[Federal Register Volume 88, Number 69 (Tuesday, April 11, 2023)]
[Rules and Regulations]
[Pages 21752-21814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06499]



[[Page 21751]]

Vol. 88

Tuesday,

No. 69

April 11, 2023

Part II





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for Air 
Cleaners; Final Rule

  Federal Register / Vol. 88, No. 69 / Tuesday, April 11, 2023 / Rules 
and Regulations  

[[Page 21752]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2021-BT-STD-0035]
RIN 1904-AF46


Energy Conservation Program: Energy Conservation Standards for 
Air Cleaners; Final Rule

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

ACTION: Direct final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
authorizes the Secretary of Energy to classify additional types of 
consumer products as covered products upon determining that: 
classifying the product as a covered product is necessary for the 
purposes of EPCA; and the average annual per-household energy use by 
products of such type is likely to exceed 100 kilowatt-hours per year 
(``kWh/yr''). In a final determination published on July 15, 2022, DOE 
determined that classifying air cleaners as a covered product is 
necessary or appropriate to carry out the purposes of EPCA, and that 
the average U.S. household energy use for air cleaners is likely to 
exceed 100 kWh/yr. In this direct final rule, DOE is establishing 
energy conservation standards for air cleaners. DOE has determined that 
energy conservation standards for these products will result in 
significant conservation of energy, and are technologically feasible 
and economically justified.

DATES: The effective date of this rule is August 9, 2023, unless 
adverse comment is received by July 31, 2023. If adverse comments are 
received that DOE determines may provide a reasonable basis for 
withdrawal of the direct final rule, a timely withdrawal of this rule 
will be published in the Federal Register. If no such adverse comments 
are received, compliance with the standards established for air 
cleaners in this direct final rule is required on and after December 
31, 2023.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
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-2021-BT-STD-0035. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket.
    For further information on how to submit a comment or review other 
public comments and the docket, contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].

FOR FURTHER INFORMATION CONTACT: Mr. Troy Watson, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, 
DC, 20585-0121. Telephone: (240) 449-9387. Email: 
[email protected].
    Ms. Amelia Whiting, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC, 
20585-0121. Telephone: (202) 586-2588. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Direct Final 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. History of Standards Rulemaking for Air Cleaners
    3. Joint Proposal Submitted by the Joint Stakeholders
III. General Discussion
    A. General Comments
    B. Scope of Coverage
    C. Test Procedure
    D. Technological Feasibility
    1. General
    2. Maximum Technologically Feasible Levels
    E. Energy Savings
    1. Determination of Savings
    2. Significance of Savings
    F. 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. Product Classes
    2. Technology Options
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Baseline Efficiency Levels
    b. Higher Efficiency Levels
    2. Cost Analysis
    3. Cost-Efficiency Results
    a. Product Class 1
    b. Product Class 2
    c. Product Class 3
    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
    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. Discussion of MIA Comments
    K. Emissions Analysis
    1. Air Quality Regulations Incorporated in DOE's Analysis
    L. Monetizing Emissions Impacts
    1. Monetization of Greenhouse Gas Emissions
    a. Social Cost of Carbon
    b. Social Cost of Methane and Nitrous Oxide
    2. Monetization of Other 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

[[Page 21753]]

    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 Air Cleaner 
Standards
    2. Annualized Benefits and Costs of the Adopted Standards
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
    M. Congressional Notification
VII. Approval of the Office of the Secretary

I. Synopsis of the Direct Final Rule

    On July 15, 2022, DOE published a final determination (``July 2022 
Final Determination'') in which it determined that air cleaners qualify 
as a ``covered product'' under the Energy Policy and Conservation Act, 
as amended (``EPCA'').\1\ 87 FR 42297. DOE determined in the July 2022 
Final Determination that coverage of air cleaners is necessary or 
appropriate to carry out the purposes of EPCA, and that the average 
U.S. household energy use for air cleaners is likely to exceed 100 kWh/
yr. Id. Currently, no energy conservation standards are prescribed by 
DOE for air cleaners.
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
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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 significant conservation of energy. 
(42 U.S.C. 6295(o)(3)(B))
    As previously mentioned, and under the authority provided by 42 
U.S.C. 6295(p)(4), DOE is issuing this direct final rule establishing 
energy conservation standards for air cleaners. These standard levels 
were submitted jointly to DOE on August 23, 2022, by groups 
representing manufacturers, energy and environmental advocates, and 
consumer groups, hereinafter referred to as ``the Joint Stakeholders.'' 
\2\ This collective set of comments, titled ``Joint Statement of Joint 
Stakeholder Proposal On Recommended Energy Conservation Standards And 
Test Procedure For Consumer Room Air Cleaners'' (the ``Joint 
Proposal''),\3\ recommends specific energy conservation standards for 
air cleaners that, in the commenters' view, would satisfy the EPCA 
requirements in 42 U.S.C. 6295(o). See sections II.B.3 and II.B.2 of 
this document for a detailed discussion of the Joint Proposal and 
history of the current rulemaking, respectively.
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    \2\ The Joint Stakeholders include the Association of Home 
Appliance Manufacturers (``AHAM''), Appliance Standards Awareness 
Project (``ASAP''), American Council for an Energy-Efficient Economy 
(``ACEEE''), Consumer Federation of America (``CFA''), Natural 
Resources Defense Council (``NRDC''), the New York State Energy 
Research and Development Authority (``NYSERDA''), and the Pacific 
Gas and Electric Company (``PG&E''). AHAM is representing the 
companies who manufacture consumer room air cleaners and are members 
of the Portable Appliance Division (DOE has included names of all 
manufacturers listed in the footnote on page 1 of the Joint Proposal 
and the signatories listed on pages 13-14): 3M Co.; Access Business 
Group, LLC; ACCO Brands Corporation; Air King, Air King Ventilation 
Products; Airgle Corporation; Alticor, Inc.; Beijing Smartmi 
Electronic Technology Co., Ltd.; BISSELL Inc.; Blueair Inc.; BSH 
Home Appliances Corporation; De'Longhi America, Inc.; Dyson Limited; 
Essick Air Products; Fellowes Inc.; Field Controls; Foxconn 
Technology Group; GE Appliances, a Haier company; Gree Electric 
Appliances Inc.; Groupe SEB; Guardian Technologies, LLC; Haier Smart 
Home Co., Ltd.; Helen of Troy-Health & Home; iRobot; Lasko Products, 
Inc.; Molekule Inc.; Newell Brands Inc.; Oransi LLC; Phillips 
Domestic Appliances NA Corporation; SharkNinja Operating, LLC; Sharp 
Electronics Corporation; Sharp Electronics of Canada Ltd.; Sunbeam 
Products, Inc.; Trovac Industries Ltd; Vornado Air LLC; Whirlpool 
Corporation; Winix Inc.; and Zojirushi America Corporation.
    \3\ DOE Docket No. EERE-2021-BT-STD-0035-0016.
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    After carefully considering the Joint Proposal, DOE determined that 
the recommendations contained therein are compliant with 42 U.S.C. 
6295(o), as required by 42 U.S.C. 6295(p)(4)(A)(i) for the issuance of 
a direct final rule. As required by 42 U.S.C. 6295(p)(4)(A)(i), DOE is 
simultaneously publishing, elsewhere in this issue of the Federal 
Register, a notice of proposed rulemaking (``NOPR'') proposing that the 
identical standard levels contained in this direct final rule be 
adopted. Consistent with the statute, DOE is providing a 110-day public 
comment period on the direct final rule. (42 U.S.C. 6295(p)(4)(B)) If 
DOE determines that any comments received provide a reasonable basis 
for withdrawal of the direct final rule under 42 U.S.C. 6295(o), DOE 
will continue the rulemaking under the NOPR. (42 U.S.C. 6295(p)(4)(C)) 
See section II.A of this document for more details on DOE's statutory 
authority.
    This direct final rule documents DOE's analyses to objectively and 
independently evaluate the energy savings potential, technological 
feasibility, and economic justification of the standard levels 
recommended in the Joint Proposal, as per the requirements of 42 U.S.C. 
6295(o).
    Ultimately, DOE found that the standard levels recommended in the 
Joint Proposal would result in significant energy savings and are 
technologically feasible and economically justified. Table I.1 
documents the standards for air cleaners. The standards correspond to 
the recommended trial standard level (``TSL'') 3 (as described in 
section V.A of this document) and are expressed as an integrated energy 
factor (``IEF'') in terms of PM2.5 \4\ clean air delivery 
rate per watt (``PM2.5 CADR/W''), based on the product's 
PM2.5 CADR. The standards are the same as those recommended 
by the Joint Stakeholders, which consist of two-tiered (Tier 1 and Tier 
2) standard levels. These standards apply to all products listed in 
Table I.1 and manufactured in, or imported into, the United States 
starting on December 31, 2023, for Tier 1 standards and on December 31, 
2025, for Tier 2 standards.
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    \4\ Section 2.8 of the industry standard AHAM AC-7-2022 defines 
PM2.5 as particulate matter with an aerodynamic diameter 
less than or equal to a nominal 2.5 micrometers as measured by a 
reference method based on 40 CFR part 50, appendix I, and designated 
in accordance with 40 CFR part 53 or by an equivalent method 
designated in accordance with 40 CFR part 53.

[[Page 21754]]



        Table I.1--Energy Conservation Standards for Air Cleaners
                 [Compliance starting December 31, 2023]
------------------------------------------------------------------------
                                         IEF (PM2.5 CADR/W) \5\
                               -----------------------------------------
         Product class            Tier 1  December     Tier 2  December
                                      31, 2023             31, 2025
------------------------------------------------------------------------
PC1: 10 <= PM2.5 CADR < 100...                  1.7                  1.9
PC2: 100 <= PM2.5 CADR < 150..                  1.9                  2.4
PC3: PM2.5 CADR >= 150........                  2.0                  2.9
------------------------------------------------------------------------

A. Benefits and Costs to Consumers

    Table I.2 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of air cleaners, as measured by the 
average life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\6\ The average LCC savings are positive for all product 
classes, and the PBP is less than the average lifetime of air cleaners, 
which is estimated to be 9.0 years (see section IV.F of this document).
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    \5\ These values from the Joint Proposal are rounded according 
to the sampling plan in 10 CFR 429.68. The rounding has no 
functional impact on the standards as compared to the levels in the 
Joint Proposal.
    \6\ 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.9 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.C of this document).

            Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers of Air Cleaners
----------------------------------------------------------------------------------------------------------------
                                                                                   Average LCC
              Air cleaners class                             Tier                    savings     Simple  payback
                                                                                     (2021$)      period (years)
----------------------------------------------------------------------------------------------------------------
Product Class 1: 10-100 PM2.5 CADR...........  Tier 1..........................             $18              0.9
                                               Tier 2..........................              12              1.4
Product Class 2: 100-150 PM2.5 CADR..........  Tier 1..........................              38              0.4
                                               Tier 2..........................              50              0.5
Product Class 3: 150+ PM2.5 CADR.............  Tier 1..........................             105              0.1
                                               Tier 2..........................              94              0.1
----------------------------------------------------------------------------------------------------------------

    DOE's analysis of the impacts of the adopted 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 (2023-2057). Using a real discount rate of 
6.6 percent, DOE estimates that the INPV for manufacturers of air 
cleaners in the case without new standards is $1,565.9 million in 
2021$. Under the adopted standards, DOE estimates the change in INPV to 
range from -4.3 percent to -2.6 percent, which is approximately -$66.7 
million to -$40.7 million. In order to bring products into compliance 
with standards, it is estimated that industry will incur total 
conversion costs of $57.3 million.
    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs \7\
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    \7\ All monetary values in this document are expressed in 2021 
dollars. and, where appropriate, are discounted to 2022 unless 
explicitly stated otherwise.
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    DOE's analyses indicate that the adopted energy conservation 
standards for air cleaners would save a significant amount of energy. 
Relative to the case without standards, the lifetime energy savings for 
air cleaners purchased in the analysis period that begins in the 
anticipated year of compliance with the standards (2024-2057), amount 
to 1.80 quadrillion British thermal units (``Btu''), or quads.\8\ This 
represents a cumulative savings of 27 percent relative to the energy 
use of these products in the case without standards (referred to as the 
``no-new-standards case'').
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    \8\ 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.1 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for air cleaners ranges from $5.8 billion (at 
a 7-percent discount rate) to $13.7 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 
air cleaners purchased in 2024-2057.
    In addition, the adopted standards for air cleaners are projected 
to yield significant environmental benefits. DOE estimates that the 
standards will result in cumulative emission reductions (over the same 
period as for energy savings) of 57.7 million metric tons (``Mt'') \9\ 
of carbon dioxide (``CO2''), 24.2 thousand tons of sulfur 
dioxide (``SO2''), 91.2 thousand tons of nitrogen oxides 
(``NOX''), 411.4 thousand tons of methane 
(``CH4''), 0.6 thousand tons of nitrous oxide 
(``N2O''), and 0.2 tons of mercury (``Hg'').\10\ The 
estimated cumulative reduction in CO2 emissions through 2030 
amounts to 2.5 million Mt, which is equivalent to the emissions

[[Page 21755]]

resulting from the annual electricity use of almost 500 thousand homes.
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    \9\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \10\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2022 (``AEO2022''). AEO2022 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 AEO2022 assumptions that affect air pollutant 
emissions.
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    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') 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 
GHG (``SC-GHG'').\11\ DOE used interim SC-GHG values developed by an 
Interagency Working Group on the Social Cost of Greenhouse Gases 
(``IWG'').\12\ 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 $2.8 billion. 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 sets of SC-
GHG estimates.
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    \11\ To monetize the benefits of reducing greenhouse gas 
emissions this analysis uses the interim 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 Interagency Working Group on the 
Social Cost of Greenhouse Gases (IWG).
    \12\ 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 (``February 2021 SC-GHG TSD''). 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions, using benefit per ton estimates 
from the scientific literature, as discussed in section IV.L of this 
document. DOE estimated the present value of the health benefits would 
be $1.8 billion using a 7-percent discount rate, and $4.7 billion using 
a 3-percent discount rate.\13\ 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.
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    \13\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
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    Table I.3 summarizes the economic benefits and costs expected to 
result from the new standards for air cleaners. 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 Economic Benefits and Costs of Adopted Energy
                 Conservation Standards for Air Cleaners
------------------------------------------------------------------------
                                                              Billion
                                                              ($2021)
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................            14.1
Climate Benefits *......................................             2.8
Health Benefits **......................................             4.7
                                                         ---------------
    Total Benefits [dagger].............................            21.6
------------------------------------------------------------------------
Consumer Incremental Product Costs......................             0.5
                                                         ---------------
    Net Benefits........................................            21.1
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings.........................             6.0
Climate Benefits * (3% discount rate)...................             2.8
Health Benefits **......................................             1.8
                                                         ---------------
    Total Benefits [dagger].............................            10.6
------------------------------------------------------------------------
Consumer Incremental Product Costs......................             0.2
                                                         ---------------
    Net Benefits........................................            10.3
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with product
  name shipped in 2024-2057. These results include benefits to consumers
  which accrue after 2057 from the products shipped in 2024-2057.
* 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) (see
  section IV.L of this document). Together these represent the global 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 DOE does not have a single central SC-GHG point estimate.
  To monetize the benefits of reducing greenhouse gas emissions this
  analysis uses the interim 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 Interagency Working Group on the Social Cost of Greenhouse Gases
  (IWG).
** 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. 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 quantified and 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 DOE does not have a single central SC-GHG point estimate.
  DOE emphasizes the importance and value of considering the benefits
  calculated using all four sets of SC-GHG estimates.


[[Page 21756]]

    The benefits and costs of the standards 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 climate and health benefits of emission 
reductions, all annualized.\14\
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    \14\ 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., 2020 or 2030), and then discounted the present value from 
each year to 2021. 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.
---------------------------------------------------------------------------

    The national operating cost 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 air cleaners 
shipped in 2024-2057. The benefits associated with reduced emissions 
achieved as a result of the adopted standards are also calculated based 
on the lifetime of air cleaners shipped in 2024-2057. DOE notes that 
DOE used its typical analytical time horizon of 30-years and then added 
4 additional years to reflect the early compliance dates that are part 
of the standard level being adopted in this final rule. 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.C.2 
of this document.
    Table I.4 presents the total estimated monetized benefits and costs 
associated with the standard, expressed in terms of annualized values. 
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 NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards adopted 
in this rule is $19.8 million per year in increased equipment costs, 
while the estimated annual benefits are $499 million in reduced 
equipment operating costs, $136 million in climate benefits, and $149 
million in health benefits. In this case, the net benefit would amount 
to $764 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $23.4 million per year in increased 
equipment costs, while the estimated annual benefits are $690 million 
in reduced operating costs, $136 million in climate benefits, and $228 
million in health benefits. In this case, the net benefit would amount 
to $1,030 million per year.

                 Table I.4--Annualized Benefits and Costs of Adopted Standards for Air Cleaners
----------------------------------------------------------------------------------------------------------------
                                                                           Million (2021$/year)
                                                        --------------------------------------------------------
                                                             Primary      Low-net-benefits    High-net-benefits
                                                            estimate          estimate             estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................           689.7               623.7                773.4
Climate Benefits *.....................................           135.6               124.2                149.9
Health Benefits **.....................................           228.4               210.1                251.0
                                                        --------------------------------------------------------
    Total Benefits [dagger]............................         1,053.6               958.1              1,174.2
----------------------------------------------------------------------------------------------------------------
Consumer Incremental Product Costs [Dagger]............            23.4                22.8                 24.7
                                                        --------------------------------------------------------
    Net Benefits.......................................         1,030.2               935.3              1,149.5
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................           498.8               459.8                546.9
Climate Benefits * (3% discount rate)..................           135.6               124.2                149.9
Health Benefits **.....................................           149.3               139.7                160.9
                                                        --------------------------------------------------------
    Total Benefits [dagger]............................           783.7               723.7                857.7
----------------------------------------------------------------------------------------------------------------
Consumer Incremental Product Costs [Dagger]............            19.8                19.3                 20.7
                                                        --------------------------------------------------------
    Net Benefits.......................................           763.9               704.4                837.0
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with air cleaners shipped in 2024-2057. These
  results include benefits to consumers which accrue after 2057 from the products shipped in 2024-2057. The
  Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
  AEO2022 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
  incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the
  Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in section IV.F.1 of this document. Note that the Benefits and
  Costs may not sum to the Net Benefits due to rounding.
* 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
  sets of SC-GHG estimates. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the
  interim 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 Interagency Working
  Group on the Social Cost of Greenhouse Gases (IWG).
** 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. 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.
[Dagger] Costs include incremental equipment costs as well as filter costs.


[[Page 21757]]

    DOE's analysis of the national impacts of the adopted standards is 
described in sections IV.H, IV.K, and IV.L of this document.

D. Conclusion

    DOE has determined that the Joint Proposal containing 
recommendations with respect to energy conservation standards for air 
cleaners was submitted jointly by interested persons that are fairly 
representative of relevant points of view, in accordance with 42 U.S.C. 
6295(p)(4)(A). After considering the analysis and weighing the benefits 
and burdens, DOE has determined that the recommended standards are in 
accordance with 42 U.S.C. 6295(o), which contains the criteria for 
prescribing new or amended standards. Specifically, the Secretary has 
determined that the adoption of the recommended standards would result 
in the significant conservation of energy and is technologically 
feasible and economically justified. In determining whether the 
recommended standards are economically justified, the Secretary has 
determined that the benefits of the recommended standards exceed the 
burdens. Namely, the Secretary has concluded that the recommended 
standards, when considering the benefits of energy savings, positive 
NPV of consumer benefits, emission reductions, the estimated monetary 
value of the emissions reductions, and positive average LCC savings, 
would yield benefits outweighing the negative impacts on some consumers 
and on manufacturers, including the conversion costs that could result 
in a reduction in INPV for manufacturers.
    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 
standards for air cleaners is $19.8 million per year in increased 
product costs, while the estimated annual benefits are $499 million in 
reduced product operating costs, $136 million in climate benefits, and 
$149 million in health benefits. The net benefit amounts to $764 
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.\15\ 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. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis.
---------------------------------------------------------------------------

    \15\ 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 1.80 quads FFC, the equivalent of 
the primary annual energy use of 19 million homes. The NPV of consumer 
benefit for these projected energy savings is $5.8 billion using a 
discount rate of 7 percent, and $13.7 billion using a discount rate of 
3 percent. The cumulative emissions reductions associated with these 
energy savings are 57.7 Mt of CO2, 24.2 thousand tons of 
SO2, 91.2 thousand tons of NOX, 0.2 tons of Hg, 
411.4 thousand tons of CH4, 0.6 thousand tons of 
N2O. The estimated monetary value of the climate benefit 
from reduced GHG emissions (associated with the average SC-GHG at a 3-
percent discount rate) is $2.8 billion. The estimated monetary value of 
the health benefits from reduced SO2 and NOX 
emissions is $1.8 billion using a 7 percent discount rate and $4.7 
billion using a 3 percent discount rate. As such, DOE has determined 
the energy savings from the standard levels adopted in this direct 
final rule are ``significant'' within the meaning of 42 U.S.C. 
6295(o)(3)(B). A more detailed discussion of the basis for these 
conclusions is contained in the remainder of this document and the 
accompanying technical support document (``TSD'').
    Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is 
issuing this direct final rule establishing the energy conservation 
standards for air cleaners. Consistent with this authority, DOE is also 
publishing elsewhere in this issue of the Federal Register a notice of 
proposed rulemaking proposing standards that are identical to those 
contained in this direct final rule. See 42 U.S.C. 6295(p)(4)(A)(i).

II. Introduction

    The following section briefly discusses the statutory authority 
underlying this direct final rule, as well as some of the relevant 
historical background related to the establishment of standards for air 
cleaners.

A. Authority

    EPCA grants DOE authority to prescribe an energy conservation 
standard for any type (or class) of covered products of a type 
specified in 42 U.S.C. 6292(a)(20) if the requirements of 42 U.S.C. 
6295(o) and 42 U.S.C. 6295(p) are met and the Secretary determines 
that--
    (A) the average per household energy use within the United States 
by products of such type (or class) exceeded 150 kWh (or its Btu 
equivalent) for any 12-month period ending before such determination;
    (B) the aggregate household energy use within the United States by 
products of such type (or class) exceeded 4,200,000,000 kWh (or its Btu 
equivalent) for any such 12-month period;
    (C) substantial improvement in the energy efficiency of products of 
such type (or class) is technologically feasible; and
    (D) the application of a labeling rule under 42 U.S.C. 6294 to such 
type (or class) is not likely to be sufficient to induce manufacturers 
to produce, and consumers and other persons to purchase, covered 
products of such type (or class) which achieve the maximum energy 
efficiency which is technologically feasible and economically 
justified. (42 U.S.C. 6295(l)(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 the EPCA specifically include 
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), 
labeling provisions (42 U.S.C. 6294), energy conservation standards (42 
U.S.C. 6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption in limited instances for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under 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

[[Page 21758]]

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 
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 air cleaners appear at 
title 10 of the Code of Federal Regulations (``CFR'') part 430, subpart 
B, appendix FF (``appendix FF'').
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including air cleaners. 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)) 
Moreover, DOE may not prescribe a standard (1) for certain products, 
including air cleaners, if no test procedure has been established for 
the product, or (2) if DOE determines by rule that the standard is not 
technologically feasible or economically justified. (42 U.S.C. 
6295(o)(3)(A)-(B)) In deciding whether a proposed standard is 
economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make 
this determination after receiving comments 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, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    Additionally, EPCA specifies requirements when promulgating an 
energy conservation standard for a covered product that has two or more 
subcategories. DOE must specify a different standard level for a type 
or class of products 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 such a 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))
    Additionally, 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 air cleaners 
address standby mode and off mode energy use, through the IEF metric. 
As IEF includes annual energy consumption in standby mode and off mode 
as part of the annual energy consumption metric and DOE is adopting 
standards for air cleaners based on IEF the standards in this direct 
final rule account for standby mode and off mode energy use of an air 
cleaner.
    Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE 
authority to issue a final rule (hereinafter referred to as a ``direct 
final rule'') establishing an energy conservation standard on receipt 
of a statement submitted jointly by interested persons that are fairly 
representative of relevant points of view (including representatives of 
manufacturers of covered products, States, and efficiency advocates), 
as determined by the Secretary, that contains recommendations with 
respect to an energy or water conservation standard that are in 
accordance with the requirements in 42 U.S.C. 6295(o). (42 U.S.C. 
6295(p)(4))
    A NOPR that proposes an identical energy efficiency standard must 
be published simultaneously with the direct final rule, and DOE must 
provide a public comment period of at least 110 days on the proposal. 
(42 U.S.C. 6295(p)(4)(A)-(B)) Based on the comments received during 
this period, the direct final rule will either become effective, or DOE 
will withdraw it not later than 120 days after its issuance if (1) one 
or more adverse comments is received, and (2) DOE determines that those 
comments, when viewed in light of the rulemaking record related to the 
direct final rule, may provide a reasonable basis for withdrawal of the 
direct final rule under 42 U.S.C. 6295(o). (42 U.S.C. 6295(p)(4)(C)) 
Receipt of an alternative joint recommendation may also trigger a DOE 
withdrawal of the direct final rule in the same manner. Id. After 
withdrawing a direct final rule, DOE must proceed with the notice of 
proposed rulemaking published simultaneously with the direct final rule 
and publish in the Federal Register the reasons why the direct final 
rule was withdrawn. Id.
    DOE has previously explained its interpretation of its direct final 
rule

[[Page 21759]]

authority. In a final rule amending the Department's ``Procedures, 
Interpretations and Policies for Consideration of New or Revised Energy 
Conservation Standards for Consumer Products'' at 10 CFR part 430, 
subpart C, appendix A, DOE explained that, because the direct final 
rule authority does not refer to any of the other requirements in EPCA, 
DOE interprets that provision as not subject to any of those other 
requirements. 86 FR 70892, 70912 (Dec. 13, 2021). Rather, DOE's 
authority under 42 U.S.C. 6295(p)(4) is constrained only by the 
requirements of 42 U.S.C. 6295(o). DOE's overarching statutory mandate 
in issuing energy conservation standards is to choose a standard that 
results in the maximum improvement in energy efficiency that is 
technologically feasible and economically justified--a requirement 
found in 42 U.S.C. 6295(o). Id.

B. Background

1. Current Standards
    Air cleaners are not currently subject to federal energy 
conservation standards. However, some states have adopted standards. 
Specifically, the District of Columbia adopted standards in 2020, 
Maryland adopted standards in 2022, and Nevada and New Jersey adopted 
standards in 2021, as shown in Table II.1. The District of Columbia and 
New Jersey State standards went into effect in 2022, while the Nevada 
State standard is expected to go into effect in 2023 and the Maryland 
State standard is expected to go into effect in 2024.

  Table II.1--Air Cleaner Standards Adopted by the District of Columbia
           and the States of Maryland, Nevada, and New Jersey
------------------------------------------------------------------------
                                                          Minimum smoke
                    Smoke CADR bins                          CADR/W
------------------------------------------------------------------------
30 <= PM2.5 CADR < 100................................               1.7
100 <= PM2.5 CADR < 150...............................               1.9
PM2.5 CADR >= 150.....................................               2.0
------------------------------------------------------------------------
Note: These standards are based on smoke clean air delivery rate
  (``CADR'') divided by the active mode power consumption in watts
  (``W''), which is different from the IEF metric specified in appendix
  FF.

    Washington State adopted the standards shown in Table II.2 in 2022 
with an effective date in 2024.

      Table II.2--Air Cleaner Standards Adopted by Washington State
------------------------------------------------------------------------
                                                          Minimum smoke
                    Smoke CADR Bins                          CADR/W
------------------------------------------------------------------------
30 <= PM2.5 CADR < 100................................               1.9
100 <= PM2.5 CADR < 150...............................               2.4
PM2.5 CADR >= 150.....................................               2.9
------------------------------------------------------------------------
Note: These standards are based on smoke CADR divided by the active mode
  power consumption in W, which is different from the IEF metric
  specified in appendix FF.

2. History of Standards Rulemaking for Air Cleaners
    DOE has not previously conducted an energy conservation standards 
rulemaking for air cleaners. On January 25, 2022, DOE published a 
request for information (``January 2022 RFI''), seeking comments on 
potential test procedure and energy conservation standards for air 
cleaners. 87 FR 3702. In the January 2022 RFI, DOE requested 
information to aid in the development of the technical and economic 
analyses to support energy conservation standards for air cleaners, 
should they be warranted. 87 FR 3702, 3705.
    DOE determined in the July 2022 Final Determination that coverage 
of air cleaners is necessary or appropriate to carry out the purposes 
of EPCA; the average U.S. household energy use for air cleaners is 
likely to exceed 100 kWh/yr; and thus, air cleaners qualify as a 
``covered product'' under EPCA. 87 FR 42297.
    On March 6, 2023, DOE published a final rule (``March 2023 TP Final 
Rule'') establishing a new test procedure (TP) at appendix FF for air 
cleaners that references the industry standard, Association of Home 
Appliance Manufacturers (``AHAM'') AC-7-2022, ``Energy Test Method for 
Consumer Room Air Cleaners'' and includes methods to (1) measure the 
performance of the covered product and (2) use the measured results to 
calculate an IEF to represent the energy efficiency of air cleaners. 88 
FR 14014.
    DOE received comments in response to the January 2022 RFI from the 
interested parties listed in Table II.4.

           Table II.4--List of Commenters With Written Submissions in Response to the January 2022 RFI
----------------------------------------------------------------------------------------------------------------
                                                                              Docket
              Commenter(s)                          Abbreviation                No.          Commenter type
----------------------------------------------------------------------------------------------------------------
ACEEE, ASAP, AHAM, CFA, and NRDC.......  Joint Commenters..................         8  Efficiency Organizations
                                                                                        and Trade Association.
Blueair IAQ............................  Blueair...........................        10  Manufacturer.
Electrolux Home Products Inc. North      Electrolux........................         6  Manufacturer.
 America.
Daikin U.S. Corporation................  Daikin............................        12  Manufacturer.
Lennox International Inc...............  Lennox............................         7  Manufacturer.
Madison Indoor Air Quality.............  MIAQ..............................         5  Manufacturer.
Molekule...............................  Molekule..........................        11  Manufacturer.
Northwest Energy Efficiency Alliance...  NEEA..............................        13  Efficiency Organization.
Pacific Gas and Electric Company, San    CA IOUs...........................         9  Utilities.
 Diego Gas and Electric, and Southern
 California Edison; collectively, the
 California Investor-Owned Utilities.
Synexis LLC............................  Synexis...........................        14  Manufacturer.
Trane Technologies.....................  Trane.............................         3  Manufacturer.
Air-Conditioning, Heating, &             AHRI..............................        15  Trade Association.
 Refrigeration Institute.
----------------------------------------------------------------------------------------------------------------

    A parenthetical reference at the end of a comment quotation or 
paraphrase provides the location of the item in the public record.\16\ 
In response to the January 2022 RFI, DOE received certain

[[Page 21760]]

comments pertaining to the scope of coverage and definition for air 
cleaners, which DOE addressed and discussed in the July 2022 Final 
Determination. Additionally, DOE addressed comments pertaining to the 
test procedure in a NOPR published on October 18, 2022 as part of the 
test procedure rulemaking establishing appendix FF. 87 FR 63324. All 
remaining comments provided by stakeholders in response to the January 
2022 RFI are addressed in this direct final rule.
---------------------------------------------------------------------------

    \16\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to determine 
coverage for air cleaners. (Docket No. EERE-2021-BT-DET-0022, which 
is maintained at www.regulations.gov). The references are arranged 
as follows: (commenter name, comment docket ID number, page of that 
document). When referring to comments received on another docket, 
the docket number is included prior to the commenter's name.
---------------------------------------------------------------------------

3. Joint Proposal Submitted by the Joint Stakeholders
    This section summarizes the recommendations included in the Joint 
Proposal submitted by the Joint Stakeholders. The Joint Proposal 
submitted by the Joint Stakeholders urged DOE to publish final rules 
adopting the consumer room air cleaner test procedure and standards and 
compliance dates contained in the Joint Proposal, as soon as possible, 
but not later than December 31, 2022. (Joint Stakeholders, No. 16 at p. 
1) The Joint Proposal also recommended that DOE adopt AHAM AC-7-2022 as 
the DOE test procedure. (Id. at p. 6) In regards to energy conservation 
standards, the Joint Proposal specified two-tiered Tier 1 and Tier 2 
standard levels, as shown in Table II.5, for conventional room air 
cleaners with proposed compliance dates of December 31, 2023, and 
December 31, 2025, respectively. (Id. at p. 9)

      Table II.5--Tier 1 and Tier 2 Standards Proposed by the Joint
                   Stakeholders in the Joint Proposal
------------------------------------------------------------------------
                                IEF  (PM2.5 CADR/W)  IEF  (PM2.5 CADR/W)
      Product description             Tier 1 *             Tier 2 **
------------------------------------------------------------------------
10 <= PM2.5 CADR < 100........                 1.69                 1.89
100 <= PM2.5 CADR < 150.......                 1.90                 2.39
PM2.5 CADR >= 150.............                 2.01                 2.91
------------------------------------------------------------------------
* Tier 1 standards would have an effective date of December 31, 2023.
** Tier 2 standards would have an effective date of December 31, 2025.

    The Tier 1 standards are equivalent to the state standards 
established by the States of Maryland, Nevada, and New Jersey, and the 
District of Columbia. (Id. at p. 9) Tier 2 standards are equivalent to 
the voluntary standards specified in the U.S. Environmental Protection 
Agency's (``EPA's'') ENERGY STAR Version 2.0 Room Air Cleaners 
Specification, Rev. May 2022, (``ENERGY STAR V. 2.0'') and those 
adopted by the State of Washington. (Id.) While the standards 
established by the States and those specified in ENERGY STAR V. 2.0 are 
based on smoke CADR and include only active mode energy consumption in 
the calculation of the CADR/W metric, the Joint Stakeholders presented 
data to show that there is a strong relationship between the 
PM2.5 CADR calculation and the measured smoke and dust CADR 
values. (Id. at p. 6) Additionally, DOE compared the IEF metric, 
calculated using PM2.5 CADR and annual energy consumption in 
active mode and standby mode (``AEC''), to the smoke CADR/W metric, 
calculated using smoke CADR and active mode power consumption, using 
the ENERGY STAR database,\17\ and found a strong relationship between 
IEF and the CADR/W metric specified in ENERGY STAR V. 2.0 and the State 
standards. The Joint Stakeholders stated that the Tier 1 and Tier 2 
standards are estimated to save 1.9 quads of FFC energy nationally over 
30 years of sales. (Id. at p. 9)
---------------------------------------------------------------------------

    \17\ Available at: https://data.energystar.gov/Active-Specifications/ENERGY-STAR-Certified-Room-Air-Cleaners/jmck-i55n/data. Last accessed: December 2022.
---------------------------------------------------------------------------

    After carefully considering the consensus recommendations for 
establishing energy conservation standards for air cleaners submitted 
by the Joint Stakeholders, DOE has determined that these 
recommendations are in accordance with the statutory requirements of 42 
U.S.C. 6295(p)(4) for the issuance of a direct final rule.
    More specifically, these recommendations comprise a statement 
submitted by interested persons who are fairly representative of 
relevant points of view on this matter. In appendix A to subpart C of 
10 CFR part 430 (``appendix A''), DOE explained that to be ``fairly 
representative of relevant points of view,'' the group submitting a 
joint statement must, where appropriate, include larger concerns and 
small business in the regulated industry/manufacturer community, energy 
advocates, energy utilities, consumers, and States. However, it will be 
necessary to evaluate the meaning of ``fairly representative'' on a 
case-by-case basis, subject to the circumstances of a particular 
rulemaking, to determine whether fewer or additional parties must be 
part of a joint statement in order to be ``fairly representative of 
relevant points of view.'' Section 10 of appendix A. In reaching this 
determination, DOE took into consideration the fact that the Joint 
Stakeholders consist of representatives of manufacturers of the covered 
product at issue, a state corporation, and efficiency advocates--all of 
which are groups specifically identified by Congress as relevant 
parties to any consensus recommendation. (42 U.S.C. 6295(p)(4)(A)) As 
delineated above, the Joint Proposal was signed and submitted by a 
broad cross-section of interests, including the trade association 
representing small and large manufacturers who produce the subject 
products, consumer groups, climate and health advocates, and energy-
efficiency advocacy organizations, each of which signed the Joint 
Proposal on behalf of their respective manufacturers and efficiency 
advocacy organizations, which includes consumer groups, utilities, and 
a state corporation. Moreover, DOE does not read the statute as 
requiring a statement submitted by all interested parties before the 
Department may proceed with issuance of a direct final rule, nor does 
appendix A require the statement be submitted by all interested parties 
listed in the appendix. By explicit language of the statute, the 
Secretary has the discretion to determine when a joint recommendation 
for an energy or water conservation standard has met the requirement 
for representativeness (i.e., ``as determined by the Secretary''). Id.
    DOE also evaluated whether the recommendation satisfies 42 U.S.C. 
6295(o), as applicable. In making this determination, DOE conducted an 
analysis to evaluate whether the potential energy conservation 
standards under consideration achieve the maximum improvement in energy 
efficiency that is technologically feasible and economically justified 
and result in significant energy conservation. The evaluation is the

[[Page 21761]]

same comprehensive approach that DOE typically conducts whenever it 
considers potential energy conservation standards for a given type of 
product or equipment.
    Upon review, the Secretary determined that the Joint Proposal 
comports with the standard-setting criteria set forth under 42 U.S.C. 
6295(p)(4)(A). Accordingly, the consensus-recommended efficiency levels 
were included as the ``recommended TSL'' for air cleaners (see section 
V.A of this document for description of all of the considered TSLs). 
The details regarding how the consensus-recommended TSLs comply with 
the standard-setting criteria are discussed and demonstrated in the 
relevant sections throughout this document.
    In sum, as the relevant criteria under 42 U.S.C. 6295(p)(4) have 
been satisfied, the Secretary has determined that it is appropriate to 
adopt the consensus-recommended new energy conservation standards for 
air cleaners through this direct final rule. Also, in accordance with 
the provisions described in section II.A of this document, DOE is 
simultaneously publishing, elsewhere in this issue of the Federal 
Register, a NOPR proposing that the identical standard levels contained 
in this direct final rule be adopted.

III. General Discussion

    DOE developed this direct final rule after considering oral and 
written comments, data, and information that DOE received in response 
to the January 2022 RFI from interested parties that represent a 
variety of interests. The following discussion addresses issues raised 
by these commenters.

A. General Comments

    While DOE received comments in response to the January 2022 RFI 
pertaining to the specific subtopics in section IV of this document, 
DOE also received several general comments in response to the January 
2022 RFI from interested parties regarding the rulemaking timing and 
process. These comments are summarized and addressed in the following 
paragraphs.
    The Joint Commenters stated support for DOE's proposal to include 
consumer room air cleaners as a covered product and indicated they were 
working to negotiate possible Federal energy conservation standards for 
consumer room air cleaners, along with an applicable test procedure for 
DOE's consideration. (Joint Commenters, No. 8 at p.1) The CA IOUs also 
stated that they were engaged with stakeholders on test procedures, 
metrics, and efficiency standards for air cleaners. (CA IOUs, No. 9 at 
pp. 1-2)
    Trane commented that a new energy conservation standard for 
consumer air cleaners is necessary because consumers need guidance at a 
time of unprecedented energy bills and the opportunity to avoid 
unnecessary energy consumption. (Trane, No. 3 at p. 2) Blueair also 
commented that it supported energy conservation standards for air 
cleaners, citing its own HEPASilentTM technology as proof 
that reduced energy consumption and maximum clean air delivery were 
compatible. Blueair also stated that it has demonstrated that it is 
technologically possible to design and manufacture air cleaners with 
reduced energy usage without loss of air cleaning performance. 
(Blueair, No. 10 at p. 4) Synexis commented that energy conservation 
standards for consumer air cleaners were economically justified, 
technologically feasible, and would lead to energy savings. Synexis 
commented that implementing uniform Federal test methods and standards 
would likely reduce costs by standardizing the evaluation processes and 
would provide common criteria so consumers can make informed decisions. 
(Synexis, No. 14 at pp. 6-7)
    NEEA stated its support for DOE's effort to adopt test procedures 
and standards for air cleaners and shared sales data from 2015-2019 
compiled from retail store sales in the U.S. Northwest. (NEEA, No. 13 
at pp. 1-2) NEEA commented that the compiled data reflected the 
dramatic increases in sales and usage of air cleaners caused by the 
pandemic and wildfires, making a compelling case for DOE regulation. 
(NEEA, No. 13 at p. 2) The CA IOUs also stated that the growth of air 
cleaner usage has been accelerated because of the pandemic and 
California wildfires, necessitating EPCA energy conservation standards. 
(CA IOUs, No. 9 at p. 2)
    DOE recognizes the comments supporting DOE regulation of air 
cleaners, and as discussed elsewhere in this document, DOE has 
determined that energy conservation standards for air cleaners are 
economically justified, technologically feasible, and would result in 
the significant conservation of energy.
    Daikin commented that DOE's effort to initiate the test procedure 
and energy conservation standards rulemakings for consumer air cleaners 
was premature without first finalizing the coverage determination, 
segmenting the market based on types of air cleaners, and identifying 
the categories that would provide the most energy savings. (Daikin, No. 
12 at p. 1) Daikin commented that since this is a new product 
rulemaking, DOE must first finalize its coverage determination and then 
a test procedure before establishing an energy conservation standard. 
Daikin further commented that DOE should provide sufficient time to 
comply with the test procedures before determining minimum efficiency 
standards. Daikin additionally stated that there may be laboratory test 
chamber shortages after a DOE test procedure is established. (Daikin, 
No. 12 at p. 3)
    DOE appreciates Daikin's concern over the timing and order of 
rulemaking publications. DOE notes that the January 2022 RFI sought to 
solicit general feedback on air cleaner test procedures and standards 
only under the condition that air cleaners are determined to be a 
covered product. DOE further notes that the July 2022 Final 
Determination was published prior to DOE proposing a test procedure and 
establishing an energy conservation standard. The timeline of this 
rulemaking is accelerated compared to DOE's typical timeline in order 
to follow as closely as possible the schedule outlined in the Joint 
Proposal.
    MIAQ also commented that it was disappointed by the shortening of 
the 75-day comment period to 30 days for the January 2022 RFI and the 
combination of the test procedure and standards rulemakings into a 
single RFI. MIAQ commented that this impacted its ability to 
investigate test laboratory capacity or capabilities. (MIAQ, No. 5 at 
p. 2)
    DOE notes that while it initially established a 30-day comment 
period to allow DOE to review comments received in response to the 
January 2022 RFI before finalizing its coverage determination, it 
reopened the comment period to provide a 45-day extension. 87 FR 11326.
    Lennox commented that DOE must maintain consumer utility of air 
cleaners when promulgating new standards and must ensure that any new 
standards are economically justified. (Lennox, No. 7 at p. 3)
    DOE agrees with Lennox and, as discussed elsewhere in this 
document, DOE screened out technology options from consideration that 
would not maintain consumer utility. DOE is also establishing standards 
that are economically justified and did not select more stringent 
standards that would have negative economic impacts on consumers.
    The Joint Stakeholders commented that the Joint Proposal comports 
with the standards-setting criteria in EPCA and that the Joint Proposal 
was designed to achieve the maximum improvement in energy efficiency 
that is

[[Page 21762]]

technologically feasible and economically justified as required by 42 
U.S.C. 6295(o). The Joint Stakeholders additionally stated that the 
standards proposed in the Joint Proposal would decrease maximum energy 
use of a covered product in both Tier 1 and Tier 2, and thus comply 
with EPCA's prohibition against standards that increase maximum 
allowable energy use of a covered product. 42 U.S.C. 6295(o)(1). (Joint 
Stakeholders, No. 16 at pp. 11)
    DOE agrees that the Joint Proposal provides standards criteria that 
are technologically feasible and economically justified, as discussed 
throughout this document. DOE believes the standards criteria set by 
the Joint Proposal will provide an improvement in energy efficiency and 
decrease maximum energy use of covered products.

B. Scope of Coverage

    DOE has defined an ``air cleaner'' as a product for improving 
indoor air quality, other than a central air conditioner, room air 
conditioner, portable air conditioner, dehumidifier, or furnace, that 
is an electrically-powered, self-contained, mechanically encased 
assembly that contains means to remove, destroy, or deactivate 
particulates, volatile organic compound (VOC), and/or microorganisms 
from the air. 10 CFR 430.2. It excludes products that operate solely by 
means of ultraviolet light without a fan for air circulation. Id.
    In response to the January 2022 RFI, the Joint Commenters commented 
that minimum energy conservation standards should apply to conventional 
room air cleaners with a measured PM2.5 CADR of 10 or 
greater in order to capture tabletop/desk portable room air cleaners. 
(Joint Commenters, No. 8 at p. 4)
    In the March 2023 TP Final Rule, DOE established the scope of the 
air cleaners test procedure at appendix FF to ``conventional room air 
cleaners,'' which are a subset of products that meet the definition of 
``air cleaner'' as defined in 10 CFR 430.2. 88 FR 14014, 14044. DOE 
established a definition for a conventional room air cleaner as a 
consumer room air cleaner that (1) is a portable or wall mounted 
(fixed) unit, excluding ceiling mounted unit, that plugs in to an 
electrical outlet; (2) operates with a fan for air circulation; and (3) 
contains means to remove, destroy, and/or deactivate particulates. The 
term ``portable'' is defined in section 2.1.3.1 of AHAM AC-7-2022 and 
``fixed'' is defined in section 2.1.3.2 of AHAM AC-7-2022. 88 FR 14014, 
14044. The scope of appendix FF is limited to conventional room air 
cleaners with smoke CADR and dust CADR greater than or equal to 10 
cubic feet per minute (``cfm'') and less than or equal to 600 cfm.
    This direct final rule covers those consumer products that meet the 
definition of conventional room air cleaners with smoke CADR and dust 
CADR greater than or equal to 10 cfm and less than or equal to 600 cfm 
as defined in section 1 of appendix FF. As discussed in section III.C 
of this document, PM2.5 CADR is calculated as the geometric 
average of smoke CADR and dust CADR, which is very similar in value to 
both the smoke CADR and dust CADR. Therefore, the scope of products 
covered in this direct final rule is consumer products that meet the 
definition of conventional room air cleaners with PM2.5 CADR 
greater than or equal to 10 cfm and less than or equal to 600 cfm.
    See section IV.A.1 of this document for discussion of the product 
classes analyzed in this direct final rule.

C. 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. DOE does not 
currently prescribe energy conservation standards for air cleaners.
    As stated, in the March 2023 TP Final Rule, DOE established a new 
test procedure for air cleaners at appendix FF. 88 FR 14014. 
Specifically, appendix FF establishes an IEF metric, expressed in terms 
of PM2.5 CADR/W, which measures the reduction rate of 
PM2.5 particulates in a given room volume per unit power. 
The numerator of the IEF metric is PM2.5 CADR, which is the 
geometric average of smoke CADR and dust CADR, where each of these CADR 
metrics refers to the reduction rate of smoke and dust particles, 
respectively, in a given room volume with the air cleaner operating. 
The denominator of the IEF metric is the annual energy consumption in 
active mode and standby mode (AEC) divided by the annual operating 
hours in active mode.\18\
---------------------------------------------------------------------------

    \18\ For more details on the AEC and IEF metrics, refer to 
section III.H of the March 2023 TP Final Rule. 88 FR 14014.
---------------------------------------------------------------------------

    Additionally, DOE discussed in the March 2023 TP Final Rule that 
for compliance with the standards in Tier 1 of the Joint Proposal, the 
Joint Stakeholders recommended that DOE permit section 6.2 of AHAM AC-
1-2020 \19\ for dust CADR to be applied as an alternative for 
calculating PM2.5 CADR. The Joint Stakeholders stated that 
the dust CADR, determined according to section 6.2 of AHAM AC-1-2020, 
is nearly identical to the subset dust CADR used to calculate 
PM2.5 CADR. The Joint Stakeholders further stated that given 
many products have already been tested per AHAM AC-1-2020, allowing 
this alternative would ensure that manufacturers are not required to 
retest using AHAM AC-7-2022 to demonstrate compliance with a new 
standard on a short timeline. (Joint Stakeholders, No. 16 a p. 6); 88 
FR 14014, 14030.
---------------------------------------------------------------------------

    \19\ American National Standards Institute (``ANSI'')/AHAM 
standard, ANSI/AHAM AC-1-2020 (``AHAM AC-1-2020''), ``Method for 
Measuring Performance of Portable Household Electric Room Air 
Cleaners''.
---------------------------------------------------------------------------

    According to section 5.1.1 of appendix FF, PM2.5 CADR is 
obtained by combining the CADR of smoke (which includes particle sizes 
ranging from 0.1 to 0.5 micrometers (``[mu]m'')) with the CADR of dust 
(which includes particle sizes ranging from 0.5 to 2.5 [mu]m) and 
performing a geometric average calculation as follows:
[GRAPHIC] [TIFF OMITTED] TR11AP23.001

    The tests to determine smoke CADR and dust CADR are specified in 
sections 5 and 6 of AHAM AC-1-2020. The allowable particle size for 
smoke particles is 0.1 to 1 [micro]m for the smoke CADR test in AHAM 
AC-1-2020 and the allowable particle size for dust particles is 0.5 to 
3 [micro]m for the dust CADR test in AHAM AC-1-2020. However, the 
calculation of PM2.5 CADR in section 5.1.1 of appendix FF 
specifies a narrower range of allowable particle sizes for the smoke 
CADR and dust CADR than the smoke CADR and dust

[[Page 21763]]

CADR tests in sections 5 and 6, respectively, of AHAM AC-1-2020.
    While the allowable smoke and dust particle size for the smoke CADR 
and dust CADR tests in sections 5 and 6 of AHAM AC-1-2020 is larger 
(i.e., 0.1 to 1 [micro]m for smoke particles and 0.5 to 3 [micro]m for 
dust particles) than the allowable smoke and dust particle size for the 
calculation of PM2.5 CADR in section 5.1.1 of appendix FF 
(i.e., 0.1 to 0.5 [micro]m for smoke particles and 0.5 to 2.5 [micro]m 
for dust particles), the subset smoke CADR and dust CADR used to 
calculate PM2.5 are nearly identical to the smoke CADR and 
dust CADR calculated according to sections 5 and 6 of AHAM AC-1-2020, 
as shown in the figures included in the Joint Proposal.\20\ 
Accordingly, in the March 2023 TP Final Rule, DOE specified in section 
5.1.2 of appendix FF that PM2.5 CADR may alternatively be 
calculated using the full range of particles used to calculate smoke 
CADR and dust CADR according to sections 5 and 6 of AHAM AC-1-2020, 
respectively. 88 FR 14014. DOE additionally stated that it may revisit 
allowing the use of both approaches to calculate PM2.5 CADR 
in a future standards rulemaking. Id.
---------------------------------------------------------------------------

    \20\ See Joint Stakeholders, No. 16 at p. 6.
---------------------------------------------------------------------------

    In this direct final rule, DOE continues to allow the full range of 
particles used to calculate smoke CADR and dust CADR according to 
sections 5 and 6 of AHAM AC-1-2020, respectively, may be used to 
determine compliance only with the Tier 1 standards specified in this 
document. Compliance with Tier 2 standards must be determined using the 
smoke and dust particle size specified in the calculation of 
PM2.5 CADR in section 5.1.1 of appendix FF. This aligns with 
the test parameters of the Joint Proposal and allows manufacturers more 
time to adjust to the tighter particle size requirements specified in 
AHAM AC-7-2022. Accordingly, DOE is amending section 5.1.2 of appendix 
FF to specify that the alternate calculation for PM2.5 CADR 
may be used for determining compliance only with Tier 1 standards 
specified at 10 CFR 430.32(ee).

D. Technological Feasibility

1. General
    In each energy conservation standards rulemaking, 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 
to 10 CFR part 430, subpart C (``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. 
Section 7(b)(2)-(5) of appendix A. Section IV.B of this document 
discusses the results of the screening analysis for air cleaners, 
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 direct final rule TSD.
2. Maximum Technologically Feasible Levels
    When DOE prescribes new or amended standards 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 air 
cleaners, 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 
of this document and in chapter 5 of the direct final rule TSD.

E. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to air cleaners purchased in the 30-year period that begins in the 
year of compliance with the standards (2024-2057 for the recommended 
TSL, and 2028-2057 for the other TSLs).\21\ The savings are measured 
over the entire lifetime of air cleaners purchased in the 30-year 
analysis 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 energy conservation 
standards.
---------------------------------------------------------------------------

    \21\ For the standards recommended in the Joint Proposal, DOE 
considered an analysis period beginning in the year of compliance 
with the Tier 1 standards (2024) and ending in the same year as the 
30-year analysis periods considered for the other analyzed TSLs 
(2057) to align the end dates of the analysis periods. DOE also 
presents a sensitivity analysis that considers impacts for products 
shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate national energy savings (``NES'') from potential standards 
for air cleaners. 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.\22\ 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.
---------------------------------------------------------------------------

    \22\ 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. (42 U.S.C. 6295(o)(3)(B)).
    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.\23\ For 
example, some

[[Page 21764]]

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. 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.
---------------------------------------------------------------------------

    \23\ 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 stated, the standard levels adopted in this direct final rule 
are projected to result in national energy savings of 1.80 quads of FFC 
energy savings, the equivalent of the annual electricity use of 19 
million homes. DOE has determined the energy savings from the standard 
levels adopted in this direct final rule are ``significant'' within the 
meaning of 42 U.S.C. 6295(o)(3)(B).

F. Economic Justification

1. Specific Criteria
    As noted previously, EPCA provides seven factors to be evaluated in 
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 potential new standards on 
manufacturers, DOE conducts a manufacturer impact analysis (``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 cost (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 IV.H 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 adopted 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 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 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 direct final rule to the Attorney General with 
a request that the Department of Justice (``DOJ'') provide its 
determination on this issue. DOE will consider DOJ's comments on the 
rule in determining whether to proceed with the direct final rule. DOE 
will also publish and respond to the DOJ's comments in the Federal 
Register in a separate notice.
f. Need for National Energy Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or

[[Page 21765]]

amended standard is economically justified. (42 U.S.C. 
6295(o)(2)(B)(i)(VI)) The energy savings from the adopted 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 effects 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The adopted standards are likely to result in 
environmental benefits in the form of reduced emissions of air 
pollutants and GHGs associated with energy production and use. DOE 
conducts an emissions analysis to estimate how potential standards may 
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 emissions reductions 
resulting from the considered TSLs, as discussed in section IV.L of 
this document.
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 effect potential new or 
amended 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 of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to air cleaners. Separate subsections address 
each component of DOE's analyses.
    DOE used several analytical tools to estimate the impact of the 
standards considered 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 NIA uses a second spreadsheet set 
that provides shipments projections and calculates NES and NPV 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-2021-BT-STD-0035/document. Additionally, DOE used output 
from the latest version of the Energy Information Administration's 
(``EIA's'') Annual Energy Outlook (``AEO'') 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 air cleaners. The key 
findings of DOE's market assessment are summarized in the following 
sections. See chapter 3 of the direct final rule TSD for further 
discussion of the market and technology assessment.
1. Product Classes
    When evaluating and establishing energy conservation standards, DOE 
may establish separate standards for a group of covered products (i.e., 
establish a separate product class) if DOE determines that separate 
standards are justified based on the type of energy used, or if DOE 
determines that a product's capacity or other performance-related 
feature justifies a different standard. (42 U.S.C. 6295(q)) In making a 
determination 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. (Id.)
    DOE currently does not specify any energy conservation standards or 
associated product classes for air cleaners. In the January 2022 RFI, 
DOE noted that it may use CADR as a measurement of capacity to 
establish product classes. 87 FR 3702, 3711. DOE requested comment on 
whether capacity or any other performance-related features, such as air 
cleaning technology (i.e., whether the product destroys or deactivates 
contaminants from the air or removes them), would justify establishing 
different product classes. Id.
    NEEA commented that, based on a review of NEEA Retail Products 
Platform (``RPP'') sales data for air cleaners and sales from the 
ENERGY STAR Retail Products Platform (``ESRPP'') data, product class 
distinctions based on CADR and smoke CADR/W would be appropriate. 
(NEEA, No. 13 at p. 3)
    Trane commented that different classes of air cleaners could be 
useful to consumers, who have varying performance goals. (Trane, No. 3 
at p. 3)
    Synexis stated that the definition of a standard should be 
applicable to all devices operating in the air cleaning technology 
space as sub-classes would likely confuse the issue and be difficult to 
apply equally across all technologies. (Synexis, No. 14 at p. 7)
    DOE agrees with NEEA and Trane's comments and, for reasons 
discussed later in this section, is establishing three separate air 
cleaner product classes based on CADR as a measurement of capacity. 
DOE's testing and teardown

[[Page 21766]]

analysis showed that air cleaning technology, particularly UV and ion 
generation, did not significantly impact the measured energy use or 
efficiency of air cleaners. Accordingly, DOE is not establishing 
additional product class distinction based on air cleaning technology.
    Regarding Synexis' comment, DOE notes that energy conservation 
standards are applicable to all conventional room air cleaners, as 
defined in the March 2023 TP Final Rule, but that the applicable 
standard level varies based on the product class. The standards are 
technology-neutral, and apply to all configurations of conventional 
room air cleaners with a PM2.5 CADR rating within the 
specified ranges for the three product classes.
    The Joint Stakeholders proposed product classes as shown in Table 
IV.1 and noted that it was proposing separate product classes because 
it is more difficult for smaller air cleaners to reach higher levels of 
efficiency because smaller products require smaller components such as 
fan blades. The Joint Stakeholders stated that as the blade design is 
made more efficient despite its smaller diameter, the optimization 
point is tight to achieve adequate air movement while not increasing 
noise levels beyond a tolerable level. They further stated that this 
makes achieving higher levels of efficiency a more difficult design 
challenge while retaining the utility of the smaller size. (Joint 
Stakeholders, No. 16 at pp. 9-10)
    The Joint Stakeholders also stated that were smaller products 
required to meet the same efficiency levels as larger and higher CADR/W 
models, a greater change in efficiency of the motor would be necessary, 
which could require more expensive motor technology that could lead to 
standards that are not economically justified. The Joint Stakeholders 
stated that the recommended product classes will help ensure that a 
broad range of capacity changes remain available for consumers. (Joint 
Stakeholders, No. 16 at p. 10)

  Table IV.1--Joint Stakeholder Recommended Air Cleaner Product Classes
------------------------------------------------------------------------
          Product class                       PM2.5 CADR bins
------------------------------------------------------------------------
PC1..............................  10 <= PM2.5 CADR < 100.
PC2..............................  100 <= PM2.5 CADR < 150.
PC3..............................  PM2.5 CADR >= 150.
------------------------------------------------------------------------

    DOE notes that the product classes are defined based on 
PM2.5 CADR, rather than smoke CADR as recommended by NEEA 
and as specified in the ENERGY STAR V. 2.0 Specification. In the March 
2023 TP Final Rule, DOE established the IEF metric based on 
PM2.5 CADR, which is based on the geometric average of the 
measured smoke CADR and dust CADR values, consistent with the Joint 
Stakeholder recommendation.
    As discussed in the following paragraphs, based on investigatory 
testing, product teardowns, and a review of the ENERGY STAR V. 2.0 
specification, DOE agrees with the Joint Stakeholders that reaching 
higher efficiencies is more difficult for smaller capacity products due 
to size and component constraints. Therefore, consistent with the Joint 
Proposal, DOE is establishing three product classes for air cleaners as 
shown in Table IV.1.
    DOE determined the three product classes specified in Table IV.1 to 
be appropriate based on an analysis of ENERGY STAR-qualified products. 
As seen in Figure IV-1, the ENERGY STAR database shows that air cleaner 
models at lower CADR values generally have lower efficiencies compared 
to models at higher CADR. DOE expects that this is likely due to the 
smaller motor and/or filter required for the lower-CADR units, which 
are typically intended to be used in rooms with smaller areas (e.g., 
units in Product Class 1 would be recommended for a maximum room size 
of 155 square feet). To achieve a certain level of cleaning 
performance, a smaller unit would need to include more filtration by 
volume in a more limited chassis space (i.e., the air cleaner cabinet). 
This would increase the pressure drop across the filter, which would 
require more blower power to maintain the same air delivery 
performance. These factors impact the overall efficiency of the unit. 
At higher CADR values (i.e., air cleaners designed for larger rooms), 
the cabinet volume is much larger, which allows the incorporation of a 
much larger filter (i.e., the filtration can be spread across a larger 
filter area), thereby reducing the pressure drop across the filter and 
necessary blower power, and therefore improving efficiency.
    Establishing separate product classes for units that are intended 
to be used in both smaller and larger rooms is necessary to maintain 
consumer utility. For example, Product Class 1 units have a small 
cabinet volume (<0.6 cubic feet (``ft\3\'')), are designed for use in a 
single small room, such as a bathroom or bedroom (<155 sq. ft), and are 
easily portable, which can allow product configurations such as 
tabletop or wall plug-ins. Units with larger capacities and 
corresponding larger cabinet volumes provide different utility to 
consumers. Product Class 2 includes medium cabinet-sized units (0.6-1.2 
ft\3\), which are designed for a larger room (155-235 sq. ft) such as a 
kitchen or living space. The size and weight of these units generally 
allow single-person portability without necessitating the use of 
wheels. Finally, Product Class 3 units have a large cabinet (>1.2 
ft\3\), are typically less portable than lower-capacity units, in some 
cases being equipped with wheels to facilitate moving, and are designed 
to be used for an extended duration in a large room (>235 sq. ft) such 
as a classroom, office, or large living area. Establishing these 
product classes is necessary because the three ranges of capacity each 
provide distinct consumer utility in terms of the application based on 
room size and portability of the unit and are associated with 
inherently different efficiency due to the different filter size and 
configurations that can be accommodated. Further, these product class 
distinctions will help ensure that higher-capacity units installed in 
smaller-sized rooms, which achieve higher efficiencies at the same 
active mode power consumption than smaller-capacity units and which 
warrant more stringent energy conservation standards, do not lead to 
unnecessarily high AEC.

[[Page 21767]]

[GRAPHIC] [TIFF OMITTED] TR11AP23.002

    Finally, DOE is establishing Product Class 1 with a 
PM2.5 CADR lower limit of 10 cfm as opposed to 30 cfm, as 
specified in the ENERGY STAR V. 2.0 specification, so that tabletop and 
desktop portable room air cleaners as well as plug-in air cleaners, 
which is a growing segment of the market, will be required to 
demonstrate compliance with the adopted standards. DOE notes that the 
PM2.5 CADR lower limit of 10 cfm for Product Class 1 is also 
recommended by the Joint Stakeholders in the Joint Proposal.
2. Technology Options
    In analyzing the feasibility of new energy conservation standards, 
DOE uses information about technology options and prototype designs to 
identify technologies that manufacturers could use to meet and/or 
exceed a given energy conservation standard level. In the January 2022 
RFI, DOE requested information on technologies that are used to improve 
the energy efficiency of air cleaners. Specifically, DOE sought 
information on the range of efficiencies or performance characteristics 
that are available for each technology option. 87 FR 3702, 3711. For 
each technology option suggested by stakeholders, DOE also sought 
information regarding its market adoption, costs, and any concerns with 
incorporating the technology into products (e.g., impacts on consumer 
utility, potential safety concerns, manufacturing or production 
challenges, etc.). 87 FR 3702, 3711-3712.
    MIAQ and AHRI commented that they could not provide concrete 
information on the availability or lack thereof of technologies for 
improving energy efficiency of air cleaners for non-portable products 
until DOE altered the scope and definitions to exclude products 
inappropriate for regulation. MIAQ and AHRI noted that ducted products, 
with fans primarily used for ventilating, cooling, and heating, employ 
different technologies than portable products, with distinctly 
different energy use patterns. (MIAQ, No. 5 at p. 8; AHRI, No. 15 at p. 
9)
    As discussed in section III.B of this document, the scope of this 
standards rulemaking includes conventional room air cleaners with 
PM2.5 CADR between 10 and 600 cfm (inclusive). Products not 
meeting the definition of conventional room air cleaners, such as 
ceiling-mounted and whole-home units are not included in the scope of 
this rulemaking. Accordingly, DOE has analyzed technology options only 
for conventional room air cleaners that are in the scope of this 
standards rulemaking.
    Trane commented that portable HEPA and other high filter efficiency 
filter-based units should be prioritized highest in a new standard 
because of their use in classrooms. (Trane, No. 3 at p. 2)
    DOE is aware of the prevalence of HEPA filters in air cleaners, and 
DOE's teardown sample largely comprised conventional room air cleaners 
that utilize a HEPA filter or other high efficiency filters. The 
teardown analysis confirmed that, by effectively removing 
PM2.5 particulates, such high efficiency filters are a 
technology option for improving air cleaner efficiency as measured 
according to the DOE test procedure at appendix FF.
    Synexis commented that safety standards should be considered for 
air cleaners that generate hazardous by-products, such as ozone, which 
can be harmful to humans at levels above established thresholds. 
(Synexis, No. 14 at p. 7) Trane also commented that since certain air 
cleaning devices, like electronic/reactive air cleaners, may produce 
by-products such as ozone, organic acids, and ultrafine particles, this 
fact complicates attempts at standards or creates a need for additional 
standards. (Trane No. 3 at p. 2) DOE is aware that technology options 
that generate ozone or other harmful by-products can have adverse 
impacts on health or safety and, as discussed in section IV.B of this 
document, DOE has screened-out such technology options accordingly.
    In the market analysis and technology assessment, DOE identified 19 
technology options for air cleaners, as shown in Table IV.2. These 
technology options have been determined to improve the efficiency of 
air cleaners, as measured by the DOE test procedure. In general, the 
technology options with the most significant impact on efficiency 
represent improvements to the filter and motor. The motor and filter 
relationship is crucial to improving efficiency, as optimization of the 
airflow across the filter is the largest factor contributing to an air 
cleaner's active mode power consumption.

[[Page 21768]]



               Table IV.2--Air Cleaner Technology Options
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
1. High efficiency particulate air (``HEPA'')-type filter (99 percent of
 0.2[mu]m particles).
2. True HEPA filter (99.97 percent of 0.3[mu]m particles).
3. Activated carbon filter.
4. High density polyethylene (``HDPE'') pre-filter.
5. Photoelectrochemical oxidation (``PECO'') filter.
6. Photocatalytic oxidation (``PCO'') filter.
7. Electrostatic/Polarizing media.
8. Filter shape.
9. Improved Motor Technologies.
10. Low standby-power electronic controls.
11. Direct double-ended blower assembly.
12. Ionization brush.
13. Ionization plates.
14. Air quality sensor.
15. Ozone generators.
16. Thermodynamic sterilization system (``TSS'').
17. Bioreactor.
------------------------------------------------------------------------

    After identifying all potential technology options for improving 
the efficiency of air cleaners, DOE performed a screening analysis (see 
section IV.B of this document) to determine which technologies merited 
further consideration in the engineering analysis.

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 commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or 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) Safety of technologies. 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 technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns. Sections 6(b)(3) and 7(b) of 
appendix A.
    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.
    In the January 2022 RFI, DOE requested feedback on whether any air 
cleaner technology options would be screened out based on the five 
screening criteria described in this section. DOE also requested 
information on the technologies that would be screened out and the 
screening criteria that would be applicable to each screened out 
technology option. 87 FR 3702, 3712.
    The subsequent paragraphs 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.
    Molekule commented that its PECO technology includes energy 
requirements different from traditional air cleaners and requested an 
exemption from Federal energy efficiency standards since its air 
cleaners have been cleared by the U.S. Food and Drug Administration 
(``FDA'') as Class II medical devices, which allows medical 
professionals to use these devices in medical settings to purify the 
air for viruses and bacteria. (Molekule, No. 11 at pp. 1-2) Molekule 
commented that while the removal and destruction of airborne microbes 
is a key benefit in medical settings, it is not measured by CADR tests 
for particulate matter. Molekule further stated that any modifications 
to meet DOE energy efficiency standards would be burdensome, requiring 
the company to re-apply for FDA clearance. (Molekule, No. 11 at p. 3). 
While FDA classification is not one of the five screening criteria that 
DOE applies, DOE notes that it has screened out PECO technology because 
it is a proprietary technology. DOE additionally notes that many air 
cleaners are capable of removing or destroying contaminants other than 
particulate matter (i.e., air cleaners that can remove, destroy, or 
deactivate smoke, dust, or pollen may also remove, destroy or 
deactivate microorganisms and/or gaseous pollutants) and that such air 
cleaners would be in the scope of this rulemaking and subject to 
applicable standards as long as the unit ``contains means to remove, 
destroy, and/or deactivate particulates,'' as included in the 
definition of a conventional room air cleaner.
    Synexis commented that DOE should eliminate this criterion \24\ 
because it is in direct and fundamental conflict with intellectual 
property rights. Synexis stated that if the United States government 
grants monopolistic rights to certain technology options through the 
patent process, then DOE should not eliminate those same technology 
options. (Synexis, No. 14 at p. 7) DOE clarifies that the intent of the 
unique-pathway proprietary technologies screening criterion is to 
screen out proprietary technologies as a design pathway for achieving 
higher efficiencies for the purposes of DOE's analysis only. That is, 
if the only way to reach a given efficiency would be to utilize a 
proprietary technology, DOE would not include it in its analysis 
because manufacturers that do not have access to the proprietary 
technology would not be able to meet the efficiency level under 
consideration. This would not preclude manufacturers from utilizing 
such technologies in their products. The intent of DOE's analysis is to 
identify a pathway to achieve higher efficiencies that would generally 
be available to all manufacturers, but DOE recognizes that 
manufacturers may have more than one pathway to achieve higher 
efficiencies, including using proprietary technologies.
---------------------------------------------------------------------------

    \24\ DOE understands Synexis to be referring to the unique-
pathway proprietary technology screening criterion.
---------------------------------------------------------------------------

1. Screened-Out Technologies
Photoelectrochemical Oxidation
    PECO is a type of photoreactor-based air purification, similar to 
PCO technology (described in the next section) with some important 
variations. PECO processes pollutants in a photoreactor that utilizes 
photons to initiate a reaction that oxidizes and destroys organic 
pollutants in the air. The reaction converts pollutants into non-toxic 
substances. Specifically, PECO works by shining UV-A light on the 
catalytic surface of the PECO filter. Once the catalyst is activated by 
the UV-A light, it forms hydroxyl radicals that combine and react with 
airborne

[[Page 21769]]

microbiological contaminants, which destroys them.
    Since PECO technology is proprietary, DOE has screened out this 
technology option as a unique pathway proprietary technology.
Photocatalytic Oxidation (PCO)
    The PCO process is similar to PECO in that it utilizes UV radiation 
combined with a catalyst to break down pollutants. The major difference 
between PCO and PECO is the filter material, UV light, and subsequent 
byproducts. While the PECO filter is a proprietary technology, PCO uses 
a catalyst such as titanium dioxide. Additionally, PECO does not emit 
any harmful byproducts such as ozone and formaldehyde as compared to 
the catalysts on PCO filters. Finally, the PECO system utilizes a UV-A 
light, instead of a UV-C light found in PCO systems.
    When the titanium dioxide used with PCO is activated by UV-C 
radiation, it forms oxidizing hydroxyl radicals which react with 
pollutants. When a pollutant comes into contact with UV-activated 
titanium dioxide, the reaction destroys the pollutant and releases non-
toxic compounds, such as carbon dioxide and water, as byproducts, as 
well as certain harmful byproducts such as ozone and formaldehyde.
    DOE is screening out the PCO technology option due to health and 
safety concerns stemming from the byproducts generated by the reaction 
of the PCO filter. Formaldehyde is a known human carcinogen that can 
cause irritation of the skin, eyes, nose, and throat. High levels of 
exposure may cause some types of cancers, according to EPA.\25\ For 
ozone, DOE describes these concerns in more detail in the following 
section.
---------------------------------------------------------------------------

    \25\ www.epa.gov/sites/default/files/2016-09/documents/formaldehyde.pdf.
---------------------------------------------------------------------------

Ozone Generation
    Ozone is a strong oxidizer and cleaning agent. Ozone generators 
work by creating an electrical discharge to split oxygen molecules in 
ambient air into single oxygen atoms, which then bind with existing 
oxygen molecules in the air to form ozone. Ozone is highly unstable and 
reactive, so after it is produced by the generator, it is released in 
the air and is claimed to chemically react with air pollutants such as 
chemicals, mold, viruses, bacteria, and odors.
    DOE has identified concerns with air cleaners that rely on ozone 
generation in terms of both efficacy and safety. The same chemical 
properties that allow ozone to be highly reactive with organic material 
in the air mean that ozone can impact organic material inside the 
respiratory system. EPA investigated the use of ozone generation for 
air cleaning and in a 1996 publication,\26\ determined that relatively 
low amounts of ozone can pose harmful health effects such as decrease 
in lung function, aggravation of asthma, throat irritation and 
coughing, chest pain and shortness of breath, inflammation of lung 
tissue and high susceptibility to respiratory infection. EPA further 
researched the effectiveness of ozone at removing indoor air 
contaminants and found that there is evidence to suggest that at 
concentrations that do not exceed public health standards, ozone is not 
effective at removing many odor-causing chemicals, viruses, bacteria, 
mold, or other biological pollutants. Additionally, ozone does not 
impact particulate matter such as dust or pollen.
---------------------------------------------------------------------------

    \26\ www.epa.gov/indoor-air-quality-iaq/ozone-generators-are-sold-air-cleaners.
---------------------------------------------------------------------------

    Due to these health and safety concerns associated with ozone and 
lack of efficacy towards particulate removal, DOE has screened out this 
technology option.
Thermodynamic Sterilization System (TSS)
    DOE has identified air cleaners on the market that use TSS in a 
ceramic core to destroy microorganisms and particle pollutants. These 
air cleaners do not rely on filter media to trap or remove particles, 
but rather utilize air convection to force air through the devices' 
internal ceramic core which heats up to about 200 degrees Celsius 
(``[deg]C'') (392 degrees Fahrenheit (``[deg]F'')) and incinerates 
pollutants. Manufacturers of these air cleaners claim that TSS can kill 
mold, bacteria, germs, and viruses and destroy pollutants such as dust, 
pollen, pet dander, hair, and other airborne particulates. After the 
air is heated and cleaned, it is immediately cooled using heat transfer 
plates and released back out of the device.
    TSS is a proprietary technology implemented by a single company. 
Therefore, DOE has screened out this technology option as a unique 
pathway proprietary technology.
Bioreactor
    DOE has identified two air cleaner models on the market that 
utilize a bioreactor system to produce clean air. The air cleaners that 
use this technology option rely on convection and fans to draw large 
particulate matter of over 0.5 microns such as dust and dander into the 
bioreactor chamber. Smaller ultra-fine air pollutants and VOCs are 
drawn into the chamber of the air purifier by a process of molecular 
attraction through an electrostatic grounded air zone.
    Once the various types of air contaminants are drawn into the 
bioreactor, an activated solution of water, oxygen, enzymes, and the 
trapped contaminants lead to an accelerated process of natural 
oxidation that digests the air contaminants and breaks them down into 
water, carbon dioxide, and base elements. This results in cleaner air 
that is released from the air purifier.
    Given the scarcity of models on the market with this technology, 
DOE has screened out this technology option as it is not proven to be 
practicable to manufacture, install, and service this technology on a 
scale necessary to serve the relevant market at the time of the 
compliance date of new standards.
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 met 
all five screening criteria to be examined further as design options in 
DOE's direct final rule analysis. In summary, DOE did not screen out 
the following technology options:

1. HEPA-type filter (99 percent of 0.2[mu]m particles)
2. True HEPA filter (99.97 percent of 0.3[mu]m particles)
3. Activated carbon filter
4. HDPE pre-filter
5. Electrostatic/Polarizing media
6. Filter shape
7. Improved Motor Technologies
8. Low standby-power electronic controls
9. Direct double ended blower assembly
10. Ionization brush
11. Ionization plates
12. Air quality sensor

    DOE 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). For additional details, see chapter 4 
of the direct final rule TSD.

[[Page 21770]]

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of air cleaners. 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 
air cleaners, 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 set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
    Chapter 5 of the direct final rule TSD provides additional details 
regarding the engineering analysis.
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 interpolate to define ``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 rulemaking, DOE primarily used the efficiency-level 
approach. This approach involved reviewing the ENERGY STAR V. 2.0 
database to identify the market distribution of existing products. DOE 
also used the design-option approach, testing and physically 
disassembling commercially available products to fill gaps where data 
was not available from the efficiency-level approach (e.g., to identify 
efficiency levels below the ENERGY STAR level). From this information, 
DOE estimated the manufacturer production costs (``MPCs'') for a range 
of products available at that time on the market. DOE then analyzed the 
steps manufacturers took to improve product efficiencies. In its 
analysis, DOE determined that manufacturers would likely rely on 
certain design options to reach higher efficiencies. From this 
information, DOE estimated the incremental cost and efficiency impacts 
of incorporating specific design options at each efficiency level. This 
section provides more detail on the development of efficiency levels 
for the air cleaner engineering analysis.
    In response to the January 2022 RFI, Molekule commented that air 
cleaners that utilize combined technologies such as a fan and UV that 
are intended to capture and destroy a wide range of potentially harmful 
pollutants should be subject to adjusted requirements. Molekule 
additionally commented that devices that feature technologies with 
capabilities outside of AHAM AC-1 and its scope of smoke, dust, and 
pollen test should receive an additional 15-percent energy allowance. 
(Molekule, No. 11 at pp. 2, 5) Molekule commented that air cleaners 
that are designed to work against contaminants such as microbes and 
organic chemicals may require technology stacks and energy usage beyond 
what is needed for mechanical filtration. Molekule further stated that 
evaluating such air cleaners solely on particle removal efficiency 
without considering these other pollutant classes is an inappropriate 
measure of an air cleaner's energy efficiency relative to its potential 
benefits. Molekule commented that many proposed and existing standards 
for microbes and chemicals, including proposed AHAM AC-4 and AHAM AC-5 
tests and NRCC_54013 \27\ protocol, will only gauge the initial 
reduction of pollutants, while an important benefit of its devices is 
the destruction of pollutants. (Molekule, No. 11 at p. 4) DOE notes 
that the air cleaners test procedure at appendix FF requires that all 
features pertaining to air cleaning (e.g., UV, ion generator, etc.) 
must be activated and set to their highest setting during testing, 
while features unrelated to air cleaning are disabled. That is, the air 
cleaners test procedure already accounts for these technologies and to 
the extent it is necessary, DOE's analysis accounts for the additional 
energy consumed by such technologies. Regarding comments related to the 
AHAM AC-4 and AHAM AC-5 industry test standards, DOE is not introducing 
a test procedure for microbes and chemicals at this time and is not 
establishing an additional energy allowance for products that target 
these pollutants.
---------------------------------------------------------------------------

    \27\ National Research Council Canada (``NRCC'')-54013, ``Method 
for Testing Portable Air Cleaners,'' April 2011. Available online 
at: https://nrc-publications.canada.ca/eng/view/ft/?id=cc1570e0-53cc-476d-b2ee-3e252d8bd739.
---------------------------------------------------------------------------

    Molekule also commented that air cleaners that utilize automatic or 
standby functionality should receive a credit and that DOE should delay 
the implementation of energy conservation standards for such air 
cleaners until the appropriate standards or credit has been determined. 
(Molekule, No. 11 at p. 2) Molekule stated that energy efficiency 
requirements should account for the typical operation of the air 
cleaner rather than only the maximum performance mode, particularly for 
air cleaners that employ air quality sensors. Molekule stated that the 
continuous use case is to operate in ``Auto'' mode or at a level lower 
than the maximum running speed and that its internal data indicates 
that the use of Auto Mode, coupled with other common user behavior of 
selecting speeds lower than the maximum speed, results in more than 50-
percent energy savings as compared to the energy use if the device was 
operated continuously at maximum speed. (Molekule, No. 11 at p. 5) DOE 
notes that the current test procedure at appendix FF requires all air 
cleaners to be tested in the maximum performance mode, not in automatic 
mode. Accordingly, a credit or separate standards are not necessary for 
such units at this time. DOE is aware that an AHAM task force is 
currently engaged in discussions to develop an industry test method to 
test air cleaners in automatic mode, and DOE is participating in these 
meetings. However, DOE's test procedure specifies testing only in 
maximum performance mode (consistent with the existing industry 
standard) and accordingly, DOE is not providing a credit for units with 
automatic mode.
a. Baseline Efficiency Levels
    For each product class, DOE generally selects a baseline model as a 
reference

[[Page 21771]]

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 (e.g., capacity, physical size). 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. In the January 
2022 RFI, DOE requested feedback on appropriate baseline efficiency 
levels for DOE to apply, and the product classes to which these 
baseline efficiency levels would be applicable, in evaluating whether 
to establish energy conservation standards for air cleaners. 87 FR 
3702, 3712.
    NEEA commented that using the ENERGY STAR V. 2.0 levels as the 
baseline efficiency level would be appropriate because of the high 
percentage of sales of ENERGY STAR units, comprising 87 percent of the 
2015 room air cleaner sales. (NEEA, No. 13 at p. 4)
    Based on publicly available data from ENERGY STAR and AHAM, DOE 
estimated that 60 percent of air cleaners on the market do not meet the 
ENERGY STAR V. 2.0 levels. Based on the large number of products 
available on the market that do not meet the ENERGY STAR V. 2.0 
specification, DOE is establishing the baseline efficiency levels below 
the ENERGY STAR V. 2.0 levels.
    As a first step to determine baseline and incremental efficiency 
levels, DOE selected units for testing and teardowns using the AHAM 
Verifide \28\ and ENERGY STAR databases and identified the CADR values 
at which most models were clustered. The ENERGY STAR database includes 
smoke CADR, dust CADR, and pollen CADR values in addition to providing 
power consumption data, but the AHAM Verifide database includes only 
smoke CADR, dust CADR, and pollen CADR values. Using these databases, 
DOE selected a representative sample of products for testing and 
teardowns. From its test sample, DOE identified a representative 
nominal PM2.5 CADR value for each product class based on the 
most commonly occurring PM2.5 CADR value for each product 
class in its test sample, which are 50 CADR/W, 125 CADR/W, and 200 
CADR/W for Product Class 1, Product Class 2, and Product Class 3, 
respectively.
---------------------------------------------------------------------------

    \28\ Available at: https://ahamverifide.org/directory-of-air-cleaners/. Last accessed: January 2022.
---------------------------------------------------------------------------

    For each product class, DOE then selected the baseline efficiency 
level based on a commercially available unit below the levels 
established by certain States and the ENERGY STAR V. 2.0 level. Given 
there is no database that contains energy use data for air cleaners 
other than the ENERGY STAR database, which provides a list of products 
that meet or exceed ENERGY STAR V. 2.0 levels, DOE identified the 
baseline efficiency levels by testing a representative sample of 
commercially available units that were not included in the ENERGY STAR 
database. Through this approach, DOE was able to identify the baseline 
efficiency level using the IEF of the least efficient unit tested in 
each product class for Product Classes 1 and 3. For Product Class 2, 
DOE did not identify any unit in its test sample with an IEF below the 
State or ENERGY STAR levels from its limited test sample. Accordingly, 
DOE used the baseline unit from Product Class 1, scaled to the 
representative PM2.5 CADR for Product Class 2, to determine 
a representative baseline unit for Product Class 2. Table IV.3 
summarizes the baseline efficiency levels defined for each product 
class:

                 Table IV.3--Baseline Efficiency Levels
------------------------------------------------------------------------
           Product class               PM2.5 CADR bins      Minimum IEF
------------------------------------------------------------------------
PC1...............................  10 <= CADR < 100....            1.53
PC2...............................  100 <= CADR < 150...            1.53
PC3...............................  CADR >= 150.........             1.2
------------------------------------------------------------------------

b. Higher Efficiency Levels
    In the January 2022 RFI, DOE requested feedback on design options 
that manufacturers would use to increase energy efficiency in air 
cleaners above the baseline, including information on the order in 
which manufacturers would incorporate the different technologies to 
incrementally improve efficiency of products. DOE also requested 
feedback on whether the increased energy efficiency would lead to other 
design changes that would not occur otherwise. DOE further requested 
information regarding any potential impact of design options on a 
manufacturer's ability to incorporate additional functions or 
attributes in response to consumer demand and on whether certain design 
options may not be applicable to (or incompatible with) certain types 
of air cleaners. 87 FR 3702, 3713.
    NEEA commented that it analyzed the ENERGY STAR database and 
identified the max-tech units shown in Table IV.4 for each product 
class:

                                  Table IV.4--Max-Tech Units Identified by NEEA
----------------------------------------------------------------------------------------------------------------
                                                                  PM2.5 CADR      IEF * (PM2.5
                         Product class                               (cfm)           CADR/W)      AEC (kWh/year)
----------------------------------------------------------------------------------------------------------------
PC1: 10 <= PM2.5 CADR < 100...................................            91.2               9.9            55.0
PC2: 100 <= PM2.5 CADR < 150..................................           120.0              12.5            57.2
PC3: PM2.5 CADR >= 150........................................           424.3              14.0           180.2
----------------------------------------------------------------------------------------------------------------
* Note that NEEA provided each unit's CADR/W in terms of smoke CADR. DOE calculated the PM2.5 CADR values using
  the information available from the ENERGY STAR database.


[[Page 21772]]

(NEEA, No. 13 at p. 5)

    As part of DOE's analysis, the maximum available efficiency level 
is 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. Table IV.5 shows the units 
that DOE determined to be the maximum available and max-tech units for 
each product class. These units are the highest efficiency units 
currently available on the market that provide complete consumer 
utility. DOE is not aware of any additional technologies that could be 
implemented to the identified units, and therefore has determined that 
the units represent the max-tech efficiency level in each product 
class. The following paragraphs in this section explain DOE's selection 
of max-tech units as well as its reasons for deviating from the units 
suggested by NEEA.

                                   Table IV.5--Max-Tech Units Analyzed by DOE
----------------------------------------------------------------------------------------------------------------
                                                                Representative
                         Product class                            PM2.5 CADR    IEF (PM2.5 CADR/   AEC (kWh/yr)
                                                                     (cfm)             W)
----------------------------------------------------------------------------------------------------------------
PC1: 10 <= PM2.5 CADR < 100...................................              50               5.4            54.1
PC2: 100 <= PM2.5 CADR < 150..................................             125              12.8            57.3
PC3: PM2.5 CADR >= 150........................................             200               7.4           157.6
----------------------------------------------------------------------------------------------------------------

    DOE recognizes that the air cleaners included in NEEA's comment may 
be the highest efficiency units available on the market for each 
product class; however, as noted previously, DOE strived to select 
units at the representative PM2.5 CADR value for each 
product class, and especially at the max-tech. For Product Class 1 and 
Product Class 3, the models suggested by NEEA have roughly twice the 
capacity, expressed in terms of PM2.5 CADR, as the 
representative capacities selected by DOE--91.2 cfm compared to DOE's 
representative PM2.5 CADR value of 50 cfm for Product Class 
1 and 424.3 cfm compared to DOE's representative PM2.5 CADR 
value of 200 cfm for Product Class 3. For Product Class 2, the 
PM2.5 CADR of the model suggested by NEEA falls within the 
range of CADR values that DOE considered for its analysis and DOE's 
max-tech unit for Product Class 2 is fairly similar to the unit 
suggested by NEEA.
    In addition to selecting units within a representative 
PM2.5 CADR range for each product class, to determine its 
max-tech units DOE also selected units that utilized a true HEPA 
filter, which is a filter that is rated to remove at least 99.97 
percent of particles that have a size of 0.3 [mu]m. DOE selected this 
criterion because, according to EPA, the diameter specification of 0.3 
[mu]m corresponds to the most penetrating particle size; that is, 
particles of 0.3 [mu]m are the most difficult size particles to capture 
and particles either larger or smaller than 0.3 [mu]m are generally 
captured more easily.\29\ Therefore, DOE selected its max-tech unit to 
include a true HEPA filter to ensure that there would not be any loss 
in product utility at the selected max-tech efficiency level. The 
Product Class 1 and Product Class 3 units suggested by NEEA do not 
include a true HEPA filter and instead utilize ionic plates or a filter 
that is rated to capture 98 percent of 5 [mu]m particles, neither of 
which meet the rating requirement of a HEPA filter for capturing at 
least 99.97 percent of particles that have a size of 0.3 [mu]m, which 
DOE determined is required to maintain full consumer functionality. DOE 
notes that the pressure drop across a HEPA filter would be greater due 
to the design of such a filter, which would require a more powerful 
motor to move the same quantity of air across the filter as compared to 
a less effective filter.
---------------------------------------------------------------------------

    \29\ www.epa.gov/indoor-air-quality-iaq/what-hepa-filter.
---------------------------------------------------------------------------

    While the max-tech units selected by DOE for Product Class 2 and 
Product Class 3 are the most-efficient units at the representative 
PM2.5 CADR value, for Product Class 1, DOE observed another 
unit that had a higher IEF compared to its selected unit. However, DOE 
ultimately selected the unit shown in Table IV.5 because the other unit 
did not include a true HEPA filter; instead, it included a filter that 
is rated to remove only up to 97 percent of particles that have a size 
of 0.3 [mu]m, which DOE determined did not maintain full consumer 
functionality.
    To establish other incremental higher efficiency levels between the 
baseline and max-tech, DOE reviewed data in the ENERGY STAR database to 
evaluate the range of efficiencies for air cleaners currently available 
on the market. For all three product classes, DOE considered Efficiency 
Level 1 (``EL 1'') to correspond to the level established by certain 
States. EL 1 also corresponds to the Tier 1 level provided in the Joint 
Proposal. DOE selected EL 2 for all product classes to correspond to 
the ENERGY STAR V. 2.0 level, which is also the Tier 2 level provided 
in the Joint Proposal. Finally, DOE identified EL 3 as a ``gap-fill'' 
level between EL 2 and max-tech (i.e., EL 4) based on number of 
available models grouped (or ``clustered'') between EL 2 and max-tech 
for each product class. Table IV.6 through Table IV.8 summarize the 
efficiency levels analyzed for each product class.

            Table IV.6--Efficiency Levels for Product Class 1
------------------------------------------------------------------------
                                   Efficiency level     IEF  (PM2.5 CADR/
              EL                      description              W)
------------------------------------------------------------------------
Baseline......................  Minimum available from               1.5
                                 tested units.
1.............................  State Standard Levels;               1.7
                                 Joint Proposal Tier 1.
2.............................  ENERGY STAR V. 2.0;                  1.9
                                 Joint Proposal Tier 2.
3.............................  Gap-fill..............               3.4
4.............................  Maximum available.....               5.4
------------------------------------------------------------------------


[[Page 21773]]


            Table IV.7--Efficiency Levels for Product Class 2
------------------------------------------------------------------------
                                   Efficiency level     IEF (PM2.5 CADR/
              EL                      description              W)
------------------------------------------------------------------------
Baseline......................  Minimum available from               1.5
                                 tested units.
1.............................  State Standard Levels;               1.9
                                 Joint Proposal Tier 1.
2.............................  ENERGY STAR V. 2.0;                  2.4
                                 Joint Proposal Tier 2.
3.............................  Gap-fill..............               5.4
4.............................  Maximum available.....              12.8
------------------------------------------------------------------------


            Table IV.8--Efficiency Levels for Product Class 3
------------------------------------------------------------------------
                                   Efficiency level     IEF (PM2.5 CADR/
              EL                      description              W)
------------------------------------------------------------------------
Baseline......................  Minimum available from               1.2
                                 tested units.
1.............................  State Standard Levels;               2.0
                                 Joint Proposal Tier 1.
2.............................  ENERGY STAR V. 2.0;                  2.9
                                 Joint Proposal Tier 2.
3.............................  Gap-fill..............               6.6
4.............................  Maximum available.....               7.4
------------------------------------------------------------------------

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 air cleaners 
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 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 bill of materials 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 primarily using the 
physical teardown approach. For each product class, DOE tore down a 
representative sample of models spanning the entire range of efficiency 
levels, as well as multiple manufacturers within each product class. 
DOE aggregated the results so that the cost-efficiency relationship 
developed for each product class reflects DOE's assessment of a market-
representative ``path'' to achieve each higher efficiency level. The 
resulting bill of materials from each teardown provides the basis for 
the MPC estimates. In addition to determining MPCs for each efficiency 
level, DOE disaggregated the overall MPCs to find the filter costs, 
which are used later in the LCC and PBP analyses.
    The detailed description of DOE's determination of costs for 
baseline and higher efficiency levels is provided in chapter 5 of the 
direct final rule TSD.
    In the January 2022 RFI, DOE sought input on the increase in MPC 
associated with incorporating each particular design option. DOE also 
requested information on the investments necessary to incorporate 
specific design options, including, but not limited to, costs related 
to new or modified tooling (if any), materials, engineering and 
development efforts to implement each design option, and manufacturing/
production impacts. 87 FR 3702, 3713.
    NEEA commented that it had analyzed the incremental cost of air 
cleaners and found the incremental cost was $6.00 for large-capacity 
room air cleaners and about $26 for smaller-capacity units. (NEEA, No. 
13 at p. 5)
    As discussed in the following sections, DOE's teardown results also 
showed that incremental MPC between baseline and max-tech units for 
Product Class 3 was much smaller compared to the incremental MPC 
between baseline and max-tech units for Product Classes 1 and 2. DOE 
estimated the incremental MPC between max-tech and baseline for Product 
Classes 1 and 2 to be approximately $12, as compared to $26 as stated 
by NEEA. This is likely due to the difference in how NEEA and DOE 
conducted their analyses--DOE's analysis is based on MPC, which 
accounts for the costs associated only with efficiency-related 
components, while it is DOE's understanding that NEEA's analysis is 
based on retail prices, which could include costs attributed to non-
efficiency-related features.
3. Cost-Efficiency Results
    The results of the engineering analysis are reported as incremental 
MPCs associated with each efficiency level and product class. At each 
efficiency level, DOE tore down a representative unit and excluded the 
non-efficiency related components from the MPC calculation. Due to 
slight variations in the PM2.5 CADR of each unit, DOE 
applied a normalization to the MPCs using a single representative 
PM2.5 CADR for each product class. See chapter 5 of the 
direct final rule TSD for complete cost-efficiency results.
a. Product Class 1
    Table IV.9 summarizes the MPCs at each efficiency level for Product 
Class 1.

[[Page 21774]]



                          Table IV.9--Manufacturer Production Costs for Product Class 1
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                                                              IEF  (PM2.5 CADR/
                             EL                                      W)               MPC        Incremental MPC
----------------------------------------------------------------------------------------------------------------
Baseline....................................................               1.5          $31.24  ................
1...........................................................               1.7           32.25             $1.01
2...........................................................               1.9           33.39              2.15
3...........................................................               3.4           39.27              8.03
4...........................................................               5.4           44.06             12.82
----------------------------------------------------------------------------------------------------------------

    The baseline unit in Product Class 1 is typically smaller than the 
baseline units in the other two product classes and is equipped with a 
shaded pole motor (``SPM'') and rectangular HEPA filter. At EL 1, 
efficiency improvements are achievable by optimizing the motor-filter 
relationship, typically by reducing the restriction of airflow (and 
therefore, the pressure drop across the filter) by increasing the 
surface area of the filter, reducing filter thickness, and/or 
increasing air inlet/outlet size. Optimizing the air flow across the 
filter enables reducing the size and power draw of the motor for an EL 
1 unit. Other than alterations to the cabinet size to accommodate the 
filter design, these changes do not significantly increase the MPC at 
EL 1.
    At EL 2, typically the SPM is upgraded to a permanent split 
capacitor (``PSC'') motor, which improves overall efficiency while 
increasing MPC slightly.
    EL 3 and EL 4 units are typically designed to house a cylindrical 
filter, and the cabinets of these units are also typically cylindrical 
in shape. A cylindrical filter design further reduces the restriction 
in air flow across the filter without compromising on performance 
because a cylindrical shape allows for a much larger surface area for 
the same volume of filter material. The larger surface area reduces the 
resistance across the filter material, which reduces the pressure drop 
and improves efficiency overall. EL 3 and EL 4 units also utilize a 
variable-speed brushless direct-current (``BLDC'') motor, which is much 
more efficient than an SPM or PSC motor. EL 4 units additionally 
improve energy efficiency by further optimizing the motor-filter 
relationship. The incremental costs associated with EL 3 and EL 4 are 
typically much higher due to the significant motor upgrade and 
cylindrical filter and case design.
b. Product Class 2
    When selecting representative units for Product Class 2, DOE was 
unable to identify commercially available units for the baseline and EL 
1 due to lack of published data for units with efficiencies below the 
ENERGY STAR V.2.0 level; the units that DOE selected for its test 
sample based on product features did not have measured efficiencies at 
EL 1 or lower. Therefore, DOE extrapolated costs from baseline and EL 1 
units in Product Class 1 with similar measured IEFs as the Product 
Class 2 baseline and EL 1 efficiency levels. Table IV.10 summarizes the 
MPCs at each efficiency level for Product Class 2.

                         Table IV.10--Manufacturer Production Costs for Product Class 2
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                                                              IEF (PM2.5 CADR/
                             EL                                      W)               MPC        Incremental MPC
----------------------------------------------------------------------------------------------------------------
Baseline....................................................               1.5          $42.97  ................
1...........................................................               1.9           44.26             $1.29
2...........................................................               2.4           45.62              2.65
3...........................................................               5.4           50.45              7.48
4...........................................................              12.8           55.55             12.58
----------------------------------------------------------------------------------------------------------------

    DOE estimated that the typical baseline unit for Product Class 2 is 
similar to the baseline unit from Product Class 1, although it has a 
larger cabinet, rectangular filter, and SPM motor in order to achieve a 
higher PM2.5 CADR value. At EL 1, DOE estimated that the air 
cleaner would require a motor upgrade to a PSC motor to be able to 
provide the increasing power required to maintain the desired IEF for 
an EL 1 unit at a representative PM2.5 CADR value of 125. At 
EL 2, DOE observed a direct, double-ended PSC motor with a blower on 
each end, compared to a single-ended blower assembly in the lower-
efficiency units.
    Similar to Product Class 1, the EL 3 and EL 4 units utilize a 
cylindrical filter and cabinet to improve filter surface area and 
airflow as well as a BLDC motor to improve efficiency. At EL 4, the 
max-tech unit uses lower-standby power components along with 
optimizations to the motor-filter relationship that allowed for the use 
of a smaller motor due to a lower pressure drop across the filter.
c. Product Class 3
    For Product Class 3, DOE was unable to identify and teardown an EL 
1 unit, again due to a lack of published power consumption data for 
commercially available units below ENERGY STAR V.2.0. Therefore, DOE 
estimated the EL 1 MPC for Product Class 3 by developing a best-fit 
curve from the IEF and MPCs of the other efficiency levels for Product 
Class 3 and using this best-fit curve to estimate the MPC for EL 1. 
Table IV.11 summarizes the MPCs at each efficiency level for the 150+ 
PM2.5 CADR product class.

[[Page 21775]]



                         Table IV.11--Manufacturer Production Costs for Product Class 3
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                                                              IEF (PM2.5 CADR/
                             EL                                      W)               MPC        Incremental MPC
----------------------------------------------------------------------------------------------------------------
Baseline....................................................               1.2          $70.50  ................
1...........................................................               2.0           71.66             $1.17
2...........................................................               2.9           72.50              2.00
3...........................................................               6.6           74.33              3.84
4...........................................................               7.4           74.61              4.11
----------------------------------------------------------------------------------------------------------------

    DOE estimated that the typical baseline unit for Product Class 3 is 
equipped with an electronic interface, a PSC motor, and a rectangular 
HEPA filter. For an EL 1 unit, DOE estimated that a PSC motor is still 
used, but the motor-filter relationship is optimized along with lower-
standby power components to increase unit efficiency. The 
representative EL 2 unit also uses a PSC motor; however, the unit has a 
filter with a larger surface area and a larger case with larger air 
inlets/outlets to improve airflow compared to the baseline and EL 1 
units. The EL 3 and EL 4 units utilize a cylindrical HEPA filter and 
BLDC motor to improve airflow through the filter while reducing power 
consumption. However, the EL 3 and EL 4 units are typically smaller in 
cabinet size compared to lower-efficiency units within Product Class 3. 
Therefore, the incremental MPCs at EL 3 and EL 4 is smaller compared to 
the incremental MPCs at EL 3 and EL 4 for the other two product 
classes.
    In addition to determining the MPCs for each representative unit at 
each efficiency level, DOE also disaggregated the overall MPC at each 
efficiency level to determine filter costs, which are used to determine 
the maintenance and repair costs for the LCC and PBP. These costs are 
shown in Table IV.12.

         Table IV.12--Filter Costs (2022$) Disaggregated From Overall MPCs for Each Representative Unit
----------------------------------------------------------------------------------------------------------------
                     Efficiency level                        Product class 1   Product class 2   Product class 3
----------------------------------------------------------------------------------------------------------------
Baseline..................................................             $2.62             $5.83             $9.06
EL 1......................................................              1.92              5.00              8.68
EL 2......................................................              1.79              4.16              8.29
EL 3......................................................              6.71             10.25             12.10
EL 4......................................................              7.05              7.78             12.69
----------------------------------------------------------------------------------------------------------------

    DOE observed that the filter MPC typically decreased going from 
baseline to EL 2 and then increased for EL 3 and EL 4. This is because 
the baseline unit typically has a larger rectangular filter compared to 
EL 1 and EL 2 filters, leading to higher filter costs for the baseline 
unit. EL 3 and EL 4 units have cylindrical filters with plastic casing, 
compared to the paper/cardboard casing seen at baseline through EL 2, 
both of which lead to much higher filter costs at these levels.
    To account for manufacturers' non-production costs and profit 
margin, DOE applies a multiplier (the manufacturer markup) to the MPC. 
The resulting manufacturer selling price (``MSP'') is the price at 
which the manufacturer distributes a unit into commerce.
    The detailed description of DOE's determination of costs for 
baseline and higher efficiency levels is provided in chapter 5 of the 
direct final rule TSD. The detailed description of DOE's determination 
of the industry average manufacturer markup is provided in chapter 12 
of the direct final rule TSD

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 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 business costs and profit 
margin.
    For air cleaners, DOE relied on the TechSci Research report,\30\ 
and manufacturer inputs from the manufacturer interviews to develop the 
distribution channels and the corresponding market share. DOE developed 
baseline and incremental markups for each link in the distribution 
chains (after the product leaves the manufacturer). Baseline markups 
are applied to the price of products with baseline efficiency, while 
incremental markups are applied to the 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 profit before and 
after new or amended standards.\31\
---------------------------------------------------------------------------

    \30\ TechSci Research. 2022. United States air purifier market, 
forecast and opportunity. June 2022. www.techsciresearch.com/report/us-air-purifier-market/3711.html.
    \31\ 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,\32\ and the 2017 Annual 
Wholesale Trade Survey for both ``Machinery, equipment, and supplies 
merchant wholesalers'' and ``Household appliances and electrical and 
electronic goods merchant wholesalers'' business types to develop the 
markups for distributors.\33\
---------------------------------------------------------------------------

    \32\ U.S. Census Bureau, Annual Retail Trade Survey, 2017. 
www.census.gov/programs-surveys/arts.html.
    \33\ U.S. Census Bureau, Annual Wholesale Trade Survey, 2017. 
www.census.gov/programs-surveys/awts.html.
---------------------------------------------------------------------------

    To differentiate the retailer markups in the online and offline 
retail channels,

[[Page 21776]]

DOE compared the retail prices of top-selling models provided in the 
TechSci Research report from major home improvement centers (offline 
retail sales) and e-commerce websites (online retail sales) and 
estimated that the online retail prices are on average 1.1% lower than 
the offline retail prices. Hence, DOE applied the price ratio to the 
retailer markups estimated from the 2017 Annual Retail Trade Survey to 
derive separate markups for the offline retail channel.
    Chapter 6 of the direct final rule TSD provides details on DOE's 
development of markups for air cleaners.

E. Energy Use Analysis

    The purpose of the energy use analysis is to determine the annual 
energy consumption of air cleaners at different efficiencies in 
representative U.S. single-family homes, multi-family residences, 
mobile homes, and commercial buildings, and to assess the energy 
savings potential of increased air cleaner efficiency. The energy use 
analysis estimates the range of energy use of air cleaners 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.
    DOE determined the annual energy consumption of air cleaners by 
multiplying the per operating mode annual operating hours by the power 
of standby and active modes. DOE used the Energy Information 
Administration's (``EIA'') Residential Energy Consumption Survey 
(``RECS'') 2020 \34\ data and EIA's Commercial Building Energy 
Consumption Survey (``CBECS'') 2018 \35\ data to represent residential 
and commercial consumer samples. In the absence of air cleaner 
ownership and usage information in both datasets, for the residential 
sector, DOE included all household samples, but adjusted the 
residential sample weights based on the geographic distribution of air 
cleaner stocks reported by TechSci Research, and the number of air 
cleaners per sample based on household size. For the commercial sector, 
DOE excluded the vacant and non-used buildings from the CBECS 2018 
samples and adjusted the remaining building sample weights based on the 
building occupancy, the square footage of the climate-controlled space, 
and the stock distribution by building principal activity reported by 
TechSci Research.
---------------------------------------------------------------------------

    \34\ U.S. Department of Energy--Energy Information 
Administration. Residential Energy Consumption Survey. 2020. 
www.eia.gov/consumption/residential/data/2020/.
    \35\ U.S. Department of Energy--Energy Information 
Administration. Commercial Buildings Energy Consumption Survey. 
2018. www.eia.gov/consumption/commercial/data/2018/.
---------------------------------------------------------------------------

    Daikin requested that DOE disclose its methodology and results of 
the Annual Energy Use assessment. Daikin recognizes that the actual 
hours of operation will obviously have a significant impact on the 
annual energy consumption of a product. (Daikin, No. 12 at p. 6) NEEA 
stated it typically estimates average operation to be 8 hours per day 
based on seasonal operation or part-day operation, but noted that the 
Northwest Regional Technical Forum estimates 16 hours per day. (NEEA, 
No. 11 at p. 5)
    The DOE test procedure produces standardized results that can be 
used to assess or compare the performance of products operating under 
specified laboratory conditions. The test procedure assumes air 
cleaners are used 16 hours of the day on active mode (maximum power) 
and 8 hours on standby mode which aligns with the ENERGY STAR 
description.\36\ Actual energy usage in the field often differs from 
that estimated by the test procedure because of variation in operating 
conditions, the behavior of users, and other factors.
---------------------------------------------------------------------------

    \36\ ENERGY STAR Certified Room Air Cleaners Database. 
Description of ``Annual Energy Use (kWh/yr)'' ``This is the 
estimated annual energy use of the room air cleaner under typical 
conditions, including the energy used in active modes and partial on 
modes . . . The active mode [. . .] is on average 16 hours active 
and 8 hours inactive per day. Actual energy consumption will vary 
depending on various factors such as the amount of usage in active 
model and the settings chosen.'' data.energystar.gov/Active-Specifications/ENERGY-STAR-Certified-Room-Air-Cleaners/jmck-i55n/data.
---------------------------------------------------------------------------

    To estimate the actual annual air cleaner energy consumption in the 
residential sector, DOE relied on the RECS 2020 consumer sample, in 
conjunction with the county-based 2020 air quality data published by 
the EPA,\37\ and a market research report conducted by Evergreen 
Economics \38\ submitted by stakeholders to determine the annual 
operating hours. DOE estimated that the air cleaners operated on 
average 10.6 hours per day, and 248 days per year in the residential 
sector.
---------------------------------------------------------------------------

    \37\ U.S. Environmental Protection Agency. Air Quality System. 
Air Quality Index per County. 2020. www.epa.gov/air-trends/air-quality-cities-and-counties.
    \38\ Evergreen Economics. Air Purifier Study Results. February 
8, 2021. The document can be found in docket, www.regulations.gov/comment/EERE-2021-BT-STD-0035-0009.
---------------------------------------------------------------------------

    To determine the commercial sector air cleaner annual energy 
consumption, DOE used the CBECS 2018 building sample regarding the 
reported building principal activities, building schedule and occupancy 
information. DOE estimated an average of 4,198 annual operating hours, 
which is equivalent to 12.9 operating hours per day and 325 operating 
days per year.
    Chapter 7 of the direct final rule TSD provides details on DOE's 
energy use analysis for air cleaners.

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 
air cleaners. 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:
     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.
     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 air cleaners 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 U.S. 
households and commercial buildings. As stated previously, DOE 
developed household samples from the RECS 2020 and commercial building 
samples from the CBECS 2018. For each sample household, DOE determined 
the energy consumption for the air cleaners and the appropriate energy 
price. By developing a representative sample of households

[[Page 21777]]

and commercial buildings, the analysis captured the variability in 
energy consumption and energy prices associated with the use of air 
cleaners.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer 
markups, and sales taxes--and filter 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 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 air cleaner user samples. For this 
rulemaking, the Monte Carlo approach is implemented in MS Excel 
together with the Crystal Ball\TM\ add-on.\39\ The model calculated the 
LCC for products at each efficiency level for 10,000 housing units and 
commercial building 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 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. DOE calculated the LCC for 
consumers of air cleaners as if each were to purchase a new product in 
the first year of required compliance with new or amended standards. 
New standards apply to air cleaners manufactured five years after the 
date on which any new standard is published. (42 U.S.C. 6295(l)(2)) 
However, on August 23, 2022, DOE received a Joint Proposal from the 
Joint Stakeholders regarding energy conservation standards for air 
cleaners recommending a two-tier approach. Therefore, DOE used 2024 and 
2026 as the first years of compliance in one of the scenarios analyzed 
based on the Joint Proposal's two-tier standard recommendation, and 
used 2028 as the first year of compliance with any new standards for 
air cleaners for the other scenarios analyzed based on the statutory 
requirement.
---------------------------------------------------------------------------

    \39\ 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 July 6, 2018).
---------------------------------------------------------------------------

    Table IV.13 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 direct final rule TSD and its appendices.

 Table IV.13--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 Cost.................  No change with efficiency level.
Annual Energy Use.................  The total annual energy use by
                                     operating mode multiplied by the
                                     hours per year. Variability: Based
                                     on the RECS 2020 and CBECS 2018.
Energy Prices.....................  Electricity: Based on Edison
                                     Electric Institute data for 2021.
                                    Variability: Regional energy prices
                                     determined for 50 states and
                                     Washington DC.
Energy Price Trends...............  Based on AEO2022 price projections.
Repair and Maintenance Costs......  Considered filter change cost only.
                                     Filter change frequency assumed to
                                     be associated with usage. On
                                     average 1.7 filters used per year
                                     for residential sector and 2
                                     filters used per year for
                                     commercial sector.
Product Lifetime..................  Average: 9.0 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...................  2024/2026 for tiered trial standard
                                     level (TSL) and 2028 for the other
                                     TSLs.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
  mentioned in this table are provided in the sections following the
  table or in chapter 8 of the direct final rule 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. An 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 air 
cleaners, DOE obtained historical Producer Price Index (``PPI'') data 
for air cleaners from the Bureau of Labor Statistics (``BLS''). A PPI 
for ``small electric household appliances'' was available for the time 
period between 1982 and 2015.\40\ However, the small electric household 
appliances PPI was discontinued beyond 2015 due to insufficient sample 
size. To extend the price index beyond 2015, DOE assumed that the more 
aggregated product series, small electrical appliances price index, is 
representative of the trend of small electric household appliances. 
Inflation-adjusted price indices were calculated by dividing the PPI 
series by the gross

[[Page 21778]]

domestic product index from Bureau of Economic Analysis for the same 
years. Using data from 1982-2021, the estimated learning rate (defined 
as the fractional reduction in price expected from each doubling of 
cumulative production) is 6 percent. DOE assumed that the air cleaner 
manufacturers do not typically manufacture the air filters themselves; 
thus, DOE applied the price learning to the non-filter portion of the 
cost only.
---------------------------------------------------------------------------

    \40\ U.S. Bureau of Labor Statistics, PPI Industry Data, Small 
electric household appliance manufacturers, Product series ID: 
PCU33521033521014. Data series available at: www.bls.gov/ppi/.
---------------------------------------------------------------------------

2. Installation Cost
    Installation costs include labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE found no data 
showing that installation costs would be impacted with increased 
efficiency levels.
3. Annual Energy Consumption
    For each sampled household and commercial building, DOE determined 
the energy consumption for air cleaners at different efficiency levels 
using the approach described previously in section IV.E of this 
document.
4. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2021 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kWh costs to the customer as charged by investor-
owned utilities. For the residential sector, DOE calculated electricity 
prices using the methodology described in Coughlin and Beraki 
(2018).\41\ For the commercial sector, DOE calculated electricity 
prices using the methodology described in Coughlin and Beraki 
(2019).\42\
---------------------------------------------------------------------------

    \41\ 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. 
https://ees.lbl.gov/publications/residential-electricity-prices-review.
    \42\ Coughlin, K. and B. Beraki. 2019. Non-residential 
Electricity Prices: A Review of Data Sources and Estimation Methods. 
Lawrence Berkeley National Lab. Berkeley, CA. Report No. LBNL-
2001203. https://ees.lbl.gov/publications/non-residential-electricity-prices.
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 2021 
energy prices by the projection of annual average price changes for 
each of the nine census divisions from the reference case in AEO2022, 
which has an end year of 2050.\43\ For the years after 2050, DOE held 
constant the 2050 electricity prices.
---------------------------------------------------------------------------

    \43\ U.S. Department of Energy--Energy Information 
Administration. Annual Energy Outlook 2022 with Projections to 2050. 
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last 
accessed December 9, 2022).
---------------------------------------------------------------------------

    See chapter 8 of the direct final rule TSD for details.
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. Typically, 
small incremental increases in product efficiency entail no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products.
    In this direct final rule analysis, DOE included no changes in 
maintenance or repair costs for air cleaners that exceed the baseline 
efficiency other than the filter change costs. As described in section 
IV.C of this document, differences in filter size, shape, and material 
lead to variations in filter costs at each efficiency level within each 
product class. DOE determined that replacement filters have the same 
distribution channels and markups as the air cleaner units. No price 
learning was considered and applied to the filter change costs. Based 
on the information received from the manufacturer interviews, for 
commercial buildings, DOE estimated a flat filter change frequency of 
twice per year. For the residential sector, DOE associated the filter 
change frequency with the air cleaner usage. DOE correlated higher 
filter change frequency with higher operating hours with the highest 
frequency of once every six months and the lowest frequency of once per 
year. This filter change rate aligns with the range suggested by 
manufacturer interviews. DOE also takes into account that a small 
percentage of consumers may never change the air cleaner filters.
6. Product Lifetime
    For air cleaners, DOE developed a distribution of lifetimes from 
which specific values are assigned to the appliances in the samples. 
DOE ensured that the average lifetime estimate of 9 years aligned with 
those lifetime estimates suggested by ENERGY STAR,\44\ and by CA IOUs 
(who cited EPA and various State Technical Reference Manuals). (CA 
IOUs, No. 9 at p. 2) NEEA also cited an estimated lifetime of 9 years. 
(NEEA, No. 11 at p. 5)
---------------------------------------------------------------------------

    \44\ Room Air Cleaners Final Version 2.0 Program Requirements--
Data and Analysis Package. October 2019. www.energystar.gov/products/spec/room_air_cleaners_version_2_0_pd.
---------------------------------------------------------------------------

7. Discount Rates
    In the calculation of LCC, DOE applies discount rates appropriate 
to households and commercial buildings to estimate the present value of 
future operating cost savings. DOE estimated a distribution of discount 
rates for air cleaners 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.\45\ 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, 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.
---------------------------------------------------------------------------

    \45\ 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. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    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 triennial Survey of Consumer

[[Page 21779]]

Finances \46\ (``SCF'') starting in 1995 and ending in 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 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.
---------------------------------------------------------------------------

    \46\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------

    For commercial consumers, DOE used the cost of capital to estimate 
the present value of cash flows to be derived from a typical company 
project or investment. Most companies use both debt and equity capital 
to fund investments, so the cost of capital is the weighted-average 
cost to the firm of equity and debt financing. This corporate finance 
approach is referred to as the weighted-average cost of capital. DOE 
used currently available economic data in developing discount rates. 
See chapter 8 of the direct final rule TSD for further details on the 
development of consumer 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 air cleaners for 
2028 (as well as 2024 and 2026), DOE combined market share information 
submitted by manufacturers \47\ and model efficiency distribution from 
the ENERGY STAR database, and assumed no annual efficiency improvement 
for the no-new-standards case. The estimated market shares for the no-
new-standards case for air cleaners are shown in Table IV.14. See 
chapter 8 of the direct final rule TSD for further information on the 
derivation of the efficiency distributions.
---------------------------------------------------------------------------

    \47\ https://www.regulations.gov/comment/EERE-2021-BT-STD-0035-0018.

                                   Table IV.14--No-New-Standards Case Efficiency Distribution for Air Cleaners in 2028
                                                                 (and in 2024 and 2026)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        PC                               PC1: 10-100 PM2.5 CADR            PC2: 100-150 PM2.5 CADR            PC3: 150+ PM2.5 CADR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                   Market Share                                    26%                               24%                               50%
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Efficiency                        Efficiency                        Efficiency
                        EL                           (PM2.5 CADR/W)    Market share    (PM2.5 CADR/W)    Market share    (PM2.5 CADR/W)    Market share
                                                                            (%)                               (%)                               (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline..........................................              1.53            28.0              1.53            24.4              1.20            22.2
1.................................................              1.69            42.1              1.90            36.6              2.01            33.3
2.................................................              1.89            19.1              2.39            28.1              2.91            37.7
3.................................................              3.37             7.5              5.44            10.5              6.55             3.1
4.................................................              5.40             3.3             12.75             0.4              7.41             3.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the air cleaner 
purchased by each sample household and commercial building in the no-
new-standards case. The resulting percent shares within the sample 
match the market shares in the efficiency distributions.
9. Payback Period Analysis
    The payback period is the amount of time (expressed in years) it 
takes the consumer to recover the additional installed cost of more-
efficient products, compared to baseline products, through energy cost 
savings. 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. DOE 
refers to this as a ``simple PBP'' because it does not consider changes 
over time in operating cost savings. The PBP calculation uses the same 
inputs as the LCC analysis when deriving first-year operating costs.
    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 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.\48\ 
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.
---------------------------------------------------------------------------

    \48\ 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.
---------------------------------------------------------------------------

    While demand for the replacement of existing products is dependent 
only on past shipments and estimated product lifetimes, new demand must 
be independently projected into the future. DOE projected new demand by 
estimating new demand in 2020, and applying an annual growth rate. In 
order to estimate new demand in 2020, DOE took estimates of past 
shipments (2007-2020) from a EuroMonitor product sales

[[Page 21780]]

report \49\ and estimated lifetimes to calculate an amount of retiring 
units in 2020. Overall new demand in 2020 was computed as the 
difference between the EuroMonitor estimate of all units shipped that 
year, and the estimated retirement demand. Separately, DOE estimated an 
average annual shipments growth rate of 4.87 percent from the 2021-2028 
shipments projection provided by EuroMonitor which is a more 
conservative estimate compared to the 7 percent annual shipments growth 
rate estimated by the TechSci Research report.\50\ New demand was 
projected using this annual growth rate. In all shipments projection 
years, based on the TechSci Research data, DOE assumed that 40 percent 
of shipments were directed to the commercial sector, and 60 percent 
were directed to the residential sector. For both sectors and based on 
manufacturers data, DOE also estimated that 26 percent of shipments 
were comprised of 10-99 CADR units, 24 percent were comprised of 100-
149 CADR units, and the remaining 50 percent were >=150 CADR units.
---------------------------------------------------------------------------

    \49\ Euromonitor International. 2021. Air treatment products in 
the U.S. December. www.euromonitor.com/air-treatment-products-in-the-us/report.
    \50\ TechSci Research. 2022. United States air purifier market, 
forecast and opportunity. June 2022. www.techsciresearch.com/report/us-air-purifier-market/3711.html.
---------------------------------------------------------------------------

H. National Impact Analysis

    The NIA assesses the national energy savings (``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.\51\ (``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 air cleaners sold through 2057.
---------------------------------------------------------------------------

    \51\ The NIA accounts for impacts in the 50 states and U.S. 
territories.
---------------------------------------------------------------------------

    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.15 summarizes the inputs and methods DOE used for the NIA 
analysis for the direct final rule. Discussion of these inputs and 
methods follows Table IV.15. See chapter 10 of the direct final rule 
TSD for further details.

   Table IV.15--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
             Inputs                               Method
------------------------------------------------------------------------
Shipments.......................  Annual shipments from shipments model.
Compliance Date of Standard.....  2024/2026 (Tiered TSL), 2028 (other
                                   TSLs).
Efficiency Trends...............  No-new-standards case: fixed
                                   efficiency distribution provided by
                                   manufacturers with no annual
                                   improvements.
                                  Standard cases: No-new-standards case
                                   market share below the standard level
                                   is rolled up to the minimum
                                   qualifying level.
Annual Energy Consumption per     Annual weighted-average values are a
 Unit.                             function of energy use at each TSL.
Total Installed Cost per Unit...  Annual weighted-average values are a
                                   function of cost at each TSL.
                                  Incorporates projection of future
                                   product prices based on historical
                                   data.
Annual Energy Cost per Unit.....  Annual weighted-average values as a
                                   function of the annual energy
                                   consumption per unit and energy
                                   prices.
Repair and Maintenance Cost per   Annual values estimated in the LCC
 Unit.                             analysis do not change across the
                                   analysis period except for the first
                                   year.
Energy Price Trends.............  AEO2022 projections (to 2050) and
                                   constant values thereafter.
Energy Site-to-Primary and FFC    A time-series conversion factor based
 Conversion.                       on AEO2022.
Discount Rate...................  Three and seven percent.
Present Year....................  2022.
------------------------------------------------------------------------

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 
a new standard. In the no-new-standards case, DOE determined that the 
present efficiency distribution would remain fixed over time due to the 
lack of evidence of efficiency improvement in the no-new-standards 
case. The approach is further described in chapter 10 of the direct 
final rule 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 (2024 and 2026 for TSL3 and 2028 for 
the other TSLs). 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

[[Page 21781]]

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 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 AEO2022. 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 and reduction in 
operating cost. However, DOE did not find any data on a rebound effect 
specific to air cleaners, and so applied no rebound for air cleaners.
    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 \52\ 
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 direct final rule TSD.
---------------------------------------------------------------------------

    \52\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2018, DOE/EIA-0581(2019), April 2019. 
Available at www.eia.gov/outlooks/aeo/nems/overview/pdf/0581(2018).pdf (last accessed December 5, 2022).
---------------------------------------------------------------------------

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 air 
cleaners price trends based on an experience curve that depends on 
cumulative product shipments. DOE applied the same trends to the non-
filter part of the projected prices for each product class at each 
considered efficiency level. By 2057, which is the end date of the 
projection period, the average air cleaner price is projected to drop 
17 percent relative to 2021. DOE's projection of product prices is 
described in chapter 8 of the direct final rule 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 air 
cleaners. In addition to the default price trend, DOE considered two 
product price sensitivity cases: (1) a high price decline case based on 
the small electric household appliance PPI from 2014 to 2021, and (2) a 
low price decline case based on the small electric household appliance 
PPI from 2009 to 2014. The derivation of these price trends and the 
results of these sensitivity cases are described in appendix 10C of the 
direct final rule TSD.
    The operating cost savings consist of repair and maintenance costs 
savings, and energy cost savings. The repair and maintenance cost 
savings are estimated based on the filter change frequency and costs in 
the LCC analysis, which are held constant during the lifetime of the 
air cleaner in the NIA except for the first year.\53\ 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 multiplied the average regional 
energy prices by the projection of annual national-average residential 
energy price changes in the Reference case from AEO2022, which has an 
end year of 2050. To estimate price trends after 2050, the 2050 value 
was used for all years. As part of the NIA, DOE also analyzed scenarios 
that used inputs from variants of the AEO2022 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 10C of the direct final rule 
TSD.
---------------------------------------------------------------------------

    \53\ A new air cleaner unit usually comes with a new filter, 
which is why the first year of operation has a lower repair and 
maintenance cost compared to the other years during the lifetime of 
a unit.
---------------------------------------------------------------------------

    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
direct final rule, 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.\54\ The discount rates 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.
---------------------------------------------------------------------------

    \54\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed 
December 9, 2022).
---------------------------------------------------------------------------

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

[[Page 21782]]

impacts and PBP for those particular consumers from alternative 
standard levels. For this direct final rule, DOE analyzed the impacts 
of the considered standard levels on three subgroups: (1) low-income 
households, (2) senior-only households and (3) small businesses. There 
may be other subgroups affected by standards for air cleaners, e.g., 
those with occupants who have chronic respiratory health conditions. 
However, DOE does not have information indicating that these consumers 
may be disproportionately affected by new air cleaner standards and DOE 
did not analyze these consumers as a separate consumer subgroup. The 
analysis used subsets of the RECS 2020 and CBECS 2018 samples composed 
of households and commercial buildings that meet the criteria for the 
considered 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 direct final rule TSD describes the 
consumer subgroup analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of new 
energy conservation standards on manufacturers of air cleaners 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 new energy conservation 
standards might affect manufacturing employment, 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 standards cases. To capture the 
uncertainty relating to manufacturer pricing strategies following 
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 direct final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the air cleaners manufacturing 
industry based on the market and technology assessment, preliminary 
manufacturer interviews, and publicly-available information. This 
included a top-down analysis of air cleaner 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 public sources of information to further calibrate its 
initial characterization of the air cleaners manufacturing industry, 
including results of the engineering analysis, the U.S. Census Bureau's 
``Economic Census,'' \55\ and reports from Dunn & Bradstreet.\56\
---------------------------------------------------------------------------

    \55\ The U.S. Census Bureau. Quarterly Survey of Plant Capacity 
Utilization. Available at www.census.gov/programs-surveys/qpc/data/tables.html.
    \56\ 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 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 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 air cleaners 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 typically conducts structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE typically discusses engineering, manufacturing, procurement, and 
financial topics to validate assumptions used in the GRIM and to 
identify key issues or concerns. For this air cleaners rulemaking, DOE 
conducted preliminary interviews that focused on key issues, product 
classes, and the engineering analysis. As part of Phase 3, DOE also 
evaluated subgroups of manufacturers that may be disproportionately 
impacted by 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 (``LVMs''), 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, ``Review under the Regulatory Flexibility 
Act'' and in chapter 12 of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
standards that result in a higher or lower industry value. The GRIM 
uses a standard, annual discounted cash-flow analysis that incorporates 
manufacturer costs, 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 energy conservation standard. The GRIM spreadsheet uses the 
inputs to arrive at a series of annual cash flows, beginning in 2023 
(the base

[[Page 21783]]

year of the analysis) and continuing to 2057. DOE calculated INPVs by 
summing the stream of annual discounted cash flows during this period. 
For manufacturers of air cleaners, DOE used a real discount rate of 6.6 
percent. Given the lack of publicly-listed original equipment 
manufacturers (OEMs) of air cleaners, DOE relied on industry parameters 
from the portable air conditioners final rule published in January 
2020. 85 FR 1378 (Jan. 9, 2020). In reviewing other appliance standards 
rulemakings where DOE had sufficient data to estimate product-specific 
manufacturer markups and other financial parameters, DOE found portable 
air conditioners to be the most recent rulemaking covering a product 
similar to air cleaners in terms of product and market attributes.
    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 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, 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 
direct final rule TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient products is typically more expensive 
than manufacturing baseline products due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the manufacturer production costs (``MPCs'') of covered 
products can affect the revenues, gross margins, and cash flow of the 
industry.
    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 interpolate to define ``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 rulemaking, DOE applied a hybrid approach of efficiency-
level and design-option approaches described above. This approach 
involved reviewing publicly available efficiency data and physically 
disassembling commercially available products. From this information, 
DOE estimated the MPCs for a range of products available at that time 
on the market. DOE then analyzed the steps manufacturers took to 
improve product efficiencies. In its analysis, DOE determined that 
manufacturers would likely rely on certain design options to reach 
higher efficiencies. From this information, DOE estimated the cost and 
efficiency impacts of incorporating specific design options at each 
efficiency level. For a complete description of the MPCs, see chapter 5 
of the direct final rule TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. 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 2023 (the base year) to 2057 (the end year of 
the analysis period). See chapter 9 of the direct final rule TSD for 
additional details.
c. Product and Capital Conversion Costs
    Energy conservation standards could cause manufacturers to incur 
conversion costs to bring their production facilities and product 
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 
energy conservation standards.
    To evaluate the level of product conversion costs industry would 
likely incur to comply with n energy conservation standard, DOE 
evaluated the testing costs for manufacturers to certify models to DOE 
and the investments necessary to update product designed to comply with 
standards. DOE relied on testing costs from the March 2023 TP Final 
Rule, which estimated $6,000 for 3rd party lab testing of a basic 
model. To estimate investment levels, DOE relied on financial 
parameters to estimate annual spending on R&D complexity of design 
options; and percentage of industry shipments that would require 
redesign. Product conversion costs by efficiency level are presented in 
Table IV.16 through Table IV.18. To evaluate the level of capital 
conversion costs for the industry, DOE relied on its product teardowns 
and analysis of the equipment and tooling required to produce 
conventional air cleaners. The conversion cost estimates are driven by 
the number of injection mold dies that would require replacement as a 
result of standards. Capital conversion costs by efficiency level are 
presented in Table IV.16 through Table IV.18.

    Table IV.16--Conversion Cost ($M) for PC1 (10 <= PM2.5 CADR <100)
------------------------------------------------------------------------
                                              Product         Capital
            Efficiency level                conversion      conversion
                                               cost            cost
------------------------------------------------------------------------
1.......................................            $3.6            $6.1
2.......................................             9.0             8.4
3.......................................            19.0            14.2
4.......................................            20.6            15.1
------------------------------------------------------------------------


[[Page 21784]]


   Table IV.17--Conversion Cost ($M) for PC2 (100 <= PM2.5 CADR <150)
------------------------------------------------------------------------
                                              Product         Capital
            Efficiency level                conversion      conversion
                                               cost            cost
------------------------------------------------------------------------
1.......................................            $3.1            $5.6
2.......................................             7.8             7.6
3.......................................            26.7            13.9
4.......................................            29.8            15.0
------------------------------------------------------------------------


      Table IV.18--Conversion Cost ($M) for PC3 (PM2.5 CADR >=150)
------------------------------------------------------------------------
                                              Product         Capital
            Efficiency level                conversion      conversion
                                               cost            cost
------------------------------------------------------------------------
1.......................................            $6.9            $5.5
2.......................................            17.2             7.3
3.......................................            48.5            14.3
4.......................................            50.1            14.7
------------------------------------------------------------------------

    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the direct final rule and the year 
by which manufacturers must comply with the new standard. For 
additional information on the estimated capital and product conversion 
costs, see chapter 12 of the direct final rule 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 scenarios to represent uncertainty 
regarding the potential impacts on prices and profitability for 
manufacturers following the implementation of a 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 
31 percent for all air cleaners.\57\ This scenario represents a high 
bound of industry profitability under an energy conservation standard.
---------------------------------------------------------------------------

    \57\ The gross margin percentage of 31 percent is based on 
manufacturer markup of 1.45.
---------------------------------------------------------------------------

    Under 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 expected compliance 
date of the standards. The implicit assumption behind this scenario is 
that the industry can only maintain its operating profit in absolute 
dollars after the standard takes effect. A comparison of industry 
financial impacts under the two scenarios is presented in section 
V.B.2.a of this document.
3. Discussion of MIA Comments
    In response to the request for comment published in January 2022, 
Molekule stated manufacturers may incur costs if energy efficiency 
redesign results in a repeat verification and testing for the Federal 
Drug Administration (FDA)-cleared device requirements. Additionally, 
manufacturers may need to re-submit new Premarket Notifications 510(k) 
to the FDA. (Molekule, No. 11, pp. 3-4)
    DOE evaluated the FDA requirements and does not anticipate air 
cleaner standards affecting submissions of Premarket Notifications 
510(k) because any design options that (1) significantly affect the 
safety or effectiveness of the device or (2) change or modify the 
intended use of the device would be screened out in the screening 
analysis. Thus, DOE's analysis does not include costs for Premarket 
Notifications 510(k) verification.

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 in 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 emission 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 direct final rule TSD. 
The analysis presented in this document uses projections from AEO2022.
    Power sector emissions of CH4 and N2O from 
fuel combustion are estimated using Emission Factors for Greenhouse Gas 
Inventories published by EPA.\58\
---------------------------------------------------------------------------

    \58\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (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 direct final rule 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 NIA.

[[Page 21785]]

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. AEO2022 generally represents current 
legislation and environmental regulations, including recent government 
actions, that were in place at the time of preparation of AEO2022, 
including the emissions control programs discussed in the following 
paragraphs.\59\
---------------------------------------------------------------------------

    \59\ For further information, see the Assumptions to AEO2022 
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 December 5, 2022).
---------------------------------------------------------------------------

    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.\60\ AEO2022 
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).\61\ 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.
---------------------------------------------------------------------------

    \60\ 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), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
    \61\ In Sept. 2019, the DC Court of Appeals remanded the 2016 
CSAPR Update to EPA. In April 2021, EPA finalized the 2021 CSAPR 
Update which resolved the interstate transport obligations of 21 
states for the 2008 ozone NAAQS. 86 FR 23054 (April 30, 2021); see 
also, 86 FR 29948 (June 4, 2021) (correction to preamble). The 2021 
CSAPR Update became effective on June 29, 2021. The release of AEO 
2022 in February 2021 predated the 2021 CSAPR Update.
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of 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 plants must have either flue 
gas desulfurization or dry sorbent injection systems installed. Both 
technologies, which are used to reduce 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 will generally reduce SO2 emissions. 
DOE estimated SO2 emissions reduction using emissions 
factors based on AEO2022.
    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 AEO2022 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 
AEO2022, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this direct final 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 considered in this direct final rule.
    To monetize the benefits of reducing greenhouse gas emissions this 
analysis uses the interim 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 
Interagency Working Group on the Social Cost of Greenhouse Gases (IWG).
    DOE requests comment on how to address the climate benefits and 
other non-monetized effects of this direct final rule.
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

[[Page 21786]]

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 direct final rule 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 published 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. 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, 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.
    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) 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 social cost of methane (SC-CH4) and nitrous 
oxide (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.\62\ 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).\63\ 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.
---------------------------------------------------------------------------

    \62\ 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.
    \63\ 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 
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 omitted effects 
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

[[Page 21787]]

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 direct final 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,\64\ and 
recommended that discount rate uncertainty and relevant aspects of 
intergenerational ethical considerations be accounted for in selecting 
future discount rates.
---------------------------------------------------------------------------

    \64\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. (Last accessed April 15, 
2022.) www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf; 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. (Last accessed 
April 15, 2022.) www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact; 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. 
(Last accessed January 18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf; 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. (Last accessed January 
18, 2022.) www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf.
---------------------------------------------------------------------------

    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% and 7% 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% discount rate 
is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented 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 the previous 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 were 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

[[Page 21788]]

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.\65\ 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 recommended that, taken 
together, the limitations suggest that the interim SC-GHG estimates 
used in this direct final rule likely underestimate the damages from 
GHG emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \65\ 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/.
    \66\ 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.
    \67\ See EPA, Revised 2023 and Later Model Year Light-Duty 
Vehicle GHG Emissions Standards: Regulatory Impact Analysis, 
Washington, DC, December 2021. Available at www.epa.gov/system/files/documents/2021-12/420r21028.pdf (last accessed January 13, 
2022).
    \68\ 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. www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf?so
urce=email.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this DFR are discussed in the 
following sections, and the results of DOE's analyses estimating the 
benefits of the reductions in emissions of these GHGs are presented in 
section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this direct final rule were 
based on the values in the IWG's February 2021 TSD. Table IV.19 shows 
the updated sets of SC-CO2 estimates from the IWG's TSD in 
5-year increments from 2020 to 2050. The full set of annual values that 
DOE used is presented in Appendix 14-A of the direct final rule 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.\66\

                    Table IV.19--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
                                           [2021$ Per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                                    Discount rate and statistic
                                                 ---------------------------------------------------------------
                                                        5%              3%             2.5%             3%
                      Year                       ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
2025............................................              18              59              86             176
2030............................................              20              64              93             194
2035............................................              23              70             100             214
2040............................................              26              76             107             234
2045............................................              30              82             114             253
2050............................................              33              88             121             271
----------------------------------------------------------------------------------------------------------------

    For 2051 to 2070, DOE used SC-CO2 estimates published by 
EPA, adjusted to 2021$.\67\ These estimates are based on methods, 
assumptions, and parameters identical to the 2020-2050 estimates 
published by the IWG.
    DOE multiplied the CO2 emissions reduction estimated for 
each year by the SC-CO2 value for that year in each of the 
four cases. DOE adjusted the values to 2021$ using the implicit price 
deflator for gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. 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.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
direct final rule were based on the values developed for the February 
2021 TSD.\68\ Table IV.20 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 14-A of the direct final rule 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

[[Page 21789]]

recommended by the IWG. DOE derived values after 2050 using the 
approach described above for the SC-CO2.

                                  Table IV.20--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        1,500        2,000        3,900        5,800       18,000       27,000       48,000
2025............................................          800        1,700        2,200        4,500        6,800       21,000       30,000       54,000
2030............................................          940        2,000        2,500        5,200        7,800       23,000       33,000       60,000
2035............................................        1,100        2,200        2,800        6,000        9,000       25,000       36,000       67,000
2040............................................        1,300        2,500        3,100        6,700       10,000       28,000       39,000       74,000
2045............................................        1,500        2,800        3,500        7,500       12,000       30,000       42,000       81,000
2050............................................        1,700        3,100        3,800        8,200       13,000       33,000       45,000       88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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. DOE 
adjusted the values to 2021$ using the implicit price deflator for 
gross domestic product (``GDP'') from the Bureau of Economic Analysis. 
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.
2. Monetization of Other Emissions Impacts
    For this direct final rule, 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.\69\ 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 and 2030, 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 range; for years beyond 2040 the values are held constant. DOE 
derived values specific to the sector for air cleaners using a method 
described in appendix 14B of the direct final rule TSD.
---------------------------------------------------------------------------

    \69\ Estimating the Benefit per Ton of Reducing PM2.5 
Precursors from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
---------------------------------------------------------------------------

    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 the changes in installed 
electrical capacity and generation projected to result for each 
considered TSL. The analysis is based on published output from the NEMS 
associated with AEO2022. 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 
AEO2022 Reference case and various side cases. Details of the 
methodology are provided in the appendices to chapters 13 and 15 of the 
direct final rule 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 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 employees of 
manufacturers of the products subject to standards.\70\ 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.
---------------------------------------------------------------------------

    \70\ 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 the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the

[[Page 21790]]

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.\71\ 
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.
---------------------------------------------------------------------------

    \71\ 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 July 1, 2021).
    \72\ 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's Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
    \73\ EL 1 also corresponds to individual standards established 
by certain states and the District of Columbia.
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this direct final rule using an input/output model 
of the U.S. economy called Impact of Sector Energy Technologies version 
4 (``ImSET'').\72\ 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.
    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, where these uncertainties are reduced. For 
more details on the employment impact analysis, see chapter 16 of the 
direct final rule 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 air 
cleaners. It addresses the TSLs examined by DOE, the projected impacts 
of each of these levels if adopted as energy conservation standards for 
air cleaners, and the standards levels that DOE is adopting in this 
direct final rule. Additional details regarding DOE's analyses are 
contained in the direct final rule TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential standards for 
products and equipment by grouping individual efficiency levels for 
each class into TSLs. Use of TSLs allows DOE to identify and consider 
manufacturer cost interactions between the air cleaner product 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 the analysis conducted for this direct final rule, DOE analyzed 
the benefits and burdens of five TSLs for air cleaners. DOE developed 
TSLs that combine efficiency levels for each analyzed product class. 
DOE presents the results for the TSLs in this document, while the 
results for all efficiency levels that DOE analyzed are in the direct 
final rule TSD.
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential energy conservation standards for 
air cleaners. TSL 5 represents the maximum technologically feasible 
(``max-tech'') energy efficiency for all product classes and 
corresponds to EL 4 for all product classes. TSL 4 represents an 
intermediate efficiency level and corresponds to EL 3 for all product 
classes. TSL 3 corresponds to the two-tier approach from the Joint 
Proposal which comprises efficiency level EL 1 \73\ for Tier 1 
standards (going to effect in 2024) and the current ENERGY STAR V.2.0 
efficiency level (EL 2) for Tier 2 standards (going to effect in 2026) 
for all the product classes. TSL 2 comprises the current ENERGY STAR 
V.2.0 efficiency level (EL 2) for all product classes. TSL 1 represents 
EL 1 for all product classes. For all TSLs other than TSL 3, the 
compliance year is considered to be 2028.

                                                    Table V.1--Trial Standard Levels for Air Cleaners
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         PC1: 10-100 PM2.5 CADR            PC2: 100-150 PM2.5 CADR           PC2: 100-150 PM2.5 CADR
                                                   -----------------------------------------------------------------------------------------------------
           TSL                 Compliance year                         Efficiency                        Efficiency                        Efficiency
                                                      Efficiency     (PM2.5 CADR/W)     Efficiency     (PM2.5 CADR/W)     Efficiency     (PM2.5 CADR/W)
                                                         level                             level                             level
--------------------------------------------------------------------------------------------------------------------------------------------------------
1........................  2028...................               1               1.7               1               1.9               1               2.0
2........................  2028...................               2               1.9               2               2.4               2               2.9
3........................  2024 (Tier 1)..........               1               1.7               1               1.9               1               2.0
                           2026 (Tier 2)..........               2               1.9               2               2.4               2               2.9
4........................  2028...................               3               3.4               3               5.4               3               6.6
5........................  2028...................               4               5.4               4              12.8               4               7.4
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on air cleaner consumers by 
looking at the effects that potential 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

[[Page 21791]]

operating costs decrease.\74\ 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 and a discount 
rate. Chapter 8 of the direct final rule TSD provides detailed 
information on the LCC and PBP analyses.
---------------------------------------------------------------------------

    \74\ For air cleaners, operating costs may increase at certain 
efficiency levels as filter costs increase due to recurring costs 
for filter replacements.
---------------------------------------------------------------------------

    Table V.2 through Table V.7 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, the 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 Product Class 1: 10-100 PM2.5 CADR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average costs (2021$)
                                                     ----------------------------------------------------------------  Simple payback   Average lifetime
         TSL *                Efficiency level                         First year's      Lifetime                          (years)           (years)
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Baseline....................             $64             $13            $117            $181  ................               9.0
1                       1...........................              65              11              98             163               0.9               9.0
2                       2...........................              67              10              91             158               1.4               9.0
3 **                    1...........................              65              11              98             163               0.9               9.0
                        2...........................              67              10              91             158               1.4               9.0
4                       3...........................              78              15             178             255                NA               9.0
5                       4...........................              86              14             176             262                NA               9.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
* All TSLs except TSL 3 have a compliance year of 2028.
** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance year.


   Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Product Class 1: 10-100 PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                             Life-cycle cost savings
                                                               -------------------------------------------------
                TSL **                     Efficiency level                                Percent of consumers
                                                                 Average LCC savings *     that experience net
                                                                        (2021$)                 cost  (%)
----------------------------------------------------------------------------------------------------------------
1....................................                        1                      $18                        0
2....................................                        2                       12                        6
3 ***................................                        1                       18                        0
                                                             2                       12                        6
4....................................                        3                     (87)                       88
5....................................                        4                     (87)                       94
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.


                                     Table V.4--Average LCC and PBP Results for Product Class 2: 100-150 PM2.5 CADR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average costs (2021$)
                                                     ----------------------------------------------------------------  Simple payback   Average lifetime
         TSL *                Efficiency level                         First year's      Lifetime                          (years)           (years)
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Baseline....................             $88             $31            $273            $361  ................               9.0
1                       1...........................              90              26             232             322               0.4               9.0
2                       2...........................              92              22             195             287               0.5               9.0
3 **                    1...........................              90              26             232             322               0.4               9.0
                        2...........................              92              22             195             287               0.5               9.0
4                       3...........................             101              24             280             381                NA               9.0
5                       4...........................             109              17             207             317               1.6               9.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
* All TSLs except TSL 3 have a compliance year of 2028.

[[Page 21792]]

 
** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance year.


   Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Product Class 2: 10-100 PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                             Life-cycle cost savings
                                                               -------------------------------------------------
                TSL **                     Efficiency level                                Percent of consumers
                                                                 Average LCC savings *     that experience net
                                                                        (2021$)                  cost (%)
----------------------------------------------------------------------------------------------------------------
1....................................                        1                      $38                        0
2....................................                        2                       50                        0
3 ***................................                        1                       38                        0
                                                             2                       50                        0
4....................................                        3                     (60)                       75
5....................................                        4                       11                       54
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.


                                       Table V.6--Average LCC and PBP Results for Product Class 3: 150+ PM2.5 CADR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Average costs (2021$)
                                                     ----------------------------------------------------------------  Simple payback   Average lifetime
         TSL *                Efficiency level                         First year's      Lifetime                          (years)           (years)
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                        Baseline....................            $144             $57            $485            $629  ................               9.0
1                       1...........................             146              41             377             523               0.1               9.0
2                       2...........................             147              34             323             470               0.1               9.0
3 **                    1...........................             146              41             377             523               0.1               9.0
                        2...........................             147              34             323             470               0.1               9.0
4                       3...........................             151              31             347             497               0.3               9.0
5                       4...........................             151              31             354             505               0.3               9.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
* All TSLs except TSL 3 have a compliance year of 2028.
** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance year.


   Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Product Class 3: 10-100 PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                             Life-cycle cost savings
                                                               -------------------------------------------------
                TSL **                     Efficiency level                                Percent of consumers
                                                                 Average LCC savings *     that experience net
                                                                        (2021$)                  cost (%)
----------------------------------------------------------------------------------------------------------------
1....................................                        1                     $105                        0
2....................................                        2                       94                        0
3 ***................................                        1                      105                        0
                                                             2                       94                        0
4....................................                        3                       29                       50
5....................................                        4                       20                       56
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on low-income households, senior-only households, and 
small businesses. Table V.8 through Table V.13 compare the average LCC 
savings and PBP at each efficiency level for the consumer subgroups 
with similar metrics for the entire consumer sample for all product 
classes. In most cases, the average LCC savings and PBP 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 direct final rule TSD presents the 
complete LCC and PBP results for the subgroups.

[[Page 21793]]



   Table V.8--Comparison of LCC Savings and PBP for Residential Consumer Subgroups and All Households; Product
                                           Class 1: 10-100 PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                    Low-income      Senior-only
                             TSL **                                 households      households    All households
                                                                     [Dagger]         Sec.
----------------------------------------------------------------------------------------------------------------
                                          Average LCC Savings * (2021$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             $17             $19             $17
TSL 2...........................................................              10              13              11
TSL 3 ***.......................................................              17              19              17
                                                                              10              13              11
TSL 4...........................................................            (95)            (87)            (95)
TSL 5...........................................................            (97)            (85)            (95)
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             1.2             1.0             1.2
TSL 2...........................................................             1.9             1.5             1.8
TSL 3 ***.......................................................             1.2             1.0             1.2
                                                                             1.9             1.5             1.8
TSL 4...........................................................              NA              NA              NA
TSL 5...........................................................              NA              NA              NA
----------------------------------------------------------------------------------------------------------------
                                         Consumers With Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................              29              29              29
TSL 2...........................................................              61              64              63
TSL 3 ***.......................................................              29              29              29
                                                                              61              64              63
TSL 4...........................................................               0               1               0
TSL 5...........................................................               1               2               1
----------------------------------------------------------------------------------------------------------------
                                           Consumers With Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................               0               0               0
TSL 2...........................................................              10               7               9
TSL 3 ***.......................................................               0               0               0
                                                                              10               7               9
TSL 4...........................................................              89              89              89
TSL 5...........................................................              96              94              95
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.
[Dagger] Low-income households represent 13.8 percent of all households for this product class.
Sec.   Senior-only households represent 22.7 percent of all households for this product class.


  Table V.9--Comparison of LCC Savings and PBP for Commercial Consumer
  Subgroup and All Commercial Buildings; Product Class 1: 10-100 PM2.5
                                  CADR
------------------------------------------------------------------------
                                               Small
                 TSL **                      business     All commercial
                                             [Dagger]        buildings
------------------------------------------------------------------------
                      Average LCC Savings * (2021$)
------------------------------------------------------------------------
TSL 1...................................             $18             $19
TSL 2...................................              14              14
TSL 3 ***...............................              18              19
                                                      14              14
TSL 4...................................            (77)            (77)
TSL 5...................................            (75)            (75)
------------------------------------------------------------------------
                         Payback Period (years)
------------------------------------------------------------------------
TSL 1...................................             0.7             0.7
TSL 2...................................             1.0             1.0
TSL 3 ***...............................             0.7             0.7
                                                     1.0             1.0
TSL 4...................................              NA              NA
TSL 5...................................              NA              NA
------------------------------------------------------------------------
                     Consumers With Net Benefit (%)
------------------------------------------------------------------------
TSL 1...................................              28              28
TSL 2...................................              68              68
TSL 3 ***...............................              28              28

[[Page 21794]]

 
                                                      68              68
TSL 4...................................               0               0
TSL 5...................................               3               3
------------------------------------------------------------------------
                       Consumers With Net Cost (%)
------------------------------------------------------------------------
TSL 1...................................               0               0
TSL 2...................................               1               1
TSL 3 ***...............................               0               0
                                                       1               1
TSL 4...................................              87              86
TSL 5...................................              92              91
------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The
  second results row has a 2026 compliance year.
[Dagger] Small business buildings represent 70.9 percent of all
  commercial buildings for this product class.


  Table V.10--Comparison of LCC Savings and PBP for Residential Consumer Subgroups and All Households; Product
                                           Class 2: 100-150 PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                    Low-income      Senior-only
                             TSL **                                 households      households    All households
                                                                     [Dagger]         Sec.
----------------------------------------------------------------------------------------------------------------
                                          Average LCC Savings * (2021$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................              34              43              35
TSL 2...........................................................              44              56              46
TSL 3 ***.......................................................              34              43              35
                                                                              44              56              46
TSL 4...........................................................            (78)            (54)            (75)
TSL 5...........................................................             (9)              23             (4)
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             0.6             0.4             0.6
TSL 2...........................................................             0.7             0.5             0.6
TSL 3 ***.......................................................             0.6             0.4             0.6
                                                                             0.7             0.5             0.6
TSL 4...........................................................              NA              NA              NA
TSL 5...........................................................              NA             1.5              NA
----------------------------------------------------------------------------------------------------------------
                                         Consumers With Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................              24              24              24
TSL 2...........................................................              60              60              60
TSL 3 ***.......................................................              24              24              24
                                                                              60              60              60
TSL 4...........................................................               8              15               8
TSL 5...........................................................              35              54              38
----------------------------------------------------------------------------------------------------------------
                                           Consumers With Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................               0               0               0
TSL 2...........................................................               0               0               0
TSL 3 ***.......................................................               0               0               0
                                                                               0               0               0
TSL 4...........................................................              82              74              81
TSL 5...........................................................              64              46              61
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.
[Dagger] Low-income households represent 13.8 percent of all households for this product class.
Sec.   Senior-only households represent 22.7 percent of all households for this product class.


[[Page 21795]]


Table V.11--Comparison of LCC Savings and PBP for Consumer Subgroups and
      All Commercial Buildings; Product Class 2: 100-150 PM2.5 CADR
------------------------------------------------------------------------
                                          Small business  All commercial
                 TSL **                      [Dagger]        buildings
------------------------------------------------------------------------
                      Average LCC Savings * (2021$)
------------------------------------------------------------------------
TSL 1...................................             $44             $44
TSL 2...................................             $57             $57
TSL 3 ***...............................             $44             $44
                                                     $57             $57
TSL 4...................................           ($38)           ($38)
TSL 5...................................             $32             $33
------------------------------------------------------------------------
                         Payback Period (years)
------------------------------------------------------------------------
TSL 1...................................             0.3             0.3
TSL 2...................................             0.3             0.3
TSL 3 ***...............................             0.3             0.3
                                                     0.3             0.3
TSL 4...................................              NA              NA
TSL 5...................................             1.1             1.0
------------------------------------------------------------------------
                     Consumers With Net Benefit (%)
------------------------------------------------------------------------
TSL 1...................................             23%             23%
TSL 2...................................             59%             59%
TSL 3 ***...............................             23%             23%
                                                     59%             59%
TSL 4...................................             20%             20%
TSL 5...................................             56%             55%
------------------------------------------------------------------------
                       Consumers With Net Cost (%)
------------------------------------------------------------------------
TSL 1...................................              0%              0%
TSL 2...................................              0%              0%
TSL 3 ***...............................              0%              0%
                                                      0%              0%
TSL 4...................................             67%             67%
TSL 5...................................             41%             42%
------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The
  second results row has a 2026 compliance year.
[Dagger] Small business buildings represent 70.9 percent of all
  commercial buildings for this product class.


  Table V.12--Comparison of LCC Savings and PBP for Residential Consumer Subgroups and All Households; Product
                                            Class 3: 150+ PM2.5 CADR
----------------------------------------------------------------------------------------------------------------
                                                                    Low-income      Senior-only
                             TSL **                                 households      households    All households
                                                                     [Dagger]         Sec.
----------------------------------------------------------------------------------------------------------------
                                          Average LCC Savings * (2021$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             $85            $127             $88
TSL 2...........................................................             $76            $111             $80
TSL 3 ***.......................................................             $85            $127             $88
                                                                             $76            $111             $80
TSL 4...........................................................              $2             $47              $7
TSL 5...........................................................            ($7)             $38            ($2)
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             0.2             0.1             0.2
TSL 2...........................................................             0.2             0.1             0.2
TSL 3 ***.......................................................             0.2             0.1             0.2
                                                                             0.2             0.1             0.2
TSL 4...........................................................             0.4             0.2             0.4
TSL 5...........................................................              NA             0.3              NA
----------------------------------------------------------------------------------------------------------------
                                         Consumers With Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................             22%             22%             22%
TSL 2...........................................................             56%             56%             56%
TSL 3 ***.......................................................             22%             22%             22%
                                                                             56%             56%             56%

[[Page 21796]]

 
TSL 4...........................................................             32%             49%             35%
TSL 5...........................................................             29%             47%             32%
----------------------------------------------------------------------------------------------------------------
                                           Consumers With Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................................              0%              0%              0%
TSL 2...........................................................              0%              0%              0%
TSL 3 ***.......................................................              0%              0%              0%
                                                                              0%              0%              0%
TSL 4...........................................................             61%             44%             59%
TSL 5...........................................................             67%             49%             64%
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The second results row has a 2026 compliance
  year.
[Dagger] Low-income households represent 13.8 percent of all households for this product class.
Sec.   Senior-only households represent 22.7 percent of all households for this product class.


  Table V.13--Comparison of LCC Savings and PBP for Commercial Consumer
Subgroups and All Commercial Buildings; Product Class 3: 150+ PM2.5 CADR
------------------------------------------------------------------------
                                          Small business  All commercial
                 TSL **                      [Dagger]        buildings
------------------------------------------------------------------------
                      Average LCC Savings * (2021$)
------------------------------------------------------------------------
TSL 1...................................            $133            $132
TSL 2...................................            $117            $116
TSL 3 ***...............................            $133            $132
                                                    $117            $116
TSL 4...................................             $61             $61
TSL 5...................................             $54             $54
------------------------------------------------------------------------
                         Payback Period (years)
------------------------------------------------------------------------
TSL 1...................................             0.1             0.1
TSL 2...................................             0.1             0.1
TSL 3 ***...............................             0.1             0.1
                                                     0.1             0.1
TSL 4...................................             0.2             0.2
TSL 5...................................             0.2             0.2
------------------------------------------------------------------------
                     Consumers With Net Benefit (%)
------------------------------------------------------------------------
TSL 1...................................             21%             21%
TSL 2...................................             55%             54%
TSL 3 ***...............................             21%             21%
                                                     55%             54%
TSL 4...................................             54%             54%
TSL 5...................................             51%             51%
------------------------------------------------------------------------
                       Consumers With Net Cost (%)
------------------------------------------------------------------------
TSL 1...................................              0%              0%
TSL 2...................................              0%              0%
TSL 3 ***...............................              0%              0%
                                                      0%              0%
TSL 4...................................             37%             37%
TSL 5...................................             43%             43%
------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All TSLs except TSL 3 have a compliance year of 2028.
*** For TSL 3, the first results row has a 2024 compliance year. The
  second results row has a 2026 compliance year.
[Dagger] Small business buildings represent 70.9 percent of all
  commercial buildings for this product class.

c. Rebuttable Presumption Payback
    As discussed in section III.F.2 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)(iii)) In calculating a rebuttable presumption payback period 
for each of the

[[Page 21797]]

considered TSLs, DOE used discrete values, and, as required by EPCA, 
based the energy use calculation on the DOE test procedures for air 
cleaners. In contrast, the PBPs presented in section V.B.1.a were 
calculated using distributions that reflect the range of energy use in 
the field.
    Table V.14 presents the rebuttable-presumption payback periods for 
the considered TSLs for air cleaners. While DOE examined the 
rebuttable-presumption criterion, it considered whether the standard 
levels considered for this rule 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.14--Rebuttable-Presumption Payback Periods
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Trial standard level (years)
                                                         -----------------------------------------------------------------------------------------------
                      Product class                                                                      3
                                                                 1               2       --------------------------------        4               5
                                                                                              Tier 1          Tier 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC 1: 10-100 PM2.5 CADR.................................             0.6             0.7             0.6             0.7             0.9             1.1
PC 2: 100-150 PM2.5 CADR................................             0.2             0.2             0.2             0.2             0.3             0.4
PC 3: 150+ PM2.5 CADR...................................             0.0             0.0             0.0             0.0             0.1             0.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of energy conservation 
standards on manufacturers of air cleaners. The next section describes 
the expected impacts on manufacturers at each considered TSL. Chapter 
12 of the direct final rule 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. The 
following tables summarize the estimated financial impacts (represented 
by changes in INPV) of potential energy conservation standards on 
manufacturers of air cleaners, as well as the conversion costs that DOE 
estimates manufacturers of air cleaners would incur at each TSL.
    To evaluate the range of cash-flow impacts on the air cleaners 
industry, DOE modeled two manufacturer markup scenarios to evaluate a 
range of cash flow impacts on the air cleaners industry: (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 31 percent for all product classes and all 
efficiency levels.\75\ As MPCs increase with efficiency, this scenario 
implies that the absolute dollar markup will increase. This scenario 
assumes that a manufacturer's absolute dollar markup would increase as 
MPCs increase in the standards cases and represents the upper-bound to 
industry profitability under potential new or amended energy 
conservation standards.
---------------------------------------------------------------------------

    \75\ The gross margin percentage of 31 percent is based on 
manufacturer markup of 1.45.
---------------------------------------------------------------------------

    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more-stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant products, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation of operating profit scenario 
results in the lower (or more severe) bound to impacts of potential 
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 (2023-2057). 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 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 new or 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 standards. Conversion costs are independent of the 
manufacturer markup scenarios and are not presented as a range in this 
analysis.
    Table V.15 and Table V.16 show the MIA results for each TSL using 
the manufacturer markup scenarios previously described.

[[Page 21798]]



                        Table V.15--Manufacturer Impact Analysis for Air Cleaners Under the Preservation of Gross Margin Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    No-new-                               Trial standard level
                                               Units               standards   -------------------------------------------------------------------------
                                                                     case           1          2                   3 *                  4          5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...............................  2021$ millions...........         1,565.9    1,535.7    1,528.0  1,525.2.....................    1,535.8    1,574.0
Change in INPV.....................  2021$ millions...........  ..............     (30.2)     (37.9)  (40.7)......................     (30.2)        8.1
                                     %........................  ..............      (1.9)      (2.4)  (2.6).......................      (1.9)        0.5
Free Cash Flow (2027)..............  2021$ millions...........            53.8       42.1       30.9  20.8 and 40.1 **............      (2.4)      (6.0)
Change in Free Cash Flow (2027)....  %........................  ..............     (21.8)     (42.6)  (55.7) and (19.7) **........    (104.5)    (111.2)
Product Conversion Costs...........  2021$ millions...........  ..............       17.2       23.2  23.2........................       42.4       44.7
Capital Conversion Costs...........  2021$ millions...........  ..............       13.6       34.1  34.1........................       94.1      100.5
                                                               -----------------------------------------------------------------------------------------
    Total Conversion Costs.........  2021$ millions...........  ..............       30.8       57.3  57.3........................      136.6      145.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* TSL 3 represents the standards case presented in the Joint Proposal which corresponds to a two-tiered approach. Conversion costs reflect the sum of
  Tier 1 and Tier 2 standards.
** The Free Cash Flow and % Change in Free Cash Flow for TSL 3 is presented to the years 2023 and 2025 due to the 2-step structure of the Joint
  Proposal. DOE presents FCF in the year before the standard year.


                      Table V.16--Manufacturer Impact Analysis for Air Cleaners Under the Preservation of Operating Profit Scenario
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    No-new-                               Trial standard level
                                               Units               standards   -------------------------------------------------------------------------
                                                                     case           1          2                   3 *                  4          5
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...............................  2021$ millions...........         1,565.9    1,528.3    1,503.5  1,499.2.....................    1,422.3    1,394.4
Change in INPV.....................  2021$ millions...........  ..............     (37.7)     (62.4)  (66.7)......................    (143.7)    (171.5)
                                     %........................  ..............      (2.4)      (4.0)  (4.3).......................      (9.2)     (11.0)
Free Cash Flow (2027)..............  2021$ millions...........            53.8       42.1       30.9  20.8 and 40.1 **............      (2.4)      (6.0)
Change in Free Cash Flow (2027)....  %........................  ..............     (21.8)     (42.6)  (55.7) and (19.7) **........    (104.5)    (111.2)
Product Conversion Costs...........  2021$ millions...........  ..............       17.2       23.2  23.2........................       42.4       44.7
Capital Conversion Costs...........  2021$ millions...........  ..............       13.6       34.1  34.1........................       94.1      100.5
                                                               -----------------------------------------------------------------------------------------
    Total Conversion Costs.........  2021$ millions...........  ..............       30.8       57.3  57.3........................      136.6      145.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* TSL 3 represents the standards case presented in the Joint Proposal which corresponds to a two-tiered approach. Conversion costs reflect the sum of
  Tier 1 and Tier 2 standards.
** The Free Cash Flow and % Change in Free Cash Flow for TSL 3 is presented to the years 2023 and 2025 due to the 2-step structure of the Joint
  Proposal. DOE presents FCF in the year before the standard year.

    At TSL 1, DOE estimates that impacts on INPV will range from -$30.2 
million to -$37.7 million, or a change in INPV of -2.4 to -1.9 percent. 
At TSL 1, industry free cash-flow is $42.1 million, which is a decrease 
of approximately $11.7 million compared to the no-new-standards case 
value of $53.8 million in 2027, the year leading up to the standards.
    TSL 1 corresponds to EL 1 for all product classes. DOE noted in the 
engineering analysis, section IV.C.3, the efficiency improvements at EL 
1 are achievable by optimizing the fan motor-filter relationship. In 
evaluating the design paths for optimization, DOE noted that increasing 
the surface area of the filter would improve test performance, but 
could also require changes to the injection molded component of air 
cleaners. DOE estimated capital conversion costs based on the costs for 
manufacturer to purchase new injection mold dies in order to 
accommodate filters with greater surface area. Manufacturers using soft 
tooling or that do not rely on injection molding would have lower 
capital conversion costs than modeled by DOE. DOE estimated the product 
conversion costs for testing all models, identifying product that would 
not meet the standard, and redesigning that portion of market 
offerings. DOE estimates capital conversion costs of $13.6 million and 
product conversion costs of $17.2 million for the industry. Conversion 
costs total $30.8 million.
    At TSL 1, the shipment-weighted average MPC for all air cleaners is 
expected to increase by 1 percent relative to the no-new-standards case 
shipment-weighted average MPC for all air cleaners in 2028. 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 $30.8 million in conversion costs, causing 
a negative change in INPV at TSL 1 under this scenario. Under the 
preservation of operating profit scenario, the reduction in the 
manufacturer markup and the $30.8 million in conversion costs incurred 
by manufacturers cause a slightly negative change in INPV.
    At TSL 2, the standard corresponds to current ENERGY STAR V.2.0 
efficiency levels for air cleaners in all product classes. DOE 
estimates that impacts on INPV will range from -$62.4 million to -$37.9 
million, or a change in INPV of -4.0 to -2.4 percent. At TSL 2, 
industry free cash-flow is $30.9 million, which is a decrease of 
approximately $22.9 million compared to the no-new-standards case value 
of $53.8 million in 2027, the year leading up to the standards.
    TSL 2 corresponds to EL 2 for all product classes. A sizeable 
portion of the market, approximately 40 percent, can currently meet the 
TSL 2 level. Additionally, a substantial portion of existing models can 
be updated to meet TSL 2 through optimization and improved components 
rather than a full product redesign. In particular, manufacturers may 
be able to leverage their existing cabinet designs. However, the 
product interior may require updates to accommodate more efficient 
motors and larger filters. Some manufacturers may be able to alter 
existing tooling to accommodate minor changes in internal dimensions. 
To avoid underestimating costs to industry, DOE estimated capital 
conversion costs based on the cost to replace tooling--specifically 
injection molding dies. Also, DOE estimated the product conversion 
costs for testing all models,

[[Page 21799]]

identifying product that would not meet the standard, and redesigning 
that portion of market offerings. Capital conversion costs may reach 
$34.1 million and product conversion costs may reach $23.2 million for 
the industry. Conversion costs total $57.3 million.
    At TSL 2, the shipment-weighted average MPC for all air cleaners is 
expected to increase by 2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all air cleaners in 2028. 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 $57.3 million in conversion costs, causing 
a negative change in INPV at TSL 2 under this scenario. Under the 
preservation of operating profit scenario, the manufacturer markup 
decreases in 2029, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $57.3 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, DOE estimates that impacts on INPV will range from -$66.7 
million to -$40.7 million, or a change in INPV of -4.3 to -2.6 percent. 
At TSL 3, industry free cash-flow is $40.1 million in 2027, which is a 
decrease of approximately $9.9 million compared to the no-new-standards 
case value of $53.8 million in 2027, the year leading up to the 
standards.
    For TSL 3, DOE analyzed the standards case presented in the Joint 
Proposal which corresponds to a two-tier approach of the lowest 
efficiency level (EL 1) \76\ for Tier 1 standards (going to effect in 
2024) and the current ENERGY STAR V.2.0 efficiency level (EL 2) for 
Tier 2 standards (going to effect in 2026) for all the product classes. 
The industry impacts at TSL 3 are very similar to the impacts at TSL 2 
because both scenarios result in standards at the Tier 2 level. 
However, TSL 3 is a two-tier standard with earlier compliance dates. 
While conversion costs for TSL 3 and TSL 2 are identical, the timing of 
the costs are different. As a result, the earlier timing of conversion 
costs result in lower INPV values at TSL 3 than at TSL 2. However, 
industry may benefit from a national standard at Tier 1 in the 2024 
timeframe in the form of potential reductions in stock keeping units 
(SKUs), marketing and sales complexity, and reduced consumer confusion 
associated with a patchwork of state-level energy performance standards 
for air cleaners. The MIA does not attempt to calculate the cost 
savings from industry that results from single national standard.
---------------------------------------------------------------------------

    \76\ EL 1 also corresponds to individual standards established 
by certain states and the District of Colombia.
---------------------------------------------------------------------------

    At TSL 3, the shipment-weighted average MPC for all air cleaners is 
expected to increase by 2 percent relative to the no-new-standards case 
shipment-weighted average MPC for all air cleaners in 2028. 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 $57.3 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 2029, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $57.3 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, DOE estimates that impacts on INPV will range from -
$143.7 million to -$30.2 million, or a change in INPV of -9.2 to -1.9 
percent. At TSL 4, industry free cash-flow is -$2.4 million, which is a 
decrease of approximately $56.2 million compared to the no-new-
standards case value of $53.8 million in 2027, the year leading up to 
the standards.
    At TSL 4, all three product classes would likely incorporate 
cylindrical shaped filters and BLDC motors without an optimized motor-
filter relationship. The cylindrical filter, which reduces the pressure 
drop across the filter because it allows for a larger surface area for 
the same volume of filter material, provides the improvement in 
efficiency at TSL 4 compared to TSL 3, which utilizes rectangular 
shaped filters. However, most models on the market today do not use 
BLDC motors and cannot accommodate cylindrical filters. Manufacturers 
would incur conversion costs to redesign the product to incorporate a 
different filter shape and more efficient components. Additionally, 
manufacturers that own tooling would incur conversion costs for updated 
cabinet designs. DOE estimates capital conversion costs of $94.1 
million and product conversion of costs of $42.4 million. Conversion 
costs total $136.6 million.
    At TSL 4, the shipment-weighted average MPC for all air cleaners is 
expected to increase by 8 percent relative to the no-new-standards case 
shipment-weighted average MPC for all air cleaners in 2028. Given the 
projected increase in production costs, DOE expects an estimated 4 
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 $136.6 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 2029, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $136.6 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, DOE estimates that impacts on INPV will range from -
$171.5 million to $8.1 million, or a change in INPV of -11.0 to 0.5 
percent. At TSL 5, industry free cash-flow is -$6.0 million, which is a 
decrease of approximately $59.8 million compared to the no-new-
standards case value of $53.8 million in 2027, the year leading up to 
the standards.
    At TSL 5, DOE's expected design path for TSL 5 incorporates 
cylindrical shaped filters and BLDC motors with an optimized motor-
filter relationship. As noted for TSL 4, the adoption of cylindrical 
filters would necessitate platform level redesign for most products on 
the market. Additionally, the move to cylindrical filters could 
necessitate significantly different cabinet designs. DOE estimates 
capital conversion costs of $100.5 million and product conversion of 
costs of $44.7 million. Conversion costs total $145.2 million.
    At TSL 5, the shipment-weighted average MPC for all air cleaners is 
expected to increase by 13 percent relative to the no-new-standards 
case shipment-weighted average MPC for all air cleaners in 2028. Given 
the projected increase in production costs, DOE expects an estimated 6 
percent drop in shipments in the year the standard takes effect. In the 
preservation of gross margin percentage scenario, INPV remains roughly 
the same as in the no-new-standards scenario. Under the preservation of 
operating profit scenario, reduction in the manufacturer markup, 
reduction in shipments, and the $145.2 million in conversion costs 
incurred by manufacturers cause a negative change in INPV at TSL 5.

[[Page 21800]]

b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of energy 
conservation standards on direct employment in the air cleaner 
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 Manufacturers (``ASM''),\77\ BLS employee compensation 
data,\78\ results of the engineering analysis, and reports from Dunn & 
Bradstreet.\79\
---------------------------------------------------------------------------

    \77\ U.S. Census Bureau, Annual Survey of Manufacturers: Summary 
Statistics for Industry Groups and Industries in the U.S.: 2018-
20201. Available at https://www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed June 29, 2022).
    \78\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation. June 17, 2021. Available at: www.bls.gov/news.release/pdf/ecec.pdf.
    \79\ The Dun & Bradstreet Hoovers login is available at 
app.dnbhoovers.com.
---------------------------------------------------------------------------

    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 2.5 percent of air cleaners 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 products covered by 
this rulemaking.
    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 previously, 
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-new-standards case and standards cases.
    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards there would be 58 domestic workers for air 
cleaners in 2028. Table V.17 shows the range of the impacts of energy 
conservation standards on U.S. manufacturing employment in the air 
cleaner industry. The following discussion provides a qualitative 
evaluation of the range of potential impacts presented in Table V.17.

              Table V.17--Domestic Direct Employment Impacts for Air Cleaners Manufacturers in 2028
----------------------------------------------------------------------------------------------------------------
                                               No-new-                      Trial standard level
                                              standards   ------------------------------------------------------
                                                case           1          2         3 **        4          5
----------------------------------------------------------------------------------------------------------------
Domestic Production Workers in 2028......              58         59         59         59         59         59
Domestic Non-Production Workers in 2028..              25         26         26         26         26         26
Total Direct Employment in 2028..........              83         85         85         85         85         85
Potential Changes in Total Direct          ..............  (58) to 1  (58) to 1  (58) to 1  (58) to 1  (58) to 1
 Employment in 2028......................
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative values.
** For TSL 3, Tier 2 standard goes into effect in 2026. DOE presents 2028 Direct Employment for consistent
  comparison in this table.

    The direct employment impacts shown in Table V.17 represent the 
potential domestic employment changes that could result following the 
compliance date of the air cleaner standards considered. The upper 
bound estimate corresponds to an increase in the number of domestic 
workers that would result from 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 their air cleaners in countries with lower labor 
costs.
    Of the 300 air cleaner brands DOE identified, the vast majority are 
produced outside of the U.S. DOE identified 4 companies that have U.S. 
manufacturing. These companies have distinct designs and manufacturing 
processes from companies that import air cleaners. DOE found these 
companies largely do not rely on injection molding, the production 
process that drives capital expenditures resulting from the standard. 
Additionally, DOE found many of these companies focus on air cleaners 
for commercial applications. These companies leverage design and 
production processes used for their commercial air cleaner models to 
offer conventional air cleaners. Additionally, when product literature 
with technical detail were available, DOE found that most conventional 
air cleaners from these domestic manufacturers would likely meet 
standards for TSLs 1, 2, and 3. DOE concludes it is unlikely these 
companies would relocate production overseas solely due to the adoption 
of this final rule.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the direct final rule TSD.

[[Page 21801]]

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 direct final rule TSD.
c. Impacts on Manufacturing Capacity
    DOE did not observe any design options at the adopted level that 
would require changes to the fundamental construction or manufacturing 
of air cleaners. Generally, DOE observed incremental increases in 
cabinet dimension, incremental changes in filter volume and dimension, 
and improved motors or optimized motor/filter relationship in the more 
efficient products meeting the adopted level. Changes in cabinet and 
filter dimensions could require tooling adjustments and replacement, 
which DOE accounted for in its analysis of conversion costs. However, 
DOE's analysis does not suggest there would be design changes that 
could lead to insufficient availability of product to meet market 
demand.
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 analyzes the impacts on small businesses 
in a separate analysis in section VI.B of this document as part of the 
Regulatory Flexibility Analysis. In summary, the Small Business 
Administration (SBA) defines a ``small business'' as having 1,500 
employees or less for North American Industry Classification System 
(NAICS) 335210, ``Small Electrical Appliance Manufacturing.'' \80\ 
Based on this classification, DOE identified four domestic OEMs that 
qualify as small businesses. For a discussion of the impacts on the 
small business manufacturer subgroup, see chapter 12 of the direct 
final rule TSD.
---------------------------------------------------------------------------

    \80\ U.S. Small Business Administration. ``Table of Small 
Business Size Standards.'' (Effective July 14, 2022). Available at: 
www.sba.gov/document/support-table-size-standards (last accessed 
September 28, 2022).
---------------------------------------------------------------------------

e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the regulatory actions 
of other Federal agencies and States 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.

Table V.18--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
                                  Air Cleaner Original Equipment Manufacturers
----------------------------------------------------------------------------------------------------------------
                                                          Number of                                  Industry
                                                            OEMs       Approx.       Industry       conversion
    Federal energy conservation standard      Number of   affected    standards     conversion     costs/product
                                               OEMs *     from this     year     costs (Millions    revenue ***
                                                           rule **                      $)              (%)
----------------------------------------------------------------------------------------------------------------
Residential Central Air Conditioners and             30           1        2023   $342.6 (2015$)            0.50
 Heat Pumps 82 FR 1786 (January 6, 2017)...
Portable Air Conditioners 85 FR 1378                 11           1        2025   320.90 (2015$)            6.70
 (January 10, 2020)........................
Room Air Conditioners [dagger] 87 FR 20608            8           1        2026    22.80 (2020$)            0.50
 (April 7, 2022)...........................
----------------------------------------------------------------------------------------------------------------
* This column presents the total number of manufacturers identified in the energy conservation standard rule
  contributing to cumulative regulatory burden.
** This column presents the number of manufacturers producing room air conditioner products that are also listed
  as manufacturers in the listed 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] This rulemaking is in the proposed rule stage and all values are subject to change until finalized.

    In a written comment, Lennox indicated heating, ventilation, air 
conditioning, and refrigeration (HVACR) manufacturers may be facing DOE 
standards for: Central Air Conditioners in 2023, Commercial Air 
Conditioners in 2023, Commercial Warm Air Furnaces in 2023, Consumer 
Furnaces, Air Cooled, Three-Phase, Small Commercial Air Conditioners 
and Heat Pumps With a Cooling Capacity of Less Than 65,000 Btu/h and 
Air-Cooled, Walk-In Coolers and Freezers, and Three-Phase, Variable 
Refrigerant Flow Air Conditioners and Heat Pumps With a Cooling 
Capacity of Less Than 65,000 Btu/h. The commenter also stated 
manufacturers may be impacted by test procedures for Variable 
Refrigerant Flow Air Conditioners and Heat Pumps, Commercial Warm Air 
Furnaces, and Walk-In Coolers and Freezers. Lennox mentioned 
manufacturers may also experience EPA Phase-down to lower global 
warming potential (GWP) refrigerants to meet the American Innovation 
and Manufacturing (AIM) Act objectives, National and Regional Cold 
Climate Heat Pump Specifications, EPA Energy Star 6.0+ for Residential

[[Page 21802]]

HVAC, and EPA Energy Star 4.0 for Light Commercial HVAC. (Lennox, No. 
7, pp. 3-4)
    Regarding the other rulemakings mentioned, DOE examines Federal, 
product-specific regulations that could affect air cleaner 
manufacturers that take effect approximately three years before the 
2024 compliance date and three years after the 2026 compliance date of 
this final rule. In-duct devices, such as those offered by Lennox, were 
not included within the proposed scope of the test procedure. 87 FR 
63324, 63331.
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 new or amended standards.
a. Significance of Energy Savings
    To estimate the energy savings attributable to potential standards 
for air cleaners, 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 standards (2024-2057 for TSL 3 and 2028-2057 for the 
other TSLs). Table V.19 presents DOE's projections of the national 
energy savings for each TSL considered for air cleaners. The savings 
were calculated using the approach described in section IV.H.2 of this 
document.

       Table V.19--Cumulative National Energy Savings for Air Cleaners; 30 Years of Shipments Through 2057
----------------------------------------------------------------------------------------------------------------
                                                           Trial standard level (quads)
                                 -------------------------------------------------------------------------------
                                         1               2              3 *              4               5
----------------------------------------------------------------------------------------------------------------
Primary energy..................            0.73            1.67            1.73            3.90            4.42
FFC energy......................            0.76            1.73            1.80            4.05            4.59
----------------------------------------------------------------------------------------------------------------
* TSL3 has an analysis period of 2024-2057 to take into account the Joint Proposal recommended compliance dates
  for the two-tiered approach and to align the end of the analysis period with the other TSLs.

    OMB Circular A-4 \81\ 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 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.\82\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to air cleaners. 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.20. The impacts are counted over the lifetime of air cleaners 
purchased in 2024-2036.
---------------------------------------------------------------------------

    \81\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf 
(last accessed December 5, 2022).
    \82\ 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.20--Cumulative National Energy Savings for Air Cleaners; 9 Years of Shipments
                                                 [Through 2036]
----------------------------------------------------------------------------------------------------------------
                                                           Trial standard level (quads)
                                 -------------------------------------------------------------------------------
                                         1               2              3 *              4               5
----------------------------------------------------------------------------------------------------------------
Primary energy..................            0.12            0.28            0.34            0.65            0.73
FFC energy......................            0.13            0.29            0.36            0.68            0.76
----------------------------------------------------------------------------------------------------------------
* TSL3 has an analysis period of 2024-2036 to take into account the Joint Proposal recommended compliance dates
  for the two-tiered approach and to align the end of the analysis period with the other TSLs.

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 air cleaners. 
In accordance with OMB's guidelines on regulatory analysis,\83\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.21 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased through 2057.
---------------------------------------------------------------------------

    \83\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf 
(last accessed December 5, 2022).

[[Page 21803]]



     Table V.21--Cumulative Net Present Value of Consumer Benefits for Air Cleaners; Shipments Through 2057
----------------------------------------------------------------------------------------------------------------
                                                       Trial standard level (billion 2021$)
          Discount rate          -------------------------------------------------------------------------------
                                         1               2              3 *              4               5
----------------------------------------------------------------------------------------------------------------
3 percent.......................             5.4            12.8            13.7           (8.4)           (4.5)
7 percent.......................             2.2             5.1             5.8           (3.4)           (1.9)
----------------------------------------------------------------------------------------------------------------
* TSL3 has an analysis period of 2024-2057 to take into account the Joint Proposal recommended compliance dates
  for the two-tiered approach and to align the end of the analysis period with the other TSLs.

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.22. The impacts are counted over the 
lifetime of products purchased in 2024-2036. 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.22--Cumulative Net Present Value of Consumer Benefits for Air Cleaners; Shipments Through 2036
----------------------------------------------------------------------------------------------------------------
                                                       Trial standard level (billion 2021$)
          Discount rate          -------------------------------------------------------------------------------
                                         1               2              3 *              4               5
----------------------------------------------------------------------------------------------------------------
3 percent.......................             1.3             3.1             4.0           (1.9)           (0.9)
7 percent.......................             0.8             1.9             2.5           (1.2)           (0.6)
----------------------------------------------------------------------------------------------------------------
* TSL3 has an analysis period of 2024-2036 to take into account the Joint Proposal recommended compliance dates
  for the two-tiered approach and to align the end of the analysis period with the other TSLs.

    The previous results reflect the use of a trend to estimate the 
change in price for air cleaners 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 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 direct final rule 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
    DOE estimates that energy conservation standards for air cleaners 
will 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 (2024-2029 for TSL 3 and 
2028-2033 for all other TSLs), where these uncertainties are reduced.
    The results suggest that the adopted standards are 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 direct final rule TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As discussed in section III.F.1.d of this document, DOE has 
concluded that the standards adopted in this direct final rule will not 
lessen the utility or performance of the air cleaners under 
consideration in this rulemaking. Manufacturers of these products 
currently offer units that meet or exceed the adopted 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.F.1.e, the Attorney General determines the impact, if any, of any 
lessening of competition likely to result from a standard and to 
transmit such determination in writing to the Secretary within 60 days 
of the publication of a rule, together with an analysis of the nature 
and extent of the impact. To assist the Attorney General in making this 
determination, DOE will provide the DOJ with copies of the direct final 
rule and the TSD for review. DOE will also publish and respond to the 
DOJ's comments in the Federal Register in a separate document. DOE 
invites comment from the public regarding the competitive impacts that 
are likely to result from this direct final rule. In addition, 
stakeholders may also provide comments separately to DOJ regarding 
these potential impacts. See the ADDRESSES section of the NOPR 
published elsewhere in this issue of the Federal Register 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 direct final 
rule 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

[[Page 21804]]

for air cleaners is expected to yield environmental benefits in the 
form of reduced emissions of certain air pollutants and greenhouse 
gases. Table V.23 provides DOE's estimate of cumulative emissions 
reductions expected to result from the TSLs considered in this 
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 direct final 
rule TSD.

      Table V.23--Cumulative Emissions Reduction for Air cleaners Shipped From Compliance Year Through 2057
----------------------------------------------------------------------------------------------------------------
                                                               Trial standard level
                                 -------------------------------------------------------------------------------
                                         1               2               3               4               5
----------------------------------------------------------------------------------------------------------------
                                         Electric Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......            22.3            50.8            53.4           118.8           134.7
CH4 (thousand tons).............             1.6             3.7             3.9             8.6             9.8
N2O (thousand tons).............             0.2             0.5             0.5             1.2             1.4
SO2 (thousand tons).............             9.9            22.5            23.9            52.6            59.6
NOX (thousand tons).............            10.8            24.6            25.9            57.4            65.1
Hg (tons).......................             0.1             0.1             0.2             0.3             0.4
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......             1.8             4.1             4.3             9.6            10.9
CH4 (thousand tons).............           171.4           391.1           407.5           914.1         1,036.3
N2O (thousand tons).............             0.0             0.0             0.0             0.0             0.1
SO2 (thousand tons).............             0.1             0.3             0.3             0.7             0.7
NOX (thousand tons).............            27.4            62.6            65.2           146.3           165.8
Hg (tons).......................             0.0             0.0             0.0             0.0             0.0
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......            24.1            55.0            57.7           128.5           145.7
CH4 (thousand tons).............           173.0           394.8           411.4           922.8         1,046.1
N2O (thousand tons).............             0.2             0.5             0.6             1.2             1.4
SO2 (thousand tons).............            10.0            22.8            24.2            53.2            60.4
NOX (thousand tons).............            38.2            87.2            91.2           203.7           231.0
Hg (tons).......................             0.1             0.1             0.2             0.3             0.4
----------------------------------------------------------------------------------------------------------------

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for air cleaners. 
Section IV.L of this document discusses the estimated SC-CO2 
values that DOE used. Table V.24 presents the value of CO2 
emissions reduction at each TSL for each of the SC-CO2 
cases. The time-series of annual values is presented for the selected 
TSL in chapter 14 of the direct final rule TSD.

 Table V.24--Present Value of CO2 Emissions Reduction for Air Cleaners Shipped From Compliance Year Through 2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CO2 Case
                                                 ---------------------------------------------------------------
                                                           Discount rate and statistics (billion 2021$)
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
1...............................................             0.2             0.9             1.5             2.8
2...............................................             0.5             2.1             3.4             6.4
3...............................................             0.5             2.3             3.6             6.9
4...............................................             1.1             5.0             7.8            15.0
5...............................................             1.3             5.6             8.9            17.0
----------------------------------------------------------------------------------------------------------------

    As discussed in section IV.L.2 of this document, DOE estimated the 
climate benefits likely to result from the reduced emissions of methane 
and N2O that DOE estimated for each of the considered TSLs 
for air cleaners. Table V.25 presents the value of the CH4 
emissions reduction at each TSL, and Table V.26 presents the value of 
the N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the selected TSL in chapter 14 of the 
direct final rule TSD.

[[Page 21805]]



 Table V.25--Present Value of Methane Emissions Reduction for Air Cleaners Shipped From Compliance Year Through
                                                      2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CH4 Case
                                                 ---------------------------------------------------------------
                                                           Discount rate and statistics (billion 2021$)
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
1...............................................             0.1             0.2             0.3             0.6
2...............................................             0.2             0.5             0.7             1.3
3...............................................             0.2             0.5             0.7             1.4
4...............................................             0.4             1.1             1.6             3.0
5...............................................             0.4             1.3             1.8             3.4
----------------------------------------------------------------------------------------------------------------


 Table V.26--Present Value of Nitrous Oxide Emissions Reduction for Air Cleaners Shipped From Compliance Through
                                                      2057
----------------------------------------------------------------------------------------------------------------
                                                                            SC-N2O Case
                                                 ---------------------------------------------------------------
                                                           Discount rate and statistics (billion 2021$)
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       percentile
----------------------------------------------------------------------------------------------------------------
1...............................................             0.8             3.2             5.0             8.6
2...............................................             1.8             7.3            11.5            19.5
3...............................................             1.9             7.9            12.3            20.9
4...............................................             4.1            17.2            26.8            45.6
5...............................................             4.7            19.5            30.4            51.7
----------------------------------------------------------------------------------------------------------------

    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 
global and U.S. 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 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, however, that the 
adopted standards would be economically justified even without 
inclusion of monetized benefits of reduced GHG emissions.
    DOE also estimated the monetary value of the economic benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for air cleaners. The 
dollar-per-ton values that DOE used are discussed in section IV.L of 
this document. Table V.27 presents the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.28 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the selected TSL in chapter 14 of the direct final rule TSD.

  Table V.27--Present Value of NOX Emissions Reduction for Air Cleaners
                Shipped From Compliance Year Through 2057
------------------------------------------------------------------------
                                            7% discount     3% discount
                   TSL                         rate            rate
------------------------------------------------------------------------
                                                   billion 2021$
------------------------------------------------------------------------
1.......................................             0.5             1.4
2.......................................             1.2             3.2
3.......................................             1.3             3.4
4.......................................             2.7             7.5
5.......................................             3.1             8.5
------------------------------------------------------------------------


  Table V.28--Present Value of SO2 Emissions Reduction for Air Cleaners
                Shipped From Compliance Year Through 2057
------------------------------------------------------------------------
                                            7% discount     3% discount
                   TSL                         rate            rate
------------------------------------------------------------------------
                                                   billion 2021$
------------------------------------------------------------------------
1.......................................             0.2             0.5
2.......................................             0.4             1.1
3.......................................             0.5             1.2
4.......................................             1.0             2.7
5.......................................             1.1             3.0
------------------------------------------------------------------------

    DOE has not considered the monetary benefits of the reduction of Hg 
for this direct final rule. Not all the public health and environmental 
benefits from the reduction of greenhouse gases, NOX, and 
SO2 are captured in the values previously mentioned, and 
additional unquantified benefits from the reductions of those 
pollutants as well as from the reduction of Hg, direct PM, and other 
co-pollutants may be significant.
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.

[[Page 21806]]

8. Summary of Economic Impacts
    Table V.29 presents the NPV values that result from adding the 
monetized estimates of the potential economic, climate, and health 
benefits resulting from reduced GHG and 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 air cleaners and are measured for the lifetime of products 
shipped in 2024-2057. 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 air cleaners shipped in 
2024-2057.

          Table V.29--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
            Category                   TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
                   Using 3% discount rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........             7.6            17.8            19.0             3.3             8.8
3% Average SC-GHG case..........             8.5            19.8            21.1             7.9            14.0
2.5% Average SC-GHG case........             9.1            21.2            22.7            11.3            17.8
3% 95th percentile SC-GHG case..            10.7            24.9            26.6            19.9            27.6
----------------------------------------------------------------------------------------------------------------
                   Using 7% discount rate for Consumer NPV and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........             3.1             7.3             8.2             1.8             3.9
3% Average SC-GHG case..........             4.0             9.3            10.3             6.4             9.2
2.5% Average SC-GHG case........             4.6            10.7            11.8             9.8            13.0
3% 95th percentile SC-GHG case..             6.3            14.4            15.8            18.4            22.8
----------------------------------------------------------------------------------------------------------------

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 direct final rule, DOE considered the impacts of 
establishing standards for air cleaners 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 direct final rule 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.\84\
---------------------------------------------------------------------------

    \84\ 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

[[Page 21807]]

which these impacts are defined and estimated in the regulatory 
process.\85\
---------------------------------------------------------------------------

    \85\ Sanstad, A.H. Notes on the Economics of Household Energy 
Consumption and Technology Choice. 2010. Lawrence Berkeley National 
Laboratory. www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed July 1, 2021).
---------------------------------------------------------------------------

    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.
1. Benefits and Burdens of TSLs Considered for Air Cleaner Standards
    Table V.30 and Table V.31 summarize the quantitative impacts 
estimated for each TSL for air cleaners. The national impacts are 
measured over the lifetime of air cleaners purchased in the analysis 
period that begins in the anticipated year of compliance with standards 
(2024-2057 for TSL3 and 2028-2057 for the other TSLs). The energy 
savings, emissions reductions, and value of emissions reductions refer 
to full-fuel-cycle results. DOE is exercising its own judgment in 
presenting monetized benefits in accordance with the applicable 
Executive orders and DOE would reach the same conclusion presented in 
this document in the absence of the social cost of greenhouse gases, 
including the Interim Estimates presented by the Interagency Working 
Group. The efficiency levels contained in each TSL are described in 
section V.A of this document.

                Table V.30--Summary of Analytical Results for Air Cleaner TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
            Category                   TSL 1           TSL 2           TSL 3           TSL 4           TSL 5
----------------------------------------------------------------------------------------------------------------
                                     Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads...........................            0.76            1.73            1.80            4.05            4.59
----------------------------------------------------------------------------------------------------------------
                                       Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......            24.1            55.0            57.7           128.5           145.7
CH4 (thousand tons).............           173.0           394.8           411.4           922.8         1,046.1
N2O (thousand tons).............             0.2             0.5             0.6             1.2             1.4
SO2 (thousand tons).............            10.0            22.8            24.2            53.2            60.4
NOX (thousand tons).............            38.2            87.2            91.2           203.7           231.0
Hg (tons).......................             0.1             0.1             0.2             0.3             0.4
----------------------------------------------------------------------------------------------------------------
                      Present Value of Benefits and Costs (3% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.             5.6            13.2            14.1           (5.9)           (0.8)
Climate Benefits *..............             1.1             2.6             2.8             6.1             6.9
Health Benefits **..............             1.9             4.4             4.7            10.2            11.6
Total Benefits [dagger].........             8.6            20.2            21.6            10.4            17.7
Consumer Incremental Product                 0.1             0.4             0.5             2.4             3.7
 Costs..........................
Consumer Net Benefits...........             5.4            12.8            13.7           (8.4)           (4.5)
Total Net Benefits..............             8.5            19.8            21.1             7.9            14.0
----------------------------------------------------------------------------------------------------------------
                      Present Value of Benefits and Costs (7% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.             2.2             5.3             6.0           (2.3)           (0.2)
Climate Benefits *..............             1.1             2.6             2.8             6.1             6.9
Health Benefits **..............             0.7             1.6             1.8             3.7             4.2
Total Benefits [dagger].........             4.1             9.5            10.6             7.5            10.9
Consumer Incremental Product                 0.1             0.2             0.2             1.1             1.7
 Costs..........................
Consumer Net Benefits...........             2.2             5.1             5.8           (3.4)           (1.9)
Total Net Benefits..............             4.0             9.3            10.3             6.4             9.2
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with air cleaners shipped from the compliance year
  through 2057. These results include benefits to consumers which accrue after 2057 from the products shipped
  starting in the compliance year up through 2057.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4, and SC-N2O. Together,
  these represent the global 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. To monetize the benefits of reducing greenhouse gas emissions this analysis
  uses the interim 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 Interagency
  Working Group on the Social Cost of Greenhouse Gases (IWG).
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for NOX and SO2) 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 consumer, climate, and health benefits. 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 sets of SC-GHG estimates.


[[Page 21808]]


                            Table V.31--Summary of Analytical Results for Air Cleaner TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           TSL 3
            Category                     TSL 1               TSL 2       ----------------------------------------        TSL 4               TSL 5
                                                                                Tier 1              Tier 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts:
    Industry NPV (million 2021$)  1,528 to 1,536....  1,504 to 1,528....  1,479 to 1,479....  1,499 to 1,525....  1,422 to 1,536....  1,394 to 1,574
     (No-new-standards case INPV
     = 1,565.94).
    Industry NPV (% change).....  (2) to (2)........  (4) to (2)........  (2) to (2)........  (4) to (3)........  (9) to (2)........  (11) to
                                                                                                                                      1
Consumer Average LCC Savings
 (2021$):
    PC1: 10 <= PM2.5 CADR < 100.  $18...............  $12...............  $18...............  $12...............  ($87).............  ($87)
    PC2: 100 <= PM2.5 CADR < 150  $38...............  $50...............  $38...............  $50...............  ($60).............  $11
    PC3: PM2.5 CADR >= 150......  $105..............  $94...............  $105..............  $94...............  $29...............  $20
    Shipment-Weighted Average     $67...............  $62...............  $67...............  $62...............  ($23).............  ($10)
     \*\.
Consumer Simple PBP (years):
    PC1: 10 <= PM2.5 CADR < 100.  0.9...............  1.4...............  0.9...............  1.4...............  NA................  NA
    PC2: 100 <= PM2.5 CADR < 150  0.4...............  0.5...............  0.4...............  0.5...............  NA................  1.6
    PC3: PM2.5 CADR >= 150......  0.1...............  0.1...............  0.1...............  0.1...............  0.3...............  0.3
    Shipment-Weighted Average     0.4...............  0.5...............  0.4...............  0.5...............  NA................  NA
     \*\.
Percent of Consumers that
 Experience a Net Cost:
    PC1: 10 <= PM2.5 CADR < 100.  0%................  6%................  0%................  6%................  88%...............  94%
    PC2: 100 <= PM2.5 CADR < 150  0%................  0%................  0%................  0%................  75%...............  54%
    PC3: PM2.5 CADR >= 150......  0%................  0%................  0%................  0%................  50%...............  56%
    Shipment-Weighted Average     0%................  1%................  0%................  1%................  66%...............  65%
     \*\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values. The entry ``NA'' means not applicable because there is no change in the standard at certain TSLs.
* Weighted by shares of each product class in total projected shipments in 2028.

    DOE first considered TSL 5, which represents the max-tech 
efficiency levels for all the three product classes. Specifically, for 
all three product classes, DOE's expected design path for TSL 5 (which 
represents EL 4 for all product classes) incorporates cylindrical 
shaped filters and BLDC motors with an optimized motor-filter 
relationship. In particular, the cylindrical filter, which reduces the 
pressure drop across the filter because it allows for a larger surface 
area for the same volume of filter material, optimized with the size of 
the BLDC motor provides the improvement in efficiency at TSL 5 compared 
to TSL 4. TSL 5 would save an estimated 4.59 quads of energy, an amount 
DOE considers significant. Under TSL 5, the NPV of consumer benefit 
would be -$1.9 billion using a discount rate of 7 percent, and -$4.5 
billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 5 are 145.7 Mt of 
CO2, 60.4 thousand tons of SO2, 231.0 thousand 
tons of NOX, 0.4 tons of Hg, 1,046.1 thousand tons of 
CH4, and 1.4 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 $6.9 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 5 is $4.2 billion using a 7-percent discount rate and $11.6 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 5 is $9.2 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 5 is $14.0 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 5, the average LCC impact is a loss of $87 for Product Class 
1 (10 <= PM2.5 CADR < 100), an average LCC savings of $11 
for Product Class 2 (100 <= PM2.5 CADR < 150), and an 
average LCC savings of $20 for Product Class 3 (PM2.5 CADR 
>= 150). The simple payback period cannot be calculated for Product 
Class 1 due to the max-tech EL not being cost effective compared to the 
baseline EL, and is 1.6 years for Product Class 2 and 0.3 years for 
Product Class 3. The fraction of consumers experiencing a net LCC cost 
is 94 percent for Product Class 1, 54 percent for Product Class 2 and 
56 percent for Product Class 3.
    For the low-income consumer group, the average LCC impact is a loss 
of $97 for Product Class 1, an average LCC loss of $9 for Product Class 
2, and an average LCC loss of $7 for Product Class 3. The simple 
payback period cannot be calculated for Product Class 1 due to a higher 
annual operating cost for the selected EL than the cost for baseline 
units, and is 2.7 years and 0.5 years for Product Class 2 and Product 
Class 3, respectively. The fraction of low-income consumers 
experiencing a net LCC cost is 95 percent for Product Class 1, 64 
percent for Product Class 2 and 67 percent for Product Class 3.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$171.5 million to an increase of $8.1 million, which corresponds to a 
decrease of 11.0 percent and an increase of 0.5 percent, respectively. 
DOE estimates that industry may need to invest $145.2 million to comply 
with standards set at TSL 5.
    At TSL 5, compliant models are typically designed to house a 
cylindrical filter, and the cabinets of these units are also typically 
cylindrical in shape. The move to cylindrical designs would require 
investment in new designs and new production tooling for most of the 
industry, as only 3% of units shipped meet TSL 5 today. Manufacturers 
would need to invest in both updated designs and updated cabinet 
tooling. The vast majority of product is made from injection molded 
plastic and DOE expect the need for new injection molding dies to drive 
conversion cost for the industry.
    The Secretary concludes that at TSL 5 for air cleaners, the 
benefits of energy savings, emission reductions, and the estimated 
monetary value of the emissions reductions would be outweighed by the 
economic burden on many consumers (negative LCC savings of Product 
Class 1, a majority of consumers with net costs for all three

[[Page 21809]]

product classes, and negative NPV of consumer benefits), and the 
capital conversion costs and profit margin impacts that could result in 
reductions in INPV for manufacturers.
    DOE next considered TSL 4, which represents the second highest 
efficiency levels. TSL 4 comprises EL 3 for all three product classes. 
Specifically, DOE's expected design path for TSL 4 incorporates many of 
the same technologies and design strategies as described for TSL 5. At 
TSL 4, all three product classes would incorporate cylindrical shaped 
filters and BLDC motors without an optimized motor-filter relationship. 
The cylindrical filter, which reduces the pressure drop across the 
filter because it allows for a larger surface area for the same volume 
of filter material, provides the improvement in efficiency at TSL 4 
compared to TSL 3 which utilizes rectangular shaped filters and less 
efficient motor designs. TSL 4 would save an estimated 4.05 quads of 
energy, an amount DOE considers significant. Under TSL 4, the NPV of 
consumer benefit would be -$3.4 billion using a discount rate of 7 
percent, and -$8.4 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 128.5 Mt of 
CO2, 53.2 thousand tons of SO2, 203.7 thousand 
tons of NOX, 0.3 tons of Hg, 922.8 thousand tons of 
CH4, and 1.2 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 $6.1 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $3.7 billion using a 7-percent discount rate and $10.2 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 4 is $6.4 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $7.9 billion. The estimated total 
NPV is provided for additional information, however DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 4, the average LCC impact is a loss of $87 for Product Class 
1, an average LCC loss of $60 for Product Class 2 and an average 
savings of $29 for Product Class 3. The simple payback period cannot be 
calculated for Product Class 1 and Product Class 2 due to the higher 
annual operating cost compared to the baseline units, and is 0.3 years 
for Product Class 3. The fraction of consumers experiencing a net LCC 
cost is 88 percent for Product Class 1, 75 percent for Product Class 2 
and 50 percent for Product Class 3.
    For the low-income consumer group, the average LCC impact is an 
average loss of $95 for Product Class 1, an average LCC loss of $78 for 
Product Class 2 and an average savings of $2 for Product Class 3. The 
simple payback period cannot be calculated for Product Class 1 and 
Product Class 2 due to a higher annual operating cost for the selected 
EL than the cost for baseline units, and is 0.4 years for Product Class 
3. The fraction of low-income consumers experiencing a net LCC cost is 
89 percent for Product Class 1, 82 percent for Product Class 2 and 61 
percent for Product Class 3.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$143.7 million to a decrease of $30.2 million, which correspond to 
decreases of 9.2 percent and 1.9 percent, respectively. Industry 
conversion costs could reach $136.6 million at this TSL.
    At TSL 4, compliant models are typically designed to house a 
cylindrical filter, and the cabinets of these units are also typically 
cylindrical in shape--much like TSL 5. Again, the major driver of 
impacts to manufacturers is the move to cylindrical designs, requiring 
redesign of products and investment in new production tooling for most 
of the industry, as only 7% of sales meet TSL 4 today.
    Based upon the previous considerations, the Secretary concludes 
that at TSL 4 for air cleaners, the benefits of energy savings, 
emission reductions, and the estimated monetary value of the health 
benefits and climate benefits from emissions reductions would be 
outweighed by negative LCC savings for Product Class 1 and Product 
Class 2, the high percentage of consumers with net costs for all 
product classes, negative NPV of consumer benefits, and the capital 
conversion costs and profit margin impacts that could result in 
reductions in INPV for manufacturers. Consequently, the Secretary has 
tentatively concluded that TSL 4 is not economically justified.
    DOE then considered the recommended TSL (TSL3), which represents 
the Joint Proposal with EL 1 (Tier 1) going into effect in 2024 
(compliance date December 31, 2023) and EL 2 (Tier 2) going into effect 
in 2026 (compliance date December 31, 2025). EL 1 comprises the lowest 
EL considered which aligns with the standards established by the States 
of Maryland, Nevada, and New Jersey, and the District of Columbia. EL 2 
comprises the current ENERGY STAR V. 2.0 level and the standard adopted 
by the State of Washington. DOE's design path for TSL 3, which includes 
both EL 1 and EL 2 for all three product classes, includes rectangular 
shaped filters and either SPM or PSC motors. Specifically, for Product 
Class 1, the Tier 1 standard, which is represented by EL 1, includes a 
rectangular filter and SPM motor with an optimized motor-filter 
relationship while the Tier 2 standard, which is represented by EL 2, 
includes a rectangular filter and PSC motor, which is generally more 
efficient than an SPM motor. For Product Class 2 and Product Class 3, 
the Tier 1 standard, which is represented by EL 1, includes a 
rectangular filter and PSC motor while the Tier 2 standard, which is 
represented by EL 2, also includes a rectangular filter and PSC motor 
but with an optimized motor-filter relationship, which improves the 
efficiency of EL 2 over EL 1. TSL3 would save an estimated 1.80 quads 
of energy, an amount DOE considers significant. Under TSL 3, the NPV of 
consumer benefit would be $13.7 billion using a discount rate of 7 
percent, and $5.8 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at the recommended TSL are 57.7 
Mt of CO2, 24.2 thousand tons of SO2, 91.2 
thousand tons of NOX, 0.2 tons of Hg, 411.4 thousand tons of 
CH4, and 0.6 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 
the recommended TSL is $2.8 billion. The estimated monetary value of 
the health benefits from reduced SO2 and NOX 
emissions at the recommended TSL is $1.8 billion using a 7-percent 
discount rate and $4.7 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 the recommended 
TSL is $10.3 billion. Using a 3-percent discount rate for all benefits 
and costs, the estimated total NPV at TSL 3 is $21.1 billion. The 
estimated total NPV is provided for additional information, however DOE 
primarily relies upon the NPV of consumer benefits when determining 
whether a standard level is economically justified.

[[Page 21810]]

    At the recommended TSL with the two-tier approach, the average LCC 
impacts are average savings of $18 and $12 for Product Class 1, $38 and 
$50 for Product Class 2, and $105 and $94 for Product Class 3, for Tier 
1 and Tier 2 respectively. The simple payback periods are below 1.4 
years for the two tiers of Product Class 1, below 0.5 years for the two 
tiers of Product Class 2, and 0.1 for the two tiers of Product Class 3. 
The fraction of consumers experiencing a net LCC cost is below 6 
percent for the two tiers of all three product classes.
    For the low-income consumer group, the average LCC impact is a 
savings of $17 and $10 for the two tiers of Product Class 1, $34 and 
$44 for the two tiers of Product Class 2, and $85 and $76 for the two 
tiers of Product Class 3. The simple payback periods for the two-tier 
approach are 1.2 years for Tier 1 and 1.9 years for Tier 2 for Product 
Class 1, are 0.6 years and 0.7 years for Tier 1 and Tier 2 respectively 
for Product Class 2, and is 0.2 years for both tiers of Product Class 
3. The fraction of low-income consumers experiencing a net LCC cost is 
10 percent for Tier 2 of Product Class 1, and 0 percent for Tier 1 of 
Product Class 1 and all other tiers of the other product classes.
    At the recommended TSL, the projected change in INPV ranges from a 
decrease of $66.7 million to a decrease of $40.7 million, which 
correspond to decreases of 4.3 percent and 2.6 percent, respectively. 
Industry conversion costs could reach $57.3 million at this TSL.
    A sizeable portion of the market, approximately 40 percent, can 
currently meet the Tier 2 level. Additionally, a substantial portion of 
existing models can be updated to meet Tier 2 through optimization and 
improved components rather than a full product redesign. In particular, 
manufacturers may be able to leverage their existing cabinet designs, 
reducing the level of investment necessitated by the standard.
    An even larger portion of the market, approximately 76 percent, can 
meet the Tier 1 level today. Efficiency improvements to meet Tier 1 are 
achievable by improving the motor or by optimizing the motor-filter 
relationship, typically by reducing the restriction of airflow (and 
therefore, the pressure drop across the filter) by increasing the 
surface area of the filter, reducing filter thickness, and/or 
increasing air inlet/outlet size. Manufacturer may be able to leverage 
their existing cabinet designs, reducing the level of investment 
necessitated by the standard.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that at a standard set at the 
recommended TSL for air cleaners would be economically justified. At 
this TSL, the average LCC savings for all three product classes are 
positive. Only an estimated 6 percent of Product Class 1 consumers 
experience a net cost. No Product Class 2 and Product Class 3 consumers 
would experience net cost based on the estimates. 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. At the 
recommended TSL, the NPV of consumer benefits, even measured at the 
more conservative discount rate of 7 percent, is over 84 times higher 
than the maximum estimated manufacturers' loss in INPV. The standard 
levels at the recommended TSL are economically justified even without 
weighing the estimated monetary value of emissions reductions. When 
those emissions reductions are included--representing $2.8 billion in 
climate benefits (associated with the average SC-GHG at a 3-percent 
discount rate), and $4.7 billion (using a 3-percent discount rate) or 
$1.8 billion (using a 7-percent discount rate) in health benefits--the 
rationale becomes stronger still.
    As stated, DOE conducts the 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. Although DOE has not conducted a comparative analysis to select 
the new energy conservation standards, DOE notes that as compared to 
TSL 4 and TSL 5, TSL 3 has positive LCC savings for all selected 
standards levels, a shorter payback period, smaller percentages of 
consumers experiencing a net cost, a lower maximum decrease in INPV, 
and lower manufacturer conversion costs.
    Although DOE considered new standard levels for air cleaners by 
grouping the efficiency levels for each product class into TSLs, DOE 
analyzes and evaluates all possible ELs for each product class in its 
analysis. For all three product classes, the adopted standard levels 
represent units with rectangular filter shape with a PSC motor at EL 1 
and an optimized motor-filter relationship at EL 2. Additionally, for 
all three product classes the adopted standard levels represent the 
maximum energy savings that does not result in a large percentage of 
consumers experiencing a net LCC cost. TSL 3 would also realize an 
additional 0.07 quads FFC energy savings compared to TSL 2, which 
selects the same standard levels but with a later compliance date. The 
efficiency levels at the specified standard levels result in positive 
LCC savings for all three product classes, significantly reduce the 
number of consumers experiencing a net cost, and reduce the decrease in 
INPV and conversion costs to the point where DOE has concluded these 
levels are economically justified, as discussed for TSL 3 in the 
preceding paragraphs.
    Therefore, based on the previous considerations, DOE adopts the 
energy conservation standards for air cleaners at the recommended TSL. 
The new energy conservation standards for air cleaners, which are 
expressed in IEF using PM2.5 CADR/W, are shown in Table 
V.32.

     Table V.32--New Energy Conservation Standards for Air Cleaners
------------------------------------------------------------------------
                                                IEF (PM2.5 CADR/W)
              Product class              -------------------------------
                                              Tier 1          Tier 2
------------------------------------------------------------------------
PC1: 10 <= PM2.5 CADR < 100.............             1.7             1.9
PC2: 100 <= PM2.5 CADR < 150............             1.9             2.4
PC3: PM2.5 CADR >= 150..................             2.0             2.9
------------------------------------------------------------------------

2. Annualized Benefits and Costs of the Adopted Standards
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2021$) of the 
benefits from operating products that meet the adopted 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 climate and health benefits.

[[Page 21811]]

    Table V.33 shows the annualized values for air cleaners under the 
recommended TSL, expressed in 2021$. The 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 
standards adopted in this rule is $19.8 million per year in increased 
product costs, while the estimated annual benefits are $499 million in 
reduced product operating costs, $136 million in climate benefits, and 
$149 million in health benefits. In this case, the net benefit amounts 
to $764 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $23.4 million per year in increased 
equipment costs, while the estimated annual benefits are $690 million 
in reduced operating costs, $136 million in climate benefits, and $228 
million in health benefits. In this case, the net benefit amounts to 
$1,030 million per year.

        Table V.33 Annualized Benefits and Costs of Adopted Standards (recommended TSL) for Air cleaners
----------------------------------------------------------------------------------------------------------------
                                                                               Million  (2021$/year)
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           689.7           623.7           773.4
Climate Benefits *..............................................           135.6           124.2           149.9
Health Benefits **..............................................           228.4           210.1           251.0
Total Benefits [dagger].........................................         1,053.6           958.1         1,174.2
Consumer Incremental Product Costs[Dagger]......................            23.4            22.8            24.7
Net Benefits....................................................         1,030.2           935.3         1,149.5
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           498.8           459.8           546.9
Climate Benefits * (3% discount rate)...........................           135.6           124.2           149.9
Health Benefits **..............................................           149.3           139.7           160.9
Total Benefit s[dagger].........................................           783.7           723.7           857.7
Consumer Incremental Product Costs [Dagger].....................            19.8            19.3            20.7
Net Benefits....................................................           763.9           704.4           837.0
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with air cleaners shipped in 2024-2057. These
  results include benefits to consumers which accrue after 2057 from the products shipped in 2024-2057. The
  Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
  AEO2022 Reference case, Low Economic Growth case, and High Economic Growth case, respectively. In addition,
  incremental equipment costs reflect a medium decline rate in the Primary Estimate, a low decline rate in the
  Low Net Benefits Estimate, and a high decline rate in the High Net Benefits Estimate. The methods used to
  derive projected price trends are explained in section IV.F.1of this document. Note that the Benefits and
  Costs may not sum to the Net Benefits due to rounding.
* 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
  sets of SC-GHG estimates. To monetize the benefits of reducing greenhouse gas emissions this analysis uses the
  interim 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 Interagency Working
  Group on the Social Cost of Greenhouse Gases (IWG).
** 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. 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.
[Dagger] Costs include incremental equipment costs as well as filter costs.

VI. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866 and 13563

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' 58 FR 51735 (Oct. 4, 1993), 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'') in the Office of Management and Budget (``OMB'') has 
emphasized that such techniques may include identifying changing future 
compliance

[[Page 21812]]

costs that might result from technological innovation or anticipated 
behavioral changes. For the reasons stated in this preamble, this final 
regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
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 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'') 
and a final regulatory flexibility analysis (``FRFA'') 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 
(www.energy.gov/gc/office-general-counsel).
    DOE is not obligated to prepare a regulatory flexibility analysis 
for this rulemaking because there is not a requirement to publish a 
general notice of proposed rulemaking under the Administrative 
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously, 
DOE has determined that the August 2022 Joint Proposal meets the 
necessary requirements under EPCA to issue this direct final rule for 
energy conservation standards for air cleaners under the procedures in 
42 U.S.C. 6295(p)(4). DOE notes that the NOPR for energy conservation 
standards for air cleaners published elsewhere in this issue of the 
Federal Register contains an IRFA.

C. Review Under the Paperwork Reduction Act

    Manufacturers of air cleaners 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 air cleaners, 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 air cleaners. 
(See generally 10 CFR part 429) 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. 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.
    Certification data will be required for air cleaners; however, DOE 
is not adopting certification or reporting requirements for air 
cleaners in this direct final rule. Instead, DOE may consider proposals 
to establish certification requirements and reporting for air cleaners 
under a separate rulemaking regarding appliance and equipment 
certification. DOE will address changes to OMB Control Number 1910-1400 
at that time, as necessary.
    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

    Pursuant to the National Environmental Policy Act of 1969 
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and 
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has 
determined that this rule qualifies for categorical exclusion under 10 
CFR part 1021, subpart D, appendix B, B5.1, because it is a rulemaking 
that establishes energy conservation standards for consumer products or 
industrial equipment, none of the exceptions identified in B5.1(b) 
apply, no extraordinary circumstances exist that require further 
environmental analysis, and it meets the requirements for application 
of a categorical exclusion. See 10 CFR 1021.410. Therefore, DOE has 
determined that promulgation of this rule is not a major Federal action 
significantly affecting the quality of the human environment within the 
meaning of NEPA, and does not require an environmental assessment or an 
environmental impact statement.

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 rule and has determined 
that it would not have a substantial direct effect 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 
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:

[[Page 21813]]

(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 3(c) of E.O. 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 direct final 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, Sec. 201 (codified at 2 U.S.C. 1531). 
For a 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 ``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 
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    This rule does not contain a Federal intergovernmental mandate, nor 
is it expected to require expenditures of $100 million or more in any 
one year by the private sector.
    As a result, the analytical requirements of UMRA do not apply.

H. Review Under the Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a 
Family Policymaking Assessment for any rule that may affect family 
well-being. This 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 (March 
18, 1988), DOE has determined that this 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 direct final rule 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 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 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 concluded that this regulatory action, which sets forth 
energy conservation standards for air cleaners, is not a significant 
energy action because the 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 direct final rule.

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

[[Page 21814]]

energy conservation standards development process and the analyses that 
are typically used and prepared a report describing that peer 
review.\86\ 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. 
Because available data, models, and technological understanding have 
changed since 2007, DOE has engaged with the National Academy of 
Sciences to review DOE's analytical methodologies to ascertain whether 
modifications are needed to improve the Department's analyses. DOE is 
in the process of evaluating the resulting report.\87\
---------------------------------------------------------------------------

    \86\ 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 July 19, 2022).
    \87\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

    AHAM AC-1-2020 is already approved at the location where it appears 
in the regulatory text.

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that it has been determined that the rule is a ``major rule'' as 
defined by 5 U.S.C. 804(2).

VII. Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this direct 
final rule.

List of Subjects in 10 CFR Part 430

    Administrative practice and procedure, Confidential business 
information, Energy conservation, Household appliances, Imports, 
Incorporation by reference, Intergovernmental relations, Reporting and 
recordkeeping requirements, and Small businesses.

Signing Authority

    This document of the Department of Energy was signed on March 22, 
2023, by Francisco Alejandro Moreno, Acting 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 March 24, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons stated in the preamble, DOE amends part 430 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, as amended at 88 FR 14014 (March 6, 2023), 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 appendix FF to subpart B of part 430 by revising section 5.1.2 
to read as follows:

Appendix FF to Subpart B of Part 430--Uniform Test Method for Measuring 
the Energy Consumption of Air Cleaners

* * * * *
    5. * * *
    5.1.2. For determining compliance only with the standards 
specified in Sec.  430.32(ee)(1), PM2.5 CADR may 
alternately be calculated using the smoke CADR and dust CADR values 
determined according to Sections 5 and 6, respectively, of AHAM AC-
1-2020, according to the following equation:
[GRAPHIC] [TIFF OMITTED] TR11AP23.003

* * * * *

0
3. Amend Sec.  430.32 by adding paragraph (ee) to read as follows:


Sec.  430.32  Energy and water conservation standards and their 
compliance dates.

* * * * *
    (ee) Air cleaners. (1) Conventional room air cleaners as defined in 
Sec.  430.2 with a PM2.5 clean air delivery rate (CADR) 
between 10 and 600 (both inclusive) cubic feet per minute (cfm) and 
manufactured on or after December 31, 2023, and before December 31, 
2025, shall have an integrated energy factor (IEF) in PM2.5 
CADR/W, as determined in Sec.  430.23(hh)(4) that meets or exceeds the 
following values:

------------------------------------------------------------------------
                                                            IEF (PM2.5
                    Product capacity                          CADR/W)
------------------------------------------------------------------------
(i) 10 <=PM2.5 CADR <100................................             1.7
(ii) 100 <=PM2.5 CADR <150..............................             1.9
(iii) PM2.5 CADR >=150..................................             2.0
------------------------------------------------------------------------

    (2) Conventional room air cleaners as defined in Sec.  430.2 with a 
PM2.5 clean air delivery rate (CADR) between 10 and 600 
(both inclusive) cubic feet per minute (cfm) and manufactured on or 
after December 31, 2025, shall have an integrated energy factor (IEF) 
in PM2.5 CADR/W, as determined in Sec.  430.23(hh)(4) that 
meets or exceeds the following values:

------------------------------------------------------------------------
                                                            IEF (PM2.5
                    Product capacity                          CADR/W)
------------------------------------------------------------------------
(i) 10 <=PM2.5 CADR <100................................             1.9
(ii) 100 <=PM2.5 CADR <150..............................             2.4
(iii) PM2.5 CADR >=150..................................             2.9
------------------------------------------------------------------------

[FR Doc. 2023-06499 Filed 4-10-23; 8:45 am]
BILLING CODE 6450-01-P