[Federal Register Volume 87, Number 162 (Tuesday, August 23, 2022)]
[Proposed Rules]
[Pages 51734-51809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17900]
[[Page 51733]]
Vol. 87
Tuesday,
No. 162
August 23, 2022
Part II
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for Consumer
Clothes Dryers; Proposed Rule
Federal Register / Vol. 87 , No. 162 / Tuesday, August 23, 2022 /
Proposed Rules
[[Page 51734]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2014-BT-STD-0058]
RIN 1904-AD99
Energy Conservation Program: Energy Conservation Standards for
Consumer Clothes Dryers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and announcement of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including consumer
clothes dryers. EPCA also requires the U.S. Department of Energy
(``DOE'') to periodically determine whether more stringent standards
would be technologically feasible and economically justified, and would
result in significant energy savings. In this notice of proposed
rulemaking (``NOPR''), DOE proposes amended energy conservation
standards for consumer clothes dryers, and also announces a public
meeting to receive comment on these proposed standards and associated
analyses and results.
DATES:
Meeting: DOE will hold a public meeting via webinar on September
13, 2022, from 1:00 p.m. to 4:00 p.m. See section VII, ``Public
Participation'' for webinar registration information, participant
instructions and information about the capabilities available to
webinar participants.
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than October 24, 2022.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the Department of Justice contact listed in
the ADDRESSES section on or before September 22, 2022.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at www.regulations.gov. Follow the
instructions for submitting comments. Alternatively, interested persons
may submit comments, identified by docket number EERE-2014-BT-STD-0058,
by any of the following methods:
1. Federal eRulemaking Portal: www.regulations.gov. Follow the
instructions for submitting comments.
2. Email: to [email protected]. Include docket
number EERE-2014-BT-STD-0058 in the subject line of the message.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section IV 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 www.regulations.gov. All documents in the
docket are listed in the www.regulations.gov index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2014-BT-STD-0058. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section VII for information on how to submit comments through
www.regulations.gov.
Written comments regarding the burden-hour estimates or other
aspects of the collection-of-information requirements contained in this
proposed rule may be submitted to Office of Energy Efficiency and
Renewable Energy following the instructions at www.RegInfo.gov.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at [email protected] on or
before the date specified in the DATES section. Please indicate in the
``Subject'' line of your email the title and Docket Number of this
rulemaking notice.
FOR FURTHER INFORMATION CONTACT:
Mr. Bryan Berringer, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
[email protected].
Ms. Kathryn McIntosh, U.S. Department of Energy, Office of the
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC
20585-0121. Telephone: (202) 586-2002. Email:
[email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. Current Process
C. Deviation From Appendix A
III. General Discussion
A. Product Classes and Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared To Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Scope of Coverage and Product Classes
2. Technology Options
B. Screening Analysis
1. Screened-Out Technologies
a. Thermoelectric Heating, Electric Only
b. Microwave, Electric Only
c. Indirect Heating
d. RF Drying, Electric Only
e. Ultrasonic Drying, Electric Only
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency Levels
b. Incremental Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
[[Page 51735]]
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Product and Capital Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Heat Pump Technology
b. Preservation of Electromechanical Controls
c. Cost Increases and Component Shortages
4. Discussion of MIA Comments
K. Emissions Analysis
1. Air Quality Regulations Incorporated in DOE's Analysis
L. Monetizing Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Consumer Clothes
Dryers Standards
2. Annualized Benefits and Costs of the Proposed Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
C. Review Under the Paperwork Reduction Act
D. Review Under the National Environmental Policy Act of 1969
E. Review Under Executive Order 13132
F. Review Under Executive Order 12988
G. Review Under the Unfunded Mandates Reform Act of 1995
H. Review Under the Treasury and General Government
Appropriations Act, 1999
I. Review Under Executive Order 12630
J. Review Under the Treasury and General Government
Appropriations Act, 2001
K. Review Under Executive Order 13211
L. Information Quality
VII. Public Participation
A. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
Title III, Part B \1\ of EPCA,\2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include consumer clothes dryers, the
subject of this proposed rulemaking.
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\1\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
\2\ All references to EPCA in this document refer to the statute
as amended through the Infrastructure Investment and Jobs Act,
Public Law 117-58 (Nov. 15, 2021).
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later
than 6 years after issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination that
standards for the product do not need to be amended, or a NOPR
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6295(m))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for consumer clothes dryers. The proposed standards, which are
expressed as the combined energy factor as determined in accordance
with the appendix D2 test procedure (``CEFD2'') in pounds
per kilowatt-hour (``lb/kWh'')--a metric based on the clothes dryer
test load weight in pounds (``lb'') divided by the sum of ``active
mode'' and ``inactive mode'' per-cycle energy use in kilowatt-hours
(``kWh''), are shown in Table I.1. These proposed standards, if
adopted, would apply to all consumer clothes dryers listed in Table I.1
manufactured in, or imported into, the United States starting on the
date 3 years after the publication of the final rule for this proposed
rulemaking.
Table I.1--Proposed Energy Conservation Standards for Consumer Clothes
Dryers as Measured Under Appendix D2
------------------------------------------------------------------------
CEFD2 (lb/
Product class kWh)
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1. Electric, Standard (4.4 cubic feet (``ft\3\'') or 3.93
greater capacity)......................................
2. Electric, Compact (120 volts (``V'')) (less than 4.4 4.33
ft\3\ capacity)........................................
3. Vented Electric, Compact (240V) (less than 4.4 ft\3\ 3.57
capacity)..............................................
4. Vented Gas, Standard (4.4 ft\3\ or greater capacity). 3.48
5. Vented Gas, Compact (less than 4.4 ft\3\ capacity)... 2.02
6. Ventless Electric, Compact (240V) (less than 4.4 2.68
ft\3\ capacity)........................................
7. Ventless Electric, Combination Washer-Dryer.......... 2.33
------------------------------------------------------------------------
[[Page 51736]]
DOE also considered more-stringent energy efficiency levels as
potential standards, and is still considering them in this proposed
rulemaking. DOE may also consider adopting more stringent-energy
efficiency levels for some or all classes. However, DOE has tentatively
concluded at this time that the potential burdens of the more-stringent
energy efficiency levels would outweigh the projected benefits.
A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of consumer clothes dryers, as measured
by the average life-cycle cost (``LCC'') savings and the simple payback
period (``PBP'').\3\ The average LCC savings are positive for all
product classes, and the PBP is less than the average lifetime of
consumer clothes dryers, which is estimated to be 14 years (see section
IV.F of this document).
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\3\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Consumer Clothes Dryers
------------------------------------------------------------------------
Average LCC Simple payback
Consumer clothes dryer class savings (2020$) period (years)
------------------------------------------------------------------------
Electric, Standard (4.4 ft\3\ or $578 0.55
greater capacity)..................
Electric, Compact (120V) (less than 160 1.81
4.4 ft\3\ capacity)................
Vented Electric, Compact (240V) 192 1.62
(less than 4.4 ft\3\ capacity).....
Vented Gas, Standard (4.4 ft\3\ or 198 1.95
greater capacity)..................
Vented Gas, Compact (less than 4.4 25.2 5.07
ft\3\ capacity)....................
Ventless Electric, Compact (240V) 145 0.33
(less than 4.4 ft\3\ capacity).....
Ventless Electric, Combination 15.1 0.00
Washer-Dryer.......................
------------------------------------------------------------------------
DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.
B. Impact on Manufacturers
The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the base year through the
end of the analysis period (2022-2056). Using a real discount rate of
7.5 percent, DOE estimates that the INPV for manufacturers of consumer
clothes dryers in the case without amended standards is $1,810.1
million in 2020$. Under the proposed standards, the change in INPV is
estimated to range from -6.4 percent to -4.5 percent, which is
approximately $115.6 million to $81.6 million. In order to bring
products into compliance with amended standards, it is estimated that
the industry would incur total conversion costs of $149.7 million.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.
C. National Benefits and Costs 4
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\4\ All monetary values in this document are expressed in 2020
dollars.
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DOE's analyses indicate that the proposed energy conservation
standards for consumer clothes dryers would save a significant amount
of energy. Relative to the case without amended standards, the lifetime
energy savings for consumer clothes dryers purchased in the 30-year
period that begins in the anticipated year of compliance with the
amended standards (2027-2056) amount to 3.11 quadrillion British
thermal units (``Btu''), or quads.\5\
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\5\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for consumer clothes dryers ranges
from $9.07 billion (at a 7-percent discount rate) to $20.8 billion (at
a 3-percent discount rate). This NPV expresses the estimated total
value of future operating-cost savings minus the estimated increased
product costs for consumer clothes dryers purchased in 2027-2056.
In addition, the proposed standards for consumer clothes dryers are
projected to yield significant environmental benefits. DOE estimates
that the proposed standards would result in cumulative emission
reductions (over the same period as for energy savings) of 116 million
metric tons (``Mt'') \6\ of carbon dioxide (``CO2''), 42.6
thousand tons of sulfur dioxide (``SO2''), 181 thousand tons
of nitrogen oxides (``NOX''), 883 thousand tons of methane
(``CH4''), 1.09 thousand tons of nitrous oxide
(``N2O''), and 0.26 tons of mercury (``Hg'').\7\
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2021 (``AEO2021''). AEO2021 represents current Federal and
State legislation and final implementation of regulations as of the
time of its preparation. See section IV.K of this document for
further discussion of AEO2021 assumptions that effect air pollutant
emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases using four different estimates of the social cost of
CO2 (``SC-CO2''), the social cost of methane
(``SC-CH4''), and the social cost of nitrous oxide (``SC-
N2O''). Together these represent the social cost of
greenhouse gases (SC-GHG). DOE used interim SC-GHG values developed by
an Interagency Working Group on the Social Cost of Greenhouse Gases
(``IWG'').\8\ The derivation of these values is discussed in section
IV.L of this document. For presentational purposes, the climate
benefits associated with the average SC-GHG at a 3-percent discount
rate are estimated to be $5.42 billion. DOE does not have a single
central SC-GHG point estimate and it emphasizes the
[[Page 51737]]
importance and value of considering the benefits calculated using all
four SC-GHG estimates.\9\
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\8\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC (February 2021) (Available at: www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf)
(Last accessed March 17, 2022).
\9\ On March 16, 2022, the Fifth Circuit Court of Appeals (No.
22-30087) granted the Federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction
issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is
no longer in effect, pending resolution of the Federal government's
appeal of that injunction or a further court order. Among other
things, the preliminary injunction enjoined the defendants in that
case from ``adopting, employing, treating as binding, or relying
upon'' the interim estimates of the social cost of greenhouse
gases--which were issued by the Interagency Working Group on the
Social Cost of Greenhouse Gases on February 26, 2021--to monetize
the benefits of reducing greenhouse gas emissions. As reflected in
this rule, DOE has reverted to its approach prior to the injunction
and presents monetized greenhouse gas abatement benefits where
appropriate and permissible under law.
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DOE also estimates health benefits from SO2 and
NOX emissions reductions. DOE estimates the present value of
the health benefits would be $3.59 billion using a 7-percent discount
rate, and $9.14 billion using a 3-percent discount rate. DOE is
currently only monetizing (for SO2 and NOX)
PM2.5 precursor health benefits and (for NOX)
ozone precursor health benefits but will continue to assess the ability
to monetize other effects such as health benefits from reductions in
direct PM2.5 emissions.
Table I.3 summarizes the monetized benefits and costs expected to
result from the proposed standards for consumer clothes dryers. There
are other important unquantified effects, including certain
unquantified climate benefits, unquantified public health benefits from
the reduction of toxic air pollutants and other emissions, unquantified
energy security benefits, and distributional effects, among others.
Table I.3--Summary of Monetized Economic Benefits and Costs of Proposed
Energy Conservation Standards for Consumer Clothes Dryers
[TSL 3]
------------------------------------------------------------------------
Billion 2020$
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 22.2
Climate Benefits *.................................... 5.42
Health Benefits **.................................... 9.14
Total Benefits [dagger]............................... 36.8
Consumer Incremental Product Costs [Dagger]........... 1.36
Net Benefits.......................................... 35.4
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings....................... 9.83
Climate Benefits *.................................... 5.42
Health Benefits **.................................... 3.59
Total Benefits [dagger]............................... 18.8
Consumer Incremental Product Costs [Dagger]........... 0.76
Net Benefits.......................................... 18.1
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Note: This table presents the costs and benefits associated with
consumer clothes dryers shipped in 2027-2056. These results include
benefits to consumers which accrue after 2056 from the products
shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate), as shown
in Table V.36, Table V.38, and Table V.40. Together these represent
the global social cost of greenhouse gases (SC-GHG). For
presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3 percent discount rate are shown, but
the Department does not have a single central SC-GHG point estimate.
See section. IV.L of this document for more details. On March 16,
2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the
Federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v.
Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth
Circuit's order, the preliminary injunction is no longer in effect,
pending resolution of the Federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and presents
monetized greenhouse gas abatement benefits where appropriate and
permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX
and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
precursor health benefits and (for NOX) ozone precursor health
benefits, but will continue to assess the ability to monetize other
effects such as health benefits from reductions in direct PM2.5
emissions. The health benefits are presented at real discount rates of
3 and 7 percent. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
health benefits that can be monetized. For presentation purposes,
total and net benefits for both the 3-percent and 7-percent cases are
presented using the average SC-GHG with 3-percent discount rate, but
the Department does not have a single central SC-GHG point estimate.
DOE emphasizes the importance and value of considering the benefits
calculated using all four SC-GHG estimates. See Table V.46 for net
benefits using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
The benefits and costs of the proposed standards, for consumer
clothes dryers sold in 2027-2056, can also be expressed in terms of
annualized values. The monetary values for the total annualized net
benefits are (1) the reduced consumer operating costs, minus (2) the
increase in product purchase prices and installation costs, plus (3)
the value of the benefits of NOX and SO2 emission
reductions, all annualized.\10\
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\10\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2021, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2021. The calculation uses discount rates of 3 and 7 percent for
all costs and benefits. Using the present value, DOE then calculated
the fixed annual payment over a 30-year period, starting in the
compliance year, that yields the same present value.
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[[Page 51738]]
The national operating savings are domestic private U.S. consumer
monetary savings that occur as a result of purchasing the covered
products and are measured for the lifetime of consumer clothes dryers
shipped in 2027-2056. The benefits associated with reduced emissions
achieved as a result of the proposed standards are also calculated
based on the lifetime of consumer clothes dryers shipped in 2027-2056.
Total benefits for both the 3-percent and 7-percent cases are presented
using the average GHG social costs with 3-percent discount rate.
Estimates of SC-GHG values are presented for all four discount rates in
section V.B.8 of this document. Estimates of annualized benefits and
costs of the proposed standards are shown in Table I.4. The results
under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from reduced SO2 and NOX
emissions, the estimated cost of the standards proposed in this rule is
$85.7 million per year in increased equipment costs, while the
estimated annual benefits are $1,111 million in reduced equipment
operating costs, $320 million in climate benefits, and $406 million in
health benefits (accounting for reduced NOX emissions and
increased SO2 emissions). In this case, the net benefit
would amount to $1,752 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $80.7 million per year in
increased equipment costs, while the estimated annual benefits are
$1,313 million in reduced operating costs, $320 million in climate
benefits, and $541 million in health benefits (accounting for reduced
NOX emissions and increased SO2 emissions). In
this case, the net benefit would amount to $2,094 million per year.
Table I.4--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Consumer
Clothes Dryers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2020$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 1,313 1,227 1,403
Climate Benefits *.............................................. 320 311 327
Health Benefits **.............................................. 541 526 551
Total Benefits [dagger]......................................... 2,174 2,065 2,280
Consumer Incremental Product Costs [Dagger]..................... 80.7 80.5 76.6
Net Benefits.................................................... 2,094 1,984 2,204
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 1,111 1,050 1,178
Climate Benefits *.............................................. 320 311 327
Health Benefits **.............................................. 406 395 413
Total Benefits [dagger]......................................... 1,837 1,757 1,917
Consumer Incremental Product Costs [Dagger]..................... 85.7 85.3 82.4
Net Benefits.................................................... 1,752 1,671 1,835
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped in 2027-2056.
These results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the global SC-GHG (see section IV.L of this
document). For presentational purposes of this table, the climate benefits associated with the average SC-GHG
at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate, and it emphasizes the importance and value of considering the benefits calculated using all four SC-
GHG estimates. On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-30087) granted the federal
government's emergency motion for stay pending appeal of the February 11, 2022, preliminary injunction issued
in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of the Fifth Circuit's order, the
preliminary injunction is no longer in effect, pending resolution of the federal government's appeal of that
injunction or a further court order. Among other things, the preliminary injunction enjoined the defendants in
that case from ``adopting, employing, treating as binding, or relying upon'' the interim estimates of the
social cost of greenhouse gases--which were issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of reducing greenhouse gas emissions. As
reflected in this rule, DOE has reverted to its approach prior to the injunction and presents monetized
greenhouse gas abatement benefits where appropriate and permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K and IV.L of this document.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified, and would result in the
significant conservation of energy. Specifically, with regards to
technological feasibility, products achieving these standard levels are
already commercially available for all product classes covered by this
proposal. As for economic justification,
[[Page 51739]]
DOE's analysis shows that the benefits of the proposed standard exceed,
to a great extent, the burdens of the proposed standards. Using a 7-
percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, the estimated
cost of the proposed standards for consumer clothes dryers is $85.7
million per year in increased product costs, while the estimated annual
benefits are $1,111 million in reduced product operating costs, and
$406 million in health benefits. The net benefit amounts to $1,752
million per year.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\11\ For
example, some covered products and equipment have substantial energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. In evaluating the
significance of energy savings, DOE considers differences in primary
energy and FFC effects for different covered products and equipment
when determining whether energy savings are significant. Primary energy
and FFC effects include the energy consumed in electricity production
(depending on load shape), in distribution and transmission, and in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and thus present a more complete picture
of the impacts of energy conservation standards. Accordingly, DOE
evaluates the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------
\11\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
As previously mentioned, the standards are projected to result in
estimated national energy savings of 3.11 quads, the equivalent of the
electricity consumption of 78 million residential homes in one
year.\12\ DOE has initially determined the energy savings from the
proposed standard levels are ``significant'' within the meaning of 42
U.S.C. 6295(o)(3)(B). A more detailed discussion of the basis for these
tentative conclusions is contained in the remainder of this document
and the accompanying technical support document (``TSD'').
---------------------------------------------------------------------------
\12\ U.S. Environmental Protection Agency, Greenhouse Gas
Equivalencies Calculator. Available at www.epa.gov/energy/greenhouse-gas-equivalencies-calculator.
---------------------------------------------------------------------------
DOE also considered more-stringent energy efficiency levels as
potential standards, and is still considering them in this proposed
rulemaking. However, DOE has tentatively concluded that the potential
burdens of the more-stringent energy efficiency levels would outweigh
the projected benefits.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed standards, or some combination of
level(s) that incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
consumer clothes dryers.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include consumer
clothes dryers, the subject of this document. (42 U.S.C. 6292(a)(8))
EPCA prescribed energy conservation standards for these products (42
U.S.C. 6295(g)(3)), and directs DOE to conduct future rulemakings to
determine whether to amend these standards. (42 U.S.C. 6295(g)(4)) EPCA
further provides that, not later than 6 years after the issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a NOPR including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(1)).
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of 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 for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (See 42
U.S.C. 6297(d)).
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly,
DOE must use these test procedures to determine whether the products
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The
DOE test procedures for consumer clothes dryers appear at title 10 of
the Code of Federal Regulations (``CFR'') part 430, subpart B, appendix
D1 and appendix D2 (``appendix D1'' and ``appendix D2'', respectively).
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including consumer clothes
dryers. Any new or amended standard for a covered product must be
designed to achieve the maximum improvement in energy efficiency that
the Secretary of Energy determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A) and 42 U.S.C.
6295(o)(3)(B)) Furthermore, DOE may not adopt any standard that would
not result in the significant conservation of energy. (42 U.S.C.
6295(o)(3) (B))
Moreover, DOE may not prescribe a standard if DOE determines by
rule that the standard is not technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed
standard is economically justified, DOE must determine whether the
benefits of the standard exceed its burdens. (42 U.S.C.
6295(o)(2)(B)(i)) DOE must make this determination after receiving
comments
[[Page 51740]]
on the proposed standard, and by considering, to the greatest extent
practicable, the following seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated
average life of the covered products in the type (or class) compared
to any increase in the price, initial charges, or maintenance
expenses for the covered products that are likely to result from the
standard;
(3) The total projected amount of energy (or as applicable,
water) savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the
covered products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'')
considers relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
product classes. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE deems appropriate. Id. Any rule prescribing such a
standard must include an explanation of the basis on which such higher
or lower level was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE's current test procedures for consumer clothes
dryers address standby mode and off mode energy use. In this
rulemaking, DOE intends to incorporate such energy use into any amended
energy conservation standards that it may adopt.
B. Background
1. Current Standards
The most recent standards rulemaking for consumer clothes dryers
was promulgated on April 21, 2011. Specifically, DOE published a direct
final rule (the ``2011 Direct Final Rule'') amending the energy
conservation standard for consumer clothes dryers manufactured on and
after January 1, 2015. 76 FR 22454 (Apr. 21, 2011). The energy
conservation standards, as amended in the 2011 Direct Final Rule,
represent the current standards and are in accordance with the appendix
D1 test procedure as discussed in section III.B of this document. They
are based on combined energy factor (``CEF'')--a metric that
incorporates energy use in active mode, standby mode, and off mode.
Compliance with the current standards was required as of January 1,
2015. 76 FR 52852 (Aug. 24, 2011).
Even though DOE maintained the same energy-efficiency descriptor
for both appendix D1 and appendix D2, DOE notes that the CEF values are
not equivalent because of the extensive differences in test methods. To
avoid potential confusion that would result from using the same
efficiency descriptor for both test procedures as it relates to the
standards discussed in this document, DOE is including a ``D1'' or
``D2'' subscript when referring to the appendix D1 CEF and appendix D2
CEF, respectively (i.e., CEFD1 and CEFD2), in
this document.\13\
---------------------------------------------------------------------------
\13\ Note that while the current standards are based on CEF as
determined in accordance with appendix D1, manufacturers are
permitted to use the appendix D2 test procedure to comply with the
current standards, as long as they use a single appendix for all
representations.
---------------------------------------------------------------------------
These current consumer clothes dryer standards as measured under
appendix D1 are set forth in DOE's regulations at 10 CFR 430.32(h) and
are repeated in Table II.1. DOE has conducted the rulemaking analysis
for this proposed rule under the appendix D2 test procedure because
compliance will be required concurrent with amended energy
conservation, if finalized. DOE discusses additional details about the
engineering baseline in section IV.C.1 of this document.
[[Page 51741]]
Table II.1--Federal Energy Conservation Standards for Consumer Clothes
Dryers as Measured Under Appendix D1
------------------------------------------------------------------------
CEFD1 (lbs/
Product class kWh)
------------------------------------------------------------------------
(A) Vented Electric, Standard (4.4 ft \3\ or greater 3.73
capacity)..............................................
(B) Vented Electric, Compact (120V) (less than 4.4 ft 3.61
\3\ capacity)..........................................
(C) Vented Electric, Compact (240V) (less than 4.4 ft 3.27
\3\ capacity)..........................................
(D) Vented Gas.......................................... 3.30
(E) Ventless Electric, Compact (240V) (less than 4.4 ft 2.55
\3\ capacity)..........................................
(F) Ventless Electric, Combination Washer-Dryer......... 2.08
------------------------------------------------------------------------
On December 16, 2020, DOE published a final rule establishing a
separate product class for consumer clothes dryers that offer cycle
times for a ``normal'' cycle \14\ of less than 30 minutes. 85 FR 81359
(Dec. 16, 2020) (``December 2020 Final Rule''). Because no such
``short-cycle'' consumer clothes dryers are currently on the market in
the United States, DOE did not include analysis of this newly
established product class in the preliminary TSD.
---------------------------------------------------------------------------
\14\ Section 3.3.2 of appendix D2 requires that the ``normal''
program shall be selected for the test cycle; for clothes dryers
that do not have a ``normal'' program, the cycle recommended by the
manufacturer for drying cotton or linen clothes shall be selected.
---------------------------------------------------------------------------
While these short-cycle products had previously been subject to
energy and water conservation standards, the December 2020 Final Rule
stated that short-cycle product classes were no longer subject to any
water or energy conservation standards. 85 FR 68723, 68742; 85 FR
81359, 81376. As a result, the short-cycle products were allowed to
consume unlimited amounts of energy and water.
As discussed in a NOPR subsequently published on August 11, 2021,
DOE noted that in amending the standards for short-cycle products to
allow for unlimited water and energy usage, DOE failed to consider
whether the amended standards met the criteria in EPCA for issuing an
amended standard. Notably, among other things, DOE did not determine,
as required, that the amended standards for short-cycle products were
designed to achieve the maximum improvement in energy efficiency that
is technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A)) 86 FR 43970, 43971. DOE has since published a final rule
on January 19, 2022, which revoked the December 2020 Final Rule that
improperly promulgated standards for this new product class and
reinstated the prior product classes and applicable standards for these
covered products. 87 FR 2673, 2686. Therefore, DOE did not include
analysis of a short-cycle product class in the NOPR TSD.
2. Current Process
DOE published a request for information (``RFI'') on March 27, 2015
(the ``March 2015 RFI'') describing the approaches and methods DOE will
use in evaluating potential amended standards for consumer clothes
dryers. 80 FR 16309 (Mar. 27, 2015). In addition, the RFI solicited
information from the public to help DOE determine whether amended
standards for consumer clothes dryers would result in a significant
amount of additional energy savings, and whether those standards would
be technologically feasible and economically justified. Id. The March
2015 RFI is available at www.regulations.gov/document/EERE-2014-BT-STD-0058-0001.
DOE published a notice of public webinar and availability of the
preliminary TSD on April 19, 2021 (``April 2021 Preliminary Analysis'')
to collect data and information to inform its decision consistent with
its obligations under EPCA. 86 FR 20327. DOE subsequently held a public
webinar on May 26, 2021, to discuss and receive comments on the
preliminary TSD. The preliminary TSD that presented the methodology and
results of the preliminary analysis is available at:
www.regulations.gov/document/EERE-2014-BT-STD-0058-0020.
DOE received comments in response to the April 2021 Preliminary
Analysis from the interested parties listed in Table II.2.
Table II.2--April 2021 Preliminary Analysis Written Comments
------------------------------------------------------------------------
Commenter(s) Abbreviation Commenter type
------------------------------------------------------------------------
Association of Home Appliance AHAM.............. Trade Association.
Manufacturers.
Appliance Standards Awareness ASAP, NRDC........ Efficiency
Project, Natural Resources Organizations.
Defense Council.
California Investor-Owned California IOUs... Utilities.
Utilities.
GE Appliances, a Haier Company.. GEA............... Manufacturer.
Whirlpool Corporation........... Whirlpool......... Manufacturer.
Samsung Electronics America..... Samsung........... Manufacturer.
Northwest Energy Efficiency NEEA.............. Efficiency
Alliance. Organization.
Institute for Policy Integrity IPI............... Efficiency
at NYU School of Law. Organization.
------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\15\
---------------------------------------------------------------------------
\15\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for consumer clothes dryers. (Docket
No. EERE-2014-BT-STD-0058, which is maintained at
www.regulations.gov). The references are arranged as follows:
(commenter name, comment docket ID number, page of that document).
---------------------------------------------------------------------------
In response to the preliminary analysis, AHAM and Whirlpool stated
that as laundry products are designed and used in pairs, DOE should
harmonize its rulemaking processes such that the compliance dates for
residential clothes washers and consumer clothes dryers are, if not
identical, very close in time. According to AHAM and Whirlpool, this
would
[[Page 51742]]
greatly reduce burden on manufacturers as they work to design products
to meet amended standards as well as on retailers and consumers as
products are re-floored leading up to and on the compliance date of any
amended energy conservation standards. (AHAM, No. 23 at p. 6;
Whirlpool, No. 27 at p. 13)
DOE appreciates the comments from AHAM and Whirlpool and recognizes
the benefits of aligning the schedule for future amended standards for
both products and may investigate harmonization of future rulemaking
processes.
Additionally, AHAM stated its strong opposition to Natural
Resources Canada's (``NRCan'') proposal to make ENERGY STAR levels the
minimum energy conservation standard for clothes dryers in Canada and
strongly urged DOE to not only weigh in against NRCan's approach
through the U.S.-Canada Regulatory Cooperation Council and under the
recently signed Memorandum of Understanding on energy cooperation, but
also to account for the burden of any misalignment in DOE's analysis.
According to AHAM it is critical that amended standards are coordinated
in both substance and timing in order to maintain a consistent U.S.-
Canadian market for home appliances. (AHAM, No. 23 at p. 9)
DOE notes that review of efficiency standards efforts in other
regions is discussed in chapter 3 of the NOPR TSD. DOE will continue to
review and track these efforts as part of its analysis.
C. Deviation From Appendix A
Section 3(a) of 10 CFR part 430, subpart C, appendix A (``appendix
A'') specifies that, in those instances where the Department may find
it necessary or appropriate to deviate from the procedures,
interpretations or policies that are generally applicable to the
development of energy conservation standards and test procedures, DOE
will provide interested parties with notice of the deviation and an
explanation. DOE finds that it is appropriate to deviate from its
existing procedures by publishing this NOPR instead of releasing an
additional framework document because such activity would be redundant
due to the information previously obtained through the March 2015 RFI
and the preliminary analysis. Additionally, DOE finds it necessary to
deviate from its existing procedures by providing a 60-day comment
period for this NOPR because interested parties received sufficient
time to comment on earlier rulemaking documents that relied on many of
the same analytical assumptions and approaches presented in this
proposal.
In accordance with section 3(a) of appendix A, DOE notes that it is
deviating from the provision in appendix A regarding the pre-NOPR
stages for an energy conservation standards rulemaking. Section 6(a)(2)
of appendix A states that if the Department determines it is
appropriate to proceed with a rulemaking, the preliminary stages of a
rulemaking to issue or amend an energy conservation standard that DOE
will undertake will be a framework document and preliminary analysis,
or an advance notice of proposed rulemaking. DOE is opting to deviate
from this step by publishing a NOPR following the preliminary analysis
without a framework document. A framework document is intended to
introduce and summarize the various analyses DOE conducts during the
rulemaking process and requests initial feedback from interested
parties. As discussed, prior to the preliminary analysis and this NOPR,
DOE published the March 2015 RFI, in which DOE identified and sought
comment on the technical and economic analyses to be conducted in
determining whether amended energy conservation standards would be
justified. See 80 FR 16309. DOE provided a 45-day comment period for
the RFI. Id. Comments received following publication of the March 2015
RFI assisted DOE in identifying and resolving issues related to the
preliminary analyses. 86 FR 20327, 20330. Given the level of comments
received to the March 2015 RFI, publication of a framework document
would be largely redundant with the published RFI and preliminary
analysis. As such, DOE is deviating from the procedures provided in
appendix A and is not publishing a framework document prior to the
publication of this NOPR. The Department has determined that it is
appropriate to proceed with this proposal due to the information
obtained through the March 2015 RFI and the preliminary analysis.
Section 6(f)(2) of appendix A specifies that the length of the
public comment period for a NOPR will vary depending upon the
circumstances of the particular rulemaking, but will not be less than
75 calendar days. For this NOPR, DOE has opted to instead provide a 60-
day comment period. As stated previously DOE requested comment in the
March 2015 RFI on the technical and economic analyses and provided
stakeholders a 45-day comment period. Additionally, DOE provided a 75-
day comment period for the preliminary analysis. 86 FR 20327. DOE has
relied on many of the same analytical assumptions and approaches as
used in the preliminary assessment and has determined that a 60-day
comment period in conjunction with the prior comment periods provides
sufficient time for interested parties to review the proposed rule and
develop comments. As such, DOE has determined that a 75-comment period
is not necessary for this proposal and that a 60-day comment period is
sufficient time for interested stakeholders to submit their comments on
this document.
III. General Discussion
DOE developed this proposal after considering oral and written
comments, data, and information from interested parties that represent
a variety of interests. The following discussion addresses issues
raised by these commenters.
A. Product Classes and Scope of Coverage
When evaluating and establishing energy conservation standards, DOE
divides covered products into product classes by the type of energy
used or by capacity or other performance-related features that justify
differing standards. In determining whether a 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
determines are appropriate. (42 U.S.C. 6295(q)) DOE's review of the
preliminary analysis and comments received in response to the
preliminary analysis, in addition to results from an updated test
sample, are discussed in more detail in section IV.A of this document.
B. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. On October
8, 2021, DOE published a final rule for the test procedure rulemaking
(86 FR 56608) (the ``October 2021 TP Final Rule''), in which it amended
appendix D1 and appendix D2, both entitled ``Uniform Test Method for
Measuring the Energy Consumption of Clothes Dryers,'' to provide
additional detail in response to questions from manufacturers and test
laboratories, including additional detail regarding the testing of
``connected'' models, dryness level selection, and the procedures for
maintaining the required heat input rate for gas clothes dryers;
[[Page 51743]]
additional detail for the test procedures for performing inactive and
off mode power measurements; specifications for the final moisture
content (``FMC'') required for testing automatic termination control
dryers; specification of a narrower scale resolution for the weighing
scale used to determine moisture content of test loads; and
specification that the test load must be weighed within 5 minutes after
a test cycle has terminated. In addition, DOE amended the test
procedures to update the estimated number of annual use cycles for
clothes dryers; provide further direction for additional provisions
within the test procedures; specify rounding requirements for all
reported values; apply consistent use of nomenclature and correct
typographical errors; remove obsolete sections of the test procedures,
including appendix D; and update the reference to the applicable
industry test procedure to the version certified by the American
National Standards Institute (``ANSI''). 86 FR 56608, 56610 DOE's
current energy conservation standards for consumer clothes dryers are
expressed in terms of CEFD1. (See 10 CFR 430.32(h)(3).)
In response to the preliminary analysis, commenters requested that
DOE finalize the test procedure rulemaking prior to proceeding with
energy conservation standards rulemaking in order to capture any
impacts a finalized test procedure would have on amended standards.
(AHAM, No. 22 at pp. 7-8; AHAM, No. 23 at pp. 2-4; California IOUs, No.
26 at pp. 4-5; GEA, No. 28 at p. 2; NEEA, No. 30 at p. 8).
At the time of the publication of the preliminary analysis, the
October 2021 TP Final Rule had not yet published; however, DOE noted in
the October 2021 TP Final Rule that the amendments adopted, other than
the amendment to the number of annual use cycles in appendix D2, would
not substantively alter the measured efficiency of consumer clothes
dryers, and that the test procedures would not be unduly burdensome to
conduct. The amendment to the number of annual use cycles specified for
calculating per-cycle standby mode and off mode energy consumption
would alter the measured energy efficiency of consumer clothes dryers
when using appendix D2, but use of the amended value in appendix D2 is
not required until such time as DOE were to amend the energy
conservations standards accounting for such changes in the test
procedure, should such amended energy conservation standards be
adopted. 86 FR 56608, 56611.
GEA, AHAM, and Samsung requested that DOE review the FMC
requirement according to appendix D2, stating that the current 2-
percent FMC requirement is too strict and not representative of
consumer preference. (GEA, No. 22 at pp. 42-44; AHAM, No. 23 at p. 4;
Samsung, No. 29 at pp. 2-3) AHAM questioned the degree of savings that
can be achieved through more stringent standards, stating that the
energy conservation standards would have less of an impact on consumer
clothes dryer energy use than the FMC itself. As stated in the October
2021 TP Final Rule, the current 2-percent FMC requirement using the DOE
test cloth was adopted as representative of approximately 5-percent FMC
for ``real-world'' clothing, based on data submitted in a joint
petition for rulemaking.\16\ DOE determined in the August 2013 Final
Rule that the specified 2-percent FMC using the DOE test load was
representative of consumer expectations for dryness of clothing in
field use. 78 FR 49608, 49620-49622, 49610-49611 (Aug. 14, 2013). DOE
has not identified any systemic problems with any consumer clothes
dryer types being able to achieve the required FMC of 2 percent or
less, such that amendments to the test procedure would be warranted and
therefore did not amend the FMC requirement for either appendix D1 or
appendix D2 in the October 2021 TP Final Rule. 86 FR 56608, 56626.
---------------------------------------------------------------------------
\16\ The petition was submitted by AHAM, Whirlpool Corporation,
General Electric Company, Electrolux, LG Electronics, Inc., BSH,
Alliance Laundry Systems, Viking Range, Sub-Zero Wolf, Friedrich A/
C, U-Line, Samsung, Sharp Electronics, Miele, Heat Controller, AGA
Marvel, Brown Stove, Haier, Fagor America, Airwell Group, Arcelik,
Fisher & Paykel, Scotsman Ice, Indesit, Kuppersbusch, Kelon, and
DeLonghi, American Council for an Energy Efficient Economy,
Appliance Standards Awareness Project, Natural Resources Defense
Council, Alliance to Save Energy, Alliance for Water Efficiency,
Northwest Power and Conservation Council, and Northeast Energy
Efficiency Partnerships, Consumer Federation of America and the
National Consumer Law Center. See Docket No. EERE-2011-BT-TP-0054,
No. 3.
---------------------------------------------------------------------------
ASAP, NRDC, and Samsung requested that DOE consider the testing of
an additional smaller test load to supplement the current test load,
stating a smaller test load could better represent consumer use and
clothes dryer efficiency. (ASAP, NRDC, No. 25 at p. 1; Samsung, No. 29
at p. 3) As stated in the October 2021 TP Final Rule, with little
expected change to the CEFD2 value when considering the
energy consumption associated with a range of load sizes, DOE does not
believe the additional testing would provide consumers with improved
information that would change their purchasing decisions compared to
the current test procedure. As such, any incremental benefit of testing
with additional load sizes would be outweighed by the significant added
burden that would be imposed by conducting such tests. For these
reasons, DOE did not propose or adopt any amendments to the test
procedure requiring additional test load sizes in the October 2021 TP
Final Rule. 86 FR 56608, 56621.
In response to the preliminary analysis, the California IOUs
presented data suggesting that consumer clothes dryers that have
identical ratings under appendix D1 can vary considerably when tested
to appendix D2, and also stated that DOE's analysis in the preliminary
TSD shows that baseline efficiency consumer clothes dryers tested under
appendix D1 significantly underperform when tested under appendix D2.
For these reasons, the California IOUs recommended that DOE use this
rulemaking or the open test procedure rulemaking to phase out appendix
D1 in favor of an updated appendix D2 test procedure. Samsung further
supported DOE requiring the appendix D2 test procedure for
manufacturers as the mandatory procedure for testing consumer clothes
dryers. (California IOUs, No. 26 at p. 5) According to Samsung,
appendix D2 has been recognized by stakeholders as truly representing
how automatic termination control dryers are used by consumers, and
manufacturers of ENERGY STAR-qualified consumer clothes dryers are
familiar with, and have invested in, the test procedure in appendix D2,
as it is already mandated for ENERGY STAR qualification. Furthermore,
Samsung asserted that the appendix D1 test procedure was intended as a
stopgap measure to test ``sensor [automatic termination control]
dryers'' using ``non-sensing'' settings (i.e., timer drying cycle) and
does not represent how automatic termination clothes dryers are used by
consumers as accurately as the appendix D2 test procedure. Samsung
recommended that, since appendix D2 has been used for many years for
ENERGY STAR qualification, appendix D1 be phased out now, with an
appropriate adjustment to the underlying energy conservation standards
to reflect the change in test method as described in EPCA. (Samsung,
No. 29 at p. 2)
As discussed in the October 2021 TP Final Rule, the version of
appendix D2 adopted in that final rule would be used for the evaluation
and issuance of updated energy conservation standards, with compliance
with that version of appendix D2 required on the
[[Page 51744]]
implementation date of updated standards. 86 FR 56608, 56635-56636
(Oct. 8, 2021). Accordingly, DOE notes that the preliminary analysis
and this NOPR analysis are based on the appendix D2 test procedure, and
therefore the proposed amended energy conservation standards in this
document are also based on the appendix D2 test procedure. These
proposed amendments are discussed in more detail in section IV.C of
this document.
C. Technological Feasibility
1. General
In evaluating potential amendments to energy conservation
standards, DOE conducts a screening analysis based on information
gathered on all current technology options and prototype designs that
could improve the efficiency of the products or equipment that are the
subject of the rulemaking. As the first step in such an analysis, DOE
develops a list of technology options for consideration in consultation
with manufacturers, design engineers, and other interested parties. DOE
then determines which of those means for improving efficiency are
technologically feasible. DOE considers technologies incorporated in
commercially-available products or in working prototypes to be
technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of appendix
A.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.B of
this document discusses the results of the screening analysis for
consumer clothes dryers, particularly the designs DOE considered, those
it screened out, and those that are the basis for the standards
considered in this rulemaking. For further details on the screening
analysis for this rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for consumer
clothes dryers, using the design parameters for the most efficient
products available on the market or in working prototypes. The max-tech
levels that DOE determined for this rulemaking are described in section
IV.C.1 of this document and in chapter 5 of the NOPR TSD.
D. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to consumer clothes dryers
purchased in the 30-year period that begins in the year of compliance
with the proposed standards (2027-2056).\17\ The savings are measured
over the entire lifetime of consumer clothes dryers purchased in the
previous 30-year period. DOE quantified the energy savings attributable
to each TSL as the difference in energy consumption between each
standards case and the no-new-standards case. The no-new-standards case
represents a projection of energy consumption that reflects how the
market for a product would likely evolve in the absence of amended
energy conservation standards.
---------------------------------------------------------------------------
\17\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for consumer clothes dryers. The NIA spreadsheet model
(described in section IV.H of this document) calculates energy savings
in terms of site energy, which is the energy directly consumed by
products at the locations where they are used. For electricity, DOE
reports national energy savings in terms of primary energy savings,
which is the savings in the energy that is used to generate and
transmit the site electricity. For natural gas, the primary energy
savings are considered to be equal to the site energy savings. DOE also
calculates NES in terms of FFC energy savings. The FFC metric includes
the energy consumed in extracting, processing, and transporting primary
fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a
more complete picture of the impacts of energy conservation
standards.\18\ DOE's approach is based on the calculation of an FFC
multiplier for each of the energy types used by covered products or
equipment. For more information on FFC energy savings, see section
IV.H.2 of this document.
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\18\ The FFC metric is discussed in DOE's statement of policy
and notice of policy amendment. 76 FR 51282 (Aug. 18, 2011), as
amended at 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------
2. Significance of Savings
To adopt any new or amended standards for a covered product, DOE
must determine that such action would result in significant energy
savings.
The significance of energy savings offered by a new or amended
energy conservation standard cannot be determined without knowledge of
the specific circumstances surrounding a given rulemaking.\19\ For
example, some covered products and equipment have most of their energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. In evaluating the
significance of energy savings, DOE considers differences in primary
energy and FFC effects for different covered products and equipment
when determining whether energy savings are significant. Primary energy
and FFC effects include the energy consumed in electricity production
(depending on load shape), in distribution and transmission, and in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and thus present a more complete picture
of the impacts of energy conservation standards.
---------------------------------------------------------------------------
\19\ The numeric threshold for determining the significance of
energy savings established in a final rule published on February 14,
2020 (85 FR 8626, 8670), was subsequently eliminated in a final rule
published on December 13, 2021 (86 FR 70892).
---------------------------------------------------------------------------
Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis, taking into account the significance of cumulative
FFC national energy savings, the cumulative FFC emissions reductions,
and the need to confront the global climate crisis, among other
factors. As discussed in section V.C of this document, DOE is proposing
to adopt TSL 3, which would save an estimated 3.11 quads of energy
(FFC). DOE has initially determined that these energy savings are
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B).
E. Economic Justification
1. Specific Criteria
As noted previously, EPCA provides seven factors to be evaluated in
[[Page 51745]]
determining whether a potential energy conservation standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII)) The
following sections discuss how DOE has addressed each of those seven
factors in this rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows; (2)
cash flows by year; (3) changes in revenue and income; and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.D of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (``DOJ'') provide its determination on this issue. DOE will
publish and respond to the Attorney General's determination in the
final rule. DOE invites comment from the public regarding the
competitive impacts that are likely to result from this proposed rule.
In addition, stakeholders may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and greenhouse gases (``GHGs'') associated with energy
production and use. DOE conducts an emissions analysis to estimate how
potential standards may
[[Page 51746]]
affect these emissions, as discussed in section IV.K of this document;
the estimated emissions impacts are reported in section V.B.6 of this
document. DOE also estimates the economic value of health benefits from
certain emissions reductions resulting from the considered TSLs, as
discussed in section IV.L of this document.
AHAM stated its continued objection to DOE's use of the social cost
of carbon and other monetization of emissions reductions benefits in
its analysis of the factors EPCA requires DOE to balance to determine
the appropriate standard. According to AHAM, while it may be acceptable
for DOE to continue its current practice of examining the social cost
of carbon and monetization of other emissions reductions benefits as
informational so long as the underlying interagency analysis is
transparent and vigorous, the monetization analysis should not impact
the trial standards levels DOE selects as a new or amended standard.
(AHAM, No. 23 at pp. 11-12)
DOE's evaluation of whether a potential energy conservation
standard is economically justified is guided by EPCA and also by OMB
Circular A-4 (Sept. 17, 2003), which provides guidance to Federal
agencies on the development of regulatory analysis. As indicated above,
DOE believes that avoiding negative impacts to human health and the
wide range of impacts associated with climate change are key factors
behind the need for energy conservation.\20\ OMB Circular A-4 states:
``Benefit-cost analysis is a primary tool used for regulatory analysis.
Where all benefits and costs can be quantified and expressed in
monetary units, benefit-cost analysis provides decision makers with a
clear indication of the most efficient alternative, that is, the
alternative that generates the largest net benefits to society.'' (p.
2) Monetizing public health benefits of regulations is a long-standing
practice in Federal regulatory analysis. To not consider such benefits
when evaluating whether a potential energy conservation standard is
economically justified would be contrary to both EPCA and OMB's
guidance. In addition, on March 16, 2022, the Fifth Circuit Court of
Appeals (No. 22-30087) granted the federal government's emergency
motion for stay pending appeal of the February 11, 2022, preliminary
injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D.
La.). As a result of the Fifth Circuit's order, the preliminary
injunction is no longer in effect, pending resolution of the federal
government's appeal of that injunction or a further court order. Among
other things, the preliminary injunction enjoined the defendants in
that case from ``adopting, employing, treating as binding, or relying
upon'' the interim estimates of the social cost of greenhouse gases--
which were issued by the Interagency Working Group on the Social Cost
of Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and presents monetized
greenhouse gas abatement benefits where appropriate and permissible
under law.
---------------------------------------------------------------------------
\20\ As mentioned previously, following the preliminary
injunction issued on February 11, 2022, in Louisiana v. Biden, No.
21-cv-1074-JDC-KK (W.D. La.), DOE is currently not monetizing the
costs of greenhouse gas emissions.
---------------------------------------------------------------------------
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the effects that proposed
energy conservation standards would have on the payback period for
consumers. These analyses include, but are not limited to, the 3-year
payback period contemplated under the rebuttable-presumption test. In
addition, DOE routinely conducts an economic analysis that considers
the full range of impacts to consumers, manufacturers, the Nation, and
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The
results of this analysis serve as the basis for DOE's evaluation of the
economic justification for a potential standard level (thereby
supporting or rebutting the results of any preliminary determination of
economic justification). The rebuttable presumption payback calculation
is discussed in section IV.F.9 of this document.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking with regard to consumer clothes dryers. Separate sections
address each component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (``GRIM''), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2014-BT-STD-0058/. Additionally, DOE used output from the
latest version of the Energy Information Administration's (``EIA's'')
Annual Energy Outlook (``AEO''), a widely known energy projection for
the United States, for the emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
that could improve the energy efficiency of consumer clothes dryers.
The key findings of DOE's market assessment are summarized in the
following sections. See chapter 3 of the NOPR TSD for further
discussion of the market and technology assessment.
[[Page 51747]]
1. Scope of Coverage and Product Classes
DOE defines ``electric clothes dryer'' under EPCA as a cabinet-like
appliance designed to dry fabrics in a tumble-type drum with forced air
circulation. The heat source is electricity and the drum and blower(s)
are driven by an electric motor(s). Similarly, DOE defines ``gas
clothes dryer'' as a cabinet-like appliance designed to dry fabrics in
a tumble-type drum with forced air circulation. The heat source is gas
and the drum and blower(s) are driven by an electric motor(s). (10 CFR
430.2)
In response to the preliminary analysis, the California IOUs
offered information on at least two manufacturers producing a dry-and-
steam clothing cabinet and encouraged DOE to explore the market
prevalence and potential growth of this equipment and what features
represent an average use cycle. The California IOUs also suggested DOE
consider the current clothes washers rulemaking or dehumidifiers
rulemaking to provide guidance on how this product should be classified
and, if appropriate, tested and rated. (California IOUs, No. 26 at p.
7) DOE may investigate this product in a future rulemaking; however, as
this product does not meet the definition of a clothes dryer because it
does not include a tumble-type drum, it was not included in this
analysis.
The current product classes, which were established by the April
2011 Direct Final Rule, are presented in Table IV.1.
Table IV.1--Current Consumer Clothes Dryer Product Classes
------------------------------------------------------------------------
-------------------------------------------------------------------------
Vented dryers:
Electric, Standard (4.4 cubic feet (ft\3\) or greater capacity).
Electric, Compact (120 volts (V)) (less than 4.4 ft\3\ capacity).
Electric, Compact (240 V) (less than 4.4 ft\3\ capacity).
Gas.
Ventless dryers:
Electric, Compact (240 V) (less than 4.4 ft\3\ capacity).
Electric, Combination Washer-Dryer.
------------------------------------------------------------------------
Based on its review of products available on the market in the
United States, DOE notes that at least six manufacturers currently
offer a ventless clothes dryer with a drum capacity greater than 4.4
ft\3\. As a result, in the preliminary analysis, DOE analyzed an
additional product class for ventless electric standard clothes dryers,
with drum capacity larger than 4.4 ft\3\.
In response to the preliminary analysis, the California IOUs
requested that DOE investigate potential reporting errors within the
Compliance Certification Database (``CCD''), as the California IOUs
asserted that multiple products were incorrectly listed in the CCD as
``vented'' products while certified as ``ventless'' products in the
ENERGY STAR product database and represented as ``ventless'' in
manufacturer literature. (California IOUs, No. 26 at p. 4) DOE will
work to investigate any classification errors within the CCD and
requests comment on additional information regarding potential
classification errors.
In response to the preliminary analysis, ASAP, NRDC, the California
IOUs, and NEEA requested that DOE review the efficiencies of models
currently available on the market, specifically for the vented electric
standard product class, stating that there are currently available
models with higher efficiencies than the max-tech efficiency level
considered in the preliminary analysis for this product class. (ASAP,
NRDC, No. 25 at pp. 1-2; California IOUs, No. 26 at pp. 3-4; NEEA, No.
30 at pp. 10-11) Upon review of these higher efficiency models, DOE
discovered that many of the higher efficiency electric standard clothes
dryers on the market are ventless and employ heat pump technology and
that there are no lower-efficiency ventless electric standard models
associated with the less efficient condensing technology that is
available with the ventless electric compact (240V) product class.
Given that most heat pump designs at the standard size are inherently
ventless and result in higher efficiencies, establishing a product
class for ventless electric standard clothes dryers would essentially
result in a separate product class for heat pump dryers and leave the
vented electric standard product class with less efficient conventional
resistive heating-element dryers. This would effectively restrict the
efficiency of the vented electric standard product class, as higher
efficiency technologies would be associated with a different product
class.
DOE received comments from AHAM and Whirlpool in response to the
preliminary analysis stating that ventless electric clothes dryers,
especially those implementing heat pump designs, have difficulty in
meeting the 2-percent FMC requirement with Whirlpool stating that
ventless electric clothes dryers result in longer cycle times than
conventional vented clothes dryers. (AHAM, No. 23, p. 11; Whirlpool,
No. 27 at pp. 13-17) Additionally, Whirlpool recommended that DOE
consider the consumer utility of the differences that arise when
consumer clothes dryers utilize heat pump technology and to establish a
separate product class for heat pump clothes dryers (including hybrid
heat pump clothes dryers). Whirlpool stated that differences in fabric
care, drying time, heating and cooling energy impacts, lower drying
temperatures, and technology used are all relevant performance-related
features that distinguish heat pump and hybrid heat pump clothes dryers
from all other consumer clothes dryer product classes, which may
justify a higher standard than for other product types. (Whirlpool, No.
27 at p. 17) DOE observes that all standard size ventless electric
clothes dryers and compact ventless electric (120V) clothes dryers are
rated according to appendix D2 and are ENERGY STAR-qualified, and
therefore meet the 80-minute cycle time requirement to receive ENERGY
STAR recognition. Additionally, DOE found no issue in its own testing
of ventless electric clothes dryers inherent in the ventless electric
clothes dryer design that supports the claims made by commenters
regarding difficulty in meeting the FMC requirement and longer cycle
times (i.e., all ventless electric clothes dryers tested, including
those utilizing either condensing or heat pump technology, were able to
meet the 2-percent FMC requirement).
As discussed, a rule prescribing an energy conservation standard
must specify a level of energy use or efficiency higher or lower than
that which applies (or would apply) for any group of covered products
which have the same function or intended use, if the Secretary
determines that covered products within such group have a
[[Page 51748]]
capacity or other performance-related feature which justifies a higher
or lower standard. (42 U.S.C. 6295(q)(1)(B)) For standard size electric
clothes dryers, the ventless feature does not justify a separate
standard as compared to standard size electric clothes dryers that are
vented. Standard size ventless electric clothes dryers can accommodate
heat pump technology that results in improved efficiency similar to
that for standard size vented electric clothes dryers. Therefore, upon
further consideration, no product class distinction is proposed in this
NOPR between ventless and vented electric standard clothes dryers, nor
between heat pump and non-heat pump clothes dryers.
Instead, DOE proposes an ``electric standard'' product class that
would comprise both ventless and vented electric standard clothes
dryers. Such a product class would not impact consumer utility, given
that a consumer could install a ventless electric standard clothes
dryer in the same locations as vented electric standard clothes dryers,
and would not result in unacceptable drying performance or cycle time,
as evidenced by the existing heat pump clothes dryers that are able to
achieve the 2-percent FMC requirement within an 80-minute cycle time.
In response to the preliminary analysis, the California IOUs
requested that DOE consider an additional product class for ventless
electric compact (120V) models, as such clothes dryers are currently
available on the market. (California IOUs, No. 26 at p. 3) Upon further
review, DOE found that, as for ventless electric standard clothes
dryers, all currently available ventless electric compact (120V)
clothes dryers utilize heat pump technology. For the same reasons as
for electric standard clothes dryers (i.e., to capture the energy
savings associated with heat pump technology and to avoid restricting
potential efficiency gains for vented electric clothes dryers), DOE
proposes an ``electric compact (120V)'' product class comprising
ventless and vented electric compact (120V) models.
In light of the proposal to have single product classes containing
all standard size electric clothes dryers and a single product class
for all compact electric (120V) clothes dryers, DOE also considered
whether to maintain the current separate product classes distinction
based on venting for compact electric (240V) clothes dryers. DOE has
previously determined that for compact electric clothes dryers, a
ventless configuration is a consumer utility because these dryers
provide for installations in space-constrained environments. 76 FR
22454, 22485 (Apr. 21, 2011). Based on the analysis presented in this
NOPR, DOE has tentatively determined that the higher efficiencies for
ventless compact (240V) clothes dryers would not be economically
justified as they would be for vented compact (240V) clothes dryers.
See Section IV.F of this document. Therefore, DOE tentatively
determines that venting characteristics continue to justify a separate
product class for compact (240V) clothes dryers.
As discussed, vented electric clothes dryers are divided, in part,
based on capacity such that there is a standard size product class (4.4
ft\3\ or greater capacity) and compact classes (capacity less than 4.4
ft\3\). There is no similar class distinction for vented gas clothes
dryers. Since the previous energy conservation standards rulemaking,
DOE has identified at least one manufacturer of a vented gas clothes
dryer with a drum less than 4.4 ft\3\. Such capacity units are subject
to the energy conservation standard for vented gas clothes dryers. AHAM
supported splitting the product classes for gas clothes dryers based on
capacity consistent with the product classes for electric dryers.
(AHAM, No. 23 at p. 7)
As discussed, DOE must specify a different standard level for a
type or class of product that has the same function or intended use, if
DOE determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE deems appropriate. Id.
In evaluating potential technologies to improve the energy
efficiency of vented gas clothes dryers, DOE tentatively has determined
that vented gas clothes dryers with a capacity of less than 4.4 ft\3\
perform in a way that is substantively different than vented gas
clothes dryers that are 4.4 ft\3\ or greater in capacity. For example,
DOE has observed that compact vented gas clothes dryers generally
perform at a lower efficiency than standard size vented gas clothes
dryers, likely due to the chassis size restrictions, and due to that
inherent difference, DOE believes that a separate product class is
warranted. Furthermore, creating a new product class for vented gas
clothes dryers with a capacity of less than 4.4 ft\3\ would ensure that
efficiency levels and potential amended standards could better and more
directly assess the impact of design option implementations for a given
product configuration. Therefore, DOE has tentatively determined that a
separate product class and standard for vented gas compact clothes
dryers (i.e., with a capacity less than 4.4 ft\3\) are justified for
similar reasons as DOE determined for vented electric compact clothes
dryers. See 76 FR 22404, 22485 (Apr. 21, 2011). As a result, DOE
analyzed separate product classes for vented gas standard and vented
gas compact clothes dryers.
In sum, DOE proposes the consumer clothes dryer product classes
listed in Table IV.2 in this NOPR, which expand the scope of certain
product classes to include both vented and ventless designs, and
include an additional product class for compact vented gas dryers.
Table IV.2--Notice of Proposed Rulemaking Consumer Clothes Dryer Product
Classes
------------------------------------------------------------------------
-------------------------------------------------------------------------
Product Classes:
1. Electric, Standard (4.4 cubic feet (ft\3\) or greater capacity).
2. Electric, Compact (120 volts (V)) (less than 4.4 ft\3\ capacity).
3. Vented Electric, Compact (240 V) (less than 4.4 ft\3\ capacity).
4. Vented Gas, Standard (4.4 ft\3\ or greater capacity).
5. Vented Gas, Compact (less than 4.4 ft\3\ capacity).
6. Ventless Electric, Compact (240 V) (less than 4.4 ft\3\
capacity).
7. Ventless Electric, Combination Washer/Dryer.
------------------------------------------------------------------------
[[Page 51749]]
2. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 16 technology options that would be expected to improve the
efficiency of consumer clothes dryers, as measured by the DOE test
procedure. DOE continues to consider these technology options in this
NOPR analysis. These technology options can be broadly grouped into
five main categories: dryer control or drum upgrades, methods of
exhaust heat recovery (for vented models only), heat generation
options, improvements to components, and options to reduce standby
power.
Table IV.3--Preliminary Analysis: Technology Options for Consumer
Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination.
Increased insulation.
Modified operating conditions.
Improved air circulation.
Improved drum design.
Methods of Exhaust Heat Recovery (Vented Models Only):
Recycle exhaust heat.
Inlet air preheat.
Inlet air preheat, condensing mode.
Heat Generation Options:
Heat pump, electric only.
Thermoelectric heating, electric only.
Microwave, electric only.
Modulating heat.
Indirect heating.
Component Improvements:
Improved motor efficiency.
Improved fan efficiency.
Standby Power Improvements:
Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------
DOE notes that two recently developed consumer clothes dryer
technologies were not included as part of the preliminary analysis:
long wavelength radio frequency (``RF'') drying and ultrasonic drying.
Despite the potential benefits of RF and ultrasonic clothes drying,
however, both technologies are currently under patent or have received
a provisional patent. Any energy conservation standard that relied on
either of these technologies would unfairly advantage the manufacturer
or individual holder of the patent, and thus DOE did not consider them
as technology options for the preliminary analysis. Because these
technologies are technologically feasible, however, DOE proposes in
this NOPR to retain these as technology options in the technology
assessment, noting one of the criteria for screening technology options
for use in further analyses is whether a technology represents a unique
proprietary pathway (see section IV.B of this document and chapter 4 of
the NOPR TSD). DOE notes that the current energy conservation standards
for consumer clothes dryers would not prohibit the use of these
technologies.
DOE received several comments in response to the technologies
proposed in the preliminary analysis to be analyzed for consumer
clothes dryers.
Whirlpool suggested that reduced drum seal leakage be considered as
a technology option. Additionally, Whirlpool stated that approaches to
reduce standby power may not be consumer-friendly solutions that
manufacturers would readily implement. Whirlpool suggested that
delaying the drum light turning on after opening the door or delaying
the start of a cycle after powering on the unit would frustrate
consumers, as they typically expect appliances to turn on when action
is taken such as pressing the power button or opening the door.
Whirlpool also suggested an off position on the control dial but stated
that intellectual property may exist around this and may result in
higher costs. (Whirlpool, No. 27 at p. 17) DOE is not aware of data at
this time to characterize the impacts reduced drum seal leakage may
have on efficiency and requests information on efficiency impacts of
this technology. In addition, the strategies that Whirlpool suggested
to reduce energy use in standby mode, including delaying the activation
of the drum light after a door opening or delaying the start of the
cycle after powering on the unit, would not be measured by appendix D2.
Furthermore, although appendix D2 incorporates measures of energy use
in both off mode and inactive (standby) mode, DOE does not have
information to indicate the relative power consumption in each of these
modes for any consumer clothes dryers on the market which may have an
off mode position on the controls, which would provide an estimate of
the reduction in combined low-power mode energy use. For these reasons,
at this time, DOE is not proposing to include these technology options
in its analysis.
NEEA stated that manufacturers in the current consumer clothes
dryer market utilize an ``eco mode'' as a lower heat/longer drying time
strategy to achieve a given efficiency. NEEA asserted that the
efficiency of a consumer clothes dryer increases substantially with
lower heat and longer drying time, citing laboratory testing by the
California IOUs that quantified this effect by alternating periods of
heat with no heat during a cycle. According to the results of this
work, NEEA claimed, the average efficiency of consumer clothes dryers
with these modified controls increased 30 percent compared to their
default settings used for appendix D2 testing, and drying time
increased 140 percent. According to NEEA, a no-heat cycle took 4 hours
to complete but achieved a CEFD2 value of 7.0. NEEA stated
that with the energy savings associated with this strategy, as well as
the relatively low cost associated with the redesign of the control
panel to enable additional heater/burner algorithms, manufacturers have
a solid incentive to extensively utilize eco mode as the sole redesign
strategy to enable their models to meet DOE's forthcoming mandatory
standard. NEEA warned that the longer drying times associated with
these energy saving programs are unlikely to be acceptable to many
consumers in some
[[Page 51750]]
circumstances (e.g., serial dryer loads and other time-sensitive
loads), which could potentially result in consumers regularly disabling
these eco modes and may therefore significantly reduce the energy
savings of dryers in everyday use relative to expectations created by
the current appendix D2 test procedure. Therefore, NEEA requested that
DOE require the sole use of appendix D2 for certification purposes as
well as the required reporting of cycle times in order to mitigate
against significant reductions in actual real-world energy savings
associated with a low heat/long drying time eco mode strategy.
According to NEEA, cycle time reporting would help moderate
inordinately long cycle times during the D2 test, enable consumers and
other stakeholders to consider trade-offs between the efficiency and
cycle time for a given model, and provide data to possibly consider
more sophisticated approaches to cycle time in subsequent standard
updates. (NEEA, No. 30 at pp. 1-7) DOE recognizes that some consumer
clothes dryers are currently certified using appendix D2, and their
controls may include an ``eco mode'' or ``energy saver mode,'' which
typically reduce the temperature used in the cycle at the expense of
increasing the drying time. However, appendix D2 requires, for
automatic termination control dryers, that the ``normal'' program be
selected for the energy test cycle. In the event that the automatic
termination control dryer does not have a ``normal'' program, the cycle
recommended by the manufacturer for drying cotton or linen clothing is
selected. Where the drying temperature setting can be chosen
independently of the program (as would be the case if ``eco mode'' or
``energy saver mode'' were an optional setting that could be selected
for the ``normal'' program), the drying temperature must be set to the
maximum. Section 3.3.2, appendix D2. For timer dryers, the maximum
temperature setting is selected for the energy test cycle. Section
3.3.1, appendix D2. Therefore, an available ``eco mode'' or ``energy
saver mode'' would not be included in the energy test cycle, as they
would not produce a measure of energy use during a representative
cycle. For this reason, DOE did not consider such energy saving modes
as a technology option in this NOPR.
NEEA further encouraged DOE to consider the following technology
options: (1) coupled blower modulation with the multi-stage burner/
heater efficiency level, (2) cabinet insulation, (3) backward curved
fan blades, and (4) recuperation heat recovery in vented heat pump
clothes dryers associated with a PNNL study. (NEEA, No. 30 at pp. 12-
13) DOE notes that blower modulation is already coupled with the multi-
stage burner/heater efficiency level for both electric and gas consumer
clothes dryers, although this was not previously stated in chapter 5 of
the preliminary TSD. DOE has not observed the technology option of
cabinet insulation in clothes dryers used in this analysis, and
therefore does not currently have sufficient information to determine
the potential efficiency impacts associated with the suggested
technology options, however, DOE notes that with the inherent risk of
fires that may occur during operation of a consumer clothes dryer, any
insulation used within the cabinet space would likely need to be fire
retardant in order to satisfy the fire containment requirements
according to the UL 2158 safety standard. While insulation of the dryer
cabinet space would likely lead to potential energy savings, DOE
expects that the insulation could lead to an increased internal cabinet
temperature and may potentially lead to the degradation of other
components within the clothes dryer assembly. DOE therefore requests
information that would be beneficial in determining any impacts to
efficiency or performance as a result of implementing each of the
technology options mentioned. DOE notes that improvements to fan blades
would be captured in the analyzed technology options as improved fan
efficiency, however the efficiency improvements specified by NEEA refer
to heating, ventilation, and air conditioning (``HVAC'') research and
do not specifically refer to efficiency improvements in consumer
clothes dryers. Therefore, until DOE has sufficient information on
efficiency improvements associated with fan designs, the proposed
incremental efficiency levels will not be associated with improved fan
efficiency. Regarding the recuperation heat recovery technology option,
DOE notes that this technology is already considered in this analysis
referred to as the inlet-air preheat design option. Given the proposed
change to the product class structure regarding the combination of
vented and ventless clothes dryers in the standard and compact (120V)
categories, this technology is now considered in the proposed design
options for vented consumer clothes dryers, however given that DOE has
not observed inlet-air preheat technology in consumer clothes dryers on
the market, specifically heat pump consumer clothes dryers, this
technology has not been considered at the max-tech level associated
with heat pump technology.
Table IV.4 lists the technology options identified for consumer
clothes dryers in this NOPR. With the inclusion of RF and ultrasonic
drying technologies in the list of technology options in the NOPR, DOE
has renamed the grouping for ``heat generation options'' as ``moisture
removal options.'' See chapter 3 of the NOPR TSD for further discussion
of the analyzed technologies.
Table IV.4--Technology Options for Consumer Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination.
Increased insulation.
Modified operating conditions.
Improved air circulation.
Improved drum design.
Methods of Exhaust Heat Recovery (Vented Models Only):
Recycle exhaust heat.
Inlet air preheat.
Inlet air preheat, condensing mode.
Moisture Removal Options:
Heat pump, electric only.
Thermoelectric heating, electric only.
Microwave, electric only.
Modulating heat.
Indirect heating.
RF drying, electric only.
[[Page 51751]]
Ultrasonic drying, electric only.
Component Improvements:
Improved motor efficiency.
Improved fan efficiency.
Standby Power Improvements:
Transformerless power supply with auto-powerdown.
------------------------------------------------------------------------
B. Screening Analysis
DOE uses the following five screening criteria to determine which
technology options are suitable for further consideration in an energy
conservation standards rulemaking:
(1) Technological feasibility. Technologies that are not
incorporated in commercial products or in working prototypes will not
be considered further.
(2) Practicability to manufacture, install, and service. If it is
determined that mass production and reliable installation and servicing
of a technology in commercial products could not be achieved on the
scale necessary to serve the relevant market at the time of the
projected compliance date of the standard, then that technology will
not be considered further.
(3) Impacts on product utility or product availability. If it is
determined that a technology would have a significant adverse impact on
the utility of the product for significant subgroups of consumers or
would result in the unavailability of any covered product type with
performance characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the United States at the time, it will not be
considered further.
(4) Adverse impacts on health or safety. If it is determined that a
technology would have significant adverse impacts on health or safety,
it will not be considered further.
(5) Unique-Pathway Proprietary Technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further due to the potential for monopolistic concerns.
10 CFR part 430, subpart C, appendix A, 6(b)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
AHAM requested that DOE consider the effects that different
technology options may have on fabric care, specifically the impact
longer drying cycles may have on fabric. (AHAM, No. 23 at p. 10) While
certain technology options may be associated with an increase in cycle
times (e.g., modified operating conditions (reduced drying
temperatures) and heat pump technology), DOE notes that AHAM did not
provide, nor is DOE aware of, information correlating fabric care
directly to cycle time. In addition, if longer cycle times are
accompanied by lower drying temperatures, it is uncertain whether the
net impact on fabric care is positive or negative, and how this result
would vary based on fabric type. Therefore, DOE did not screen out any
technology options solely on the basis of any fabric care
considerations due to cycle time. However, DOE requests comment on any
potential impacts that different technology options, including any that
may impact cycle times, have on fabric care.
a. Thermoelectric Heating, Electric Only
DOE notes that Oak Ridge National Laboratory (``ORNL'') is still
researching thermoelectric heating clothes dryers. While ORNL's test
results of a preliminary prototype have shown the potential for
improved efficiency, ORNL indicated that the initial prototype design
produced longer-than-desired drying times due to direct-contact heat
transfer limitations via the drum surface. ORNL has subsequently
developed another prototype which added pumped secondary water loops
that transferred heat from the thermoelectric modules to the process
air via air-to-water heat exchangers to further improve efficiency and
minimize cycle length. ORNL's testing indicated efficiency and cycle
times for this prototype that are approximately equivalent to those of
vapor compression heat pump clothes dryers.\21\ Because the research
for such a thermoelectric heating clothes dryer that produces energy
savings and meets consumer expectations for drying cycle time is still
in the prototype stage, DOE determined that this technology option
would not be practicable to manufacture, install, and service on a
scale necessary to serve the relevant market at the time of the
projected compliance date of any new or amended consumer clothes dryer
standards, and did not be consider it for further analysis.
---------------------------------------------------------------------------
\21\ Patel, V., Boudreaux, P., and Gluesenkamp, K. Oak Ridge
National Laboratory. Validated Model of a Thermoelectric Heat Pump
Clothes Dryer Using Secondary Pumped Loops. Applied Thermal
Engineering, Volume 184, February 5, 2021.
---------------------------------------------------------------------------
b. Microwave, Electric Only
Due to the large energy savings associated with microwave drying,
this technology was the subject of a multi-year development effort at
the Electric Power Research Institute (``EPRI'') in the mid-1990s; \22\
and at least one major manufacturer, Whirlpool Corporation
(``Whirlpool''), developed a countertop-scale version of such a product
as recently as 2002,\23\ but to date this technology has not been
successfully commercialized.
---------------------------------------------------------------------------
\22\ S. Ashley. 1998. ``Energy-Efficient Appliances'',
Mechanical Engineering Magazine, March, 1998, pp. 94-97.
\23\ E. Spagat. 2002. ``Whirlpool Goes Portable to Sell Dryers
to Gen Y'', Wall Street Journal, June 4, 2002.
---------------------------------------------------------------------------
Significant technical and safety issues are introduced by the
potential arcing from metallic objects in the fabric load, including
zippers, buttons, or ``stray'' items such as coins. While efforts have
been made to mitigate the conditions that are favorable to arcing, or
to detect incipient arcing and terminate the cycle, the possibility of
fabric damage cannot be completely eliminated.\24\ In addition to
consumer utility impacts, these conditions can also pose a safety
hazard.
[[Page 51752]]
For these reasons, microwave drying was not considered further for
analysis.
---------------------------------------------------------------------------
\24\ J.F. Gerling. 2003. ``Microwave Clothes Drying--Technical
Solutions to Fundamental Challenges'', Appliance Magazine, April,
2003, p. 120.
---------------------------------------------------------------------------
c. Indirect Heating
Indirect heating would be viable only in residences that use a
hydronic heating system. Also, in order to derive clothes dryer heat
energy from the home's heating system, significant plumbing work would
be required to circulate heated water through a heat exchanger in the
clothes dryer. Therefore, this technology option does not meet the
criterion of practicability to install on a scale necessary to serve
the relevant market at the time of the effective date of any new
standard and will not be considered for further analysis.
d. RF Drying, Electric Only
CoolDry, LLC (``CoolDry''), developed an RF clothes dryer
prototype, claiming an efficiency of 90 percent, compared to 50 percent
for conventional clothes dryers.\25\ CoolDry states that its RF drying
technology operates at lower temperatures than do conventional clothes
dryers and, because the transfer of energy to clothes is not dependent
on convective heat transfer, the RF clothes dryer requires less
tumbling and subsequently consumes less energy for drum rotation than a
conventional clothes dryer. Because this technology was in the
prototype stage at the time it was initially considered and the company
is no longer in business and thus there is likely no longer research
and development ongoing, DOE determined that this technology option
would not be practicable to manufacture, install, and service on a
scale necessary to serve the relevant market at the time of the
projected compliance date of any new or amended consumer clothes dryer
standards, and did not be consider it for further analysis.
---------------------------------------------------------------------------
\25\ CoolDry does not specify the metric or test method used to
determine the efficiency of its prototype. More information is
available at: http://www.cooldryrf.com/.
---------------------------------------------------------------------------
e. Ultrasonic Drying, Electric Only
Researchers at ORNL have developed an ultrasonic drying prototype
that uses piezoelectric transducers to separate water from clothes
through water cavitation produced by ultrasonic vibrations. According
to their research, the energy imparted to the water must overcome
surface tension in order to break the water into droplets, but this
energy is substantially less than the latent heat of vaporization of
water, which is the primary thermodynamic barrier for conventional
evaporation drying. The ORNL researchers anticipate that ultrasonic
drying technology will result in an energy factor (``EF'') \26\ of
greater than 10 and a drying time of less than 20 minutes.\27\ Because
this technology is still in the prototype stage, DOE determined that
this technology option would not be practicable to manufacture,
install, and service on a scale necessary to serve the relevant market
at the time of the projected compliance date of any new or amended
consumer clothes dryer standards, and did not be consider it for
further analysis.
---------------------------------------------------------------------------
\26\ EF only incorporates active mode energy use and not standby
and off mode energy use.
\27\ Momen, A. Ultrasonic Clothes Dryer: 2016 Building
Technologies Office Peer Review. 2016. Prepared for the U.S.
Department of Energy at Oak Ridge National Laboratory, in
partnership with the University of Florida and General Electric. p.
2.
---------------------------------------------------------------------------
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.A.2 of
this document met all five screening criteria to be examined further as
design options in DOE's NOPR analysis. In summary, DOE did not screen
out the following technology options listed in Table IV.5.
Table IV.5--Retained Design Options for Consumer Clothes Dryers
------------------------------------------------------------------------
-------------------------------------------------------------------------
Dryer Control or Drum Upgrades:
Improved termination.
Modified operating conditions.
Improved air circulation.
Increased insulation.
Improved drum design.
Methods of Exhaust Heat Recovery (vented models only):
Recycle exhaust heat.
Inlet air preheat.
Inlet air preheat, condensing mode.
Moisture Removal Options:
Heat pump, electric only.
Modulating heat.
Component Improvements:
Improved motor efficiency.
Improved fan efficiency.
Standby Power Improvements:
Transformerless Power Supply with Auto-Powerdown.
------------------------------------------------------------------------
DOE has initially determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially-available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., practicable to manufacture, install, and
service and do not result in adverse impacts on consumer utility,
product availability, health, or safety, nor are unique-pathway
proprietary technologies). For additional details, see chapter 4 of the
NOPR TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of consumer clothes
dryers. There are two elements to consider in the engineering analysis;
the selection of efficiency levels to analyze (i.e., the ``efficiency
analysis'') and the determination of product cost at each efficiency
level (i.e., the ``cost analysis''). In determining the performance of
higher-efficiency products, DOE considers technologies and design
option combinations not eliminated by the screening analysis. For each
product class, DOE estimates the baseline cost, as well as the
incremental cost for the product at efficiency levels above the
baseline. The output of the engineering analysis is a
[[Page 51753]]
set of cost-efficiency ``curves'' that are used in downstream analyses
(i.e., the LCC and PBP analyses and the NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
In this proposed rulemaking, DOE relied on an efficiency-level
approach, supplemented with reverse-engineering. This approach involved
testing and physically disassembling a representative sample of
commercially available products, reviewing publicly available cost
information, and modeling equipment cost. From this information, DOE
estimated the manufacturer production costs (``MPCs'') for a range of
products currently available on the market, considering the design
options and the steps manufacturers would likely take to reach a
certain efficiency level. As part of this NOPR analysis, DOE included
additional test units beyond those considered in the preliminary
analysis as part of its updated test sample. The additional test units
were included to represent additional baseline models, newly introduced
units on the market, units with unique configurations, and units with
technologies that were not available at the time of the preliminary
analysis. The efficiency levels analyzed as part of this engineering
analysis are attainable using commercially available clothes dryer
technologies, or technologies that have been demonstrated in working
prototypes.
a. Baseline Efficiency Levels
For each product class, DOE generally selects a baseline model as a
reference point for each class, and measures changes resulting from
potential energy conservation standards against the baseline. The
baseline model in each product class represents the characteristics of
a product typical of that class. Generally, a baseline model is one
that just meets current energy conservation standards, or, if no
standards are in place, the baseline is typically the most common or
least efficient unit on the market.
The baseline clothes dryer efficiency levels for this NOPR differ
from the existing energy conservation standards that were established
in the 2011 rulemaking analysis primarily due to the difference between
the then-current appendix D1, which DOE used to evaluate products in
the previous rulemaking, and the present version of appendix D2, as
established by the October 2021 TP Final Rule and which DOE used as the
basis for this analysis. Appendix D2 includes test methods that more
accurately measure the effects of automatic cycle termination and that
may result in differences in the total measured energy consumption of
the test cycle as compared to the test methods in appendix D1.
Specifically, for automatic termination control dryers, appendix D2
requires a lower FMC of the test load and does not rely on a field use
factor to account for the over drying energy consumption, instead
requiring that the automatic termination drying program run to the end
of the cycle. Additionally, appendix D2 contains instructions for the
testing of timer dryers, which include a lower FMC of the test load as
compared to the version of appendix D1 used for the 2011 rulemaking
analysis.
For the engineering analysis, DOE begins the engineering analysis
by identifying the efficiency level corresponding to the Federal
minimum energy conservation standards for each product class. Due to
the test procedure changes adopted in the October 2021 Final Rule, DOE
determined the baseline efficiency level representative of minimally
compliant products when tested under appendix D2. In order to identify
the appendix D2 baseline levels, DOE tested 22 models that were
certified as minimally compliant with the current energy conservation
standards, from across all product classes. Because certified
performance data are not available for models on the market as tested
in accordance with both appendix D1 and appendix D2, DOE tested each
basic model in its test sample in accordance with appendix D1 and
appendix D2 and used the test values for appendix D2 to determine the
baseline models in support of this engineering analysis. Due to the
differences in the two test procedures described above, the baseline
CEFD2 measured using appendix D2 is numerically lower for
each product class than the corresponding CEFD1 value in the
current energy conservation standards, though that does not indicate a
lower efficiency. The test procedure differences are driving the lower
baseline CEFD2 values and do not represent a lower
efficiency or backsliding.
The consumer clothes dryer baseline efficiency levels for the
preliminary analysis are presented in Table IV.6.
Table IV.6--Preliminary Analysis Consumer Clothes Dryer Baseline
Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Product class
------------------------------------------------------------------------
Vented Electric, Standard (4.4 ft\3\ or greater 2.20
capacity)..............................................
Vented Electric, Compact (120V) (less than 4.4 ft\3\ 2.42
capacity)..............................................
Vented Electric, Compact (240V) (less than 4.4 ft\3\ 2.00
capacity)..............................................
Vented Gas, Standard (4.4 cubic ft\3\ or greater 2.63
capacity)..............................................
Vented Gas, Compact (less than 4.4 ft\3\ capacity)...... 1.66
Ventless Electric, Compact (240V) (less than 4.4 ft\3\ 2.03
capacity)..............................................
Ventless Electric, Standard ((4.4 ft\3\ or greater 2.23
capacity)..............................................
Ventless Electric, Combination Washer-Dryer............. 2.27
------------------------------------------------------------------------
[[Page 51754]]
In response to the preliminary analysis, AHAM agreed that testing
was appropriate to determine the baseline and incremental efficiency
levels, but stated that the testing of 18 models was insufficient to
establish the baseline efficiency levels. AHAM also stated that basing
DOE's analysis on a few baseline units may not accurately represent the
market, especially when so many baseline models have electromechanical
controls. AHAM therefore requested that DOE make its test results
available so that representativeness could be assessed from a shipments
perspective, and so that manufacturers could evaluate the test results
for their models and compare to their own results. (AHAM, No. 23 at p.
3)
Upon request, DOE provided to individual manufacturers the test
data for any of their units which were included in DOE's testing
sample, otherwise maintaining confidentiality of the products tested.
DOE also increased the number of units included in its updated test
sample to better represent consumer clothes dryers currently available
on the market, as discussed in chapter 5 of the NOPR TSD.
The California IOUs recommended that DOE revise the engineering
analysis and investigate lowering the baseline efficiency of the vented
gas standard dryer product class. According to the California IOUs,
their testing data that were presented to DOE in response to the test
procedure NOPR that was published on July 23, 2019 (84 FR 35484),
support the baseline efficiency level for the vented electric standard
product class. However, for the vented gas standard product class, the
California IOUs referred to a currently available product with a
CEFD2 value below the baseline efficiency level presented in
the preliminary TSD. NEEA asserted that DOE has historically set
standard levels for gas clothes dryers lower than the standards for
electric clothes dryers because some energy counted in the higher
heating value of the gas consumed, which is the basis of the
CEFD2, is not used by the consumer clothes dryer. NEEA
encouraged DOE to re-evaluate the CEFD2 levels of electric
and gas clothes dryers in its engineering analysis, as it pointed out
that the electric clothes dryer efficiency levels are lower than the
efficiency levels for gas clothes dryers that incorporate similar
technology options. NEEA encouraged DOE to increase the stringency of
the electric clothes dryer efficiency levels. (California IOUs, No. 26
at pp. 1-3; NEEA, No. 30 at pp. 13-14)
Additionally, NEEA submitted test data for 41 standard size
electric and gas clothes dryers, which suggested that the average
CEFD2 values for the non-ENERGY STAR-qualified electric and
gas clothes dryers in its sample were significantly higher than the
baseline efficiency levels in the preliminary analysis. NEEA also found
that the least efficient electric clothes dryer in its sample had a
measured CEFD2 that was more than 20 percent higher than
DOE's value for electromechanically controlled consumer clothes dryers.
NEEA encouraged DOE to use these data in developing appropriate
efficiency levels for the engineering analysis. (NEEA, No. 30 at pp. 8-
10)
DOE appreciates the data provided by NEEA and observes that, in
general, the data support the historical trend regarding the lower
efficiency of gas clothes dryers in comparison to electric clothes
dryers. These data also support the updated baseline and incremental
efficiency levels for gas clothes dryers, that latter of which are
discussed in more detail in section IV.C.1.b of this document. Although
the results of NEEA's test sample exhibit a higher average efficiency
among baseline electromechanically controlled electric clothes dryers,
as stated above, DOE set the baseline efficiency levels so that they
would represent a minimally compliant, basic-construction consumer
clothes dryer on the market. Accordingly, DOE has updated the baseline
value for each product class to be equal to the minimum
CEFD2, measured using appendix D2, among the corresponding
consumer clothes dryers in its NOPR test sample.
Similarly, DOE notes that the baseline efficiency level for the
vented electric compact (120V) product class has been updated to
reflect the CEFD2 value using the appendix D2 test procedure
based on the best available data at this time.
Finally, DOE has considered the revised product classes proposed in
this NOPR analysis in updating the baseline efficiency levels, based on
further analysis of results and new testing since the preliminary
analysis. The baseline efficiency levels considered for this NOPR
analysis are presented along with the current standards in Table IV.7
and are discussed in more detail in chapter 5 of the NOPR TSD.
Table IV.7--Notice of Proposed Rulemaking Consumer Clothes Dryer
Baseline Efficiency Levels
------------------------------------------------------------------------
CEFD1 (lb/kWh) CEFD2 (lb/kWh)
Product class *
------------------------------------------------------------------------
Electric, Standard (4.4 ft\3\ or greater 3.73 2.20
capacity)..............................
Electric, Compact (120V) (less than 4.4 3.61 2.36
ft\3\ capacity)........................
Vented Electric, Compact (240V) (less 3.27 2.00
than 4.4 ft\3\ capacity)...............
Vented Gas, Standard (4.4 cubic ft\3\ or 3.30 2.00
greater capacity)......................
Vented Gas, Compact (less than 4.4 ft\3\ 3.30 ** 1.66
capacity)..............................
Ventless Electric, Compact (240V) (less 2.55 2.03
than 4.4 ft\3\ capacity)...............
Ventless Electric, Combination Washer- 2.08 2.27
Dryer..................................
------------------------------------------------------------------------
* As discussed above, the baseline CEFD2 values represent differences in
test procedure between appendix D1 and appendix D2 and do not
constitute backsliding.
** CEFD2 baseline efficiency levels as measured under the Appendix D2
account for differences in the effectiveness of automatic cycle
termination. Manufacturers implement automatic termination in a
variety of ways, which will impact the representations as measured
under Appendix D2 resulting in a range of possible CEFD2 values, as
compared to the same CEFD1 values in the existing Federal standards.
b. Incremental Efficiency Levels
DOE developed incremental efficiency levels by reviewing products
currently available on the market and by testing and reverse
engineering products in the DOE test sample in support of the NOPR. For
each product class, DOE analyzed several efficiency levels and
determined the incremental MPC at each of these levels. DOE initially
reviewed data in DOE's CCD to evaluate the range of efficiencies for
consumer clothes dryers currently available on the market.\28\ As
discussed in chapter 5 of the NOPR TSD, non-ENERGY STAR-qualified
products (generally units with lower rated efficiencies) are typically
[[Page 51755]]
tested using appendix D1, while ENERGY STAR-qualified products are
required to be tested using appendix D2. As a result, DOE conducted
testing on a representative sample of non-ENERGY STAR products using
appendix D2 to determine appropriate initial incremental efficiency
levels for each product class. DOE observed that while electronic
controls are typically implemented with other design options in this
NOPR analysis, the improved automatic termination precision offered by
switching to electronic controls contributed significantly to an
increase in efficiency. This efficiency gain informed the first
incremental efficiency levels for most product classes and was noted
simply as electronic controls in the design options listed in the
following tables. The design options associated with higher efficiency
levels were subsequently distinguished according to specific design
options DOE found manufacturers used to meet these higher efficiencies.
As part of DOE's analysis, the maximum available efficiency level is
defined by the highest efficiency unit currently available on the
market. DOE also defines a ``max-tech'' efficiency level to represent
the maximum possible efficiency for a given product.
---------------------------------------------------------------------------
\28\ DOE's Compliance Certification Database is available for
review at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A*.
---------------------------------------------------------------------------
The incremental efficiency levels developed in the preliminary
analysis are presented in Table IV.8 through Table IV.15.
Table IV.8--Preliminary Analysis: Vented Electric Standard Efficiency
Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline 2.20
(Electromechanical
Controls).
1.............................. Baseline + Electronic 2.68
Controls.
2.............................. EL1 + Optimized Heating 3.04
System.
3.............................. EL2 + More Advanced 3.27
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 3.93
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 4.21
6.............................. Heat Pump Dryer (Max- 4.30
Tech).
------------------------------------------------------------------------
Table IV.9--Preliminary Analysis: Vented Electric Compact (120V)
Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline 2.42
(Electromechanical
Controls).
1.............................. Baseline + Electronic 2.95
Controls.
2.............................. EL1 + Optimized Heating 3.35
System.
3.............................. EL2 + More Advanced 4.28
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 4.33
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 4.63
6.............................. Heat Pump Dryer (Max- 4.73
Tech).
------------------------------------------------------------------------
Table IV.10--Preliminary Analysis: Vented Electric Compact (240V)
Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline 2.00
(Electromechanical
Controls).
1.............................. Baseline + Electronic 2.44
Controls.
2.............................. EL1 + Optimized Heating 2.76
System.
3.............................. EL2 + More Advanced 3.53
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 3.57
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 3.82
6.............................. Heat Pump Dryer (Max- 2.91
Tech).
------------------------------------------------------------------------
Table IV.11--Preliminary Analysis: Vented Gas Standard Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline 2.63
(Electromechanical
Controls).
1.............................. Baseline + Electronic 3.21
Controls.
2.............................. EL1 + Optimized Heating 3.48
System and More
Advanced Automatic
Termination Control
System.
3.............................. EL2 + Modulating (2- 4.70
Stage) Heat.
4.............................. EL3 + Inlet Air Preheat 5.04
(Max-Tech).
------------------------------------------------------------------------
Table IV.12--Preliminary Analysis: Vented Gas Compact Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline 1.66
(Electromechanical
Controls).
1.............................. Baseline + Electronic 2.02
Controls.
2.............................. EL1 + Optimized Heating 2.19
System and More
Advanced Automatic
Termination Control
System.
[[Page 51756]]
3.............................. EL2 + Modulating (2- 2.96
Stage) Heat.
4.............................. EL3 + Inlet Air Preheat 3.17
(Max-Tech).
------------------------------------------------------------------------
Table IV.13--Preliminary Analysis: Ventless Electric Standard Efficiency
Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic 2.23
Controls).
1.............................. Baseline + More 2.95
Advanced Automatic
Termination Control
System.
2.............................. Heat Pump Dryer (Max- 4.50
Tech).
------------------------------------------------------------------------
Table IV.14--Preliminary Analysis: Ventless Electric Compact (240V)
Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic 2.03
Controls).
1.............................. Baseline + More 2.68
Advanced Automatic
Termination Control
System.
2.............................. Heat Pump Dryer (Max- 5.70
Tech).
------------------------------------------------------------------------
Table IV.15--Preliminary Analysis: Ventless Electric Combination Washer-
Dryer Efficiency Levels
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Level Design option
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic 2.27
Controls).
1.............................. Baseline + High Speed 2.55
Spin.
2.............................. Heat Pump Dryer (Max- 5.42
Tech).
------------------------------------------------------------------------
DOE received comments regarding the hybrid heat pump design
investigated in a 2016 study by Pacific Northwest National Laboratory
(``PNNL''), which utilizes a low-wattage electric resistance heater
located downstream of the condenser to provide supplementary heating to
minimize drying cycle time.\29\ ASAP and NRDC encouraged DOE to review
the max-tech level and heat pump technology design option based on
current hybrid heat pump models available and the PNNL prototype hybrid
heat pump clothes dryer which utilized a recuperative heat exchanger in
addition to a resistive heating element and heat pump design. (ASAP,
NRDC, No. 25 at p. 2)
---------------------------------------------------------------------------
\29\ See: www.pnnl.gov/main/publications/external/technical_reports/PNNL-25510.pdf.
---------------------------------------------------------------------------
At the time of the preliminary analysis, DOE was not aware of the
efficiency impacts associated with consumer clothes dryers utilizing a
hybrid heat pump design and therefore did not include this design as
part of the preliminary analysis. In the time since the publishing of
the preliminary analysis, DOE has identified at least two manufacturers
that market consumer clothes dryers utilizing a hybrid heat pump
design. DOE investigated the efficiency savings associated with hybrid
heat pump clothes dryers and included in its updated test sample two
hybrid heat pump clothes dryers. DOE observed that, compared to heat
pump-only clothes dryer designs, the hybrid heat pump clothes dryers
had lower efficiencies, albeit higher than the efficiencies of any non-
heat pump clothes dryer. This analysis indicates that use of hybrid
heat pump technology may provide a ``bridge'' in the market between
consumer clothes dryer models utilizing conventional heating elements
and models based on heat pump-only technology. Therefore, in this NOPR,
DOE analyzed an intermediate efficiency level associated with the
hybrid heat pump technology that would capture the efficiency savings
from consumer clothes dryers implementing a conventional heating
element in addition to heat pump technology. The efficiency savings
associated with heat recovery are still captured in the efficiency
levels modeling inlet air preheat.
ASAP, NRDC, the California IOUs, and NEEA requested that DOE review
the consumer clothes dryers currently available on the market,
asserting that at the time of publication of the preliminary analysis,
there were models available with higher efficiency than the preliminary
max-tech levels in the ventless electric standard and compact product
classes. (ASAP, NRDC, No. 25 at pp. 1-2; California IOUs, No. 26 at pp.
3-4; NEEA, No. 30 at pp. 10-11) DOE reviewed the highest efficiency
ventless clothes dryers on the market by examining DOE's Compliance
Certification Management System database (``CCMS'') and ENERGY STAR
databases and included a sample of them in the updated test sample to
better represent the max-tech levels in the proposed electric standard,
electric compact (120V), and ventless electric compact (240V) product
classes.
Chapter 5 of the NOPR TSD discusses the incremental efficiency
levels for each of the product classes proposed in this NOPR analysis.
The revised CEFD2 efficiency levels for each product class
are shown below in Table IV.16 through Table IV.21, along with the
current energy conservation standards in CEFD1 for
comparison. As discussed in section IV.C.1.a of this document, the
baseline CEFD2 values estimated for the preliminary analysis
are lower than the current CEFD1 values in the energy
conservation standards due to the differences in testing using appendix
D1 and appendix D2. DOE requests
[[Page 51757]]
comment on the incremental efficiency levels used in the NOPR
engineering analysis.
---------------------------------------------------------------------------
\30\ DOE is aware of clothes dryers in the electric standard
product class that perform at higher efficiencies than the proposed
max-tech level, but those models are not representative of the
typical capacity in the electric standard product class. Therefore,
based on the certified performance of those models and additional
investigative testing, DOE determined a representative max-tech
efficiency for the electric standard product class that reflects an
appropriate, representative unit capacity. See chapter 5 of the TSD
for more information.
Table IV.16--Notice of Proposed Rulemaking Analysis: Electric Standard Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 NOPR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh) *
----------------------------------------------------------------------------------------------------------------
Baseline...................................... Baseline (Electromechanical 3.73 2.20
Controls).
1............................................. Baseline + Electronic Controls.. .............. 2.68
2............................................. EL1 + Optimized Heating System.. .............. 3.04
3............................................. EL2 + More Advanced Automatic .............. 3.27
Termination Control System.
4............................................. EL3 + Modulating (2-Stage) Heat. .............. 3.93
5............................................. EL4 + Inlet Air Preheat......... .............. 4.21
6............................................. Hybrid Heat Pump Dryer .............. 5.20
(Additional Resistance Heater).
7............................................. Heat Pump Dryer (Max-Tech)...... .............. \30\ 7.39
----------------------------------------------------------------------------------------------------------------
* As discussed above, the baseline CEFD2 values represent differences in test procedure between Appendix D1 and
Appendix D2 and do not constitute backsliding.
Table IV.17--Notice of Proposed Rulemaking Analysis: Electric Compact (120V) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 NOPR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline...................................... Baseline (Electromechanical 3.61 2.36
Controls).
1............................................. Baseline + Electronic Controls.. .............. 3.15
2............................................. EL1 + Optimized Heating System.. .............. 3.35
3............................................. EL2 + More Advanced Automatic .............. 4.28
Termination Control System.
4............................................. EL3 + Modulating (2-Stage) Heat. .............. 4.33
5............................................. EL4 + Inlet Air Preheat......... .............. 4.63
6............................................. Heat Pump Dryer (Max-Tech)...... .............. 6.37
----------------------------------------------------------------------------------------------------------------
Table IV.18--Notice of Proposed Rulemaking Analysis: Vented Electric Compact (240V) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 NOPR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline...................................... Baseline (Electromechanical 3.27 2.00
Controls).
1............................................. Baseline + Electronic Controls.. .............. 2.44
2............................................. EL1 + Optimized Heating System.. .............. 2.76
3............................................. EL2 + More Advanced Automatic .............. 3.30
Termination Control System.
4............................................. EL3 + Modulating (2-Stage) Heat. .............. 3.57
5............................................. EL4 + Inlet Air Preheat......... .............. 3.82
6............................................. Heat Pump Dryer (Max-Tech)...... .............. 3.91
----------------------------------------------------------------------------------------------------------------
Table IV.19--Notice of Proposed Rulemaking Analysis: Vented Gas Standard and Compact Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current NOPR CEFD2 (lb/kWh)
standard CEFD1 -------------------------------
Efficiency level Design option (lb/kWh) \31\ Vented gas Vented gas
standard compact
----------------------------------------------------------------------------------------------------------------
Baseline.............................. Baseline 3.30 2.00 1.66
(Electromechanical
Controls).
1..................................... Baseline + Electronic .............. 2.44 2.02
Controls.
2..................................... EL1 + Optimized Heating .............. 3.00 2.49
System and More
Advanced Automatic
Termination Control
System.
3..................................... EL2 + Modulating (2- .............. 3.48 2.89
Stage) Heat.
4..................................... EL3 + Inlet Air Preheat .............. 3.83 3.17
(Max-Tech).
----------------------------------------------------------------------------------------------------------------
[[Page 51758]]
---------------------------------------------------------------------------
\31\ The current standard does not distinguish a separate
product class for compact sized gas consumer clothes dryers. As
such, the current standard may apply to all gas consumer clothes
dryers.
Table IV.20--Notice of Proposed Rulemaking Analysis: Ventless Electric Compact (240V) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 NOPR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline...................................... Baseline (Electronic Controls).. 2.55 2.03
1............................................. Baseline + More Advanced .............. 2.68
Automatic Termination Control
System.
2............................................. Heat Pump Dryer (Max-Tech)...... .............. 6.80
----------------------------------------------------------------------------------------------------------------
Table IV.21--Notice of Proposed Rulemaking Analysis: Ventless Electric Combination Washer-Dryer Efficiency
Levels
----------------------------------------------------------------------------------------------------------------
Current
standard CEFD1 NOPR CEFD2 (lb/
Efficiency level Design option (lb/kWh) kWh)
----------------------------------------------------------------------------------------------------------------
Baseline...................................... Baseline (Electronic Controls).. 2.08 2.27
1............................................. Baseline + High Speed Spin...... .............. 2.55
2............................................. Heat Pump Dryer (Max-Tech)...... .............. 4.01
----------------------------------------------------------------------------------------------------------------
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the product on
the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component-by-component, to
develop a detailed bill of materials (``BOM'') for the product.
Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (available
from manufacturer websites or appliance repair websites, for example)
to develop the BOM for the product.
Price surveys: If neither a physical nor catalog teardown
is feasible (for example, for tightly integrated products such as
fluorescent lamps, which are infeasible to disassemble and for which
parts diagrams are unavailable) or cost-prohibitive and otherwise
impractical (e.g. large commercial boilers), DOE conducts price surveys
using publicly available pricing data published on major online
retailer websites and/or by soliciting prices from distributors and
other commercial channels.
In the present case, DOE conducted the analysis using physical
product teardowns to determine the baseline MPC for each product class
as outlined in chapter 5 of the NOPR TSD. DOE developed the cost-
efficiency relationships for each product class as discussed in section
IV.C.3 of this document. DOE developed incremental MPCs based on
product teardowns and manufacturing cost modeling of the expected
design changes at each efficiency level. DOE observed that the basic
product designs of vented electric and vented gas clothes dryers are
similar except for the heating system. DOE also observed that the
technology designs of standard size and compact size clothes dryers are
similar as well, simply scaled in size. As a result, in the absence of
models available on the market at certain efficiency levels for certain
product classes, DOE estimated the incremental MPC for these based on
the same design changes observed for the electric standard product
class. DOE updated the cost-efficiency analysis from the preliminary
analysis by updating the costs of raw materials and purchased
components, as well as updating costs for manufacturing equipment,
labor, and depreciation. DOE also used information from teardown of
units in the updated test sample to inform updates to the cost-
efficiency analysis. Not all units in the updated test sample were torn
down; DOE focused on units recently introduced in the market, units
with unique configuration, and units with technologies that were not
available at the time of the preliminary analysis to better inform the
costs associated with particular product classes and design options.
The resulting BOMs provided the basis for the MPC estimates in this
NOPR. The baseline MPCs for each consumer clothes dryer product class
are listed in Table IV.22, with all costs presented in 2020 dollars.
DOE requests comment on the baseline MPCs in the NOPR engineering
analysis.
Table IV.22--Notice of Proposed Rulemaking: Consumer Clothes Dryer
Baseline Manufacturing Production Costs
------------------------------------------------------------------------
Baseline MPC
Product class (2020$)
------------------------------------------------------------------------
1. Electric, Standard (4.4 cubic feet (ft\3\) or greater $250.65
capacity)..............................................
2. Electric, Compact (120 volts (V)) (less than 4.4 267.09
ft\3\ capacity)........................................
3. Vented Electric, Compact (240V) (less than 4.4 ft\3\ 267.68
capacity)..............................................
4. Gas, Standard (4.4 cubic ft\3\ or greater capacity).. 284.33
5. Gas, Compact (less than 4.4 ft\3\ capacity).......... 309.82
[[Page 51759]]
6. Ventless Electric, Compact (240V) (less than 4.4 464.90
ft\3\ capacity)........................................
7. Electric, Combination Washer-Dryer................... 629.65
------------------------------------------------------------------------
The following section presents the incremental MPCs for each
consumer clothes dryer product class.
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
product classes that were analyzed, as well as those extrapolated from
a product class with similar features. DOE developed estimates of MPCs
for each unit in the teardown sample to develop a comprehensive set of
incremental MPCs (i.e., the additional costs manufacturers would likely
incur by producing consumer clothes dryers at each efficiency level
compared to the baseline).
In response to the MPCs presented in the preliminary analysis, AHAM
stated that due to unprecedented supply chain issues facing home
appliance manufacturers resulting from the COVID-19 pandemic and
increased tariffs on raw materials, components, and finished goods, DOE
must take into account these challenges if it is to consider amending
energy conservation standards. AHAM stated it is working to collect
data on the impact of supply chain challenges and would be willing to
share that data with DOE. (AHAM, No. 23 at p. 9) DOE also received
similar feedback from manufacturers during the interview process. DOE
notes that increased costs associated with recent supply chain issues
have been implemented in the cost analysis and are presented in the
MPCs in this NOPR analysis, specifically by way of 5-year moving
averages for material and purchase parts prices.
The resulting incremental MPCs from this NOPR analysis are provided
in Table IV.23 through Table IV.29. See chapter 5 of the NOPR TSD for
additional detail on the engineering analysis. DOE requests comment on
the incremental MPCs from the NOPR engineering analysis, as well as any
data on the impact of supply chain challenges that could better inform
the cost analysis.
Table IV.23--Notice of Proposed Rulemaking Analysis: Electric Standard
Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic $11.02
Controls.
2.............................. EL1 + Optimized Heating 13.70
System.
3.............................. EL2 + More Advanced 16.59
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 21.00
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 70.51
6.............................. Hybrid Heat Pump Dryer 226.18
(Additional Resistive
Heater).
7.............................. Heat Pump Dryer (Max- 239.46
Tech).
------------------------------------------------------------------------
Table IV.24--Notice of Proposed Rulemaking Analysis: Electric Compact
(120V) Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic $13.43
Controls.
2.............................. EL1 + Optimized Heating 17.76
System.
3.............................. EL2 + More Advanced 21.40
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 26.32
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 83.07
6.............................. Heat Pump Dryer (Max- 220.29
Tech).
------------------------------------------------------------------------
Table IV.25--Notice of Proposed Rulemaking Analysis: Vented Electric
Compact (240V) Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic $13.99
Controls.
2.............................. EL1 + Optimized Heating 18.31
System.
[[Page 51760]]
3.............................. EL2 + More Advanced 21.97
Automatic Termination
Control System.
4.............................. EL3 + Modulating (2- 26.88
Stage) Heat.
5.............................. EL4 + Inlet Air Preheat 83.63
6.............................. Heat Pump Dryer (Max- 220.84
Tech).
------------------------------------------------------------------------
Table IV.26--Notice of Proposed Rulemaking Analysis: Vented Gas Standard
Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic $14.50
Controls.
2.............................. EL1 + Optimized Heating 17.46
System and More
Advanced Automatic
Termination Control
System.
3.............................. EL2 + Modulating (2- 26.75
Stage) Heat.
4.............................. EL3 + Inlet Air Preheat 76.25
(Max-Tech).
------------------------------------------------------------------------
Table IV.27--Notice of Proposed Rulemaking Analysis: Vented Gas Compact
Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline ..............
(Electromechanical
Controls).
1.............................. Baseline + Electronic $12.32
Controls.
2.............................. EL1 + Optimized Heating 16.49
System and More
Advanced Automatic
Termination Control
System.
3.............................. EL2 + Modulating (2- 26.97
Stage) Heat.
4.............................. EL3 + Inlet Air Preheat 83.72
(Max-Tech).
------------------------------------------------------------------------
Table IV.28--Notice of Proposed Rulemaking Analysis: Ventless Electric
Compact (240V) Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic ..............
Controls).
1.............................. Baseline + More $3.01
Advanced Automatic
Termination Control
System.
2.............................. Heat Pump Dryer (Max- 184.11
Tech).
------------------------------------------------------------------------
Table IV.29--Notice of Proposed Rulemaking Analysis: Ventless Electric
Combination Washer-Dryer Incremental Manufacturing Production Costs
------------------------------------------------------------------------
Incremental
Efficiency level Design option MPC (2020$)
------------------------------------------------------------------------
Baseline....................... Baseline (Electronic ..............
Controls).
1.............................. Baseline + High Speed $0.00
Spin.
2.............................. Heat Pump Dryer (Max- 383.58
Tech).
------------------------------------------------------------------------
D. Markups Analysis
The markups analysis develops appropriate markups (e.g., retailer
markups, distributor markups, contractor markups) in the distribution
chain and sales taxes to convert the manufacturer selling price
(``MSP'') estimates derived in the engineering analysis to consumer
prices, which are then used in the LCC and PBP analysis. At each step
in the distribution channel, companies mark up the price of the product
to cover costs.
Before developing mark-ups, DOE defines key market participants and
identifies distribution channels.
For consumer clothes dryers, the main parties in the distribution
chain are retailers.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the
[[Page 51761]]
difference in price between baseline and higher-efficiency models (the
incremental cost increase). The incremental markup is typically less
than the baseline markup and is designed to maintain similar per-unit
operating costs before and after new or amended standards.\32\
---------------------------------------------------------------------------
\32\ Because the projected price of standards-compliant products
is typically higher than the price of baseline products, using the
same markup for the incremental cost and the baseline cost would
result in higher per-unit operating profit. While such an outcome is
possible, DOE maintains that in markets that are reasonably
competitive it is unlikely that standards would lead to a
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------
DOE relied on economic data from the U.S. Census Bureau to estimate
average baseline and incremental markups. Specifically, DOE used the
2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector to develop retailer markups; \33\ and the 2017 Annual
Wholesale Trade Survey for the ``household appliances, and electrical
and electronic goods merchant wholesalers'' to estimate wholesaler
markups.\34\
---------------------------------------------------------------------------
\33\ US Census Bureau, Annual Retail Trade Survey. 2017.
Available at www.census.gov/programs-surveys/arts.html (last
accessed November 17, 2021).
\34\ US Census Bureau, Annual Wholesale Trade Survey. 2017.
Available at www.census.gov/awts (last accessed November 17, 2021).
---------------------------------------------------------------------------
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for consumer clothes dryers.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of consumer clothes dryers at different efficiencies
in representative U.S. single-family homes, multi-family residences,
and mobile homes, and to assess the energy savings potential of
increased consumer clothes dryer efficiency. The energy use analysis
estimates the range of energy use of consumer clothes dryers in the
field (i.e., as they are actually used by consumers). The energy use
analysis provides the basis for other analyses DOE performed,
particularly assessments of the energy savings and the savings in
consumer operating costs that could result from adoption of amended or
new standards.
To establish a reasonable range of energy consumption in the field
for consumer clothes dryers, DOE primarily used data from the EIA's
2015 Residential Energy Consumption Survey (``2015 RECS'').\35\ 2015
RECS collected data on 5,686 housing units and was constructed by EIA
to be a national representation of the household population in the
United States. DOE developed household samples from 2015 RECS.\36\
---------------------------------------------------------------------------
\35\ U.S. Department of Energy--Energy Information
Administration, Residential Energy Consumption Survey: 2015 Public
Use Data Files. Available at www.eia.doe.gov/emeu/recs/recspubuse15/pubuse15.html (last accessed November 18, 2021).
\36\ Microdata of 2020 RECS, which contains household samples,
was released in July 2022. Hence it was not available at the time
the NOPR analysis was conducted. However, DOE plans to use 2020 RECS
for the Final Rule analysis.
---------------------------------------------------------------------------
DOE divided the sample of households into four sub-samples to
characterize the product classes being analyzed: standard or compact
clothes dryer using electricity or natural gas as the clothes dryer
fuel. For compact clothes dryers, DOE developed a sub-sample consisting
of households with an electric or gas clothes dryer in multifamily
buildings, manufactured homes, and single-family homes with less than
1,000 square feet and no garage or basement, since these products are
most likely to be found in these housing types.
The energy use analysis requires DOE to establish a range of total
annual usage (number of cycles) in order to estimate annual energy
consumption by a clothes dryer. DOE estimated the number of clothes
dryer cycles per year for each sample household using data given by
2015 RECS on the number of laundry loads washed (clothes washer cycles)
per week and the frequency of clothes dryer use.
AHAM agreed with DOE's use of the 2015 RECS to establish the annual
number of cycles for clothes dryers along with other available
national, statistically significant field use data that may be
available. (AHAM, No. 23 at pp. 10-11) In contrast, NEEA encouraged DOE
to increase the number of annual dryer cycles in its energy analysis or
conduct its own field study to more accurately determine this value.
NEEA found that the RECS estimate of 243 dryer cycles per year was
significantly lower than its own RBSA Laundry Study, which found 311 +/
-42 loads per year for the same group of products, which was based on
metering of dryers in the field. NEEA also indicated that the RECS
methodology is subject to recall bias and may not be an accurate
representation of consumer use. (NEEA, No. 30 at pp. 14-15; Webinar
Transcript, No. 22 at pp. 41-42) ASAP and NRDC encouraged DOE to
consider data from the NEEA 2014 Field Study in estimating the number
of dryer loads per year. (ASAP, NRDC, No. 25 at p. 2)
The RBSA study includes sample households from three states in the
U.S. Northwest. Since sample households in 2015 RECS are nationally
representative, it is more accurate to use in the analysis.
GEA stated that DOE must consider product performance to prevent
consumer usage with unintended energy consumption consequences, stating
that long cycle times may lead to re-washing or re-drying of clothes.
(GEA, No. 28 at pp. 2-3)
For this analysis, DOE did not find any studies supporting or
indicating an increased usage resulting from cycle times. DOE will
consider any new information or data that points to an impact on usage
due to a change in cycle times. The California IOUs suggested that
updated RECS data be utilized for the final rule analysis. (CA IOUs,
No. 26 at p. 6) Data collection for the 2020 RECS are in progress but
it is unclear if the data needed to estimate clothes dryer cycles will
be available for the final rule analysis.
The California IOUs recommended DOE consider the impact of the
COVID-19 pandemic has had as updates are made. The California IOUs
encouraged DOE to consider carefully what portions of updated RECS data
are representative of current and future use as the updated data may
have heavy influences from the COVID-19 pandemic. (CA IOUs, No. 26 at
p. 6) Energy Solutions also requested that DOE consider how consumer
usage has shifted due to the COVID-19 pandemic. (Webinar Transcript,
No. 22 at p. 66)
If appropriate data from the 2020 RECS are available for the final
rule analysis, DOE will evaluate the extent to which the data may have
been affected by changes in dryer usage due to the pandemic.
For each considered efficiency level, DOE derived the field energy
use by separately estimating the active mode and standby mode energy
use and then adding them together. The per-cycle active mode energy
consumption is estimated using the DOE clothes dryer test procedure at
appendix D2. It can be back-calculated from the test procedure results
by dividing the weight (lb) of clothes dried per cycle (8.45 lb for
standard and 3 lb for compact clothes dryers) by the CEFD2
(lb/kWh) and subtracting standby power. DOE adjusted the test procedure
energy use to reflect field conditions by making an adjustment for
clothes dryer load weight and moisture removal factor. Chapter 7 of the
NOPR TSD provides more detail about these calculations.
DOE also considered the impact of clothes dryer operation on home
heating and cooling loads. A clothes dryer releases heat to the
surrounding environment. If the clothes dryer is located indoors, its
use will tend to
[[Page 51762]]
slightly reduce the heating load during the heating season and slightly
increase the cooling load during the cooling season. To calculate this
impact, DOE first estimated whether the clothes dryer in a RECS sample
home is located in conditioned space (referred to as indoors) or in
unconditioned space (such as garages, unconditioned basements, outdoor
utility closets, or attics). Based on the 2015 RECS and the 2015
American Housing Survey (``AHS''),\37\ DOE assumed that 50 percent of
vented standard electric and gas clothes dryers are located indoors,
while 100 percent of compact and ventless clothes dryers are located
indoors. For these installations, DOE utilized the results from a
European Union study about the impacts of clothes dryers on home
heating and cooling loads to determine the appropriate factor to apply
to the total clothes dryer energy use.\38\ This study reported that for
vented clothes dryers there is a factor of negative 3 to 9 percent
(average 6 percent), and for ventless clothes dryers there is a factor
of positive 7 to 15 percent (average 11 percent).\39\ This effect is
likely to be approximately the same for all of the considered
efficiency levels because the amount of air passing through the clothes
dryer does not vary.
---------------------------------------------------------------------------
\37\ U.S. Census Bureau: Housing and Household Economic
Statistics Division, American Housing Survey National Data. 2015,
HUD. Available at www.census.gov/programs-surveys/ahs/data.2015.html
(last accessed November 29, 2021).
\38\ R[uuml]denauer, I. and C.-O. Gensch, Energy demand of
tumble dryers with respect to differences in technology and ambient
conditions, January 13, 2004. European Committee of Domestic
Equipment Manufacturers (CECED).
\39\ For units that are located in conditioned space, a negative
factor for vented consumer clothes dryers translates to a penalty in
energy use whereas a positive factor for ventless consumer clothes
dryers translates to a credit in energy use. For details of the
calculations see the R[uuml]denauer, I. and C.-O. Gensch study
referenced above.
---------------------------------------------------------------------------
ASAP and NRDC requested that DOE confirm the baseline annual energy
use for ventless electric standard dryers, pointing out that while
baseline CEFD2 values for vented and ventless models are
almost identical, the baseline annual energy consumption for ventless
models is almost three times smaller than that for vented models.
(ASAP, NRDC, No. 25 at pp. 2-3; ASAP, No. 22 at p. 40)
The difference in energy use between vented and ventless models is
a function of dryer usage, efficiency, and additional impacts on
heating and cooling loads from operating a dryer. DOE has since updated
its product classes for electric standard dryers and the update removes
the distinction between ventless and vented product classes in this
NOPR. DOE proposes an ``Electric Standard'' product class containing
both the vented electric standard product class and the ventless
electric standard product class analyzed in the preliminary analysis.
See the discussion of product classes in section IV.A.1 of this
document.
Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for consumer clothes dryers.
F. Life-Cycle Cost and Payback Period Analysis
DOE conducted LCC and PBP analyses to evaluate the economic impacts
on individual consumers of potential energy conservation standards for
consumer clothes dryers. The effect of new or amended energy
conservation standards on individual consumers usually involves a
reduction in operating cost and an increase in purchase cost. DOE used
the following two metrics to measure consumer impacts:
(1) The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
(2) The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
at higher efficiency levels by the change in annual operating cost for
the year that amended or new standards are assumed to take effect.
For any given efficiency level, DOE measures the change in LCC
relative to the LCC in the no-new-standards case, which reflects the
estimated efficiency distribution of consumer clothes dryers in the
absence of new or amended energy conservation standards. In contrast,
the PBP for a given efficiency level is measured relative to the
baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. As stated previously, DOE developed household samples
from the 2015 RECS.\40\ For each sample household, DOE determined the
energy consumption for the consumer clothes dryers and the appropriate
energy price. By developing a representative sample of households, the
analysis captured the variability in energy consumption and energy
prices associated with the use of consumer clothes dryers.
---------------------------------------------------------------------------
\40\ DOE will update all the data to 2020 RECS if it is
available prior to the final rule.
---------------------------------------------------------------------------
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached to each value, to account for their
uncertainty and variability.
The computer model DOE uses to calculate the LCC and PBP relies on
a Monte Carlo simulation to incorporate uncertainty and variability
into the analysis. The Monte Carlo simulations randomly sample input
values from the probability distributions and consumer clothes dryers
user samples. For this rulemaking, the Monte Carlo approach is
implemented in MS Excel together with the Crystal Ball\TM\ add-on.\41\
The model calculated the LCC and PBP for products at each efficiency
level for 10,000 housing units per simulation run. The analytical
results include a distribution of 10,000 data points showing the range
of LCC savings for a given efficiency level relative to the no-new-
standards case efficiency distribution. In performing an iteration of
the Monte Carlo simulation for a given consumer, product efficiency is
chosen based on its probability. If the chosen product efficiency is
greater than or equal to the efficiency of the standard level under
consideration, the LCC and PBP calculation reveals that a consumer is
not impacted by the standard level. By accounting for consumers who
already purchase more-efficient products, DOE avoids overstating the
potential benefits from increasing product efficiency.
---------------------------------------------------------------------------
\41\ Crystal Ball\TM\ is commercially-available software tool to
facilitate the creation of these types of models by generating
probability distributions and summarizing results within Excel.
Available at www.oracle.com/technetwork/middleware/crystalball/overview/index.html (last accessed November 8, 2021).
---------------------------------------------------------------------------
DOE calculated the LCC and PBP for all consumers of consumer
clothes dryers as if each were to purchase a new product in the
expected year of required compliance with new or amended standards.
Amended standards would
[[Page 51763]]
apply to consumer clothes dryers manufactured 3 years after the date on
which any amended standard is published. (42 U.S.C. 6295(m)(4)(A)(i))
At this time, DOE estimates publication of a final rule in 2023.
Therefore, for purposes of its analysis, DOE used 2027 as the first
year of compliance with any amended standards for consumer clothes
dryers.
Table IV.30 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the NOPR TSD and its appendices.
Table IV.30--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost...................... Derived by multiplying MPCs by
manufacturer and retailer markups
and sales tax, as appropriate. Used
historical data to derive a price
scaling index to project product
costs.
Installation Costs................ Baseline installation cost
determined with data from RSMeans
Residential Cost Data 2020. Assumed
no change with efficiency level.
Annual Energy Use................. The total per unit energy use
multiplied by the cycles per year.
Variability: Based on the 2015 RECS
(dryer usage), market data on
remaining moisture content
(``RMC'') and load weights.
Energy Prices..................... Electricity: Based on EEI 2020.
Variability: Regional energy prices
determined for each Census regions.
Energy Price Trends............... Based on AEO2021 price projections.
Repair and Maintenance Costs...... Assumed no change with efficiency
level for maintenance costs. Repair
costs estimated for each product
class and efficiency level.
Product Lifetime.................. Average: 14 years.
Discount Rates.................... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the
considered appliances, or might be
affected indirectly. Primary data
source was the Federal Reserve
Board's Survey of Consumer
Finances.
Compliance Date................... 2027.
------------------------------------------------------------------------
* References for the data sources mentioned in this table are provided
in the sections following the table or in chapter 8 of the NOPR TSD.
1. Product Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products, because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis implicitly includes
factors such as efficiencies in labor, capital investment, automation,
materials prices, distribution, and economies of scale at an industry-
wide level. To derive the learning rate parameter for consumer clothes
dryers, DOE obtained historical Producer Price Index (``PPI'') data for
``household laundry equipment'' between 1948 and 2016 and ``major
household appliance: primary products'' between 2016 and 2020 from the
Bureau of Labor Statistics (``BLS'') to form a time series price index
representing household laundry equipment from 1948 to 2020.\42\
Inflation-adjusted price indices were calculated by dividing the PPI
series by the gross domestic product index from the Bureau of Economic
Analysis for the same years. Using data from 1948-2020, the estimated
learning rate (defined as the fractional reduction in price from each
doubling of cumulative production) is 14.8 percent.
---------------------------------------------------------------------------
\42\ Household laundry equipment PPI (PCU3352203352204) is
available till May 2016, and major household appliance: primary
products (PCU335220335220P) is available starting from 2016. See
more information at www.bls.gov/ppi/ (last accessed November 29,
2021).
---------------------------------------------------------------------------
ASAP and NRDC encouraged DOE to investigate how the analysis could
reflect learning rates associated with specific technology options for
clothes dryers and suggested an approach similar to that taken in the
2017 Final Rule for ceiling fans where DOE estimated a learning rate
specific to brushless DC motors. (ASAP, NRDC, No. 25 at p. 4)
DOE examined data pertaining to specific technologies, such as the
heat pump. However, the heat pump producer price index series starts
only from 2010, and the deflated PPI for the limited data does not
indicate any observable trend specific to heat pump technology during
this limited time series. DOE has therefore not incorporated a learning
or experience trend specific to heat pump technology in this analysis.
As heat pump technology continues to mature and gain market share over
time, DOE expects that ``learning'' or ``experience'' curves are likely
to become relevant to heat pump technology in the future. DOE seeks
comment on this approach and how product costs for heat pump technology
may change over time.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE used data from
RSMeans Residential Cost Data to estimate the baseline installation
cost for consumer clothes dryers.\43\ DOE estimated that for the new
construction market it takes on average a total of one hour to install
a clothes dryer, while for the replacement or new owners markets it
takes a total of two-and a-half hours to install a clothes dryer (one
hour for trip charge, half an hour to remove old clothes dryer, and one
hour to install).
---------------------------------------------------------------------------
\43\ RSMeans Online Residential Data (2020 Release). Gordian:
Greenville, SC. Available at www.rsmeansonline.com/ (last accessed
November 8, 2021).
---------------------------------------------------------------------------
ASAP and NRDC encouraged DOE to reevaluate the increased
installation costs associated with the additional labor hours DOE
stated would be required for heat pumps due to their larger dimensions
relative to conventional dryers. According to ASAP and NRDC, ENERGY
STAR-certified heat pump dryers have total volumes of either 18.1 or
18.4 ft\3\, while most non-heat pump models have total volumes between
17 and 23 ft\3\, so it does not appear that heat pump dryers have
larger dimensions than
[[Page 51764]]
conventional dryers. (ASAP, NRDC, No. 25 at p. 3)
DOE collected and analyzed retail data of available models of both
conventional dryers and dryers with heat pump technology, and found
that the dimensions and weight of heat pump dryers are not
significantly different from other conventional dryers. DOE has
therefore revised its installation cost to not vary based on
technology.
3. Annual Energy Consumption
For each sampled household, DOE determined the energy consumption
for a consumer clothes dryer at different efficiency levels using the
approach described previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity and gas prices more accurately
captures the incremental savings associated with a change in energy use
from higher efficiency, they provide a better representation of
incremental change in consumer costs than average electricity and gas
prices. Therefore, DOE applied average electricity and gas prices for
the energy use of the product purchased in the no-new-standards case,
and marginal electricity and gas prices for the incremental change in
energy use associated with the other efficiency levels considered.
DOE derived electricity prices in 2020 using data from Edison
Electric Institute (``EEI'') Typical Bills and Average Rates
reports.\44\ Based upon comprehensive, industry-wide surveys, this
semi-annual report presents typical monthly electric bills and average
kilowatt-hour costs to the customer as charged by investor-owned
utilities. DOE calculated residential sector electricity prices using
the methodology described in Coughlin and Beraki (2018).\45\
---------------------------------------------------------------------------
\44\ Edison Electric Institute. Typical Bills and Average Rates
Report. 2020. Winter 2020, Summer 2020: Washington, DC.
\45\ Coughlin, K. and B. Beraki.2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169.
Available at ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------
DOE obtained data for calculating regional prices of natural gas
from the EIA publication, Natural Gas Navigator.\46\ This publication
presents monthly volumes of natural gas deliveries and average prices
by state for residential, commercial, and industrial customers.
---------------------------------------------------------------------------
\46\ U.S. Department of Energy-Energy Information
Administration. Natural Gas Navigator 2020. Available at
www.eia.gov/naturalgas/data.php (last accessed November 14, 2021).
---------------------------------------------------------------------------
DOE's methodology allows electricity and gas prices to vary by
sector, region and season. In the analysis, variability in electricity
and gas prices is chosen to be consistent with the way the consumer
economic and energy use characteristics are defined in the LCC
analysis. For consumer clothes dryers, DOE calculated weighted-average
values for average and marginal electricity and gas price for the nine
census divisions. See chapter 8 of the NOPR TSD for details.
To estimate energy prices in future years, DOE multiplied the 2020
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2021,
which has an end year of 2050.\47\ To estimate price trends after 2050,
DOE used the average annual rate of change in prices from 2040 through
2050.
---------------------------------------------------------------------------
\47\ EIA. Annual Energy Outlook 2021 with Projections to 2050.
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last
accessed November 8, 2021).
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product. Past rules
indicate in general that small incremental increases in product
efficiency produce no, or only minor, changes in repair and maintenance
costs compared to baseline efficiency products. 76 FR 22454.
For consumer clothes dryers, DOE derived annualized repair
frequencies based on Consumer Reports data on repair and maintenance
issues for clothes dryers during the first five years of ownership. DOE
estimated that on average 2.7 percent of electric and 3.3 percent of
gas clothes dryers are repaired each year. DOE estimated that an
average service call and repair takes about 2.5 hours and that the
average material cost is equal to one-half of the equipment cost. The
values for cost per service call are then annualized by multiplying by
the frequencies and dividing by the average equipment lifetime of 14
years.
AHAM suggested that repair costs may be higher with increased
efficiency because repairs will likely be more complex. AHAM stated
that if energy conservation standards require baseline products to have
electronic controls, repair and maintenance costs will likely increase
for the same reason. Additionally, AHAM stated that longer cycle times
may also drive increased rate of repair and shorter product lifetimes.
(AHAM, No. 23 at p. 11) Whirlpool requested that DOE account for
changes to components that may be needed to accommodate longer cycle
times, as well as the possibility of increased maintenance costs
associated with longer cycle times. According to Whirlpool, increased
cycle time leads to more wear and tear on the dryer as components could
fail before the end of the estimated lifespan of the entire dryer,
resulting in additional expenses. (Whirlpool, No. 27 at p. 12)
DOE based its current estimates of repair and maintenance cost on
available data. As stated above, DOE estimated that an average service
call and repair for a consumer clothes dryer takes about 2.5 hours and
the average material cost is equal to one-half of the equipment cost.
DOE will take into consideration any data on frequency of repair for
higher-efficiency dryers if it becomes available.
DOE requests information and data on repair cost for replacing an
electromechanical and electronic control panel.
In addition, DOE seeks input on characterizing maintenance and
repair costs for more-efficient consumer clothes dryers.
6. Product Lifetime
For consumer clothes dryers, DOE developed a distribution of
lifetimes from which specific values are assigned to the appliances in
the samples. DOE conducted an analysis of actual lifetime in the field
using a combination of historical shipments data, the stock of the
considered appliances in the American Housing Survey, and responses in
RECS on the age of the appliances in the homes. The data allowed DOE to
estimate a survival function, which provides an average appliance
lifetime. This analysis yielded a lifetime probability distribution
with an average lifetime for consumer clothes dryers of approximately
14 years. See chapter 8 of the NOPR TSD for further details.
Whirlpool requested that DOE account for changes to components that
may be needed to accommodate longer cycle times, as well as the
possibility of shorter product lifetimes associated with longer cycle
times. (Whirlpool, No. 27 at p. 12)
DOE will take into consideration any data that becomes available on
changes to components to accommodate longer cycle times and the
possibility of its impact on product lifetime.
[[Page 51765]]
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating cost
savings. DOE estimated a distribution of discount rates for consumer
clothes dryers based on the opportunity cost of consumer funds.
DOE applies weighted average discount rates calculated from
consumer debt and asset data, rather than marginal or implicit discount
rates.\48\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long time horizon modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\48\ The implicit discount rate is inferred from a consumer
purchase decision between two otherwise identical goods with
different first cost and operating cost. It is the interest rate
that equates the increment of first cost to the difference in net
present value of lifetime operating cost, incorporating the
influence of several factors: transaction costs; risk premiums and
response to uncertainty; time preferences; interest rates at which a
consumer is able to borrow or lend.
---------------------------------------------------------------------------
To establish residential discount rates for the LCC analysis, DOE
identified all relevant household debt or asset classes in order to
approximate a consumer's opportunity cost of funds related to appliance
energy cost savings. It estimated the average percentage shares of the
various types of debt and equity by household income group using data
from the Federal Reserve Board's Survey of Consumer Finances \49\
(``SCF'') for 1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019.
Using the SCF and other sources, DOE developed a distribution of rates
for each type of debt and asset by income group to represent the rates
that may apply in the year in which amended standards would take
effect. DOE assigned each sample household a specific discount rate
drawn from one of the distributions. The average rate across all types
of household debt and equity and income groups, weighted by the shares
of each type, is 4.3 percent. See chapter 8 of the NOPR TSD for further
details on the development of consumer discount rates.
---------------------------------------------------------------------------
\49\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed November 8, 2021.)
---------------------------------------------------------------------------
Energy Solutions questioned whether DOE expects changes to be made
regarding average real effective discount rate as a function of
different income groups. (Webinar Transcript, No. 22 at p. 71)
As discussed above, DOE takes different income groups into
consideration for establishing discount rates.
8. Energy Efficiency Distribution in the No-New-Standards Case
To accurately estimate the share of consumers that would be
affected by a potential energy conservation standard at a particular
efficiency level, DOE's LCC analysis considered the projected
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy
conservation standards).
To estimate the energy efficiency distribution of consumer clothes
dryers for 2027, DOE used data from DOE's CCMS and ENEGY STAR Clothes
Dryer program.\50\ \51\ DOE estimated an annual 0.31 percent and 0.37
percent increase in shipment-weighted efficiency beginning in 2022 for
electric standard and vented gas standard clothes dryers, respectively.
Annual shipment-weighted efficiency for the other product classes
(which in total have less than 2.5 percent market share) is held
constant. The estimated market shares for the no-new-standards case for
consumer clothes dryers are shown in Table IV.31 and Table IV.32. See
chapter 8 of the NOPR TSD for further information on the derivation of
the efficiency distributions.
---------------------------------------------------------------------------
\50\ U.S. Department of Energy's Compliance Certification
Database. Available at www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (last accessed November 8, 2021).
\51\ ENERGY STAR, ENERGY STAR[supreg] Unit Shipment and Market
Penetration Report Calendar Year 2020 Summary. Available at
www.energystar.gov/partner_resources/products_partner_resources/brand_owner_resources/unit_shipment_data (last accessed November 8,
2021).
Table IV.31--No-New-Standards Case Efficiency Distribution in 2027: Electric Standard, Electric Compact (120V), Vented Electric Compact (240V), and
Ventless Electric Compact (240V)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric standard Electric compact (120V) Vented electric, compact Ventless electric, compact
----------------------------------------------------------------------------------------- (240V) (240V)
---------------------------------------------------------------
CEFD2 (lb/kWh) Share (%) CEFD2 (lb/kWh) Share (%) CEFD2 (lb/kWh) CEFD2 (lb/kWh)
Share (%) Share (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2.20.................................... 30.8 2.36 58.6 2.00 73.7 2.03 10.4
2.68.................................... 0.89 3.15 0.0 2.44 0.0 2.68 87.5
3.04.................................... 1.07 3.35 10.3 2.76 10.5 6.80 2.08
3.27.................................... 1.94 4.28 0.0 3.30 15.8
3.93.................................... 61.0 4.33 0.0 3.57 0.0
4.21.................................... 2.62 4.63 0.0 3.82 0.0
5.20.................................... 0.60 6.37 31.0 3.91 0.0
7.39.................................... 1.06
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 51766]]
Table IV.32--No-New-Standards Case Efficiency Distribution in 2027: Vented Gas Standard, Vented Gas Compact, and
Ventless Electric Combination Washer-Dryer
----------------------------------------------------------------------------------------------------------------
Vented gas standard Vented gas compact Ventless electric, combination
--------------------------------------------------------------------------------- washer-dryer
-------------------------------
CEFD2 (lb/kWh) Share (%) CEFD2 (lb/kWh) Share (%) CEFD2 (lb/kWh)
Share (%)
----------------------------------------------------------------------------------------------------------------
2.00............................ 49.3 1.66 100 2.27 70.0
2.44............................ 4.45 2.02 0.0 2.33 26.7
3.00............................ 3.75 2.49 0.0 4.01 3.33
3.48............................ 38.1 2.89 0.0
3.83............................ 4.44 3.17 0.0
----------------------------------------------------------------------------------------------------------------
NEEA encouraged DOE to retain the market distribution of dryer
efficiency levels shown in the NIA of the preliminary analysis TSD.
(NEEA, No. 30 at p. 15)
DOE has revised its efficiency distribution based on more recent
market data. DOE chose to not develop a consumer choice model for
estimating the efficiency distribution for this round of analysis, as
the only available model and price data are more than a decade old, and
not as useful in capturing the current distribution. DOE will update
the efficiency distribution if more recent price data becomes
available.
DOE requests comments, information, and data on the no-new-
standards case efficiency distribution of consumer clothes dryers.
9. Payback Period Analysis
The payback period is the amount of time it takes the consumer to
recover the additional installed cost of more-efficient products,
compared to baseline products, through energy cost savings. Payback
periods are expressed in years. Payback periods that exceed the life of
the product mean that the increased total installed cost is not
recovered in reduced operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. The
PBP calculation uses the same inputs as the LCC analysis, except that
discount rates are not needed.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the amended standards
would be required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\52\
The shipments model takes an accounting approach, tracking market
shares of each product class and the vintage of units in the stock.
Stock accounting uses product shipments as inputs to estimate the age
distribution of in-service product stocks for all years. The age
distribution of in-service product stocks is a key input to
calculations of both the NES and NPV, because operating costs for any
year depend on the age distribution of the stock.
---------------------------------------------------------------------------
\52\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
Total product shipments for consumer clothes dryers are developed
by considering the demand from replacements for units in stock that
fail and the demand from new installations in newly constructed homes.
DOE calculated shipments due to replacements using the retirement
function developed for the LCC analysis. DOE calculated shipments due
to new installations using estimates for consumer clothes dryer
saturation rate in newly constructed homes from 2010 to 2015 in 2015
RECS and projections of new housing starts from AEO2021.
DOE disaggregated total product shipments into each product class
using estimated market shares of each product class. To estimate these
market shares, DOE first developed a linear time-series regression
model to estimate market share between the product fuel type (gas or
electric) by fitting the historical shipments of gas consumer clothes
dryers. Historical shipments data shown a steady decline of market
share of gas consumer clothes dryers from 23 percent in 2000 to 18
percent in 2020. The linear regression model indicates that market
share of gas consumer clothes dryers is strongly correlated with its
historical time-series.
After developing the market share estimation between the electric
and gas consumer clothes dryers, DOE then subtracted estimated gas
clothes dryer market share from total shipments and divided the
electric clothes dryer market share into each electric consumer clothes
dryer product class. DOE estimated that electric standard and vented
gas standard consumer clothes dryers account for approximately 84
percent and 14 percent of the total shipments during the analysis
period, respectively.
Whirlpool points out that the projected consumer clothes dryer
market shares by product class do not show any change in the balance of
sale between the product classes, aside from a loss of share from
Vented Gas Standard and an increase in share of Vented Electric
Standard. Whirlpool indicates that they have started to see more
shipments of other product classes over the last few years, including
the ventless and combination washer/dryer product classes and therefore
suggests that DOE project some growth in the balance of sale of these
product classes. (Whirlpool, No. 27 at pp. 17-18)
For this analysis, DOE does consider a slight growth in the market
share of other product classes such as ventless and combination washer/
dryers. DOE will consider any specific data that is available to
project this category more accurately.
To estimate shipments under a standards case, DOE considers the
impacts on shipments from changes in product purchase price and
operating cost associated with higher energy efficiency levels using a
price elasticity and an efficiency elasticity. As in the
[[Page 51767]]
April 2021 Preliminary Analysis, DOE employed a 0.2 percent efficiency
elasticity rate and a price elasticity of -0.45 percent in its
shipments model. These values are based on analysis of aggregated data
for five residential appliances including consumer clothes washers,
dishwashers, refrigerators, freezers, and room air-conditioners.\53\
The market impact is defined as the difference between the product of
price elasticity of demand and the change in price due to a standard
level, and the product of the efficiency elasticity and the change in
operating costs due to a standard level. See chapter 9 of the NOPR TSD
for details.
---------------------------------------------------------------------------
\53\ Fujita, K. (2015) Estimating Price Elasticity using Market-
Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL-
188289.
---------------------------------------------------------------------------
ASAP and NRDC encouraged DOE to clarify and confirm whether the
efficiency elasticity is considered in calculating the standards-case
shipments. Commenters noted that the preliminary TSD described a price
elasticity of -0.45 and an efficiency elasticity of +0.2 but that the
equation for calculating total shipments in the standards case included
only the price elasticity of -0.45. (ASAP, NRDC, No. 25 at p. 4)
As discussed earlier, DOE considers the impact of increase in
purchase price as well as efficiency in estimating the shipments
through the use of a price elasticity. The NOPR TSD describes both
elasticities and provides an equation in chapter 9.
DOE requests comment on its methodology for estimating shipments.
DOE also requests comment on its approach to estimate the market share
for each consumer clothes dryer product class.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels.\54\
(``Consumer'' in this context refers to consumers of the product being
regulated.) DOE calculates the NES and NPV for the potential standard
levels considered based on projections of annual product shipments,
along with the annual energy consumption and total installed cost data
from the energy use and LCC analyses. For the present analysis, DOE
projected the energy savings, operating cost savings, product costs,
and NPV of consumer benefits over the lifetime of consumer clothes
dryers sold from 2027 through 2056.
---------------------------------------------------------------------------
\54\ The NIA accounts for impacts in the 50 states and the
District of Columbia.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of products with efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.33 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV.33--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments......................... Annual shipments from shipments
model.
Compliance Date of Standard....... 2027.
Efficiency Trends................. No-new-standards case: Annual
efficiency improvement of 0.31
percent for electric standard and
0.37 for vented gas standard
consumer clothes dryers.
Standards cases: ``Roll up''
equipment to meet potential
efficiency level.
Annual Energy Consumption per Unit Calculated for no-new-standards case
and each TSL based on inputs from
energy use analysis.
Total Installed Cost per Unit..... Calculated for no-new-standards case
and each TSL based on inputs from
the LCC analysis. Incorporates
projection of future product prices
based on historical data.
Repair and Maintenance Cost per Assumed no change with efficiency
Unit. level for maintenance cost. Repair
cost is calculated for each
efficiency level based on inputs
from the LCC analysis.
Energy Prices..................... Estimated average and marginal
electricity and gas prices from the
LCC analysis based on EEI and EIA
data.
Energy Price Trends............... AEO2021 projections (to 2050) and
extrapolation using a fixed annual
rate of price change between 2040
and 2050 thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO2021.
Discount Rate..................... 3 percent and 7 percent.
Present Year...................... 2021.
------------------------------------------------------------------------
1. Product Efficiency Trends
A key component of the NIA is the trend in energy efficiency
projected for the no-new-standards case and each of the standards
cases. Section IV.F.8 of this document describes how DOE developed an
energy efficiency distribution for the no-new-standards case (which
yields a shipment-weighted average efficiency) for each of the
considered product classes for the year of anticipated compliance with
an amended or new standard. To project the trend in efficiency absent
amended standards for consumer clothes dryers over the entire shipments
projection period, DOE used an annual 0.31 percent and 0.37 percent
increase in shipment-weighted efficiency beginning in 2022 for electric
standard and vented gas standard consumer clothes dryers,
[[Page 51768]]
respectively. The efficiency for the other product classes remains at
their 2021 shipments-weighted efficiency levels. The approach is
further described in chapter 10 of the NOPR TSD.
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective (2027). In this scenario, the market
shares of products in the no-new-standards case that do not meet the
standard under consideration would ``roll up'' to meet the new standard
level, and the market share of products above the standard would remain
unchanged.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered products between each
potential standards case (``TSL'') and the case with no new or amended
energy conservation standards. DOE calculated the national energy
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy consumption (also by vintage).
DOE calculated annual NES based on the difference in national energy
consumption for the no-new standards case and for each higher
efficiency standard case. DOE estimated energy consumption and savings
based on site energy and converted the electricity consumption and
savings to primary energy (i.e., the energy consumed by power plants to
generate site electricity) using annual conversion factors derived from
AEO2021. Cumulative energy savings are the sum of the NES for each year
over the timeframe of the analysis.
Use of higher-efficiency products is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. DOE did not find any
data on the rebound effect specific to consumer clothes dryers, so it
did not include a rebound effect in the analysis.
Whirlpool suggested that additional energy usage may result from
increased cycle times and the inability to complete serial loads when
consumers decide to re-wash a load if wet clothes sit in the washer
while waiting for the drying cycle to terminate. Whirlpool stated that
such a scenario could result in additional and unnecessary energy
consumption and should be closely examined as rebound effects from
increased cycle times. (Whirlpool No. 27, at p. 11)
For this analysis, DOE did not find any studies supporting or
indicating an increased usage resulting from cycle times. DOE requests
comment on any new information or data that points to an impact on
usage due to a change in cycle times and will consider such data at the
final rule stage and in the final TSD.
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011 notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \55\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas (including fugitive emissions) and additional energy used to
produce and deliver the various fuels used by power plants. The
approach used for deriving FFC measures of energy use and emissions is
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------
\55\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009.
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed
November 8, 2021).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the 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.
As discussed in section IV.F.1 of this document, DOE developed
consumer clothes dryers price trends based on historical PPI data. DOE
applied the same trends to project prices for each product class at
each considered efficiency level. By 2056, which is the end date of the
projection period, the average consumer clothes dryers (real) price is
projected to drop 15 percent relative to 2020. DOE's projection of
product prices is described in appendix 10C of the NOPR TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for consumer
clothes dryers. In addition to the default price trend, DOE considered
two product price sensitivity cases: (1) a high price decline case
based on the combined price index from 1980 to 2020 and (2) a low price
decline case based on the same series from 1948 to 1979.\56\ The
derivation of these price trends and the results of these sensitivity
cases are described in appendix 10C of the NOPR TSD.
---------------------------------------------------------------------------
\56\ DOE combined PPI data of ``household laundry equipment''
from 1948 to 2016 and PPI data of ``major household appliance:
primary products'' from 2016 to 2020 into one time series price
index to project future price for consumer clothes washers.
---------------------------------------------------------------------------
The energy cost savings are calculated using the estimated energy
savings in each year and the projected price of the appropriate form of
energy. To estimate energy prices in future years, DOE used the
projection of annual national-average residential energy price changes
in the Reference case from AEO2021, which has an end year of 2050. To
estimate price trends after 2050, DOE used the average annual rate of
change in prices from 2040 through 2050. As part of the NIA, DOE also
analyzed scenarios that used inputs from variants of the AEO2021
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10D of
the NOPR TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (``OMB'') to Federal agencies on the development of regulatory
analysis.\57\ The discount rates
[[Page 51769]]
for the determination of NPV are in contrast to the discount rates used
in the LCC analysis, which are designed to reflect a consumer's
perspective. The 7-percent real value is an estimate of the average
before-tax rate of return to private capital in the U.S. economy. The
3-percent real value represents the ``social rate of time preference,''
which is the rate at which society discounts future consumption flows
to their present value.
---------------------------------------------------------------------------
\57\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed November 8, 2021).
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this NOPR, DOE analyzed
the impacts of the considered standard levels on two subgroups: (1)
low-income households and (2) senior-only households. The analysis used
subsets of the 2015 RECS sample composed of households that meet the
criteria for the two subgroups. DOE used the LCC and PBP spreadsheet
model to estimate the impacts of the considered efficiency levels on
these subgroups. Chapter 11 in the NOPR TSD describes the consumer
subgroup analysis.
Whirlpool requested that DOE examine the impact of amended
standards on the increased purchase cost of dryers, particularly for
low-income consumers. According to Whirlpool, the purchase cost of a
dryer plays a significant, and often the leading, factor in a low-
income consumer's purchase decision. Additionally, Whirlpool states
that for many low-income consumers, appliance purchases are generally
not planned and happen when their current appliance breaks down or is
too costly or old to fix. With a high purchase cost, low-income
consumers may ultimately decide to keep the old unit and repair it or
purchase a used appliance, both of which would keep old, inefficient
appliances on the grid, counter to DOE's mission to save energy.
(Whirlpool, No. 27 at pp. 6-8) AHAM requested that DOE take special
care to protect low-income consumers and to ensure energy conservation
standards do not have a disproportionate impact on those consumers,
stating that any proposed standard level not require product design
options that price consumers, particularly low-income consumers, out of
the clothes dryer market by eliminating technology options that allow
manufacturers to produce ``entry level'' models. (AHAM, No. 23 at p. 5)
DOE considers the impact of increase in purchase price as well as
efficiency in estimating the shipments through the use of a price
elasticity. This integrated elasticity accounts for the choice of
repair versus replace, which is ultimately reflected in the resulting
shipments. Additionally, the impacts from design options on low-income
consumers are already accounted for by definition in the screening,
engineering, LCC subgroup, and manufacturer impact analyses. See
chapter 9 of the NOPR TSD for details on price elasticity and chapter
11 for details on low-income consumers impacts.
J. Manufacturer Impact Analysis
1. Overview
DOE performed a MIA to estimate the financial impacts of amended
energy conservation standards on manufacturers of consumer clothes
dryers and to estimate the potential impacts of such standards on
employment and manufacturing capacity. The MIA has both quantitative
and qualitative aspects and includes analyses of projected industry
cash flows, the INPV, investments in research and development (``R&D'')
and manufacturing capital, and domestic manufacturing employment.
Additionally, the MIA seeks to determine how amended energy
conservation standards might affect manufacturing capacity and
competition, as well as how standards contribute to overall regulatory
burden. Finally, the MIA serves to identify any disproportionate
impacts on manufacturer subgroups, including small business
manufacturers.
The quantitative part of the MIA primarily relies on the Government
Regulatory Impact Model (``GRIM''), an industry cash flow model with
inputs specific to this rulemaking. The key GRIM inputs include data on
the industry cost structure, unit production costs, product shipments,
manufacturer markups, and investments in R&D and manufacturing capital
required to produce compliant products. The key GRIM outputs are the
INPV, which is the sum of industry annual cash flows over the analysis
period, discounted using the industry-weighted average cost of capital,
and the impact to domestic manufacturing employment. The model uses
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by
comparing changes in INPV and domestic manufacturing employment between
a no-new-standards case and the various TSLs. To capture the
uncertainty relating to manufacturer pricing strategies following
amended standards, the GRIM estimates a range of possible impacts under
different manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the consumer clothes dryer
industry based on publicly available data and information from its
market and technology assessment and engineering analysis. This
included a top-down analysis of consumer clothes dryer manufacturers
that DOE used to derive preliminary financial inputs for the GRIM
(e.g., revenues; materials, labor, overhead, and depreciation expenses;
selling, general, and administrative expenses (``SG&A''); and R&D
expenses). DOE also used other public sources of information to further
calibrate its initial characterization of the consumer clothes dryer
manufacturing industry, including company filings of form 10-K from the
U.S. Securities and Exchange Commission (``SEC''),\58\ corporate annual
reports, and the U.S. Census Bureau's Economic Census,\59\ as well as
subscription-based market research tools (e.g., reports from Dun &
Bradstreet \60\).
---------------------------------------------------------------------------
\58\ U.S. Securities and Exchange Commission. Company Filings.
Available at https://www.sec.gov/edgar/searchedgar/companysearch.html.
\59\ The U.S. Census Bureau. Quarterly Survey of Plant Capacity
Utilization. Available at www.census.gov/programs-surveys/qpc/data/tables.html.
\60\ The Dun & Bradstreet Hoovers login is available at
app.dnbhoovers.com.
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of amended energy
conservation standards. The GRIM uses several factors to determine a
series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. These factors include annual
[[Page 51770]]
expected revenues, costs of sales, SG&A and R&D expenses, taxes, and
capital expenditures. In general, energy conservation standards can
affect manufacturer cash flow in three distinct ways: (1) creating a
need for increased investment, (2) raising production costs per unit,
and (3) altering revenue due to higher per-unit prices and changes in
sales volumes.
In addition, during Phase 2, DOE developed interview guides to
distribute to manufacturers of consumer clothes dryers in order to
develop other key GRIM inputs, including product and capital conversion
costs, and to gather additional information on the anticipated effects
of energy conservation standards on revenues, direct employment,
capital assets, industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with representative manufacturers. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics to validate assumptions used in the GRIM and to identify key
issues or concerns. See section IV.J.3 of this document for a
description of the key issues raised by manufacturers during the
interviews. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by amended
standards or that may not be accurately represented by the average cost
assumptions used to develop the industry cash flow analysis. Such
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers, niche players, and/or manufacturers exhibiting a
cost structure that largely differs from the industry average. DOE
identified one subgroup for a separate impact analysis: small business
manufacturers. The small business subgroup is discussed in section VI.B
of this document, ``Review under the Regulatory Flexibility Act'' and
in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to
amended standards that result in a higher or lower industry value. The
GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, manufacturer markups, shipments, and
industry financial information as inputs. The GRIM models changes in
costs, distribution of shipments, investments, and manufacturer margins
that could result from an amended energy conservation standard. The
GRIM spreadsheet uses the inputs to arrive at a series of annual cash
flows, beginning in 2022 (the base year of the analysis) and continuing
to 2056. DOE calculated INPVs by summing the stream of annual
discounted cash flows during this period. For manufacturers of consumer
clothes dryers, DOE used a real discount rate of 7.5 percent, which was
derived from industry financials and then modified according to
feedback received during manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the
amended energy conservation standard on manufacturers. As discussed
previously, DOE developed critical GRIM inputs using a number of
sources, including publicly available data, results of the engineering
analysis, projections from the shipments analysis, and information
gathered from industry stakeholders during the course of manufacturer
interviews. The GRIM results are presented in section V.B.2 of this
document. Additional details about the GRIM, the discount rate, and
other financial parameters can be found in chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
Manufacturing more efficient equipment is typically more expensive
than manufacturing baseline equipment due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of covered products can affect the revenues,
gross margins, and cash flow of the industry. DOE models the
relationship between efficiency and MPCs as a part of its engineering
analysis. For a complete description of the MPCs, see chapter 5 of the
NOPR TSD or section IV.C of this document.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level and by product class. Changes in sales volumes and
efficiency mix over time can significantly affect manufacturer
finances. For this analysis, the GRIM uses the NIA's annual shipment
projections derived from the shipments analysis from 2022 (the base
year) to 2056 (the end year of the analysis period). See chapter 9 of
the NOPR TSD for additional details or section IV.G of this document.
c. Product and Capital Conversion Costs
Amended energy conservation standards could cause manufacturers to
incur conversion costs to bring their production facilities and
equipment designs into compliance. DOE evaluated the level of
conversion-related expenditures that would be needed to comply with
each considered efficiency level in each product class. For the MIA,
DOE classified these conversion costs into two major groups: (1)
capital conversion costs; and (2) product conversion costs. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant product designs can be fabricated and assembled. Product
conversion costs are investments in research, development, testing,
marketing, and other non-capitalized costs necessary to make product
designs comply with amended energy conservation standards.
DOE relied on manufacturer feedback to evaluate the level of
capital and product conversion costs manufacturers would likely incur
at the various TSLs. During confidential interviews, DOE asked
manufacturers to estimate the capital conversion costs (e.g., changes
in production processes, equipment, and tooling) to meet the various
efficiency levels. DOE also asked manufacturers to estimate the
redesign effort and engineering resources required at various
efficiency levels to quantify the product conversion costs. Based on
manufacturer feedback, DOE also estimated ``re-flooring'' costs
associated with replacing obsolete display models in big-box stores
(e.g., Lowe's, Home Depot, Best Buy) due to higher standards. Some
manufacturers stated that with a new product release, big-box retailers
discount outdated display models, and manufacturers share any losses
associated with discounting the retail price. The estimated re-flooring
costs for each efficiency level were incorporated into the product
conversion cost estimates, as DOE modeled the re-flooring costs as a
marketing expense.
DOE reviewed the DOE CCMS \61\ database, U.S. market share
estimates, and company characteristics to scale the company-specific
conversion cost estimates to levels that represent the overall
industry. First, DOE used its
[[Page 51771]]
CCMS database to identify original equipment manufacturers (``OEMs'')
of the covered products. Next, DOE assessed each OEM's U.S. market
share and product profile (e.g., estimated sales by product class and
efficiency) for consumer clothes dryers. Finally, DOE estimated
industry-level conversion cost estimates by scaling feedback from OEMs
based on a combination of product offerings and U.S. market share
estimates.
---------------------------------------------------------------------------
\61\ U.S. Department of Energy's Compliance Certification
Database is available at www.regulations.doe.gov/certification-data
(last accessed October 8, 2021).
---------------------------------------------------------------------------
DOE assumes all conversion-related investments occur between the
year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion cost
figures used in the GRIM can be found in section V.B.2 of this
document. For additional information on the estimated capital and
product conversion costs, see chapter 12 of the NOPR TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs
estimated in the engineering analysis for each product class and
efficiency level. Modifying these manufacturer markups in the standards
case yields different sets of impacts on manufacturers. For the MIA,
DOE modeled two standards-case manufacturer markup scenarios to
represent uncertainty regarding the potential impacts on prices and
profitability for manufacturers following the implementation of amended
energy conservation standards: (1) a preservation of gross margin
percentage scenario; and (2) a preservation of operating profit
scenario. These scenarios lead to different manufacturer markup values
that, when applied to the MPCs, result in varying revenue and cash flow
impacts.
Under the preservation of gross margin percentage scenario, DOE
applied a single uniform ``gross margin percentage'' across all
efficiency levels, which assumes that manufacturers would be able to
maintain the same amount of profit as a percentage of revenues at all
efficiency levels within a product class. As manufacturer production
costs increase with efficiency, this scenario implies that the per-unit
dollar profit will increase. DOE assumed a gross margin percentage of
21 percent for all product classes.\62\ Manufacturers tend to believe
it is optimistic to assume that they would be able to maintain the same
gross margin percentage as their production costs increase,
particularly for minimally efficient products. Therefore, this scenario
represents a high bound to industry profitability under an amended
energy conservation standard.
---------------------------------------------------------------------------
\62\ The gross margin percentage of 21 percent is based on a
manufacturer markup of 1.26.
---------------------------------------------------------------------------
In the preservation of operating profit scenario, as the cost of
production goes up under a standards case, manufacturers are generally
required to reduce their manufacturer markups to a level that maintains
base-case operating profit. DOE implemented this scenario in the GRIM
by lowering the manufacturer markups at each TSL to yield approximately
the same earnings before interest and taxes in the standards case as in
the no-new-standards case in the year after the compliance date of the
amended standards. The implicit assumption behind this scenario is that
the industry can only maintain its operating profit in absolute dollars
after the standard. A comparison of industry financial impacts under
the two manufacturer markup scenarios is presented in section V.B.2.a
of this document.
3. Manufacturer Interviews
DOE interviewed manufacturers representing approximately 55 percent
of domestic consumer clothes dryer industry shipments. Participants
included domestic-based and foreign-based OEMs with a range of
different product offerings and market shares.
In interviews, DOE asked manufacturers to describe their major
concerns regarding potential increases in energy conservation standards
for consumer clothes dryers. The following section highlights
manufacturer concerns that helped inform the projected potential
impacts of an amended standard on the industry. Manufacturer interviews
are conducted under non-disclosure agreements (``NDAs''), so DOE does
not document these discussions in the same way that it does public
comments in the comment summaries and in DOE's responses throughout the
rest of this document.
a. Heat Pump Technology
Some manufacturers expressed concerns about potential adverse
impacts of a standard that could only be met using heat pump technology
on product affordability, consumer satisfaction, profitability, and
manufacturing capacity. Heat pump dryers currently cost more to produce
than other electric dryers. In interviews, some manufacturers stated
that a portion of consumers cannot afford the increased upfront cost
and may forgo purchasing a new dryer or rely on alternatives such as
laundromats or dryer rentals if the standard were to increase to a
level that required the use of heat pump technology. Some manufacturers
asserted, based on their market research and customer reviews of
existing heat pump dryers, that consumers would be dissatisfied with a
standard that could be achieved only by a heat pump dryer. These
manufacturers cited instances of customer complaints about drying
performance and longer cycle times that have been associated with
certain implementations of heat pump technology.
In interviews, several manufacturers also stated that heat pump
technology represents a significant departure from vented electric
dryers and would require new manufacturing plants or a total renovation
of existing production facilities. Those manufacturers pointed out that
heat pump dryers make up less than one percent of the consumer clothes
dryer sales in the United States. The same manufacturers expressed
concern about a potential shortage of products given the scale of
investment, redesign efforts, and time constraints.
Although some manufacturers expressed concerns about a standard
that could only be met using heat pump technology, several
manufacturers emphasized the benefits of heat pump technology. These
manufacturers stated that heat pump dryers provide more energy savings
and improved fabric care compared to conventional clothes dryers due to
the lower drying temperatures associated with heat pump technology.
Several manufacturers noted recent increases in domestic heat pump
dryer sales and predicted that the trend would continue. These
manufacturers also emphasized the increasing popularity of heat pump
dryers in the European market, which they attributed to the
proliferation of cost-competitive offerings, improved payback period,
and shifting consumer preferences in that market.
Although heat pump technology is still in the early stages of
adoption in the United States, heat pump technology is commercially
available on the market and can be incorporated into standard-size
electric clothes dryers without the need to increase overall product
size. As discussed in the engineering analysis, recent advances have
resulted in heat pump products that do not require sacrifices in either
dryness level or cycle time. DOE expects that that the U.S. market will
continue to benefit from further advances in heat pump technology in
the European
[[Page 51772]]
market, as manufacturers adapt those advances to products designed for
the U.S. consumer. In addition, voluntary programs such as ENERGY STAR
and various State incentive programs have the potential to
significantly grow the market share of heat pump models. As discussed
in the life-cycle cost analysis, as heat pump technology continues to
gain market share over time, DOE expects that learning and experience
by manufacturers will likely contribute to downward costs over time.
b. Preservation of Electromechanical Controls
Some manufacturers expressed concern that higher energy
conservation standards or requiring the use of the Appendix D2 test
procedure would threaten the viability of dryers with electromechanical
controls. In interviews, these manufacturers noted that some consumers
prefer the simplicity of electromechanical control knobs and the lower
price point associated with the lower production cost. Manufacturers
also noted that eliminating electromechanical control dryers may raise
the cost of baseline dryers, which would disproportionately impact low-
income consumers since they typically purchase low-cost dryers with
electromechanical controls.
c. Cost Increases and Component Shortages
Some manufacturers noted that increases in raw material prices,
escalating shipping and transportation costs, and limited component
availability over the last two years all affect manufacturer production
costs. As a result, cost estimates based on historic 5-year averages
would underestimate current production costs.
4. Discussion of MIA Comments
In response to the preliminary analysis, AHAM commented on DOE's
approach to analyzing cumulative regulatory burden. AHAM stated that
the cumulative regulatory burden analysis should incorporate and
quantify the costs to manufacturers associated with responding to and
monitoring proposed test procedures and energy conservation standards.
Additionally, AHAM urged DOE to incorporate the financial results of
the cumulative regulatory burden analysis into the MIA, stating that
this could be done by adding the combined cost of complying with
multiple regulations into the product conversion costs in the GRIM.
AHAM suggests performing a consolidated analysis of multiple
regulations and notes that this approach is particularly important for
related products like clothes washers and clothes dryers that are often
designed, invested in, and sold together. In addition, AHAM noted other
regulations impact consumer clothes dryer manufacturers such as
commercial clothes washers, consumer refrigerator/freezers,
dishwashers, room air conditioners, dehumidifiers, and portable air
conditioners rulemakings. (AHAM, No. 23 at pp. 7-8)
AHAM requested that DOE include the cost of monitoring test
procedure and energy conservation standard rulemakings in its
rulemaking analyses. (AHAM, No. 23 at p. 8) DOE requests AHAM provide
the costs of monitoring, which would be independent from the conversion
costs required to adapt product designs and manufacturing facilities to
an amended standard, for DOE to determine whether these costs would
materially affect the analysis. In particular, a summary of the job
titles and annual hours per job title at a prototypical company would
allow DOE to construct a detailed analysis of AHAM's monitoring costs.
Additionally, AHAM encouraged DOE to incorporate product conversion
costs from multiple rulemakings in the GRIM. (AHAM, No. 23 at p. 8) If
DOE were to combine the conversion costs from multiple regulations, as
requested, it would be appropriate to match the combined conversion
costs against combined revenues of the regulated products. DOE is
concerned that combined results would likely make it more difficult to
discern the direct impact of the amended standard on manufacturers,
particularly for rulemakings where there is only partial overlap of
manufacturers. Conversion costs would be spread over a larger revenue
base and result in less severe INPV impacts, when evaluated on a
percent change basis.
Regarding the specific case of consumer clothes washers and clothes
dryers, DOE understands that these products are often designed as sets
and sold together. Additionally, DOE has received feedback from
industry that aligning the compliance data for potential amended
standards across the two rulemakings would reduce overall compliance
costs. DOE will investigate harmonizing the timing of the two
rulemakings but must work within the constraints of EPCA, which
determines both the timing of when rulemakings are initiated and the
selection of compliance dates when an amended standard is adopted.
Regarding the other ongoing rulemakings mentioned, DOE has not
proposed amended energy conservation standards or compliance dates for
most of the products identified. Table V.31 details the rulemakings and
expected conversion expenses of Federal energy conservation standards,
such as room air conditioners and portable air conditioners, affecting
consumer clothes dryer OEMs. DOE will reassess and consider all
relevant final rules contributing to cumulative regulatory burden in
any subsequent analysis.
In written comment, Whirlpool asserted that requiring the use of
the appendix D2 test procedure would effectively eliminate
electromechanical controlled dryers since electronic controls would
very likely be needed to deliver accurate sensing and end-of-cycle
detection. Whirlpool expressed a variety of concerns regarding the
potential phase out of electromechanical controls. First, Whirlpool
stated that phasing out electromechanical control dryers will
disproportionately harm manufacturers, such as Whirlpool, with
significant sales of electromechanical control dryers. Whirlpool noted
that a transition from electromechanical to electronic controls would
require a significant amount of engineering resources and capital
investment to upgrade manufacturing facilities and production lines.
Second, Whirlpool noted that electromechanical control dryers are often
purchased by price-sensitive customers as these dryers are typically
entry-level and low-cost. Whirlpool stated that they may be forced to
make significant product changes and add product costs, which would
subsequently increase the upfront cost for the consumer. Third,
Whirlpool expressed concerns about manufacturers' ability to move to
electronic controls considering the global supply chain shortage of
semiconductors. Lastly, Whirlpool requested DOE consider the negative
financial impact of potential standards on timer component suppliers.
Demand for timer components is largely driven by dryers, so phasing out
electromechanical controls might represent a significant business risk
to these companies. Whirlpool stated at least one of these suppliers is
a ``small U.S.-based company.'' (Whirlpool, No. 27 at pp. 4-6)
DOE test data shows that requiring the use of the appendix D2 test
procedure will not preclude the use of electromechanical controls. As
discussed in section IV.C.1 of this document, DOE tested baseline
models with electromechanical controls under appendix D2. The baseline
efficiency levels in this NOPR represent a minimally compliant, basic-
construction consumer clothes dryer on the market, such as a dryer with
[[Page 51773]]
electromechanical controls. If tested under appendix D2, DOE does not
expect dryers currently on the market to achieve a CEFD2
rating below the baseline efficiency levels detailed in this NOPR.
As for Whirlpool's broader concerns regarding the shift to
electronic controls, DOE acknowledges that the GRIM is intended to
represent the consumer clothes dryer industry as a whole. The impacts
on individual manufacturers may vary from the industry average. DOE
also recognizes that manufacturers with significant sales volumes of
baseline efficiency dryers may experience differential impacts from
amended standards relative to manufacturers specializing in high-
efficiency dryers. However, as many of the GRIM inputs (e.g.,
conversion costs, industry financials) account for U.S. market share
weights, the GRIM is most reflective of large manufacturers like
Whirlpool. Where possible, DOE suggests manufacturers provide company-
specific information about their consumer clothes dryer business so DOE
can more accurately incorporate it into its modeling of the overall
industry.
Regarding the other concerns identified, DOE's analysis of
conversion cost estimates is published in Table V.29 and the consumer
sub-group analysis can be found in section V.B.1.b of this document.
DOE appreciates the information about potential impacts to sub-
component suppliers, however, analyzing the impacts of proposed
standards on a timer component supplier is outside the scope of this
analysis.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions to emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions factors intended
to represent the marginal impacts of the change in electricity
consumption associated with amended or new standards. The methodology
is based on results published for the AEO, including a set of side
cases that implement a variety of efficiency-related policies. The
methodology is described in appendix 13A in the NOPR TSD. The analysis
presented in this notice uses projections from AEO2021.
Power sector emissions of CH4 and N2O are
estimated using Emission Factors for Greenhouse Gas Inventories
published by the EPA.\63\
---------------------------------------------------------------------------
\63\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
---------------------------------------------------------------------------
The on-site operation of gas consumer clothes dryers requires
combustion of fossil fuel and results in emissions of CO2,
NOX, SO2, CH4, and N2O
where these products are used. Site emissions of these gases were
estimated using Emission Factors for Greenhouse Gas Inventories and,
for NOX and SO2, emissions intensity factors from
an EPA publication.\64\
---------------------------------------------------------------------------
\64\ U.S. Environmental Protection Agency. External Combustion
Sources. In Compilation of Air Pollutant Emission Factors. AP-42.
Fifth Edition. Volume I: Stationary Point and Area Sources. Chapter
1. Available at www.epa.gov/ttn/chief/ap42/index.html (last accessed
July 12, 2021).
---------------------------------------------------------------------------
FFC upstream emissions, which include emissions from fuel
combustion during extraction, processing, and transportation of fuels,
and ``fugitive'' emissions (direct leakage to the atmosphere) of
CH4 and CO2, are estimated based on the
methodology described in chapter 15 of the NOPR TSD.
The emissions intensity factors are expressed in terms of physical
units per megawatt-hours (``MWh'') or million British thermal units
(``MMBtu'') of site energy savings. For power sector emissions,
specific emissions intensity factors are calculated by sector and end
use. Total emissions reductions are estimated using the energy savings
calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO2021 generally represents current
legislation and environmental regulations, including recent government
actions, that were in place at the time of preparation of AEO 2021,
including the emissions control programs discussed in the following
paragraphs.\65\
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\65\ For further information, see the Assumptions to AEO2021
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed November 8, 2021).
---------------------------------------------------------------------------
SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (``DC''). (42 U.S.C. 7651 et seq.)
SO2 emissions from numerous States in the eastern half of
the United States are also limited under the Cross-State Air Pollution
Rule (``CSAPR''). 76 FR 48208 (Aug. 8, 2011). CSAPR requires these
States to reduce certain emissions, including annual SO2
emissions, and went into effect as of January 1, 2015.\66\ AEO2021
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------
\66\ CSAPR requires states to address annual emissions of
SO2 and NOX, precursors to the formation of
fine particulate matter (PM2.5) pollution, in order to
address the interstate transport of pollution with respect to the
1997 and 2006 PM2.5 National Ambient Air Quality
Standards (``NAAQS''). CSAPR also requires certain states to address
the ozone season (May-September) emissions of NOX, a
precursor to the formation of ozone pollution, in order to address
the interstate transport of ozone pollution with respect to the 1997
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a
supplemental rule that included an additional five states in the
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011)
(Supplemental Rule).
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However, beginning in 2016, SO2 emissions began to fall
as a result of implementation the Mercury and Air Toxics Standards
(``MATS'') for power plants. 77 FR 9304 (Feb. 16, 2012). In the MATS
final rule, EPA established a standard for hydrogen chloride as a
surrogate for acid gas hazardous air pollutants (``HAP''), and also
established a standard for SO2 (a non-HAP acid gas) as an
alternative equivalent surrogate standard for acid gas HAP. The same
controls are used to reduce HAP and non-HAP acid gas; thus,
SO2 emissions are being reduced as a result of the control
technologies installed on coal-fired power plants to comply with the
MATS requirements for acid gas. In order to continue operating, coal
power plants must have either flue gas desulfurization or dry sorbent
injection systems installed. Both technologies, which are used to
reduce
[[Page 51774]]
acid gas emissions, also reduce SO2 emissions. Because of
the emissions reductions under the MATS, it is unlikely that excess
SO2 emissions allowances resulting from the lower
electricity demand would be needed or used to permit offsetting
increases in SO2 emissions by another regulated EGU.
Therefore, energy conservation standards that decrease electricity
generation would generally reduce SO2 emissions. DOE
estimated SO2 emissions reduction using emissions factors
based on AEO2021.
CSAPR also established limits on NOX emissions for
numerous States in the eastern half of the United States. Energy
conservation standards would have little effect on NOX
emissions in those States covered by CSAPR emissions limits if excess
NOX emissions allowances resulting from the lower
electricity demand could be used to permit offsetting increases in
NOX emissions from other EGUs. In such case, NOx emissions
would remain near the limit even if electricity generation goes down. A
different case could possibly result, depending on the configuration of
the power sector in the different regions and the need for allowances,
such that NOX emissions might not remain at the limit in the
case of lower electricity demand. In this case, energy conservation
standards might reduce NOX emissions in covered States.
Despite this possibility, DOE has chosen to be conservative in its
analysis and has maintained the assumption that standards will not
reduce NOX emissions in States covered by CSAPR. Energy
conservation standards would be expected to reduce NOX
emissions in the States not covered by CSAPR. DOE used AEO2021 data to
derive NOX emissions factors for the group of States not
covered by CSAPR. DOE used AEO2021 data to derive NOX
emissions factors for the group of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2021, which incorporates the MATS.
L. Monetizing Emissions Impacts
As part of the development of this proposed rule, for the purpose
of complying with the requirements of Executive Order 12866, DOE
considered the estimated monetary benefits from the reduced emissions
of CO2, CH4, N2O, NOX, and
SO2 that are expected to result from each of the TSLs
considered. In order to make this calculation analogous to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of products shipped in
the projection period for each TSL. This section summarizes the basis
for the values used for monetizing the emissions benefits and presents
the values used for this NOPR.
On March 16, 2022, the Fifth Circuit Court of Appeals (No. 22-
30087) granted the Federal government's emergency motion for stay
pending appeal of the February 11, 2022, preliminary injunction issued
in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a result of
the Fifth Circuit's order, the preliminary injunction is no longer in
effect, pending resolution of the Federal government's appeal of that
injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from
``adopting, employing, treating as binding, or relying upon'' the
interim estimates of the social cost of greenhouse gases--which were
issued by the Interagency Working Group on the Social Cost of
Greenhouse Gases on February 26, 2021--to monetize the benefits of
reducing greenhouse gas emissions. As reflected in this rule, DOE has
reverted to its approach prior to the injunction and presents monetized
greenhouse gas abatement benefits where appropriate and permissible
under law. DOE requests comment on how to address the climate benefits
of the proposal.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., SC-CO2). These
estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services. DOE exercises its own judgment in presenting monetized
climate benefits as recommended by applicable Executive Orders, and DOE
would reach the same conclusion presented in this notice in the absence
of the social cost of greenhouse gases. That is, the social costs of
greenhouse gases, whether measured using the February 2021 Interim
Estimates presented by the Interagency Working Group on the Social Cost
of Greenhouse Gases or by another means, did not affect the rule
ultimately proposed by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions (i.e., SC-GHGs) using the
estimates presented in the Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990 published in February 2021 by the IWG.\67\ The SC-GHGs is
the monetary value of the net harm to society associated with a
marginal increase in emissions in a given year, or the benefit of
avoiding that increase. In principle, SC-GHGs includes the value of all
climate change impacts, including (but not limited to) changes in net
agricultural productivity, human health effects, property damage from
increased flood risk and natural disasters, disruption of energy
systems, risk of conflict, environmental migration, and the value of
ecosystem services. The SC-GHGs therefore, reflects the societal value
of reducing emissions of the gas in question by one metric ton. The SC-
GHGs is the theoretically appropriate value to use in conducting
benefit-cost analyses of policies that affect CO2,
N2O and CH4 emissions. As a member of the IWG
involved in the development of the February 2021 SC-GHG TSD, the DOE
agrees that the interim SC-GHG estimates represent the most appropriate
estimate of the SC-GHG until revised estimates have been developed
reflecting the latest, peer-reviewed science.
---------------------------------------------------------------------------
\67\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC, February 2021 (Available at: www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf)
(Last accessed Jan. 18, 2022).
---------------------------------------------------------------------------
The SC-GHGs estimates presented here were developed over many
years, using transparent process, peer-reviewed methodologies, the best
science available at the time of that process, and with input from the
public. Specifically, in 2009, the IWG, that included the DOE and other
executive branch agencies and offices was established to ensure that
agencies were using the best available science and to promote
consistency in the social cost of carbon (SC-CO2) values
used across agencies. The IWG published SC-CO2 estimates in
2010 that were developed from an ensemble of three widely cited
integrated assessment models (``IAMs'')
[[Page 51775]]
that estimate global climate damages using highly aggregated
representations of climate processes and the global economy combined
into a single modeling framework. The three IAMs were run using a
common set of input assumptions in each model for future population,
economic, and CO2 emissions growth, as well as equilibrium
climate sensitivity--a measure of the globally averaged temperature
response to increased atmospheric CO2 concentrations. These
estimates were updated in 2013 based on new versions of each IAM. In
August 2016 the IWG published estimates of the SC-CH4 and
SC-N2O using methodologies that are consistent with the
methodology underlying the SC-CO2 estimates. The modeling
approach that extends the IWG SC-CO2 methodology to non-
CO2 GHGs has undergone multiple stages of peer review. The
SC-CH4 and SC-N2O estimates were developed by
Marten et al.\68\ and underwent a standard double-blind peer review
process prior to journal publication. In 2015, as part of the response
to public comments received to a 2013 solicitation for comments on the
SC-CO2 estimates, the IWG announced a National Academies of
Sciences, Engineering, and Medicine review of the SC-CO2
estimates to offer advice on how to approach future updates to ensure
that the estimates continue to reflect the best available science and
methodologies. In January 2017, the National Academies released their
final report, Valuing Climate Damages: Updating Estimation of the
Social Cost of Carbon Dioxide, and recommended specific criteria for
future updates to the SC-CO2 estimates, a modeling framework
to satisfy the specified criteria, and both near-term updates and
longer-term research needs pertaining to various components of the
estimation process (National Academies, 2017).\69\ Shortly thereafter,
in March 2017, President Trump issued Executive Order 13783, which
disbanded the IWG, withdrew the previous TSDs, and directed agencies to
ensure SC-CO2 estimates used in regulatory analyses are
consistent with the guidance contained in OMB's Circular A-4,
``including with respect to the consideration of domestic versus
international impacts and the consideration of appropriate discount
rates'' (E.O. 13783, Section 5(c)). Benefit-cost analyses following
E.O. 13783 used SC-GHG estimates that attempted to focus on the U.S.-
specific share of climate change damages as estimated by the models and
were calculated using two discount rates recommended by Circular A-4, 3
percent and 7 percent. All other methodological decisions and model
versions used in SC-GHG calculations remained the same as those used by
the IWG in 2010 and 2013, respectively.
---------------------------------------------------------------------------
\68\ Marten, A.L., E.A. Kopits, C.W. Griffiths, S.C. Newbold,
and A. Wolverton. Incremental CH4 and N2O mitigation benefits
consistent with the US Government's SC-CO2 estimates. Climate
Policy. 2015. 15(2): pp. 272-298.
\69\ National Academies of Sciences, Engineering, and Medicine.
Valuing Climate Damages: Updating Estimation of the Social Cost of
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of the National Academies (2017). The IWG was tasked
with first reviewing the SC-GHG estimates currently used in Federal
analyses and publishing interim estimates within 30 days of the E.O.
that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller
update of the SC-GHG estimates by January 2022 that takes into
consideration the advice of the National Academies (2017) and other
recent scientific literature.
The February 2021 SC-GHG TSD provides a complete discussion of the
IWG's initial review conducted under E.O. 13990. In particular, the IWG
found that the SC-GHG estimates used under E.O. 13783 fail to reflect
the full impact of GHG emissions in multiple ways. First, the IWG found
that the SC-GHG estimates used under E.O. 13783 fail to fully capture
many climate impacts that affect the welfare of U.S. citizens and
residents, and those impacts are better reflected by global measures of
the SC-GHG. Examples of effects omitted from the E.O. 13783 estimates
include direct effects on U.S. citizens, assets, and investments
located abroad, supply chains, U.S. military assets and interests
abroad, and tourism, and spillover pathways such as economic and
political destabilization and global migration that can lead to adverse
impacts on U.S. national security, public health, and humanitarian
concerns. In addition, assessing the benefits of U.S. GHG mitigation
activities requires consideration of how those actions may affect
mitigation activities by other countries, as those international
mitigation actions will provide a benefit to U.S. citizens and
residents by mitigating climate impacts that affect U.S. citizens and
residents. A wide range of scientific and economic experts have
emphasized the issue of reciprocity as support for considering global
damages of GHG emissions. If the United States does not consider
impacts on other countries, it is difficult to convince other countries
to consider the impacts of their emissions on the United States. The
only way to achieve an efficient allocation of resources for emissions
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of
damages. As a member of the IWG involved in the development of the
February 2021 SC-GHG TSD, DOE agrees with this assessment and,
therefore, in this proposed rule DOE centers attention on a global
measure of SC-GHG. This approach is the same as that taken in DOE
regulatory analyses from 2012 through 2016. A robust estimate of
climate damages that accrue only to U.S. citizens and residents does
not currently exist in the literature. As explained in the February
2021 TSD, existing estimates are both incomplete and an underestimate
of total damages that accrue to the citizens and residents of the U.S.
because they do not fully capture the regional interactions and
spillovers discussed above, nor do they include all of the important
physical, ecological, and economic impacts of climate change recognized
in the climate change literature. As noted in the February 2021 SC-GHG
TSD, the IWG will continue to review developments in the literature,
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full
range of carbon impacts. As a member of the IWG, DOE will continue to
follow developments in the literature pertaining to this issue.
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies (2017) and the economic literature, the IWG continued to
conclude that the consumption rate of interest is the theoretically
appropriate discount rate in an intergenerational context (IWG 2010,
2013, 2016a,
[[Page 51776]]
2016b),\70\ and recommended that discount rate uncertainty and relevant
aspects of intergenerational ethical considerations be accounted for in
selecting future discount rates.
---------------------------------------------------------------------------
\70\ Interagency Working Group on Social Cost of Carbon. Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866. 2010. United States Government. (Available at: www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf) (Last
accessed April 15, 2022.); Interagency Working Group on Social Cost
of Carbon. Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order 12866. 2013.
(Available at: www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact) (Last accessed April 15,
2022.); Interagency Working Group on Social Cost of Greenhouse
Gases, United States Government. Technical Support Document:
Technical Update on the Social Cost of Carbon for Regulatory Impact
Analysis-Under Executive Order 12866. August 2016. (Available at:
www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf) (Last accessed January 18, 2022.);
Interagency Working Group on Social Cost of Greenhouse Gases, United
States Government. Addendum to Technical Support Document on Social
Cost of Carbon for Regulatory Impact Analysis under Executive Order
12866: Application of the Methodology to Estimate the Social Cost of
Methane and the Social Cost of Nitrous Oxide. August 2016.
(Available at: www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf) (Last accessed January 18,
2022.).
---------------------------------------------------------------------------
Furthermore, the damage estimates developed for use in the SC-GHG
are estimated in consumption-equivalent terms, and so an application of
OMB Circular A-4's guidance for regulatory analysis would then use the
consumption discount rate to calculate the SC-GHG. DOE agrees with this
assessment and will continue to follow developments in the literature
pertaining to this issue. DOE also notes that while OMB Circular A-4,
as published in 2003, recommends using 3 percent and 7 percent discount
rates as ``default'' values, Circular A-4 also reminds agencies that
``different regulations may call for different emphases in the
analysis, depending on the nature and complexity of the regulatory
issues and the sensitivity of the benefit and cost estimates to the key
assumptions.'' On discounting, Circular A-4 recognizes that ``special
ethical considerations arise when comparing benefits and costs across
generations,'' and Circular A-4 acknowledges that analyses may
appropriately ``discount future costs and consumption benefits . . . at
a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE concludes that a 7-percent discount
rate is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented herein. In this analysis, to calculate
the present and annualized values of climate benefits, DOE uses the
same discount rate as the rate used to discount the value of damages
from future GHG emissions, for internal consistency. That approach to
discounting follows the same approach that the February 2021 TSD
recommends ``to ensure internal consistency--i.e., future damages from
climate change using the SC-GHG at 2.5 percent should be discounted to
the base year of the analysis using the same 2.5-percent rate.'' DOE
has also consulted the National Academies' 2017 recommendations on how
SC-GHG estimates can ``be combined in RIAs with other cost and benefits
estimates that may use different discount rates.'' The National
Academies reviewed ``several options,'' including ``presenting all
discount rate combinations of other costs and benefits with [SC-GHG]
estimates.''
As a member of the IWG involved in the development of the February
2021 SC-GHG TSD, DOE agrees with this assessment and will continue to
follow developments in the literature pertaining to this issue.
While the IWG works to assess how best to incorporate the latest,
peer reviewed science to develop an updated set of SC-GHG estimates, it
set the interim estimates to be the most recent estimates developed by
the IWG prior to the group being disbanded in 2017. The estimates rely
on the same models and harmonized inputs and are calculated using a
range of discount rates. As explained in the February 2021 SC-GHG TSD,
the IWG has recommended that agencies revert to the same set of four
values drawn from the SC-GHG distributions based on three discount
rates as were used in regulatory analyses between 2010 and 2016 and
subject to public comment. For each discount rate, the IWG combined the
distributions across models and socioeconomic emissions scenarios
(applying equal weight to each) and then selected a set of four values
recommended for use in benefit-cost analyses: an average value
resulting from the model runs for each of three discount rates (2.5
percent, 3 percent, and 5 percent), plus a fourth value, selected as
the 95th percentile of estimates based on a 3 percent discount rate.
The fourth value was included to provide information on potentially
higher-than-expected economic impacts from climate change. As explained
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects
the immediate need to have an operational SC-GHG for use in regulatory
benefit-cost analyses and other applications that was developed using a
transparent process, peer-reviewed methodologies, and the science
available at the time of that process. Those estimates were subject to
public comment in the context of dozens of proposed rulemakings as well
as in a dedicated public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent or
lower.\71\ Second, the IAMs used to produce these interim estimates do
not include all of the important physical, ecological, and economic
impacts of climate change recognized in the climate change literature
and the science underlying their ``damage functions''--i.e., the core
parts of the IAMs that map global mean temperature changes and other
physical impacts of climate change into economic (both market and
nonmarket) damages--lags behind the most recent research. For example,
limitations include the incomplete treatment of catastrophic and non-
catastrophic impacts in the integrated assessment models, their
incomplete treatment of adaptation and technological change, the
incomplete way in which inter-regional and intersectoral linkages are
modeled, uncertainty in the extrapolation of damages to high
temperatures, and inadequate representation of the relationship between
the discount rate and uncertainty in economic growth over long time
horizons. Likewise, the socioeconomic and emissions scenarios used as
inputs to the models do not reflect new information from the last
decade of scenario generation or the full range of projections. The
modeling limitations do not all work in the same direction in terms of
their influence on the SC-CO2 estimates. However, as
discussed in the February 2021 TSD, the IWG has concluded that, taken
together,
[[Page 51777]]
the limitations suggest that the interim SC-GHG estimates used in this
proposed rule likely underestimate the damages from GHG emissions. DOE
concurs with this assessment.
---------------------------------------------------------------------------
\71\ Interagency Working Group on Social Cost of Greenhouse
Gases (IWG). 2021. Technical Support Document: Social Cost of
Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990. February. United States Government. (Available at:
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/) (Last accessed Jan. 18, 2022).
---------------------------------------------------------------------------
DOE's derivations of the SC-GHG (i.e., SC-CO2, SC-
N2O, and SC-CH4) values used for this NOPR are
discussed in the following sections, and the results of DOE's analyses
estimating the benefits of the reductions in emissions of these
pollutants are presented in section V.B.6 of this document.
a. Social Cost of Carbon
The SC-CO2 values used for this NOPR were based on the
values presented in the 2021 update from the IWG's February 2021 TSD.
Table IV.34 shows the updated sets of SC-CO2 estimates from
the latest interagency update in 5-year increments from 2020 to 2050.
The full set of annual values used is presented in appendix 14A of the
NOPR TSD. For purposes of capturing the uncertainties involved in
regulatory impact analysis, DOE has determined it is appropriate to
include all four sets of SC-CO2 values, as recommended by
the IWG.\72\
---------------------------------------------------------------------------
\72\ For example, the February 2021 TSD discusses how the
understanding of discounting approaches suggests that discount rates
appropriate for intergenerational analysis in the context of climate
change may be lower than 3 percent.
Table IV.34--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050 (2020$ per Metric Ton CO2)
----------------------------------------------------------------------------------------------------------------
Discount rate
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2020............................................ 14 51 76 152
2025............................................ 17 56 83 169
2030............................................ 19 62 89 187
2035............................................ 22 67 96 206
2040............................................ 25 73 103 225
2045............................................ 28 79 110 242
2050............................................ 32 85 116 260
----------------------------------------------------------------------------------------------------------------
In calculating the potential global benefits resulting from reduced
CO2 emissions, DOE used the values from the 2021 interagency
report, adjusted to 2020$ using the implicit price deflator for gross
domestic product (``GDP'') from the Bureau of Economic Analysis. For
2051 to 2070, DOE used estimates published by EPA, adjusted to 2020$.
These estimates are based on methods, assumptions, and parameters
identical to the 2020-2050 estimates published by the IWG. DOE expects
additional climate benefits to accrue for any longer-life consumer
clothes dryers post 2070, but a lack of available SC-CO2
estimates for emissions years beyond 2070 prevents DOE from monetizing
these potential benefits in this analysis. If further analysis of
monetized climate benefits beyond 2070 becomes available prior to the
publication of the final rule, DOE will include that analysis in the
final rule.
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. To calculate a present value of the stream of monetary
values, DOE discounted the values in each of the four cases using the
specific discount rate that had been used to obtain the SC-
CO2 values in each case. See chapter 13 for the annual
emissions reduction. See appendix 14A for the annual SC-CO2
values.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
NOPR were generated using the values presented in the 2021 update from
the IWG.\73\ Table IV.35 shows the updated sets of SC-CH4
and SC-N2O estimates from the latest interagency update in
5-year increments from 2020 to 2050. The full set of annual values used
is presented in appendix 14A of the NOPR TSD. To capture the
uncertainties involved in regulatory impact analysis, DOE has
determined it is appropriate to include all four sets of SC-
CH4 and SC-N2O values, as recommended by the IWG.
DOE used the same approach described above for the SC-CO2
for values after 2050.
---------------------------------------------------------------------------
\73\ See Interagency Working Group on Social Cost of Greenhouse
Gases, Technical Support Document: Social Cost of Carbon, Methane,
and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
Washington, DC (February 2021) (Available at: www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf)
(Last accessed Jan. 18, 2022).
Table IV.35--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton]
--------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-------------------------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
-------------------------------------------------------------------------------------------------------
Year 5% 3% 2.5% 3% 5% 3% 2.5% 3%
-------------------------------------------------------------------------------------------------------
95th 95th
Average Average Average percentile Average Average Average percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................................ 670 1500 2000 3900 5800 18000 27000 48000
2025............................................ 800 1700 2200 4500 6800 21000 30000 54000
2030............................................ 940 2000 2500 5200 7800 23000 33000 60000
2035............................................ 1100 2200 2800 6000 9000 25000 36000 67000
2040............................................ 1300 2500 3100 6700 10000 28000 39000 74000
2045............................................ 1500 2800 3500 7500 12000 30000 42000 81000
2050............................................ 1700 3100 3800 8200 13000 33000 45000 88000
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 51778]]
DOE multiplied the CH4 and N2O emissions
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. To
calculate a present value of the stream of monetary values, DOE
discounted the values in each of the cases using the specific discount
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case. See chapter 13 for the annual
emissions reduction. See appendix 14A for the annual SC-CH4
and SC-N2O values.
2. Monetization of Other Air Pollutants
DOE estimated the monetized value of NOX and
SO2 emissions reductions from electricity generation using
the latest benefit-per-ton estimates for that sector from the EPA's
Benefits Mapping and Analysis Program.\74\ DOE used EPA's values for
PM2.5-related benefits associated with NOX and
SO2 and for ozone-related benefits associated with
NOX for 2025, 2030, 2035 and 2040, calculated with discount
rates of 3 percent and 7 percent. DOE used linear interpolation to
define values for the years not given in the 2025 to 2040 period; for
years beyond 2040 the values are held constant. DOE derived values
specific to the sector for consumer clothes dryers using a method
described in appendix 14A of the NOPR TSD.
---------------------------------------------------------------------------
\74\ U.S. Environmental Protection Agency, Estimating the
Benefit per Ton of Reducing PM2.5 Precursors from 21 Sectors.
Available at: www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------
DOE also estimated the monetized value of NOX and
SO2 emissions reductions from site use of natural gas in
consumer clothes dryers using benefit-per-ton estimates from the EPA's
Benefits Mapping and Analysis Program. Although none of the sectors
covered by EPA refers specifically to residential and commercial
buildings, the sector called ``area sources'' would be a reasonable
proxy for residential and commercial buildings.\75\ The EPA document
provides high and low estimates for 2025 and 2030 at 3- and 7-percent
discount rates.\76\ DOE used the same linear interpolation and
extrapolation as it did with the values for electricity generation.
---------------------------------------------------------------------------
\75\ ``Area sources'' represents all emission sources for which
states do not have exact (point) locations in their emissions
inventories. Because exact locations would tend to be associated
with larger sources, ``area sources'' would be fairly representative
of small dispersed sources like homes and businesses.
\76\ ``Area sources'' are a category in the 2018 document from
EPA, but are not used in the 2021 document cited above. Available
at: www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf.
---------------------------------------------------------------------------
DOE multiplied the site emissions reduction (in tons) in each year
by the associated $/ton values, and then discounted each series using
discount rates of 3 percent and 7 percent as appropriate.
M. Utility Impact Analysis
The utility impact analysis estimates several effects on the
electric power generation industry that would result from the adoption
of new or amended energy conservation standards. The utility impact
analysis estimates the changes in installed electrical capacity and
generation that would result for each TSL. The analysis is based on
published output from the NEMS associated with AEO2021. NEMS produces
the AEO Reference case, as well as a number of side cases that estimate
the economy-wide impacts of changes to energy supply and demand. For
the current analysis, impacts are quantified by comparing the levels of
electricity sector generation, installed capacity, fuel consumption and
emissions in the AEO2020 Reference case and various side cases. Details
of the methodology are provided in the appendices to chapters 13 and 15
of the NOPR TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts from new or
amended energy conservation standards include both direct and indirect
impacts. Direct employment impacts are any changes in the number of
production and non-production employees of manufacturers of the
products subject to standards.\77\ The MIA addresses those impacts.
Indirect employment impacts are changes in national employment that
occur due to the shift in expenditures and capital investment caused by
the purchase and operation of more-efficient appliances. Indirect
employment impacts from standards consist of the net jobs created or
eliminated in the national economy, other than in the manufacturing
sector being regulated, caused by (1) reduced spending by consumers on
energy, (2) reduced spending on new energy supply by the utility
industry, (3) increased consumer spending on the products to which the
new standards apply and other goods and services, and (4) the effects
of those three factors throughout the economy.
---------------------------------------------------------------------------
\77\ As defined in the U.S. Census Bureau's 2016 Annual Survey
of Manufactures, production workers include ``Workers (up through
the line-supervisor level) engaged in fabricating, processing,
assembling, inspecting, receiving, packing, warehousing, shipping
(but not delivering), maintenance, repair, janitorial, guard
services, product development, auxiliary production for plant's own
use (e.g., power plant), record keeping, and other closely
associated services (including truck drivers delivering ready-mixed
concrete)'' Non-production workers are defined as ``Supervision
above line-supervisor level, sales (including a driver salesperson),
sales delivery (truck drivers and helpers), advertising, credit,
collection, installation, and servicing of own products, clerical
and routine office functions, executive, purchasing, finance, legal,
personnel (including cafeteria, etc.), professional and technical.''
---------------------------------------------------------------------------
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by BLS. BLS regularly publishes its
estimates of the number of jobs per million dollars of economic
activity in different sectors of the economy, as well as the jobs
created elsewhere in the economy by this same economic activity. Data
from BLS indicate that expenditures in the utility sector generally
create fewer jobs (both directly and indirectly) than expenditures in
other sectors of the economy.\78\ There are many reasons for these
differences, including wage differences and the fact that the utility
sector is more capital-intensive and less labor-intensive than other
sectors. Energy conservation standards have the effect of reducing
consumer utility bills. Because reduced consumer expenditures for
energy likely lead to increased expenditures in other sectors of the
economy, the general effect of efficiency standards is to shift
economic activity from a less labor-intensive sector (i.e., the utility
sector) to more labor-intensive sectors (e.g., the retail and service
sectors). Thus, the BLS data suggest that net national employment may
increase due to shifts in economic activity resulting from energy
conservation standards.
---------------------------------------------------------------------------
\78\ See U.S. Department of Commerce-Bureau of Economic
Analysis. Regional Multipliers: A User Handbook for the Regional
Input-Output Modeling System (RIMS II). 1997. U.S. Government
Printing Office: Washington, DC. Available at www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (last accessed November 9, 2021).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this NOPR using an input/output model of the U.S.
economy called Impact of Sector Energy
[[Page 51779]]
Technologies version 4 (``ImSET'').\79\ ImSET is a special-purpose
version of the ``U.S. Benchmark National Input-Output'' (``I-O'')
model, which was designed to estimate the national employment and
income effects of energy-saving technologies. The ImSET software
includes a computer-based I-O model having structural coefficients that
characterize economic flows among 187 sectors most relevant to
industrial, commercial, and residential building energy use.
---------------------------------------------------------------------------
\79\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2027-2033), where these uncertainties are
reduced. For more details on the employment impact analysis, see
chapter 16 of the NOPR TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
consumer clothes dryers. It addresses the TSLs examined by DOE, the
projected impacts of each of these levels if adopted as energy
conservation standards for consumer clothes dryers, and the standards
levels that DOE is proposing to adopt in this NOPR. Additional details
regarding DOE's analyses are contained in the NOPR TSD supporting this
document.
A. Trial Standard Levels
In general, DOE typically evaluates potential amended standards for
products and equipment at the product class level and by grouping
select individual efficiency levels for each class into TSLs. Use of
TSLs allows DOE to identify and consider manufacturer cost interactions
between the equipment classes, to the extent that there are such
interactions, and market cross elasticity from consumer purchasing
decisions that may change when different standard levels are set. In
addition, the use of TSLs allows DOE to account for shifts in
manufacturing practices, such as consolidation or expansion of
manufacturing lines that may occur as a result of differential
efficiency levels set for different product classes. In the case of
consumer clothes dryers, DOE did not find any cross elasticities in the
marketplace and DOE does not believe consumers would modify their
purchasing decisions to change to different categories of consumer
clothes dryers due to the imposition of standards. DOE also believes
that manufacturers will continue producing compact and standard size
clothes dryers on different product lines due to their significantly
different platforms and production quantities. DOE presents the results
for the TSLs in this document, while the results for all efficiency
levels that DOE analyzed are in the NOPR TSD. Table V.1 presents the
TSLs and the corresponding efficiency levels that DOE has identified
for potential amended energy conservation standards for consumer
clothes dryers. TSL 6 represents the maximum technologically feasible
(``max-tech'') energy efficiency for all product classes. TSL 5
represents the maximum national energy savings with positive NPV. TSL 4
represents the maximum national energy savings with simple PBP less
than 4 years. TSL 3 represents the intermediate efficiency level
between TSL 2 and TSL 4. TSL 2 corresponds to efficiency level with
automatic termination control system for product class (``PC'')1 to PC6
and high-speed spin for PC7. TSL 1 corresponds to efficiency level with
electronic controls for all product classes. DOE constructed the TSLs
for this NOPR to include ELs representative of ELs with similar
characteristics (i.e., using similar technologies and/or efficiencies,
and having roughly comparable equipment availability). The use of
representative ELs provided for greater distinction between the TSLs.
While representative ELs were included in the TSLs, DOE considered all
efficiency levels as part of its analysis but did not include all
efficiency levels in the TSLs.\80\
---------------------------------------------------------------------------
\80\ Efficiency levels that were analyzed for this NOPR are
discussed in section IV.C.3 of this document. Results by efficiency
level are presented in the NOPR TSD chapters 8 and 12.
Table V.1--Trial Standard Levels for Consumer Clothes Dryer
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Efficiency level and representative CEFD2 (lb/kWh)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard.................... 1 (2.68)................ 3 (3.27) 4 (3.93) 5 (4.21)............... 7 (7.39) 7 (7.39)
Electric Compact (120V).............. 1 (3.15)................ 3 (4.28) 4 (4.33) 4 (4.33)............... 5 (4.63) 6 (6.37)
Vented Electric Compact (240V)....... 1 (2.44)................ 3 (3.30) 4 (3.57) 4 (3.57)............... 5 (3.82) 6 (3.91)
Vented Gas Standard.................. 1 (2.44)................ 2 (3.00) 3 (3.48) 3 (3.48)............... 3 (3.48) 4 (3.83)
Vented Gas Compact................... 1 (2.02)................ 2 (2.49) 1 (2.02) Baseline (1.66)........ 3 (2.89) 4 (3.17)
Ventless Electric Compact (240V)..... Baseline (2.03)......... 1 (2.68) 1 (2.68) 1 (2.68)............... 1 (2.68) 2 (6.80)
Ventless Electric Combination Washer- Baseline (2.27)......... 1 (2.33) 1 (2.33) 1 (2.33)............... 1 (2.33) 2 (4.01)
Dryer.
--------------------------------------------------------------------------------------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on consumers of consumer clothes
dryers by looking at the effects that potential amended standards at
each TSL would have on the LCC and PBP. DOE also examined the impacts
of potential standards on selected consumer subgroups. These analyses
are discussed in the following sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime
[[Page 51780]]
and a discount rate. Chapter 8 of the NOPR TSD provides detailed
information on the LCC and PBP analyses.
Table V.2 through Table V.15 show the LCC and PBP results for the
TSLs considered for each product class. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, impacts are measured relative to the
efficiency distribution in the no-new-standards case in the compliance
year (see section IV.F.8 of this document). Because some consumers
purchase products with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline product and the average LCC at each TSL. The
savings refer only to consumers who are affected by a standard at a
given TSL. Those who already purchase a product with efficiency at or
above a given TSL are not affected. Consumers for whom the LCC
increases at a given TSL experience a net cost.
Table V.2--Average LCC and PBP Results for Electric Standard Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.20 Baseline........................ $607 $147 $1,567 $2,174 .............. 14.0
1............................................. 2.68 1............................... 625 122 1,301 1,926 0.7 14.0
2............................................. 3.27 3............................... 634 101 1,085 1,719 0.6 14.0
3............................................. 3.93 4............................... 641 85.3 919 1,560 0.6 14.0
4............................................. 4.21 5............................... 721 80.3 865 1,587 1.7 14.0
5, 6.......................................... 7.39 7............................... 996 50.0 537 1,533 4.0 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Electric Standard Consumer Clothes
Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.68 1 $252 0.32
2................................... 3.27 3 439 0.16
3................................... 3.93 4 578 0.11
4................................... 4.21 5 182 53.5
5, 6................................ 7.39 7 230 53.1
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.4--Average LCC and PBP Results for Electric Compact (120V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.36 Baseline........................ $635 $54.1 $383 $1,206 .............. 14.0
1............................................. 3.15 1............................... 657 41.0 297 1,090 1. 7 14.0
2............................................. 4.28 3............................... 670 30.7 228 995 1.5 14.0
3, 4.......................................... 4.33 4............................... 678 30.4 226 999 1.8 14.0
5............................................. 4.63 5............................... 770 28.6 215 1,073 5.3 14.0
6............................................. 6.37 6............................... 993 21.6 169 1,222 11.0 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Electric Compact (120V) Consumer
Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 3.15 1 $115 5.66
2................................... 4.28 3 194 4.46
3, 4................................ 4.33 4 160 21.6
5................................... 4.63 5 86.3 53.0
[[Page 51781]]
6................................... 6.37 6 (62.6) 76.3
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.6--Average LCC and PBP Results for Vented Electric Compact (240V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.00 Baseline........................ $636 $64.4 $682 $1,318 .............. 14.0
1............................................. 2.44 1............................... 659 53.3 565 1,223 2.0 14.0
2............................................. 3.30 3............................... 672 40.2 426 1,098 1.5 14.0
3, 4.......................................... 3.57 4............................... 680 37.4 396 1,076 1.6 14.0
5............................................. 3.82 5............................... 772 35.2 373 1,145 4.7 14.0
6............................................. 3.91 6............................... 995 34.8 368 1,363 12.1 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Vented Electric Compact (240V) Consumer
Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.44 1 $94.1 8.63
2................................... 3.30 3 201 4.35
3, 4................................ 3.57 4 192 8.37
5................................... 3.82 5 123 47.0
6................................... 3.91 6 (94.8) 79.6
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.8--Average LCC and PBP Results for Vented Gas Standard Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.00 Baseline........................ $740 $60.0 $689 $1,429 -- 14.0
1............................................. 2.44 1............................... 763 51.5 586 1,350 2.8 14.0
2............................................. 3.00 2............................... 768 42.1 478 1,246 1.6 14.0
3, 4, 5....................................... 3.48 3............................... 783 37.7 426 1,209 1.9 14.0
6............................................. 3.83 4............................... 863 37.5 421 1,284 5.5 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.9--Average LCC Savings Relative to the No-New-Standards Case for Vented Gas Standard Consumer Clothes
Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.44 1 $77.7 6.04
2................................... 3.00 2 174 1.66
3, 4, 5............................. 3.48 3 198 3.74
[[Page 51782]]
6................................... 3.83 4 43.0 59.3
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.10--Average LCC and PBP Results for Vented Gas Compact Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1.66 Baseline........................ $790 $27.4 $308 $1,098 .............. 14.0
1, 3.......................................... 2.02 1............................... 810 23.4 263 1,073 5.1 14.0
2............................................. 2.49 2............................... 817 23.2 258 1,075 6.4 14.0
4............................................. 1.66 Baseline........................ 790 27.4 308 1,098 .............. 14.0
5............................................. 2.89 3............................... 834 21.2 235 1,069 7.1 14.0
6............................................. 3.17 4............................... 926 19.0 211 1,137 16.3 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.11--Average LCC Savings Relative to the No-New-Standards Case for Vented Gas Compact Consumer Clothes
Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1, 3................................ 2.02 1 $25.2 32.7
2................................... 2.49 2 23.5 50.2
4................................... 1.66 Baseline .................... ....................
5................................... 2.89 3 29.4 51.9
6................................... 3.17 4 (38.8) 78.8
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.12--Average LCC and PBP Results for Ventless Electric Standard (240V) Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.03 Baseline........................ $1,020 $53.8 $567 $1,588 .............. 14.0
1............................................. 2.03 Baseline........................ 1,020 53.8 567 1,588 .............. 14.0
2, 3, 4, 5.................................... 2.68 1............................... 1,025 38.8 412 1,438 0.3 14.0
6............................................. 6.80 2............................... 1,319 11.7 123 1,442 7.1 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.13--Average LCC Savings Relative to the No-New-Standards Case for Ventless Electric Standard (240V)
Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.03 Baseline .................... ....................
2, 3, 4, 5.......................... 2.68 1 $145 0.0
6................................... 6.80 2 11.0 66.4
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[[Page 51783]]
Table V.14--Average LCC and PBP Results for Ventless Electric Combination Washer-Dryer Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2020$)
CEFD2 (lb/kWh) ---------------------------------------------------------------- Simple payback Average
TSL Efficiency level First year's Lifetime (years) lifetime
Installed cost operating cost operating cost LCC (years)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2.27 Baseline........................ $1,342 $48.3 $513 $1,855 .............. 14.0
1............................................. 2.27 Baseline........................ 1,342 48.3 513 1,855 .............. 14.0
2, 3, 4, 5.................................... 2.33 1............................... 1,342 46.9 498 1,840 0.0 14.0
6............................................. 4.01 2............................... 1,965 25.7 272 2,237 27.5 14.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the baseline product.
Table V.15--Average LCC Savings Relative to the No-New-Standards Case for Ventless Electric Combination Washer-
Dryer Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
TSL CEFD2 (lb/kWh) Efficiency Percent of consumers
level Average LCC savings that experience net
* (2020$) cost (%)
----------------------------------------------------------------------------------------------------------------
1................................... 2.27 Baseline .................... ....................
2, 3, 4, 5.......................... 2.33 1 15.1 0.0
6................................... 4.01 2 (387) 89.8
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and senior-only households for
product classes with a sufficient sample size in RECS to perform a
Monte Carlo analysis. DOE was unable to conduct a consumer subgroup
analysis for product class--vented gas compact for either low-income
households or senior-only households due to insufficient sample size
and therefore does not report results for that product class. Table
V.16 through Table V.27 compare the average LCC savings, PBP, percent
of consumers negatively impacted, and percent of consumers positively
impacted at each efficiency level for the consumer subgroups, along
with corresponding values for the entire residential consumer sample
for product classes with a sufficient sample size. In most cases, the
values for low-income households and senior-only households at the
considered efficiency levels are not substantially different from the
average for all households. Chapter 11 of the NOPR TSD presents the
complete LCC and PBP results for the subgroups.
Table V.16--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Electric Standard Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $246 $172 $252 0.6 1.0 0.7
3....................................... 2 430 302 439 0.5 0.8 0.6
4....................................... 3 566 398 578 0.4 0.8 0.6
5....................................... 4 196 101 182 1.4 2.4 1.7
7....................................... 5, 6 306 57.7 230 3.2 5.5 4.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.17--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Electric
Standard Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 0.27 0.45 0.32
3............................................... 2 0.17 0.25 0.16
4............................................... 3 0.15 0.22 0.11
5............................................... 4 43.7 60.0 53.5
7............................................... 5, 6 42.7 65.2 53.1
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
[[Page 51784]]
Table V.18--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Electric Compact (120V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $139 $86.8 $115 1.1 2.1 1. 7
3....................................... 2 232 147 194 1.0 1.9 1.5
4....................................... 3, 4 195 119 160 1.2 2.3 1.8
5....................................... 5 151 41.9 86.3 3.6 6.6 5.3
6....................................... 6 77.4 (123) (62.6) 7.6 13.8 11.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.19--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Electric
Compact (120V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 2.43 7.56 5.66
3............................................... 2 1.92 6.15 4.46
4............................................... 3, 4 14.3 24.6 21.6
5............................................... 5 35.5 59.4 53.0
6............................................... 6 53.0 81.5 76.3
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
Table V.20--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Vented Electric Compact (240V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $116 $70.0 $94.1 1.4 2.6 2.0
3....................................... 2 241 153 201 1.0 1.9 1.5
4....................................... 3, 4 232 145 192 1.1 2.0 1.6
5....................................... 5 193 70.8 123 3.2 5.9 4.7
6....................................... 6 41.2 (148) (94.8) 8.3 15.3 12.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.21--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Vented
Electric Compact (240V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 3.71 11.2 8.63
3............................................... 2 1.89 5.96 4.35
4............................................... 3, 4 3.79 11.7 8.37
5............................................... 5 29.0 53.2 47.0
6............................................... 6 57.0 84.5 79.6
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
Table V.22--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Vented Gas Standard Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
1....................................... 1 $85.1 $52.5 $77.7 2.2 3.6 2.8
2....................................... 2 $182 122 174 1.3 2.1 1.6
3....................................... 3, 4, 5 209 137 198 1.5 2.6 1.9
4....................................... 6 66.5 6.97 43.0 4.4 7.3 5.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[[Page 51785]]
Table V.23--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Vented Gas
Standard Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
1............................................... 1 3.97 9.45 6.04
2............................................... 2 0.94 2.70 1.66
3............................................... 3, 4, 5 2.16 5.71 3.74
4............................................... 6 52.2 67.7 59.3
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
Table V.24--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Ventless Electric Standard (240V) Consumer Clothes Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................... 1 .............. .............. .............. .............. .............. ..............
1....................................... 2, 3, 4, 5 $174 $116 $145 0.2 0.4 0.3
2....................................... 6 136 (53.1) 11.0 4.9 8.9 7.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.25--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Ventless
Electric Standard (240V) Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
0............................................... 1 .............. .............. ..............
1............................................... 2, 3, 4, 5 0.0 0.01 0.0
2............................................... 6 43.3 72.5 66.4
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
Table V.26--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households: Ventless Electric Combination Washer-Dryer Consumer Clothes
Dryers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average life-cycle cost savings * (2020$) Simple payback period (years)
-----------------------------------------------------------------------------------------------
EL TSL Low-income Senior-only Low-income Senior-only
households households All households households households All households
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................... 1 .............. .............. .............. .............. .............. ..............
1....................................... 2, 3, 4, 5 $17.2 $12.0 $15.1 0.0 0.0 0.0
2....................................... 6 (174) (435) (387) 18.8 34.9 27.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers. Negative values denoted in parentheses.
Table V.27--Comparison of Percent of Impacted Consumers * for Consumer Subgroups and All Households: Ventless
Electric Combination Washer-Dryer Consumer Clothes Dryers
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only All households
EL TSL households (%) households (%) (%)
----------------------------------------------------------------------------------------------------------------
0............................................... 1 .............. .............. ..............
1............................................... 2, 3, 4, 5 0.0 0.0 0.0
2............................................... 6 71.5 92.8 89.8
----------------------------------------------------------------------------------------------------------------
* Percent of impacted consumers indicates households with net cost.
c. Rebuttable Presumption Payback
As discussed in section II.A of this document, EPCA establishes a
rebuttable presumption that an energy conservation standard is
economically justified if the increased purchase cost for a product
that meets the standard is less than three times the value of the
first-year energy savings resulting from the standard. (42 U.S.C.
6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback
period for each of the considered TSLs, DOE used discrete values, and,
as required by EPCA, based the energy use calculation on the DOE test
procedure for consumer clothes dryers. In contrast, the PBPs presented
in section V.B.1.a of this document were calculated using distributions
that reflect the range of energy use in the field.
[[Page 51786]]
Table V.28 presents the rebuttable-presumption payback periods for
the considered TSLs for consumer clothes dryers. The results show that
the estimated rebuttable payback period ranges broadly between the
product classes. While DOE examined the rebuttable-presumption
criterion, it considered whether the standard levels considered for the
NOPR are economically justified through a more detailed analysis of the
economic impacts of those levels, pursuant to 42 U.S.C.
6295(o)(2)(B)(i), that considers the full range of impacts to the
consumer, manufacturer, Nation, and environment. The results of that
analysis serve as the basis for DOE to definitively evaluate the
economic justification for a potential standard level, thereby
supporting or rebutting the results of any preliminary determination of
economic justification.
Table V.28--Rebuttable-Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Product class -----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(Years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard....................................... 0.67 0.56 0.52 1.62 3.75 3.75
Electric Compact (120 V)................................ 1.78 1.59 1.93 1.93 5.64 11.7
Vented Electric Compact (240 V)......................... 2.18 1.57 1.72 1.72 4.93 12.7
Vented Gas Standard..................................... 4.28 2.80 3.26 3.26 3.26 8.29
Vented Gas Compact...................................... 8.48 6.15 8.48 .............. 7.35 20.5
Ventless Electric Compact (240 V)....................... .............. 0.35 0.35 0.35 0.35 7.52
Ventless Electric Combination Washer-Dryer.............. .............. 0.00 0.00 0.00 0.00 28.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of consumer clothes dryers. The
following section describes the expected impacts on manufacturers at
each considered TSL. Chapter 12 of the NOPR TSD explains the analysis
in further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard.
Table V.29 illustrates the estimated financial impacts (represented by
changes in INPV) of potential amended energy conservation standards on
manufacturers of consumer clothes dryers, as well as the conversion
costs that DOE estimates manufacturers of consumer clothes dryers would
incur at each TSL.
The impact of potential amended energy conservation standards were
analyzed under two scenarios: (1) the preservation of gross margin
percentage; and (2) the preservation of operating profit, as discussed
in section IV.J.2.d of this document. In the preservation of gross
margin percentage scenario, DOE applied a gross margin percentage of 21
percent for all product classes and all efficiency levels in the
standards case. This scenario assumes that a manufacturer's per-unit
dollar profit would increase as MPCs increase in the standards cases.
DOE understand this scenario to be an upper bound to industry
profitability under an energy conservation standard.
In the preservation of operating profit scenario manufacturers do
not earn additional operating profit when compared to the no-standards
case scenario. While manufacturers make the necessary upfront
investments required to produce compliant products, per-unit operating
profit does not change in absolute dollars. The preservation of
operating profit scenario results in the lower (or more severe) bound
to impacts of potential amended standards on industry.
Each of the modeled scenarios results in a unique set of cash flows
and corresponding INPV for each TSL. INPV is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2022-2056). The ``change in INPV'' results refer to
the difference in industry value between the no-new-standards case and
standards case at each TSL. To provide perspective on the short-run
cash flow impact, DOE includes a comparison of free cash flow between
the no-new-standards case and the standards case at each TSL in the
year before amended standards would take effect. This figure provides
an understanding of the magnitude of the required conversion costs
relative to the cash flow generated by the industry in the no-new-
standards case.
Conversion costs are one-time investments for manufacturers to
bring their manufacturing facilities and product designs into
compliance with potential amended standards. As described in section
IV.J.2.c of this document, conversion cost investments occur between
the year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion costs
can have a significant impact on the short-term cash flow on the
industry and generally result in lower free cash flow in the period
between the publication of the final rule and the compliance date of
potential amended standards. Conversion costs are independent of the
manufacturer markup scenarios and are not presented as a range in this
analysis.
Table V.29--Manufacturer Impact Analysis Results for Consumer Clothes Dryers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
Units standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV............................ 2020$ millions..... 1,810.1 1,785.0 to 1,798.5. 1,766.8 to 1,789.8. 1,694.5 to 1,728.5. 1,368.8 to 1,582.5 830.1 to 1,675.5.. 732.4 to 1,632.0.
Change in INPV *................ %.................. .............. (1.4) to (0.6)..... (2.4) to (1.1)..... (6.4) to (4.5)..... (24.4) to (12.6).. (54.1) to (7.4)... (59.5) to (9.8).
Free Cash Flow (2026) *......... 2020$ millions..... 120.5 107.2.............. 98.8............... 57.7............... (124.1)........... (392.3)........... (443.3).
[[Page 51787]]
Change in Free Cash Flow (2026) %.................. .............. (11.0)............. (18.0)............. (52.1)............. (203.0)........... (425.7)........... (468.0).
*.
Conversion Costs................ 2020$ millions..... .............. 34.1............... 55.3............... 149.7.............. 561.7............. 1,164.2........... 1,280.0.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative values.
The cash flow results discussion below refers to product classes as
defined in Table IV.2 in section IV.A.1 of this proposed rule. It also
refers to the efficiency levels (``ELs'') and associated design options
designated in the Table IV.16 through Table IV.21 in section IV.C.1.b
of this document.
At TSL 1, the standard reflects efficiency levels with electronic
controls for all product classes. The change in INPV is expected to
range from -1.4 to -0.6 percent. At this level, free cash flow is
estimated to decrease by 11.0 percent compared to the no-new-standards
case value of $120.5 million in the year 2026, the year before the
standards year. DOE's shipments analysis estimates approximately 61
percent of current shipments meet this level.
The design options DOE analyzed for Product Classes 1 through 5
include implementing electronic controls. For Product Classes 1 through
5, TSL 1 corresponds to EL 1. For Product Classes 6 and 7, TSL 1
corresponds to the baseline CEFD2. Capital conversion costs
may be necessary for additional tooling for timers and electronics.
Product conversion costs may be necessary for developing, sourcing, and
testing electronics (e.g., safety, performance, and durability tests).
DOE does not expect industry to incur re-flooring costs at this level
since the necessary enhancements could be done ``behind the hinge,''
incorporating the design changes in a manner that does not impact
product appearance. DOE does not expect industry to incur conversion
costs related to Product Classes 6 and 7, as the efficiency levels
would remain at baseline. DOE estimates capital conversion costs of
$15.7 million and product conversion of costs of $18.4 million.
Conversion costs total $34.1 million.
At TSL 1, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 1 percent relative to the no-
new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given this relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year the standard takes effect. In the preservation of gross margin
percentage scenario, the slight increase in MSP is outweighed by the
$34.1 million in conversion costs, causing a slightly negative change
in INPV at TSL 1 under this scenario. Under the preservation of
operating profit scenario, manufacturers earn the same per-unit
operating profit as would be earned in the no-new-standards case, but
manufacturers do not earn additional profit from their investments. In
this scenario, the manufacturer markup decreases in 2028, the year
after the analyzed compliance year. This reduction in the manufacturer
markup and the $34.1 million in conversion costs incurred by
manufacturers cause a slightly negative change in INPV at TSL 1 under
the preservation of operating profit scenario.
At TSL 2, the standard reflects efficiency levels with more
advanced automatic termination controls for Product Classes 1 through
6, and high-speed spin for product class 7. The change in INPV is
expected to range from -2.4 to -1.1 percent. At this level, free cash
flow is estimated to decrease 18.0 percent compared to the no-new-
standards case value of $120.5 million in the year 2026, the year
before the standards year. DOE's shipments analysis estimates
approximately 60 percent of current shipments meet this level.
The design options for Product Classes 1 through 6 include
implementing electronic controls, optimized heating systems, and more
advanced automatic termination controls. For Product Class 7, the
design option analyzed includes high-speed spin cycles. For Product
Classes 1 through 3, TSL 2 corresponds to EL 3. For Product Classes 4
and 5, TSL 2 corresponds to EL 2. For Product Classes 6 and 7, TSL 2
corresponds to EL 1. Capital conversion costs may be necessary for
incremental updates in tooling. Product conversion costs may be
necessary for software optimization, prototyping, and testing. DOE
expects industry to incur some re-flooring costs as manufacturers
redesign product lines to meet the efficiency levels required by TSL 2.
DOE estimates capital conversion costs of $26.9 million and product
conversion of costs of $28.4 million. Conversion costs total $55.3
million.
At TSL 2, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 2 percent relative to the no-
new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year the standard takes effect. In the preservation of gross margin
percentage scenario, the slight increase in MSP is outweighed by the
$55.3 million in conversion costs, causing a slightly negative change
in INPV at TSL 2 under this scenario. Under the preservation of
operating profit scenario, the manufacturer markup decreases in 2028,
the year after the analyzed compliance year. This reduction in the
manufacturer markup and the $55.3 million in conversion costs incurred
by manufacturers cause a negative change in INPV at TSL 2 under the
preservation of operating profit scenario.
At TSL 3, the standard reflects a set of efficiency levels between
the levels designated in TSL 2 and TSL 4 and corresponds to the current
ENERGY STAR efficiency level for vented electric standard dryers, which
represent over 80 percent of the market. The change in INPV is expected
to range from -6.4 to -4.5 percent. At this level, free cash flow is
estimated to decrease 52.1 percent compared to the no-new-standards
case value of $120.5 million in the year 2026, the year before the
standards year. DOE's shipments analysis estimates approximately 59
percent of current shipments meet this level.
The design options analyzed for Product Classes 1 through 4 include
implementing electronic controls, optimized heating systems, more
advanced automatic termination controls, and modulating heat. The
design option for Product Class 5 includes implementing electronic
controls. For Product Classes 6 and 7, the design options analyzed are
the same as with TSL 2. For Product Classes
[[Page 51788]]
1 through 3, TSL 3 corresponds to EL 4. For Product Class 4, TSL 3
corresponds to EL 3. For Product Classes 5 through 7, TSL 3 corresponds
to EL 1. The incremental increase in industry conversion costs from the
prior TSL are due to the higher efficiency level requirements for
Product Classes 1 through 4. Capital conversion costs may be necessary
as manufacturers increase tooling for two-stage heating systems.
Product conversion costs may be necessary for prototyping and testing.
DOE expects industry to incur similar re-flooring costs as with TSL 2.
DOE estimates capital conversion costs of $108.8 million and product
conversion of costs of $40.9 million. Conversion costs total $149.7
million.
At TSL 3, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 3 percent relative to the no-
new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the relatively small increase in
production costs, DOE does not project a notable drop in shipments in
the year the standard takes effect. In the preservation of gross margin
percentage scenario, the increase in MSP is outweighed by the $149.7
million in conversion costs, causing a negative change in INPV at TSL 3
under this scenario. Under the preservation of operating profit
scenario, the manufacturer markup decreases in 2028, the year after the
analyzed compliance year. This reduction in the manufacturer markup and
the $149.7 million in conversion costs incurred by manufacturers cause
a negative change in INPV at TSL 3 under the preservation of operating
profit scenario.
At TSL 4, the standard reflects the maximum national energy savings
with simple PBP of less than 4 years. The change in INPV is expected to
range from -24.4 to -12.6 percent. At this level, free cash flow is
estimated to decrease by 203.0 percent compared to the no-new-standards
case value of $120.5 million in the year 2026, the year before the
standards year. DOE's shipments analysis estimates approximately 11
percent of current shipments meet this level.
The design options analyzed for Product Class 1 include
implementing electronic controls, optimized heating systems, more
advanced automatic termination controls, modulating heat, and inlet air
preheat. For Product Classes 2 through 7, the efficiency levels
required for TSL 4 are the same as the efficiency levels required by
TSL 3, except for Product Class 5, which corresponds to the baseline
CEFD2. The incremental increase in industry conversion costs
from the prior TSL are due to the efficiency level requirements for
Product Class 1. There is very little industry experience with inlet
air preheat designs. Currently, DOE is not aware of any consumer
clothes dryers on the market utilizing this design option. Electric
standard dryers (Product Class 1) account for an estimated 81 percent
of domestic consumer clothes dryer shipments. Of these standard
electric dryer shipments, DOE estimates only 4 percent meet or exceed
the efficiency level required by TSL 4. Implementing inlet air preheat
represents a major overhaul of existing product lines and manufacturing
facilities. For capital conversion costs, this change might necessitate
significant new equipment and tooling. Product conversion costs may be
necessary for designing, prototyping, and testing new or updated
platforms. DOE expects industry to incur more re-flooring costs
compared to prior TSLs as more display units would need to be replaced
with high-efficiency models. DOE estimates capital conversion costs of
$489.2 million and product conversion of costs of $72.5 million.
Conversion costs total $561.7 million.
At TSL 4, the large conversion costs result in a free cash flow
dropping below zero in the years before the standards year. The
negative free cash flow calculation indicates manufacturers may need to
access cash reserves or outside capital to finance conversion efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 17 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE expects an estimated 1 percent drop in shipments in the year
the standard takes effect. In the preservation of gross margin
percentage scenario, the increase in MSP is outweighed by the $561.7
million in conversion costs, causing a negative change in INPV at TSL 4
under this scenario. Under the preservation of operating profit
scenario, the manufacturer markup decreases in 2028, the year after the
analyzed compliance year. This reduction in the manufacturer markup and
the $561.7 million in conversion costs incurred by manufacturers cause
a negative change in INPV at TSL 4 under the preservation of operating
profit scenario.
At TSL 5, the standard reflects the maximum national energy savings
with positive NPV. The change in INPV is expected to range from -54.1
to -7.4 percent. At this level, free cash flow is estimated to decrease
by 425.7 percent compared to the no-new-standards case value of $120.5
million in the year 2026, the year before the standards year. DOE's
shipments analysis estimates approximately 9 percent of current
shipments meet this level.
The design option analyzed for Product Class 1 includes
implementing heat pump technology. The design options analyzed for
Product Classes 2 and 3 include implementing electronic controls,
optimized heating systems, more advanced automatic termination
controls, modulating heat, and inlet air preheat. For Product Classes
4, 6, and 7, the design options analyzed are the same as prior TSL. At
TSL 5, the design option for Product Class 5 includes implementing
electronic controls, optimized heating systems, more advanced automatic
termination controls, and modulating heat. For Product Class 1, TSL 5
corresponds to EL 7. For Product Class 2 and 3, TSL 5 corresponds to EL
5. For Product Class 4 and 5, TSL 5 corresponds to EL 3. For Product
Class 6 and 7, TSL 5 corresponds to EL 1.
At TSL 5, conversion costs are largely driven by the max-tech
efficiency level required for Product Class 1. As previously discussed,
electric standard dryers account for 81 percent of domestic consumer
clothes dryer shipments. Currently, there are few electric standard
models on the U.S. market that meet the max-tech efficiency level
required by TSL 5. Of the 15 OEMs identified, seven OEMs do not offer
any U.S. dryers utilizing heat pump technology. Of the eight OEMs with
heat pump dryers, only three have electric standard dryers that meet
max-tech efficiencies. Most manufacturers would need to significantly
update facilities to meet a heat pump efficiency level for Product
Class 1. Mandating a heat pump efficiency level for Product Class 1
would require many manufacturers to design completely new clothes dryer
platforms or adapt heat pump designs from other markets (i.e., redesign
European heat pump models to adhere to U.S. safety standards and
consumer preferences). DOE expects industry to incur more re-flooring
costs compared to prior TSLs as nearly all display units would need to
be replaced with high-efficiency models. DOE estimates capital
conversion costs of $1,066.0 million and product conversion of costs of
$98.2 million. Conversion costs total $1,164.2 million.
As with TSL 4, the large conversion costs result in a free cash
flow dropping below zero in the years before the standard year. The
negative free cash flow calculation indicates
[[Page 51789]]
manufacturers may need to access cash reserves or outside capital to
finance conversion efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 64 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE expects an estimated 12 percent drop in shipments in the
year the standard takes effect. In the preservation of gross margin
percentage scenario, the increase in MSP is outweighed by the $1,164.2
million in conversion costs and the drop in annual shipments, causing a
negative change in INPV at TSL 5 under this scenario. Under the
preservation of operating profit scenario, the manufacturer markup
decreases in 2028, the year after the analyzed compliance year. This
large reduction in manufacturer markup, the $1,164.2 million in
conversion costs incurred by manufacturers, and the drop in annual
shipments cause a significantly negative change in INPV at TSL 5 under
the preservation of operating profit scenario.
At TSL 6, the standard reflects max-tech efficiency for all product
classes. The change in INPV is expected to range from -59.5 to -9.8
percent. At this level, free cash flow is estimated to decrease by
468.0 percent compared to the no-new-standards case value of $120.5
million in the year 2026, the year before the standards year. DOE's
shipments analysis estimates approximately 1 percent of current
shipments meet this level.
The design option analyzed for TSL 6 incorporates heat pump
technology for Product Classes 1, 2, 3, 6, and 7. For Product Classes 4
and 5, the design options analyzed include implementing electronic
controls, optimized heating systems, more advanced automatic
termination controls, modulating heat, and inlet air preheat. Seven out
of 15 manufacturers identified do not offer any models for the domestic
market that utilize heat pump technology. Of the eight OEMs that offer
domestic heat pump models, only four of them offer an electric dryer at
or above the efficiencies required by TSL 6. A standard that could only
be met using heat pump technology could require a total renovation of
existing facilities and completely new clothes dryer platforms for
manufacturers that do not offer heat pump clothes dryers today. In
interviews, two OEMs with significant market shares stated that they
would require additional facilities to handle dryer manufacturing under
a standard that could only be met using heat pump technology. As
previously discussed, implementing inlet air preheat also represents a
major overhaul of existing vented gas product lines. DOE expects
industry to incur slightly more re-flooring costs compared to TSL 5 as
all display models below max-tech efficiency would need to be replaced
due to the higher standard. At TSL 6, reaching max-tech efficiency
levels is a billion-dollar investment for industry. DOE estimates
capital conversion costs of $1,172.0 million and product conversion of
costs of $108.0 million. Conversion costs total $1,280.0 million.
As with TSLs 4 and 5, the large conversion costs result in a free
cash flow dropping below zero in the years before the standard year.
The negative free cash flow calculation indicates manufacturers may
need to access cash reserves or outside capital to finance conversion
efforts.
At this level, the shipment-weighted average MPC for all consumer
clothes dryers is expected to increase by 69 percent relative to the
no-new-standards case shipment-weighted average MPC for all consumer
clothes dryers in 2027. Given the projected increase in production
costs, DOE expects an estimated 13 percent drop in shipments in the
year the standard takes effect. In the preservation of gross margin
percentage scenario, the large increase in MSP is still outweighed by
the $1,280.0 million in conversion costs and drop in annual shipments,
causing a moderately negative change in INPV at TSL 6 under this
scenario. Under the preservation of operating profit scenario, the
manufacturer markup decreases in 2028, the year after the analyzed
compliance year. This large reduction in manufacturer markup, the
$1,280.0 million in conversion costs incurred by manufacturers, and the
drop in annual shipments cause a significantly negative change in INPV
at TSL 6 under the preservation of operating profit scenario.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of amended energy
conservation standards on direct employment in the consumer clothes
dryer industry, DOE used the GRIM to estimate the domestic labor
expenditures and number of direct employees in the no-new-standards
case and in each of the standards cases during the analysis period. DOE
calculated these values using statistical data from the U.S. Census
Bureau's 2020 Annual Survey of Manufactures (``ASM''),\81\ the U.S.
Bureau of Labor Statistics' employee compensation data,\82\ results of
the engineering analysis, and manufacturer interviews.
---------------------------------------------------------------------------
\81\ U.S. Census Bureau, Annual Survey of Manufacturers: Summary
Statistics for Industry Groups and Industries in the U.S.: 2018-
2020. Available at www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html (Last Accessed December 10, 2021).
\82\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. June 17, 2021. Available at: www.bls.gov/news.release/pdf/ecec.pdf.
---------------------------------------------------------------------------
Labor expenditures related to product manufacturing depend on the
labor intensity of the product, the sales volume, and an assumption
that wages remain fixed in real terms over time. The total labor
expenditures in each year are calculated by multiplying the total MPCs
by the labor percentage of MPCs. The total labor expenditures in the
GRIM were then converted to total production employment levels by
dividing production labor expenditures by the average fully burdened
wage multiplied by the average number of hours worked per year per
production worker. To do this, DOE relied on the ASM inputs: Production
Workers Annual Wages, Production Workers Annual Hours, Production
Workers for Pay Period, and Number of Employees. DOE also relied on the
BLS employee compensation data to determine the fully burdened wage
ratio. The fully burdened wage ratio factors in paid leave,
supplemental pay, insurance, retirement and savings, and legally
required benefits.
The number of production employees is then multiplied by the U.S.
labor percentage to convert total production employment to total
domestic production employment. The U.S. labor percentage represents
the industry fraction of domestic manufacturing production capacity for
the covered product. This value is derived from manufacturer
interviews, product database analysis, and publicly available
information. DOE estimates that 58 percent of consumer clothes dryers
are produced domestically.
The domestic production employees estimate covers production line
workers, including line supervisors, who are directly involved in
fabricating and assembling products within the OEM facility. Workers
performing services that are closely associated with production
operations, such as materials handling tasks using forklifts, are also
included as production labor. DOE's estimates only account for
production workers who manufacture the specific equipment covered by
this proposed rulemaking.
[[Page 51790]]
Non-production workers account for the remainder of the direct
employment figure. The non-production employees estimate covers
domestic workers who are not directly involved in the production
process, such as sales, engineering, human resources, and management.
Using the amount of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio
of non-production workers in the industry compared to production
employees. DOE assumes that this employee distribution ratio remains
constant between the no-standards case and standards cases.
Using the GRIM, DOE estimates in the absence of new energy
conservation standards there would be 2,460 domestic workers for
consumer clothes dryers in 2027. Table V.30 shows the range of the
impacts of energy conservation standards on U.S. manufacturing
employment in the consumer clothes dryer industry. The following
discussion provides a qualitative evaluation of the range of potential
impacts presented in Table V.30.
Table V.30--Domestic Direct Employment Impacts for Consumer Clothes Dryer Manufacturers in 2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2027 2,460 2,468........... 2,489........... 2,495........... 2,809........... 5,101........... 5,209.
(Production Workers + Non-
Production Workers).
Potential Changes in Direct .............. (2,166) to 8.... (2,166) to 29... (2,166) to 35... (2,166) to 349.. (2,166) to 2,641 (2,166) to
Employment Workers in 2027 *. 2,749.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative numbers.
The direct employment impacts shown in Table V.30 represent the
potential domestic employment changes that could result following the
compliance date for the consumer clothes dryer product classes in this
proposal. The upper bound estimate corresponds to an increase in the
number of domestic workers that would result from amended energy
conservation standards if manufacturers continue to produce the same
scope of covered equipment within the United States after compliance
takes effect. The lower bound estimate represents the maximum decrease
in production workers if manufacturing moved to lower labor-cost
countries. Most manufacturers currently produce at least a portion of
their consumer clothes dryers in countries with lower labor costs, and
an amended standard that necessitates large increases in labor content
or large expenditures to re-tool facilities could cause manufacturers
to re-evaluate domestic production siting options.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the NOPR TSD. Additionally, the employment impacts
discussed in this section are independent of the employment impacts
from the broader U.S. economy, which are documented in chapter 16 of
the NOPR TSD.
c. Impacts on Manufacturing Capacity
As discussed in section V.B.2.a of this document, implementing the
different design options analyzed for this NOPR would require varying
levels of resources and investment. A standard level that would require
the use of heat pump technology for electric dryers and combination
washer-dryers would represent the biggest shift in technology for
clothes dryer manufacturing among all the design options considered for
this analysis. Adopting efficiency levels that require heat pump
technology would necessitate very large investments to both redesign
products and update production facilities. Currently, DOE estimates
that approximately 1 percent of consumer clothes dryer shipments meet
heat pump efficiency levels. In interviews, several manufacturers
expressed concerns that the 3-year time period between the announcement
of the final rule and the compliance date of the amended energy
conservation standard might be insufficient to design, test, and
manufacture the necessary number of products to meet demand.
In interviews, some manufacturers raised concerns about
implementing inlet air preheat designs. Unlike the discussions about
heat pump technology, there is very little industry experience with
inlet air preheat designs. Currently, no models on the U.S. market
incorporate this design option. Several manufacturers speculated that
implementing inlet air preheat would require a major overhaul of
existing production facilities and a significant amount of engineering
time.
For the remaining dryer design options associated with lower
efficiency levels (e.g., implementing electronic controls, optimized
heating systems, more advanced automatic termination controls, and
modulating heat), manufacturers could likely maintain manufacturing
capacity levels and continue to meet market demand under amended energy
conservation standards. A significant portion of consumer clothes
dryers already incorporate these design options. For instance,
approximately 64 percent of standard electric dryer shipments meet or
exceed the efficiencies associated with implementing modulating heat
(EL 4). However, industry did note concerns about the ongoing supply
constraints related to the COVID-19 pandemic, particularly around
sourcing microprocessors and electronics. Any shift away from
electromechanical controls would require that industry source more
electronic components, which are already difficult to secure. If these
supply constraints continue through the end of the conversion period,
industry could face production capacity constraints.
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop industry cash-flow
estimates may not capture the differential impacts among subgroups of
manufacturers. Small manufacturers, niche players, or manufacturers
exhibiting a cost structure that differs substantially from the
industry average could be affected disproportionately. DOE investigated
small businesses as a manufacturer subgroup that could be
disproportionally impacted by energy conservation standards and could
merit additional analysis. DOE did not identify any other adversely
impacted manufacturer subgroups for this rulemaking based on the
results of the industry characterization.
DOE analyzes the impacts on small businesses in a separate analysis
in section VI.B of this document as part of the Regulatory Flexibility
Analysis. For a discussion of the impacts on the small business
manufacturer subgroup, see the Regulatory Flexibility Analysis in
[[Page 51791]]
section VI.B of this document and chapter 12 of the NOPR TSD.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at 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.
For the cumulative regulatory burden analysis, DOE examines
Federal, product-specific regulations that could affect consumer
clothes dryer manufacturers that take effect approximately three years
before or after the 2027 compliance date.
Table V.31--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
Consumer Clothes Dryer Original Equipment Manufacturers
----------------------------------------------------------------------------------------------------------------
Industry
Number of OEMs Industry conversion
Federal energy conservation Number of OEMs affected from Approx. conversion costs costs/product
standard * today's rule ** standards year (millions $) revenue ***
(%)
----------------------------------------------------------------------------------------------------------------
Portable Air Conditioners 85 11 2 2025 $320.9 (2015$) 6.7
FR 1378 (January 10, 2020).
Room Air Conditioners 8 4 2026 22.8 (2020$) 0.5
[dagger] 87 FR 20608 (April
7, 2022)...................
Commercial Water Heating 15 1 2026 34.6 (2020$) 4.7
Equipment [dagger] 87 FR
30610 (May 19, 2022).......
Consumer Furnaces [dagger] 15 1 2029 150.6 (2020$) 1.4
87 FR 40590 (July 7, 2022).
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule contributing
to cumulative regulatory burden.
** This column presents the number of OEMs producing consumer clothes dryers that are also listed as OEMs in the
identified energy conservation standard contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of product revenue during the conversion
period. Industry conversion costs are the upfront investments manufacturers must make to sell compliant
products/equipment. The revenue used for this calculation is the revenue from just the covered product/
equipment associated with each row. The conversion period is the time frame over which conversion costs are
made and lasts from the publication year of the final rule to the compliance year of the final rule. The
conversion period typically ranges from 3 to 5 years, depending on the energy conservation standard.
[dagger] The Room Air Conditioners, Consumer Furnaces, and Commercial Water Heating Equipment rulemakings are in
the NOPR stage and all values are subject to change until finalized.
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for consumer clothes dryers, DOE compared their energy
consumption under the no-new-standards case to their anticipated energy
consumption under each TSL. The savings are measured over the entire
lifetime of products purchased in the 30-year period that begins in the
year of anticipated compliance with amended standards (2027-2056).
Table V.32 presents DOE's projections of the national energy savings
for each TSL considered for consumer clothes dryers. The savings were
calculated using the approach described in section IV.H.2 of this
document.
Table V.32--Cumulative National Energy Savings for Consumer Clothes Dryers; 30 Years of Shipments
[2027-2056]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy.......................................... 0.97 1.98 2.97 3.90 9.59 9.68
FFC energy.............................................. 1.01 2.07 3.11 4.06 9.97 10.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \83\ requires agencies to present analytical
results, including separate schedules of the monetized benefits and
costs that show the type and timing of benefits and costs. Circular A-4
also directs agencies to consider the variability of key elements
underlying the estimates of benefits and costs. For this rulemaking,
DOE undertook a sensitivity analysis
[[Page 51792]]
using 9 years, rather than 30 years, of product shipments. The choice
of a 9-year period is a proxy for the timeline in EPCA for the review
of certain energy conservation standards and potential revision of and
compliance with such revised standards.\84\ The review timeframe
established in EPCA is generally not synchronized with the product
lifetime, product manufacturing cycles, or other factors specific to
consumer clothes dryers. Thus, such results are presented for
informational purposes only and are not indicative of any change in
DOE's analytical methodology. The NES sensitivity analysis results
based on a 9-year analytical period are presented in Table V.33. The
impacts are counted over the lifetime of consumer clothes dryers
purchased in 2027-2035.
---------------------------------------------------------------------------
\83\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
December 16, 2021).
\84\ Section 325(m) of EPCA requires DOE to review its standards
at least once every 6 years, and requires, for certain products, a
3-year period after any new standard is promulgated before
compliance is required, except that in no case may any new standards
be required within 6 years of the compliance date of the previous
standards. While adding a 6-year review to the 3-year compliance
period adds up to 9 years, DOE notes that it may undertake reviews
at any time within the 6-year period and that the 3-year compliance
date may yield to the 6-year backstop. A 9-year analysis period may
not be appropriate given the variability that occurs in the timing
of standards reviews and the fact that for some products, the
compliance period is 5 years rather than 3 years.
Table V.33--Cumulative National Energy Savings for Consumer Clothes Dryers; 9 Years of Shipments
[2027-2035]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(quads)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Primary energy.......................................... 0.41 0.78 1.09 1.35 2.92 2.95
FFC energy.............................................. 0.43 0.82 1.14 1.41 3.04 3.07
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Net Present Value of Consumer Costs and Benefits
DOE estimated the cumulative NPV of the total costs and savings for
consumers that would result from the TSLs considered for consumer
clothes dryers. In accordance with OMB's guidelines on regulatory
analysis,\85\ DOE calculated NPV using both a 7-percent and a 3-percent
real discount rate. Table V.34 shows the consumer NPV results with
impacts counted over the lifetime of products purchased in 2027-2056.
---------------------------------------------------------------------------
\85\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
December 16, 2021).
Table V.34--Cumulative Net Present Value of Consumer Benefits for Consumer Clothes Dryers; 30 Years of Shipments
[2027-2056]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(billion 2020$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent............................................... 6.90 14.1 20.8 18.4 27.8 25.7
7 percent............................................... 3.10 6.28 9.07 7.13 7.76 6.60
--------------------------------------------------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.35. The impacts are counted over the
lifetime of products purchased in 2027-2035. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.35--Cumulative Net Present Value of Consumer Benefits for Consumer Clothes Dryers; 9 Years of Shipments
[2027-2035]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
(billion 2020$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 percent............................................... 3.61 7.02 9.78 8.90 12.8 11.9
7 percent............................................... 1.96 3.84 5.34 4.38 4.91 4.27
--------------------------------------------------------------------------------------------------------------------------------------------------------
The previous results in Table V.34 reflect the use of a default
trend to estimate the change in price for consumer clothes dryers over
the analysis period (see section IV.F.1 of this document). DOE also
conducted a sensitivity analysis that considered one scenario with a
lower rate of price decline than the reference case and one
[[Page 51793]]
scenario with a higher rate of price decline than the reference case.
The results of these alternative cases are presented in appendix 10C of
the NOPR TSD. In the high-price-decline case, the NPV of consumer
benefits is higher than in the default case. In the low-price-decline
case, the NPV of consumer benefits is lower than in the default case.
c. Indirect Impacts on Employment
It is estimated that that amended energy conservation standards for
consumer clothes dryers would reduce energy expenditures for consumers
of those products, with the resulting net savings being redirected to
other forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2027-2033), where these uncertainties are reduced.
The results suggest that the proposed standards would be likely to
have a negligible impact on the net demand for labor in the economy.
The net change in jobs is so small that it would be imperceptible in
national labor statistics and might be offset by other, unanticipated
effects on employment. Chapter 16 of the NOPR TSD presents detailed
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section III.E.1.d of this document, DOE has
tentatively concluded that the standards proposed in this NOPR would
not lessen the utility or performance of the consumer clothes dryers
under consideration in this rulemaking. Manufacturers of these products
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.E.1.e
of this document, the Attorney General determines the impact, if any,
of any lessening of competition likely to result from a proposed
standard, and transmits such determination in writing to the Secretary,
together with an analysis of the nature and extent of such impact. To
assist the Attorney General in making this determination, DOE has
provided DOJ with copies of this NOPR and the accompanying TSD for
review. DOE will consider DOJ's comments on the proposed rule in
determining whether to proceed to a final rule. DOE will publish and
respond to DOJ's comments in that document. DOE invites comment from
the public regarding the competitive impacts that are likely to result
from this proposed rule. In addition, stakeholders may also provide
comments separately to DOJ regarding these potential impacts. See the
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the NOPR TSD
presents the estimated impacts on electricity generating capacity,
relative to the no-new-standards case, for the TSLs that DOE considered
in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for consumer clothes dryers is expected to yield
environmental benefits in the form of reduced emissions of certain air
pollutants and greenhouse gases. Table V.36 provides DOE's estimate of
cumulative emissions reductions expected to result from the TSLs
considered in this proposed rulemaking. The emissions were calculated
using the multipliers discussed in section IV.K of this document. DOE
reports annual emissions reductions for each TSL in chapter 13 of the
NOPR TSD.
Table V.36--Cumulative Emissions Reduction for Consumer Clothes Dryers Shipped in 2027-2056
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
-----------------------------------------------------------------------------------------------
1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
Power Sector Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 35.1 71.5 107 138 329 334
SO2 (thousand tons)..................................... 13.7 27.9 42.1 56.5 145 145
NOX (thousand tons)..................................... 17.2 35.1 52.1 65.0 144 149
Hg (tons)............................................... 0.08 0.17 0.25 0.34 0.88 0.88
CH4 (thousand tons)..................................... 2.48 5.05 7.58 10.0 25.2 25.3
N2O (thousand tons)..................................... 0.34 0.70 1.05 1.39 3.51 3.52
--------------------------------------------------------------------------------------------------------------------------------------------------------
Upstream Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 2.82 5.77 8.60 10.9 25.0 25.6
SO2 (thousand tons)..................................... 0.16 0.33 0.49 0.66 1.67 1.67
NOX (thousand tons)..................................... 42.1 86.3 129 163 372 382
Hg (tons)............................................... 0.000 0.001 0.001 0.001 0.003 0.003
CH4 (thousand tons)..................................... 287 587 875 1,101 2,494 2,567
N2O (thousand tons)..................................... 0.01 0.03 0.04 0.05 0.12 0.12
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total FFC Emissions
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)............................... 37.9 77.3 116 149 354 360
SO2 (thousand tons)..................................... 13.9 28.3 42.6 57.2 147 147
NOX (thousand tons)..................................... 59.4 121 181 228 516 531
Hg (tons)............................................... 0.08 0.17 0.26 0.34 0.88 0.88
[[Page 51794]]
CH4 (thousand tons)..................................... 289 592 883 1,111 2,519 2,592
N2O (thousand tons)..................................... 0.36 0.72 1.09 1.44 3.64 3.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for consumer clothes
dryers. Section IV.L.1.a of this document discusses the SC-
CO2 values used.
Table V.37 presents the present value of the CO2
emissions reduction at each TSL.
Table V.37--Potential Standards: Present Value of CO2 Emissions Reduction for Consumer Clothes Dryers Shipped in
2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CO2 case discount rate and statistics
TSL ------------------------------------------------------------------------------
5%, Average 3%, Average 2.5%, Average 3%, 95th percentile
----------------------------------------------------------------------------------------------------------------
(million 2020$)
----------------------------------------------------------------------------------------------------------------
1................................ 337 1,459 2,284 4,445
2................................ 677 2,945 4,617 8,963
3................................ 993 4,351 6,834 13,236
4................................ 1,263 5,558 8,742 16,899
5................................ 2,918 12,977 20,475 39,423
6................................ 2,966 13,187 20,807 40,061
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.1.b of this document, DOE estimated
monetary benefits likely to result from the reduced emissions of
methane and N2O that DOE estimated for each of the
considered TSLs for consumer clothes dryers. Table V.38 presents the
value of the CH4 emissions reduction at each TSL, and Table
V.39 presents the value of the N2O emissions reduction at
each TSL.
Table V.38--Potential Standards: Present Value of Methane Emissions Reduction for Consumer Clothes Dryers
Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CH4 case discount rate and statistics
TSL ------------------------------------------------------------------------------
5%, Average 3%, Average 2.5%, Average 3%, 95th percentile
----------------------------------------------------------------------------------------------------------------
(million 2020$)
----------------------------------------------------------------------------------------------------------------
1................................ 118 350 489 929
2................................ 237 711 994 1,886
3................................ 348 1,052 1,474 2,789
4................................ 432 1,317 1,848 3,489
5................................ 955 2,949 4,151 7,805
6................................ 983 3,035 4,272 8,032
----------------------------------------------------------------------------------------------------------------
Table V.39--Potential Standards: Present Value of Nitrous Oxide Emissions Reduction for Consumer Clothes Dryers
Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-N2O case discount rate and statistics
TSL ------------------------------------------------------------------------------
5%, Average 3%, Average 2.5%, Average 3%, 95th percentile
----------------------------------------------------------------------------------------------------------------
(million 2020$)
----------------------------------------------------------------------------------------------------------------
1................................ 1.20 4.81 7.47 12.8
2................................ 2.40 9.71 15.1 25.9
3................................ 3.54 14.4 22.5 38.4
4................................ 4.64 19.0 29.7 50.6
5................................ 11.4 47.2 73.8 126
6................................ 11.4 47.3 74.0 126
----------------------------------------------------------------------------------------------------------------
[[Page 51795]]
DOE is well aware that scientific and economic knowledge about the
contribution of CO2 and other GHG emissions to changes in
the future global climate and the potential resulting damages to the
world economy continues to evolve rapidly. Thus, any value placed on
reduced GHG emissions in this rulemaking is subject to change. That
said, because of omitted damages, DOE agrees with the IWG that these
estimates most likely underestimate the climate benefits of greenhouse
gas reductions. DOE, together with other Federal agencies, will
continue to review various methodologies for estimating the monetary
value of reductions in CO2 and other GHG emissions. This
ongoing review will consider the comments on this subject that are part
of the public record for this and other rulemakings, as well as other
methodological assumptions and issues. DOE notes that the proposed
standards would be economically justified even without inclusion of
monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the economic impacts
associated with changes in SO2 emissions anticipated to
result from the considered TSLs for consumer clothes dryers. The
dollar-per-ton values that DOE used are discussed in section IV.L.2 of
this document. Table V.40 presents the present value SO2
emission changes for each TSL calculated using 7-percent and 3-percent
discount rates. This table presents results that use the low benefit-
per-ton values, which reflect DOE's primary estimate.
Table V.40--Potential Standards: Present Value of SO2 Emission Reduction
for Consumer Clothes Dryers Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2020$)
------------------------------------------------------------------------
1............................... 773 318
2............................... 1,552 628
3............................... 2,298 911
4............................... 3,039 1,184
5............................... 7,592 2,850
6............................... 7,581 2,845
------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE also estimated the
monetary value of the economic benefits associated with NOX
emissions reductions anticipated to result from the considered TSLs for
consumer clothes dryers. The dollar-per-ton values that DOE used are
discussed in section IV.L of this document. Table V.41 presents the
present value for NOX emissions reduction for each TSL
calculated using 7-percent and 3-percent discount rates. The results in
this table reflect application of the low dollar-per-ton values, which
DOE used to be conservative. Results that reflect high dollar-per-ton
values are presented in chapter 14 of the NOPR TSD.
Table V.41--Potential Standards: Present Value of NOX Emissions
Reduction for Consumer Clothes Dryers Shipped in 2027-2056
------------------------------------------------------------------------
TSL 3% Discount rate 7% Discount rate
------------------------------------------------------------------------
(million 2020$)
------------------------------------------------------------------------
1............................... 2,317 943
2............................... 4,656 1,858
3............................... 6,842 2,678
4............................... 8,640 3,335
5............................... 19,688 7,339
6............................... 20,094 7,490
------------------------------------------------------------------------
Note: Results are based on the low benefit-per-ton values.
The benefits of reduced CO2, CH4, and
N2O emissions are collectively referred to as climate
benefits. The benefits of reduced SO2 and NOX
emissions changes are collectively referred to as health benefits. For
the time series of estimated monetary values of reduced emissions, see
chapter 14 of the NOPR TSD.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No
other factors were considered in this analysis.
8. Summary of Economic Impacts
Table V.42 presents the NPV values that result from adding the
estimates of the potential monetized estimates of the potential
economic, climate, and health benefits resulting from reduced GHG,
NOX, and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered consumer clothes dryers and are
measured for the lifetime of products shipped in 2027-2056. The climate
benefits associated with reduced GHG emissions resulting from the
adopted standards are global benefits and are also calculated based on
the lifetime of consumer clothes dryers shipped in 2027-2056. The
climate benefits associated with four SC-GHG estimates are shown. DOE
does not have a single central SC-GHG point estimate and it emphasizes
the importance and value of considering the benefits calculated using
all four SC-GHG estimates.
[[Page 51796]]
Table V.42--Potential Standards: NPV of Consumer Benefits Combined With Monetized Climate and Health Benefits
From Emissions Reductions
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
3% discount rate for NPV of Consumer and Health Benefits (billion 2020$)
----------------------------------------------------------------------------------------------------------------
5% d.r., Average SC-GHG case...... 10.4 21.3 31.3 31.8 59.0 57.3
3% d.r., Average SC-GHG case...... 11.8 24.0 35.4 37.0 71.1 69.7
2.5% d.r., Average SC-GHG case.... 12.8 26.0 38.3 40.7 79.8 78.5
3% d.r., 95th percentile SC-GHG 15.4 31.2 46.0 50.5 102 102
case.............................
----------------------------------------------------------------------------------------------------------------
7% discount rate for NPV of Consumer and Health Benefits (billion 2020$)
----------------------------------------------------------------------------------------------------------------
5% d.r., Average SC-GHG case...... 4.82 9.68 14.0 13.3 21.8 20.9
3% d.r., Average SC-GHG case...... 6.18 12.4 18.1 18.5 33.9 33.2
2.5% d.r., Average SC-GHG case.... 7.14 14.4 21.0 22.3 42.7 42.1
3% d.r., 95th percentile SC-GHG 9.75 19.6 28.7 32.1 65.3 65.2
case.............................
----------------------------------------------------------------------------------------------------------------
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered product
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining
whether a standard is economically justified, the Secretary must
determine whether the benefits of the standard exceed its burdens by,
to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of amended standards for
consumer clothes dryers at each TSL, beginning with the maximum
technologically feasible level, to determine whether that level was
economically justified. Where the max-tech level was not justified, DOE
then considered the next most efficient level and undertook the same
evaluation until it reached the highest efficiency level that is both
technologically feasible and economically justified and saves a
significant amount of energy. DOE refers to this process as the ``walk-
down'' analysis.
To aid the reader as DOE discusses the benefits and/or burdens of
each TSL, tables in this section present a summary of the results of
DOE's quantitative analysis for each TSL. In addition to the
quantitative results presented in the tables, DOE also considers other
burdens and benefits that affect economic justification. These include
the impacts on identifiable subgroups of consumers who may be
disproportionately affected by a national standard and impacts on
employment.
DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy
savings in the absence of government intervention. Much of this
literature attempts to explain why consumers appear to undervalue
energy efficiency improvements. There is evidence that consumers
undervalue future energy savings as a result of (1) a lack of
information, (2) a lack of sufficient salience of the long-term or
aggregate benefits, (3) a lack of sufficient savings to warrant
delaying or altering purchases, (4) excessive focus on the short term,
in the form of inconsistent weighting of future energy cost savings
relative to available returns on other investments, (5) computational
or other difficulties associated with the evaluation of relevant
tradeoffs, and (6) a divergence in incentives (for example, between
renters and owners, or builders and purchasers). Having less than
perfect foresight and a high degree of uncertainty about the future,
consumers may trade off these types of investments at a higher-than-
expected rate between current consumption and uncertain future energy
cost savings.
In DOE's current regulatory analysis, potential changes in the
benefits and costs of a regulation due to changes in consumer purchase
decisions are included in two ways. First, if consumers forgo the
purchase of a product in the standards case, this decreases sales for
product manufacturers, and the impact on manufacturers attributed to
lost revenue is included in the MIA. Second, DOE accounts for energy
savings attributable only to products actually used by consumers in the
standards case; if a standard decreases the number of products
purchased by consumers, this decreases the potential energy savings
from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of product purchases in chapter 9
of the NOPR TSD. However, DOE's current analysis does not explicitly
control for heterogeneity in consumer preferences, preferences across
subcategories of products or specific features, or consumer price
sensitivity variation according to household income.\86\
---------------------------------------------------------------------------
\86\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883.
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\87\ DOE
welcomes comments on how to more fully assess the potential impact of
energy conservation standards on consumer choice and how to quantify
this impact in its regulatory analysis in future rulemakings.
---------------------------------------------------------------------------
\87\ Sanstad, A.H. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed
November 12, 2021).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for Consumer Clothes Dryers
Standards
Table V.43 and Table V.44 summarize the quantitative impacts
estimated for each TSL for consumer clothes dryers.
[[Page 51797]]
The national impacts are measured over the lifetime of consumer clothes
dryers purchased in the 30-year period that begins in the anticipated
year of compliance with amended standards (2027-2056). The energy
savings, emissions reductions, and value of emissions reductions refer
to full-fuel-cycle results. The efficiency levels contained in each TSL
are described in section V.A of this document. In addition, as DOE
noted in section V.A of this document, DOE is evaluating proposed
energy conservation standards by looking at the maximum improvement
that is technologically feasible and cost justified under bundled
policy scenarios referred to as TSLs. Since there are not cross
elasticities modeled in this proposed rulemaking for consumer clothes
dryers, the cost analysis and associated justification would be the
same if DOE evaluated at the individual product class level.
Table V.43--Summary of Analytical Results for Consumer Clothes Dryers TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 TSL 6
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings (quads)
----------------------------------------------------------------------------------------------------------------
Quads............................. 1.01 2.07 3.11 4.06 9.97 10.1
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction (Total FFC Emissions)
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)......... 37.9 77.3 116 149 354 360
SO2 (thousand tons)............... 13.9 28.3 42.6 57.2 147 147
NOX (thousand tons)............... 59.4 121 181 228 516 531
Hg (tons)......................... 0.08 0.17 0.26 0.34 0.88 0.88
CH4 (thousand tons)............... 289 592 883 1,111 2,519 2,592
N2O (thousand tons)............... 0.36 0.72 1.09 1.44 3.64 3.64
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (3% discount rate, billion 2020$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings... 7.50 15.1 22.2 28.8 69.5 69.8
Climate Benefits *................ 1.81 3.67 5.42 6.89 16.0 16.3
Health Benefits **................ 3.09 6.21 9.14 11.7 27.3 27.7
Total Benefits [dagger]........... 12.4 24.9 36.8 47.4 113 114
Consumer Incremental Product Costs 0.61 0.92 1.36 10.4 41.7 44.1
[Dagger].........................
Consumer Net Benefits............. 6.90 14.1 20.8 18.4 27.8 25.7
Total Net Benefits................ 11.8 24.0 35.4 37.0 71.1 69.7
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (7% discount rate, billions 2020$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings... 3.45 6.80 9.83 12.6 29.2 29.3
Climate Benefits *................ 1.81 3.67 5.42 6.89 16.0 16.3
Health Benefits **................ 1.26 2.49 3.59 4.52 10.2 10.3
Total Benefits [dagger]........... 6.53 13.0 18.8 24.0 55.4 55.9
Consumer Incremental Product Costs 0.35 0.52 0.76 5.42 21.4 44.1
[Dagger].........................
Consumer Net Benefits............. 3.10 6.28 9.07 7.13 7.76 6.60
Total Net Benefits................ 6.18 12.4 18.1 18.5 33.9 33.2
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped in 2027-2056.
These results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate). Together these represent the global social cost of greenhouse
gases (SC-GHG). For presentational purposes of this table, the climate benefits associated with the average SC-
GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate. See section. IV.L of this document for more details. On March 16, 2022, the Fifth Circuit Court of
Appeals (No. 22-30087) granted the Federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of
the Federal government's appeal of that injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from ``adopting, employing, treating as binding,
or relying upon'' the interim estimates of the social cost of greenhouse gases--which were issued by the
Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021--to monetize the
benefits of reducing greenhouse gas emissions. As reflected in this rule, DOE has reverted to its approach
prior to the injunction and presents monetized greenhouse gas abatement benefits where appropriate and
permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and health benefits that can be monetized. For
presentation purposes, total and net benefits for both the 3-percent and 7-percent cases are presented using
the average SC-GHG with 3-percent discount rate, but the Department does not have a single central SC-GHG
point estimate. DOE emphasizes the importance and value of considering the benefits calculated using all four
SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[[Page 51798]]
Table V.44--Summary of Analytical Results for Consumer Clothes Dryers TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 * TSL 5 * TSL 6 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2020$) (No- 1,785.0 to 1,798.5 1,766.8 to 1,789.8 1,694.5 to 1,728.5 1,368.8 to 1,582.5 830.1 to 1,675.5.. 732.4 to 1,632.0.
new-standards case INPV =
1,810.1).
Industry NPV (% change)......... (1.4) to (0.6).... (2.4) to (1.1).... (6.4) to (4.5).... (24.4) to (12.6).. (54.1) to (7.4)... (59.5) to (9.8).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2020$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............... $252.............. $439.............. $578.............. $182.............. $230.............. $230.
Electric Compact (120 V)........ $115.............. $194.............. $160.............. $160.............. $86.3............. ($62.6).
Vented Electric Compact (240 V). $94.1............. $201.............. $192.............. $192.............. $123.............. ($94.8).
Vented Gas Standard............. $77.7............. $174.............. $198.............. $198.............. $198.............. $43.0.
Vented Gas Compact.............. $25.2............. $23.5............. $25.2............. .................. $29.4............. ($38.8).
Ventless Electric Compact (240 .................. $145.............. $145.............. $145.............. $145.............. $11.0.
V).
Ventless Electric Combination .................. $15.1............. $15.1............. $15.1............. $15.1............. ($387).
Washer/Dryer.
Shipment-Weighted Average *..... $219.............. $390.............. $507.............. $184.............. $222.............. $191.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............... 0.7............... 0.6............... 0.6............... 1.7............... 4.0............... 4.0.
Electric Compact (120 V)........ 1.7............... 1.5............... 1.8............... 1.8............... 5.3............... 11.0.
Vented Electric Compact (240 V). 2.0............... 1.5............... 1.6............... 1.6............... 4.7............... 12.1.
Vented Gas Standard............. 2.8............... 1.6............... 1.9............... 1.9............... 1.9............... 5.5.
Vented Gas Compact.............. 5.1............... 6.4............... 5.1............... 0.0............... 7.1............... 16.3.
Ventless Electric Compact (240 .................. 0.3............... 0.3............... 0.3............... 0.3............... 7.1.
V).
Ventless Electric Combination .................. 0................. 0................. 0................. 0................. 27.5.
Washer-Dryer.
Shipment-Weighted Average *..... 1.0............... 0.8............... 0.8............... 1.7............... 3.6............... 4.5.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Electric Standard............... 0.32%............. 0.16%............. 0.11%............. 53.5%............. 53.1%............. 53.1%.
Electric Compact (120 V)........ 5.66%............. 4.46%............. 21.6%............. 21.6%............. 53.0%............. 76.3%.
Vented Electric Compact (240 V). 8.63%............. 4.35%............. 8.37%............. 8.37%............. 47.0%............. 79.6%.
Vented Gas Standard............. 6.04%............. 1.66%............. 3.74%............. 3.74%............. 3.74%............. 59.3%.
Vented Gas Compact.............. 32.7%............. 50.2%............. 32.7%............. .................. 51.9%............. 78.8%.
Ventless Electric Compact (240 .................. 0%................ 0%................ 0%................ 0%................ 66.4%.
V).
Ventless Electric Combination .................. 0%................ 0%................ 0%................ 0%................ 89.8%.
Washer-Dryer.
Shipment-Weighted Average *..... 1.33%............. 0.45%............. 0.81%............. 44.4%............. 44.5%............. 54.7%.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each product class in total projected shipments in 2027.
DOE first considered TSL 6, which represents the max-tech
efficiency levels, which includes the design parameters of the most
efficient products available on the market or in working prototypes for
all product classes. The max-tech design options include heat pump
technology for electric consumer clothes dryers and inlet air preheat
technology for gas consumer clothes dryers. DOE's shipments analysis
estimates approximately 1 percent of annual consumer clothes dryer
shipments currently meet this level. TSL 6 would save an estimated 10.1
quads of energy, an amount DOE considers significant. Under TSL 6, the
NPV of consumer benefit would be $6.60 billion using a discount rate of
7 percent, and $25.7 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 6 are 360 Mt of
CO2, 147 thousand tons of SO2, 531 thousand tons
of NOX, 0.88 ton of Hg, 2,592 thousand tons of
CH4, and 3.64 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 6 is $16.3 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 6 is $10.3 billion using a 7-percent discount rate and $27.7
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 6 is $33.2
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 6 is $69.7 billion.
[[Page 51799]]
At TSL 6, the average LCC impact on affected consumers is a savings
of $230 for electric standard (PC1), ($62.6) for electric compact
(120V) (PC2), ($94.8) for vented electric compact (240V) (PC3), $43.0
for vented gas standard (PC4), ($38.8) for vented gas compact (PC5),
$11.0 for ventless electric compact (240V) (PC6), and ($387) for
ventless electric combination washer-dryer (PC7). The simple payback
period is 4.0 years for PC1, 11.0 years for PC2, 12.1 years for PC3,
5.5 years for PC4, 16.3 years for PC5, 7.1years for PC6, and 27.5 years
for PC7. The fraction of consumers experiencing a net LCC cost is 53.1
percent for PC1, 76.3 percent for PC2, 79.6 percent for PC3, 59.3
percent for PC4, 78.8 percent for PC5, 66.4 percent for PC6, and 89.8
percent for PC7. Overall, across the product classes a majority of
consumers will experience a net LCC cost, especially for senior
households. DOE estimated that more 65 percent of senior consumers will
experience a net LCC cost at TSL 6.
At TSL 6, the projected change in INPV ranges from a decrease of
$1,077.6 million to a decrease of $178.0 million, which correspond to
decreases of 59.5 percent and 9.8 percent, respectively. The loss in
INPV is largely driven by industry conversion costs as manufacturer
work to redesign their portfolio of model offerings and re-tool entire
factories to comply with amended standards at this level. Industry
conversion costs could reach $1,280.0 million at this TSL.
Conversion costs at TSL 6 are significant as nearly all existing
consumer clothes dryer models would need to be redesigned to meet the
max-tech efficiencies. For the electric clothes dryer product classes,
manufacturers would need to implement the most efficient heat pump
technology to meet max-tech levels. Of the eight OEMs that offer
domestic heat pump models, four of them already offer models that meet
the efficiencies required by TSL 6. These four OEMs specialize in high-
efficiency clothes dryers, but currently produce low volumes of
products for the U.S. market. For the other four manufacturers of heat
pump models, which have the most domestic sales and account for an
estimated 72 percent of total annual clothes dryer shipments, TSL 6
would require substantial additional investments to their current heat
pump product lines to produce cost-optimized models at the max-tech
efficiency level. Seven out of 15 OEMs identified do not offer any
models for the domestic market that utilize heat pump technology. A
standard that could only be met using heat pump technology would
require a total renovation of existing production facilities and would
require most manufacturers to design completely new clothes dryer
platforms, as they would not be able to maintain the resistive heating
designs that currently dominate the U.S. electric clothes dryer market.
In interviews, several manufacturers expressed concern about a
potential shortage of products given the required scale of investment,
redesign efforts, and compliance timeline.
For gas clothes dryers, manufacturers would need to implement inlet
air preheat technology along with other design options to meet the
efficiency levels required by TSL 6. Thus far, dryers with this
technology and performance have not been observed in clothes dryers
available on the consumer market. Clothes dryers with inlet air preheat
designs have been observed only in laboratory settings. In interviews,
some manufacturers raised concerns about implementing a relatively
untested technology for the consumer market. There is very little
industry experience with inlet air preheat designs. Several
manufacturers speculated that implementing inlet air preheat would
require a major overhaul of existing production facilities and a
significant amount of engineering time.
At this level, DOE estimated a 13-percent drop in shipments in the
year the standard takes effect, as price-sensitive consumers may forgo
purchasing a new clothes dryer or rely on alternatives such as
laundromats or clothes dryer rentals due to the increased upfront cost
of baseline models.
The Secretary tentatively concludes that at TSL 6 for consumer
clothes dryers, the benefits of energy savings, positive NPV of
consumer benefits, emission reductions, and the estimated monetary
value of the emissions reductions would be outweighed by the economic
burden on many consumers, especially senior consumers, as well as the
impacts on manufacturers, including the potential for large conversion
costs and reduction in INPV.
TSL 6, representing the most efficient heat pump technology on the
market, would provide significant energy savings potential, as
discussed.
Despite the current and potential future benefits of heat pump
technology, at TSL 6, the analysis indicates that a significant
fraction of electric and vented gas standard clothes dryer consumers,
including low-income and senior consumers, would experience a net cost
given the current relatively high incremental cost of electric and
vented gas standard clothes dryers at the max-tech efficiency level.
This is particularly pronounced for electric standard clothes dryers,
where the incremental production cost at the max-tech efficiency level
is comparable to the manufacturer production cost for the baseline
efficiency level. Consumers with existing electric standard clothes
dryers below EL 4 (about 34 percent) and consumers with existing vented
gas standard clothes dryers below EL 3 (about 58 percent) are more
likely to experience a net cost at TSL 6, given the relatively modest
decrease in operating costs compared to the high incremental installed
costs. Few products currently meet the efficiency levels required by
TSL 6. DOE estimates that approximately 1 percent of current shipments
meet the max-tech efficiencies. At max-tech, limited industry
experience by certain manufacturers with the high-efficiency design
options, the large conversion costs to update facilities and product
designs, and expected drop in industry shipments would result in a
reduction of INPV and a potential shortage of products given the
required scale of investment, redesign efforts, and time constraints.
Consequently, the Secretary has tentatively concluded that TSL 6 is not
economically justified.
DOE then considered TSL 5, which represents the maximum energy
savings with positive NPV. TSL 5 corresponds to the max-tech level,
which represents heat pump technology, for the electric standard
product class, and the ELs corresponding to inlet air preheat
technology in the electric compact (120V) and vented electric compact
(240V) product classes considered in this analysis. For gas consumer
clothes dryer product classes, TSL 5 corresponds to EL 3, which
represents modulating (2-stage) heating technology. TSL 5 would save an
estimated 9.97 quads of energy, an amount DOE considers significant.
Under TSL 5, the NPV of consumer benefit would be $7.76 billion using a
discount rate of 7 percent, and $27.8 billion using a discount rate of
3 percent.
The cumulative emissions reductions at TSL 5 are 354 Mt of
CO2, 147 thousand tons of SO2, 516 thousand tons
of NOX, 0.88 ton of Hg, 2,519 thousand tons of
CH4, and 3.64 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 5 is $16.0 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $ 10.2 billion using a 7-percent discount rate and $27.3
billion using a 3-percent discount rate.
[[Page 51800]]
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 5 is $33.9
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 5 is $71.1 billion.
At TSL 5, the average LCC impact on affected consumers is a savings
of $230 for electric standard (PC1), $86.3 for electric compact (120V)
(PC2), $123 for vented electric compact (240V) (PC3), $198 for vented
gas standard (PC4), $29.4 for vented gas compact (PC5), $145 for
ventless electric compact (240V) (PC6), and $15.1 for ventless electric
combination washer-dryer (PC7). The simple payback period is 4.0 years
for PC1, 5.3 years for PC2, 4.7 years for PC3, 1.9 years for PC4, 7.1
years for PC5, 0.3 years for PC6, and 0 years for PC7. The fraction of
consumers experiencing a net LCC cost is 53.1 percent for PC1, 53.0
percent for PC2, 47.0 percent for PC3, 3.74 percent for PC4, 51.9
percent for PC5, zero percent for PC6 and PC 7. Overall, across the
product classes, more than 40 percent of the consumers will experience
a net LCC cost, especially for senior households. DOE estimated that
more 55 percent of senior consumers will experience a net LCC cost at
TSL 5.
At TSL 5, the projected change in INPV ranges from a decrease of
$980.0 million to a decrease of $134.5 million, which correspond to
decreases of 54.1 percent and 7.4 percent, respectively. Industry
conversion costs could reach $1,164.2 million at this TSL.
DOE's shipments analysis estimates approximately 9 percent of
annual shipments currently meet this level. The efficiency level for
electric standard dryers, which account for 81 percent of annual
shipments, is the same as at max-tech, and would be associated with the
same current and potential future benefits as the market share of
clothes dryers with heat pump technology continues to grow over time.
Nonetheless, requiring heat pump technology for electric standard
dryers at this time would result in similar conversion costs, reduction
in INPV, and drop in shipments as TSL 6. For the electric compact
(120V) and vented electric compact (240V) dryers, the design options
include implementing inlet air preheat. In its review of the compact
electric models commercially available on the U.S. market at this time,
DOE did not identify any that incorporate the inlet air preheat
technology option.
For the vented gas product classes, which account for approximately
17 percent of total annual shipments, the design options include
implementing modulating (2-stage) heating technology along with other
features. DOE's shipments analysis estimates that approximately 43
percent of gas clothes dryer shipments currently meet the efficiencies
required by TSL 5. All seven manufacturers of gas clothes dryers offer
products that meet or exceed the efficiencies required at TSL 5. DOE
does not believe that there are any substantive barriers to modulating
(2-stage) heating technology. Capital conversion costs would be
necessary as manufacturers increase tooling for 2-stage heating
systems. Product conversion costs would be necessary for cost-
optimizing and testing new designs for a market with amended standards.
At this level, DOE expects an estimated 12-percent drop in
shipments in the year the standard takes effect, as price-sensitive
consumers may forgo purchasing a new clothes dryer or rely on
alternatives such as laundromats or clothes dryer rentals due to the
increased upfront cost of baseline models.
The Secretary tentatively concludes that at TSL 5 for consumer
clothes dryers, the benefits of energy savings, positive NPV of
consumer benefits, emission reductions, and the estimated monetary
value of the emissions reductions would be outweighed by the economic
burden on many consumers, especially senior consumers, as well as the
impacts on manufacturers, including the significant conversion costs
and large potential reduction in INPV. A significant fraction of
electric standard clothes dryer consumers, including low-income and
senior consumers, would experience a net cost. This is due to the high
incremental cost of electric standard clothes dryers at the max-tech
efficiency level. Consumers with existing electric standard clothes
dryers below EL 4 are more likely to experience a net cost at TSL 5,
given the relatively modest decrease in operating costs compared to the
high incremental installed costs. DOE estimates that approximately 9
percent of shipments currently meet the efficiencies required by this
TSL. At TSL 5, the limited industry experience with the high-efficiency
design options, particularly for electric standard dryers which account
for 81 percent of total shipments, the substantial conversion costs
required to update facilities and product designs, and expected drop in
industry shipments would result in a reduction in INPV and a potential
shortage of electric standard dryers given the scale of required
investment, redesign efforts, and time constraints. Consequently, the
Secretary has tentatively concluded that TSL 5 is not economically
justified.
DOE then considered TSL 4, which represents the maximum national
energy savings with simple PBP less than 4 years for each product
class. TSL 4 corresponds to the EL that represents inlet air preheat
technology for the electric standard product class considered in this
analysis. For the electric compact (120V) and vented electric compact
(240V) product classes, TSL 4 corresponds to EL 4, which represents
modulating (2-stage) heating technology. For the vented gas standard
product class, TSL 4 corresponds to EL 3 which also represents
modulating (2-stage) heating technology. TSL 4 would save an estimated
4.06 quads of energy, an amount DOE considers significant. Under TSL 4,
the NPV of consumer benefit would be $7.13 billion using a discount
rate of 7 percent, and $18.4 billion using a discount rate of 3
percent.
The cumulative emissions reductions at TSL 4 are 149 Mt of
CO2, 57.2 thousand tons of SO2, 228 thousand tons
of NOX, 0.34 ton of Hg, 1,111 thousand tons of
CH4, and 1.44 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 4 is $6.89 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $4.52 billion using a 7-percent discount rate and $11.7
million using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 4 is $18.5
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $37.0 billion.
At TSL 4, the average LCC impact on affected consumers is a savings
of $182 for electric standard (PC1), $160 for electric compact (120V)
(PC2), $192 for vented electric compact (240V) (PC3), $198 for vented
gas standard (PC4), $145 for ventless electric compact (PC6), and $15.1
for ventless electric combination washer-dryer (PC7). The simple
payback period is 1.7 years for PC1, 1.8 years for PC2, 1.6 years for
PC3, 1.9 years for PC4, 0.3 years for PC6, and 0 years for PC7. The
fraction of consumers experiencing a net LCC cost is 53.5 percent for
PC1, 21.6 percent for
[[Page 51801]]
PC2, 8.37 percent for PC3, 3.74 percent for PC4, zero percent for PC6
and PC 7.\88\ Overall, across the product classes, more than 40 percent
of the consumers will experience a net LCC cost, especially for senior
households. DOE estimated that about 50 percent of senior consumers
will experience a net LCC cost at TSL 4.
---------------------------------------------------------------------------
\88\ No economic impact values are reported for product class 5
under TSL4 because energy efficiency level for the product class is
at baseline.
---------------------------------------------------------------------------
At TSL 4, the projected change in INPV ranges from a decrease of
$441.3 million to a decrease of $227.6 million, which correspond to
decreases of 24.4 percent and 12.6 percent, respectively. Industry
conversion costs could reach $561.7 million at this TSL.
At TSL 4, the majority of consumer clothes dryer models would need
to be redesigned to meet the efficiency levels required. DOE's
shipments analysis estimates approximately 11 percent of current
shipments meet this level. For electric standard dryers, the design
options include implementing inlet air preheat and other features. As
previously noted, electric standard dryers account for approximately 81
percent of total shipments. There is very little industry experience
with inlet air preheat designs. Currently, DOE is not aware of any
consumer clothes dryers on the market utilizing this design option.
DOE's shipments analysis estimates that approximately 4 percent of
electric standard shipments currently meet the efficiency required by
TSL 4. Implementing inlet air preheat for electric standard dryers
would represent a major overhaul of existing product lines and
manufacturing facilities. This change would necessitate significant
investments in new equipment and tooling. Product conversion costs
would be necessary for designing, prototyping, and testing new or
updated platforms.
For vented gas standard clothes dryers, the design options at TSL 4
are the same as at TSL 5. DOE does not believe that there are any
substantive barriers to modulating (2-stage) heating technology.
Capital conversion costs may be necessary as manufacturers increase
tooling for 2-stage heating systems. Product conversion costs may be
necessary for cost-optimizing and testing new designs for a market with
amended standards.
At this level, DOE does not expect a notable drop in shipments in
the year the standard takes effect.
The Secretary tentatively concludes that at TSL 4 for consumer
clothes dryers, the benefits of energy savings, positive NPV of
consumer benefits, emission reductions, and the estimated monetary
value of the emissions reductions would be outweighed by the economic
burden on many consumers, especially senior consumers, as well as the
impacts on manufacturers, including the conversion costs and profit
margin impacts that could result in a large reduction in INPV. A
significant fraction of electric standard clothes dryer consumers,
including senior consumers, would experience a net cost. This is due to
the high incremental cost of electric standard clothes dryers at the
inlet air preheat technology efficiency level. Consumers with existing
electric standard clothes dryers below EL 4 are more likely to
experience a net cost at TSL 4, given the relatively modest decrease in
operating costs compared to the high incremental installed costs.
Consequently, the Secretary has tentatively concluded that TSL 4 is not
economically justified.
DOE then considered TSL 3, which represents a set of intermediate
efficiency levels between those designated in TSL 2 and TSL 4 and
corresponds to the current ENERGY STAR efficiency level for vented
electric standard dryers, which represent over 80 percent of the
market. TSL 3 corresponds to the EL that represents modulating (2-
stage) heating technology for the electric standard, electric compact
(120V), and vented electric compact (240V) product classes. For the
vented gas standard product class, TSL 3 corresponds to EL 3, which
also represents modulating (2-stage) heating technology. For the vented
gas compact product class, TSL 3 corresponds to EL 1, which represents
a baseline model with electronic controls. For the ventless electric
(240V) product class, TSL 3 corresponds to EL 1, which represents a
baseline model with a more advanced automatic termination control
system. For the ventless electric combination washer-dryer product
class, TSL 3 corresponds to EL 1, which represents a baseline model
with high-speed spin technology. TSL 3 would save an estimated 3.11
quads of energy, an amount DOE considers significant. Under TSL 3, the
NPV of consumer benefit would be $9.07 billion using a discount rate of
7 percent, and $20.8 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 116 Mt of
CO2, 42.6 thousand tons of SO2, 181 thousand tons
of NOX, 0.26 ton of Hg, 883 thousand tons of CH4,
and 1.09 thousand tons of N2O. The estimated monetary value
of the climate benefits from reduced GHG emissions (associated with the
average SC-GHG at a 3-percent discount rate) at TSL 3 is $5.42 billion.
The estimated monetary value of the health benefits from reduced
SO2 and NOX emissions at TSL 3 is $3.59 billion
using a 7-percent discount rate and $9.14 billion using a 3-percent
discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 3 is $18.1
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $35.4 billion.
At TSL 3, the average LCC impact on affected consumers is a savings
of $578 for electric standard (PC1), $160 for electric compact (120V)
(PC2), $192 for vented electric compact (240V) (PC3), $198 for vented
gas standard (PC4), $25.2 for PC5, $145 for ventless electric compact
(PC6), and $15.1 for ventless electric combination washer-dryer (PC7).
The simple payback period is 0.6 years for the largest product class
(PC1), 1.8 years for PC2, 1.6 years for PC3, 1.9 years for PC4, 5.1
years for PC5, 0.3 years for PC6, and 0 years for PC7. The fraction of
consumers experiencing a net LCC cost is 0.11 percent for PC1, 21.6
percent for PC2, 8.37 percent for PC3, 3.74 percent for PC4, 32.7
percent for PC5, and zero percent for PC6 and PC7. Overall, across the
product classes, less than 1 percent of the consumers, including low-
income consumers, will experience a net LCC cost. For senior consumers,
DOE estimated that 1 percent will experience a net LCC cost at TSL 3.
At TSL 3, the projected change in INPV ranges from a decrease of
$115.6 million to a decrease of $81.6 million, which correspond to
decreases of 6.4 percent and 4.5 percent, respectively. Industry
conversion costs could reach $149.7 million at this TSL.
DOE expects that some existing consumer clothes dryer models would
need to be redesigned to meet TSL 3 efficiencies, but there are a wide
range of available models for vented electric standard dryers due to
participation in the ENERGY STAR program. DOE's shipments analysis
estimates approximately 59 percent of annual shipments currently meet
this level. For electric standard, compact electric (120V), vented
electric compact (240V), and vented gas standard clothes dryers, which
account for over 98 percent of total annual shipments, the design
options include implementing electronic controls, optimized heating
systems, more advanced automatic termination controls, and modulating
(2-stage) heat. Of the 15 electric dryer
[[Page 51802]]
OEMs, 13 offer products at or above the efficiencies required for the
electric dryer product classes at TSL 3. As previously noted, all seven
OEMs of vented gas standard dryers offer products at or above the
efficiency required at TSL 3. Capital conversion costs may be necessary
as manufacturers increase tooling for 2-stage heating systems.
Manufacturers may choose to further cost-optimize and test new designs
as a result of the standards, but DOE believes some of this has already
occurred in response to ENERGY STAR for vented electric standard
dryers. DOE does not expect any drop in shipments in the year the
standard takes effect.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that a standard set at
TSL 3 for consumer clothes dryers would result in the maximum
improvement in energy efficiency that is technologically feasible and
economically justified and would result in the significant conservation
of energy. At this TSL, the average LCC savings for all consumer
clothes dryer product classes are positive. An estimated weighted
average of less than 1 percent of consumer clothes dryer consumers
would experience a net cost. The FFC national energy savings are
significant and the NPV of consumer benefits is positive using both a
3-percent and 7-percent discount rate. Notably, the benefits to
consumers vastly outweigh the cost to manufacturers. At TSL 3, the NPV
of consumer benefits, even measured at the more conservative discount
rate of 7 percent, is over 78 times higher than the maximum estimated
manufacturers' loss in INPV. The positive LCC savings--a different way
of quantifying consumer benefits--reinforces this conclusion. The
standard levels at TSL 3 are economically justified even without
weighing the estimated monetary value of emissions reductions. When
those emissions reductions are included--representing $5.42 billion in
climate benefits (associated with the average SC-GHG at a 3-percent
discount rate), and $9.14 billion (using a 3-percent discount rate) or
$3.59 billion (using a 7-percent discount rate) in health benefits--the
rationale becomes stronger still.
As stated, DOE conducts a ``walk-down'' analysis to determine the
TSL that represents the maximum improvement in energy efficiency that
is technologically feasible and economically justified as required
under EPCA. The walk-down is not a comparative analysis, as a
comparative analysis would result in the maximization of net benefits
instead of energy savings that are technologically feasible and
economically justified, and would be contrary to the statute. 86 FR
70892, 70908. Although DOE has not conducted a comparative analysis to
select the proposed energy conservation standards, DOE notes that as
compared to TSL 6, TSL 5, and TSL 4--TSL 3 has higher average LCC
savings, smaller percentages of consumer experiencing a net cost, a
lower maximum decrease in INPV, and lower manufacturer conversion
costs.
Accordingly, the Secretary has tentatively concluded that TSL 3
would offer the maximum improvement in efficiency that is
technologically feasible and economically justified and would result in
the significant conservation of energy. For electric standard and
vented gas standard consumer clothes dryers, which account for
approximately 98 percent of U.S. shipments, requiring efficiency levels
above the levels required by TSL 3 result in a large percentage of
consumers experiencing a net LCC cost, in addition to significant
manufacturer impacts and reductions in INPV. Additionally, for consumer
clothes dryers, nearly all manufacturers offer products that can meet
TSL 3 across both electric and gas consumer clothes dryers. In
addition, DOE is proposing to adopt TSL 3, which corresponds to the
current ENERGY STAR levels for electric standard and ventless compact
electric (240V), which have significant market share and manufacturer
support due to their promotion over the past couple of years as a
voluntary energy-efficiency program. The adoption of standards, if
finalized as proposed, at this TSL may encourage ENERGY STAR to further
consider more-efficient levels for dryers in the year leadings up to
the compliance of date of the standard, which would in turn likely spur
additional market introductions of consumer clothes dryers with heat
pump technology, foster maturation of the technology and downward price
trends, and further support differentiation within the dryer market for
energy efficient products. For electric and vented gas standard
consumer clothes dryers, TSL 3 is comprised of EL 4 and EL 3,
respectively, resulting in higher LCC savings, a significant reduction
in the number of consumers experiencing a net cost, a lower maximum
decrease in INPV, and lower conversion costs to the point where DOE has
tentatively concluded they are economically justified, as discussed for
TSL 3 in the preceding paragraphs.
Therefore, based on the previous considerations, DOE proposes to
adopt the energy conservation standards for consumer clothes dryers at
TSL 3. The proposed amended energy conservation standards for consumer
clothes dryers, which are expressed as CEFD2, are shown in
Table V.45.
Table V.45--Proposed Amended Energy Conservation Standards for Consumer
Clothes Dryers
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Product class
------------------------------------------------------------------------
Electric, Standard (4.4 cubic feet (``ft\3\'') or 3.93
greater capacity)......................................
Electric, Compact (120 volts (``V'')) (less than 4.4 4.33
ft\3\ capacity)........................................
Vented Electric, Compact (240V) (less than 4.4 ft\3\ 3.57
capacity)..............................................
Ventless Electric, Compact (240V) (less than 4.4 ft\3\ 2.68
capacity)..............................................
Ventless Electric, Combination Washer-Dryer............. 2.33
Vented Gas, Standard (4.4 ft\3\ or greater capacity).... 3.48
Vented Gas, Compact (less than 4.4 ft\3\ capacity)...... 2.02
------------------------------------------------------------------------
2. Annualized Benefits and Costs of the Proposed Standards
The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2020$) of the
benefits from operating products that meet the proposed standards
(consisting primarily of operating cost savings from using less energy,
minus increases in product purchase costs, and (2) the annualized
monetary value of the benefits of GHG and NOX emission
reductions.
Table V.46 shows the annualized values for consumer clothes dryers
under TSL 3, expressed in 2020$. The
[[Page 51803]]
results under the primary estimate are as follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for consumer clothes dryers is $85.7 million per
year in increased equipment costs, while the estimated annual benefits
are $1,111 million from reduced equipment operating costs, $320 million
from GHG reductions, and $406 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$1,752 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for consumer clothes dryers is
$80.7 million per year in increased equipment costs, while the
estimated annual benefits are $1,313 million in reduced operating
costs, $320 million from GHG reductions, and $541 million from reduced
NOX and SO2 emissions. In this case, the net
benefit amounts to $2,094 million per year.
Table V.46--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Consumer
Clothes Dryers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2020$/year
-----------------------------------------------
Low-net- High-net-
Primary benefits benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 1,313 1,227 1,403
Climate Benefits *.............................................. 320 311 327
Health Benefits **.............................................. 541 526 551
Total Benefits [dagger]......................................... 2,174 2,065 2,280
Consumer Incremental Product Costs [Dagger]..................... 80.7 80.5 76.6
Net Benefits.................................................... 2,094 1,984 2,204
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................................. 1,111 1,050 1,178
Climate Benefits *.............................................. 320 311 327
Health Benefits **.............................................. 406 395 413
Total Benefits [dagger]......................................... 1,837 1,757 1,917
Consumer Incremental Product Costs [Dagger]..................... 85.7 85.3 82.4
Net Benefits.................................................... 1,752 1,671 1,835
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with consumer clothes dryers shipped in 2027-2056.
These results include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the social cost of carbon (SC-CO2), methane
(SC-CH4), and nitrous oxide (SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent discount rates;
95th percentile at 3 percent discount rate). Together these represent the global social cost of greenhouse
gases (SC-GHG). For presentational purposes of this table, the climate benefits associated with the average SC-
GHG at a 3 percent discount rate are shown, but the Department does not have a single central SC-GHG point
estimate. See section. IV.L of this document for more details. On March 16, 2022, the Fifth Circuit Court of
Appeals (No. 22-30087) granted the Federal government's emergency motion for stay pending appeal of the
February 11, 2022, preliminary injunction issued in Louisiana v. Biden, No. 21-cv-1074-JDC-KK (W.D. La.). As a
result of the Fifth Circuit's order, the preliminary injunction is no longer in effect, pending resolution of
the Federal government's appeal of that injunction or a further court order. Among other things, the
preliminary injunction enjoined the defendants in that case from ``adopting, employing, treating as binding,
or relying upon'' the interim estimates of the social cost of greenhouse gases--which were issued by the
Interagency Working Group on the Social Cost of Greenhouse Gases on February 26, 2021--to monetize the
benefits of reducing greenhouse gas emissions. As reflected in this rule, DOE has reverted to its approach
prior to the injunction and presents monetized greenhouse gas abatement benefits where appropriate and
permissible under law.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
(for SO2 and NOX) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate. DOE emphasizes
the importance and value of considering the benefits calculated using all four SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
D. Reporting, Certification, and Sampling Plan
In addition to reporting cycle time, the California IOUs also
encouraged DOE to incorporate refrigerant type and charge quantity into
the reporting requirement for any products that use heat pump
technology, stating that the regulatory landscape around refrigerant
types and charge quantity has been changing rapidly and disclosure of
these two parameters would be useful for compliance with those
requirements. The California IOUs also stated that ENERGY STAR
currently allows manufacturers to voluntarily disclose the refrigerant
type. (California IOUs, No. 26 at p. 6)
DOE will continue to monitor the regulatory landscape around
refrigerants in the consumer clothes dryer industry, and if DOE
determines that the additional reporting information would be useful,
DOE may consider requiring that information in a future separate
rulemaking that would address any necessary amendments to reporting
requirements for all covered products and equipment.
Manufacturers, including importers, must use product-specific
certification templates to certify compliance to DOE. For consumer
clothes dryers, the certification template reflects the general
certification requirements specified at 10 CFR 429.12 and the product-
specific requirements specified at 10 CFR 429.21. As discussed in the
[[Page 51804]]
previous paragraphs, DOE is not proposing to amend the product-specific
certification requirements for consumer clothes dryers.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
Executive Order (``E.O.'') 12866, ``Regulatory Planning and
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving
Regulation and Regulatory Review, 76 FR 3821 (Jan. 21, 2011), requires
agencies, to the extent permitted by law, to (1) propose or adopt a
regulation only upon a reasoned determination that its benefits justify
its costs (recognizing that some benefits and costs are difficult to
quantify); (2) tailor regulations to impose the least burden on
society, consistent with obtaining regulatory objectives, taking into
account, among other things, and to the extent practicable, the costs
of cumulative regulations; (3) select, in choosing among alternative
regulatory approaches, those approaches that maximize net benefits
(including potential economic, environmental, public health and safety,
and other advantages; distributive impacts; and equity); (4) to the
extent feasible, specify performance objectives, rather than specifying
the behavior or manner of compliance that regulated entities must
adopt; and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public. DOE
emphasizes as well that E.O. 13563 requires agencies to use the best
available techniques to quantify anticipated present and future
benefits and costs as accurately as possible. In its guidance, the
Office of Information and Regulatory Affairs (``OIRA'') has emphasized
that such techniques may include identifying changing future compliance
costs that might result from technological innovation or anticipated
behavioral changes. For the reasons stated in the preamble, this
proposed regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to the OIRA for review. OIRA has
determined that this proposed regulatory action constitutes an
economically significant regulatory action under section 3(f) of E.O.
12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O. 12866, DOE
has provided to OIRA an assessment, including the underlying analysis,
of benefits and costs anticipated from the proposed/final regulatory
action, together with, to the extent feasible, a quantification of
those costs; and an assessment, including the underlying analysis, of
costs and benefits of potentially effective and reasonably feasible
alternatives to the planned regulation, and an explanation why the
planned regulatory action is preferable to the identified potential
alternatives. These assessments are summarized in this preamble and
further detail can be found in the technical support document for this
rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
for any rule that by law must be proposed for public comment, unless
the agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by E.O. 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (energy.gov/gc/office-general-counsel). DOE has not
prepared an IRFA for the products that are the subject of this proposed
rulemaking.
DOE reviewed this proposed rule under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003. DOE certifies that the proposed rule, if adopted,
would not have significant economic impact on a substantial number of
small entities. The factual basis of this certification is set forth in
the following paragraphs.
In accordance with EPCA, DOE is publishing this NOPR as part of the
legislated 6-year review of energy conservation standards for consumer
clothes dryers. (42 U.S.C. 6295(m)) The most recent standards
rulemaking for consumer clothes dryers was promulgated on April 21,
2011. Specifically, DOE published a direct final rule (the ``2011
Direct Final Rule'') amending the energy conservation standard for
consumer clothes dryers manufactured on and after January 1, 2015. 76
FR 22454 (Apr. 21, 2011). Pursuant to EPCA, any new or amended energy
conservation standard must be designed to achieve the maximum
improvement in energy efficiency that DOE determines is technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A))
Furthermore, the new or amended standard must result in a significant
conservation of energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides
that not later than 6 years after issuance of any final rule
establishing or amending a standard, DOE must publish either a notice
of determination that standards for the product do not need to be
amended, or a NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m))
For manufacturers of consumer clothes dryers, the SBA has set a
size threshold, which defines those entities classified as ``small
businesses'' for the purposes of the statute. DOE used the SBA's small
business size standards to determine whether any small entities would
be subject to the requirements of the rule. (See 13 CFR part 121.) The
size standards are listed by North American Industry Classification
System (``NAICS'') code and industry description and are available at
www.sba.gov/document/support-table-size-standards. Manufacturing of
consumer clothes dryers is classified under NAICS 335220, ``Major
Household Appliance Manufacturing.'' The SBA sets a threshold of 1,500
employees or fewer for an entity to be considered as a small business
for this category.
To estimate the number of companies that could be small business
manufacturers of products covered by this rulemaking, DOE conducted a
market survey using public information and subscription-based company
reports to identify potential small business manufacturers. DOE
reviewed the CCMS database,\89\ California Energy Commission's
Modernized Appliance Efficiency Database System (``MAEDbS''),\90\ the
ENERGY STAR Product Finder dataset,\91\ individual company websites,
import/export logs, and product specifications to create a list of
companies that manufacture, produce, import, or private label the
products covered by this rulemaking.
[[Page 51805]]
DOE relied on public information and market research tools (e.g.,
reports from Dun and Bradstreet \92\) to determine company structure,
location, headcount, and annual revenue. DOE screened out companies
that do not manufacture the products covered by this rulemaking, do not
meet the SBA's definition of a ``small business,'' or are foreign-owned
and operated. DOE also asked stakeholders and industry representatives
if they were aware of any small manufacturers during manufacturer
interviews and through requests for comment.
---------------------------------------------------------------------------
\89\ U.S. Department of Energy's Compliance Certification
Database is available at regulations.doe.gov/certification-data
(last accessed October 8, 2021).
\90\ California Energy Commission's Modernized Appliance
Efficiency Database System is available at
cacertappliances.energy.ca.gov/Pages/ApplianceSearch.aspx (last
accessed October 8, 2021).
\91\ ENERGY STAR Product Finder is available at energystar.gov/productfinder/ (last accessed October 8, 2021).
\92\ The Dun & Bradstreet subscription login is available at
app.dnbhoovers.com.
---------------------------------------------------------------------------
DOE identified 15 OEMs of the covered product. Of these 15 OEMs,
DOE determined none of them qualify as a domestic ``small business
manufacturer'' of consumer clothes dryers. Given the lack of small
domestic OEMs with a direct compliance burden, DOE concludes that the
proposed rule would not have ``a significant impact on a substantial
number of small entities.'' DOE requests comment on this certification
conclusion.
DOE will transmit the certification and supporting statement of
factual basis to the Chief Counsel for Advocacy of the Small Business
Administration for review under 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
Manufacturers of consumer clothes dryers must certify to DOE that
their products comply with any applicable energy conservation
standards. In certifying compliance, manufacturers must test their
products according to the DOE test procedures for consumer clothes
dryers, including any amendments adopted for those test procedures. DOE
has established regulations for the certification and recordkeeping
requirements for all covered consumer products and commercial
equipment, including consumer clothes dryers. 76 FR 12422 (Mar. 7,
2011); 80 FR 5099 (Jan. 30, 2015). The collection-of-information
requirement for the certification and recordkeeping is subject to
review and approval by OMB under the Paperwork Reduction Act (``PRA'').
This requirement has been approved by OMB under OMB control number
1910-1400.
In this rulemaking, DOE proposes standards expressed as the
combined energy factor, determined in accordance with the appendix D2
test procedure (CEFD2). Were this NOPR to be finalized as
proposed, manufacturers of consumer clothes dryers would certify to DOE
using the certification template associated with appendix D2 once the
standard goes into effect. The public reporting burden under appendix
D2 is not substantially different than the public reporting burden
under appendix D1 and is already required for ENERGY STAR
certification. Adopting standards based on the CEFD2 metric
would not cause any measurable change in reporting burden or hours to
manufacturers of consumer clothes dryers. Thus, DOE is not proposing
any changes to its information collection requirements as these are
already accounted for by DOE's existing regulations. DOE seeks comment
on DOE's estimated burden for certifying compliance under appendix D2
should amended standards be finalized.
Public reporting burden for the certification is estimated to
average 35 hours per response, including the time for reviewing
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
DOE is analyzing this proposed regulation in accordance with the
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA
implementing regulations (10 CFR part 1021). DOE's regulations include
a categorical exclusion for rulemakings that establish energy
conservation standards for consumer products or industrial equipment.
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this
rulemaking qualifies for categorical exclusion B5.1 because it is a
rulemaking that establishes energy conservation standards for consumer
products or industrial equipment, none of the exceptions identified in
categorical exclusion B5.1(b) apply, no extraordinary circumstances
exist that require further environmental analysis, and it otherwise
meets the requirements for application of a categorical exclusion. See
10 CFR 1021.410. DOE will complete its NEPA review before issuing the
final rule.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have Federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this proposed rule and has
tentatively determined that it would not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. EPCA governs
and prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297)
Therefore, no further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section
[[Page 51806]]
3(c) of Executive Order 12988 requires Executive agencies to review
regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this proposed rule
meets the relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C.
1531). For a proposed regulatory action likely to result in a rule that
may cause the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector of $100 million or more in any
one year (adjusted annually for inflation), section 202 of UMRA
requires a Federal agency to publish a written statement that estimates
the resulting costs, benefits, and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of State, local, and Tribal governments on a proposed
``significant intergovernmental mandate,'' and requires an agency plan
for giving notice and opportunity for timely input to potentially
affected small governments before establishing any requirements that
might significantly or uniquely affect them. On March 18, 1997, DOE
published a statement of policy on its process for intergovernmental
consultation under UMRA. 62 FR 12820. DOE's policy statement is also
available at energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
Although this proposed rule does not contain a Federal
intergovernmental mandate, it may require expenditures of $100 million
or more in any one year by the private sector. Such expenditures may
include: (1) investment in research and development and in capital
expenditures by consumer clothes dryer manufacturers in the years
between the final rule and the compliance date for the new standards
and (2) incremental additional expenditures by consumers to purchase
higher-efficiency consumer clothes dryers, starting at the compliance
date for the applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this
proposed rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the proposed rule unless DOE publishes
an explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m)
this proposed rule would establish amended energy conservation
standards for consumer clothes dryers that are designed to achieve the
maximum improvement in energy efficiency that DOE has determined to be
both technologically feasible and economically justified, as required
by 42 U.S.C. 6295(o)(2)(A) and 42 U.S.C. 6295(o)(3)(B). A full
discussion of the alternatives considered by DOE is presented in
chapter 17 of the TSD for this proposed rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rule would not have any impact on the autonomy or integrity of the
family as an institution. Accordingly, DOE has concluded that it is not
necessary to prepare a Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this proposed rule would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this NOPR under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgates or is expected to lead to promulgation of a
final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
proposes amended energy conservation standards for consumer clothes
dryers, is not a significant energy action because the proposed
standards are not likely to have a significant adverse effect on the
supply, distribution, or use of energy, nor has it been designated as
such by the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects on this proposed rule.
[[Page 51807]]
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\93\ Generation of this report involved a rigorous, formal, and
documented evaluation using objective criteria and qualified and
independent reviewers to make a judgment as to the technical/
scientific/business merit, the actual or anticipated results, and the
productivity and management effectiveness of programs and/or projects.
DOE has determined that the peer-reviewed analytical process continues
to reflect current practice, and the Department followed that process
for developing energy conservation standards in the case of the present
rulemaking.
---------------------------------------------------------------------------
\93\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed November 2021).
---------------------------------------------------------------------------
VII. Public Participation
A. Participation in the Webinar
The time and date of the webinar are listed in the DATES section at
the beginning of this document. Webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants will be published on DOE's website:
www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=50&action=viewlive. Participants are
responsible for ensuring their systems are compatible with the webinar
software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has plans to present a prepared general statement
may request that copies of his or her statement be made available at
the webinar. Such persons may submit requests, along with an advance
electronic copy of their statement in PDF (preferred), Microsoft Word
or Excel, WordPerfect, or text (ASCII) file format, to the appropriate
address shown in the ADDRESSES section at the beginning of this
document. The request and advance copy of statements must be received
at least one week before the public meeting and are to be emailed.
Please include a telephone number to enable DOE staff to make follow-up
contact, if needed.
C. Conduct of the Public Meeting
DOE will designate a DOE official to preside at the webinar and may
also use a professional facilitator to aid discussion. The meeting will
not be a judicial or evidentiary-type public hearing, but DOE will
conduct it in accordance with section 336 of EPCA. (42 U.S.C. 6306) A
court reporter will be present to record the proceedings and prepare a
transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the webinar. There shall not be discussion of proprietary information,
costs or prices, market share, or other commercial matters regulated by
U.S. anti-trust laws. After the webinar, interested parties may submit
further comments on the proceedings, as well as on any aspect of the
rulemaking, until the end of the comment period.
The webinar will be conducted in an informal, conference style. DOE
will present a general overview of the topics addressed in this
rulemaking, allow time for prepared general statements by participants,
and encourage all interested parties to share their views on issues
affecting this rulemaking. Each participant will be allowed to make a
general statement (within time limits determined by DOE), before the
discussion of specific topics. DOE will allow, as time permits, other
participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this rulemaking. The
official conducting the webinar will accept additional comments or
questions from those attending, as time permits. The presiding official
will announce any further procedural rules or modification of the
previous procedures that may be needed for the proper conduct of the
webinar.
A transcript of the public meeting will be included in the docket,
which can be viewed as described in the Docket section at the beginning
of this document and will be accessible on the DOE website. In
addition, any person may buy a copy of the transcript from the
transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
[[Page 51808]]
Confidential Business Information (``CBI'')). Comments submitted
through 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 www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email. Comments and documents submitted via
email also will be posted to www.regulations.gov. If you do not want
your personal contact information to be publicly viewable, do not
include it in your comment or any accompanying documents. Instead,
provide your contact information in a cover letter. Include your first
and last names, email address, telephone number, and optional mailing
address. The cover letter will not be publicly viewable as long as it
does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. No telefacsimiles (``faxes'')
will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email 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. 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).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
(1) DOE seeks comment on the method for estimating manufacturing
production costs.
(2) DOE seeks comment on additional information regarding
potential classification errors within the CCMS database. See
section IV.A.1 of this document.
(3) DOE requests comment on any potential impacts that different
technology options, including any that may impact cycle times, have
on fabric care. See section IV.B.1 of this document.
(4) DOE seeks comment on the baseline and incremental efficiency
levels used in the NOPR engineering analysis. See section IV.C.1 of
this document.
(5) DOE seeks comment on the baseline and incremental MPCs from
the NOPR engineering analysis, as well as any data on the impact of
supply chain challenges that could better inform the cost analysis.
See section IV.C.3 of this document.
(6) DOE seeks comment on product cost trends over time of heat
pump technology. See section IV.F.1 of this document.
(7) DOE requests information and data on repair cost for
replacing an electromechanical and electronic control panel. See
section IV.F.5 of this document.
(8) DOE seeks input from interested parties on characterizing
maintenance and repair costs for more-efficient consumer clothes
dryers. See section IV.F.5 of this document.
(9) DOE requests comments, information, and data on the no-new-
standards case efficiency distribution of consumer clothes dryers.
See section IV.F.8 of this document.
(10) DOE requests comment on its methodology for estimating
shipments. DOE also requests comment on its approach to estimate the
market share for each consumer clothes dryer product class. See
section IV.G of this document.
(11) DOE requests comment on any new information or data that
points to an impact on usage due to a change in cycle times (See
section IV.H.2 of this document) or changes to cycle times as a
result of the proposed standard.
Additionally, DOE welcomes comments on other issues relevant to the
conduct of this proposed rulemaking that may not specifically be
identified in this document.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Small businesses.
Signing Authority
This document of the Department of Energy was signed on August 14,
2022, by Kelly J. Speakes-Backman, Principal Deputy 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 August 16, 2022.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE proposes to amend
part 430 of chapter II, subchapter D, of title 10 of the Code of
Federal Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Amend Sec. 430.32 by revising the introductory text to paragraph
(h)(3) and adding paragraph (h)(4) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(h) * * *
(3) Clothes dryers manufactured on or after January 1, 2015 and
before [date 3
[[Page 51809]]
years after publication of a final rule], shall have a combined energy
factor no less than:
* * * * *
(4) Clothes dryers manufactured on or after [date 3 years after
publication of a final rule], shall have a combined energy factor,
determined in accordance with Appendix D2 of this subpart, no less
than:
------------------------------------------------------------------------
CEFD2 (lb/kWh)
Product class
------------------------------------------------------------------------
Electric, Standard (4.4 ft\3\ or greater capacity)...... 3.93
Electric, Compact (120V) (less than 4.4 ft\3\ capacity). 4.33
Vented Electric, Compact (240V) (less than 4.4 ft\3\ 3.57
capacity)..............................................
Vented Gas, Standard (4.4 ft\3\ or greater capacity).... 3.48
Vented Gas, Compact (less than 4.4 ft\3\ capacity)...... 2.02
Ventless Electric, Compact (240V) (less than 4.4 ft\3\ 2.68
capacity)..............................................
Ventless Electric, Combination Washer-Dryer............. 2.33
------------------------------------------------------------------------
* * * * *
[FR Doc. 2022-17900 Filed 8-22-22; 8:45 am]
BILLING CODE 6450-01-P