[Federal Register Volume 85, Number 186 (Thursday, September 24, 2020)]
[Proposed Rules]
[Pages 60090-60096]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20773]
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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. 186 / Thursday, September 24, 2020 /
Proposed Rules
[[Page 60090]]
DEPARTMENT OF ENERGY
10 CFR Parts 430 and 431
Energy Conservation Program for Appliance Standards: Energy
Conservation Standards for Residential Furnaces and Commercial Water
Heaters
AGENCY: Office of Energy Efficiency and Renewable Energy, U.S.
Department of Energy.
ACTION: Notice of supplemental proposed interpretive rule; request for
comment.
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SUMMARY: In response to a petition for rulemaking submitted on October
18, 2018 (Gas Industry Petition), the Department of Energy (DOE)
published that petition in the Federal Register on November 1, 2018,
for public review and input, and DOE subsequently published a proposed
interpretive rule in the Federal Register on July 11, 2019, which
tentatively determined that in the context of residential furnaces,
commercial water heaters and similarly-situated products/equipment, use
of non-condensing technology (and associated venting) may constitute a
performance-related ``feature'' under the Energy Policy and
Conservation Act (EPCA) that cannot be eliminated through adoption of
an energy conservation standard. After carefully considering the public
comments on its proposed interpretive rule, DOE has tentatively
determined to consider a more involved class structure which turns on
maintenance of compatibility with existing venting categories, and the
Department seeks further information on the potential feasibility,
burdens, and other implications of implementing such a venting-
compatibility approach. DOE requests comments limited in scope to this
issue, after which DOE will respond to not only this matter, but also
to all of the other topics raised in comments on the July 2019 notice
of proposed interpretive rule.
DATES: Written comments and information are requested on or before
October 26, 2020.
ADDRESSES: Interested persons are encouraged to submit comments,
identified by ``Energy Conservation Standards for Residential Furnaces
and Commercial Water Heaters,'' by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments.
Email: [email protected]. Include
Docket No. EERE-2018-BT-STD-0018 in the subject line of the message.
Submit electronic comments in WordPerfect, Microsoft Word, PDF, or
ASCII file format, and avoid the use of special characters or any form
of encryption.
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. If possible,
please submit all items on a compact disc (CD), in which case it is not
necessary to include printed copies.
Hand Delivery/Courier: Appliance and Equipment Standards Program,
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant
Plaza SW, Suite 600, 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 telefacsimiles (faxes) will be accepted. For detailed
instructions on submitting comments and additional information, see
section IV of this document (Public Participation).
Docket: For access to the docket to read background documents, or
comments received, go to the Federal eRulemaking Portal at: http://www.regulations.gov/docket?D=EERE-2018-BT-STD-0018.
FOR FURTHER INFORMATION CONTACT:
Ms. Lysia Bowling, Senior Advisor, U.S. Department of Energy,
Office of Energy Efficiency and Renewable Energy, 1000 Independence
Avenue SW, Washington, DC 20585. Telephone: (202) 430-1257. Email:
[email protected].
Mr. Eris Stas, U.S. Department of Energy, Office of the General
Counsel, 1000 Independence Avenue SW, Washington, DC 20585. Telephone:
(202) 586-5827. Email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Summary Description
A. Relevant Statutory Provisions
B. DOE's Historical Interpretation
C. The Gas Industry Petition
D. DOE's Proposed Interpretive Rule
III. Discussion of Issues Regarding Structuring of Potential
Product/Equipment Classes
IV. Public Participation
V. Approval of the Office of the Secretary
I. Background
On October 18, 2018, the Department received a petition for
rulemaking submitted by the American Public Gas Association (APGA),
Spire, Inc., the Natural Gas Supply Association (NGSA), the American
Gas Association (AGA), and the National Propane Gas Association (NPGA),
collectively referred to as the ``Gas Industry Petitioners,'' asking
DOE to: (1) Issue an interpretive rule stating that DOE's proposed
energy conservation standards for residential furnaces and commercial
water heaters would result in the unavailability of ``performance
characteristics'' within the meaning of the Energy Policy and
Conservation Act of 1975 \1\ (EPCA; 42 U.S.C. 6291 et seq.), as amended
(i.e., by setting standards which can only be met by products/equipment
using condensing combustion technology and thereby precluding the
distribution in commerce of products/equipment using non-condensing
combustion technology) and (2) withdraw the proposed energy
conservation standards for residential furnaces \2\ and commercial
water heaters \3\ based upon such findings. DOE published the petition
in the Federal Register on November 1, 2018 (83 FR 54883) and requested
public comment,
[[Page 60091]]
with a comment period scheduled to close on January 30, 2019. 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 those requests through publication in the Federal
Register of a notice extending the comment period on the notice of
petition for rulemaking until March 1, 2019. 84 FR 449 (Jan. 29, 2019).
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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\ Standards for non-weatherized residential furnaces were
published in a notice of proposed rulemaking at 80 FR 13120 (March
12, 2015) (Docket No. EERE-2014-BT-STD-0031-0032) and in a
supplemental notice of proposed rulemaking at 81 FR 65720 (Sept. 23,
2016) (Docket No. EERE-2014-BT-STD-0031-0230).
\3\ Standards for commercial water heating equipment were
published in a notice of proposed rulemaking at 81 FR 34440 (May 31,
2016) (Docket No. EERE-2014-BT-STD-0042).
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The 90-day public comment period, including the 30-day extension to
submit comments, invited public input in order to better understand
stakeholder perspectives and increase transparency around a complex
issue involving DOE's legal authority. DOE received comments from a
variety of stakeholders, including representatives from gas industry
associations, the manufactured housing industry, efficiency advocates,
consumer advocates, State organizations and Attorneys General, and
individuals (mostly form letter comments). In general, the gas industry
associations and the manufactured housing industry supported the
petition, and the advocates and State officials opposed it.
After carefully considering the comments on the petition, DOE
published a notice of proposed interpretive rule in the Federal
Register on July 11, 2019 to provide the public additional information
about DOE's tentative interpretation of EPCA's ``features'' provision
\4\ in the context of condensing vs. non-condensing furnaces and water
heaters, as informed by public comments. 84 FR 33011. Once again, DOE
received comments from a variety of stakeholders, including
representatives from gas industry associations, the housing industry,
appliance manufacturers, utilities, environmental and efficiency
advocates, consumer advocates, State organizations and Attorneys
General, and individuals. DOE plans to respond to these comments, and
the issues raised therein, fully in a subsequent document, after
receiving comment on the topic presented in this supplemental notice of
proposed interpretive rule.
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\4\ See 42 U.S.C. 6295(o)(4); 42 U.S.C.
6313(a)(6)(B)(iii)(II)(aa); and as applicable in certain cases
through 42 U.S.C. 6316(a)).
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II. Summary Description
A. Relevant Statutory Provisions
In this notice, DOE explains its historical interpretation
regarding the evaluation of what constitutes a product ``feature''
which cannot be eliminated under EPCA, specifically in the context of
residential furnaces and commercial water heaters. For covered consumer
products, the key statutory provision at issue can be found at 42
U.S.C. 6295(o)(4), which provides that the Secretary may not prescribe
an amended or new standard under this section if the Secretary finds
(and publishes such finding) that interested persons have established
by a preponderance of the evidence that the standard is likely to
result in the unavailability in the United States in any covered
product type (or class) of performance characteristics (including
reliability), features, sizes, capacities, and volumes that are
substantially the same as those generally available in the United
States at the time of the Secretary's finding.
Where the Secretary finds such ``performance characteristics
(including reliability), features, sizes, capacities, and volumes''
(collectively referred to hereafter as ``features'') to exist, the
statute provides a remedy at 42 U.S.C. 6295(q)(1), which states that a
rule prescribing an energy conservation standard for a type (or class)
of covered products shall specify a level of energy use or efficiency
higher or lower than that which applies (or would apply) for such type
(or class) for any group of covered products which have the same
function or intended use, if the Secretary determines that covered
products within such group--(A) consume a different kind of energy from
that consumed by other covered products within such group (or class);
or (B) have a capacity or other performance-related feature which other
products within such type (or class) do not have and such feature
justifies a higher or lower standard from that which applies (or will
apply) to other products within such type (or class). In making a
determination under 42 U.S.C. 6295(q)(1) concerning whether a
performance-related feature justifies the establishment of a higher or
lower standard, the Secretary shall consider such factors as the
utility to the consumer of such a feature, and such other factors as
the Secretary deems appropriate.
These provisions also apply to covered non-ASHRAE \5\ commercial
and industrial equipment through the crosswalk provision at 42 U.S.C.
6316(a). (Under the statute, ``ASHRAE equipment'' refers to small
commercial package air conditioning and heating equipment, large
commercial package air conditioning and heating equipment, very large
commercial package air conditioning and heating equipment, packaged
terminal air conditioners (PTACs), packaged terminal heat pumps
(PTHPs), warm-air furnaces, packaged boilers, storage water heaters,
instantaneous water heaters, or unfired hot water storage tanks, which
are addressed by ASHRAE in ASHRAE Standard 90.1, Energy Standard for
Buildings Except Low-Rise Residential Buildings.)
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\5\ ``ASHRAE'' refers to the American Society of Heating,
Refrigerating and Air-Conditioning Engineers.
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ASHRAE equipment has its own separate statutory scheme under EPCA,
with the default situation being that DOE must adopt the level set
forth in ASHRAE Standard 90.1, unless the Department has clear and
convincing evidence to adopt a more-stringent standard (see 42 U.S.C.
6313(a)(6)). Under 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa), there is a
similar ``features'' provision which states, ``The Secretary may not
prescribe an amended standard under this subparagraph if the Secretary
finds (and publishes the finding) that interested persons have
established by a preponderance of the evidence that a standard is
likely to result in the unavailability in the United States in any
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 finding of the Secretary.'' However, it is
noted that this provision contains the specific limitation that it
applies to an amended standard prescribed under this subparagraph
(i.e., when DOE is acting under its authority to set a more-stringent
standard). There is no companion ``features'' provision under 42 U.S.C.
6313(a)(6)(A), which is the provision that would apply when DOE is
adopting the levels set by ASHRAE. Congress was clearly aware of the
features issue, and it chose to act in the context of DOE standard
setting, but not ASHRAE standard setting. There is likewise no
companion provision to 42 U.S.C. 6295(q)(1) for ASHRAE equipment.
B. DOE's Historical Interpretation
With this statutory background in mind, in the March 12, 2015,
notice of proposed rulemaking (NOPR) for energy conservation standards
for residential furnaces, DOE set forth in detail its rationale for why
it did not considering the venting of non-condensing furnaces to
constitute a product ``feature'' under 42 U.S.C. 6295(o)(4). 80 FR
13120, 13137-13138.
As discussed previously, when evaluating and establishing energy
conservation standards, the statute requires DOE to divide covered
products into product classes by the
[[Page 60092]]
type of energy used, by capacity, or by other performance-related
features that justify a different standard. In making a determination
whether a performance-related feature justifies a different standard,
DOE must consider factors such as the utility to the consumer of the
feature and other factors DOE determines are appropriate. (42 U.S.C.
6295(q)) Historically, DOE has viewed utility as an aspect of the
product that is accessible to the layperson and is based on user
operation, rather than performing a theoretical function. This
interpretation has been implemented consistently in DOE's previous
rulemakings by determining utility through the value the item brings to
the consumer, rather than through analyzing more complicated design
features, or costs that anyone, including the consumer, manufacturer,
installer, or utility companies may bear. DOE reasoned that this
approach is consistent with EPCA's requirement for a separate and
extensive analysis of economic justification for the adoption of any
new or amended energy conservation standard (see 42 U.S.C.
6295(o)(2)(A)-(B) and (3)).
Under EPCA, DOE has typically addressed consumer utility by
establishing separate product classes or otherwise taken action when a
consumer may value a product feature based on the consumer's everyday
needs. For instance, DOE has determined that it would be impermissible
under 42 U.S.C. 6295(o)(4) to include elimination of oven door windows
as a technology option to improve the energy efficiency of cooking
products.\6\ DOE reached this conclusion based upon how consumers
typically use the product: Peering through the oven window to judge if
an item is finished cooking, as opposed to checking the timer and/or
indicator light or simply opening the oven door (which could waste more
energy) to see if the item is finished cooking. DOE has also determined
that consumers may value other qualities such as ability to self-
clean,\7\ size,\8\ and configuration.\9\ This determination, however,
can change depending on technological developments and shifts in
consumer behavior/preferences, and it is conceivable that certain
products may disappear from the market entirely due to shifting
consumer demand. DOE stated that it has determined such value on a
case-by-case basis through its own research, as well as public comments
received.
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\6\ 63 FR 48038, 48041 (Sept. 8, 1998).
\7\ 73 FR 62034, 62048 (Oct. 17, 2008) (separating standard
ovens and self-cleaning ovens into different product classes).
\8\ 77 FR 32307, 32319 (May 31, 2012) (creating a separate
product class for compact front-loading residential clothes
washers).
\9\ 75 FR 59469, 59487 (Sept. 27, 2010) (creating a separate
product class for refrigerators with bottom-mounted freezers).
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DOE offered a cautionary note that disparate products may have very
different consumer utilities, thereby making direct comparisons
difficult and potentially misleading. For instance, in a 2011
rulemaking, DOE created separate product classes for vented and
ventless residential clothes dryers based on DOE's recognition of the
``unique utility'' that ventless clothes dryers offer to consumers. 76
FR 22454, 22485 (April 21, 2011). This utility could be characterized
as the ability to have a clothes dryer in a living area where vents are
impossible to install (e.g., an apartment in a high-rise building). As
explained in that April 2011 direct final rule technical support
document, ventless dryers can be installed in locations where venting
dryers would be precluded due to venting restrictions.
But in another rulemaking, DOE found that water heaters that
utilize heat pump technology did not need to be put in a separate
product class from conventional types of hot water heaters that utilize
electric resistance technology, even though water heaters utilizing
heat pumps require the additional installation of a condensate drain
that a hot water heater utilizing electric resistance technology does
not require. 74 FR 65852, 65871 (Dec. 11, 2009). DOE found that
regardless of these installation factors, the heat pump water heater
and the conventional water heater still had the same utility to the
consumer: Providing hot water. Id. In both cases, DOE made its finding
based on consumer type and utility type, rather than product design
criteria that impact product efficiency.
DOE expressed concern that tying the concept of ``feature'' to a
specific technology would effectively lock-in the currently existing
technology as the ceiling for product efficiency and eliminate DOE's
ability to address technological advances that could yield significant
consumer benefits in the form of lower energy costs while providing the
same functionality for the consumer. DOE stated that it was very
concerned that determining features solely on product technology could
undermine the Department's Appliance Standards Program. DOE reasoned
that if it is required to maintain separate product classes to preserve
less-efficient technologies, future advancements in the energy
efficiency of covered products would become largely voluntary, an
outcome which seems inimical to Congress's purposes and goals in
enacting EPCA.
Turning to the product at issue in that rulemaking, DOE noted that
residential furnaces are currently divided into several product
classes. For example, furnaces are separated into product classes based
on their fuel source (gas, oil, or electricity), which is required by
statute. In the most recent rulemaking for that covered product, DOE
analyzed only two product classes for residential furnaces: (1) Non-
weatherized gas-fired furnaces (NWGFs) and (2) mobile home gas-fired
furnaces (MHGFs). DOE did not additionally separate NWGFs and MHGFs
into condensing and noncondensing product classes.
In that rulemaking, DOE tentatively concluded that the methods by
which a furnace is vented did not provide any separate performance-
related impacts, and, therefore, that DOE had no statutory basis for
defining a separate class based on venting and drainage
characteristics. DOE reasoned that NWGF and MHGF venting methods did
not provide unique utility to consumers beyond the basic function of
providing heat, which all furnaces perform. Using this logic, the
possibility that installing a non-condensing furnace may be less costly
than a condensing furnace due to the difference in venting methods did
not justify separating the two types of NWGFs into different product
classes. Unlike the consumers of ventless dryers, which DOE had
determined to be a performance-related feature based on the
impossibility of venting in certain circumstances (e.g., high-rise
apartments), DOE reasoned that consumers of condensing NWGFs are
homeowners that may either use their existing venting or have a
feasible alternative to obtain heat. In other words, homeowners would
still be able to obtain heat regardless of the venting. In contrast,
DOE reasoned that a resident of a high-rise apartment or condominium
building that is not architecturally designed to accommodate vented
clothes dryers would have no option in terms of installing and enjoying
the utility of a dryer in their home unless he or she used a ventless
dryer.
As explained previously, DOE's conclusion in the March 12, 2015,
NOPR was that the utility of a furnace involves providing heat to a
consumer. DOE reasoned that such utility is provided by any type of
furnace, but to the extent that a consumer has a preference for a
particular fuel type (e.g., gas), improvements in venting technology
may eventually allow a consumer to obtain the efficiency of a
condensing furnace using the existing
[[Page 60093]]
venting in a residence by sharing venting space with water heaters. DOE
postulated that this update in technology would significantly reduce
the cost burden associated with installing condensing furnaces and
reduce potential instances of ``orphaned'' water heaters, where the
furnace and water heater can no longer share the same venting (due to
one unit being condensing and the other noncondensing). In other words,
when mature, this technology could allow consumers to switch from a
non-condensing furnace to a condensing furnace in a greater variety of
applications, such as urban row houses. For more information,
interested parties were asked to consult appendix 8L of the NOPR TSD.
C. The Gas Industry Petition
As noted previously, on October 18, 2018, DOE received a petition
from the Gas Industry Petitioners asking DOE to: (1) Issue an
interpretive rule stating that DOE's proposed energy conservation
standards for residential furnaces and commercial water heaters would
result in the unavailability of ``performance characteristics'' within
the meaning of the Energy Policy and Conservation Act of 1975, as
amended (i.e., by setting standards which can only be met by products/
equipment using condensing combustion technology) and (2) withdraw the
proposed energy conservation standards for residential furnaces and
commercial water heaters based upon such findings. In their petition,
the Gas Industry Petitioners argue that DOE misinterpreted its mandate
under section 325(o)(4) of EPCA by failing to consider as a ``feature''
of the subject residential furnaces and commercial water heating
equipment the compatibility of a product/equipment with conventional
atmospheric venting systems and the ability to operate without
generating liquid condensate requiring disposal via a plumbing
connection. Consequently, the Gas Industry Petitioners assert that
DOE's proposals would make unavailable non-condensing products/
equipment with such features, which currently exist in the marketplace,
in contravention of the statute. The petition makes a number of
technical, legal, and economic arguments in favor of its suggested
interpretation, and it points to DOE's past precedent related to space
constraints and differences in available electrical power supply (and
associated installation costs) as supporting its call to find that non-
condensing technology amounts to a performance-related ``feature.''
Based upon these arguments, the Gas Industry Petitioners concluded that
DOE should issue an interpretive rule treating non-condensing
technology as a ``feature'' under EPCA, withdraw its rulemaking
proposals for both residential furnaces and commercial water heaters,
and proceed on the basis of this revised interpretation.
D. DOE's Proposed Interpretive Rule
As discussed in section I of this document, DOE published a notice
of proposed interpretive rule in the Federal Register on July 11, 2019.
84 FR 33011. In consideration of public comments and other information
received on the Gas Industry Petition, DOE proposed to revise its
interpretation of EPCA's ``features'' provision in the context of
condensing and non-condensing technology used in furnaces, water
heating equipment, and similarly-situated appliances (where permitted
by EPCA). Based on those comments and for the reasons set forth fully
in that document, DOE proposed to interpret prospectively the statute
to provide that adoption of energy conservation standards that would
limit the market to natural gas and/or propane gas 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) and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) (and as
applicable in certain cases through 42 U.S.C. 6316(a)).
As explained in the proposed interpretive rule, the statute accords
the Secretary of Energy considerable discretion in terms of determining
whether a performance characteristic of a covered product/equipment
amounts to a performance-related feature which cannot be eliminated
through adoption of an energy conservation standard. DOE stated that it
has taken the opportunity presented by the Gas Industry Petition to
reconsider its historical interpretation of EPCA's ``features''
provision in the context of condensing and non-condensing technologies
used by certain gas appliances. Contrary to the petitioners'
assessment, DOE found this to be a close case, with persuasive
arguments on both sides of the issue. However, a number of factors
convinced DOE to propose a revision to its interpretation.
First, DOE acknowledged that it has, in the past, taken space
constraints and similar limitations into account when setting product
classes (e.g., PTACs, ventless clothes dryers). For example, DOE was
sensitive to the costs associated with requiring expensive building
modifications when it decided to set separate equipment classes for
standard size PTACs and non-standard size PTACs. 73 FR 58772 (Oct. 7,
2008). DOE stated that it expects that similar expenses would occur
here, if DOE were to hold to its historical interpretation, at least
for some subset of installations. Although limited data were provided
to address the actual costs that consumers and commercial customers
would face to modify their existing category I venting, there is little
doubt that some number of such installations would be quite costly.
These more complicated/costly installations are documented as part of
DOE's analysis of the venting costs for residential furnaces, which
considered potential venting modifications that could be required when
replacing an existing category I furnace with a condensing (category
IV) furnace (see appendix 8D of the 2016 SNOPR TSD for further
details).
Second, DOE stated that it has in the past focused on the
consumer's interaction with the product/equipment in deciding whether a
performance feature is at issue. In the context of residential furnaces
and commercial water heaters, DOE has focused on the primary function
of the appliance (e.g., providing heat to a home or potable hot water)
in establishing the nexus to the consumer. In the past, DOE opined that
consumers were only interested in obtaining heat or hot water from the
appliance, so they would not care about the mechanism for generating
that end product. However, commenters have made clear that in at least
some cases, the physical changes associated with a condensing appliance
may change a home's aesthetics (e.g., by adding new venting into the
living space or decreasing closet or other storage space), thereby
impacting consumer utility even under DOE's prior approach.
Third, DOE noted that it has been its policy to remain neutral
regarding competing energy sources in the marketplace. As certain
commenters have pointed out and as DOE's own analyses have shown, some
enhanced level of fuel switching is likely to accompany standard
setting using DOE's prior interpretation. Many consumers who are
currently gas customers may show a proclivity for that fuel type and
would be negatively impacted by a standard that requires the purchase
of a condensing unit to the extent they feel compelled to change to a
different fuel type. DOE explained that it seeks neither to determine
winners and losers in the marketplace nor to limit consumer choice.
Finally, DOE stated that it is very concerned about ensuring energy
[[Page 60094]]
affordability, particularly for persons with low incomes. Although
energy efficiency improvements may pay for themselves over time, there
is typically a significant increase in first-cost associated with
furnaces and water heaters using condensing technology. For consumers
with difficult installation situations (e.g., inner-city row houses),
there would be the added cost of potentially extensive venting
modifications. In certain cases, commenters have argued that
accommodating condensing products may not even be possible. Although
DOE continues to believe that costs are properly addressed in the
economic analysis portion of its rulemakings, it stated that it remains
cognizant of such issues. DOE stated that it has tentatively concluded
that the other reasons discussed immediately above are sufficient in
and of themselves to justify the Department's proposed change in
interpretation, but it acknowledged these cost impacts in order to be
fully transparent in terms of the agency's thinking.
The agency reasoned that creating separate product classes for
condensing and non-condensing furnaces, water heaters, and similarly-
situated products/equipment (where permitted by EPCA) would prevent
many of these potential problems. Although DOE's proposed revised
approach may have some impact on overall energy saving potential as a
result of establishing separate product/equipment classes, the
Department noted that that is not the touchstone of EPCA's ``features''
provision; through that provision, Congress expressed its will that
certain product utilities will take priority over additional energy-
saving measures. (For example, DOE did not eliminate the oven window
which consumers found useful, despite the potential for further energy
savings.) With that said, DOE expressed it belief that any potentially
negative programmatic impacts of its revised interpretation are likely
to be limited. DOE reasoned that the proposed interpretation would be
likely to impact only a limited set of appliances, and DOE noted that
market trends have favored the growing reach of condensing furnaces,
even as non-condensing alternatives have remained available. DOE stated
that it has every reason to believe that such trends will continue.
DOE sought to clarify the limitations of its proposed revised
interpretation, based upon the existing statutory provisions. As
discussed previously, DOE can effect this change for all relevant
consumer products, all non-ASHRAE commercial and industrial equipment,
and ASHRAE equipment in those instances where DOE has clear and
convincing evidence to adopt levels higher than the levels in ASHRAE
Standard 90.1.
As noted, additional, subsequent DOE action would be required
before the interpretation in the proposed interpretive rule could be
implemented. The proposed interpretive rule, even once finalized, would
not alter the Department's current regulations. This interpretation
does not and will not be used to abrogate DOE's responsibilities under
existing laws or regulations, nor does it change DOE's existing
statutory authorities or those of regulators at the Federal, State, or
local level. DOE anticipates continued engagement and productive
involvement of members of the public and the regulated community in
subsequent activities that may follow this interpretation.
As discussed in the proposed interpretive rule, DOE decided to
grant the Gas Industry Petition to the extent that it proposed to
prospectively interpret the statute to provide that adoption of energy
conservation standards that would limit the market of natural gas and/
or propane gas furnaces, water heaters, or similarly-situated products/
equipment (where permitted by EPCA) to appliances 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)
and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) (and as applicable in certain
cases through 42 U.S.C. 6316(a)). The proposal clarified that such
interpretation would apply to all applicable residential products, non-
ASHRAE commercial equipment, and ASHRAE equipment where DOE adopts a
level more stringent than the ASHRAE level.
DOE stated that it is denying the Gas Industry Petition as it
pertains to those rulemakings where ASHRAE sets standard levels that
trigger DOE to consider and adopt those level (unless DOE finds clear
and convincing evidence to adopt more-stringent levels), due to lack of
authority. DOE also denied the Gas Industry Petition's request for DOE
to withdraw the proposed rules for residential furnaces and commercial
water heaters as unnecessary. DOE stated that if the interpretive rule
were to be finalized, it would anticipate developing supplemental
notices of proposed rulemaking (SNOPRs) that would implement the new
legal interpretation for those two rulemakings that were the subject of
the petition for rulemaking.
III. Discussion of Issues Regarding Structuring of Potential Product/
Equipment Classes
DOE received a number of comments with diverse views on the
Department's proposed interpretive rule related to the Gas Industry
Petition, with some supporting the proposal and others in opposition.
Once again, all of those comments will be addressed by DOE in a
subsequent document. Consequently, there is no need to repeat those
arguments, and interested parties are instead asked to limit the scope
of their comments to the specific issue raised in this supplemental
notice of proposed interpretive rule.
As noted previously, in its proposed interpretive rule, DOE
explored the issue of whether non-condensing technology (and associated
venting) constitutes a performance-related ``feature'' under 42 U.S.C.
6295(o)(4),\10\ as would support a separate product/equipment class
under 42 U.S.C. 6295(q)(1).\11\ 84 FR 33011, 33015 (July 11, 2019). DOE
initially assumed that if it were to adopt an interpretation consistent
with the Gas Industry Petition, it would suffice to set product/
equipment classes largely based upon the key distinction of whether an
appliance utilizes condensing or non-condensing combustion technology.
However, a number of comments on the proposed interpretive rule
suggested that such approach may not adequately resolve the issue at
hand, as presented in the petition.
---------------------------------------------------------------------------
\10\ 42 U.S.C. 6316(a) for non-ASHRAE equipment; 42 U.S.C.
6313(a)(6)(B)(iii)(II)(aa) for ASHRAE equipment where DOE is setting
more-stringent standards.
\11\ 42 U.S.C. 6316(a) for non-ASHRAE equipment.
---------------------------------------------------------------------------
More specifically, while U.S. Boiler (USB) generally agreed with
DOE's revised interpretation, the commenter argued that DOE has erred
in focusing on ``non-condensing'' technology as the performance-related
feature, suggesting that the agency should instead focus on Category I
venting. According to USB, Category II, III, and IV (as well as non-
categorized direct vent furnaces and boilers) are currently available
using non-condensing technology, but many of the same problems
identified in the Gas Industry Petition still may arise. USB stated
that non-condensing Category II, III, and IV appliances generally share
the same venting consumer utility issues as condensing appliances and
equipment, and that they can theoretically operate at higher
efficiencies than Category I. However, the commenter argued that
elimination of models using Category I venting (under a standard level
that could only
[[Page 60095]]
be met by products/equipment using Category II, III, or IV venting)
would create the same problems which DOE has sought to address through
its proposed revised interpretation. USB commented that vent
categorization has been recognized for over 20 years by manufacturers,
utilities, and code enforcement officials as the best way to determine
how to safely vent appliances. (USB, No. 78 at pp. 1-2) Burnham
Holdings, International (BHI) made essentially identical arguments to
those raised by USB, and Crown Boiler offered a similar comment that
DOE should focus product classes based upon type of venting used,
rather than the use of condensing or non-condensing technology. (BHI,
No. 83 at pp. 1-2; Crown Boiler, No. 79 at pp. 1-2)
In response to the comments from USB, BHI, and Crown Boiler
suggesting that DOE focus on the type of venting as the performance
related feature rather than non-condensing operation, DOE notes that,
while separate from the product/equipment, the venting system is
inextricably linked to the design of the product. Because the venting
system is a separate component from the product, DOE initially sought
to focus on non-condensing operation as the performance-related
characteristic of the product itself. However, after further
considering these commenters' concerns, DOE understands that
interpreting non-condensing operation to be a feature could still
result in a reduction of utility for certain consumers, because some
non-condensing appliances require connection to venting systems other
than Category I and would likely result in many of the installation
issues that DOE seeks to address through this interpretive rulemaking.
As a result, DOE further considered what constitutes a ``feature''
or ``performance-related characteristic'' under EPCA, and in
particular, whether such feature might be based on venting system
compatibility of the product. Because the most significant concerns
regarding venting system compatibility involve use of gas appliances
that are not compatible with Category I venting in place of gas
appliances that are compatible with Category I venting, DOE considered
whether compatibility with Category I venting should be a protected
feature under EPCA. Moreover, DOE also considered whether any impact to
venting system compatibility resulting from increasing product or
equipment efficiency standards would cause the aforementioned issues.
For example, it is conceivable that if a more-stringent standard
results in an appliance compatible with Category III venting systems
being replaced with an appliance that is only compatible with Category
IV venting systems, many of the same issues might arise as have been
identified for the replacement of appliances compatible with Category I
venting systems. Thus, compatibility with venting systems of any type
could conceivably be a feature that consumers desire and which DOE must
consider when evaluating more-stringent standards. Under such an
interpretation, compatibility with each existing venting technology
would be a feature under EPCA that could require separate classes based
on compatibility with venting systems for each venting category, and
uncategorized venting systems could also require separate classes.
The first approach (i.e., considering only Category I venting
compatibility as a performance-related feature) has the benefit of
potentially simplifying the regulatory scheme in comparison to the
latter approach, which could require classification of products in each
venting category separately. The first approach would result in more
streamlined regulations and product/equipment classes for gas
appliances, as compared to the latter approach, while resolving the
most significant issues involved with venting system compatibility. The
latter approach potentially would address more comprehensively possible
issues related to the compatibility of an appliance with venting
systems, but it would make the regulatory scheme more complex and could
create extra compliance burdens, as the number of product/equipment
classes for vented appliances could increase greatly (e.g., each
current class of gas appliance could require further segmentation by
each of the four categories of venting and also could need to account
for gas appliances that are compatible with uncategorized venting
systems). Both approaches would have the benefit of not limiting DOE to
consideration of the combustion technology that provides the function
of the appliance (e.g., condensing, non-condensing), about which some
commenters have expressed concerns. Instead, DOE's focus would be to
ensure compatibility with existing venting, thereby allowing DOE to be
responsive to potential future technological advances in venting system
compatibility.
Based on these considerations, DOE is considering a proposed
alternative interpretation, in addition to the interpretation proposed
in the July 2019 notice of proposed interpretive rule. As discussed
previously, the July 2019 notice of proposed interpretive rule proposed
that adoption of energy conservation standards that would limit the
market to natural gas and/or propane gas 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) and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) (and as applicable
in certain cases through 42 U.S.C. 6316(a)). In this document, DOE is
also proposing an interpretation that an appliance's compatibility with
a venting system is a performance-related characteristic of that
appliance under EPCA. Specifically, DOE is also considering an
interpretation that, based on current appliance/venting system
compatibility limitations, the adoption of energy conservation
standards that would limit the market to natural gas and/or propane gas
furnaces, water heaters, or similarly-situated products/equipment
(where permitted by EPCA) that are incompatible with any existing
venting systems available on the market would result in the
unavailability of a performance related feature within the meaning of
42 U.S.C. 6295(o)(4) and 42 U.S.C. 6313(a)(6)(B)(iii)(II)(aa) (and as
applicable in certain cases through 42 U.S.C. 6316(a)). DOE considered
limiting its proposal to include only that compatibility with Category
I venting systems is a feature, as suggested by the commenters, and
seeks comment on doing so. In addition, DOE is considering a broader
approach taking into consideration all venting categories since
concerns similar to those that gave rise to the petition could
conceivably occur for appliances that are compatible with venting
systems other than Category I. The Department welcomes input on both
potential approaches, and it will consider adopting either or the
original proposed approach in its final interpretation, in light of the
information received both previously and in response to today's
request.
DOE will consider all comments received on the issue of the
potential utility associated with ensuring venting system
compatibility, as well as comments on the potential for added
regulatory complexity from the alternative approaches, before making a
final decision.
IV. Public Participation
Submission of Comments
DOE invites all interested parties to submit in writing by the date
listed in the DATES section of this document, comments and information
regarding
[[Page 60096]]
this supplemental proposed interpretive rule.
Submitting comments via http://www.regulations.gov. The http://www.regulations.gov web page will require you to provide your name and
contact information prior to submitting comments. 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. 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, or postal mail.
Comments and documents via email, hand delivery, or postal mail will
also 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 on 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 in your cover letter each time you
submit comments, data, documents, and other information to DOE. If you
submit via postal mail or hand delivery, please provide all items on a
CD, if feasible, in which case it is not necessary to submit printed
copies. No telefacsimiles (faxes) will be accepted.
Comments, data, and other information submitted 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 include any 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 two well-marked copies: One copy
of the document marked ``Confidential'' including all the information
believed to be confidential, and one copy of the document marked ``Non-
confidential'' with the information believed to be confidential
deleted. Submit these documents via email or on a CD, if feasible. DOE
will make its own determination about the confidential status of the
information and treat it according to its determination.
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
its process for considering regulatory actions. DOE actively encourages
the participation and interaction of the public during the comment
period. Interactions with and between members of the public provide a
balanced discussion of the issues and assist DOE in determining how to
proceed with a regulatory action. Anyone who wishes to be added to DOE
mailing list to receive future notices and information about this
matter should contact Appliance and Equipment Standards Program staff
at (202) 287-1445 or via email at
[email protected].
V. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this
supplemental notice of proposed interpretive rule.
Signing Authority
This document of the Department of Energy was signed on September
16, 2020, by Daniel R Simmons, Assistant Secretary for 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 September 16, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-20773 Filed 9-23-20; 8:45 am]
BILLING CODE 6450-01-P