this to be true, DOE plans to merely convert 
the existing standards from EF to equivalent UEF standards for these 
product classes.

[[Page 30862]]



           Table II.5--Preliminary Representative Values for Products Currently Without UEF Standards
----------------------------------------------------------------------------------------------------------------
                                            Distinguishing
                                       characteristics  (rated     Currently planned         Other potential
            Product class                 storage volume and    representative value(s)   representative values
                                            input rating*)                                 under consideration
----------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater.......  <20 gal **                                        .......................
                                       >100 gal **                                       .......................
Oil-fired Storage Water Heater.......  >50 gal **                                        .......................
Electric Storage Water Heater........  <20 gal................  19 gal.................  6 gal, 12 gal, or 19.9
                                                                                          gal.
                                       > 120 gal **                                      .......................
Tabletop Water Heater................  <20 gal **                                        .......................
                                       > 120 gal **                                      .......................
Gas-fired Instantaneous Water Heater.  >=2 gal or <= 50,000     20 gal.................  4 gal.
                                        Btu/h **.
Oil-fired Instantaneous Water Heater.  All....................  5.1 gal                  .......................
Electric Instantaneous Water Heater..  >=2 gal **                                        .......................
----------------------------------------------------------------------------------------------------------------
* Input rating is only used as a distinguishing characteristic for consumer gas-fired instantaneous water
  heaters. Models with input rates greater than 50,000 Btu/h currently have UEF standards.
** DOE was unable to find models on the market in this product class.

    Issue E.2 DOE requests feedback on the appropriate representative 
storage volumes and specifically whether those identified in Table II.5 
are reasonable. DOE also seeks feedback on whether products exist in 
the classes for which DOE was unable to find models on the market, and, 
if so, relevant information about those products and appropriate 
representative characteristics.
2. Efficiency Levels
a. Baseline Efficiency Levels
    For each established product class, DOE selects a baseline 
efficiency as a reference point against which any changes resulting 
from energy conservation standards can be measured. For products with 
an existing energy conservation standard, the baseline efficiency level 
is typically the current minimum energy conservation standard. For 
products that do not have an existing minimum energy conservation 
standard, DOE considers the least-efficient product on the market as a 
baseline product. DOE will establish the baseline efficiency level for 
each product class in terms of UEF. For products where UEF standards 
are established, DOE will use those standards as the baseline level; 
for covered consumer water heaters where the standard has not yet been 
converted to UEF (i.e., water heaters stated as being covered by EF 
standards from EPCA in Table II.1 of this RFI), DOE will undertake an 
analysis to translate the EF standard to an equivalent UEF standard, 
which will serve as the baseline level.\4\ The baseline model in each 
product class represents the characteristics of common or typical 
products in that class. Typically, a baseline model is one that just 
meets the current minimum energy conservation standards and provides 
basic consumer utility.
---------------------------------------------------------------------------

    \4\ For certain categories of consumer water heaters, these 
translations were not done during the December 2016 conversion 
factor rulemaking. DOE concluded that to start enforcing standards 
immediately would have been quite burdensome to industry. Further, 
DOE received a number of comments regarding the technical merits of 
the proposed conversions for these products and decided to defer 
finalizing and implementing UEF standards to allow for further 
consideration of those comments. 81 FR 96204, 96211 (Dec. 29, 2016).
---------------------------------------------------------------------------

    DOE uses baseline units for comparison in several phases of the 
analyses, including the engineering analysis, life-cycle cost (``LCC'') 
analysis, payback period (``PBP'') analysis, and national impact 
analysis (``NIA''). In the engineering analysis, to determine the 
changes in price to the consumer that result from amended energy 
conservation standards, DOE compares the price of a baseline unit to 
the price of a unit at each higher efficiency level.
    Consistent with this analytical approach, DOE tentatively plans to 
consider the current minimum energy conservation standards to establish 
the baseline efficiency levels for each product class. The current 
standards that rely on UEF are found at 10 CFR 430.32(d). For consumer 
water heaters not identified at 10 CFR 430.32(d), the standards rely on 
EF and are set forth at 42 U.S.C. 6295(e)(1). For storage water 
heaters, the baseline level varies based on the storage volume, and DOE 
would focus on the baseline efficiency standard for models at the 
representative storage volume. For the product classes without UEF-
based standards (i.e., products listed in Table II.5 of this RFI), DOE 
would translate the EF-based standards to UEF to determine the baseline 
level.
    DOE has preliminarily identified a technology pathway for each 
product class. The preliminary baseline technology options that DOE has 
identified as being representative for each product class are discussed 
in section II.E.3 of this RFI.
    Issue E.3 For the products listed in Table II.5 for this RFI as 
being covered by EPCA standards but not the included in the December 
2016 Conversion Factor Final Rule that converted standards to UEF, DOE 
requests EF and UEF test data and/or other relevant information that 
could assist in the development of UEF-based standard levels to serve 
as the baseline levels.
    Issue E.4 DOE requests feedback on the preliminary baseline 
technology options for each product class. (Note, DOE discusses its 
preliminary understanding of the technology options used in baseline 
products in section III.E.3 of this RFI) DOE requests feedback on 
whether there are any important features of baseline models (other than 
energy efficiency, storage volume, and input capacity) that should be 
accounted for in its analysis.
b. Intermediate Energy Efficiency Levels
    DOE conducted a survey of the consumer water heater market to 
determine the designs and efficiencies of products that are currently 
available to consumers. For each representative product, DOE surveyed 
various manufacturers' product offerings to identify the efficiency 
levels that correspond to the highest number of models and the 
prevailing technologies used to reach those efficiency levels. By 
identifying the most prevalent energy efficiencies in the range of 
available

[[Page 30863]]

products and examining the designs used at those efficiencies, DOE has 
preliminarily identified a technology path that manufacturers typically 
use to increase the energy efficiency of consumer water heating 
products (see section III.E.3 of this RFI).
    DOE analyzes intermediate energy efficiency levels between the 
baseline and max-tech levels for each product class. The intermediate 
efficiency levels are generally representative of the most commonly 
available efficiency levels available on the market, and follow 
technology paths that manufacturers of consumer water heaters commonly 
use to maintain cost-effective designs while increasing energy 
efficiency. DOE conducted a preliminary review of manufacturer 
literature, the Air-Conditioning Heating and Refrigeration Institute 
(``AHRI'') directory of certified product performance,\5\ and DOE's 
compliance certification database to compile efficiency information for 
a wide range of water heaters available on the market.\6\ DOE also 
reviewed manufacturer literature to assess, to the extent possible, the 
technologies in use in consumer water heaters. DOE notes that different 
manufacturers may use different technology pathways to achieve the same 
efficiency level, and, if it determines that a rulemaking is necessary, 
the Department would expect to attempt to capture this in the analysis. 
Section II.E.3 presents the product classes and the respective 
technology pathways that DOE anticipates analyzing.
---------------------------------------------------------------------------

    \5\ AHRI, Directory of Certified Product Performance for 
Residential Water Heaters. (Available at: https://www.ahridirectory.org/NewSearch?programId=24&searchTypeId=3) (Last 
accessed: Dec. 2, 2019).
    \6\ DOE, Compliance Certification Database (Available at: 
https://www.regulations.doe.gov/certification-data/CCMS-4-Water_Heaters.html#q=Product_Group_s%3A%22Water%20Heaters%22) (Last 
accessed: Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue E.5 DOE seeks comment on whether there are any key 
intermediate efficiency levels (in terms of UEF values) that should be 
considered in the analysis. DOE also seeks comment on common technology 
pathways to reach higher efficiency levels (i.e., the order in which 
manufacturers implement energy-saving technologies). (Note, DOE 
discusses its preliminary understanding of the technology options used 
in consumer water heaters in section III.E.3 of this RFI.)
c. Maximum Technologically Feasible Efficiency Levels
    The maximum available efficiency level is the efficiency level of 
the highest-efficiency unit currently available on the market. The 
current maximum available efficiencies are included in Table II.6 of 
this RFI.

               Table II.6--Maximum Efficiency Levels Currently Available at Representative Values
----------------------------------------------------------------------------------------------------------------
                                                Distinguishing
                                            characteristics (rated         Currently planned        Maximum UEF
              Product class                storage volume  and input   representative  value(s)      currently
                                                   rating *)                      **                 available
----------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heater..........  >=20 gal and <=55 gal.....  38 gal, Medium Draw                   0.68
                                                                       Pattern.
                                          >55 gal and <=100 gal.....  80 gal, High Draw Pattern.     [dagger]N/A
Oil-fired Storage Water Heater..........  <=50 gal..................  30 gal, High Draw Pattern.            0.68
Electric Storage Water Heater...........  >=20 gal and <= 55 gal....  46 gal, Medium Draw                   3.55
                                                                       Pattern.
                                          >55 gal and <=120 gal.....  80 gal, High Draw Pattern.            3.70
Tabletop Water Heater...................  >=20 gal and <=120 gal....  36 gal, Low Draw Pattern..            0.81
Gas-fired Instantaneous Water Heater....  <2 gal and >50,000 Btu/h..  0 gal and 199,000 Btu/h,              0.97
                                                                       High Draw Pattern.
Oil-fired Instantaneous Water Heater....  All.......................  5.1 gal...................  [dagger][dagge
                                                                                                           r]N/A
Electric Instantaneous Water Heater.....  <2 gal....................  0 gal and 3.5 kW,                     0.98
                                                                       [dagger][dagger][dagger]V
                                                                       ery Small Draw Pattern.
Grid-Enabled Water Heater...............  >75 gal...................  100 gal, High Draw Pattern            0.93
----------------------------------------------------------------------------------------------------------------
* Input rating is only used as a distinguishing characteristic for consumer gas-fired instantaneous water
  heaters. Models with input rates greater than 50,000 Btu/h currently have UEF standards.
** Storage volumes listed are the rated storage volume as determined under 10 CFR 429.17.
[dagger] DOE did not identify any consumer gas-fired storage water heater models with rated storage volume >55
  gal and <=100 gal on the market.
[dagger][dagger] There are currently no oil-fired instantaneous water heaters certified in the DOE compliance
  certification database.
[dagger][dagger][dagger] The spread of input rates is evenly distributed across range of available inputs (i.e.,
  0 kW to 12 kW).

    DOE also determines the maximum technologically feasible (max-tech) 
improvement in energy efficiency for consumer water heaters. DOE 
defines a max-tech efficiency level to represent the theoretical 
maximum possible efficiency if all available design options are 
incorporated in a model. In many cases, the max-tech efficiency level 
is not commercially available because it is not economically feasible. 
Based on DOE's initial review of the consumer water heater market (as 
discussed in the previous section), DOE has preliminarily identified 
technology options commonly used to increase efficiency, including 
those associated with the max-tech efficiency level for each product 
class. DOE intends to analyze the available efficiency data to 
determine the UEF values that correspond to the technology options 
currently used to reach max-tech levels to determine the appropriate 
max-tech UEF values. DOE describes the technologies currently used to 
reach the max-tech efficiency levels in section II.E.3 of this RFI.
    Issue E.6 DOE seeks input on whether the maximum available 
efficiency levels are appropriate for potential consideration as 
possible energy conservation standards for the products at issue--and 
if not, why not.
    Issue E.7 DOE seeks feedback on what design options would be 
incorporated at a max-tech efficiency level, and the efficiencies 
associated with those levels. As part of this request, DOE also seeks 
information as to whether there are limitations on the use of certain 
combinations of design options. (Note, DOE discusses its preliminary 
understanding of the technology options in max-tech products in section 
III.E.3 of this RFI.)
3. Technology Pathway
    DOE plans to consider and analyze various technologies for 
improving the energy efficiency of consumer water heaters. To 
accurately represent the current market in its analyses, DOE uses 
information from publicly-available

[[Page 30864]]

product literature to determine which technologies are used in 
commercially-available products. DOE also identifies which technologies 
manufacturers would be most likely to include in products to meet 
potential amended energy conservation standards based on current 
designs observed on the market. DOE's preliminary understanding of the 
most prevalent technologies to obtain the intermediate and max-tech 
energy efficiency levels for each product class are described 
immediately below. DOE may revise the technology pathway for each 
category of consumer water heater in the preliminary analysis based on 
stakeholder comments and observations made during teardowns.
a. Gas-Fired Storage Water Heaters
    As stated previously, DOE conducted a review of the currently-
available consumer gas-fired storage water heaters on the market. DOE 
has observed that the baseline design typically consists of a standing 
pilot, atmospheric venting, and 2 inches of foam insulation. DOE found 
that models in the representative volume and draw pattern (40 gallons 
and medium draw pattern) use similar technology options to those found 
in the baseline (0.58 UEF) up to 0.61 UEF and can achieve higher 
efficiencies by increasing insulation thickness or increasing the heat 
exchange via improvements to the flue and/or baffling. To obtain 
efficiencies above 0.61 UEF, manufacturers can make use of the 
aforementioned options, and also typically remove the standing pilot 
ignition system in favor of an electronic ignition system and add a 
flue damper or power venting system, or some combination of these 
options. The highest efficiency products currently on the market 
utilize condensing technology. However, gas-fired heat pump water 
heater designs are currently under development and would likely result 
in higher efficiencies than those achieved by condensing gas-fired 
water heaters currently available on the market. In the event of any 
rulemaking resulting from this RFI, DOE would assess gas-fired heat 
pump water heater technology using the screening criteria discussed in 
section II.D to determine whether it is appropriate for consideration 
in the analysis.
    Issue E.8  DOE requests feedback on the specific technologies used 
to increase efficiency of atmospherically-vented, standing pilot models 
that have efficiencies between the baseline (0.58 UEF) and 0.61 UEF. 
Specifically, how much insulation and/or baffling/heat exchange area is 
used at each level, and are there other design changes that increase 
the efficiency?
    Furthermore, in any rulemaking resulting from this RFI, DOE 
tentatively intends to consider separately analyzing models that use 
standard and low-nitrogen oxide (``NOX'') burners from those 
that use ultra-low-NOX burners, as was done in the April 
2010 Final Rule. However, due to the similarity between these 
categories of gas-fired storage water heaters, for this RFI, DOE did 
not identify a separate technology pathway for consumer gas-fired water 
heaters that use standard and low-NOX burners from those 
that use ultra-low-NOX burners.
    Issue E.9  DOE requests feedback on the typical technology pathway 
for increasing the energy efficiency of consumer gas-fired storage 
water heaters. DOE is also interested in differences in the design 
pathway between water heaters with standard and low-NOX 
burners and those with ultra-low-NOX burners. This includes 
information on the order in which manufacturers would incorporate the 
different technologies to incrementally improve the efficiencies of 
products. DOE also requests feedback on whether the increased energy 
efficiency would lead to other design changes that would not occur 
otherwise. DOE is also interested in information regarding any 
potential impact of design options on a manufacturer's ability to 
incorporate additional functions or attributes in response to consumer 
demand.
    Issue E.10  DOE requests feedback on whether gas-fired heat pump 
water heaters should be considered as the max-tech design for consumer 
gas-fired water heaters.
    Issue E.11  DOE requests feedback on the thickness of insulation in 
products currently available on the market and what would be 
technologically feasible as the maximum insulation thickness. DOE has 
particular interest in understanding the insulation thickness beyond 
which an increase in thickness would not produce a noticeable effect on 
energy efficiency.
b. Electric Storage Water Heaters
    For consumer electric storage water heaters with a rated storage 
volume of 50 gallons, the baseline efficiency level is achieved with 
electric resistance heating elements. To obtain slightly higher 
efficiencies, increased insulation or optimized geometry could be 
employed for water heaters using only electric resistance heating 
elements. For larger increases in efficiency, heat pump technology is 
used. From a review of manufacturer literature, DOE was unable to 
assess specific differences between the less-efficient and more-
efficient heat pump water heater designs, up to the max-tech efficiency 
level. The magnitude of the increase between these levels suggests that 
improvements to the various heat pump components are responsible for 
these efficiency level increases. DOE intends to explore these 
efficiency and design differences further during its testing and 
teardown analysis.
    Issue E.12  DOE requests feedback on the technology pathway for 
electric storage water heaters. This includes information on the order 
in which manufacturers would incorporate the different technologies to 
incrementally improve the efficiencies of products. DOE also requests 
feedback on whether the increased energy efficiency would lead to other 
design changes that would not occur otherwise. DOE is also interested 
in information regarding any potential impact of design options on a 
manufacturer's ability to incorporate additional functions or 
attributes in response to consumer demand.
    Issue E.13 DOE requests feedback on heat pump components used in 
heat pump water heaters of varying efficiency, up to the max-tech 
level.
    Issue E.14 DOE requests feedback on the insulation thickness and 
materials used in electric storage water heaters (both electric 
resistance and heat pump water heaters).
    Issue E.15 DOE requests feedback on the maximum efficiency 
potential of CO2 heat pump water heaters.
c. Oil-Fired Storage Water Heaters
    DOE examined the representative storage volume of 30 gallons for 
consumer oil-fired storage water heaters. Very few models currently 
exist on the market compared to the other product classes. DOE found 
oil-fired storage water heaters at the representative storage volume 
with rated UEF values up to 0.68. Consumer oil-fired storage water 
heaters typically incorporate electronic ignition and power venting; 
therefore, efficiency improvement technologies are likely to include 
increasing the surface area within the flue, and to a lesser extent 
increasing the insulation thickness or upgrading the insulation 
material. Improvements to the flue include increased baffling, multiple 
flues, and/or multi-pass flues.
    Issue E.16 DOE requests feedback on the technology pathway for 
consumer oil-fired water heaters and in particular the insulation 
material and thickness currently being used. This includes information 
on the order in which manufacturers would incorporate the different 
technologies to incrementally improve the efficiencies of products. DOE 
also requests feedback on whether the increased energy efficiency would

[[Page 30865]]

lead to other design changes that would not occur otherwise. DOE is 
also interested in information regarding any potential impact of design 
options on a manufacturer's ability to incorporate additional functions 
or attributes in response to consumer demand.
d. Tabletop Water Heaters
    DOE has found that all tabletop water heaters currently on the 
market have a rated storage volume of either 38 or 40 gallons and a 
rated UEF of 0.81 and 0.90 in the low and high draw patterns, 
respectively. Tabletop water heaters use electric resistance elements 
to heat water and are contained in a rectangular box enclosure designed 
to slide into a kitchen countertop space with typical dimensions of 36 
inches high, 25 inches deep, and 24 inches wide. 66 FR 4474, 4497 (Jan. 
17, 2001). Efficiency improvements, if possible, would most likely be 
accomplished though upgrading the insulation material and/or increasing 
the insulation thickness.
    Issue E.17 DOE requests feedback on what materials and methods are 
currently being used to insulate tabletop water heaters, and whether 
there are any technologies that can be used to improve the energy 
efficiency of these products. DOE also requests information on 
potential impacts any such technologies would have on the capacity or 
other performance-related features of tabletop water heaters.
e. Gas-Fired Instantaneous Water Heaters
    Currently, all consumer gas-fired instantaneous water heaters, 
including those at the baseline, appear to use electronic ignition 
along with power venting. Based on an examination of literature for 
products currently available in the market, the primary method for 
increasing the energy efficiency of consumer gas-fired instantaneous 
water heaters is typically through increasing the heat exchanger 
surface area. As the heat exchanger surface area increases, heat 
transfer is improved, resulting in an increase in the efficiency of the 
unit. In addition, the heat transfer between flue gases and the water 
can be improved to the point where the flue gases are cooled below the 
dew point, resulting in condensation within the heat exchanger. 
Therefore, at higher efficiency levels, manufacturers design heat 
exchangers for condensing operation that are capable of managing the 
condensate, which include materials that can withstand corrosive 
condensate and methods for condensate disposal.
    Issue E.18 DOE requests feedback on its assessment of the 
technologies used at the baseline for consumer gas-fired instantaneous 
water heaters, as well as the technologies used to improve efficiency.
f. Electric Instantaneous Water Heaters
    Consumer electric instantaneous water heaters use electric 
resistance heating along with low flow rates to provide hot water, 
typically for applications with lower demand, such as handwashing. Most 
electric instantaneous water heaters that DOE identified currently on 
the market have rated UEF values close to 1. This is likely the result 
of minimal losses from the electric resistance heating elements, 
combined with a lack of standby losses due to the low or negligible 
amount of stored water. Consequently, DOE has not identified any 
technology options that are currently being used or could be used to 
improve the energy efficiency of electric instantaneous water heaters.
    Issue E.19 DOE requests feedback on the technology options 
available for improving the energy efficiency of consumer electric 
instantaneous water heaters, if any.
g. Oil-Fired Instantaneous Water Heaters
    DOE has found that consumer oil-fired instantaneous water heaters 
exist on the market. These water heaters use electronic ignition, are 
direct vented, and force air through the unit. Currently, EF and UEF 
values are not available for these water heaters, but the manufacturer 
literature advertises the ``efficiency'' as being up to 88 percent for 
these models.
    Issue E.20 DOE requests feedback on the availability of consumer 
oil-fired instantaneous water heaters and the technology options 
available to improve UEF.
h. Grid-Enabled Water Heaters
    As a preliminary step for this RFI, DOE reviewed the current market 
for grid-enabled water heaters. Based on a review of product literature 
for grid-enabled designs, DOE has found that these water heaters use 
electric resistance heating elements and typically have between two to 
three inches of foam insulation. Plastic, stainless steel, and stone-
lined steel storage tanks are currently available on the market, and 
these models do not use an anode rod. Glass-lined steel tanks are also 
available, and these models do use an anode rod. At the 96-gallon 
representative storage volume, all UEF ratings are at or just above the 
minimum efficiency standard.
    Issue E.21 DOE requests feedback on the technology options 
available for improving the energy efficiency of grid-enabled water 
heaters.
4. Manufacturer Production Costs and Manufacturer Selling Prices
    As described at the beginning of this section, the main outputs of 
the engineering analysis are cost-efficiency relationships that 
describe the estimated increases in manufacturer production cost 
associated with higher-efficiency products for the analyzed product 
classes. For the April 2010 Final Rule, DOE developed the cost-
efficiency relationships by first identifying specific efficiency 
levels and the technologies incorporated at those levels. DOE then 
performed reverse-engineering analysis to estimate the typical cost at 
each efficiency level from the baseline to the max-tech. 75 FR 20112, 
20141 (April 16, 2010). For this analysis, DOE plans to use a similar 
approach to that used in the April 2010 Final Rule, by identifying 
efficiency levels and performing reverse-engineering on models from 
various manufacturers to identify the technology(ies) implemented at 
each efficiency level and the cost to achieve that level. DOE plans to 
use the data gathered in the reverse-engineering analysis to develop 
the manufacturing cost-efficiency relationship.
    Issue E.22 DOE seeks input on the increase in MPC associated with 
incorporating each particular design option. Specifically, DOE is 
interested in whether and how the costs estimated for design options in 
the April 2010 Final Rule have changed since the time of that analysis. 
DOE also requests information on the investments necessary to 
incorporate specific design options, including, but not limited to, 
costs related to new or modified tooling (if any), materials, 
engineering and development efforts to implement each design option, 
and manufacturing/production impacts.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a non-production cost multiplier (the manufacturer 
markup) to the MPC. The resulting manufacturer selling price (``MSP'') 
is the price at which the manufacturer distributes a unit into 
commerce. For the April 2010 Final Rule, DOE estimated the manufacturer 
markups as 1.31 for gas-fired storage water heaters, 1.28 for electric 
storage water heaters, 1.30 for oil-fired storage water heaters, and 
1.45 for gas-fired instantaneous water heaters. See chapter 5 of the 
April 2010 Final Rule technical support document (``TSD'').\7\
---------------------------------------------------------------------------

    \7\ Available at: https://www.regulations.gov/document?D=EERE-2006-STD-0129-0149.
---------------------------------------------------------------------------

    Issue E.23 DOE requests feedback on whether the manufacturer 
markups of 1.31, 1.28, 1.30, and 1.45 are still

[[Page 30866]]

appropriate for gas-fired storage water heaters, electric storage water 
heaters, oil-fired storage water heaters, and gas-fired instantaneous 
water heaters, respectively.
    In addition, for products where changes to the energy conservation 
standard are likely to cause a large difference in the size of the 
product, DOE sometimes considers shipping costs incurred by 
manufacturers to ship the product to their first customer separately 
from the manufacturer markup. In such cases, manufacturer selling price 
is calculated as the manufacturer production cost multiplied by the 
manufacturer markup, and shipping price is added (as shipping cost is 
not typically marked up). DOE plans to investigate this approach for 
consumer water heaters to determine how dimensions may change with 
increasing efficiency and whether such changes would increase the 
shipping costs for manufacturers.
    Issue E.24 DOE requests comment on how the cost to ship a consumer 
water heater changes with efficiency.

F. Markups Analysis

    The markups analysis develops appropriate markups (e.g., for 
wholesalers, contractors, general contractors, mobile home 
manufacturers, and mobile home dealers) in the distribution chain and 
sales taxes to convert the MSP derived in the engineering analysis to 
consumer prices, which are then used in the LCC and PBP analyses and 
other analyses. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
1. Distribution Channels
    In generating end-user price inputs for the LCC analysis and NIA, 
DOE must identify distribution channels (i.e., how the products are 
moved from the manufacturer to the consumer), and estimate relative 
sales volumes through each channel.
    Markups depends on the distribution channels for a product (i.e., 
how the product passes through the chain of commerce from the 
manufacturer to the customer). Two different markets exist for consumer 
water heating systems: (1) Replacements and new owners \8\ and (2) new 
construction. Based on several references, DOE plans to determine the 
main distribution channels for each water heater product class and the 
fraction of shipments through each channel.\9\
---------------------------------------------------------------------------

    \8\ New owners are defined as existing buildings that acquire a 
consumer water heater for the first time or get a new category of 
consumer water heater during the analysis period.
    \9\ Clear Seas Research, 2019 Mechanical Systems--Water Heater 
CLEAReport (Dec. 2019) (Available at: https://clearseasresearch.com/product/2019-mechanical-systems-water-heater/) (Last accessed Dec. 
2, 2019); A.O. Smith, Autumn 2019 Analyst Presentation (November 
2019) (Available at: http://investor.aosmith.com/events-and-presentations) (Last accessed Dec. 2, 2019); Northwest Energy 
Efficiency Alliance (``NEEA''), Water Heater Market Characterization 
Report (April 2018) (Available at: https://neea.org/img/documents/water-heater-market-characterization-report.pdf) (Last accessed Dec. 
2, 2019); Consortium for Energy Efficiency (``CEE''), Residential 
Water Heating Initiative (March 2018) (Available at: https://library.cee1.org/system/files/library/13557/CEE_ResWaterHeating_Initiative_16Mar2018.pdf) (Last accessed Dec. 2, 
2019); Energy Trust of Oregon, Existing Homes Gas Water Heater 
Market Research Report (Jan 2016) (Available at: https://energytrust.org/wp-content/uploads/2016/12/Gas_Water_Heater_Market_Research_Report_Public_FINAL_wSR.pdf) (Last 
accessed Dec. 2, 2019); California Energy Commission (``CEC''), 
Residential Water Heating Program, Facilitating the Market 
Transformation to Higher Efficiency Gas-Fired Water Heating 
(December 2012) (Available at: http://www.energy.ca.gov/2013publications/CEC-500-2013-060/CEC-500-2013-060.pdf) (Last 
accessed Dec. 2, 2019); NEEA, 2011 Water Heater Market Update (Jan. 
2012) (Available at: https://neea.org/img/uploads/2011WaterHeaterMarketUpdateA273DBB87CA3.pdf) (Last accessed Dec. 2, 
2019); ENERGY STAR, Water Heater Market Profile: Efficiency Sells 
(Sept. 2010) (Available at: https://www.energystar.gov/ia/partners/prod_development/new_specs/downloads/water_heaters/Water_Heater_Market_Profile_2010.pdf) (Last accessed Dec. 2, 2019); 
ENERGY STAR, Water Heater Market Profile: New Technology, New 
Savings (Sept. 2009) (Available at: https://www.energystar.gov/ia/partners/prod_development/new_specs/downloads/water_heaters/Water_Heater_Market_Profile_Sept2009.pdf) (Last accessed Dec. 2, 
2019); CEE, High-Efficiency Residential Gas Water Heating Initiative 
(March 2008); A.O. Smith, Water Heater Marketplace (2008) (Available 
at: https://www.energystar.gov/sites/default/files/asset/document/AOSmith_General_Session.pdf) (Last accessed Dec. 2, 2019); NEEA, 
Residential Water Heater Market (July 2006) (Available at: https://neea.org/img/uploads/AssessmentoftheResidentialWaterHeaterMarketingNWC6F59C4D2EEB.pdf) 
(Last accessed Dec. 2, 2019); Lawrence Berkeley National Laboratory 
(``LBNL''), The LBNL Water Heater Retail Price Database (Oct. 2000) 
(Available at: https://www.osti.gov/biblio/775102) (Last accessed 
Dec. 2, 2019).
---------------------------------------------------------------------------

a. Replacement and New Owner
    For replacement and new owner applications, manufacturers sell 
mainly to either plumbing distributors or retailers (including 
retailers that sell online \10\). The four main distribution paths that 
DOE intends to consider are: (1) A plumbing distributor sells a water 
heater to a contractor, who then sells it to a consumer and installs 
it, (2) a retailer sells a water heater to a contractor, who then sells 
it to a consumer and installs it, (3) a retailer sells a water heater 
to the consumer, who hires a contractor to install it, or (4) a 
retailer sells a water heater to the consumer, who self-installs 
it.\11\ In addition, DOE plans to consider distribution channels where 
the manufacturer sells the consumer water heater directly to a 
commercial consumer through a national account or the commercial 
consumer purchases the consumer water heater directly through a 
wholesaler. These channels reflect those cases where the installation 
can be accomplished by site personnel.
---------------------------------------------------------------------------

    \10\ Online sales includes sales through home improvement and 
hardware store websites (such as Home Depot, Lowe's, Ace Hardware, 
and Menards), as well as online-only websites (such as amazon.com). 
DOE does not have enough information at this point to compute a 
separate markup estimate the online sales distribution channel. DOE 
intends to assume that the retailer mark-up is similar to the online 
sales mark-up.
    \11\ In some cases, the retail outlet provides installation as 
part of a package. In others, the retail outlet links the customer 
to a contractor for installation. Self-installation is likely more 
common for electric than for gas water heaters due to the greater 
complexity of replacing a gas unit. This is consistent with data 
from ENERGY STAR's 2010 Water Heater Market Profile study that show 
that consumers are more likely to install electric storage water 
heaters themselves compared to other categories of consumer water 
heaters.
---------------------------------------------------------------------------

    In summary, DOE plans to characterize the replacement and new owner 
market distribution channels for consumer water heating systems as 
follows:

Manufacturer [rarr] Wholesaler [rarr] Contractor [rarr] Consumer
Manufacturer [rarr] Retail Store [rarr] Contractor [rarr] Consumer
Manufacturer [rarr] Retail Store [rarr] Consumer [Contractor-Installed]
Manufacturer [rarr] Retail Store [rarr] Consumer [Self-Installed]
Manufacturer [rarr] Wholesaler [rarr] Commercial Consumer \12\
---------------------------------------------------------------------------

    \12\ This represents consumer water heaters that are purchased 
by commercial consumers for use in a commercial applications. Unlike 
commercial consumers, residential consumers typically are unable to 
purchase directly from a wholesaler.
---------------------------------------------------------------------------

Manufacturer [rarr] National Account [rarr] Commercial Consumer \13\
---------------------------------------------------------------------------

    \13\ This represents consumer water heaters that are purchased 
by commercial consumers for use in a commercial applications. Unlike 
commercial consumers, residential consumers typically are unable to 
purchase from manufacturers through a national account.
---------------------------------------------------------------------------

b. New Construction
    The new construction distribution channel for consumer water 
heaters includes an additional link in the chain--the general 
contractor. In most new construction applications, the consumer water 
heater is part of the overall plumbing package installed by a plumbing 
contractor or, in the case of large building companies, by its own 
master plumber and crew. A plumbing contractor usually purchases the 
consumer water heater from a plumbing distributor, and in this case, 
DOE includes a contractor mark-up. In the

[[Page 30867]]

case of mobile home new construction, the distribution channel includes 
a mobile home manufacturer and mobile home dealer. In addition, similar 
to the replacement and new owner distribution channel, DOE plans to 
consider distribution channels in which the manufacturer sells the 
consumer water heater directly to a commercial consumer through a 
national account or the commercial consumer purchases the consumer 
water heater directly through a wholesaler.
    In the case of new construction, DOE plans to characterize the 
distribution channels as follows:

Manufacturer [rarr] Wholesaler [rarr] Contractor [rarr] General 
Contractor [rarr] Consumer
Manufacturer [rarr] Retailer [rarr] Contractor [rarr] General 
Contractor [rarr] Consumer
Manufacturer [rarr] Wholesaler [rarr] General contractor [rarr] 
Consumer
Manufacturer [rarr] Retailer [rarr] General contractor [rarr] Consumer
Manufacturer [rarr] Wholesaler [rarr] Consumer
Manufacturer [rarr] Retailer [rarr] Commercial Consumer \14\
---------------------------------------------------------------------------

    \14\ This represents consumer water heaters that are purchased 
by commercial consumers for use in a commercial applications.
---------------------------------------------------------------------------

Manufacturer [rarr] National Account [rarr] Commercial Consumer \15\
---------------------------------------------------------------------------

    \15\ This represents consumer water heaters that are purchased 
by commercial consumers for use in a commercial applications. Unlike 
commercial consumers, residential consumers typically are unable to 
purchase from manufacturers through a national account.
---------------------------------------------------------------------------

Manufacturer [rarr] Mobile Home Manufacturer [rarr] Mobile Home Dealer 
[rarr] Consumer

    Issue F.1 DOE seeks input on whether the distribution channels 
described above are appropriate for each of the consumer water heaters 
product classes and are sufficient to characterize distributions in 
this market. In particular, DOE seeks input on the appropriate 
distribution channel for grid-enabled water heaters.
    Issue F.2 DOE seeks input on the percentage of consumer water 
heaters being distributed through the different distribution channels 
and whether the share of products through each channel varies based on 
product capacity, water heater product class, or water heater 
technology. In particular, DOE seeks input about the percentage of 
consumer water heaters being distributed through online sales and 
whether the percentage is likely to increase in the future.
2. Mark-Ups
    To develop mark-ups for the parties involved in the distribution of 
the product, DOE plans to utilize several sources, including: (1) Form 
10-K reports \16\ from the main consumer water heater wholesalers \17\ 
and retailers (for wholesalers and retailers); 3. the Heating, Air 
Conditioning & Refrigeration Distributors International (``HARDI'') 
2013 Profit Report \18\ (for wholesalers); 3.U.S. Census 2017 Annual 
Retail Trade Survey data \19\ (for retailers); and 3. Census Bureau 
2012 Economic Census data \20\ on the residential and commercial 
building construction industry (for general contractors, mechanical 
contractors, retailers, and mobile home manufacturers). DOE plans to 
use the 2005 Air Conditioning Contractors of America's (``ACCA'') 
Financial Analysis on the Heating, Ventilation, Air-Conditioning, and 
Refrigeration (``HVACR'') contracting industry \21\ to disaggregate the 
mechanical contractor mark-ups into replacement and new construction 
markets. DOE also plans to use several sources for the derivation of 
the mobile home dealer mark-up.\22\
---------------------------------------------------------------------------

    \16\ U.S. Securities and Exchange Commission, SEC 10-K Reports 
(Available at https://www.sec.gov/) (Last accessed Dec. 2, 2019).
    \17\ Clear Seas Research, 2017 Top List--Premier Distributors--
Plumbing, Heating, Cooling (Available at https://clearseasresearch.com/product/2017-top-list-premier-distributors-plumbing-heating-cooling/) (Last accessed Dec. 2, 2019).
    \18\ HARDI, 2013 HARDI Profit Report (Available at: http://hardinet.org/) (Last accessed Dec. 2, 2019).
    \19\ U.S. Census Bureau, 2017 Annual Retail Trade Survey Data 
(Available at https://www.census.gov/programs-surveys/arts.html) 
(Last accessed Dec. 2, 2019). Note the 2018 Annual Retail Trade 
Survey data are expected to be released in April 2020. Until that 
time, 2017 Annual Retail Trade Survey remains the most recent full 
data release.
    \20\ U.S. Census Bureau, 2012 Economic Census Data (Available 
at: https://www.census.gov/programs-surveys/economic-census.html) 
(Last accessed Dec.2, 2019). Note that the 2017 Economic Census data 
are planned to be fully released by late 2020. Until that time, 2012 
Economic Census remains the most recent full data release.
    \21\ ACCA, Financial Analysis for the HVACR Contracting Industry 
(2005) (Available at: https://www.acca.org/store) (Last accessed 
Dec. 2, 2019).
    \22\ Reference for Business Encyclopedia of Business, 2nd ed. 
SIC 6515 Operators of Residential Mobile Home Sites (Available at: 
http://www.referenceforbusiness.com/industries/Finance-Insurance-Real-Estate/Operators-Residential-Mobile-Home-Sites.html) (Last 
accessed Dec. 2, 2019); Cook, P., State Board of Equalization, Staff 
Legislative Bill Analysis, Assembly Bill 1474 (2011) (Available at: 
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_1451-1500/ab_1474_cfa_20090515_114322_asm_comm.html) (Last accessed Dec. 2, 
2019); F. Walter, Comments on the Energy Conservation Program for 
Consumer Products: Standards for Furnaces & Boilers, DOE Docket 
Number EE-RM/STD-01-350, Comment No.13 (2001) Manufactured Housing 
Institute (Available at: https://www.regulations.gov/#!documentDetail;D=EERE-2006-STD-0102-0042) (Last accessed Dec. 2, 
2019).
---------------------------------------------------------------------------

    Issue F.3 DOE seeks recent data and recommendations regarding data 
sources to establish the markups for the parties involved with the 
distribution of the consumer water heating products.

G. Energy Use Analysis

    As part of a typical rulemaking process, DOE conducts an energy use 
analysis to identify how products are used by consumers, and thereby 
determine the energy savings potential of energy efficiency 
improvements. The purpose of the energy use analysis is to determine 
the annual energy consumption of consumer water heaters at different 
efficiencies in representative U.S. single-family homes, manufactured 
housing, multi-family residences, and commercial buildings, and to 
assess the energy savings potential of increased consumer water heater 
efficiency. The energy use analysis estimates the range of energy use 
of consumer water heaters in the field (i.e., as they are actually used 
by consumers). The energy use analysis provides the basis for other 
analyses DOE performs, particularly assessments of the energy savings 
and the savings in consumer operating costs that could result from 
adoption of amended or new standards. DOE will estimate the annual 
energy consumption of consumer water heaters at specified energy 
efficiency levels across a range of applications, house or building 
types, and climate zones. The annual energy consumption includes use of 
natural gas, liquefied petroleum gas (``LPG''), oil, or electricity for 
hot water production, as well as use of electricity for the auxiliary 
components.
1. Building Sample
    DOE intends to base the energy use analysis on key characteristics 
from the Energy Information Administration's (``EIA'') 2015 Residential 
Energy Consumption Survey (``RECS'') \23\ for the subset of building 
types that use consumer water heating products covered by the standard. 
DOE also plans to look at the use of consumer water heaters in 
commercial applications, for which it plans to include characteristics 
from EIA's 2012 Commercial Building Energy Consumption Survey 
(``CBECS'') \24\ for a subset of building

[[Page 30868]]

types that use consumer water heating products covered by this 
standard.
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    \23\ EIA, 2015 RECS (Available at: http://www.eia.gov/consumption/residential/) (Last accessed Dec. 2, 2019). Note the EIA 
plans to conduct the 2020 RECS sometime in 2020, and it usually 
takes a couple of years to fully release the data. Until that time, 
2015 RECS remains the most recent full data release.
    \24\ EIA, 2012 CBECS (Available at: http://www.eia.gov/consumption/commercial/) (Last accessed Dec. 2, 2019). Note the 2018 
CBECS data are expected to be released in late 2020. Until that 
time, 2012 CBECS remains the most recent full data release.
---------------------------------------------------------------------------

    RECS and CBECS survey data include information on the physical 
characteristics of building units, water heating products used, size of 
the products in terms of rated volume, fuels used, energy consumption 
and expenditures, and other characteristics.\25\ DOE intends to use 
available shipments data by water heater size to disaggregate the 
sample into the considered product classes.\26\ DOE will also consult 
Building America's 2015 report, ``Strategy Guideline: Proper Water 
Heater Selection,'' \27\ as well as American Society of Heating, 
Refrigerating and Air-Conditioning Engineers (``ASHRAE'') \28\ and 
Electric Power Research Institute (``EPRI'') \29\ handbooks, which 
contain data on the typical categories and sizes (both input capacity 
and rated volume) of consumer water heaters used for different building 
types and applications, and can be used to compare to, supplement, and 
corroborate the RECS and CBECS data. In addition, DOE intends to review 
other data sets (e.g., data from the End-Use Load and Consumer 
Assessment Program (``ELCAP''),\30\ 2016 Residential Building Stock 
Assessment for the Northwest,\31\ 2014 Commercial Building Stock 
Assessment for the Northwest,\32\ 2015 Residential Statewide Baseline 
Study of New York State,\33\ 2009 Residential Appliance Saturation 
Study (``RASS''),\34\ and 2006 California Commercial End-Use Survey 
(``CEUS'') \35\) to compare to RECS 2015 and CBECS 2012 data. Based on 
these data, DOE will develop a representative population of buildings 
for each consumer water heater product class. Calculating the hot water 
use for the sampled households requires assigning a specific water 
heater size (rated volume). DOE plans to use the RECS sizing data 
together with the available shipments and models data to assign the 
consumer water heaters sizes for each sampled RECS household.
---------------------------------------------------------------------------

    \25\ Neither RECS nor CBECS provide data on whether the water 
heater used in the building is a consumer water heater covered in 
this rulemaking (i.e., water heating could also be provided by a 
consumer boiler, commercial boiler, or commercial water heater). 
Therefore, DOE intends to develop a methodology for adjusting its 
building sample to reflect buildings that use a consumer water 
heater covered in this rulemaking based on ASHRAE and EPRI handbooks 
and other references on how consumer water heaters are typically 
used in residential and commercial applications.
    \26\ If shipments data are not available for a considered 
product class, DOE intends to use any other available data including 
number of available models.
    \27\ Building America, DOE, Strategy Guideline: Proper Water 
Heater Selection (Available at: https://www1.eere.energy.gov/buildings/publications/pdfs/building_america/strategy-guideline-water-heater-selection.pdf) (Last accessed Dec. 2, 2019).
    \28\ ASHRAE, ASHRAE Handbook of HVAC Applications: Chapter 50 
(Service Water Heating) (2011) pp. 50.1 to 50.32.
    \29\ EPRI, Commercial Water Heating Applications Handbook (1992) 
CU-6666.
    \30\ Bonneville Power Administration, ELCAP Data from 1986 to 
1989 (2012) (Available at: http://rtf.nwcouncil.org/ELCAP/) (Last 
accessed Dec. 2, 2019).
    \31\ NEEA, Residential Building Stock Assessment (2016) 
(Available at: https://neea.org/data/residential-building-stock-assessment) (Last accessed Dec. 2, 2019).
    \32\ NEEA, Commercial Building Stock Assessment (2014) 
(Available at: https://neea.org/data/commercial-building-stock-assessments) (Last accessed Dec. 2, 2019).
    \33\ New York State Energy Research and Development Authority 
(``NYSERDA''), Residential Statewide Baseline Study of New York 
State (July 2015) (Available at: https://www.nyserda.ny.gov/About/Publications/Building-Stock-and-Potential-Studies/Residential-Statewide-Baseline-Study-of-New-York-State) (Last accessed Dec. 2, 
2019).
    \34\ CEC, 2009 RASS (2009) (Available at: https://ww2.energy.ca.gov/appliances/rass/previous_rass.html) (Last accessed 
Dec. 2, 2019). Note the 2019 RASS data are expected to be completed 
in March 2020. Until that time, 2009 RASS remains the most recent 
full data release.
    \35\ CEC, 2006 CEUS (2006) (Available at: http://www.energy.ca.gov/ceus/2006_enduse.html) (Last accessed Dec. 2, 
2019).
---------------------------------------------------------------------------

    Issue G.1 DOE seeks shipments data and input on typical categories 
(in terms of product classes) and sizes (including fuel type, input 
capacity, and rated volume) of consumer water heaters used for 
different building types and applications.
    Issue G.2 DOE seeks input and sources of data or recommendations to 
support sizing of consumer water heaters typical in consumer water 
heater applications.
    Issue G.3 DOE requests comment on the fraction of installations and 
classes of consumer water heaters that are used in commercial 
applications.
2. Hot Water Use
    To estimate the annual hot water use of each sampled unit, DOE 
intends to use the RECS 2015 and CBECS 2012 estimates of water heating 
annual energy consumption \36\ together with the existing water 
heater's estimated efficiency and other water heater characteristics. 
DOE intends to assume that some households or buildings have multiple 
water heaters, with the hot water use split evenly between them. The 
efficiency of the existing water heater will be determined using the 
consumer water heater vintage (the year of installation of the product) 
provided by RECS and historical efficiency data for water heaters.
---------------------------------------------------------------------------

    \36\ EIA estimates the equipment's annual energy consumption 
from the household's utility bills using conditional demand 
analysis.
---------------------------------------------------------------------------

    DOE plans to compare the results of its methodology to total hot 
water use from field data, models based on field data (such as the 2015 
Florida Solar Energy Center study \37\ and the model used in the April 
2010 Final Rule (75 FR 20112) \38\), and any other model or data 
available in the literature. These total hot water use models typically 
account for the number and ages of the people who live in the 
household, the way they consume hot water, the presence of hot-water-
using appliances, the tank size and thermostat set point of the 
consumer water heater, and the climate in which the residence is 
situated. DOE also plans to consider data regarding the total amount of 
water drawn per day for various draw patterns based on the field data 
collated by the Lawrence Berkeley National Laboratory (``LBNL'') and 
other sources.\39\
---------------------------------------------------------------------------

    \37\ Danny Parker, Fairey, P, and Lutz, J., Estimating Daily 
Domestic Hot Water Use in North American Homes, Florida Solar Energy 
Center (June 2015) (Available at: http://www.fsec.ucf.edu/en/publications/pdf/FSEC-PF-464-15.pdf) (Last accessed Dec. 2, 2019).
    \38\ Lutz, J.D., X. Liu, J.E. McMahon, C. Dunham, L.J. Shown, 
and Q.T. McGrue, Modeling Patterns of Hot Water Use in Households 
(1996) LBNL (LBL-37805) (Available at: https://ees.lbl.gov/sites/all/files/modeling_patterns_of_hot_water_use_in_households_lbl-37805_rev.pdf) (Last accessed Dec. 2, 2019).
    \39\ The Water Research Foundation, Residential End Uses of 
Water, Version 2 (June 2019) (Available at: https://www.waterrf.org/research/projects/residential-end-uses-water-version-2) (Last 
accessed Dec. 2, 2019); Kruis, N., B. Wilcox, J. Lutz, C. Barnaby, 
Development of Realistic Water Draw Profiles for California 
Residential Water Heating Energy Estimation (August 2017) (Available 
at: http://www.ibpsa.org/proceedings/BS2017/BS2017_237.pdf) (Last 
accessed Dec. 2, 2019); Lutz, JD, Renaldi, Lekov A, Qin Y, and 
Melody M., ``Hot Water Draw Patterns in Single Family Houses: 
Findings from Field Studies,'' LBNL Report number LBNL-4830E (May 
2011) (Available at: http://www.escholarship.org/uc/item/2k24v1kj) 
(Last accessed Dec. 2, 2019); NREL, Tool for Generating Realistic 
Residential Hot Water Event Schedules (August 2010) (Available at: 
https://www.ibpsa.us/sites/default/files/publications/SB10-PPT-TS06B-01-Hendron.pdf) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    For each analyzed consumer water heater and building type 
combination, DOE plans to determine the typical water heating usage 
profiles, water volumetric loads, and hot water usage temperatures 
using data from the ASHRAE Heating, Ventilation, and Air-Conditioning 
(``HVAC'') Systems and Equipment Handbook, EPRI Handbook, and reports 
from National Renewable Energy Laboratory (``NREL'') \40\ and LBNL.\41\ 
For residential applications,

[[Page 30869]]

DOE plans to determine average set point temperature by using the 2006-
2019 survey data from plumbing/hydronic heating contractor firms.\42\ 
These data will capture the variability in water heating use due to 
factors such as building activity, schedule, occupancy, water supply 
temperature, tank losses, cycling losses, and distribution system 
piping losses. DOE intends to derive the inlet water temperature using 
an approach developed by NREL.\43\ This approach accounts for seasonal 
variations in inlet water temperature as a function of annual average 
outdoor air temperature. The monthly average inlet water temperature 
varies directly with the average annual outdoor air temperature 
corrected by an offset term.
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    \40\ NREL, DOE Commercial Reference Building Models of the 
National Building Stock (February 2011) (Available at: https://www.nrel.gov/docs/fy11osti/46861.pdf) (Last accessed Dec. 2, 2019).
    \41\ Huang, J., Akbari, H., Rainer, L., Ritschard, R., 481 
Prototypical Commercial Buildings for 20 Urban Market Areas, LBL-
29798 (April 1991) (Available at: http://simulationresearch.lbl.gov/dirpubs/29798.pdf) (Last accessed Dec. 2, 2019).
    \42\ Clear Seas Research, 2019 Mechanical Systems--Water Heater 
CLEAReport (Dec. 2019) (Available at: https://clearseasresearch.com/product/2019-mechanical-systems-water-heater/) (Last accessed Dec. 
2, 2019).
    \43\ Burch, J.a.C.C., Towards Development of an Algorithm for 
Mains Water Temperature, NREL (Available at: https://www.osti.gov/scitech/biblio/981988) (Last accessed Dec. 2, 2019); Hendron, R., R. 
Anderson, C. Christensen, M. Eastment, and P. Reeves, Development of 
an Energy Savings Benchmark for All Residential End-Uses (August 
2004) NREL, Report No. NREL/BK-610-28044 (Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.577.9027&rep=rep1&type=pdf) (Last accessed Dec. 
2, 2019).
---------------------------------------------------------------------------

    DOE also plans to consider market changes or future efficiency 
standards in technologies that reduce water heating loads in 
residential housing or commercial buildings using consumer water 
heaters, such as more-efficient clothes washers.
    Issue G.4 DOE seeks field data and input on representative hot 
water usage, water heating usage load profile, and representative hot 
water usage temperatures for consumer water heaters used in various 
consumer and commercial water heater applications.
    Issue G.5 DOE seeks input on the historical distribution of product 
efficiencies in the building population for different product classes.
    Issue G.6 DOE seeks input on water use data by season to more 
accurately calculate the inlet water temperature.
3. Determination of Consumer Water Heating Energy Use
    In the past, DOE calculated the field energy use of water heaters 
using a simplified energy equation, the consumer water heater analysis 
model (``WHAM''),\44\ and modified WHAM equations developed for the 
April 2010 Final Rule. WHAM accounts for a range of operating 
conditions and energy efficiency characteristics of water heaters. To 
describe energy efficiency characteristics of water heaters, WHAM uses 
parameters that were also used in the previous consumer water heater 
test procedure. DOE intends to create a similar set of equations to 
determine field energy use based on the most recent consumer water 
heater test procedure, which determines UEF.
---------------------------------------------------------------------------

    \44\ Lutz, J., C.D. Whitehead, A. Lekov, D. Winiarski, and G. 
Rosenquist, WHAM: A Simplified Energy Consumption Equation for Water 
Heaters, in 1998 American Council for an Energy-Efficient Economy 
(``ACEEE'') Summer Study on Energy Efficiency in Buildings (1998): 
Asilomar, CA. p. 1.171-1.183 (Available at: https://www.osti.gov/biblio/20001984-wham-simplified-energy-consumption-equation-water-heaters) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    For gas-fired and oil-fired water heaters, DOE plans to estimate 
the auxiliary electricity use associated with water heater operation, 
such as that consumed by the electronic ignition, controls, power vent 
fan, standby mode and off mode, etc. For heat pump water heaters, DOE 
plans to take into account that the energy efficiency and consumption 
are dependent on ambient temperature when in heat pump mode and the 
amount of time the unit operates using the electric resistance mode. 
DOE also intends to estimate the impact of heat pump water heaters on 
the home's space heating, air conditioning, and dehumidifier 
operation.\45\ DOE also plans to take into account the electricity use 
associated with condensate withdrawal, such as that consumed by the 
condensate pump or heat tape for condensing and heat pump water heater 
technologies. For grid-enabled water heaters, DOE plans to use common 
draw patterns and utility program structure (i.e., turned off at a 
fixed schedule or turned off during peak periods only) to determine the 
electricity use and match it with the appropriate electricity tariff 
structure.
---------------------------------------------------------------------------

    \45\ Heat pump water heaters draw heat from the space in which 
they are located. Thus, when such a water heater is located in a 
conditioned space, its operation affects the load that the home's 
space heating and air conditioning equipment must meet. When the 
home is being heated, use of the heat pump water heater increases 
the heating load, and when the house is being cooled, its use 
decreases the cooling load.
---------------------------------------------------------------------------

    Issue G.7 DOE requests field or test energy use data or other 
relevant information that could assist in the development of an 
equation or set of equations based on the latest consumer water heater 
test procedure that can calculate field water heating energy use for 
each product class.
    Issue G.8 DOE requests comment on the methodology for determining 
energy use for each consumer water heater product class, including the 
impact of ambient conditions and draw patterns.
    Issue G.9 DOE requests comment on the methodology for determining 
energy use of heat pump water heaters, including the impact of ambient 
conditions and draw patterns on efficiency, as well as taking into 
account the cooling effect and humidity withdrawal of heat pump water 
heaters installed in conditioned spaces.
    Issue G.10 DOE requests comment on the methodology for determining 
energy use for grid-enabled water heaters.
    Issue G.11 DOE requests comment on the fraction of installations 
and classes of consumer water heaters used for other applications such 
as space heating (in hydronic systems or fan-coils).
    Issue G.12 DOE seeks input on the fraction of installations and 
types of buildings that use recirculation loops associated with 
consumer water heaters and the impact of recirculation loops on water 
heater performance.

H. Life-Cycle Cost and Payback Period Analysis

    DOE plans to conduct LCC and PBP analyses to evaluate the economic 
impacts on individual consumers of potential energy conservation 
standards for consumer water heaters. 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 intends to analyze the potential for variability by performing 
the LCC and PBP calculations on a representative sample of individual 
consumers. DOE plans to utilize the sample of buildings developed for 
the energy use analysis and the corresponding simulation results.\46\ 
Within a given building, one or more consumer water heater units may 
serve the building's water heating needs, depending on the hot water 
requirements of the building. Therefore, DOE intends to express the LCC 
and PBP results for each of the individual consumer water heaters 
installed in the building. DOE plans to model uncertainty in many of 
the inputs to the LCC and PBP analysis using Monte Carlo simulation and 
probability distributions. As a result, the LCC and PBP results will be 
displayed as distributions of impacts compared to the no-new-standards 
case (i.e., without amended standards) conditions.
---------------------------------------------------------------------------

    \46\ Specifically, DOE plans to utilize the household types 
defined in RECS 2015, as well as commercial building types in CBECS 
2012 that use consumer water heaters.
---------------------------------------------------------------------------

    Issue H.1 DOE requests comment on the overall methodology that it 
intends

[[Page 30870]]

to use to conduct the LCC and PBP analysis for consumer water heaters.
    Inputs to the LCC and PBP analysis are categorized as: (1) Inputs 
for establishing the purchase expense, otherwise known as the total 
installed cost, and (2) inputs for calculating the operating costs. 
Each type of input is discussed in the paragraphs that follow.
1. Total Installed Cost
    The primary inputs for establishing the total installed cost are 
the baseline consumer price, standard-level customer price increases, 
and installation costs. Baseline consumer prices and standard-level 
consumer price increases will be determined by applying markups to 
manufacturer selling price estimates and sales tax. For gas-fired water 
heaters, DOE intends to take into account location where ultra-low-
NOX gas-fired water heaters would be required by the 
compliance date for any amended standards, such as the Bay Area Air 
Quality Management District (``AQMD'') (Regulation 9, Rule 6),\47\ 
Sacramento Metropolitan AQMD (Rule 414),\48\ San Joaquin Valley Air 
Pollution Control District (``APCD'') (Rule 4902),\49\ Santa Barbara 
County APCD (Rule 352),\50\ South Coast AQMD (Rule 1112),\51\ Ventura 
County AQMD (Rule 74-11),\52\ and Yolo-Solano AQMD (Rule 2.37).\53\
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    \47\ Bay Area Air Quality Management District, Regulation 9: 
Inorganic Gaseous Pollutants; Rule 6: Nitrogen Oxides Emissions from 
Natural Gas-Fired Boilers and Water Heaters (Available at: https://www.arb.ca.gov/drdb/ba/curhtml/r9-6.pdf) (Last accessed Dec. 2, 
2019).
    \48\ Sacramento Metropolitan Air Quality Management District, 
Rule 414: Water Heaters, Boilers and Process Heaters Rated Less Than 
1,000,000 BTU PER HOUR Adopted 08-01-96 (Amended 03-25-10) 
(Available at: http://www.airquality.org/ProgramCoordination/Documents/rule414.pdf) (Last accessed Dec. 2, 2019).
    \49\ San Joaquin Valley Air Pollution Control District, Rule 
4902: Residential Water Heaters (Adopted June 17, 1993; Amended 
March 19, 2009) (Available at: http://valleyair.org/rules/currntrules/r4902.pdf) (Last accessed Dec. 2, 2019).
    \50\ Santa Barbara County Air Pollution Control District, Rule 
352: Natural Gas-Fired Fan-Type Central Furnaces and Small Water 
Heaters (Adopted 9/16/1999, revised 10/20/2011) (Available at: 
https://www.ourair.org/wp-content/uploads/rule352.pdf) (Last 
accessed Dec. 2, 2019).
    \51\ South Coast Air Quality Management District, Rule 1121: 
Control of Nitrogen Oxides from Residential Type, Natural Gas-Fired 
Water Heaters (Adopted Dec. 1, 1978; Amended Mar. 10, 1995; Amended 
Dec. 10, 1999; Amended Sept. 3, 2004) (Available at: http://www.aqmd.gov/home/regulations/rules/support-documents/rule-1121) 
(Last accessed Dec. 2, 2019).
    \52\ Ventura County Air Quality Management District, Rule 74-11: 
Natural Gas-Fired Water Heaters (Available at: http://www.vcapcd.org/pubs/Advisories/7411/Ru7411Revision2010.pdf) (Last 
accessed Dec. 2, 2019).
    \53\ Yolo-Solano Air Quality Management District, Rule 2.37: 
Natural Gas-Fired Water Heaters and Small Boilers (Adopted Nov. 9, 
1994; Revised April 8, 2009) (Available at: https://www.arb.ca.gov/DRDB/YS/CURHTML/R2-37.pdf) (Last accessed Dec. 2, 2019).
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    Issue H.2 DOE seeks input on locations requiring ultra-low-
NOX gas-fired water heaters.
    The installation cost is added to the consumer price to arrive at a 
total installed cost. DOE intends to develop installation costs using 
the most recent RS Means data available.\54\ DOE also intends to use 
regional labor costs to more accurately estimate installation costs by 
applying the appropriate regional labor cost from RS Means to each 
sampled household or building.
---------------------------------------------------------------------------

    \54\ RS Means, 2020 Mechanical Cost Data (Available at: https://www.rsmeans.com/products/books/cost-books.aspx) (Last accessed Dec. 
2, 2019).
---------------------------------------------------------------------------

    For water heaters in new homes, DOE plans to include basic 
installation cost, such as adding a gas line branch and/or electrical 
connection and water piping, in addition to putting the new water 
heater in place and additional set-up. For natural draft venting gas-
fired water heaters in new construction, DOE plans to account for both 
commonly-vented water heaters (together with a central furnace) and 
isolated water heaters (separately vented). For replacement cases, DOE 
plans to include the installation cost associated with disconnecting 
and removing the old water heater, removal/disposal fees, permit fees, 
as well as the cost of putting the new water heater in place and 
additional set-up.
    DOE also intends to account for additional labor costs associated 
with larger water heaters, replacing a larger drain pan, and potential 
space-constraint issues when the original water heater location is too 
small to accommodate the replacement water heater. DOE also intends to 
add any costs associated with updating or repairing existing flue 
venting including vent resizing and chimney relining. For efficiency 
levels that include electronic ignition, power vent, or condensing 
design, DOE intends to add the cost of installing an electrical outlet, 
a new venting system, and any additional cost for condensate disposal. 
For heat pump water heater installation, DOE intends to apply several 
additional costs, including one additional hour of labor for the extra 
time required to install this product, potential space-constraint 
issues, adding condensate withdrawal, and adding ductwork for supply 
and/or outlet air from the heat pump component (including adding 
louvered doors for water heaters installed in indoor closets).
    Issue H.3 DOE seeks input on the approach and data sources it 
intends to use to develop installation costs, specifically, its 
intention to use the most recent RS Means Mechanical Cost Data.
    Issue H.4 DOE seeks input on the fraction and categories of water 
heaters that encounter space-constraint issues (such as impact of 
height and width on installation space constraints or constraints in 
getting the consumer water heater through attic or closet doors).
    Issue H.5 DOE seeks input on issues and costs associated with 
venting of flue gases of gas-fired storage and instantaneous water 
heaters, in particular regarding retrofit issues related to installing 
a new vent system for power vent and condensing water heaters, 
disconnecting the existing water heater from non-condensing furnace 
common venting system, and upgrading existing non-condensing venting 
(chimney relining or vent resizing). DOE also seeks input on how often 
and in what applications direct venting or sealed combustion are used 
or required.
    Issue H.6 DOE seeks input on issues and costs associated with 
condensate disposal for condensing gas-fired storage and instantaneous 
water heaters, specifically how often and in what applications a 
condensate filter is installed or a condensate pump is installed.
    Issue H.7 DOE seeks input on issues and costs associated with 
installing consumer water heaters in multi-family buildings and mobile 
homes.
    Issue H.8 DOE seeks input on issues and costs associated with 
installing heat pump water heaters, including adjustment of electrical 
circuits, additional labor, space constraints, adding condensate 
withdrawal, and adding ductwork for supply and/or outlet air from the 
heat pump component.
    Issue H.9 DOE seeks input on issues and costs associated with 
installing consumer water heaters with large input capacities, such as 
instantaneous natural gas water heaters, when replacing an existing 
smaller capacity natural gas storage water heater. DOE requests comment 
on how often a new larger gas pipe is required.
2. Operating Costs
    The primary inputs for calculating the operating costs are energy 
consumption, product efficiency, energy prices, maintenance and repair 
costs, product lifetime, and discount rates. Both product lifetime and 
discount rates are used to calculate the present value of future 
operating costs.
    The relevant energy consumption is the site energy use associated 
with

[[Page 30871]]

providing water heating to the building. (The primary energy used to 
provide electricity for electric water heaters is accounted for in the 
NIA.) DOE intends to utilize the energy use calculation methodology 
described in section II.G of this document to determine water heater 
energy use.
    DOE intends to determine recent gas, oil, and electricity prices 
based on geographically-available fuel cost data such as State level 
data, with consideration for the variation in energy costs paid by 
consumers living in different building types. DOE calculates energy 
expenses based on estimated marginal energy prices that customers are 
paying in different geographical areas of the country. DOE may consider 
data provided by EIA's Form EIA-861 \55\ to calculate residential and 
commercial electricity prices, EIA's Natural Gas Navigator \56\ to 
calculate residential and commercial natural gas prices, and EIA's 
State Energy Data Systems (``SEDS'') \57\ to calculate liquefied 
petroleum gas (LPG) and fuel oil prices. Future energy prices will be 
projected using trends from the latest Annual Energy Outlook 
(``AEO'').\58\
---------------------------------------------------------------------------

    \55\ EIA, Survey form EIA-861--Annual Electric Power Industry 
Report (Available at: https://www.eia.gov/electricity/) (Last 
accessed Dec. 2, 2019).
    \56\ EIA, Natural Gas Navigator (Available at: http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm) (Last accessed Dec. 2, 
2019).
    \57\ EIA, SEDS (Available at: http://www.eia.gov/state/seds/) 
(Last accessed Dec. 2, 2019).
    \58\ EIA, AEO Full Version (Available at: https://www.eia.gov/outlooks/aeo/) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue H.10 DOE seeks comment on its planned approach and sources 
for developing gas, oil, and electricity prices.
    Maintenance costs are expenses associated with ensuring continued 
operation of the covered product over time. DOE intends to develop 
maintenance costs using the most recent RS Means data available \59\ 
and manufacturer product literature. DOE intends to assess whether 
maintenance costs vary with product efficiency and product category. In 
addition, DOE plans to consider the cases when the product is covered 
by service and/or maintenance agreements. More specifically, DOE 
intends to account for the following: (1) Maintenance cost associated 
with storage water heaters being drained and flushed annually to 
minimize deposition of sediment, maintain operating efficiency, and 
prolong product life; (2) any maintenance cost associated with the 
flammable vapor ignition resistant (``FVIR'') component of gas-fired 
storage water heaters; (3) for a heat pump water heater, the cost of 
annual cleaning of the air filter and a preventive maintenance cost to 
check the evaporator and refrigeration system; (4) for gas-fired 
instantaneous water heaters, maintenance costs associated with the 
fouling of the heat exchanger from hard water, periodic sensor 
inspections, and filter changes; and (5) for oil-fired storage water 
heaters, the cost of annual maintenance contracts, which are available 
for this product category.
---------------------------------------------------------------------------

    \59\ RS Means, 2020 Facilities Maintenance & Repair Cost Data 
(Available at: https://www.rsmeans.com/products/books/cost-books.aspx) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue H.11 DOE seeks input on the approach and data sources it 
intends to use to develop maintenance costs, specifically, its 
intention to use the most recent RS Means Facilities Maintenance & 
Repair Cost Data and to consider the cost of service and/or maintenance 
agreements.
    Repair costs are expenses associated with repairing or replacing 
components of the covered product that have failed. DOE intends to 
develop maintenance costs using the most recent RS Means data available 
\60\ and manufacturer literature. DOE intends to assess whether repair 
costs vary with product efficiency and product category. DOE intends to 
include repair cost for components that are more likely to fail during 
the consumer water heater's lifetime, such as pilot ignition, 
electronic ignition, and power vent fan for gas-fired water heaters; 
and electric resistance element, compressor, and the evaporator fan for 
electric water heaters. For oil-fired storage water heaters, DOE 
intends to calculate the cost of annual maintenance contracts, which 
typically include repair/replacement of failed components.
---------------------------------------------------------------------------

    \60\ RS Means, 2020 Facilities Maintenance & Repair Cost Data 
(Available at: https://www.rsmeans.com/products/books/cost-books.aspx) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue H.12 DOE seeks comment as to whether water heater repair 
costs vary as a function of product efficiency. DOE also requests any 
data or information on developing repair costs.
    Product lifetime is the age at which a unit is retired from 
service. DOE intends to conduct an analysis of water heater lifetimes 
using a combination of data on shipments, the consumer water heater 
stock, and RECS data on the age of existing water heaters in the 
sampled homes based on a methodology described in a journal 
article.\61\ The data allow DOE to develop a Weibull probability 
distribution to characterize consumer water heater lifetime, which 
provides a range from minimum to maximum lifetime, as well as an 
average lifetime.\62\
---------------------------------------------------------------------------

    \61\ Lutz, J., A. Hopkins, V. Letschert, V. Franco, and A. 
Sturges, Using national survey data to estimate lifetimes of 
residential appliances, HVAC&R Research, 2011. 17(5): pp. 28 
(Available at: https://www.tandfonline.com/doi/abs/10.1080/10789669.2011.558166) (Last accessed Dec. 2, 2019).
    \62\ If the data are available, DOE also plans to take into 
account differences in consumer water heater lifetime based on usage 
and application of the consumer water heater.
---------------------------------------------------------------------------

    Issue H.13 DOE seeks comment on its planned approach of using a 
Weibull probability distribution to characterize product lifetime. DOE 
also requests product lifetime data and information on whether product 
lifetime varies based on product characteristics, product application, 
or product efficiency.
    In the calculation of LCC, DOE applies discount rates appropriate 
to households to estimate the present value of future operating costs. 
The discount rate used in the LCC analysis represents the rate from an 
individual consumer's perspective. DOE estimates a distribution of 
residential discount rates based on the opportunity cost of funds 
related to appliance energy cost savings and maintenance costs. DOE 
estimates commercial discount rates as the weighted average cost of 
capital (``WACC''), using the Capital Asset Pricing Model (``CAPM'').
    To establish residential discount rates for the LCC analysis, DOE 
intends to use the Federal Reserve Board's Survey of Consumer Finances 
\63\ (``SCF'') for 1995, 1998, 2001, 2004, 2007, 2010, 2013, and 2016 
data, as well as other data sources,\64\ to develop a distribution of

[[Page 30872]]

discount rates by income group to represent the rates that may apply in 
the year in which potential amended standards would take effect. For 
commercial discount rates, DOE intends to use Damodaran Online, which 
is a widely used source of information about company debt and equity 
financing for most types of firms, as the primary source of data.\65\
---------------------------------------------------------------------------

    \63\ The Federal Reserve Board, SCF (1995, 1998, 2001, 2004, 
2007, 2010, 2013, and 2016) (Available at: https://www.federalreserve.gov/econres/scfindex.htm) (Last accessed Dec. 2, 
2019).
    \64\ Damodaran, A., Data Page: Historical Returns on Stocks, 
Bonds and Bills-United States (Available at: http://
pages.stern.nyu.edu/~adamodar/) (Last accessed Dec. 2, 2019); 
Moody's, Moody's Seasoned AAA Corporate Bond Yield [AAA], retrieved 
from FRED, Federal Reserve Bank of St. Louis (Available at: https://fred.stlouisfed.org/series/AAA) (Last accessed Dec. 2, 2019); Wells 
Fargo, Wells Fargo Cost of Savings Index (``COSI'') (Available at: 
https://www.wellsfargo.com/mortgage/manage-account/cost-of-savings-index/) (Last accessed Dec. 2, 2019); National Bureau of Economic 
Research, Marginal Income Tax Rates by Income Type (Available at: 
http://users.nber.org/~taxsim/marginal-tax-rates/) (Last accessed 
Dec. 2, 2019); U.S. Board of Governors of the Federal Reserve 
System, State and Local Bonds--Bond Buyer Go 20-Bond Municipal Bond 
Index (DISCONTINUED) [WSLB20], retrieved from FRED, Federal Reserve 
Bank of St. Louis (Available at: https://fred.stlouisfed.org/series/WSLB20) (Last accessed Dec. 2, 2019); U.S. Board of Governors of the 
Federal Reserve System, 30-Year Treasury Constant Maturity Rate 
[DGS30], retrieved from FRED, Federal Reserve Bank of St. Louis 
(Available at: https://fred.stlouisfed.org/series/DGS30) (Last 
accessed Dec. 2, 2019); Organisation for Economic Co-operation and 
Development (``OECD''), Short-term interest rates (indicator) 
(Available at https://data.oecd.org/interest/short-term-interest-rates.htm) (Last accessed Dec. 2, 2019); U.S. Department of Labor-
Bureau of Labor Statistics, Bureau of Labor Statistics Data, 
Consumer Price Index (2018) (Available at: http://data.bls.gov) 
(Last accessed Dec. 2, 2019).
    \65\ Damodaran A., Data Page: Costs of Capital by Industry 
Sector (Available at: http://pages.stern.nyu.edu/~adamodar/) (Last 
accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue H.14 DOE seeks comment on its planned discount rate 
methodology.
    DOE measures LCC and PBP impacts of potential standard levels 
relative to a no-new-standards case that reflects the likely market in 
the absence of amended standards. DOE plans to develop market-share 
efficiency data (i.e., the distribution of product shipments by 
efficiency) for the product classes DOE is considering, for the year in 
which compliance with any potential amended standards would be 
required. To estimate the market shares of different water heater 
energy efficiency levels in the no-new-standards case, DOE intends to 
use historical data provided by AHRI for the April 2010 Final Rule,\66\ 
along with more recent data that may be provided by stakeholders. DOE 
also intends to use 2010-2018 ENERGY STAR shipments data.\67\ Because 
these data may not cover all of the energy efficiency levels under 
consideration, DOE also intends to use data on the number of water 
heater models at different energy efficiency levels, as reported in 
DOE's compliance certification database,\68\ the AHRI directory of 
certified product performance,\69\ the California Energy Commission 
(``CEC'') appliance efficiency database,\70\ and the ENERGY STAR 
certified water heaters directory.\71\
---------------------------------------------------------------------------

    \66\ AHRI provided to DOE 2002-2006 shipments data by energy 
factor (EF) bins for gas-fired storage water heaters (40 gallons) 
and oil-fired storage water heaters (50 gallon). In addition, AHRI 
provided LBNL 2004-2007 shipments data by energy factor (EF) bins 
for gas-fired instantaneous water heaters.
    \67\ ENERGY STAR, 2010-2018 Unit Shipment Data (Available at: 
https://www.energystar.gov/index.cfm?c=partners.unit_shipment_data) 
(Last accessed Dec. 2, 2019).
    \68\ DOE, Compliance Certification Database (Available at: 
https://www.regulations.doe.gov/certification-data/CCMS-4-Water_Heaters.html#q=Product_Group_s%3A%22Water%20Heaters%22) (Last 
accessed Dec. 2, 2019).
    \69\ AHRI, Directory of Certified Product Performance for 
Residential Water Heaters (Available at: https://www.ahridirectory.org/NewSearch?programId=24&searchTypeId=3) (Last 
accessed Dec. 2, 2019).
    \70\ CEC, Appliance Efficiency Database (Available at: https://cacertappliances.energy.ca.gov/Pages/ApplianceSearch.aspx) (Last 
accessed Dec. 2, 2019).
    \71\ ENERGY STAR, ENERGY STAR Certified Water Heaters Directory 
(Available at: https://www.energystar.gov/productfinder/product/certified-water-heaters/results) (Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    Issue H.15 DOE requests shipments data for consumer water heaters, 
broken down by product class, that show current market shares by 
efficiency level. DOE also seeks input on similar historic data.
    A table of the types of data requested for shipments in Issue H.15 
can be found in Table II.7 and Table II.8. Table II.7 represents 
efficiency data from 2007-2015 based on EF metric based on the test 
procedure that was effective prior to December 31, 2015, while Table 
II.8 represents efficiency data from 2016-2018 based on the amended 
test procedure using the UEF metric. Interested parties are also 
encouraged to provide additional shipment data as may be relevant.

 Table II.7--Summary Table of Shipments-Related Data Requests From 2007 to 2015 by EF Bins Using Test Procedure
                 Prior to December 31, 2015 by Product Class and Representative Rated Volumes *
----------------------------------------------------------------------------------------------------------------
                                                         Historical shipments (millions)
            EF bins             --------------------------------------------------------------------------------
                                   2007     2008     2009     2010     2011     2012     2013     2014     2015
----------------------------------------------------------------------------------------------------------------
                                     Gas-Fired Storage Water Heaters, 40 gal
----------------------------------------------------------------------------------------------------------------
0.59-0.60......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.61-0.63......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.64-0.69......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.70 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
                                     Oil-Fired Storage Water Heaters, 32 gal
----------------------------------------------------------------------------------------------------------------
0.53-0.61......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.62-0.65......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.66-0.67......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.68 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
                                     Electric Storage Water Heaters, 50 gal
----------------------------------------------------------------------------------------------------------------
0.90...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.91-0.93......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.94-0.96......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.97-2.49......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
2.50-2.99......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
3.00 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
                                     Electric Storage Water Heaters, 80 gal
----------------------------------------------------------------------------------------------------------------
0.86-0.96......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.97-2.49......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
2.50-2.99......................  .......  .......  .......  .......  .......  .......  .......  .......  .......

[[Page 30873]]

 
3.00 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
                                   Gas-Fired Instantaneous Water Heaters, All
----------------------------------------------------------------------------------------------------------------
0.62-0.77......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.78-0.80......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.81-0.82......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.83-0.86......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.87-0.92......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.93-0.94......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.95 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
                                       Grid-Enabled Water Heaters, 80 gal
----------------------------------------------------------------------------------------------------------------
0.86-0.91......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.92...........................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.93-0.95......................  .......  .......  .......  .......  .......  .......  .......  .......  .......
0.96 and above.................  .......  .......  .......  .......  .......  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
* Any additional shipments by efficiency bins data for additional rated volumes, such as 50 or 30 gallons for
  gas-fired storage water heaters, 50 gallon oil-fired storage water heaters, 30, 40, or 67 gallons for electric
  storage water heaters, or 100 gallon for grid-enabled water heaters are welcome. In addition, any data for any
  other product classes are also welcome.


 Table II.8--Summary Table of Shipments-Related Data Requests From 2016-2018 by Uniform Energy Factor (UEF) Bins
           Using Test Procedure After December 31, 2015 by Product Class and Representative Capacity *
----------------------------------------------------------------------------------------------------------------
                                                                          Historical shipments (millions)
                            UEF bins                             -----------------------------------------------
                                                                       2016            2017            2018
----------------------------------------------------------------------------------------------------------------
                          Gas-Fired Storage Water Heaters, 38 gal, Medium Draw Pattern
----------------------------------------------------------------------------------------------------------------
0.58............................................................  ..............  ..............  ..............
0.59-0.60.......................................................  ..............  ..............  ..............
0.61-0.63.......................................................  ..............  ..............  ..............
0.64-0.66.......................................................  ..............  ..............  ..............
0.67-0.69.......................................................  ..............  ..............  ..............
0.70 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                           Oil-Fired Storage Water Heaters, 30 gal, High Draw Pattern
----------------------------------------------------------------------------------------------------------------
0.62-0.65.......................................................  ..............  ..............  ..............
0.66-0.67.......................................................  ..............  ..............  ..............
0.68 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                           Electric Storage Water Heaters, 46 gal, Medium Draw Pattern
----------------------------------------------------------------------------------------------------------------
0.92............................................................  ..............  ..............  ..............
0.93-0.96.......................................................  ..............  ..............  ..............
0.97-2.49.......................................................  ..............  ..............  ..............
2.50-2.99.......................................................  ..............  ..............  ..............
3.00 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                            Electric Storage Water Heaters, 80 gal, High Draw Pattern
----------------------------------------------------------------------------------------------------------------
2.00-2.49.......................................................  ..............  ..............  ..............
2.50-3.00.......................................................  ..............  ..............  ..............
3.00 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                                   Gas-Fired Instantaneous Water Heaters, All
----------------------------------------------------------------------------------------------------------------
0.81............................................................  ..............  ..............  ..............
0.82-0.86.......................................................  ..............  ..............  ..............
0.87-0.92.......................................................  ..............  ..............  ..............
0.93-0.94.......................................................  ..............  ..............  ..............
0.95 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------

[[Page 30874]]

 
                              Grid-Enabled Water Heaters, 80 gal, High Draw Pattern
----------------------------------------------------------------------------------------------------------------
0.90-0.91.......................................................  ..............  ..............  ..............
0.92............................................................  ..............  ..............  ..............
0.93-0.95.......................................................  ..............  ..............  ..............
0.96 and above..................................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
* Any additional shipments by efficiency bins data for additional rated volumes, such as 48 gallon (high draw)
  for gas-fired storage water heaters, 48 gallon (high draw) oil-fired storage water heaters, 27 gallon (low
  draw), 36 (medium draw), or 67 gallons (high draw) for electric storage water heaters, 100 gallon (high draw)
  for grid-enabled water heaters are welcome. In addition, any data for any other product classes are also
  welcome.

    Issue H.16 DOE also requests information on expected future trends 
in efficiency for consumer water heaters product classes, including the 
relative market shares of condensing versus non-condensing products in 
the market for storage water heaters and instantaneous water heaters, 
as well as the share of heat pump water heaters in the absence of 
amended efficiency standards.
    DOE intends to consider the possibility for potential amended 
standards to impact the choice between categories of water heating 
products or product switching (including the potential for fuel 
switching), both for new construction and the replacement of existing 
products. Because home builders are sensitive to the cost of water 
heating products, standards that significantly increase the purchase 
price of one category of product relative to other options may induce 
some builders to switch to a different water heating product than they 
would have otherwise installed (i.e., in the no-new-standards case). 
Such an amended standard level may also induce some home owners to 
replace their existing water heater at the end of its useful life with 
a different category of water heating product, or to repair the product 
instead of replacing, thereby delaying the replacement of the consumer 
water heater.
    DOE plans to develop a consumer choice model to estimate the 
response of builders and homeowners to potential amended consumer water 
heater standards. DOE plans to consider three options available to each 
sample household: (1) Replace with the same category of consumer water 
heater that meets a particular standard level, (2) replace with a 
consumer water heater using a different fuel or a different product 
category (e.g., switching from a storage gas-fired unit to an 
instantaneous gas-fired unit; storage gas-fired unit to storage 
electric unit, storage electric unit to a storage gas-fired unit), or 
(3) repair the existing product, thereby delaying replacement. DOE 
plans to have the consumer choice model use the installed cost of each 
option, as estimated for each sample household or building, and the 
operating costs, taking into account the water heating load for each 
household and the energy prices it will pay over the lifetime of the 
available product options. DOE intends to account for any additional 
costs to accommodate a new product or repair it. To determine which 
consumer choice option each sampled household or building is likely to 
select, DOE intends to use the estimated total installed cost and 
operating cost of each of the modeled choices together with decision 
criteria that take into account consumer willingness to pay for more-
expensive but more-efficient products, as well as other factors such as 
income and purchase incentives.
    Issue H.17 DOE seeks any data and comment on its planned consumer 
choice methodology approach.
    Issue H.18 DOE seeks any data or comments on the consumer choice 
model in new construction, specifically identifying what the principal 
factors are driving the selection of different water heater categories 
in new construction. For example, how often are gas water heaters 
installed if a gas furnace is selected as the heating system in new 
construction?

I. Shipments Analysis

    DOE uses shipment forecasts to calculate the national impacts of 
potential amended energy conservation standards on energy consumption, 
net present value (``NPV'') of consumer benefits, and future 
manufacturer cash flows. DOE shipments projections are based on 
available historical data broken out by product class, capacity, and 
efficiency. Current sales estimates allow for a more accurate model 
that captures recent trends in the market. In the present case, DOE 
intends to develop a shipments model for consumer water heaters based 
on available historical shipments data. DOE currently has historical 
shipments data by product class listed in Table II.9, from data sources 
as listed in Table II.10. In addition, DOE has limited historical data 
to disaggregate water heaters by capacity. Unless more recent data 
become available, DOE intends to use AHRI and U.S. Census shipments 
data to disaggregate gas-fired storage water heaters and electric 
storage water heaters above 55 gallons.\72\
---------------------------------------------------------------------------

    \72\ AHRI, Statistical Release: 1988-1995 data from the Gas 
Appliance Manufacturers Association (``GAMA'') (1999); U.S. 
Department of Commerce-Bureau of the Census, Current Industrial 
Reports for Major Household Appliances (MA335F), 2003-2010 
(Available at: https://www.census.gov/data/tables/time-series/econ/cir/ma335f.html) (Last accessed Dec. 2, 2019).

[[Page 30875]]



                                                    Table II.9--Historical Shipments by Product Class
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Historical shipments (millions)
                         Product class                         -----------------------------------------------------------------------------------------
                                                                  2009     2010     2011     2012     2013     2014     2015     2016     2017     2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Gas-fired Storage Water Heaters *.............................    3.761    3.918    3.953    3.959    4.282    4.472    4.374    4.209    4.359    4.521
Electric Storage Water Heaters *..............................    3.752    3.737    3.739    3.734    4.008    4.277    4.027    3.938    4.127    4.230
                                                               -----------------------------------------------------------------------------------------
Oil-fired Storage Water Heaters...............................                                          No Data.
                                                               -----------------------------------------------------------------------------------------
Tabletop Water Heaters........................................                                          No Data.
                                                               -----------------------------------------------------------------------------------------
Instantaneous Gas-fired Water Heaters **......................  No Data    0.384    0.337    0.339    0.397    0.416    0.297    0.304    0.387       No
                                                                                                                                                   Data.
                                                               -----------------------------------------------------------------------------------------
Instantaneous Electric Water Heaters..........................                                          No Data.
                                                               -----------------------------------------------------------------------------------------
Grid-Enabled Water Heaters....................................                                          No Data.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* AHRI data for all storage water heaters that are marketed by the manufacturer for residential use. These data are aggregated and include grid-enabled
  and tabletop water heaters.
** Data from 2010 to 2017 are ENERGY STAR unit shipment data for whole home instantaneous water heaters meeting the ENERGY STAR criteria, which may not
  reflect the entire market. If no other data source is available, DOE intends to adjust these values so that they are more representative of the entire
  market.


   Table II.10--Historical Shipments Data Sources Available by Product
                                 Classes
------------------------------------------------------------------------
        Product class                    Shipments data source
------------------------------------------------------------------------
Gas-fired Storage Water        1954 to 2018 based on AHRI data \73\ and
 Heaters.                       Appliance Magazine report.\74\
Electric Storage Water
 Heaters.
Oil-fired Storage Water        1997 to 2007 data from Oil Heating
 Heaters.                       Magazine.\75\
Tabletop Water Heaters.......  No data.
Instantaneous Gas-fired Water  2004 to 2007 shipments data provided by
 Heaters.                       AHRI.\76\
                               2010 to 2017 shipments data from ENERGY
                                STAR.\77\
Instantaneous Electric Water   No Data.
 Heaters.
Grid-Enabled Water Heaters...  No Data.
------------------------------------------------------------------------

    Issue I.1 DOE seeks  up-to-date historical shipments data for 
consumer water heaters by product class, particularly for product 
classes other than gas-fired and electric storage water heaters.
---------------------------------------------------------------------------

    \73\ AHRI, Residential Automatic Storage Water Heaters 
Historical Data: 1996-2018 (Available at: http://www.ahrinet.org/statistics.aspx) (Last accessed Dec. 2, 2019).
    \74\ Appliance Magazine, Appliance Historical Statistical 
Review: 1954-2012 (2014).
    \75\ Oil Heating Magazine, Multiple Years (1997-2007).
    \76\ Data submitted as part of the April 2010 Final Rule.
    \77\ ENERGY STAR, 2010-2017 Unit Shipment Data (Available at: 
https://www.energystar.gov/index.cfm?c=partners.unit_shipment_data) 
(Last accessed Dec. 2, 2019).
---------------------------------------------------------------------------

    The shipments model will consider three market segments: (1) New 
residential households or commercial buildings acquiring water heaters; 
(2) existing households or buildings replacing old water heaters; and 
(3) existing households or buildings acquiring new water heaters for 
the first time.\78\
---------------------------------------------------------------------------

    \78\ New owners primarily consist of households or buildings 
that during a major remodel add a consumer water heater, or 
households or buildings that switch from a non-consumer water heater 
(such as a boiler). For this analysis, new owners also include 
households or buildings that switch between different consumer water 
heater product classes.
---------------------------------------------------------------------------

    DOE intends to utilize U.S. Census Bureau data to establish 
historical housing starts for residential households,79 80 
as well as National Energy Modeling System (``NEMS'') data published in 
the latest AEO to establish historical new construction floor space for 
commercial buildings. DOE intends to use the latest AEO to project 
housing starts for residential households and new construction floor 
space for commercial buildings. Using these sources, as well as 
historical product saturation data from RECS and CBECS, DOE will 
estimate shipments to these market segments.
---------------------------------------------------------------------------

    \79\ U.S. Census Bureau, New Privately Owned Housing Units 
Started: Annual Data 1959-2018 (Available at: http://www.census.gov/construction/nrc/historical_data/) (Last accessed Dec. 2, 2019).
    \80\ U.S. Census Bureau, Placements of New Manufactured Homes by 
Region and Size of Home: 1980-2018 (Available at: https://www.census.gov/programs-surveys/mhs.html) (Last accessed Dec. 2, 
2019).
---------------------------------------------------------------------------

    Issue I.2 DOE seeks input on the approach and data sources it 
intends to use in developing the shipments model and shipments 
projections for this analysis.
    To estimate the impact on consumer water heater shipments from 
product switching and repair versus replacement decisions \81\ that may 
be incentivized by potential standards, DOE plans to use the consumer 
choice model described in section II.G of this RFI. The options DOE 
plans to consider are: (1) Replace with the same category of consumer 
water heater that meets a particular standard level, (2) replace with a 
consumer water heater using a different fuel or a different category 
product (e.g., switching from a storage gas-fired unit to an 
instantaneous gas-fired unit; storage gas-fired unit to a storage 
electric unit, storage electric unit to a storage gas-fired unit), or 
(3) repair the existing product, thereby delaying the replacement. To 
determine whether a consumer would choose to switch products or repair 
rather than replacing their water heater, the shipments model will 
account for the combined effects of changes in purchase price and 
annual operating cost. Changes to the purchase price and operating 
costs due to amended energy conservation standards are the drivers for 
shipment estimates for the standards cases relative to the no-new-
standards case.
---------------------------------------------------------------------------

    \81\ Consumers can choose to extend the useful life of their 
existing broken consumer water heater through additional repairs 
instead of replacing it.
---------------------------------------------------------------------------

    Issue I.3 DOE seeks any data sources and input on the approach for 
determining potential impacts on

[[Page 30876]]

product shipments related to consumers' decision on product switching 
and repair versus replacement.

J. National Impact Analysis

    The purpose of the NIA is to estimate aggregate impacts of 
potential energy conservation standards at the national level. DOE's 
analysis includes the national energy savings (``NES'') from potential 
standards and the NPV of the total consumer costs and savings.
    To develop the NES, DOE calculates and examines the difference 
between the annual energy consumption for the no-new-standards case and 
the standards cases. DOE calculates the annual energy consumption using 
per-unit annual energy use data multiplied by projected shipments.
    The inputs for determining the NPV of the total costs and benefits 
experienced by consumers are: (1) Total annual installed cost, (2) 
total annual operating costs (energy costs and repair and maintenance 
costs), and (3) a discount rate to calculate the present value of costs 
and savings. DOE calculates net savings each year as the difference 
between the no-new-standards case and each standards case in terms of 
total savings in operating costs versus total increases in installed 
costs. DOE calculates operating cost savings over the lifetime of each 
product shipped during the projection period.
    The NIA requires a projection of product energy efficiencies for 
the no-new-standards case and for each of the standards cases. For the 
no-new-standards case trend, DOE will consider whether historical data 
show any trend and whether any trend can be reasonably extrapolated 
beyond current efficiency levels.
    Issue J.1 DOE requests comment on the anticipated future market 
share of higher-efficiency products, such as condensing gas-fired water 
heaters and heat pump water heaters, as compared to less-efficient 
products, such as non-condensing gas-fired water heaters and electric 
water heaters, respectively, for each product class.
    For the various standards cases, to estimate the impact that 
amended energy conservation standards may have in the year compliance 
becomes required, DOE may use a ``roll-up'' scenario in which product 
efficiencies in the no-new-standards case that do not meet the new or 
amended standard level under consideration would ``roll up'' to meet 
that standard level, and shipments at efficiencies above the standard 
level under consideration would not be affected. After DOE establishes 
the efficiency distribution for the assumed compliance date of a 
standard, it may consider future projected efficiency growth using 
available trend data.
    Issue J.2 DOE requests comment on use of a ``roll-up'' scenario for 
the standards cases.
    When calculating energy consumption for water heaters at each 
considered efficiency level above the baseline, DOE plans to consider 
applying a rebound effect. A rebound effect occurs when a more-
efficient product is used more intensively than its less-efficient 
predecessor, such that the expected energy savings from the efficiency 
improvement may not fully materialize. Accordingly, when a rebound 
effect is incorporated, calculated energy savings are lower than if no 
rebound effect were considered. For example, in the April 2010 Final 
Rule, DOE applied a rebound effect of 10 percent.
    Issue J.3 DOE seeks information regarding whether there is a 
rebound effect associated with more-efficient consumer water heaters, 
as would be expected to impact a potential amended energy conservation 
standard for those products, and if so, what that effect would be. If 
data indicate that there is such an effect, DOE will account for the 
rebound effect in its calculation of NES.

K. Manufacturer Impact Analysis

    The purpose of the manufacturer impact analysis (``MIA'') is to 
estimate the impact of amended energy conservation standards on 
manufacturers of consumer water heaters. The MIA includes both 
quantitative and qualitative aspects. The quantitative part of the MIA 
primarily relies on the Government Regulatory Impact Model (``GRIM''), 
an industry cash-flow model adapted for each product in this analysis, 
with the key output of industry net present value (``INPV'') to assess 
the financial impacts of a standard. The qualitative part of the MIA 
addresses the potential impacts of energy conservation standards on 
manufacturing capacity and manufacturing employment as well as factors 
such as product characteristics, impacts on particular subgroups of 
firms, and important market and product trends.
    As part of the MIA, DOE intends to analyze impacts of amended 
energy conservation standards on subgroups of manufacturers of covered 
products, including small business manufacturers. DOE uses the Small 
Business Administration's (``SBA'') small business size standards to 
determine whether manufacturers qualify as small businesses, which are 
listed by the North American Industry Classification System 
(``NAICS'').\82\ Manufacturing of consumer water heaters is classified 
under NAICS 335220, ``Major Household Appliance Manufacturing,'' and 
the SBA sets a threshold of 1,500 employees or less for a domestic 
entity to be considered as a small business. This employee threshold 
includes all employees in a business's parent company and any other 
subsidiaries.
---------------------------------------------------------------------------

    \82\ Available at: https://www.sba.gov/document/support--table-size-standards.
---------------------------------------------------------------------------

    One aspect of assessing manufacturer burden involves examining the 
cumulative impact of multiple DOE standards and the product-specific 
regulatory actions of other Federal agencies 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. Assessing the impact of a single regulation may 
overlook this cumulative regulatory burden. In addition to energy 
conservation standards, other regulations can significantly affect 
manufacturers' financial operations. Multiple regulations affecting the 
same manufacturer can strain profits and lead companies to abandon 
product lines or markets with lower expected future returns than 
competing products. For these reasons, DOE conducts an analysis of 
cumulative regulatory burden as part of its rulemakings pertaining to 
appliance efficiency.
    Issue K.1 To the extent feasible, DOE seeks company names and 
contact information for domestic or foreign-based manufacturers that 
distribute consumer water heaters in commerce in the United States.
    Issue K.2 DOE identified small businesses as a subgroup of 
manufacturers that could be disproportionally impacted by amended 
energy conservation standards. DOE requests the names and contact 
information of small business manufacturers (as defined by the SBA's 
size threshold) of consumer water heaters that distribute products in 
commerce in the United States. In addition, DOE requests comment on any 
other manufacturer subgroups that could be disproportionally impacted 
by amended energy conservation standards. DOE requests feedback on any 
potential approaches that could be considered to address impacts on 
manufacturers, including small businesses.

[[Page 30877]]

    Issue K.3 DOE requests information regarding the cumulative 
regulatory burden impacts on manufacturers of consumer water heaters 
associated with: (1) Other DOE standards applying to different products 
that these manufacturers may also make and (2) product-specific 
regulatory actions of other Federal agencies. DOE also requests comment 
on its methodology for computing cumulative regulatory burden and 
whether there are any flexibilities it can consider that would reduce 
this burden while remaining consistent with the requirements of EPCA.

L. Other Energy Conservation Standards Topics

1. Market Failures
    In the field of economics, a market failure is a situation in which 
the market outcome does not maximize societal welfare. Such an outcome 
would result in unrealized potential welfare. DOE welcomes comment on 
any aspect of market failures, especially those in the context of 
amended energy conservation standards for consumer water heaters.
2. Other
    In addition to the issues identified earlier in this document, DOE 
welcomes comment on any other aspect of energy conservation standards 
for consumer water heaters not already addressed by the specific areas 
identified in this document.

III. Submission of Comments

    DOE invites all interested parties to submit in writing by July 6, 
2020, comments and information on matters addressed in this notice and 
on other matters relevant to DOE's consideration of amended energy 
conservations standards for consumer water heaters. After the close of 
the comment period, DOE will review the public comments received and 
may begin collecting data and conducting the analyses discussed in this 
RFI.
    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page requires 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 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. Following such instructions, 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 http://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 http://www.regulations.gov cannot be claimed as CBI. Comments 
received through the website will waive any CBI claims for the 
information submitted. For information on submitting CBI, see the 
Confidential Business Information section.
    DOE processes submissions made through http://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 http://www.regulations.gov provides after you have successfully uploaded your 
comment.
    Submitting comments via email, hand delivery/courier, or postal 
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to http://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 postal mail 
or hand delivery/courier, please provide all items on a CD, if 
feasible. It is not necessary to submit printed copies. No 
telefacsimilies (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, written in English, and 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 to 
[email protected] 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.
    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).
    DOE considers public participation to be a very important part of 
the process for developing energy conservation standards. DOE actively 
encourages the participation and interaction of the public during the 
comment period in each stage of this process. Interactions with and 
between members of the public provide a balanced discussion of the 
issues and assist DOE in the process. Anyone who wishes to be added to 
the DOE mailing list to receive future notices and information about 
this process should contact Appliance and Equipment Standards Program 
staff at (202) 287-1445 or via email at 
[email protected].

[[Page 30878]]

Signing Authority

    This document of the Department of Energy was signed on February 
25, 2020, by Alexander N. Fitzsimmons, Deputy Assistant Secretary for 
Energy Efficiency, Energy Efficiency and Renewable Energy, pursuant to 
delegated authority from the Secretary of Energy. That document with 
the original signature and date is maintained by DOE. For 
administrative purposes only, and in compliance with requirements of 
the Office of the Federal Register, the undersigned DOE Federal 
Register Liaison Officer has been authorized to sign and submit the 
document in electronic format for publication, as an official document 
of the Department of Energy. This administrative process in no way 
alters the legal effect of this document upon publication in the 
Federal Register.

    Signed in Washington, DC, on May 13, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-10564 Filed 5-20-20; 8:45 am]
 BILLING CODE 6450-01-P