[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]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 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.
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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))
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\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.
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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
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EPCA requirement Corresponding DOE analysis
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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.
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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.
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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).
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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\
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\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).
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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.
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\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).
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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.
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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\
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\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).
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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).
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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.
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\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).
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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.
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\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.
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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.
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\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.
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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.
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\54\ RS Means, 2020 Mechanical Cost Data (Available at: https://www.rsmeans.com/products/books/cost-books.aspx) (Last accessed Dec.
2, 2019).
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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\
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\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).
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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.
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\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\
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\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.
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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