[Federal Register Volume 88, Number 97 (Friday, May 19, 2023)]
[Proposed Rules]
[Pages 32514-32581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09969]
[[Page 32513]]
Vol. 88
Friday,
No. 97
May 19, 2023
Part III
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Dishwashers; Proposed Rule
Federal Register / Vol. 88, No. 97 / Friday, May 19, 2023 / Proposed
Rules
[[Page 32514]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2019-BT-STD-0039]
RIN 1904-AE32
Energy Conservation Program: Energy Conservation Standards for
Dishwashers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and request for comment.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including dishwashers.
EPCA also requires the U.S. Department of Energy (``DOE'' or ``the
Department'') to periodically determine whether more-stringent
standards would be technologically feasible and economically justified
and would result in significant energy savings. In this notice of
proposed rulemaking (``NOPR''), DOE proposes amended energy
conservation standards for dishwashers, and requests comment on these
proposed standards and associated analyses and results.
DATES:
Comments: DOE will accept comments, data, and information regarding
this NOPR no later than July 18, 2023.
Meeting: DOE will hold a public meeting via webinar on June 8,
2023, from 1 p.m. to 4 p.m. See section VII, ``Public Participation,''
for webinar registration information, participant instructions and
information about the capabilities available to webinar participants.
Comments regarding the likely competitive impact of the proposed
standard should be sent to the Department of Justice contact listed in
the ADDRESSES section on or before June 20, 2023.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at www.regulations.gov under docket
number EERE-2019-BT-STD-0039. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2019-BT-STD-0039, by any of the
following methods. Individuals who are deaf or hard of hearing, or who
have speech and other communication disabilities may use a relay
service to reach the telephone numbers in this section and farther
below in this document. To learn more about how to make an accessible
telephone call, visit the web page for Federal Communications
Commission at https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.
(1) Email: [email protected]. Include the docket number
EERE-2019-BT-STD-0039 in the subject line of the message.
(2) Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-1445. If possible, please submit all items on a compact disc
(``CD''), in which case it is not necessary to include printed copies.
(3) Hand Delivery/Courier: Appliance and Equipment Standards
Program, U.S. Department of Energy, Building Technologies Office, 950
L'Enfant Plaza SW, 6th Floor, Washington, DC 20024. Telephone: (202)
287-1445. If possible, please submit all items on a CD, in which case
it is not necessary to include printed copies.
No telefacsimiles (``faxes'') will be accepted. For detailed
instructions on submitting comments and additional information on this
process, see section VII of this document.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at www.regulations.gov. All documents in the
docket are listed in the www.regulations.gov index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at www.regulations.gov/docket?D=EERE-2019-BT-STD-0039. The docket web page contains
instructions on how to access all documents, including public comments,
in the docket. See section VII of this document for information on how
to submit comments through www.regulations.gov.
EPCA requires the Attorney General to provide DOE a written
determination of whether the proposed standard is likely to lessen
competition. The U.S. Department of Justice Antitrust Division invites
input from market participants and other interested persons with views
on the likely competitive impact of the proposed standard. Interested
persons may contact the Division at [email protected] on or
before the date specified in the DATES section. Please indicate in the
``Subject'' line of your email the title and Docket Number of this
proposed rulemaking.
FOR FURTHER INFORMATION CONTACT:
Dr. Carl Shapiro, U.S. Department of Energy, Office of Energy
Efficiency and Renewable Energy, Building Technologies Office, EE-5B,
1000 Independence Avenue SW, Washington, DC 20585-0121. Telephone:
(202) 287-5649 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].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Synopsis of the Proposed Rule
A. Benefits and Costs to Consumers
B. Impact on Manufacturers
C. National Benefits and Costs
D. Conclusion
II. Introduction
A. Authority
B. Background
1. Current Standards
2. History of Standards Rulemaking for Dishwashers
C. Deviation From Appendix A
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 and Water Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy and Water Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
1. Product Classes
2. Technology Options
[[Page 32515]]
B. Screening Analysis
1. Screened-Out Technologies
a. Desiccant Drying
b. Reduced Inlet-Water Temperature
c. Supercritical Carbon Dioxide Washing
d. Ultrasonic Washing
e. Thermoelectric Heat Pumps
f. Water Re-Use System
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Manufacturer Production Cost Analysis
3. Manufacturer Selling Price
D. Markups Analysis
E. Energy and Water Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy and Water 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 and Water Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
1. Low-Income Households
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Capital and Product Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Test Procedure and Cleaning Index
b. Balancing Dishwasher Attributes
4. 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
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 and Water Savings
b. Net Present Value of Consumer Costs and Benefits
c. Indirect Impacts on Employment
4. Impact on Utility or Performance of Products
5. Impact of Any Lessening of Competition
6. Need of the Nation To Conserve Energy
7. Other Factors
8. Summary of Economic Impacts
C. Conclusion
1. Benefits and Burdens of TSLs Considered for Dishwashers
Standards
2. Annualized Benefits and Costs of the Proposed 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
VII. Public Participation
A. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Webinar
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
The Energy Policy and Conservation Act, Public Law 94-163, as
amended (``EPCA''),\1\ authorizes DOE to regulate the energy efficiency
of a number of consumer products and certain industrial equipment. (42
U.S.C. 6291-6317) Title III, Part B of EPCA \2\ established the Energy
Conservation Program for Consumer Products Other Than Automobiles. (42
U.S.C. 6291-6309) These products include dishwashers, the subject of
this document. (42 U.S.C. 6292(a)(6))
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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.
\2\ For editorial reasons, upon codification in the U.S. Code,
Part B was redesignated Part A.
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Pursuant to EPCA, any new or amended energy conservation standard
must be designed to achieve the maximum improvement in energy
efficiency that DOE determines is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A)) Furthermore, the new
or amended standard must result in a significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B)) EPCA also provides that not later
than 6 years after issuance of any final rule establishing or amending
a standard, DOE must publish either a notice of determination that
standards for the product do not need to be amended, or a notice of
proposed rulemaking including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)) Not later than 3 years after issuance of a final determination
not to amend standards, DOE must publish either a notice of
determination that standards for the product do not need to be amended,
or a NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
In accordance with these and other statutory provisions discussed
in this document, DOE proposes amended energy conservation standards
for dishwashers. The proposed standards shall not exceed the estimated
annual energy use, as expressed in kilowatt hours per year (``kWh/
year''), and water consumption, as expressed in gallons per cycle
(``gal/cycle'') shown in Table I.1. These proposed standards, if
adopted, would apply to all dishwashers listed in Table I.1
manufactured in, or imported into, the United States starting on the
date 3 years after the publication of the final rule for this
rulemaking.
[[Page 32516]]
Table I.1--Proposed Energy Conservation Standards for Dishwashers
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Maximum estimated Maximum per-cycle
Product class annual energy use * water consumption
(kWh/year) (gal/cycle)
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PC 1: Standard-Size Dishwasher 223 3.3
PC 2: Compact-Size Dishwasher. 174 3.1
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* Using appendix C2.
A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of dishwashers, as measured by the
average life-cycle cost (``LCC'') savings and the simple payback period
(``PBP'').\3\ The average LCC savings are positive for all product
classes, and the PBP is less than the average lifetime of dishwashers,
which is estimated to be 15.2 years (see section IV.F.6 of this
document).
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\3\ The average LCC savings refer to consumers that are affected
by a standard and are measured relative to the efficiency
distribution in the no-new-standards case, which depicts the market
in the compliance year in the absence of new or amended standards
(see section IV.F.8 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.F.9 of this document).
Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Dishwashers
------------------------------------------------------------------------
Average LCC savings Simple payback
Product class (2021$) period (years)
------------------------------------------------------------------------
Standard-Size................. $17 2.4
Compact-Size.................. 30 0.0
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DOE's analysis of the impacts of the proposed standards on
consumers is described in section IV.F of this document.
B. Impact on Manufacturers 4
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\4\ All monetary values in this document are expressed in 2021
dollars.
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The industry net present value (``INPV'') is the sum of the
discounted cash flows to the industry from the NOPR publication year
through the end of the analysis period (2023-2056). Using a real
discount rate of 8.5 percent, DOE estimates that the INPV for
manufacturers of dishwashers in the case without amended standards is
$713.6 million. Under the proposed standards, the change in INPV is
estimated to range from -$134.9 million to -$89.5 million, which
represents a change of -18.9 percent to -12.5 percent. To bring
products into compliance with amended standards, it is estimated that
the industry would incur total conversion costs of approximately $125.6
million.
DOE's analysis of the impacts of the proposed standards on
manufacturers is described in section IV.J of this document. The
analytic results of the manufacturer impact analysis (``MIA'') are
presented in section V.B.2 of this document.
C. National Benefits and Costs
DOE's analyses indicate that the proposed energy conservation
standards for dishwashers would save a significant amount of energy.
Relative to the case without amended standards, the lifetime energy
savings for dishwashers purchased in the 30-year period that begins in
the anticipated year of compliance with the amended standards (2027-
2056) amount to 0.31 quadrillion British thermal units (``Btu''), or
quads.\5\ This represents a savings of 2.7 percent relative to the
energy use of these products in the case without amended standards
(referred to as the ``no-new-standards case'').
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\5\ The quantity refers to full-fuel-cycle (``FFC'') energy
savings. FFC energy savings includes the energy consumed in
extracting, processing, and transporting primary fuels (i.e., coal,
natural gas, petroleum fuels), and, thus, presents a more complete
picture of the impacts of energy efficiency standards. For more
information on the FFC metric, see section IV.H.2 of this document.
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The cumulative net present value (``NPV'') of total consumer
benefits of the proposed standards for dishwashers ranges from $1.11
billion (at a 7-percent discount rate) to $2.77 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
dishwashers purchased in 2027-2056.
In addition, the proposed standards for dishwashers are projected
to yield significant environmental benefits. DOE estimates that the
proposed standards would result in cumulative emission reductions (over
the same period as for energy savings) of 12.54 million metric tons
(``Mt'') \6\ of carbon dioxide (``CO2''), 3.38 thousand tons
of sulfur dioxide (``SO2''), 25.15 thousand tons of nitrogen
oxides (``NOX''), 112.88 thousand tons of methane
(``CH4''), 0.09 thousand tons of nitrous oxide
(``N2O''), and 0.02 tons of mercury (``Hg'').\7\
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\6\ A metric ton is equivalent to 1.1 short tons. Results for
emissions other than CO2 are presented in short tons.
\7\ DOE calculated emissions reductions relative to the no-new-
standards case, which reflects key assumptions in the Annual Energy
Outlook 2022 (``AEO 2022''). AEO 2022 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 AEO 2022 assumptions that effect 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'').\8\ DOE used interim SC-GHG values developed by an
Interagency Working Group on the Social Cost of Greenhouse Gases
(``IWG'').\9\ The derivation of these values is discussed
[[Page 32517]]
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 $0.60 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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\8\ To monetize the benefits of reducing GHG 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).
\9\ 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 $0.35 billion using a 7-percent discount rate, and $0.94 billion
using a 3-percent discount rate.\10\ 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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\10\ 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 monetized benefits and costs expected to
result from the proposed standards for dishwashers. There are other
important unquantified effects, including certain unquantified climate
benefits, unquantified public health benefits from the reduction of
toxic air pollutants and other emissions, unquantified energy security
benefits, and distributional effects, among others.
Table I.3--Summary of Monetized Benefits and Costs of Proposed Energy
Conservation Standards for Dishwashers
[TSL 3]
------------------------------------------------------------------------
Billion $2021
------------------------------------------------------------------------
3% discount rate
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Consumer Operating Cost Savings........................ 2.92
Climate Benefits *..................................... 0.60
Health Benefits **..................................... 0.94
Total Benefits [dagger]................................ 4.47
Consumer Incremental Product Costs [Dagger]............ 0.15
Consumer Net Benefits.................................. 2.77
Total Net Benefits..................................... 4.32
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 1.19
Climate Benefits * (3% discount rate).................. 0.60
Health Benefits **..................................... 0.35
Total Benefits [dagger]................................ 2.14
Consumer Incremental Product Costs [Dagger]............ 0.08
Consumer Net Benefits.................................. 1.11
Total Net Benefits..................................... 2.06
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Note: This table presents the costs and benefits associated with product
name shipped in 2027-2056. These results include benefits to consumers
which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5 percent, 3 percent, and 5 percent
discount rates; 95th percentile at 3 percent discount rate) (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 GHG 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.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
The benefits and costs of the proposed 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.\11\
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\11\ To convert the time-series of costs and benefits into
annualized values, DOE calculated a present value in 2022, the year
used for discounting the NPV of total consumer costs and savings.
For the benefits, DOE calculated a present value associated with
each year's shipments in the year in which the shipments occur
(e.g., 2030), and then discounted the present value from each year
to 2022. Using the present value, DOE then calculated the fixed
annual payment over a 30-year period, starting in the compliance
year, that yields the same present value.
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The national operating savings are domestic private U.S. consumer
monetary savings that occur as a result of purchasing the covered
products and are measured for the lifetime of dishwashers shipped in
2027-2056. The benefits associated with reduced emissions achieved as a
result of the proposed standards are also calculated based on the
lifetime of dishwashers shipped in 2027-2056. Total benefits for both
the 3-percent and 7-percent cases are presented using the average GHG
social costs with 3-percent discount rate. Estimates of SC-GHG values
are presented for all four discount rates in section V.B.8 of this
document.
Table I.4 presents the total estimated monetized benefits and costs
associated with the proposed standard, expressed in terms of annualized
values. The
[[Page 32518]]
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
proposed in this rule is $8.6 million per year in increased product
costs, while the estimated annual benefits are $125.8 million in
reduced product operating costs, $34.6 million in climate benefits, and
$37.0 million in health benefits. In this case, the net benefit would
amount to $188.8 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $8.5 million per year in
increased product costs, while the estimated annual benefits are $167.8
million in reduced operating costs, $34.6 million in climate benefits,
and $54.3 million in health benefits. In this case, the net benefit
would amount to $248.1 million per year.
Table I.4--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Dishwashers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
--------------------------------------------------------
Primary Low-Net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 167.8 166.8 169.5
Climate Benefits *..................................... 34.6 33.8 35.3
Health Benefits **..................................... 54.3 53.1 55.4
Total Benefits [dagger]................................ 256.6 253.7 260.2
Consumer Incremental Product Costs [Dagger]............ 8.5 9.8 8.2
Net Benefits........................................... 248.1 243.8 251.9
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 125.8 125.0 127.0
Climate Benefits * (3% discount rate).................. 34.6 33.8 35.3
Health Benefits *...................................... 37.0 36.3 37.7
Total Benefits [dagger]................................ 197.3 195.1 199.9
Consumer Incremental Product Costs [Dagger]............ 8.6 9.7 8.3
Net Benefits........................................... 188.8 185.3 191.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dishwashers shipped in 2027-2056. These results
include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056. 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 sections IV.F.1 and IV.H.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 GHG 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.
[Dagger] Costs include incremental equipment costs as well as installation costs.
DOE's analysis of the national impacts of the proposed standards is
described in sections IV.H, IV.K, and IV.L of this document.
D. Conclusion
DOE has tentatively concluded that the proposed standards represent
the maximum improvement in energy efficiency that is technologically
feasible and economically justified and would result in the significant
conservation of energy. Specifically, with regards to technological
feasibility, products achieving these standard levels are already
commercially available for all product classes covered by this
proposal. As for economic justification, DOE's analysis shows that the
benefits of the proposed standard exceed the burdens of the proposed
standards.
Using a 7-percent discount rate for consumer benefits and costs and
health benefits from NOX and SO2 reduction, and a
3-percent discount rate case for climate benefits from reduced GHG
emissions, the estimated cost of the proposed standards for dishwashers
is $8.6 million per year in increased dishwasher costs, while the
estimated annual benefits are $125.8 million in reduced equipment
operating costs, $34.6 million in climate benefits, and $37.0 million
in health benefits. The net benefit amounts to $188.8 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.\12\ 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.
[[Page 32519]]
Accordingly, DOE evaluates the significance of energy savings on a
case-by-case basis.
---------------------------------------------------------------------------
\12\ 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 proposed standards are projected to
result in estimated national energy savings of 0.31 quads full-fuel-
cycle (``FFC''), the equivalent of the primary annual energy use of 3.3
million homes. The NPV of consumer benefit for these projected energy
savings is $1.11 billion using a discount rate of 7 percent, and $2.77
billion using a discount rate of 3 percent. The cumulative emissions
reductions associated with these energy savings are 12.56 Mt of
CO2, 3.39 thousand tons of SO2, 25.20 thousand
tons of NOX, 0.02 tons of Hg, 113.10 thousand tons of
CH4, and 0.09 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
$0.6 billion. The estimated monetary value of the health benefits from
reduced SO2 and NOX emissions is $0.35 billion
using a 7-percent discount rate and $0.94 billion using a 3-percent
discount rate. As such, DOE has initially determined the energy savings
from the proposed standard levels are ``significant'' within the
meaning of 42 U.S.C. 6295(o)(3)(B).\13\ A more detailed discussion of
the basis for these tentative conclusions is contained in the remainder
of this document and the accompanying technical support document
(``TSD'').
---------------------------------------------------------------------------
\13\ See section III.D.2 of this document for further discussion
of how DOE determines whether energy savings are ``significant''
within the context of the statute.
---------------------------------------------------------------------------
DOE also considered more-stringent energy efficiency levels as
potential standards, and is still considering them in this proposed
rulemaking. However, DOE has tentatively concluded that the potential
benefits of the more-stringent energy efficiency levels would outweigh
the projected burdens.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed standards, or some combination of
level(s) that incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule, as well as some of the relevant
historical background related to the establishment of standards for
dishwashers.
A. Authority
EPCA authorizes DOE to regulate the energy efficiency of a number
of consumer products and certain industrial equipment. Title III, Part
B of EPCA established the Energy Conservation Program for Consumer
Products Other Than Automobiles. These products include dishwashers,
the subject of this document. (42 U.S.C. 6292(a)(6)) EPCA prescribed
energy conservation standards for these products (42 U.S.C. 6295(g)(1)
and 10(A)), and directs DOE to conduct future rulemakings to determine
whether to amend these standards. (42 U.S.C. 6295(g)(4) and (10)(B))
EPCA further provides that, not later than 6 years after the issuance
of any final rule establishing or amending a standard, DOE must publish
either a notice of determination that standards for the product do not
need to be amended, or a NOPR including new proposed energy
conservation standards (proceeding to a final rule, as appropriate).
(42 U.S.C. 6295(m)(1)) Not later than 3 years after issuance of a final
determination not to amend standards, DOE must publish either a notice
of determination that standards for the product do not need to be
amended, or a NOPR including new proposed energy conservation standards
(proceeding to a final rule, as appropriate). (42 U.S.C. 6295(m)(3)(B))
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (See 42
U.S.C. 6297(d))
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(r)) Manufacturers of covered products must use the prescribed DOE
test procedure as the basis for certifying to DOE that their products
comply with the applicable energy conservation standards adopted under
EPCA and when making representations to the public regarding the energy
use or efficiency of those products. (42 U.S.C. 6293(c) and 42 U.S.C.
6295(s)) Similarly, DOE must use these test procedures to determine
whether the products comply with standards adopted pursuant to EPCA.
(42 U.S.C. 6295(s)) The DOE test procedures for dishwashers appear at
title 10 of the Code of Federal Regulations (``CFR'') part 430, subpart
B, appendix C1 (``appendix C1'') and appendix C2 (``appendix C2'').
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including dishwashers. 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 if DOE determines by
rule that the standard is not technologically feasible or economically
justified. (42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed
standard is economically justified, DOE must determine whether the
benefits of the standard exceed its burdens. (42 U.S.C.
6295(o)(2)(B)(i)) DOE must make this determination after receiving
comments 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;
[[Page 32520]]
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
EPCA also contains what is known as an ``anti-backsliding''
provision, which prevents the Secretary from prescribing any amended
standard that either increases the maximum allowable energy use or
decreases the minimum required energy efficiency of a covered product.
(42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe an amended
or new standard if interested persons have established by a
preponderance of the evidence that the standard is likely to result in
the unavailability in the United States in any covered product type (or
class) of performance characteristics (including reliability),
features, sizes, capacities, and volumes that are substantially the
same as those generally available in the United States. (42 U.S.C.
6295(o)(4))
Additionally, EPCA specifies requirements when promulgating an
energy conservation standard for a covered product that has two or more
subcategories. DOE must specify a different standard level for a type
or class of product that has the same function or intended use, if DOE
determines that products within such group: (A) consume a different
kind of energy from that consumed by other covered products within such
type (or class); or (B) have a capacity or other performance-related
feature which other products within such type (or class) do not have
and such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)) In determining whether a performance-related feature
justifies a different standard for a group of products, DOE must
consider such factors as the utility to the consumer of the feature and
other factors DOE deems appropriate. Id. Any rule prescribing such a
standard must include an explanation of the basis on which such higher
or lower level was established. (42 U.S.C. 6295(q)(2))
Finally, pursuant to the amendments contained in the Energy
Independence and Security Act of 2007 (``EISA 2007''), Public Law 110-
140, any final rule for new or amended energy conservation standards
promulgated after July 1, 2010, is required to address standby mode and
off mode energy use. (42 U.S.C. 6295(gg)(3)) Specifically, when DOE
adopts a standard for a covered product after that date, it must, if
justified by the criteria for adoption of standards under EPCA (42
U.S.C. 6295(o)), incorporate standby mode and off mode energy use into
a single standard, or, if that is not feasible, adopt a separate
standard for such energy use for that product. (42 U.S.C.
6295(gg)(3)(A)-(B)) DOE's current test procedures for dishwashers
address standby mode and off mode energy use. In this rulemaking, DOE
intends to incorporate such energy use into any amended energy
conservation standards that it may adopt.
B. Background
1. Current Standards
In a direct final rule published on May 30, 2012 (``May 2012 Direct
Final Rule''), DOE prescribed the current energy conservation standards
for dishwashers manufactured on or after May 30, 2013. 77 FR 31918. In
a final determination published on December 13, 2016 (``December 2016
Final Determination''), DOE concluded that amended energy conservation
standards would not be economically justified at any level above the
standards established in the May 2012 Direct Final Rule, and therefore
determined not to amend the standards. 81 FR 90072. The current energy
and water conservation standards are set forth in DOE's regulations at
10 CFR part 430, Sec. 430.32(f), and are repeated in Table II.1. The
current applicable DOE test procedure for dishwashers appears at
appendix C1.
Table II.1--Federal Energy Conservation Standards for Dishwashers
------------------------------------------------------------------------
Maximum estimated Maximum per-cycle
Product class annual energy use * water consumption
(kWh/year) (gal/cycle)
------------------------------------------------------------------------
Standard-Size Dishwasher...... 307 5.0
Compact-Size Dishwasher....... 222 3.5
------------------------------------------------------------------------
* Using appendix C1.
The Association of Home Appliance Manufacturers (``AHAM'') standard
AHAM DW-1-2020 is also referenced in the amendatory text of this
document but has already been approved for Sec. 430.32. No changes are
proposed.
2. History of Standards Rulemaking for Dishwashers
The current energy conservation standards for dishwashers were
submitted to DOE by groups representing manufacturers, energy and
environmental advocates, and consumer groups on July 30, 2010. This
collective set of comments, titled ``Agreement on Minimum Federal
Efficiency Standards, Smart Appliances, Federal Incentives and Related
Matters for Specified Appliances'' (the ``Joint Petition''),\14\
recommended specific energy conservation standards for dishwashers
that, in the commenters' view, would satisfy the EPCA requirements. (42
U.S.C. 6295(o)) DOE analyzed the benefits and burdens of multiple
standard levels for residential dishwashers, including a standard level
that corresponded to the recommended levels in the Joint Petition. 77
FR 31945, 31945-6. In the May 2012 Direct Final Rule, DOE established
energy conservation standards for dishwashers manufactured on or after
May 30, 2013, consistent with the levels suggested in the Joint
Petition. 77 FR 31918.
---------------------------------------------------------------------------
\14\ DOE Docket No. EERE-2011-BT-STD-0060-0001.
---------------------------------------------------------------------------
In the December 2016 Final Determination, DOE concluded that
amended energy conservation standards would not be economically
justified at that time at any level above the standards established in
the May 2012 Direct Final Rule, and therefore determined not to amend
the standards. 81 FR 90072.
[[Page 32521]]
On March 21, 2018, the Competitive Enterprise Institute (``CEI'')
submitted a petition for rulemaking requesting that DOE establish a new
product class for dishwashers with a cycle time of less than one hour.
DOE granted the petition and proposed a new product class for
dishwashers with a ``normal'' cycle time of 60 minutes or less. 84 FR
33869 (July 16, 2019). On October 30, 2020, DOE published a final rule
establishing a separate product class for standard-size dishwashers
with a cycle time for the ``normal'' cycle of 60 minutes or less from
washing through drying (``short cycle dishwashers''). 85 FR 68723
(``October 2020 Final Rule'').
Subsequently, in a final rule published on January 19, 2022, DOE
revoked the final rule that established the new product class for
dishwashers as it was improperly promulgated. 87 FR 2673.
EPCA requires that, not later than 3 years after the issuance of a
final determination not to amend standards, DOE must publish either a
notice of determination that standards for the product do not need to
be amended, or a NOPR including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(3)(B)) DOE must make the analysis on which a determination is
based publicly available and provide an opportunity for written
comment. (42 U.S.C. 6295(m)(2))
DOE is examining whether to amend the current standards pursuant to
its obligations under EPCA. In an early assessment request for
information published on October 14, 2020 (``October 2020 RFI''), DOE
initiated the current rulemaking with an early assessment review to
determine whether any new or amended standards would satisfy the
relevant requirements of EPCA for a new or amended energy conservation
standard for dishwashers. 85 FR 64981.
Subsequently, on January 24, 2022, DOE published a notification of
a webinar and availability of preliminary technical support document
(``January 2022 Preliminary Analysis''). 87 FR 3450. In that
notification, DOE sought comment on the analytical framework, models,
and tools that DOE used to evaluate potential standards for
dishwashers, the results of preliminary analyses performed, and the
potential energy and water conservation standard levels derived from
these analyses, which DOE presented in the accompanying preliminary TSD
(``January 2022 Preliminary TSD'').\15\ Id.
---------------------------------------------------------------------------
\15\ January 2022 Dishwashers Energy Conservation Standards
Preliminary Technical Support Document. Available online at
www.regulations.gov/document/EERE-2019-BT-STD-0039-0015.
---------------------------------------------------------------------------
Prior to the publication of the January 2022 Preliminary Analysis,
DOE published proposed amendments to the dishwashers test procedure at
appendix C1 and proposed a new appendix C2 in a test procedure NOPR
published on December 22, 2021 (``December 2021 TP NOPR''). 86 FR
72738. On January 18, 2023, DOE published the final test procedure
rulemaking (``January 2023 TP Final Rule'') amending appendix C1 and
establishing a new appendix C2. 88 FR 3234.The new appendix C2
specifies updated annual cycles and low-power mode hours, both of which
are used to calculate the estimated annual energy use (``EAEU'')
metric, and introduces a cleaning performance threshold requirement.
DOE held a public meeting on February 22, 2022 (``January 2022
Preliminary Analysis webinar''), to solicit feedback from stakeholders
concerning the January 2022 Preliminary Analysis, and received comments
in response from the interested parties listed in Table II.2.
Table II.2--January 2022 Preliminary Analysis Written Comments for Dishwashers
----------------------------------------------------------------------------------------------------------------
Comment No. in the
Commenter(s) Abbreviation docket Commenter type
----------------------------------------------------------------------------------------------------------------
Westview and Global Guideway......... Westview and Global 17..................... Individual.
Guideway.
Whirlpool Corporation................ Whirlpool.............. 21..................... Manufacturer.
Samsung Electronics America, Inc..... Samsung................ 22..................... Manufacturer.
Appliance Standards Awareness Joint Commenters....... 23..................... Efficiency Advocates.
Project, American Council for an
Energy-Efficient Economy, Consumer
Federation of America, Natural
Resources Defense Council.
Northwest Energy Efficiency Alliance. NEEA................... 24..................... Efficiency Advocates.
GE Appliances, a Haier Company....... GEA.................... 25..................... Manufacturer.
Association of Home Appliance AHAM................... \16\ 26, 31............ Trade Association.
Manufacturers.
Pacific Gas and Electric Company, San CA IOUs................ 27..................... Utilities.
Diego Gas and Electric, and Southern
California Edison (collectively, the
California Investor Owned Utilities).
----------------------------------------------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\17\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the February 22, 2022, public meeting, DOE cites the written
comments throughout this final rule. Any oral comments provided during
the webinar that are not substantively addressed by written comments
are summarized and cited separately throughout this final rule.
---------------------------------------------------------------------------
\16\ AHAM's supplemental comment (No. 31) was received 161 days
after the comment submission deadline. DOE generally will not
consider late filed comments, but may exercise its discretion to do
so where necessary and appropriate. In this case, DOE is considering
AHAM's comment because its tardiness has not disrupted DOE's
consideration of this matter and because the comment regards a
subject important to this matter.
\17\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for dishwashers. (Docket No. EERE-
2019-BT-STD-0039, which is maintained at www.regulations.gov). The
references are arranged as follows: (commenter name, comment docket
ID number, page of that document).
---------------------------------------------------------------------------
C. Deviation From Appendix A
The timing of DOE's test procedures and energy conservation
standards rulemakings are conducted in accordance with DOE's procedures
at appendix A to subpart C of part 430, Procedures, Interpretations,
and Policies for Consideration of New or Revised Energy Conservation
Standards and Test Procedures for Consumer Products and Certain
Commercial/Industrial Equipment (``appendix A''). Section 6(f)(2) of
appendix A provides that the length of the public comment period for
[[Page 32522]]
a notice of proposed rulemaking to amend an energy conservation
standard will be at least 75 days. In accordance with section 3(a) of
appendix A, DOE notes that it is deviating from the provision in
appendix A regarding the pre- stages for an energy conservation
standards rulemaking. DOE faces an overdue statutory deadline for this
rulemaking and, furthermore, the analytical methods used for this NOPR
are similar to those used in previous rulemaking notices. Consequently,
DOE has determined it is necessary and appropriate to provide a 60-day
comment period, which the Department has determined provides sufficient
time for interested parties to review the NOPR and develop comments and
for DOE to complete its analyses prior to the publication of the final
rule by June 30, 2024, as required by a consent decree.
III. General Discussion
DOE developed this proposal after considering oral and written
comments, data, and information submitted by stakeholders. The
following discussion addresses issues raised by these commenters.
A. General Comments
This section summarizes general comments received from interested
parties regarding rulemaking timing and process.
AHAM noted that DOE's comment period on the January 2022
Preliminary Analysis overlapped with the December 2021 TP NOPR comment
period by 30 days. (AHAM, No. 26 at p. 28) AHAM commented that DOE
should have received and considered stakeholder comments on the
December 2021 TP NOPR, which proposed a significant change (i.e., a
cleaning index threshold as a condition for a valid test cycle), before
proceeding with the energy conservation standard itself, including the
January 2022 Preliminary Analysis. (Id.) AHAM commented that it
supported DOE's interest in moving rulemakings forward, but to provide
stakeholders with a real opportunity to evaluate proposals, DOE should
have released the test procedure proposal for comment before conducting
its preliminary analysis. (AHAM, No. 26 at p. 28)
AHAM commented that, regardless of the desire to rectify missed
deadlines, DOE must ensure that its process allows early stakeholder
engagement and that it meets other statutory criteria, such as ensuring
that the standard is technically feasible and economically justified.
(AHAM, No. 26 at pp. 28-29) AHAM commented that the process DOE had
chosen for the dishwashers test procedure and standards rulemakings
significantly undercuts commenters' ability to provide critical, early
feedback to DOE on both the proposed test procedure and the preliminary
analysis. (AHAM, No. 26 at p. 28) AHAM commented that DOE's proposed
dishwasher test procedure amendments would alter measured efficiency in
many cases, that DOE did not fully analyze the impact of the December
2021 TP NOPR amendments on the standards rulemaking, and that DOE's
process does not allow commenters sufficient time to analyze the
implications. (Id.)
DOE notes that the timing of the test procedure and energy
conservation standards rulemakings have been conducted in accordance
with DOE's procedures at appendix A. The procedures at appendix A
inherently recognize a certain amount of overlap between test procedure
and energy conservation standards rulemakings. In particular, appendix
A specifies that new test procedures and amended test procedures that
impact measured energy use or efficiency will be finalized at least 180
days prior to the close of the comment period for a NOPR proposing new
or amended energy conservation standards or a notice of proposed
determination that standards do not need to be amended. Section 8(d)(1)
of appendix A. Inherent to this requirement is a recognition that the
earlier stages of the test procedure rulemaking (i.e., the test
procedure NOPR stage) would be conducted concurrently with the pre-NOPR
stages of the energy conservation standards rulemaking (i.e., the
preliminary analysis stage). In other words, the implication of the
timing established by appendix A is that a test procedure NOPR may
provide the basis for a standards preliminary analysis; while a test
procedure final rule provides the basis for a standards NOPR. DOE
issued the January 2023 TP Final Rule on December 16, 2022. The comment
period for this standards NOPR will end more than 180 days after the
issuance of the January 2023 TP Final Rule, in accordance with the
requirements of appendix A.
As acknowledged by AHAM, DOE is conducting this rulemaking in
fulfillment of its statutory obligations under EPCA. Furthermore, DOE
expects to publicly post the intended final rule for this rulemaking by
June 30, 2024, in fulfillment of the terms of a consent decree,\18\
which necessitates timely issuance of this NOPR. DOE recognizes and
appreciates the information and data provided by stakeholders in
response to the January 2022 Preliminary Analysis. As discussed
throughout this NOPR, DOE has incorporated data and other information
received during the prior rulemaking stages into the analyses conducted
for this NOPR.
---------------------------------------------------------------------------
\18\ On October 30, 2020, Natural Resources Defense Council,
Center for Biological Diversity, Consumer Federation of America,
Massachusetts Union of Public Housing, and Sierra Club filed a
lawsuit against DOE and the Secretary alleging that DOE failed to
complete rulemakings by statutory deadlines for 25 consumer products
and commercial equipment, including dishwashers. See Natural
Resources Defense Council, et al. v. Granholm, et al., No. 1:20-cv-
09127 (S.D.N.Y.) On November 9, 2020, the States of New York,
California, Colorado, Connecticut, Illinois, Maine, Maryland,
Minnesota, New Jersey, Oregon, Vermont, Washington, the Commonwealth
of Massachusetts, the People of the State of Michigan, the District
of Columbia, and the City of New York filed a similar complaint,
amended on January 29, 2021 to include the Commonwealth of
Pennsylvania and the States of New Mexico and Nevada. See State of
New York, et al. v. Granholm, et al., No. 1:20-cv-09362 (S.D.N.Y.)
Under the terms of a negotiated consent decree to settle these
lawsuits, entered on September 20, 2022, DOE is required, in part,
to publicly post the intended final rule for dishwasher standards by
June 30, 2024.
---------------------------------------------------------------------------
AHAM commented that DOE's test procedure proposal and preliminary
analysis are missing key data and the data which are included are not
transparent, which fails to meet EPCA, the Administrative Procedure
Act, and the Data Quality Act requirements. (AHAM, No. 26 at p. 28)
DOE understands AHAM's above comment to be discussing the cleaning
performance requirement in the January 2023 TP Final Rule. As noted in
the January 2023 TP Final Rule, DOE discussed in the December 2021 TP
NOPR its justification for including a cleaning performance measurement
and establishing a minimum cleaning index threshold to define what
constitutes completely washing a full load of normally soiled dishes.
88 FR 3234. The December 2021 TP NOPR presented details of a rigorous
analysis performed by DOE, building upon a comprehensive investigation
and analysis of dishwasher cleaning performance conducted by DOE over
the course of the development of the U.S. Environmental Protection
Agency's (``EPA's'') ENERGY STAR Cleaning Performance Test Method \19\
and previous dishwasher energy conservation standards rulemakings, and
using the best available data of which it was aware at the time of the
December 2021 TP NOPR to tentatively determine the specific cleaning
index threshold that aligns with consumer expectations for completely
washing a
[[Page 32523]]
full load of normally soiled dishes. 86 FR 72738, 72756-72759. DOE
reiterated its results and analysis, and included additional resources,
when it presented the final cleaning index threshold in newly
established appendix C2 in the January 2023 TP Final Rule. 88 FR 3234.
Similarly, in the January 2022 Preliminary TSD, DOE presented test
results pertaining to energy use, water use, and cleaning performance
by soil level (i.e., heavy, medium, or light soil load) and efficiency
level as determined by the rated energy and water use. See chapter 5,
section 5.5.1 of the January 2022 Preliminary TSD. These aggregated
data informed DOE's preliminary analysis and formed the basis for the
efficiency levels presented in the January 2022 Preliminary TSD.
Additionally, DOE released test data, including model name and numbers,
to individual manufacturers that requested this information for their
own models that were tested. These data were released under a non-
disclosure agreement (``NDA'').
---------------------------------------------------------------------------
\19\ Available at www.energystar.gov/products/spec/residential_dishwashers_specification_pd.
---------------------------------------------------------------------------
AHAM commented that dishwashers are an energy efficiency success
story and that AHAM, DOE, EPA, and other interested parties should work
to promote dishwasher ownership and proper use as the next step towards
energy and water savings. (AHAM, No. 26 at pp. 1-2) AHAM suggested that
non-regulatory options, such as government-industry partnerships, can
significantly contribute to achieving the President's climate goals via
non-regulatory programs to promote ownership and effective use of
dishwashers, especially for low-income consumers. (AHAM, No. 26 at pp.
2-3) AHAM commented that DOE should amend standards to EL 1, but
without the cleaning performance metric that was proposed in the
December 2021 TP NOPR, and focus any additional resources on developing
non-regulatory programs that will increase dishwasher ownership and
proper use of dishwashers. (AHAM, No. 26 at pp. 3-4) AHAM commented
that increasing dishwasher ownership and proper use of dishwashers has
the potential to drive significant energy and water savings compared to
savings attributable to amended standards. (AHAM, No. 26 at p. 16) AHAM
commented that from an environmental perspective, the preferred
consumer behavior from most preferred to least preferred is: no pre-
rinsing and running full or partial loads in a dishwasher; pre-rinsing
and running full or partial loads in a dishwasher; and, complete hand
washing. AHAM commented that hand washing and pre-rinsing consumes
substantially more water than running a dishwasher with partial loads
even twice as often (i.e., every day rather than an average of 185
loads per year). (Id.)
Whirlpool supported AHAM's recommendation to explore non-regulatory
options to promote broader dishwasher ownership and optimal usage.
(Whirlpool, No. 21 at p. 2) Whirlpool commented that DOE's efforts to
further improve energy and water savings should focus on non-regulatory
options. (Whirlpool, No. 21 at p. 6)
GEA also supported AHAM's comment proposing a partnership between
DOE, EPA, industry, and energy efficiency advocates to encourage non-
regulatory options to further improve energy and water savings. (GEA,
No. 25 at p. 2)
DOE acknowledges that non-regulatory options may exist to promote
dishwasher ownership and proper use to further push the potential for
energy and water savings. However, under EPCA, DOE is statutorily
required to conduct energy conservation standards rulemaking for
dishwashers to determine whether amending the current standards would
achieve the maximum improvement in energy efficiency and are
technologically feasible and economically justified.\20\ (42 U.S.C.
6295(g), (m), and (o)) Since DOE published the December 2016 Final
Determination not to amend dishwasher standards, it has initiated this
current process to evaluate whether amended standards are economically
justified and technologically feasible, warranting a NOPR or a
determination that standards for dishwashers do not need to be amended.
As discussed throughout this document, unlike the 2016 Final
Determination, DOE has preliminarily determined that amended standards
are economically justified, technologically feasible, and would result
in significant energy savings. The vast majority, 93 percent, of the
market currently meets or exceeds the ENERGY STAR V. 6.0 \21\ level,
which corresponds to EL 1 in this document, compared to only 62 percent
of the market that met or exceeded that level \22\ in the December 2016
Final Determination. Further, as discussed in section IV.C.2 of this
document, the anticipated requirement to increase dishwasher efficiency
from EL 1 to EL 2 is estimated to be a zero-cost improvement in control
strategies. Accordingly, DOE is proposing amended energy conservation
standards for dishwashers in this NOPR.
---------------------------------------------------------------------------
\20\ DOE conducts an energy conservation standard every 3 to 6
years depending on whether DOE issued a determination not to amend
standards or DOE amended standards. (42 U.S.C. 6295(m)).
\21\ ENERGY STAR Program Requirements. Product Specification for
Residential Dishwashers. Eligibility Criteria. Version 6.0.
Effective date: January 29, 2016.
\22\ In the December 2016 Final Determination, EL 2 corresponded
to the ENERGY STAR V. 6.0 level.
---------------------------------------------------------------------------
In response to results shown in the preliminary analysis, Whirlpool
and GEA noted the estimates of consumers experiencing net costs of
greater than 40 percent for both product classes analyzed beyond EL 1.
(Whirlpool, No. 21 at p. 3; GEA, No. 25 at p. 2)
DOE updated its preliminary analysis for this NOPR. Between
publication of the preliminary analysis and this NOPR some of the
inputs into DOE's analysis have changed, greatly reducing the
percentage of customers experiencing net costs. DOE uses the most
currently available information at each stage of an energy conservation
standards rulemaking. Updates in the NOPR analysis, compared to the
preliminary analysis, include changes to the consumer sample, energy
prices, discount rate, product costs at each efficiency level and
market shares for the product classes (see sections IV.D and IV.F.8 of
this document), which in turn update the net costs experienced by
consumers as estimated in the LCC analysis (see Table V.2 through Table
V.5). DOE's proposed standards are based on the updated analysis, as
described in section V of this document.
B. Scope of Coverage
This NOPR covers those consumer products that meet the definition
of ``dishwasher'' as codified at 10 CFR 430.2.
Dishwasher means a cabinet-like appliance which with the aid of
water and detergent, washes, rinses, and dries (when a drying process
is included) dishware, glassware, eating utensils, and most cooking
utensils by chemical, mechanical and/or electrical means and discharges
to the plumbing drainage system. 10 CFR 430.2.
See section IV.A.1 of this document for discussion of the product
classes analyzed in this NOPR.
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's
current energy conservation standards for dishwashers are expressed in
terms of EAEU, in kWh/year, and water consumption, in gal/cycle, as
[[Page 32524]]
measured using appendix C1. (See 10 CFR 430.32(f).)
As discussed, on January 18, 2023, DOE published a final rule
amending the dishwashers test procedure at appendix C1 and adopting a
new test procedure at appendix C2. 88 FR 3234. The amendments to
appendix C1 establish requirements for water hardness, relative
humidity, and loading pattern; update requirements for ambient
temperature, detergent dosage, and standby power measurement; and
include testing approaches from published waivers for dishwashers. Id.
The new appendix C2 additionally includes updated annual number of
cycles and low-power mode hours for the calculation of energy
consumption, as well as provisions for a minimum cleaning index
threshold of 70 to validate the selected test cycle. Id. Cleaning index
is calculated based on the number and size of particles remaining on
each item of the test load at the completion of a dishwasher cycle as
specified in AHAM DW-2-2020.\23\ Items that do not have any soil
particles are scored 0 (i.e., completely clean). No single item in the
test load can exceed a score of 9. Individual scores for each item in
the test load are combined as a weighted average to calculate the per
cycle cleaning index. A cleaning index of 100 indicates completely
clean test load. In the final rule, DOE specified that the cleaning
index is calculated by only scoring soil particles on all items in the
test load and that spots, streaks, and rack contact marks on glassware
are not included in the cleaning index calculation.\24\ 88 FR 3234. The
new appendix C2 will go into effect only at such time as compliance is
required with any amended energy conservation standards. Accordingly,
DOE used appendix C2 as finalized in the January 2023 TP Final Rule as
the basis for the analysis in this NOPR. Specifically, in this NOPR,
DOE's EAEU analysis is based on 184 cycles/year as specified in
appendix C2.
---------------------------------------------------------------------------
\23\ Household Electric Dishwashers. AHAM DW-2-2020. Copyright
2020.
\24\ In the December 2021 TP NOPR, DOE proposed a cleaning index
threshold of 65 calculated by scoring soil particles on all items as
well as spots, streaks, and rack contact marks on glassware. In the
January 2023 TP Final Rule, DOE noted that the specified cleaning
index threshold of 70 is equivalent to the cleaning index threshold
of 65 that was proposed in the December 2021 TP NOPR.
---------------------------------------------------------------------------
In response to the January 2022 Preliminary Analysis, Whirlpool
commented that DOE had not shown that any cleaning index score
correlates strongly to high consumer satisfaction or prevents consumers
from performing more energy- and water-intensive behaviors. Whirlpool
further cited its comments on the December 2021 TP NOPR regarding the
relationship between the cleaning index as calculated using AHAM DW-2-
2020 and real world consumer satisfaction.\25\ (Whirlpool, No. 21 at p.
4) GEA stated that DOE lacked data on the reproducibility and
repeatability of the proposed cleaning performance metric, as well as
data that indicate the cleaning index threshold is relevant to DOE's
stated goal. (GEA, No. 25 at p. 2) GEA also stated that a requirement
to test the most energy-intensive cycle as a result of failing DOE's
cleaning metric is effectively a change to the standard. (Id.)
---------------------------------------------------------------------------
\25\ This comment was addressed by DOE in the January 2023 TP
Final Rule, as such, DOE is not responding to this comment here.
---------------------------------------------------------------------------
AHAM stated it had concerns with DOE's cleaning performance metric,
claiming that (1) EPCA does not authorize a cleaning performance metric
in the test procedure; (2) DOE had failed to support its proposal with
data; and (3) the December 2021 TP NOPR proposal was fraught with
technical challenges and uncertainty. (AHAM, No. 26 at p. 12) \26\ AHAM
further commented that DOE had not proven that the December 2021 TP
NOPR proposal to include a minimum cleaning index threshold of 65 as a
condition for a test cycle to be valid will protect product performance
in the event of increased standards. (AHAM, No. 26 at p. 11) AHAM
commented that DOE's data were not transparent and DOE provided only
summary information in graphs, which did not allow commenters to fully
analyze the data and understand the relationship between cleaning
indices and energy and water usage. (AHAM, No. 26 at pp. 12, 29) AHAM
requested that DOE provide its full data set to facilitate complete
evaluation by commenters. AHAM noted that failure to provide this data
would be inconsistent with the requirements under the Data Quality Act
and other applicable statutory provisions. AHAM requested that, if DOE
provides its full data, it do so in a format that permits public
comment for at least 60 days on both the December 2021 TP NOPR and the
January 2022 Preliminary Analysis. (AHAM, No. 26 at p. 14) AHAM
requested that DOE provide its full test data by model via a notice of
data availability or other appropriate regulatory tool. AHAM requested
that the data include, at a minimum, for each soil level, the following
information: machine energy (in watt-hours (``Wh'')), water energy (in
Wh), power dry energy (in Wh), total cycle energy (in Wh), annual
energy (in kWh), water use (in gal), per-cycle cleaning index, and
water energy during rinse (in Wh). AHAM also requested DOE to share the
model numbers because it would help AHAM and its members determine
representativeness of the sample. (AHAH, No. 26 at pp. 29-30) AHAM
commented that it could not support DOE's test procedure proposal to
include a performance metric in the test procedure without DOE
providing data and information to address the significant concerns AHAM
raised in its comments on the December 2021 TP NOPR. (AHAM, No. 26 at
p. 12) AHAM also commented that the impact of a test procedure
amendment to include cleaning performance would be additional
manufacturer cost and redesign to comply with future amended standards,
and DOE's analysis should account for these costs. (AHAM, No. 26 at p.
29)
---------------------------------------------------------------------------
\26\ DOE has addressed AHAM's bulleted comments in the January
2023 TP Final Rule.
---------------------------------------------------------------------------
The CA IOUs stated their support for the adoption of a cleaning
index threshold to ensure dishwashers adequately clean dishes per
consumer expectations while improving energy and water efficiency. The
CA IOUs commented that greater satisfaction in dishwasher performance
will increase the use and adoption of more-efficient dishwashers,
resulting in a virtuous cycle that leads to even more significant real-
world savings due to a reduction in pre-washing and pre-rinsing. (CA
IOUs, No. 27 at p. 4) Samsung stated that it supports the cleaning
index threshold of 65 as proposed in the December 2021 TP NOPR to
incentivize adequate cleaning efficiency. (Samsung, No. 22 at p. 3)
Samsung provided further comment acknowledging variability in the
cleaning performance test method, but that variability could be
compensated by adjusting the minimum threshold level using the observed
standard deviation. (Samsung, No. 22 at p. 4)
DOE has responded to all of these comments in the January 2023 TP
Final Rule when establishing the cleaning index threshold of 70 as a
condition for a valid test cycle in new appendix C2. The December 2021
TP NOPR, stakeholder comments, January 2023 TP Final Rule, and
supporting material are available on the docket at www.regulations.gov/docket/EERE-2016-BT-TP-0012.
D. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening
[[Page 32525]]
analysis based on information gathered on all current technology
options and prototype designs that could improve the efficiency of the
products or product that are the subject of the rulemaking. As the
first step in such an analysis, DOE develops a list of technology
options for consideration in consultation with manufacturers, design
engineers, and other interested parties. DOE then determines which of
those means for improving efficiency are technologically feasible. DOE
considers technologies incorporated in commercially-available products
or in working prototypes to be technologically feasible. Sections
6(b)(3)(i) and 7(b)(1) of appendix A.
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety, and (4) unique-pathway proprietary technologies.
Sections 6(b)(3)(ii)-(v) and 7(b)(2)-(5) of appendix A. Section IV.B of
this document discusses the results of the screening analysis for
dishwashers, particularly the designs DOE considered, those it screened
out, and those that are the basis for the standards considered in this
rulemaking. For further details on the screening analysis for this
rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt an amended standard for a type or class
of covered product, it must determine the maximum improvement in energy
efficiency or maximum reduction in energy use that is technologically
feasible for such product. (42 U.S.C. 6295(p)(1)) Accordingly, in the
engineering analysis, DOE determined the maximum technologically
feasible (``max-tech'') improvements in energy efficiency for
dishwashers, 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 NOPR TSD.
E. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to dishwashers purchased in the 30-
year period that begins in the year of compliance with the proposed
standards (2027-2056).\27\ The savings are measured over the entire
lifetime of dishwashers purchased in the 30-year period. DOE quantified
the energy savings attributable to each TSL as the difference in energy
consumption between each standards case and the no-new-standards case.
The no-new-standards case represents a projection of energy consumption
that reflects how the market for a product would likely evolve in the
absence of amended energy conservation standards.
---------------------------------------------------------------------------
\27\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') and national water
savings (``NWS'') from potential amended or new standards for
dishwashers. 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. 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.\28\
DOE's approach is based on the calculation of an FFC multiplier for
each of the energy types used by covered products or product. For more
information on FFC energy savings, see section IV.H.2 of this document.
---------------------------------------------------------------------------
\28\ 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.\29\ 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, taking into
account the significance of cumulative FFC national energy savings, the
cumulative FFC emissions reductions, and the need to confront the
global climate crisis, among other factors. As discussed in section V.C
of this document, DOE is proposing to adopt TSL 3, which would save an
estimated 0.31 quads of energy (FFC) and 0.24 trillion gallons of
water. DOE has initially determined the energy savings from the
proposed standard levels are ``significant'' within the meaning of 42
U.S.C. 6295(o)(3)(B).
---------------------------------------------------------------------------
\29\ 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).
---------------------------------------------------------------------------
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 NOPR.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential amended standard on
manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows, (2)
cash flows by year, (3) changes in revenue and income, and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and
[[Page 32526]]
manufacturing capacity, as well as the potential for standards to
result in plant closures and loss of capital investment. Finally, DOE
takes into account cumulative impacts of various DOE regulations and
other regulatory requirements on manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more-stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy and Water Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.D of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this rulemaking.
e. Impact of Any Lessening of Competition
EPCA directs DOE to consider the impact of any lessening of
competition, as determined in writing by the Attorney General, that is
likely to result from a proposed standard. (42 U.S.C.
6295(o)(2)(B)(i)(V)) It also directs the Attorney General to determine
the impact, if any, of any lessening of competition likely to result
from a proposed standard and to transmit such determination to the
Secretary within 60 days of the publication of a proposed rule,
together with an analysis of the nature and extent of the impact. (42
U.S.C. 6295(o)(2)(B)(ii)) DOE will transmit a copy of this proposed
rule to the Attorney General with a request that the Department of
Justice (``DOJ'') provide its determination on this issue. DOE will
publish and respond to the Attorney General's determination in the
final rule. DOE invites comment from the public regarding the
competitive impacts that are likely to result from this proposed rule.
In addition, stakeholders may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information to send comments to DOJ.
f. Need for National Energy and Water Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and GHGs associated with energy production and use. As part
of the analysis of the need for national energy and water conservation,
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 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
[[Page 32527]]
test procedure. DOE's LCC and PBP analyses generate values used to
calculate the effects that proposed energy conservation standards would
have on the payback period for consumers. These analyses include, but
are not limited to, the 3-year payback period contemplated under the
rebuttable-presumption test. In addition, DOE routinely conducts an
economic analysis that considers the full range of impacts to
consumers, manufacturers, the Nation, and the environment, as required
under 42 U.S.C. 6295(o)(2)(B)(i). The results of this analysis serve as
the basis for DOE's evaluation of the economic justification for a
potential standard level (thereby supporting or rebutting the results
of any preliminary determination of economic justification). The
rebuttable presumption payback calculation is discussed in section
IV.F.9 of this document.
IV. Methodology and Discussion of Related Comments
This section addresses the analyses DOE has performed for this
rulemaking regarding dishwashers. Separate subsections address each
component of DOE's analyses.
DOE used several analytical tools to estimate the impact of the
standards proposed in this document. The first tool is a spreadsheet
that calculates the LCC savings and PBP of potential amended or new
energy conservation standards. The national impacts analysis uses a
second spreadsheet set that provides shipments projections.
Additionally, this second spreadsheet calculates national energy
savings and net present value of total consumer costs and savings
expected to result from potential energy conservation standards. DOE
uses the third spreadsheet tool, the Government Regulatory Impact Model
(``GRIM''), to assess manufacturer impacts of potential standards.
These three spreadsheet tools are available on the DOE website for this
rulemaking: www.regulations.gov/docket?D=EERE-2019-BT-STD-0039.
Additionally, DOE used output from the latest version of the Energy
Information Administration's (``EIA's'') Annual Energy Outlook
(``AEO''), a widely known energy projection for the United States, for
the emissions and utility impact analyses.
A. Market and Technology Assessment
DOE develops information in the market and technology assessment
that provides an overall picture of the market for the products
concerned, including the purpose of the products, the industry
structure, manufacturers, market characteristics, and technologies used
in the products. This activity includes both quantitative and
qualitative assessments, based primarily on publicly-available
information. The subjects addressed in the market and technology
assessment for this rulemaking include (1) a determination of the scope
of the rulemaking and product classes, (2) manufacturers and industry
structure, (3) existing efficiency programs, (4) shipments information,
(5) market and industry trends, and (6) technologies or design options
that could improve the energy efficiency of dishwashers. The key
findings of DOE's market assessment are summarized in the following
sections. See chapter 3 of the NOPR TSD for further discussion of the
market and technology assessment.
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 defines separate energy conservation standards for
the following two product classes of dishwashers (10 CFR 430.32(f)):
(1) Standard-size dishwashers (capacity equal to or greater than
eight place settings plus six serving pieces); and
(2) Compact-size dishwashers (capacity less than eight place
settings plus six serving pieces).
For these two classes of dishwashers, DOE's current test procedure
measures the energy consumption in terms of EAEU, in kWh/year, and
water consumption, in gal/cycle (see 10 CFR 430.32(f)).
As part of its rulemaking process, DOE considers, among other
things, whether changes to the current product classes are warranted
under the criteria in 42 U.S.C. 6295(q). In surveying the dishwasher
market, DOE determined that, in addition to a ``normal'' cycle, many
dishwasher models offer a variety of other cycles, e.g., delicate
cycles, eco wash cycles, heavy soil cycles, pots and pans cycles, and
quick or short cycles. In order to establish a separate product class
for dishwasher models that offer any of these other cycles, DOE would
have to determine that: (1) the other cycle is a performance-related
feature which other products within such type (or class) do not have;
and (2) such feature justifies a higher or lower standard. (42 U.S.C.
6295(q)(1)(B)) In making the latter determination, DOE considers such
factors as the utility to the consumer of such a feature, and such
other factors as the Department determines appropriate. Id.
With respect to the first criterion for establishing product
classes, DOE has preliminarily determined that these other cycles may
constitute performance-related features. For example, in 2020, DOE
analyzed he average ``normal'' and ``quick'' cycle times for 31
dishwasher models. The average cycle time for a ``normal'' cycle was
131.1 minutes, while the average ``quick'' cycle time was 75.5
minutes.\30\ DOE recognizes that ``quick'' cycle options, which are on
average approximately an hour shorter than a ``normal'' cycle, allow
consumers access to clean dishes in an expedited manner.
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\30\ The test results for the 31 units are available at:
www.regulations.gov/document/EERE-2018-BT-STD-0005-3213.
---------------------------------------------------------------------------
However, with respect to the second criterion for establishing
product classes, DOE tentatively concludes that there is not a
correlation between any of these additional cycles and energy and water
use as measured by the DOE test procedure. In other words, DOE does not
find a justification for setting a lower or higher standard for
dishwasher models that offer any of these other cycles because only the
``normal'' cycle is tested pursuant to the DOE test procedure for
compliance with the applicable standard. The current and proposed
standards impose restrictions on energy or water use only when a
dishwasher is operating in its ``normal'' cycle. Thus, there is no
justification or need to establish separate product classes for
dishwashers with these other cycles.
As a result, in this NOPR, DOE proposes to maintain the existing
standard-size and compact-size product classes for dishwashers.
DOE requests comment on its preliminary determination to maintain
the current product classes for dishwashers.
2. Technology Options
In the January 2022 Preliminary Analysis, DOE identified 19
technology options that would be expected to improve the efficiency of
dishwashers, as measured by the DOE test procedure:
[[Page 32528]]
condensation drying; control strategies; \31\ desiccant drying; fan/jet
drying; flow-through heating; improved fill control; improved food
filter; improved motor efficiency; improved spray-arm geometry;
increased insulation; low-standby-loss electronic controls;
microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls; modified sump geometry, with and without dual pumps;
reduced inlet-water temperature; supercritical carbon dioxide washing;
thermoelectric heat pumps; ultrasonic washing; variable washing
pressures and flow rates; and, water re-use system. See chapter 3,
section 3.14.2 of the January 2022 Preliminary Analysis.
---------------------------------------------------------------------------
\31\ Control strategies refers to how manufacturers program the
microprocessor to control a dishwasher to limit the amount of water
used, or to reduce the set-point temperature of the wash or rinse
water.
---------------------------------------------------------------------------
In the January 2022 Preliminary Analysis, DOE requested feedback on
whether there are additional technologies available that may improve
dishwasher performance. See chapter ES, section ES.4.3 of the January
2022 Preliminary Analysis.
Westview and Global Guideway commented that use of grey water and
``back side heat recovery'' design ideas from solar panels could be
used to improve whole-home efficiency. (Westview and Global Guideway,
No. 17 at p. 1) While DOE appreciates the comment, DOE notes that it
identifies technology options that would improve the efficiency of the
covered product itself, and typically, the technology exists as part of
the product's design. Accordingly, DOE has not considered this
technology option in this document.
Samsung commented that opportunities for improved energy efficiency
beyond EL 1 exist, such as implementation of variable-speed motors.
(Samsung, No. 22 at p. 2) DOE agrees and, as discussed in Chapter 5 of
the January 2022 Preliminary TSD and this NOPR TSD, DOE implemented a
3-phase variable-speed motor design option at EL 3. Such a motor, along
with more sophisticated electronic controls, allows the dishwasher to
adjust the flow rate at which the water is pumped throughout the water
system at different times during the cycle. Using the most energy-
intensive pump operation only when needed eliminates excess energy
consumption for portions of the wash cycle requiring less aggressive
circulation.
AHAM commented that DOE should not be able to claim more efficient
motors as a design option in this end-use product rulemaking and claim
separate savings in a potential future motors standards rulemaking for
those same motors. AHAM stated that if DOE regulates special and
definite purpose motors in spite of AHAM's objection, then DOE must
remove the savings from motors from amended standards for dishwashers.
(AHAM, No. 26 at p. 15) DOE acknowledges AHAM's comment, but notes that
the drain and sump motors analyzed for this rulemaking are currently
not subject to motor standards.
The CA IOUs encouraged DOE to reconsider its assumption that all
dishwasher models above the baseline have the same standby power levels
and recognize the potential for advanced electronics and power supplies
to lower standby power. The CA IOUs commented that more advanced
electronics and power supplies may translate to energy savings
significantly greater than those calculated by DOE. (CA IOUs, No. 27 at
p. 4) DOE used the efficiency-level approach to conduct its efficiency
analysis for the engineering analysis, and identified the most likely
design pathways to achieve the analyzed levels. DOE did not analyze
incremental improvements to electronic controls because it implemented
the improved electronic controls design option at EL 1.
DOE requests comment on specific technology options for reducing
standby power, including the type of technologies implemented and the
estimated improvement in standby power.
In this NOPR, DOE considered the same technology options as those
considered in the January 2022 Preliminary Analysis. Additionally, DOE
proposes to explicitly discuss variable-speed motors as a technology
option in the market and technology assessment, since DOE included it
in its design options for EL 3 and higher in the engineering analysis
for the January 2022 Preliminary Analysis as well as the December 2016
Final Determination. Chapter 3 of the NOPR TSD includes the detailed
descriptions of each technology option.
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.
The subsequent sections include DOE's evaluation of each technology
option against the screening analysis criteria and whether DOE
determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
The following sections detail the technology options that were
screened out for this proposed rulemaking, and the reasons why they
were eliminated.
a. Desiccant Drying
Desiccant drying relies on a material such as zeolite \32\ to
adsorb moisture to aid in the drying process and reduce drying energy
consumption. In the January 2022 Preliminary TSD, DOE noted that it is
aware of dishwashers
[[Page 32529]]
from one manufacturer on the market in the United States that use
desiccant drying. See chapter 4, section 4.2.1.1 of the January 2022
Preliminary TSD.
---------------------------------------------------------------------------
\32\ Zeolite is a highly porous aluminosilicate mineral that
adsorbs moisture and releases heat to aid in the drying process.
---------------------------------------------------------------------------
DOE has screened out desiccant drying from further consideration
because it would not be practicable to manufacture on the scale
necessary for the dishwasher market. Desiccant drying is a patented
technology, and although multiple manufacturers hold patents for
dishwasher designs with desiccant drying features, DOE is concerned
that this technology option is not available for all manufacturers.
b. Reduced Inlet-Water Temperature
Reduced inlet-water temperature requires that dishwashers tap the
cold water line for their water supply. Because most dishwashers in the
United States tap the hot water line, this technology option would
require significant alteration of existing dishwasher installations in
order to accommodate newly purchased units incorporating this
technology option. Therefore, DOE believes that it would not be
practicable to install this technology on the scale necessary to serve
the relevant market at the time of the effective date of an amended
standard.
c. Supercritical Carbon Dioxide Washing
Supercritical carbon dioxide washing, which uses supercritical
carbon dioxide instead of conventional detergent and water to wash
dishes, is currently being researched. Given that this technology is in
the research stage, DOE believes that it would not be practicable to
manufacture, install and service this technology on the scale necessary
to serve the relevant market at the time of the effective date of an
amended standard. Furthermore, because this technology is in the
research stage, it is not yet possible to assess whether it would have
any adverse impacts on equipment utility to consumers or equipment
availability, or any adverse impacts on consumers' health or safety.
d. Ultrasonic Washing
A dishwasher using ultrasonic waves to generate a cleaning mist was
produced for the Japanese market in 2002; however, this model is no
longer available on the market. Available information indicates that
the use of a mist with ion generation instead of water with detergent
would decrease cleaning performance, impacting consumer utility.
Ultrasonic dishwashing based upon soiled-dish immersion in a fluid
that is then excited by ultrasonic waves has not been demonstrated. In
an immersion-based ultrasonic dishwasher, standing ultrasonic waves
within the washing cavity and the force of bubble cavitation implosion
can damage fragile dishware. Because no manufacturers currently produce
ultrasonic consumer dishwashers, it is impossible to assess whether
this technology option would have any impacts on consumers' health or
safety, or product availability.
Based on this information, DOE has screened out both identified
product types that incorporate the ultrasonic washing technology
option.
e. Thermoelectric Heat Pumps
The thermoelectric heat pump system aims to extract waste heat from
drain water and recover heat normally lost during the drying process,
and apply it to the washing, rinsing, and drying phases, effectively
saving energy. The technology is not commercially available yet as
research and development is still underway. Therefore, DOE believes
that it would not be practicable to manufacture, install and service
this technology on the scale necessary to serve the relevant market at
the time of the effective date of an amended standard. Furthermore,
because this technology is in the research stage, it is not yet
possible to assess whether it would have any adverse impacts on
equipment utility to consumers or equipment availability, or any
adverse impacts on consumers' health or safety.
f. Water Re-Use System
This system saves water from the final rinse of a given dishwasher
cycle for use in a subsequent dishwasher cycle. A water re-use system
dishwasher also performs ``drain out'' and ``clean out'' cycles if the
dishwasher is not operated for a certain period of time. Both ``drain
out'' and ``clean out'' events consume additional water and energy
during the subsequent cycle, even though such a system saves water and
energy consumption overall.
DOE has screened out this technology option as it believes that
leaking and contamination from a water holding tank could potentially
present negative health or safety impacts.
2. Remaining Technologies
Through a review of each technology, DOE tentatively concludes that
all of the other identified technologies listed in section IV.A.2 of
this document, including variable-speed motors, met all five screening
criteria to be examined further as design options in DOE's NOPR
analysis. In summary, DOE did not screen out the following technology
options: condensation drying; control strategies; fan/jet drying; flow-
through heating; improved fill control; improved food filter; improved
motor efficiency; variable-speed motors; improved spray-arm geometry;
increased insulation; low-standby-loss electronic controls;
microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls; modified sump geometry, with and without dual pumps;
and, variable washing pressures and flow rates.
DOE has initially determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially-available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., are practicable to manufacture, install, and
service; do not result in adverse impacts on consumer utility, product
availability, health, or safety; and are not unique-pathway proprietary
technologies). For additional details, see chapter 4 of the NOPR TSD.
C. Engineering Analysis
The purpose of the engineering analysis is to establish the
relationship between the efficiency and cost of dishwashers. 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
dishwashers, 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).
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
[[Page 32530]]
efficiencies and efficiency level ``clusters'' that already exist on
the market). Using the design-option approach, the efficiency levels
established for the analysis are determined through detailed
engineering calculations and/or computer simulations of the efficiency
improvements from implementing specific design options that have been
identified in the technology assessment. DOE may also rely on a
combination of these two approaches. For example, the efficiency-level
approach (based on actual products on the market) may be extended using
the design option approach to ``gap fill'' levels (to bridge large gaps
between other identified efficiency levels) and/or to extrapolate to
the max-tech level (particularly in cases where the max-tech level
exceeds the maximum efficiency level currently available on the
market).
For this analysis, DOE used a combination of these engineering
approaches. This approach involved physically disassembling
commercially available products, reviewing publicly available cost
information, and modeling equipment cost. From this information, DOE
estimated the manufacturer production costs (``MPCs'') for a range of
products currently available on the market. DOE then considered the
incremental steps manufacturers may take to reach higher efficiency
levels. In its modeling, DOE started with the baseline MPC and added
the expected design options at each higher efficiency level to estimate
incremental MPCs. By doing this, the engineering analysis did not
factor in the additional higher-cost features with no impact on
efficiency that are included in some models. However, at efficiency
levels where the product designs significantly deviated from the
baseline product, DOE used the efficiency-level approach to determine
an MPC estimate, while removing the costs associated with non-
efficiency-related components or features. DOE also provides further
discussion on the design options and efficiency improvements in chapter
5 of the NOPR TSD.
a. Baseline Efficiency
For each product/product class, DOE generally selects a baseline
model as a reference point for each class, and measures changes
resulting from potential energy conservation standards against the
baseline. The baseline model in each product class represents the
characteristics of a product typical of that class (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.
For dishwashers, DOE identified products available on the market
rated at the current energy conservation standards levels for both
standard-size and compact-size dishwasher product classes. Accordingly,
DOE analyzed these products as baseline units. DOE uses the baseline
unit for comparison in several phases of the NOPR analyses, including
the engineering analysis, LCC analysis, PBP analysis, and NIA. To
determine energy savings that will result from an amended energy
conservation standard, DOE compares energy use at each of the higher
energy efficiency levels to the energy consumption of the baseline
unit. Similarly, to determine the changes in price to the consumer that
will result from an amended energy conservation standard, DOE compares
the price of a unit at each higher efficiency level to the price of a
unit at the baseline. Additional details on the selection of baseline
units may be found in chapter 5 of the NOPR TSD.
Table IV.1 presents the baseline levels identified for each
dishwasher product class in the January 2022 Preliminary Analysis, and
Table IV.2 presents the baseline levels identified for each dishwasher
product class in this NOPR.
Table IV.1--Baseline Dishwasher Efficiency Levels Evaluated in the January 2022 Preliminary Analysis \33\
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Product class energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Standard-size..................................... 307 263 5.0
Compact-size...................................... 222 178 3.5
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
Table IV.2--Baseline Dishwasher Efficiency Levels Proposed in This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Product class energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Standard-size..................................... 307 263 5.0
Compact-size...................................... 222 191 3.5
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
DOE updated the baseline efficiency level for the compact-size
dishwasher product class from 178 kWh/year to 191 kWh/year, when using
appendix C2, as shown in Table IV.1 and Table IV.2. In the January 2022
Preliminary Analysis, DOE translated the current compact-size product
class standard level of 222 kWh/year, which is based on 215 annual
cycles, to an EAEU based on 184 annual cycles using the baseline
standby power energy use estimate of 2.3 watts from the December 2016
Final Determination (See chapter 7 of the December 2016 Final
Determination TSD).\34\ However, based on its most
[[Page 32531]]
recent testing of compact-size dishwashers, conducted in October 2020,
DOE determined for this NOPR that current baseline compact-size
dishwashers consume 0.5 watts in standby mode. Using this updated
standby power value to translate 222 kWh/year from 215 annual cycles to
184 annual cycles, DOE calculated an updated baseline EAEU value of 191
kWh/year for compact-size dishwashers. Accordingly, DOE is proposing
the baseline compact-size dishwasher efficiency level to be 191 kWh/
year and 3.5 gal/cycle.
---------------------------------------------------------------------------
\33\ See chapter 5, section 5.3.1 of the January 2022
Preliminary TSD for further information. The second Estimated Annual
Energy Use column did not appear in the January 2022 Preliminary
TSD, but has been added to reflect the changes in the January 2023
TP Final Rule.
\34\ To translate the current dishwasher EAEU standards from 215
annual cycles to 184 annual cycles, DOE separated the EAEU into
annual active mode energy use and annual standby mode energy use.
DOE multiplied the annual active mode energy use by 184 cycles/year
and divided by 215 cycles/year, then added back the annual standby
energy use to determine updated EAEU values based on 184 annual
cycles.
---------------------------------------------------------------------------
DOE requests comment on the proposed baseline compact-size
dishwasher EAEU of 191 kWh/year for this NOPR.
b. Higher Efficiency Levels
Using the efficiency-level approach, the higher 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 this approach, DOE identified four efficiency levels
beyond the baseline for standard-size dishwashers and two for the
compact-size product class.
Table IV.3 and Table IV.4 present the efficiency levels for
standard-size and compact-size dishwashers, respectively, from the
January 2022 Preliminary Analysis.
Table IV.3--Efficiency Levels for Standard-Size Dishwashers Evaluated in the January 2022 Preliminary Analysis
\35\
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Efficiency level energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 307 263 5.0
1................................................. 270 232 3.5
2................................................. 260 223 3.3
3................................................. 240 206 3.2
4 (Max-Tech)...................................... 225 193 2.4
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
Table IV.4--Efficiency Levels for Compact-Size Dishwashers Evaluated in the January 2022 Preliminary Analysis
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Efficiency level energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 222 178 3.5
1................................................. 203 174 3.1
2 (Max-Tech)...................................... 144 124 1.6
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
In the January 2022 Preliminary Analysis, DOE requested comment on
whether the efficiency levels for each product class were appropriate.
DOE also observed that the design options at baseline and EL 1 for
compact-size dishwashers were the same and sought feedback on the
differences, if any, between baseline and EL 1 compact-size dishwasher
design options. See Executive Summary, section ES.4.4 of the January
2022 Preliminary TSD. DOE did not receive any comments on the
similarities or differences in design options between baseline and EL 1
for compact-size dishwashers. The following paragraphs summarize the
comments DOE received regarding the efficiency levels for each product
class.
---------------------------------------------------------------------------
\35\ See chapter 5, section 5.3.2 of the January 2022
Preliminary TSD for further information. The second Estimated Annual
Energy Use column did not appear in the January 2022 Preliminary
TSD, but has been added to reflect the changes in the January 2023
TP Final Rule.
---------------------------------------------------------------------------
AHAM commented that energy conservation standards more stringent
than ENERGY STAR V. 6.0 criteria are likely to result in limited energy
savings, degraded performance, and, due to undesirable consumer
behaviors such as increased handwashing and pre-rinsing, increased
water and energy consumption. (AHAM, No. 26 at p. 2) Whirlpool
commented that consumers would be dissatisfied with dishwasher
performance at EL 2 and above, which will lead to compensatory
behaviors, such as pre-rinsing, handwashing, using heavier cycles and
options, and rewashing dishes, that lower the overall expected energy
and water savings from such standards. Whirlpool requested that DOE
assess and quantify this compensatory behavior in its analysis.
(Whirlpool, No. 21 at p. 6)
AHAM commented that, if DOE did not include a cleaning index
threshold in the dishwashers test procedure, the January 2022
Preliminary Analysis justified amended energy conservation standards
for dishwashers up to, but not exceeding, EL 1. AHAM stated that
products on the market have a demonstrated capability to achieve EL 1
while retaining consumer satisfaction with cleaning performance, drying
performance, and cycle duration. (AHAM, No. 26 at p. 3) AHAM commented
that DOE's data demonstrate that many models at EL 1 would not meet
DOE's cleaning index threshold of 65 proposed in the December 2021 TP
NOPR, and would require re-testing. (AHAM, No. 26 at p. 13) In late
comments submitted after the close of the comment period, AHAM noted
that its initial analysis indicating that many models at EL 1 would not
meet DOE's cleaning index threshold of 65 proposed in the December 2021
TP NOPR is unchanged by its updated comments, wherein AHAM commented
that its data from the 2013 round robin testing was more relevant,
given that the test variation in cleaning index based on the 2013 round
robin testing was also 7. (AHAM, No. 31 at p. 4)
AHAM stated that dishwashers are nearing maximum efficiency under
the available technology, and additional
[[Page 32532]]
efficiency gains are not available without increasing costs or
sacrificing performance or product functionality. (AHAM, No. 26 at p.
3) AHAM also commented that more radical or comprehensive the design
change, the more likely retooling is necessary and the greater the
product cost and the investment. AHAM also stated current dishwasher
platforms are at the limit of energy and water use reduction achievable
through changes in components. (AHAM, No. 26 at pp. 14-15)
DOE notes that its analyses account for consumer behaviors such as
handwashing when conducting the energy and water use analyses.\36\ DOE
also notes that testing and teardowns showed that dishwashers that span
a range of efficiencies are available currently, utilizing available
technology options, and these models are capable of achieving a
cleaning index of at least 70, as required by the test procedure
adopted in the January 2023 TP Final Rule that would be applicable for
any amended energy conservation standards. Additionally, DOE's teardown
analysis showed that a product platform change would not be necessary
until the max-tech efficiency level for standard-size dishwashers.
---------------------------------------------------------------------------
\36\ See section 10.4.2 in chapter 10 of the NOPR TSD.
---------------------------------------------------------------------------
Whirlpool commented that manufacturers typically underestimate
product efficiency, meaning that the vast majority of existing
dishwasher models already perform within the energy limit where DOE
believes cleaning performance can be maintained, rendering amended
energy conservation standards beyond EL 1 for standard-size dishwashers
unnecessary. (Whirlpool, No. 21 at p. 4) Whirlpool provided an example
to note that if manufacturers use a 3 to 5-percent safety factor, it
will imply that units rated at EL 1 (i.e., 270 kWh/year and 3.5 gal/
cycle when testing according to the currently applicable appendix C1)
already perform between 257-262 kWh/year and 3.3-3.4 gal/cycle.
Whirlpool stated that this indicates that many models are already
currently within the energy limit to where DOE believes that cleaning
performance can be maintained. (Id.) DOE notes that it evaluated
dishwasher cleaning performance based on the rated energy and water use
values certified by manufacturers. These results showed that units up
to the rated efficiencies at EL 3 achieved the specified cleaning index
threshold. Additionally, during manufacturer interviews, some
manufacturers acknowledged that DOE's cleaning index threshold was
achievable at efficiency levels up to EL 3 for standard-size
dishwashers. These manufacturers also stated that for certain models
that may not meet the cleaning index threshold, the safety margin
already built into the rated energy and water use values for such
models could be narrowed to maintain the existing efficiency level
without requiring recertification or to exceed the existing efficiency
level without requiring a redesign.
GEA supported increasing the minimum efficiency standard for
standard-size dishwashers to EL 1. (GEA, No. 25 at p. 2) But, GEA
commented that it opposed an increase to EL 1 if it were coupled with a
cleaning performance metric because, according to GEA, DOE's cleaning
performance metric as proposed in the December 2021 TP NOPR is flawed.
(Id.) GEA commented that the limited data provided by DOE indicate that
at least 73 percent of units would fail the cleaning performance score
at EL 1. (Id.)
The CA IOUs commented that EL 2 is an appropriate higher efficiency
level for both standard-size and compact-size dishwashers. The CA IOUs
stated that EL 1 would not provide significant enough energy and water
savings due to the fact that 100 percent of standard-size dishwasher
shipments in 2020 already met this efficiency level, according to
ENERGY STAR. Further, for standard-size dishwashers, the CA IOUs stated
that EL 2 would provide an average lifetime savings of $4 per consumer
and a net benefit to the majority of consumers, with an estimated
payback period of 7 years that is less than half of the average
dishwasher lifetime of 15.2 years. For compact-size dishwashers, the CA
IOUs stated that EL 2 is a reasonable standard level noting that it
would provide average lifetime cost savings of $36 per consumer with 60
percent of consumers experiencing a net benefit and a payback period of
7.1 years. (CA IOUS, No. 27 at pp. 1-2) The CA IOUs further commented
that DOE should amend standards to EL 2 to coordinate with the adoption
of the ENERGY STAR V. 7.0 \37\ specification, which finalized more
stringent energy and water use qualification criteria. (Id.)
---------------------------------------------------------------------------
\37\ ENERGY STAR Program Requirements. Product Specification for
Residential Dishwashers. Eligibility Criteria. Version 7.0.
Effective date: July 19, 2023.
---------------------------------------------------------------------------
The Joint Commenters stated that dishwashers are able to meet EL 3
while providing high consumer satisfaction across various areas of
performance. The Joint Commenters noted that: DOE investigated, in the
January 2022 Preliminary Analysis, the potential impact of reduced
energy and water consumption on dishwasher cleaning performance and
cycle time; and (2) EPA analyzed during the development of the ENERGY
STAR V. 7.0 Specification how dishwashers meeting the proposed
requirements perform across a range of metrics that impact consumer
satisfaction. (Joint Commenters, No. 23 at p. 1) The Joint Commenters
stated that EPA's analysis found that all dishwasher models rated by
Consumer Reports that met the ENERGY STAR V. 7.0 requirements (i.e., EL
3) received a cleaning performance rating of Very Good or Excellent.
The Joint Commenters additionally noted that both DOE and EPA found no
clear correlation between cycle time and energy and water consumption
and that the average cycle time of models rated by Consumer Reports for
models that meet ENERGY STAR V. 7.0 was 142 minutes, which is less than
the average cycle time of 148 minutes across all models rated by
Consumer Reports. The Joint Commenters additionally noted that higher
efficiency models are rated better than average for noise performance
and there were minimum differences in drying performance when comparing
models that met the ENERGY STAR V. 7.0 requirements to other reviewed
models. Finally, the Joint Commenters noted that the overall
satisfaction rating for models meeting the ENERGY STAR V. 7.0
requirements was 4.36 compared to 3.56 for all models. (Joint
Commenters, No. 23 at p. 2) NEEA commented that its consumer
satisfaction data for high efficiency dishwashers supports DOE's
conclusion regarding cleaning performance (i.e., cleaning performance
can be maintained up to EL 3 for standard-size dishwashers) and
demonstrates that noise and cycle time do not increase up to EL 3.
Specifically, NEEA commented that its market research found that
consumer satisfaction was higher at EL 1 and EL 3 compared to the
baseline (i.e., EL 0) and it was likely that these units operated
quietly compared to baseline units. (NEEA, No. 24 at pp. 2-3)
Whirlpool commented that amended standards beyond EL 1 would allow
only a third or less of the total allowable energy usage for drying
after allocating energy to cleaning, which is less than the half or
more of total energy use that Whirlpool would want to allocate to
drying to ensure excellent performance. (Whirlpool, No. 21 at p. 4)
Whirlpool commented that manufacturers struggle to deliver consistent
drying performance due to existing efficiency standards, and
[[Page 32533]]
the problem would be exacerbated at all levels beyond EL 1. Whirlpool
stated that there is not enough energy that can be allocated to drying
performance after available energy is allocated to the core function of
a dishwasher, cleaning performance, and that lower final rinse
temperatures and shorter heated drying necessitated by efficiency
standards make it difficult to completely dry all items in the
consumer's load and the interior tub itself. (Id.) During the January
2022 Preliminary Analysis webinar, AHAM asked if DOE had evaluated the
impact of potentially more stringent standards on drying performance,
noise, or other factors. (AHAM, Public Meeting Transcript, No. 20 at p.
43) AHAM commented that in order to design dishwashers that meet the
cleaning index threshold requirements proposed in the December 2021 TP
NOPR as well as potentially more stringent standards, it is likely that
manufacturers will need to reduce drying energy, lengthen cycles, and
potentially impact noise levels. (AHAM, No. 31 at p. 4)
Whirlpool commented that beyond EL 1, plastic tub dishwashers which
are lower priced and common amongst lower-income consumers, may not be
able to retain enough heat to keep the internal temperature high enough
with lower rinse temperatures and shorter heated drying durations, to
adequately remove water from dishes and the interior tub surfaces.
(Whirlpool, No. 21 at p. 4) Whirlpool further commented that if
manufacturers cannot offer competitive plastic tub dishwashers, it
would force low-income consumers to spend approximately $200 or more on
the purchase of a new dishwasher, negating potential lifetime energy
and water savings for the consumer. (Whirlpool, No. 21 at p. 5)
DOE notes that appendix C2 regulates only the normal cycle, as long
as the normal cycle meets the specified cleaning index threshold. As
such, DOE expects that a variety of other, non-regulated cycles
available on current dishwasher models would continue to be available
even if DOE were to amend existing standards, given that such cycle
types and/or cycle options have not been, and would continue to not be,
subject to any water or energy limits as a result of any energy
conservation standards. Specifically, DOE expects quick cycles, which
often clean a load within 1 hour or less, would still be available on
dishwasher models that currently offer such a cycle. DOE also expects
existing drying options would continue to be available on dishwashers
regardless of amended standards up to at least EL 3. DOE additionally
expects any amended standards up to at least EL 3 would not stifle
innovation around drying options and other features that could be
implemented on dishwashers outside the regulated cycle.
Additionally, while DOE's teardown analysis shows that plastic tubs
are available in dishwasher models at efficiency levels higher than EL
1, and DOE estimates that plastic tubs can be used up to EL 3 based on
its testing and teardowns, DOE also recognizes potential utility
concerns associated with implementing plastic tubs at higher efficiency
levels. DOE received similar feedback during manufacturer interviews
that some aspect of dishwasher performance could be compromised
particularly at EL 3 and beyond and DOE considered this feedback during
its analysis.
DOE additionally notes that its testing demonstrated that standard-
size dishwashers can achieve the threshold cleaning performance on the
normal cycle at all soil levels up to EL 3 and at least one of the
three soil levels at the max-tech efficiency level (EL 4).
Additionally, the ENERGY STAR Most Efficient 2022 \38\ database
includes other models besides the max-tech unit that DOE tested that
meet or exceed EL 4. To qualify for ENERGY STAR Most Efficient 2022,
units need to meet a minimum cleaning index of 70, including scores for
spots, streaks, and rack contact marks which are excluded from DOE's
test procedure at appendix C2, at each soil level on the normal cycle.
Accordingly, standard-size dishwashers that can achieve the threshold
cleaning performance on the normal cycle at EL 4 currently exist on the
market. DOE's testing also indicated that compact-size dishwashers can
achieve the threshold cleaning performance on the normal cycle even at
the heavy soil load.\39\
---------------------------------------------------------------------------
\38\ ENERGY STAR Most Efficient 2022. Dishwashers. Available at:
www.energystar.gov/most-efficient/me-certified-dishwashers/results?is_most_efficient_filter=Most+Efficient (last accessed
October 28, 2022).
\39\ All of the compact units in DOE's test sample were non-soil
sensing dishwashers, which are not required under appendix C2 to be
tested with lesser soil loads if the cleaning performance threshold
is met with the heavy soil load.
---------------------------------------------------------------------------
During the January 2022 Preliminary Analysis webinar, AHAM asked if
DOE had conducted any testing or crosswalk to evaluate the impact of
the cleaning performance requirement proposed in the December 2021 TP
NOPR on the efficiency levels presented in the January 2022 Preliminary
Analysis. (AHAM, Public Meeting Transcript, No. 20 at p. 15) AHAM
commented that if DOE included a cleaning performance metric, DOE would
need to account for the changes in measured energy and water efficiency
that would likely result from the amendment and repeat its analysis to
re-establish the baseline and examine the distribution of higher-
efficiency models. (AHAM, No. 26 at pp. 3, 14) AHAM commented that,
based on the data DOE presented in the January 2022 Preliminary TSD,
most dishwashers would need to be re-rated, and many may be rated at
lower efficiency levels because the cleaning index threshold proposed
in the December 2021 TP NOPR would require the products be tested at
their highest energy consuming cycle. (AHAM, No. 26 at p. 13)
DOE notes that the January 2023 TP Final Rule has established the
cleaning performance requirement in the dishwasher test procedure that
will be required to demonstrate compliance with any amended standards.
That is, any dishwasher manufactured or sold in the United States on or
after the compliance date of any such amended standards will be
required to meet a minimum cleaning index threshold of 70 as a
condition of a valid test cycle. As such, no products would have to be
re-rated to comply with the current standards. Based on an analysis of
DOE's test data (presented previously in the December 2021 TP NOPR,
January 2022 Preliminary TSD, and January 2023 TP Final Rule),
dishwasher models that can meet or exceed the cleaning index threshold
of 70 on the normal cycle for all test cycles are already available up
to EL 3. Additionally, as mentioned elsewhere in this document, during
manufacturer interviews, some manufacturers acknowledged that DOE's
cleaning index threshold was achievable at efficiency levels up to EL 3
for standard-size dishwashers and, for certain models that may not meet
this threshold, the rated energy and water use values have an allowance
to allow potential increases in energy and water consumption without
requiring models to be re-rated at a higher energy and water
consumption value. Accordingly, DOE has not adjusted its baseline or
higher efficiency levels in this NOPR.
Whirlpool reiterated its comments from the October 2020 RFI that
until water filtration technology changes and poor water dilution
issues were resolved by a new technology, Whirlpool expects cleaning
performance will degrade at increasing efficiency levels. (Whirlpool,
No. 21 at p. 3) While DOE recognizes that poor water dilution can
impact cleaning performance, as mentioned elsewhere in this document,
DOE's testing and analysis indicates that satisfactory cleaning
performance is
[[Page 32534]]
achievable at all efficiencies. Additionally, the minimum cleaning
index threshold requirement specified in the new appendix C2 ensures
that cleaning performance will be maintained after the compliance date
of any new standards.
The Joint Commenters commented that DOE should evaluate an
additional intermediate efficiency level for compact-size dishwashers
between EL 1 and EL 2 to cover a significant gap of models that meet
the requirements of EL 1, but do not meet EL 2. The Joint Commenters
noted that over half of the models listed in CCMS meet the requirements
of EL 1, but fall short of EL 2. (Joint Commenters, No. 23 at pp. 2-3)
NEEA also commented on the lack of gradation between EL 1 and EL 2 and
stated that DOE should consider adding an efficiency level between EL 1
and EL 2 for compact-size dishwashers for similar reasons. NEEA stated
that the TSD shows a group of products at 1.75 gal/cycle and 155 kWh/
year as the water and energy values for the potential intermediate
level. (NEEA, No. 24 at p. 2) DOE considered whether to include an
additional gap-fill level between EL 1 and EL 2 for compact-size
dishwashers in the NOPR analysis. However, DOE found only 11 compact-
size basic models out of 65 compact-size basic models, excluding
``ultra-compact'' units with capacities less than 4 place settings,\40\
that could be considered for such a gap-fill level, with EAEUs ranging
from 155 kWh/year to 144 kWh/year and water consumption from 1.8 gal/
cycle to 1.7 gal/cycle. Given that compact-size dishwashers comprise
roughly 2 percent of the market, and the even smaller share of
dishwashers at such an intermediate level, DOE determined that an
additional gap-fill efficiency level is not warranted.
---------------------------------------------------------------------------
\40\ DOE did not include ``ultra-compact'' compact-size
dishwashers when considering a gap-fill efficiency level because
these dishwashers could limit utility for certain consumers given
their small capacity.
---------------------------------------------------------------------------
The CA IOUs commented that DOE should revisit its analysis of the
max-tech efficiency level for standard-size dishwashers. The CA IOUs
commented that they reviewed DOE's Compliance Certification Database
(``CCD'') and observed that the current market exceeds the max-tech
level specified in the January 2022 Preliminary TSD. The CA IOUs noted
that even though DOE screened out some technologies, it appeared that
the max-tech units observed by the CA IOUs represent levels of
efficiency available in today's market beyond DOE's max-tech level. (CA
IOUs, No. 27 at pp. 5-6) DOE notes that while units exist that exceed
the max-tech efficiency level presented in the January 2022 Preliminary
TSD, DOE did not consider these units for the max-tech efficiency level
for the following reasons: (1) they utilize a cold-water connection,
which DOE eliminated from consideration as a technology option in the
screening analysis; (2) they have a rated capacity of eight place
settings, but do not use a typical standard dishwasher configuration
(i.e., they have an 18-inch width instead of the more common 24-inch
width); (3) they are no longer available on the market; or (4) there is
an inconsistency between the rated EAEU in DOE's CCD and the EAEU
listed on the model's EnergyGuide label. DOE reviewed the CCD and
proposes to maintain the current EL 4 level for the reasons stated.
Table IV.5 shows the efficiency levels DOE evaluated for standard-
size dishwashers in this NOPR analysis.
Table IV.5--Efficiency Levels for Standard-Size Dishwashers Proposed in This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Efficiency Level energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 307 263 5.0
1................................................. 270 232 3.5
2................................................. 260 223 3.3
3................................................. 240 206 3.2
4 (Max-Tech)...................................... 225 193 2.4
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
DOE selected EL 1 to correspond to the current ENERGY STAR V. 6.0
qualification criteria for standard-size dishwashers. Seventy percent
of standard-size dishwasher basic models, as included in DOE's CCD,\41\
are rated at EL 1. DOE considered an intermediate level between ENERGY
STAR V. 6.0 and the baseline, but determined it to be unnecessary,
since only 5 percent of standard-size dishwasher basic models do not
meet the water and energy use criteria of the ENERGY STAR V. 6.0 level.
Therefore, further disaggregation of such a small portion of the market
is not warranted. DOE selected EL 3 as the level that corresponds to
the energy and water consumption levels that correspond to the 2022
ENERGY STAR Most Efficient \42\ qualification criteria as well as the
finalized ENERGY STAR V. 7.0 criteria which have a scheduled effective
date of July 2023.\43\ Additionally, 10 percent of standard-size
dishwasher basic models meet the EL 3 criteria according to DOE's CCD.
DOE established EL 2 as a gap-fill level by identifying product
efficiency ``clusters'' when analyzing the range of efficiencies
available on the market. The EAEU and water consumption values
associated with a significant cluster, comprising approximately 14
percent of basic models, between EL 1 and EL 3 served as the basis for
selecting EL 2. DOE also defines a ``max-tech'' efficiency level to
represent the maximum possible efficiency for a given product. EL 4 is
the max-tech efficiency level, as defined by the maximum available
technology that DOE identified on the market at the time of its
analysis, excluding from consideration those models discussed
previously. DOE did not identify any working prototypes that were more
efficient than this maximum available technology.
---------------------------------------------------------------------------
\41\ U.S. Department of Energy's Compliance Certification
Database. Dishwashers (last accessed: July 19, 2022).
\42\ 2022 ENERGY STAR Most Efficient requirement for
dishwashers: www.energystar.gov/sites/default/files/ENERGY%20STAR%20Most%20Efficient%202022%20Dishwasher%20Final%20Criteria%20Memo_0.pdf.
\43\ ENERGY STAR Program Requirements for Residential
Dishwashers: www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Version%207.0%20Residential%20Dishwasher%20Final%20Specification.pdf.
---------------------------------------------------------------------------
Table IV.6 shows the efficiency levels DOE evaluated for compact-
size dishwashers in this NOPR analysis.
[[Page 32535]]
Table IV.6--Efficiency Levels for Compact-Size Dishwashers Proposed in This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Estimated annual Per-cycle water
Efficiency level energy use (kWh/ energy use (kWh/ consumption (gal/
year) * year) ** cycle)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 220 191 3.5
1................................................. 203 174 3.1
2 (Max-Tech)...................................... 144 124 1.6
----------------------------------------------------------------------------------------------------------------
* Using appendix C1.
** Using appendix C2.
DOE evaluated two incremental efficiency levels above the baseline
for compact-size dishwashers. DOE selected EL 1 to correspond to the
current ENERGY STAR V. 6.0 qualification criteria for compact-size
dishwashers. Sixty-six percent of compact-size dishwasher models in
DOE's CCD are rated at EL 1. DOE identified EL 2 as the max-tech
efficiency level, defined by the maximum available technology that DOE
identified on the market at the time of its analysis.\44\ Based on its
analysis of the CCD, DOE identified EAEU and water consumption levels
of 144 kWh/year, based on 215 annual cycles, and 1.6 gal/cycle for EL
2. Approximately 21 percent of compact-size basic models in DOE's CCD
are rated at EL 2. At EL 2, all units in DOE's CCD are either under-
counter drawer units or ultra-compact units with rated capacities of 1
or 2 place settings. DOE is not aware of any countertop compact-size
dishwasher basic models on the market with rated capacities of 4 or
more place settings beyond EL 1. However, based on its analysis, DOE
understands that it is technologically feasible to design countertop
compact-size dishwashers with 4 or more place settings that can meet
the energy and water consumption requirements at EL 2.
---------------------------------------------------------------------------
\44\ For reasons similar to those described in the consideration
of a potential compact-size dishwasher gap-fill level, ultra-compact
dishwashers were excluding from consideration as the compact-size
max-tech level. Additionally, as discussed previously, DOE did not
consider those compact-size models with a discrepancy between the
rated EAEU in the CCD and the value on the EnergyGuide label.
---------------------------------------------------------------------------
DOE requests feedback on the efficiency levels analyzed for each
product class in this proposal.
2. Manufacturer Production Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, the availability and timeliness of purchasing the product on
the market. The cost approaches are summarized as follows:
Physical teardowns: Under this approach, DOE physically
dismantles a commercially available product, component-by-component, to
develop a detailed bill of materials 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 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 provides the basis for the MPC estimates.
To develop the incremental MPCs associated with improving product
efficiency, DOE started with the baseline unit cost model and added the
expected changes associated with improving efficiency at each higher
efficiency level. By doing this, DOE excluded the costs of any non-
efficiency related components from the more efficient units.
Table IV.7 and Table IV.8 show incremental manufacturing costs
developed in the January 2022 Preliminary Analysis for standard-size
and compact-size dishwashers, in 2020 dollars.
---------------------------------------------------------------------------
\45\ See Chapter ES section ES.3.3.4 of the January 2022
Preliminary Analysis.
Table IV.7--Efficiency Levels and Incremental Manufacturer Production Costs for Standard-Size Dishwashers
Evaluated in the January 2022 Preliminary Analysis \45\
----------------------------------------------------------------------------------------------------------------
Estimated annual Per-cycle water
Efficiency level energy use (kWh/ consumption (gal/ Incremental MPC
year) * cycle) (2020$)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 263 5.0 -
1................................................. 232 3.5 $18.27
2................................................. 223 3.3 27.53
3................................................. 206 3.2 71.12
4 (Max-Tech)...................................... 193 2.4 113.86
----------------------------------------------------------------------------------------------------------------
* Using appendix C2.
[[Page 32536]]
Table IV.8--Efficiency Levels and Incremental Manufacturer Production Costs for Compact-Size Dishwashers
Evaluated in January 2022 Preliminary Analysis \46\
----------------------------------------------------------------------------------------------------------------
Estimated annual Per-cycle water
Efficiency level energy use (kWh/ consumption (gal/ Incremental MPC
year) * cycle) (2020$)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 178 3.5 ..................
1................................................. 174 3.1 ..................
2 (Max-Tech)...................................... 124 1.6 $37.41
----------------------------------------------------------------------------------------------------------------
* Using appendix C2.
In the January 2022 Preliminary Analysis, DOE sought comment on
whether the MPCs at each efficiency level were appropriate given the
associated incremental changes manufacturers would likely make to meet
these levels.
---------------------------------------------------------------------------
\46\ See Chapter ES section ES.3.3.5 of the January 2022
Preliminary Analysis.
---------------------------------------------------------------------------
The Joint Commenters and NEEA commented that DOE may be
overestimating the incremental costs to meet intermediate efficiency
levels for standard-size dishwashers, citing EPA's analysis of prices
of available models on the market meeting the EL 3 level which is
equivalent to the ENERGY STAR V. 7.0 criteria. While both commenters
acknowledged that EPA's methodology is based on retail pricing instead
of MPCs, the Joint Commenters and NEEA concluded that DOE should
reevaluate the incremental costs at EL 3 since DOE's preliminary
analysis showed an incremental cost of more than two times the EPA
estimate. (Joint Commenters, No. 23 at p. 2; NEEA, No. 24 at pp. 1-2)
DOE notes that its incremental MPCs, which were determined from
teardowns and reviewed with manufacturers during interviews, estimate
the manufacturing cost of dishwashers including any necessary redesigns
to meet potential standards. Topics of discussion with manufacturers
included the design options that would be used to reach each efficiency
level for standard-size products as well as the costs associated with
those design options. DOE also reviewed its design options assumptions
and cost estimates for all components at each EL to identify if any
changes to its preliminary estimates would be appropriate. Based on
these discussions and additional analysis, DOE estimated its standard-
size dishwasher EL 3 costs to be the same as those presented in the
January 2022 Preliminary TSD, adjusted to 2022$.
For the other efficiency levels above the baseline for standard-
size dishwashers, DOE received manufacturer feedback that DOE had
identified all of the design options manufacturers would use to improve
efficiencies. Manufacturers also generally agreed with the design
options DOE assumed for each efficiency level, but some manufacturers
asserted that the distinction between EL 1 and EL 2 is less than DOE's
preliminary estimates. Upon reviewing its teardown sample again, DOE
observed that the same technology options exist at both EL 1 and EL 2,
with the EL 2 units often being rated with a smaller tolerance on the
rated EAEU and water consumption. In general, DOE observed that EL 2
units reduce rated energy and water use primarily by improving the
control strategy and design tolerances that are implemented to more
closely control water temperature, water fill volumes, etc.
Accordingly, in this NOPR, DOE revised its estimated design options and
MPC for standard-size dishwashers at EL 2. Specifically, DOE estimates
that the same design options would be implemented at EL 2 as are used
at EL 1, but with improved control strategies. Under this approach, the
MPC at EL 2 would be the same as that at EL 1.
Table IV.9 shows the baseline MPCs for standard-size and compact-
size dishwashers estimated for this NOPR. Table IV.10 and Table IV.11
show the incremental MPCs from the baseline for standard-size and
compact-size dishwashers, respectively, that were estimated for this
NOPR.
Table IV.9--Baseline Manufacturer Production Costs Estimated for This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Per-cycle water Manufacturer
Product class energy use (kWh/ consumption (gal/ production cost
year) * cycle) (2022$)
----------------------------------------------------------------------------------------------------------------
Standard-size..................................... 263 5.0 184.35
Compact-size...................................... 191 3.5 215.17
----------------------------------------------------------------------------------------------------------------
* Using appendix C2.
Table IV.10--Incremental Manufacturer Production Costs for Standard-Size Dishwashers Proposed for This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Per-cycle water
Efficiency level energy use (kWh/ consumption (gal/ Incremental MPC
year) * cycle) (2022$)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 263 5.0 ..................
1................................................. 232 3.5 10.17
2................................................. 223 3.3 10.17
3................................................. 206 3.2 61.50
4 (Max-Tech)...................................... 193 2.4 91.25
----------------------------------------------------------------------------------------------------------------
* Using appendix C2.
[[Page 32537]]
Table IV.11--Incremental Manufacturer Production Costs for Compact-Size Dishwashers Proposed for This NOPR
----------------------------------------------------------------------------------------------------------------
Estimated annual Per-cycle water
Efficiency level energy Use (kWh/ consumption (gal/ Incremental MPC
year) * cycle) (2022$)
----------------------------------------------------------------------------------------------------------------
Baseline.......................................... 191 3.5 ..................
1................................................. 174 3.1 ..................
2 (Max-Tech)...................................... 124 1.6 39.45
----------------------------------------------------------------------------------------------------------------
*Using appendix C2.
The detailed description of DOE's determination of costs for
baseline and higher efficiency levels is provided in chapter 5 of the
NOPR TSD.
DOE requests comment on the baseline MPCs and incremental MPCs
developed for each dishwasher product class.
3. Manufacturer Selling Price
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. DOE developed
an average manufacturer markup by examining the annual Securities and
Exchange Commission (``SEC'') 10-K reports filed by publicly traded
manufacturers primarily engaged in appliance manufacturing and whose
combined product range includes dishwashers.\47\ See chapter 12 of the
NOPR TSD for additional detail on the manufacturer markup.
---------------------------------------------------------------------------
\47\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. Available at
www.sec.gov/edgar/search/ (last accessed September 27, 2022).
---------------------------------------------------------------------------
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 dishwashers, DOE further developed baseline and incremental
markups for each link in the distribution chain (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.\48\
---------------------------------------------------------------------------
\48\ 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.\49\
---------------------------------------------------------------------------
\49\ U.S. Census Bureau, Annual Retail Trade Survey. 2017.
www.census.gov/programs-surveys/arts.html.
---------------------------------------------------------------------------
AHAM commented that it objects to DOE's use of incremental markups
in translating manufacturer costs to retail prices. AHAM stated that it
has offered a wide range of actual results demonstrating that DOE's
theoretical model has no empirical justification. (AHAM, No. 26 at p.
10)
DOE's incremental markup approach assumes that an increase in
profitability, which is implied by keeping a fixed markup when the
product price goes up, is unlikely to be viable over time in reasonably
competitive markets. DOE recognizes that retailers are likely to seek
to maintain the same markup on appliances in response to changes in
manufacturer sales prices after an amendment to energy conservation
standards for dishwashers. However, DOE believes that retail pricing is
likely to adjust over time as retailers are forced to readjust their
markups to reach a medium-term equilibrium in which per-unit profit is
relatively unchanged before and after standards are implemented.
DOE acknowledges that retailer markup practices in response to
amended standards are complex and vary with business conditions.
However, DOE's analysis necessarily only considers changes in appliance
offerings that occur in response to amended standards. DOE continues to
maintain that its assumption that standards do not facilitate a
sustainable increase in profitability is reasonable.
Chapter 6 of the NOPR TSD provides additional detail on DOE's
development of the baseline and incremental retail markups.
E. Energy and Water Use Analysis
The purpose of the energy and water use analysis is to determine
the annual energy consumption of dishwashers at different efficiencies
in representative U.S. single-family homes, multi-family residences,
and mobile homes, and to assess the energy savings potential of
increased dishwasher efficiency. The energy use analysis estimates the
range of energy use of dishwashers in the field (i.e., as they are
actually used by consumers). The energy and water use analysis provides
the basis for other analyses DOE performed, particularly assessments of
the energy and water savings and the savings in consumer operating
costs that could result from adoption of amended or new standards.
DOE determined the average annual energy and water consumption of
dishwashers by multiplying the per-cycle energy and water consumption
by the number of cycles per year. In the January 2022 Preliminary
Analysis, DOE used the Energy Information Administration (``EIA'')'s
2015 Residential Energy Consumption Survey (``RECS'') data to calculate
an estimate of annual number of cycles.\50\ Having determined number of
cycles of dishwasher use per year for each RECS household, DOE
determined the corresponding annual energy and water consumption. In
the January 2022 Preliminary Analysis, DOE determined the average
annual cycles of operation for dishwashers to be 185 cycles per year
based on RECS 2015.
---------------------------------------------------------------------------
\50\ U.S. Department of Energy--Energy Information
Administration, Residential Energy Consumption Survey, 2015 Public
Use Microdata Files, 2015. Washington, DC. Available online at:
www.eia.doe.gov/emeu/recs/recspubuse15/pubuse15.html.
---------------------------------------------------------------------------
[[Page 32538]]
The CA IOUs recommended that DOE reconsider its decision to use 185
average cycles per year in its analysis, and stated that RECS 2015 may
not accurately represent current consumer usage suggesting that later
surveys may find that use bounces back. Additionally, the CA IOUs
requested that DOE conduct a new survey on consumer usage to capture
current usage patterns and dishwasher load levels. (CA IOUs, No. 27 at
p. 3)
For this NOPR analysis, DOE primarily used data from RECS 2020,
which provides information on the frequency of dishwasher usage per
week for each household, to determine dishwasher utilization.\51\ RECS
2020 is the most recent data available regarding consumer usage that is
based on a nationally representative sample of housing units.\52\ For
surveyed households with a dishwasher for which usage was greater than
zero, RECS 2020 showed an increase, relative to RECS 2015, to an
average of 197 cycles per year, which was used in this analysis.\53\ A
report from Sun et al. showed that the average annual dishwasher cycle
counts obtained from Pecan Street field metered data based on a limited
household sample size and limited geographic locations were comparable
with the average cycle counts reported by RECS 2015 and RECS 2020.\54\
DOE is not aware of any publicly available data source in which
dishwasher load levels are reported.
---------------------------------------------------------------------------
\51\ U.S. Department of Energy--Energy Information
Administration, Residential Energy Consumption Survey, 2015 Public
Use Microdata Files, 2015. Washington, DC. Available online at:
www.eia.gov/consumption/residential/data/2020/.
\52\ Compared to RECS 2015, RECS 2020 has a 72-percent larger
sample and more refined definition of household demographics, which
provides more granular information for the LCC analyses about the
presence of dishwashers in U.S. households and the variability of
their use.
\53\ DOE notes the 6-percent difference in annual cycle values
used in the test procedure final rule for dishwashers (88 FR 3234)
and this NOPR analysis. Appendix 8G shows the LCC results using the
RECS 2015 sample.
\54\ Sun, Qingyi, et. al. 2022. Using Field-Metered Data to
Characterize Consumer Usage Patterns of Residential Diswashers.
Lawrence Berkeley National Laboratory, Berkeley, CA.
---------------------------------------------------------------------------
NEEA stated that both market and field data analysis reveal typical
gas water heater efficiency factor is 0.62 to 0.70 EF, much lower than
the 0.78 EF used in the January 2022 Preliminary TSD. NEEA recommended
DOE to revisit the gas water heater efficiency value to ensure it is
nationally representative and to provide justification for the typical
gas water heat efficiency value in the final TSD. (NEEA, No. 24 at pp.
4-5) The Joint Commenters also urged DOE to reevaluate the assumed
water heater efficiencies to better reflect actual efficiencies in the
field in order to more accurately capture the energy savings associated
with reduced hot water consumption. The Joint Commenters stated that
DOE is overestimating the efficiencies of current water heaters in the
field and therefore underestimating the real-world energy savings for
dishwashers. The Joint Commenters estimated that the shipment-weighted
efficiencies for new water heaters are 92 percent and 64 percent for
electric and gas water heaters, respectively, and that average
efficiencies of water heaters found in the existing housing stock are
likely lower than those of new shipments. (Joint Commenters, No. 23 at
pp. 3-4)
In its analyses for consumer water heaters, DOE calculates the
energy use of water heaters using a simplified energy equation, the
water heater analysis model (``WHAM''). WHAM accounts for a range of
operating conditions and energy efficiency characteristics of water
heaters. To describe energy efficiency characteristics of water
heaters, WHAM uses three parameters that also are used in the DOE test
procedure: recovery efficiency, standby heat-loss coefficient, and
rated input power. The January 2022 Preliminary TSD states that DOE
used a recovery efficiency of 78 percent for gas water heaters, not
0.78 EF, for the calculation of hot water energy savings. The hot water
energy savings are almost directly proportional to the recovery
efficiency, and the NOPR analysis uses the most recent data reported
for the 2022 consumer water heater rulemaking.\55\ DOE requests comment
on the efficiency characteristics used in the consumer water heater
rulemaking described here and encourages comment in both rulemakings.
---------------------------------------------------------------------------
\55\ DOE, 2022-03 Preliminary Analysis Technical Support
Document: Energy Efficiency Program for Consumer Products and
Commercial and Industrial Equipment: Consumer Water Heaters, March
2022. EERE-2017-BT-STD-0019-0018. Available at: www.regulations.gov/document/EERE-2017-BT-STD-0019-0018 (last accessed June 21, 2022).
---------------------------------------------------------------------------
Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for dishwashers.
DOE requests comment on the amount of water and energy used for
pre-rinsing dishes and flatware before their placement into a
dishwasher.
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
dishwashers. 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 (MSP, 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 dishwashers in the absence of new
or amended energy conservation standards. In contrast, the PBP for a
given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of
housing units. As stated previously, DOE developed household samples
from RECS 2020. For each sample household, DOE determined the energy
consumption for dishwashers and the appropriate energy price. By
developing a representative sample of households, the analysis captured
the variability in energy consumption and energy prices associated with
the use of dishwashers.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached
[[Page 32539]]
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 dishwashers user samples. For this
rulemaking, the Monte Carlo approach is implemented in MS Excel
together with the Crystal Ball\TM\ add-on.\56\ The model calculated the
LCC for products at each efficiency level for 10,000 housing units per
simulation run. The analytical results include a distribution of 10,000
data points showing the range of LCC savings for a given efficiency
level relative to the no-new-standards case efficiency distribution. In
performing an iteration of the Monte Carlo simulation for a given
consumer, product efficiency is chosen based on its probability. If the
chosen product efficiency is greater than or equal to the efficiency of
the standard level under consideration, the LCC 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.
---------------------------------------------------------------------------
\56\ 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 October 22, 2021).
---------------------------------------------------------------------------
DOE calculated the LCC and PBP for all consumers of dishwashers as
if each were to purchase a new product in the expected year of
compliance with new or amended standards. Amended standards would apply
to dishwashers manufactured 3 years after the date on which any new or
amended standard is published. (42 U.S.C. 6295(m)(4)(B)) At this time,
DOE estimates publication of a final rule in 2024. Therefore, for
purposes of its analysis, DOE used 2027 as the first year of compliance
with any amended standards for dishwashers.
Table IV.12 summarizes the approach and data DOE used to derive
inputs to the LCC and PBP calculations. The subsections that follow
provide further discussion. Details of the spreadsheet model, and of
all the inputs to the LCC and PBP analyses, are contained in chapter 8
of the NOPR TSD and its appendices.
Table IV.12--Summary of Inputs and Methods for the LCC and PBP Analysis
*
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Cost................. Derived by multiplying MPCs by
manufacturer and retailer markups and
sales tax, as appropriate. Used
historical data to derive a price
scaling index to project product costs.
Installation Costs........... Assumed no change in installation costs
with efficiency level.
Annual Energy and Water Use.. The standby wattage multiplied by the
hours per year in standby mode. Average
number of cycles based on RECS 2020
data.
Variability: Based on the RECS 2020.
Energy Prices................ Electricity: Based on EEI 2021.
Variability: Regional energy prices
determined for 9 regions.
Energy Price Trends.......... Based on AEO 2022 price projections.
Repair and Maintenance Costs. Assumed no change with efficiency level.
Product Lifetime............. Average: 15.2 years.
Discount Rates............... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the considered
appliances, or might be affected
indirectly. Primary data source was the
Federal Reserve Board's Survey of
Consumer Finances.
Compliance Date.............. 2027.
------------------------------------------------------------------------
* 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 NOPR TSD.
AHAM stated that consumer costs and benefits from operating a
dishwasher are impacted more by the methods used to clean dishes, such
as washing by hand, pre-rinsing and then using a dishwasher, or using a
dishwasher without pre-rinsing than the economics of running a
dishwasher itself. AHAM further stated that instead of using the
existing LCC model, DOE should analyze the cost to a consumer of these
three principal modes of dish cleaning. (AHAM, No. 26 at pp. 7-8)
DOE included the water and energy volumes of washing dishes by hand
as an alternative to washing dishes by machine in the NIA model and is
described in section 10.4.2 in chapter 10 of the NOPR TSD. DOE
acknowledges that a broader perspective on dish cleaning could be
useful in identifying opportunities for energy and water conservation,
but the type of analysis that AHAM proposes is outside the scope of the
standards rulemaking process, which is focused on evaluating the
economic justification of potential standards on a particular product,
in this case dishwashers, according to the criteria set by EPCA. In
this rulemaking, DOE is only estimating the shipments of TSL3 would
drop 0.01% compared to the no new standards case during the 30-year
analysis period (2027-2056). DOE welcomes comment on the shipments
estimation and publicly available data on the energy and water
consumption from pre-rinsing dishes.
NEEA stated that efficiency improvements to an appliance can be
considered capital investments, with ``returns'' being the money saved
from utility bill reductions. NEEA commented that the return on
investment (``ROI'') is easy to calculate using this peer-reviewed
method and adds additional insight for stakeholders and decision-makers
and encouraged DOE to calculate and consider the ROI for each
efficiency level in its analysis. (NEEA, No. 24 at p. 5)
DOE acknowledges that ROI is a metric that can be useful in
evaluating investments in energy efficiency. However, the measures that
DOE has historically used to evaluate the economic impacts of standards
on consumers--LCC savings and PBP--are more closely related to the
language in EPCA that 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)) Therefore,
[[Page 32540]]
DOE finds it reasonable to continue to use those measures.
AHAM commented that DOE's use of the term ``Net Cost'' for impacted
households is incomplete and misleading. AHAM suggested that the ``Net
Cost'' should be calculated only among the affected households at a
given standard level. (AHAM, No. 26 at p. 10)
DOE notes that EPCA requires DOE to consider the impact of
standards on ``consumers'' of a product, not only those who would be
affected by a standard.\57\ Therefore, showing the share of all
consumers purchasing dishwashers who would experience a net LCC cost or
experience no impact at a given standard level is appropriate. The LCC
spreadsheet provides information that allows calculation of the share
of affected consumers that experience a net cost.
---------------------------------------------------------------------------
\57\ Some dishwasher consumers would not be affected by a given
standard if they already purchased a product at or above that
efficiency level in the no-new-standards case.
---------------------------------------------------------------------------
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 applied 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
dishwashers, DOE obtained historical Producer Price Index (``PPI'')
data for dishwashers from the Bureau of Labor Statistics (``BLS''). A
PPI for ``all other miscellaneous household appliances'' was available
for the time period between 1988 and 2014.\58\ However, the all other
miscellaneous household appliances PPI was discontinued beyond 2014 due
to insufficient sample size. To extend the price index beyond 2014, DOE
assumed that the price index of primary products of major household
appliance manufacturing would trend similarly to all other
miscellaneous household appliances. This is because, based on
communications with BLS researchers, discontinued series are often
grouped into the primary products under the more aggregated PPI series.
Examining the PPI of all other miscellaneous household appliances and
primary products of major household appliances shows that the
magnitudes of both price trends align with each other. Inflation-
adjusted price indices were calculated by dividing the PPI series by
the gross domestic product index from Bureau of Economic Analysis for
the same years. Using data from 1988-2021, the estimated learning rate
(defined as the fractional reduction in price expected from each
doubling of cumulative production) is 25.1 percent.
---------------------------------------------------------------------------
\58\ U.S. Bureau of Labor Statistics, PPI Industry Data, Major
household appliance manufacturers, Product series ID: PCU
33522033522011. Data series available at: www.bls.gov/ppi/.
---------------------------------------------------------------------------
NEEA supported DOE's approach to applying a learning rate for
dishwasher prices and concluded that pre-rinsing of dishes remains
consistent after an updated dishwasher standard. (NEEA, No. 24 at pp.
5-6)
DOE assembled a time series of historical annual shipments of
dishwashers for 1972-2020. The data for historical annual shipments
were used to project future shipments and to estimate cumulative
shipments (production). Projected shipments after 2020 were obtained
from the no-new-standards case projections made for the NIA.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. DOE found no
evidence that installation costs would be impacted with increased
efficiency levels.
3. Annual Energy Consumption
For each sampled household, DOE determined the energy consumption
for dishwashers at different efficiency levels using the approach
described previously in section IV.E of this document.
4. Energy and Water Prices
Because it captures the incremental savings associated with a
change in energy use from higher efficiency, a marginal electricity
price more accurately represents an incremental change in consumer
costs than would 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.\59\ DOE used the EEI data to define a
marginal price as the ratio of the change in the bill to the change in
energy consumption.
---------------------------------------------------------------------------
\59\ Edison Electric Institute. Typical Bills and Average Rates
Report. 2021. Winter 2021, Summer 2021: Washington, DC.
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the 2021
energy prices by a projection of annual average price changes for each
of the nine census divisions from the Reference case in AEO 2022. AEO
2022 has an end year of 2050.\60\ To estimate prices after 2050, a
constant trend was used for all years.
---------------------------------------------------------------------------
\60\ EIA. Annual Energy Outlook 2022 with Projections to 2050.
Washington, DC. Available at www.eia.gov/forecasts/aeo/ (last
accessed September 22, 2022).
---------------------------------------------------------------------------
DOE obtained data on public supply water prices for 2020 from the
Water and Wastewater Rate Survey conducted by Raftelis Financial
Consultants and the American Water Works Association.\61\ The survey
covers approximately 194 water utilities and 140 wastewater utilities,
analyzing each industry (water and wastewater) separately. The water
survey includes the cost to consumers of a given volume of water for
each utility. The total consumer cost is divided into fixed and
volumetric charges. DOE's calculation of water prices uses only
volumetric charges, as only those charges would be affected by a change
in water consumption. Including the fixed charge in the price average
would lead to a higher water price. For wastewater utilities, the data
format is similar except that the price represents the cost to treat a
given volume of wastewater.
---------------------------------------------------------------------------
\61\ The American Water Works Association & Raftelis Financial
Consultants, Inc., 2020 RFC/AWWA Water and Wastewater Rate Survey.
2021. Charlotte, NC.
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Maintenance costs are associated with maintaining the operation of
the product; repair costs are associated with repairing or replacing
product components that have failed in an appliance. Typically, small
incremental increases in product efficiency produce no, or only minor,
changes in maintenance and repair costs compared to baseline efficiency
products. In this NOPR analysis, DOE included no changes in maintenance
or repair costs for dishwashers that exceed baseline efficiency.
6. Product Lifetime
For dishwashers, DOE developed a distribution of lifetimes from
which specific values are assigned to the
[[Page 32541]]
appliances in the samples. DOE conducted an analysis of actual lifetime
in the field using a combination of historical shipments data, the
stock of the considered appliances in the American Housing Survey, and
responses in RECS on the age of the appliances in the homes. The data
allowed DOE to estimate a survival function, which provides an average
appliance lifetime. This analysis yielded a lifetime probability
distribution with an average lifetime for dishwashers of approximately
15.2 years. See chapter 8 of the NOPR TSD for further details.
DOE requests comment and information on dishwasher lifetime.
7. Discount Rates
In the calculation of LCC, DOE applies discount rates appropriate
to households to estimate the present value of future operating cost
savings. DOE estimated a distribution of discount rates for dishwashers
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.\62\ DOE notes that the LCC does not analyze the appliance
purchase decision, so the implicit discount rate is not relevant in
this model. The LCC 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 lifetime scale into
account. Given the 30-year analysis period modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\62\ 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 Finances
\63\ (``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 amended standards would take effect. DOE assigned
each sample household a specific discount rate drawn from one of the
distributions. The average rate across all types of household debt and
equity and income groups, weighted by the shares of each type, is 4.3
percent. See chapter 8 of the NOPR TSD for further details on the
development of consumer discount rates.
---------------------------------------------------------------------------
\63\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019 (last accessed August 20, 2021).
www.federalreserve.gov/econresdata/scf/scfindex.htm.
---------------------------------------------------------------------------
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 dishwashers for
2027, DOE used data from the engineering analysis, the manufacturer
interviews, and DOE's CCD. DOE assumed no annual efficiency improvement
for the no-new-standards case based on the current market evaluation
and the efficiency distributions used in the December 2016 Final
Determination. The estimated market shares for the no-new-standards
case for dishwashers are shown in Table IV.13. See chapter 8 of the
NOPR TSD for further information.
AHAM commented that it was inaccurate to use model counts from
DOE's CCD as a means of determining the saturation of the efficiency
levels. AHAM noted that the model count in the CCD substantially
overstates the number of different models, and that, based upon AHAM's
review, a majority of the apparently higher efficiency models in the
CCD are in fact no longer widely available through retail channels or
are for niche groups of consumers. AHAM stated that a comparison of
AHAM shipments data to DOE's CCD model counts by efficiency show a
significant difference between models being shipped for sale on the
market versus what is listed in DOE's CCD. (AHAM, No. 26 at p. 4)
Samsung recommended that DOE amend dishwasher standards to EL 1 or
greater given the market penetration for ENERGY STAR V. 6.0 dishwashers
(which represents units at EL 1 and above) was approximately 91
percent. (Samsung, No. 22 at p. 2)
For this NOPR, for the standard-size product class, DOE used
information provided by the manufacturer interviews, and for the
compact-size product class, counts of models in the DOE CCD as a means
of determining the market shares of the efficiency levels because that
is the best source that was available. DOE agrees that shipment-
weighted efficiency distributions would be preferable to shares based
on model counts, but such data were not available for compact
dishwashers, and there is no publicly available data to support making
an adjustment to the model count market shares. DOE's approach may well
overstate the market share of higher-efficiency products in the absence
of new standards, but this would mean that the energy and economic
benefits estimated by DOE for new standards are likely understated. The
justification for the adopted standards could be even stronger if DOE
were able to use actual shipment data for the model counts. DOE
welcomes recent shipments data by efficiency level and will consider
using such data for the final rule.
[[Page 32542]]
Table IV.13--No-New-Standards Case Efficiency Distribution for Dishwashers in 2027
----------------------------------------------------------------------------------------------------------------
Product Class 1 standard-size Product Class 2 compact-size
dishwashers: dishwashers:
TSL ------------------------------------------------------------------------------
Annual energy use * Market share Annual energy use * Market share
(kWh/year) (%) (kWh/year) (%)
----------------------------------------------------------------------------------------------------------------
Baseline......................... 272 7 197 13
1................................ 241 84 181 66
2................................ 232 6 129 21
3................................ 214 3 ..................... ..............
4................................ 202 0 ..................... ..............
----------------------------------------------------------------------------------------------------------------
* Based on the assumption of 197 dishwasher cycles per year.
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the dishwasher
purchased by each sample household in the no-new-standards case. The
resulting percent shares within the sample match the market shares in
the efficiency distributions.
AHAM objected to DOE's use of random assignment of RECS households
to the no-new-standards case and standard cases, which assumes that
consumers are agnostic to energy costs. AHAM stated that DOE has never
provided a justification for the assumption it uses that operating
costs play no effect on consumer choice for dishwashers. AHAM added
that it is very unlikely that consumers with very high potential LCC
savings would not have already decided to purchase a more efficient
dishwasher (i.e., in the no-new-standards case), and DOE's assumption
that these consumers are indifferent to operating costs appears
contrary to common sense and experience in the retail field. AHAM
stated that the most appropriate solution is to have a much more robust
consumer choice theory, and in the absence of such theory, DOE should
use median, not mean values in its analysis and conclusions. (AHAM, No.
26 at pp. 8-9)
While DOE acknowledges that economic factors may play a role when
consumers decide on what type of dishwasher to install, assignment of
dishwasher efficiency for a given installation, based solely on
economic measures such as LCC or simple PBP most likely would not fully
and accurately reflect actual real-world installations. There are a
number of market failures discussed in the economics literature that
illustrate how purchasing decisions with respect to energy efficiency
are unlikely to be perfectly correlated with energy use, as described
as described elsewhere in this document. DOE maintains that the method
of assignment is a reasonable approach, one that reflects behavior in
the dishwasher market, where market failures result in purchasing
decisions not being perfectly aligned with economic interests, more
realistically than relying only on apparent cost-effectiveness criteria
derived from the information in RECS. DOE further emphasizes that its
approach does not assume that all purchasers of dishwashers make
economically irrational decisions (i.e., the lack of a correlation is
not the same as a negative correlation). By using this approach, DOE
acknowledges the uncertainty inherent in the data and minimizes any
bias in the analysis by using random assignment, as opposed to assuming
certain market conditions that are unsupported given the available
evidence.
First, consumers are motivated by more than simple financial trade-
offs. There are consumers who are willing to pay a premium for more
energy-efficient products because they are environmentally
conscious.\64\ There are also several behavioral factors that can
influence the purchasing decisions of complicated multi-attribute
products, such as dishwashers. For example, consumers (or decision
makers in an organization) are highly influenced by choice
architecture, defined as the framing of the decision, the surrounding
circumstances of the purchase, the alternatives available, and how they
are presented for any given choice scenario.\65\ The same consumer or
decision maker may make different choices depending on the
characteristics of the decision context (e.g., the timing of the
purchase, competing demands for funds), which have nothing to do with
the characteristics of the alternatives themselves or their prices.
Consumers or decision makers also face a variety of other behavioral
phenomena including loss aversion, sensitivity to information salience,
and other forms of bounded rationality. Thaler, who won the Nobel Prize
in Economics in 2017 for his contributions to behavioral economics, and
Sunstein point out that these behavioral factors are strongest when the
decisions are complex and infrequent, when feedback on the decision is
muted and slow, and when there is a high degree of information
asymmetry.\66\ These characteristics describe almost all purchasing
situations of appliances and equipment, including dishwashers. The
installation of a new dishwasher is done very infrequently.
Additionally, it would take at least one full year for any impacts on
operating costs to be fully apparent. Further, if the purchaser of the
dishwasher is not the entity paying the energy costs (e.g., a tenant),
there may be little to no feedback on the purchase. Additionally, there
are systematic market failures that are likely to contribute further
complexity to how products are chosen by consumers, as explained in the
following paragraphs.
---------------------------------------------------------------------------
\64\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., &
Russell, C.S. (2011): ``Factors influencing willingness-to pay for
the ENERGY STAR[supreg] label,'' Energy Policy, 39(3), 1450-1458.
(Available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (last accessed Feb. 15, 2022).
\65\ Id.
\66\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale
University Press.
---------------------------------------------------------------------------
The first of these market failures--the split-incentive or
principal-agent problem. The principal-agent problem is a market
failure that results when the consumer that purchases the equipment
does not internalize all of the costs associated with operating the
equipment. Instead, the user of the product, who has no control over
the purchase decision, pays the operating costs. There is a high
likelihood of split incentive problems in the case of rental properties
where the landlord makes the choice of what dishwasher to install,
whereas the renter is responsible for paying energy bills. In addition
to the split-incentive problem, there are other market failures that
are likely to affect the choice of dishwasher efficiency made by
consumers. Davis and Metcalf \67\ conducted an experiment
[[Page 32543]]
demonstrating that the nature of the information available to consumers
from EnergyGuide labels posted on air conditioning equipment results in
an inefficient allocation of energy efficiency across households with
different usage levels. Their findings indicate that households are
likely to make decisions regarding the efficiency of the climate
control equipment of their homes that do not result in the highest net
present value for their specific usage pattern (i.e., their decision is
based on imperfect information and, therefore, is not necessarily
optimal).
---------------------------------------------------------------------------
\67\ Davis, L.W., and G.E. Metcalf (2016): ``Does better
information lead to better choices? Evidence from energy-efficiency
labels,'' Journal of the Association of Environmental and Resource
Economists, 3(3), 589-625. (Available at: www.journals.uchicago.edu/doi/full/10.1086/686252) (last accessed Feb. 15, 2022).
---------------------------------------------------------------------------
In part because of the way information is presented, and in part
because of the way consumers process information, there is also a
market failure consisting of a systematic bias in the perception of
equipment energy usage, which can affect consumer choices.
These market failures affect a sizeable share of the consumer
population. A study by Houde \68\ indicates that there is a significant
subset of consumers that appear to purchase appliances without taking
into account their energy efficiency and operating costs at all.
However, the literature is not specific to dishwashers.
---------------------------------------------------------------------------
\68\ Houde, S. (2018): ``How Consumers Respond to Environmental
Certification and the Value of Energy Information,'' The RAND
Journal of Economics, 49 (2), 453-477 (Available at:
onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12231) (last
accessed Feb. 15, 2022).
---------------------------------------------------------------------------
The existence of market failures in the residential sector is well
supported by the economics literature and by a number of case studies.
If DOE developed an efficiency distribution that assigned dishwasher
efficiency in the no-new-standards case solely according to energy and
water use or economic considerations such as LCC or PBP, the resulting
distribution of efficiencies within the household sample would not
reflect any of the market failures or behavioral factors mentioned
previously. DOE thus concludes such a distribution would not be
representative of the dishwasher market. Further, even if a specific
household is not subject to the market failures, the purchasing
decision of dishwasher efficiency can be highly complex and influenced
by a number of factors not captured by the information available in the
RECS samples. These factors can lead to households choosing a
dishwasher efficiency that deviates from the efficiency predicted using
only energy and water use or economic considerations such as LCC or PBP
(as calculated using the information from RECS). However, DOE intends
to investigate this issue further, and it welcomes suggestions as to
how it might improve its assignment of appliance efficiency in its
analyses.
DOE seeks data on the no-new-standards case efficiency distribution
for the compact-size product class, and the efficiency distribution
projection for both the standard-size and the compact-size product
classes during the analysis period (2027-2056).
9. Payback Period Analysis
The PBP 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.
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.\69\
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.
---------------------------------------------------------------------------
\69\ DOE uses data on manufacturer shipments as a proxy for
national sales, as aggregate data on sales are lacking. In general,
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------
Total shipments for dishwashers are developed by considering the
demand from replacements for units in stock that fail and the demand
from first-time owners (``FTOs''), which are the households without
existing dishwashers. DOE calculated shipments due to replacements
using the retirement function developed for the LCC analysis and
historical data from AHAM. DOE estimated the ratio of households that
would become FTOs each year based on the historical housing stock data,
the estimated shipments of replacement units and the estimated shipment
to FTOs. DOE calculated shipments of FTOs by multiplying the forecasted
housing stock by the annualized ratio of existing households without a
dishwasher that would purchase this product over the period 2027-2056,
based on the housing stocks from AEO 2022. See chapter 9 of the NOPR
TSD for details.
AHAM commented that more dishwashers meet ENERGY STAR V. 6.0
criteria now than during the last energy conservation standards
rulemaking. (AHAM, No. 26 at p. 2) For this NOPR analysis, DOE used the
CCD for dishwashers and noted a shift in the models now meeting the
ENERGY STAR V. 6.0 criteria than for the January 2022 Preliminary
Analysis. DOE also estimated the market share for compact-size
dishwashers at 2 percent based on the information obtained from
manufacturers.
DOE considers the impacts on shipments from changes in product
purchase price associated with higher energy efficiency levels using a
price elasticity. DOE employed a price elasticity of -0.45 in its
shipments model.\70\ The market impact is defined as the difference
between the product of price elasticity of demand and the change in
price due to a standard level.
---------------------------------------------------------------------------
\70\ Fujita, K. (2015) Estimating Price Elasticity using Market-
Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL-
188289.
---------------------------------------------------------------------------
DOE seeks comment on the approach and inputs used to develop no-
new-standards case shipments projection.
H. National Impact Analysis
The NIA assesses the NES and the NPV from a national perspective of
total consumer costs and savings that would be expected to result from
new or amended standards at specific efficiency levels.\71\
(``Consumer'' in this context refers to consumers of the product being
regulated.) DOE calculates the NES and NPV for the TSLs 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
[[Page 32544]]
dishwashers sold from 2027 through 2056.
---------------------------------------------------------------------------
\71\ The NIA accounts for impacts in the 50 states.
---------------------------------------------------------------------------
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 point values (as
opposed to probability distributions) as inputs.
Table IV.14 summarizes the inputs and methods DOE used for the NIA
analysis for the NOPR. Discussion of these inputs and methods follows
the table. See chapter 10 of the NOPR TSD for further details.
Table IV.14--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.................... Annual shipments from shipments model.
Compliance Date of Standard.. 2027.
Efficiency Trends............ No-new-standards case: fixed efficiency
distribution with no annual
improvements.
Standards cases: ``Roll up'' equipment to
meet potential efficiency level.
Annual Energy Consumption per Calculated for no-new-standards case and
Unit. each TSL based on inputs from energy use
analysis.
Total Installed Cost per Unit Calculated for no-new-standards case and
each TSL based on inputs from the LCC
analysis.
Incorporated projection of future product
prices based on historical data.
Repair and Maintenance Cost Annual values do not change with
per Unit. efficiency level.
Energy and Water Price Trends AEO 2022 projections (to 2050) and
constant value thereafter.
Historical Water CPI extrapolated
projection to 2050 and constant value
thereafter.
Energy Site-to-Primary and A time-series conversion factor based on
FFC Conversion. AEO 2022.
Discount Rate................ 3 percent and 7 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
an amended or new standard.
To project the trend in efficiency absent amended standards for
dishwashers over the entire shipments projection period, DOE used the
shipments-weighted standby power (``SWSP'') as a starting point. DOE
assumed that the shipment weighted efficiency would not increase
annually for the dishwasher product classes.
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 in 2027. In the year of compliance, the
market shares of products in the no-new-standards case that do not meet
the standard under consideration would ``roll up'' to meet the new
standard level, and the market share of products above the standard
would remain unchanged.
2. National Energy and Water Savings
The national energy and water 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 and water
consumption by multiplying the number of units (stock) of each product
(by vintage or age) by the unit energy and water consumption (also by
vintage). DOE calculated annual NES and NWS based on the difference in
national energy and water 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 AEO 2022. Cumulative energy and water
savings are the sum of the NES and NWS for each year over the timeframe
of the analysis.
In the NES and NWS analysis DOE accounted for the possible increase
in energy and water use from handwashing dishes for those households
that would not purchase a replacement dishwasher due to the higher
purchase cost under the proposed standards. However, these energy and
water use costs may be overestimated if, for example, households
instead keep their current dishwasher longer than they otherwise would,
instead use disposable plates and utensils, or are those households
that use their dishwasher less frequently. Furthermore, for those
households that still would forgo a replacement dishwasher, DOE did not
account for the value of time required for handwashing. Consistent with
an economic analysis responsive to E.O. 12866, DOE seeks comments and
publicly-available data to improve its estimation of how the proposed
standards may affect the rate at which dishwashers are replaced, and
therefore the estimates of overall energy and water use, and to
evaluate other potential effects on households that would no longer own
a dishwasher. DOE is committed to developing a framework that can
support empirical quantitative tools for improved assessment of the
consumer welfare impacts of appliance standards, including dishwashers.
AHAM commented that energy conservation standards beyond EL 1 will
cause rebound consumer behavior, such as running the dishwasher more
than once to reach the desired cleanliness, re-rinsing dishes before
placing them in the dishwasher, or handwashing, that undercuts
projected
[[Page 32545]]
energy and water savings. AHAM added that DOE should not adopt energy
conservation standards that could make it less likely consumers will
purchase or use their efficient dishwashers. (AHAM, No. 26 at p. 11)
DOE has not found any evidence that the proposed standards would be
likely to cause the types of consumer behavior suggested by AHAM. As
discussed in section IV.B of this document, DOE has initially
determined that the technology options likely to be used to meet the
proposed standards would not have a significant adverse impact on the
utility of the product to subgroups of consumers.
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 NIA 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 \72\ that EIA uses to
prepare its AEO. The FFC factors incorporate losses in production and
delivery in the case of natural gas (including fugitive emissions) and
additional energy used to produce and deliver the various fuels used by
power plants. The approach used for deriving FFC measures of energy use
and emissions is described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------
\72\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2009, DOE/EIA-0581 (2009), October
2009. Available at www.eia.gov/forecasts/aeo/ (last accessed October
22, 2021).
---------------------------------------------------------------------------
3. Net Present Value Analysis
The inputs for determining the NPV of the total costs and benefits
experienced by consumers are (1) total annual installed cost, (2) total
annual operating costs (energy costs and repair and maintenance costs),
and (3) a discount factor to calculate the present value of costs and
savings. DOE calculates net savings each year as the difference between
the no-new-standards case and each standards case in terms of total
savings in operating costs versus total increases in installed costs.
DOE calculates operating cost savings over the lifetime of each product
shipped during the projection period.
As discussed in section IV.F.1 of this document, DOE developed
dishwasher price trends based on historical PPI data. DOE applied the
same trends to project prices for each product class at each considered
efficiency level. By 2056, which is the end date of the projection
period, the average dishwasher price is projected to drop 25.1 percent
relative to 2021. DOE's projection of product prices is described in
appendix 10C of the NOPR TSD.
To evaluate the effect of uncertainty regarding the price trend
estimates, DOE investigated the impact of different product price
projections on the consumer NPV for the considered TSLs for
dishwashers. In addition to the default price trend, DOE considered two
product price sensitivity cases: (1) a low price decline case based on
the combined PPI series of ``all other miscellaneous household
appliances'' and ``primary products of major household appliance
manufacturing'' from 2009 to 2021; and, (2) a high price decline
scenario based on the same PPI series from 1988 to 2008, which shows a
faster price decline than the full time series between 1988-2021. The
derivation of these price trends and the results of these sensitivity
cases are described in appendix 10C of the NOPR TSD.
The energy cost savings are calculated using the estimated energy
savings in each year and the projected price of the appropriate form of
energy. To estimate energy prices in future years, DOE multiplied the
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from AEO
2022, 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 AEO 2022
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10D of
the NOPR TSD.
AHAM commented that DOE has never provided a justification for the
assumption it uses that operating costs play no effect on consumer
choice for dishwashers. Further, AHAM stated that the current LCC model
does not address key issues affecting consumer economics for
dishwashers, noting that consumer costs and benefits for dish cleaning
are related not so much to the economics of running a dishwasher as
they are to the broader differences in methods used to clean dishes
whether it be washing by hand, pre-rinsing and then using a dishwasher,
or using a dishwasher without pre-rinsing. (AHAM, No. 26 at pp. 7-8)
DOE forecasted an initial drop in dishwasher shipments in response
to an increase in purchase price attributable to potential standards-
related efficiency increases. DOE assumed that those consumers who
forgo buying a dishwasher because of the higher purchase price would
then wash their dishes by hand, and DOE estimated the energy and water
use of washing dishes by hand (see chapter 10 of the NOPR TSD for
details).\73\ DOE did not account for differences in handwashing and
pre-rinsing dishes among the considered efficiency levels due to the
lack of data regarding consumer behavior.
---------------------------------------------------------------------------
\73\ While TSD Chapter 9 includes information on projected
shipments, DOE did not estimate the number of households that would
forgo a dishwasher under a standards scenario. However, the analysis
projects a 0.01 percent reduction in shipments over 30 years.
---------------------------------------------------------------------------
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (``OMB'') to Federal agencies on the development of regulatory
analysis.\74\ 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.
---------------------------------------------------------------------------
\74\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last
accessed November 21, 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
[[Page 32546]]
impacts on particular subgroups of consumers by analyzing the LCC
impacts and PBP for those particular consumers from alternative
standard levels. For this NOPR, DOE analyzed the impacts of the
considered standard levels on two subgroups: (1) low-income households
and (2) senior-only households. The analysis used subsets of the RECS
2020 sample composed of households that meet the criteria for the two
subgroups and shows the percentages of those both negatively and
positively impacted. DOE used the LCC and PBP spreadsheet model to
estimate the impacts of the considered efficiency levels on these
subgroups. Chapter 11 in the NOPR TSD describes the consumer subgroup
analysis.
Samsung stated that the 2021 LBNL survey showed that as household
income declines, higher value is placed on reductions in energy
consumption and low-income and the senior-only households are more
likely to prefer all energy efficiency improvement options compared to
the national average. (Samsung, No. 22 at p. 2)
As stated above, DOE determines the extent to which identifiable
subgroups of consumers are disproportionately affected by a new or
amended national standard. In this NOPR analysis, DOE analyzed the
impacts of the considered standard levels on low-income households and
senior-only households.
AHAM stated that RECS 2015 data shows only 67 percent of U.S.
households have a dishwasher, and the percentage decreases among low-
income households. AHAM commented that promoting dishwasher ownership
and policies that increase dishwasher ownership in low-income
communities will save those consumers money on energy and water bills,
while also achieving water and energy savings. (AHAM, No. 26 at p. 6)
AHAM commented that the existing LCC model is not relevant and does not
address key issues affecting consumer economics. AHAM commented that
DOE should carefully assess the consumer economic effects on several
subgroups: Low-income households, including the effects of lost time
used in handwashing versus using a dishwasher; rural households,
including an accurate measure of the cost to the consumer of water and
sewer; households with dishwashers that do not use them or use them
only infrequently, to determine why they do not use a dishwasher and
what can be done to increase dishwasher use; and households without
dishwashers, to determine why they do not currently own a dishwasher
and what can be done to make dishwasher access or ownership possible.
(AHAM, No. 26 at pp. 7-8)
For the NOPR, DOE conducted an analysis of the impact of potential
dishwasher standards on low-income households. DOE did not evaluate
rural households as a subgroup, as it does not expect that these
households would see a disproportionate impact from potential
standards. However, DOE included estimates of well water and septic
costs in its calculations for rural households and households using
well water and septic systems. DOE did not include households with
dishwashers that do not use them or use them only infrequently or
households without dishwashers as consumer subgroups, as the type of
assessment suggested by AHAM is outside the scope of the analysis that
DOE does to evaluate the economic justification of potential standards.
1. Low-Income Households
Low-income households are significantly more likely to be renters
or to live in subsidized housing units, compared to households that are
not low-income. In these cases, the landlord purchases the equipment
and may pay the energy bill as well.
For this NOPR analysis, DOE used RECS data to divide low-income
households into three sub-subgroups: (1) renters who pay the energy
bill, (2) renters who do not pay the energy bill, and (3)
homeowners.\75\ For large appliance such as dishwashers, renters are
unlikely to be purchasers. Instead, the landlord would bear the cost,
and some or none of the cost could get passed on to the renter. Renters
who pay the energy bill would receive the energy cost savings from
higher-efficiency appliances. This disaggregation allows DOE to
determine whether low-income households are disproportionately affected
by an amended energy conservation standard in a more accurate manner.
Table IV.15 shows the distribution of low-income household dishwasher
users with respect to whether they rent or own and whether they pay the
energy bill.
---------------------------------------------------------------------------
\75\ The energy bill includes fuel types of electricity, natural
gas, or propane consumed by a household.
Table IV.15--Characterization of Low-Income Households in the Sample for Dishwashers
----------------------------------------------------------------------------------------------------------------
Percentage of low-
income sample Impact of higher
Type of household * (standard-size efficiency on energy Impact of first cost
dishwashers) and water bills
----------------------------------------------------------------------------------------------------------------
Renters--Pay for Energy Bill **..... 48 Full/Partial savings... None.
Renters--Do Not Pay for Energy Bill 6 None................... None.
**.
Owners.............................. 46 Full/Partial savings Full.
[dagger].
----------------------------------------------------------------------------------------------------------------
* RECS lists three categories: (1) Owned or being bought by someone in your household (classified as ``Owners''
in this table); (2) Rented (classified as ``Renters'' in this table); (3) Occupied without payment of rent
(also classified as ``Renters'' in this table). Renters include occupants in subsidized housing including
public housing, subsidized housing in private properties, and other households that do not pay rent. RECS does
not distinguish homes in subsidized or public housing.
** RECS lists four categories for each of the fuels used by a household: (1) Household is responsible for paying
for all used in this home; (2) All used in this home is included in the rent or condo fee; (3) Some is paid by
the household, some is included in the rent or condo fee; and (4) Paid for some other way. ``Do Not Pay for
Energy Bill'' includes only category (2). Partial energy bill savings would occur in cases of category (3).
*** It is assumed that incremental costs usually are not included in rent increases, but some portion of the
incremental cost could be passed on in the rent over time.
[dagger] It is assumed that in the cases where buildings share electricity bills, owners would receive only
partial benefit from savings.
Whirlpool stated that with amended standards beyond EL 1,
purchasing a new dishwasher may become out of reach for many low-income
households, including those representing disadvantaged communities, or
present
[[Page 32547]]
them with options that do not help them save energy and water or end up
costing them even more over the life of the appliance. Whirlpool stated
that this would keep less efficient dishwashers in the stock or
increase the time spent on household chores. Whirlpool further stated
that making dishwashers less affordable will not serve to increase the
overall household penetration of dishwashers. (Whirlpool, No. 21 at pp.
5-6) AHAM commented that amended energy conservation standards beyond
EL 1 are not justified because they will disproportionately and
negatively affect low-income consumers, drive unintended consumer
behaviors that negate predicted savings, and lead to consumer
dissatisfaction with performance due to unavoidable performance
declines with currently available technology. (AHAM, No. 26 at p. 3)
AHAM also stated that lower-income consumers cannot pay more for a more
efficient dishwasher and are less likely to own a dishwasher, and some
consumers who cannot afford to purchase a new appliance may instead
purchase a used, less efficient appliance, or more likely, forego what
is seen as a discretionary purchase and, instead hand wash their
dishes. As a result, AHAM contended that these consumers will use
significantly more water and energy and spend more money on their water
and electricity bill than other population segments, which is contrary
to environmental justice goals. (AHAM, No. 26 at p. 6)
As shown in section V.B.1.b of this document, the proposed standard
for standard-size dishwashers yields an LCC savings of $21 for low-
income dishwasher users, and the percent of low-income dishwasher
consumers experiencing a net LCC cost under the proposed standards is
smaller than in the full LCC sample. The majority of low-income
households using dishwashers are renters who do not have to pay the
total cost of higher-efficiency dishwashers. While some of the
incremental cost of a standards-compliant dishwasher could get passed
on in rent, this would happen over time and would be far less than the
energy and water cost savings received by renters who pay the energy
and water bills. The alternatives to buying a new dishwasher mentioned
by Whirlpool and AHAM are possible options for non-renter households,
but there is insufficient information to evaluate the extent to which
they might occur or the consequences with respect to energy and water
use.
As discussed in section IV.H.2, DOE accounted for how higher
product prices attributable to the proposed standards may reduce
purchases of new dishwashers, and further assumed that households that
would no longer purchase a dishwasher would instead handwash their
dishes. Furthermore, section IV.H.2 describes how households may
alternatively respond to higher dishwasher prices, and welcomes
comments providing data and analysis to improve is evaluation of these
alternative responses. DOE did not account for how higher dishwasher
prices may lead to low-income households forgoing the purchase or no
longer having a dishwasher and the potential consequences. DOE welcomes
comments specific to how low-income households may respond to higher
dishwasher prices and in particular forgoing the purchase of a new
dishwasher, which will allow DOE to improve its analysis, perhaps by
bounding potential outcomes, of the potential impact of more stringent
standards on these households if finalized. Also, the results of this
analysis on consumers is uncertain as DOE does not account for
potential differences in the marginal cost of energy or water for low-
income households relative to the general population. For example,
there may be differences in energy prices faced by these households due
to reduced marginal electricity tariffs offered to lower income
households prices or other programs that specifically reduce the energy
or water expenses borne by these households (e.g., LIHEAP). DOE
welcomes comment on how it may account for energy and water prices
faced by low income, as well as senior, households.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of amended
energy conservation standards on manufacturers of dishwashers and to
estimate the potential impacts of such standards on employment and
manufacturing capacity. The MIA has both quantitative and qualitative
aspects and includes analyses of projected industry cash flows; the
INPV; investments in research and development (``R&D'') and
manufacturing capital; and domestic manufacturing employment.
Additionally, the MIA seeks to determine how amended energy
conservation standards might affect manufacturing 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 GRIM, an
industry cash flow model with inputs specific to this rulemaking. The
key GRIM inputs include data on the industry cost structure, MPCs,
product shipments, manufacturer markups, and investments in R&D and
manufacturing capital required to produce compliant products. The key
GRIM output is the INPV, which is the sum of industry annual cash flows
over the analysis period, discounted using the industry-weighted
average cost of capital. 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 between a no-new-
standards case and the various standards cases. To capture the
uncertainty relating to manufacturer pricing strategies following
amended standards, the GRIM estimates a range of possible impacts under
different scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the dishwasher manufacturing
industry based on the market and technology assessment and publicly-
available information. This included a top-down analysis of dishwasher
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 dishwasher manufacturing
industry, including company filings of Form 10-Ks from the SEC,\76\
corporate annual reports, the U.S. Census Bureau's Annual Survey of
[[Page 32548]]
Manufactures (``ASM''),\77\ and reports from Dun & Bradstreet.\78\
---------------------------------------------------------------------------
\76\ U.S. Securities and Exchange Commission, Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) system. Available at:
www.sec.gov/edgar/search/ (last accessed September 27, 2022).
\77\ U.S. Census Bureau, Annual Survey of Manufactures.
``Summary Statistics for Industry Groups and Industries in the U.S
(2020).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html (last accessed September 27, 2022).
\78\ The Dun & Bradstreet Hoovers login is available at:
app.dnbhoovers.com (last accessed September 27, 2022).
---------------------------------------------------------------------------
In Phase 2 of the MIA, DOE prepared a framework industry cash-flow
analysis to quantify the potential impacts of amended energy
conservation standards. The GRIM uses several factors to determine a
series of annual cash flows starting with the announcement of the
standard and extending over a 30-year period following the compliance
date of the standard. These factors include annual 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 dishwashers in order to develop other
key GRIM inputs, including product and capital conversion costs, and to
gather additional information on the anticipated effects of energy
conservation standards on revenues, direct employment, capital assets,
industry competitiveness, and subgroup impacts.
In Phase 3 of the MIA, DOE conducted structured, detailed
interviews with representative manufacturers. During these interviews,
DOE discussed engineering, manufacturing, procurement, and financial
topics to validate assumptions used in the GRIM and to identify key
issues or concerns. See section IV.J.3 of this document for a
description of the key issues raised by manufacturers during the
interviews. As part of Phase 3, DOE also evaluated subgroups of
manufacturers that may be disproportionately impacted by amended
standards or that may not be accurately represented by the average cost
assumptions used to develop the industry cash flow analysis. Such
manufacturer subgroups may include small business manufacturers, low-
volume manufacturers, niche players, and/or manufacturers exhibiting a
cost structure that largely differs from the industry average. DOE
identified one subgroup for a separate impact analysis: small business
manufacturers. The small business subgroup is discussed in section VI.B
of this document, ``Review under the Regulatory Flexibility Act'' and
in chapter 12 of the NOPR TSD.
2. Government Regulatory Impact Model and Key Inputs
DOE uses the GRIM to quantify the changes in cash flow due to
amended standards that result in a higher or lower industry value. The
GRIM uses a standard, annual discounted cash-flow analysis that
incorporates manufacturer costs, manufacturer markups, shipments, and
industry financial information as inputs. The GRIM models changes in
costs, distribution of shipments, investments, and manufacturer margins
that could result from amended energy conservation standards. The GRIM
spreadsheet uses the inputs to arrive at a series of annual cash flows,
beginning in 2023 (the NOPR publication year) and continuing to 2056.
DOE calculated INPVs by summing the stream of annual discounted cash
flows during this period. For manufacturers of dishwashers, DOE used a
real discount rate of 8.5 percent, which was derived from industry
financials and then modified according to feedback received during
manufacturer interviews.
The GRIM calculates cash flows using standard accounting principles
and compares changes in INPV between the no-new-standards case and each
standards case. The difference in INPV between the no-new-standards
case and a standards case represents the financial impact of the
amended energy conservation standard on manufacturers. As discussed
previously, DOE developed critical GRIM inputs using a number of
sources, including publicly available data, results of the engineering
analysis and shipments analysis, and information used in the January
2022 Preliminary Analysis. The GRIM results are presented in section
V.B.2 of this document. Additional details about the GRIM, the discount
rate, and other financial parameters can be found in chapter 12 of the
NOPR TSD.
a. Manufacturer Production Costs
Manufacturing more efficient 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 MPCs of covered products can affect the revenues,
gross margins, and cash flow of the industry. For a complete
description of the MPCs, see chapter 5 of the NOPR TSD or section IV.C
of this document.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. 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 NOPR publication year) to 2056 (the
end year of the analysis period). See chapter 9 of the NOPR TSD or
section IV.G of this document for additional details.
c. Capital and Product Conversion Costs
Amended 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 product necessary to adapt or
change existing production facilities such that new compliant product
designs can be fabricated and assembled. Product conversion costs are
investments in research, development, testing, marketing, and other
non-capitalized costs necessary to make product designs comply with
amended energy conservation standards.
DOE relied on information derived from manufacturer interviews, the
engineering analysis, and product teardowns to evaluate the level of
capital and product conversion costs manufacturers would likely incur
at the various efficiency levels. During interviews, DOE asked
manufacturers to estimate the capital conversion costs to meet the
various efficiency levels. This feedback was compared to findings from
the engineering analysis to determine the validity of investment
levels. DOE also asked manufacturers to estimate the redesign effort,
engineering resources, and marketing expenses required at various
efficiency levels to quantify the product conversion costs. Based on
manufacturer feedback, DOE also estimated ``re-flooring'' costs
associated with replacing obsolete display models in big-box stores
(e.g., Lowe's, Home Depot, Best Buy) due to higher standards. Some
manufacturers stated that with a new product release, big-box
[[Page 32549]]
retailers discount outdated display models and manufacturers share any
losses associated with discounting the retail price. The estimated re-
flooring costs for each efficiency level were incorporated into the
product conversion cost estimates, as DOE modeled the re-flooring costs
as a marketing expense. DOE also estimated industry costs associated
with the new appendix C2, as finalized in the January 2023 TP Final
Rule. Among other updates, appendix C2 contains provisions for a
minimum cleaning index threshold to validate the regulated test cycle.
At each efficiency level, DOE included the costs associated with re-
rating compliant basic models in accordance with appendix C2. 88 FR
3234, 3271-2. Based on manufacturer feedback, DOE expects some
manufacturers may incur one-time costs if their current testing
laboratories are at capacity and additional laboratory space or test
stations are required. DOE interviewed manufacturers representing
approximately 90 percent of industry shipments. In interviews, multiple
manufacturers provided estimates for the expected upfront capital costs
associated with implementing the cleaning performance test (e.g.,
additional test stations, equipment upgrades for existing stations,
building modifications, etc.) DOE considered these costs in its
conversion cost estimates, as appendix C2 would go into effect at the
time when compliance is required for any amended energy conservation
standards.
Manufacturer feedback on conversion costs was aggregated to protect
confidential information. DOE then scaled up the aggregate capital and
product conversion cost feedback from interviews to estimate total
industry conversion costs.
d. Manufacturer Markup Scenarios
MSPs include manufacturer production costs 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. For the MIA, DOE modeled two standards-case scenarios
to represent the uncertainty regarding the potential impacts on prices
and profitability for manufacturers following the implementation of
amended energy conservation standards: (1) a preservation of gross
margin percentage scenario; (2) a tiered scenario. These scenarios lead
to different manufacturer markup values that, when applied to the MPCs,
result in varying revenue and cash-flow impacts. The industry cash flow
analysis results in section V.B.2.a of this document present the
impacts of the upper and lower bound scenarios on INPV.
Under the preservation of gross margin percentage scenario, DOE
applied a single uniform ``gross margin percentage'' across all
efficiency levels, which assumes that following amended standards,
manufacturers would be able to maintain the same amount of profit as a
percentage of revenue at all efficiency levels within a product class.
As production costs increase with efficiency, this scenario implies
that the per-unit dollar profit will increase. Based on publicly-
available financial information, results from the as well as comments
from manufacturer interviews, DOE assumed average gross margin
percentages of 19.4 percent for both standard-size and compact-size
product classes.\79\ Manufacturers noted that this scenario represents
the upper bound of the dishwasher industry's profitability in the
standards case because manufacturers can fully pass on additional costs
due to standards to consumers.
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\79\ The gross margin percentage of 19.4 percent is based on a
manufacturer markup of 1.24.
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The tiered scenario starts with the three tiers of manufacturer
markups wherein higher efficiency products have higher markup than low
efficiency products. In the no-new-standards case, the three tiers are
baseline efficiency, ENERGY STAR V. 6.0, and 2022 ENERGY STAR Most
Efficient qualification criteria. In the standards case, DOE models the
breadth of manufacturers' portfolio of products shrinking and amended
standards resulting in higher-tier products moving to lower tiers. As a
result, higher efficiency products that previously commanded the ENERGY
STAR and 2022 ENERGY STAR Most Efficient manufacturer markups are
assigned the baseline and ENERGY STAR markups, respectively. This
scenario models reflects a concern about product commoditization at
higher efficiency levels as efficiency differentiators are eliminated.
DOE requests comment on whether industry expects a compression of
markups due higher standards, as reflected in the tiered scenario for
manufacturer markups.
3. Manufacturer Interviews
DOE interviewed manufacturers representing approximately 90 percent
of industry shipments. Participants included domestic-based and
foreign-based original equipment manufacturers (``OEMs'') with a range
of different product offerings and market shares.
In interviews, DOE asked manufacturers to describe their major
concerns regarding this rulemaking. The following section highlights
manufacturer concerns that helped inform the projected potential
impacts of an amended standard on the industry. Manufacturer interviews
are conducted under NDAs, so DOE does not document these discussions in
the same way that it does public comments.
a. Test Procedure and Cleaning Index
In interviews, manufacturers expressed two main concerns about the
proposed test procedure and cleaning index threshold as it relates to
potential amended energy conservation standards.\80\ First, multiple
manufacturers asserted that the repeatability and reproducibility of
the cleaning performance test varies between testing laboratories could
lead to unintentional non-compliance (i.e., a product meeting the
cleaning performance threshold in one laboratory, but not meeting it
for enforcement testing). To help guard against unintentional non-
compliance, these manufacturers stated that they would need to invest
in extensive technician training and conduct additional rounds of
cleaning performance testing. Furthermore, these manufacturers
suggested that they would need to potentially update product designs or
build in safety margins to ensure that their products consistently test
above the minimum cleaning index threshold. Second, several
manufacturers questioned whether the cleaning index score correlates to
consumer satisfaction. Some manufacturers noted that they have
developed internal test methods to assess and improve the cleaning
performance of their products, which they favor over DOE's proposed
cleaning performance test. Therefore, they stated that imposing a
cleaning index threshold could limit their ability to conduct their
preferred cleaning performance tests due to limited laboratory space
and personnel.
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\80\ The test procedure final rule had not been published at the
time of the interviews. DOE finalized its proposal in the January
2023 TP Final Rule, including establishing a minimum cleaning index
threshold of 70 as a condition of a valid test cycle in new appendix
C2.
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One manufacturer supported implementing a cleaning performance
threshold. A different manufacturer supported the concept of the
cleaning performance threshold, but encouraged DOE to continue to work
with manufacturers to improve the cleaning
[[Page 32550]]
test so that it is repeatable and reproducible.
b. Balancing Dishwasher Attributes
Several manufacturers expressed concerns that the reduction of
energy and water usage beyond EL 1 could lead to longer cycle times,
more variation in dish cleanliness, and diminished drying of dishes.
Manufacturers emphasized that energy and water use are interconnected
to other key attributes of dishwashers that affect customer
satisfaction. Manufacturers noted that these concerns about additional
product attributes and consumer satisfaction are further exacerbated at
max-tech.
4. Discussion of MIA Comments
In response to the January 2022 Preliminary Analysis, AHAM
commented that shipments are currently concentrated at EL 1, and the
lack of shipments above EL 1 indicates significant investment would be
necessary to comply with standards above EL 1. (AHAM, No. 26 at p. 5)
Whirlpool stated that the significant redesign and investment necessary
to meet amended standards beyond EL 1 may lead to a corresponding
significant increase in product cost that would affect low-income
consumers. (Whirlpool, No. 21 at p. 5) AHAM commented that the cost
effectiveness of technology options and the incremental cost to achieve
lower energy use must be assessed within a product platform. AHAM noted
that changes to the dishwasher chassis size require expensive changes
to tooling and may change the fundamental product manufacturing
approach. AHAM suggested that technology options should only be
considered if they can be physically accommodated within the product
chassis as there is only so much room in a product that has a standard
cutout and fits under the countertop. (AHAM, No. 26 at p. 15)
DOE recognizes that the majority of the domestic dishwasher
shipments are currently at EL 1. To account for the level of redesign
and investment required to meet amended standards above EL 1, DOE
relied on manufacturer feedback and the engineering analysis to assess
industry conversion costs at each analyzed efficiency level. As noted
in section IV.J.3 of this document, DOE interviewed manufacturers
representing approximately 90 percent of industry shipments. In
interviews, manufacturers discussed the investments required to
redesign their various product platforms and DOE incorporated those
costs into its analysis. See section IV.J.2.c of this document for a
description of the conversion cost methodology and section V.B.2.a of
this document for the estimated product and capital conversion costs at
the various analyzed standard levels. Regarding the impact on low-
income consumers, section IV.I and section V.B.1.b of this document
provides additional information on the consumer subgroup analysis of
low-income consumers. As for changes in chassis size, DOE notes that
the engineering analysis did not consider design options that would
necessitate a width greater than the typical standard-size dishwasher
width of 24 inches.
AHAM urged DOE to consider alternative approaches to cumulative
regulatory burden. AHAM encouraged DOE to incorporate the financial
results of the cumulative regulatory burden analysis into the MIA,
stating that this could be done by adding the combined cost of
complying with multiple regulations into the product conversion costs
in GRIM. (AHAM, No. 26 at p. 30) AHAM noted other regulations impact
dishwasher manufacturers such as residential and commercial clothes
washers, residential clothes dryers, consumer refrigerator/freezers,
miscellaneous refrigeration products, cooking products, room air
conditioners, dehumidifiers, portable air conditioners, and electric
motors. (AHAM, No. 26 at p. 31) Additionally, AHAM requested that DOE
include the cost of monitoring test procedure and energy conservation
standard rulemakings in its rulemaking analyses. (Id.)
If DOE were to combine the conversion costs from multiple
regulations, as requested, it would be appropriate to match the
combined conversion costs against combined revenues of the regulated
products. DOE is concerned that combined results would make it more
difficult to discern the direct impact of the amended standard on
covered manufacturers.
Regarding the ongoing DOE rulemakings AHAM mentioned, DOE has not
proposed amended energy conservation standards or compliance dates for
some of the products identified. Table V.11 details the rulemakings and
expected conversion expenses of Federal energy conservation standards,
such as consumer clothes dryers, residential clothes washers, and
refrigerators, refrigerator-freezers, and freezers, affecting
dishwasher OEMs. DOE will reassess and consider all relevant final
rules contributing to cumulative regulatory burden in any subsequent
analysis.
To consider the costs of monitoring test procedure and energy
conservation standard rulemakings, DOE requests AHAM provide the costs
of monitoring, which would be independent from the conversion costs
required to adapt product designs and manufacturing facilities to an
amended standard, for DOE to determine whether these costs would
materially affect the analysis. In particular, a summary of the job
titles and annual hours per job title at a prototypical company would
allow DOE to construct a detailed analysis of AHAM's monitoring costs.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions to emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of power sector emissions of CO2,
NOX, SO2, and Hg uses marginal emissions factors
that were derived from data in AEO 2022, as described in section IV.K
of this document. Details of the methodology are described in the
appendices to chapters 13 and 15 of the NOPR TSD.
Power sector emissions of CO2, CH4 and
N2O are estimated using Emission Factors for Greenhouse Gas
Inventories published by the EPA.\81\ The FFC upstream emissions are
estimated based on the methodology described in chapter 15 of the NOPR
TSD. The upstream emissions include both emissions from extraction,
processing, and transportation of fuel, and ``fugitive'' emissions
(direct leakage to the atmosphere) of CH4 and
CO2.
---------------------------------------------------------------------------
\81\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed July 12,
2021).
---------------------------------------------------------------------------
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.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO 2022, which incorporates the projected
[[Page 32551]]
impacts of existing air quality regulations on emissions. AEO 2022
generally represents current legislation and environmental regulations,
including recent government actions that were in place at the time of
preparation of AEO 2022, including the emissions control programs
discussed in the following paragraphs.\82\
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\82\ For further information, see the Assumptions to AEO 2022
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 October 15, 2021).
---------------------------------------------------------------------------
SO2 emissions from affected electric generating units
(``EGUs'') are subject to nationwide and regional emissions cap-and-
trade programs. Title IV of the Clean Air Act sets an annual emissions
cap on SO2 for affected EGUs in the 48 contiguous States and
the District of Columbia (DC). (42 U.S.C. 7651 et seq.) SO2
emissions from numerous States in the eastern half of the United States
are also limited under the Cross-State Air Pollution Rule (``CSAPR'').
76 FR 48208 (Aug. 8, 2011). CSAPR requires these States to reduce
certain emissions, including annual SO2 emissions, and went
into effect as of January 1, 2015.\83\ AEO 2022 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).\84\ 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.
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\83\ 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).
\84\ In Sept. 2019, the D.C. 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 implementation 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
power 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 would generally reduce SO2 emissions. DOE
estimated SO2 emissions reduction using emissions factors
based on AEO 2022.
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 AEO 2022 data to derive NOX
emissions factors for the group of States not covered by CSAPR.\85\
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\85\ See footnote 41.
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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
AEO 2022, which incorporates the MATS.
L. Monetizing Emissions Impacts
As part of the development of this proposed rule, for the purpose
of complying with the requirements of Executive Order 12866, DOE
considered the estimated monetary benefits from the reduced emissions
of CO2, CH4, N2O, NOX, and
SO2 that are expected to result from each of the TSLs
considered. In order to make this calculation analogous to the
calculation of the NPV of consumer benefit, DOE considered the reduced
emissions expected to result over the lifetime of products shipped in
the projection period for each TSL. This section summarizes the basis
for the values used for monetizing the emissions benefits and presents
the values considered in this NOPR.
DOE requests comment on how to address the climate benefits and
other non-monetized effects of the proposal.
1. Monetization of Greenhouse Gas Emissions
DOE estimates the monetized benefits of the reductions in emissions
of CO2, CH4, and N2O by using a
measure of the SC of each pollutant (e.g., SC-CO2). These
estimates represent the monetary value of the net harm to society
associated with a marginal increase in emissions of these pollutants in
a given year, or the benefit of avoiding that increase. These estimates
are intended to include (but are not limited to) climate-change-related
changes in net agricultural productivity, human health, property
damages from increased flood risk, disruption of energy systems, risk
of conflict, environmental migration, and the value of ecosystem
services.
DOE exercises its own judgment in presenting monetized climate
benefits as recommended by applicable Executive orders, and DOE would
reach the same conclusion presented in this proposed rulemaking 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
[[Page 32552]]
another means, did not affect the rule ultimately proposed by DOE.
DOE estimated the global social benefits of CO2,
CH4, and N2O reductions (i.e., ``SC-GHGs'') using
the estimates presented in the Technical Support Document: Social Cost
of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive
Order 13990, published in February 2021 by the IWG. 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.\86\ 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).\87\ 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.
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\86\ 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.
\87\ 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.
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On January 20, 2021, President Biden issued Executive Order 13990,
which re-established the IWG and directed it to ensure that the U.S.
Government's estimates of the social cost of carbon and other
greenhouse gases reflect the best available science and the
recommendations of the National Academies (2017). The IWG was tasked
with first reviewing the SC-GHG estimates currently used in Federal
analyses and publishing interim estimates within 30 days of the E.O.
that reflect the full impact of GHG emissions, including by taking
global damages into account. The interim SC-GHG estimates published in
February 2021 are used here to estimate the climate benefits for this
proposed rulemaking. The E.O. instructs the IWG to undertake a fuller
update of the SC-GHG estimates by January 2022 that takes into
consideration the advice of the National Academies (2017) and other
recent scientific literature. The February 2021 SC-GHG TSD provides a
complete discussion of the IWG's initial review conducted under
E.O.13990. In particular, the IWG found that the SC-GHG estimates used
under E.O. 13783 fail to reflect the full impact of GHG emissions in
multiple ways.
First, the IWG found that the SC-GHG estimates used under E.O.
13783 fail to fully capture many climate impacts that affect the
welfare of U.S. citizens and residents, and those impacts are better
reflected by global measures of the SC-GHG. Examples of 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 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
[[Page 32553]]
States. The only way to achieve an efficient allocation of resources
for emissions reduction on a global basis--and so benefit the U.S. and
its citizens--is for all countries to base their policies on global
estimates of damages. As a member of the IWG involved in the
development of the February 2021 SC-GHG TSD, DOE agrees with this
assessment and, therefore, in this proposed rule DOE centers attention
on a global measure of SC-GHG. This approach is the same as that taken
in DOE regulatory analyses from 2012 through 2016. A robust estimate of
climate damages that accrue only to U.S. citizens and residents does
not currently exist in the literature. As explained in the February
2021 TSD, existing estimates are both incomplete and an underestimate
of total damages that accrue to the citizens and residents of the U.S.
because they do not fully capture the regional interactions and
spillovers discussed above, nor do they include all of the important
physical, ecological, and economic impacts of climate change recognized
in the climate change literature. As noted in the February 2021 SC-GHG
TSD, the IWG will continue to review developments in the literature,
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full
range of carbon impacts. As a member of the IWG, DOE will continue to
follow developments in the literature pertaining to this issue.
Second, the IWG found that the use of the social rate of return on
capital (7 percent under current OMB Circular A-4 guidance) to discount
the future benefits of reducing GHG emissions inappropriately
underestimates the impacts of climate change for the purposes of
estimating the SC-GHG. Consistent with the findings of the National
Academies (2017) and the economic literature, the IWG continued to
conclude that the consumption rate of interest is the theoretically
appropriate discount rate in an intergenerational context,\88\ and
recommended that discount rate uncertainty and relevant aspects of
intergenerational ethical considerations be accounted for in selecting
future discount rates.
---------------------------------------------------------------------------
\88\ 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 percent and 7 percent discount
rates as ``default'' values, Circular A-4 also reminds agencies that
``different regulations may call for different emphases in the
analysis, depending on the nature and complexity of the regulatory
issues and the sensitivity of the benefit and cost estimates to the key
assumptions.'' On discounting, Circular A-4 recognizes that ``special
ethical considerations arise when comparing benefits and costs across
generations,'' and Circular A-4 acknowledges that analyses may
appropriately ``discount future costs and consumption benefits . . . at
a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE concludes that a 7 percent discount
rate is not appropriate to apply to value the social cost of greenhouse
gases in the analysis presented 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 above 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 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.
[[Page 32554]]
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.\89\ 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 NOPR likely underestimate the damages from GHG emissions.
DOE concurs with this assessment.
---------------------------------------------------------------------------
\89\ 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/.
---------------------------------------------------------------------------
DOE's derivations of the SC-CO2, SC-N2O, and
SC-CH4 values used for this NOPR are discussed in the
following sections, and the results of DOE's analyses estimating the
benefits of the reductions in emissions of these GHGs are presented in
section V.B. of this document.
a. Social Cost of Carbon
The SC-CO2 values used for this NOPR were based on the
values in the IWG's February 2021 TSD. Table IV.16 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 used that
DOE is presented in appendix 14A of the NOPR TSD. For purposes of
capturing the uncertainties involved in regulatory impact analysis, DOE
has determined it is appropriate include all four sets of SC-
CO2 values, as recommended by the IWG.\90\
---------------------------------------------------------------------------
\90\ For example, the February 2021 TSD discusses how the
understanding of discounting approaches suggests that discount rates
appropriate for intergenerational analysis in the context of climate
change may be lower than 3 percent.
Table IV.16--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate and statistic
---------------------------------------------------
Year 5% 3% 2.5% 3%
---------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
2020........................................................ 14 51 76 152
2027........................................................ 17 56 83 169
2030........................................................ 19 62 89 187
2035........................................................ 22 67 96 206
2040........................................................ 25 73 103 225
2045........................................................ 28 79 110 242
2050........................................................ 32 85 116 260
----------------------------------------------------------------------------------------------------------------
For 2051 to 2070, DOE used SC-CO2 estimates published by
EPA, adjusted to 2021$.\91\ These estimates are based on methods,
assumptions, and parameters identical to the 2020-2050 estimates
published by the IWG (which were based on EPA modeling).
---------------------------------------------------------------------------
\91\ See EPA, Revised 2023 and Later Model Year Light-Duty
Vehicle GHG Emissions Standards: Regulatory Impact Analysis,
Washington, DC, December 2021. Available at: nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1013ORN.pdf (last accessed January 13, 2023).
---------------------------------------------------------------------------
DOE multiplied the CO2 emissions reduction estimated for
each year by the SC-CO2 value for that year in each of the
four cases. DOE adjusted the values to 2021$ 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.
AHAM cautioned against DOE using the social cost of carbon and
other monetization of emissions reductions benefits in its analysis of
the factors EPCA requires DOE to balance to determine the appropriate
standard noting that the values are constantly subject to change. AHAM
stated that while it may be acceptable for DOE to continue its current
practice of examining the social cost of carbon and monetization of
other emissions reductions benefits as informational so long as the
underlying interagency analysis is transparent and vigorous, the
monetization analysis should not impact the TSLs DOE selects as a new
or amended standard. (AHAM, No. 26 at p. 15) As stated in section
III.F.1.f of this document, DOE accounts for the environmental and
public health benefits associated with the more efficient use of
energy, including those connected to global climate change, when
considering the need for national energy conservation. (See 42 U.S.C.
6295(o)(2)(B)(i)(IV)) In addition, Executive Order 13563, which was re-
affirmed on January 21, 2021, stated that each agency must, among other
things: ``select, in choosing among alternative regulatory approaches,
those approaches that maximize net benefits (including potential
economic, environmental,
[[Page 32555]]
public health and safety, and other advantages; distributive impacts;
and equity).'' For these reasons, DOE includes monetized emissions
reductions in its evaluation of potential standard levels. As
previously stated, however, DOE would reach the same conclusion
presented in this proposed rulemaking in the absence of the social cost
of greenhouse gases.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
NOPR were based on the values developed for the February 2021 TSD.\92\
Table IV.17 shows the updated sets of SC-CH4 and SC-
N2O estimates from the latest interagency update in 5-year
increments from 2020 to 2050. The full set of annual values used is
presented in appendix 14A of the NOPR TSD. To capture the uncertainties
involved in regulatory impact analysis, DOE has determined it is
appropriate to include all four sets of SC-CH4 and SC-
N2O values, as recommended by the IWG. DOE derived values
after 2050 using the approach described above for the SC-
CO2.
Table IV.17--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%
--------------------------------------------------------------------------------------------------------
Average Average Average 95th percentile Average Average Average 95th percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
2020........................................... 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2027........................................... 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 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. See
chapter 13 of the NOPR TSD for the annual emissions reduction. See
appendix 14A of the NOPR TSD for the annual SC-CH4 and SC-
N2O values.
2. Monetization of Other Air Pollutants
For the NOPR, 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.\93\ DOE used EPA's values
for PM2.5-related benefits associated with NOX
and SO2 and for ozone-related benefits associated with
NOX for 2027, 2030, 2035, and 2040, calculated with discount
rates of 3 percent and 7 percent. DOE used linear interpolation to
define values for the years not given in the 2027 to 2040 period; for
years beyond 2040 the values are held constant. DOE combined the EPA
benefit per ton estimates with regional information on electricity
consumption and emissions to define weighted-average national values
for NOX and SO2 as a function of sector (see
appendix 14B of the NOPR TSD).
---------------------------------------------------------------------------
\92\ 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.
\93\ 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 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 AEO 2022. 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
AEO 2022 Reference case and various side cases. Details of the
methodology are provided in the appendices to chapters 13 and 15 of the
NOPR TSD.
The output of this analysis is a set of time-dependent coefficients
that capture the change in electricity generation, primary fuel
consumption, installed capacity, and power sector emissions due to a
unit reduction in demand for a given end use. These coefficients are
multiplied by the stream of electricity savings calculated in the NIA
to provide estimates of selected utility impacts of potential new or
amended energy conservation standards.
N. Employment Impact Analysis
DOE considers employment impacts in the domestic economy as one
factor in selecting a proposed standard. Employment impacts from new or
amended energy conservation standards include both direct and indirect
impacts. Direct employment impacts are any changes in the number of
production and non-production employees of manufacturers of the
products subject to standards.\94\ The
[[Page 32556]]
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.
---------------------------------------------------------------------------
\94\ 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 BLS. BLS
regularly publishes its estimates of the number of jobs per million
dollars of economic activity in different sectors of the economy, as
well as the jobs created elsewhere in the economy by this same economic
activity. Data from BLS indicate that expenditures in the utility
sector generally create fewer jobs (both directly and indirectly) than
expenditures in other sectors of the economy.\95\ 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.
---------------------------------------------------------------------------
\95\ 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 October 21, 2021).
---------------------------------------------------------------------------
DOE estimated indirect national employment impacts for the standard
levels considered in this NOPR using an input/output model of the U.S.
economy called Impact of Sector Energy Technologies version 4
(``ImSET'').\96\ 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.
---------------------------------------------------------------------------
\96\ Livingston, O.V., S.R. Bender, M.J. Scott, and R.W.
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model
Description and User Guide. 2015. Pacific Northwest National
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------
DOE notes that ImSET is not a general equilibrium forecasting
model, and that the uncertainties involved in projecting employment
impacts, especially changes in the later years of the analysis. Because
ImSET does not incorporate price changes, the employment effects
predicted by ImSET may over-estimate actual job impacts over the long
run for this proposed 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 NOPR TSD.
V. Analytical Results and Conclusions
The following section addresses the results from DOE's analyses
with respect to the considered energy conservation standards for
dishwashers. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for dishwashers, and the standards levels that DOE is
proposing to adopt in this NOPR. Additional details regarding DOE's
analyses are contained in the NOPR TSD supporting this document.
A. Trial Standard Levels
In general, DOE typically evaluates potential amended standards for
products and equipment by grouping individual efficiency levels for
each class into TSLs. Use of TSLs allows DOE to identify and consider
manufacturer cost interactions between the 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. DOE analyzed the benefits and burdens of five
TSLs for dishwashers. 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 NOPR TSD.
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential amended energy conservation
standards for dishwashers. TSL 5 represents the max-tech energy
efficiency for both product classes and corresponds to EL 4 for
standard-size dishwashers and EL 2 for compact-size dishwashers. TSL 4
is the TSL that maximizes net benefits at a 3% discount rate; this TSL
represents the highest efficiency levels providing positive LCC
savings, which comprises the gap-fill efficiency level between the
current ENERGY STAR V. 6.0 level and ENERGY STAR Most Efficient level
(EL 2) for standard-size dishwashers and max-tech efficiency level (EL
2) for compact-size dishwashers. TSL 3 maximizes net benefits at a 7%
discount rate; this TSL comprises the gap-fill efficiency level between
the current ENERGY STAR V. 6.0 level and ENERGY STAR Most Efficient
level (EL 2) for standard-size dishwashers and the current ENERGY STAR
V. 6.0 level (EL 1) for compact-size dishwashers. TSL 2 comprises the
current ENERGY STAR V. 6.0 level (EL 1) for standard-size dishwashers
and the max-tech efficiency level (EL 2) for compact-size dishwashers.
TSL 1 represents EL 1 across both product classes and the current
ENERGY STAR V. 6.0 level.
[[Page 32557]]
Table V.1--Trial Standard Levels for Dishwashers
----------------------------------------------------------------------------------------------------------------
Product class TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Maximum allowable estimated annual energy use (kWh/year) *
----------------------------------------------------------------
PC 1: Standard-size dishwasher................. 232 232 223 223 193
PC 2: Compact-size dishwasher.................. 174 124 174 124 124
----------------------------------------------------------------------------------------------------------------
* Based on appendix C2.
DOE constructed the TSLs for this NOPR to include ELs
representative of ELs with similar characteristics (i.e., using similar
technologies and/or efficiencies, and having roughly comparable
equipment availability). The use of representative ELs provided for
greater distinction between the TSLs. While representative ELs were
included in the TSLs, DOE considered all efficiency levels as part of
its analysis and included the efficiency levels with positive LCC
savings in the TSLs.\97\
---------------------------------------------------------------------------
\97\ Efficiency levels that were analyzed for this NOPR are
discussed in section IV.C.3 of this document. Results by efficiency
level are presented in TSD chapters 8, 10, and 12.
---------------------------------------------------------------------------
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on dishwashers consumers by
looking at the effects that potential amended standards at each TSL
would have on the LCC and PBP. DOE also examined the impacts of
potential standards on selected consumer subgroups. These analyses are
discussed in the following sections.
a. Life-Cycle Cost and Payback Period
In general, higher-efficiency products affect consumers in two
ways: (1) purchase price increases and (2) annual operating costs
decrease. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, water prices, water price trends, repair costs, and maintenance
costs). The LCC calculation also uses product lifetime and a discount
rate. Chapter 8 of the NOPR TSD provides detailed information on the
LCC and PBP analyses.
Table V.2 through Table V.5 show the default case LCC and PBP
results for the TSLs considered for both product classes. The LCC and
PBP results based on the incremental MPC sensitivity cases are
presented appendix 8D of the NOPR TSD. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second of each pair of tables, 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. DOE does not
include price-sensitive consumers who do not purchase new dishwashers
in the percent of consumers that experience a net cost. DOE seeks
comment and publicly-available data to improve its analysis of the
consumer effects of the proposed standards for dishwashers. DOE is
committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards, including dishwashers.
Table V.2--Average LCC and PBP Results for PC 1: Standard-Size Dishwashers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2021$)
----------------------------------------------------
AEU * (kWh/ First Simple Average
TSL EL yr) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 263 $477 $44 $590 $1,067 ........... 15.2
1,2................................. 1...................... 232 492 39 558 1,050 3.0 15.2
3,4................................. 2...................... 223 492 38 542 1,034 2.4 15.2
5................................... 4...................... 193 612 33 536 1,148 12.4 15.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Based on the test procedure assumption of 184 cycles per year.
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The simple PBP is measured relative to
the baseline product.
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for PC 1: Standard-Size Dishwashers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
Percent of
TSL EL Average LCC savings consumers that
* (2021$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1,2................................................. 1 20 3
3,4................................................. 2 17 3
5................................................... 4 (96) 94
----------------------------------------------------------------------------------------------------------------
[[Page 32558]]
Table V.4--Average LCC and PBP Results for PC 2: Compact-Size Dishwashers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2021$)
----------------------------------------------------
AEU * (kWh/ First Simple Average
TSL EL yr) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline............... 191 $532 $32 $468 $1,000 ........... 15.2
1,3................................. 3...................... 174 532 30 438 969 0.0 15.2
2,4,5............................... 4...................... 124 590 22 378 968 5.7 15.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Based on the test procedure assumption of 184 cycles per year.
Note:The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The simple PBP is measured relative to
the baseline product.
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for PC 2: Compact-Size Dishwashers
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-------------------------------------------
Percent of
TSL EL Average LCC savings consumers that
* (2021$) experience net cost
(%)
----------------------------------------------------------------------------------------------------------------
1,3................................................. 1 30 0
2,4,5............................................... 2 6 49
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and senior-only households.
Table V.6 and Table V.7 compare the average LCC savings and PBP at each
efficiency level for the consumer subgroups with similar metrics for
the entire consumer sample for both 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 NOPR
TSD presents the complete LCC and PBP results for the subgroups.
Table V.6--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; PC 1: Standard-Size
Dishwashers
----------------------------------------------------------------------------------------------------------------
Low-income
households Senior-only All
[Dagger] households households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings * (2021$):
TSL 1-2..................................................... 36 6 20
TSL 3-4..................................................... 20 14 17
TSL 5....................................................... (28) (108) (96)
Payback Period (years):
TSL 1-2..................................................... 1.3 3.7 3.0
TSL 3-4..................................................... 1.0 2.9 2.4
TSL 5....................................................... 5.5 14.9 12.4
Consumers with Net Benefit (%):
TSL 1-2..................................................... 4 2 3
TSL 3-4..................................................... 80 87 88
TSL 5....................................................... 32 4 6
Consumers with Net Cost (%):
TSL 1-2..................................................... 2 4 3
TSL 3-4..................................................... 2 4 3
TSL 5....................................................... 59 96 94
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[Dagger] Low-income households represent 5.7 percent of all households for this product class.
Senior-only households represent 23.2 percent of all households for this product class.
Table V.7--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; PC 2: Compact-Size
Dishwashers
----------------------------------------------------------------------------------------------------------------
Low-income
households Senior-only All
[Dagger] households households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings * (2021$):
TSL 1,3..................................................... 33 24 30
TSL 2,4,5................................................... 50 (10) 6
Payback Period (years):
TSL 1,3..................................................... 0.0 0.0 0.0
[[Page 32559]]
TSL 2,4,5................................................... 2.6 6.8 5.7
Consumers with Net Benefit (%):
TSL 1,3..................................................... 11 12 12
TSL 2,4,5................................................... 44 23 30
Consumers with Net Cost (%):
TSL 1,3..................................................... 0 0 0
TSL 2,4,5................................................... 28 56 49
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[Dagger] Low-income households represent 5.7 percent of all households for this product class.
Senior-only households represent 23.2 percent of all households for this product class.
c. Rebuttable Presumption Payback
As discussed in section III.E.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)(B)(iii)) In calculating a rebuttable presumption payback
period for each of the considered TSLs, DOE used discrete values, and,
as required by EPCA, based the energy use calculation on the DOE test
procedure for dishwashers. In contrast, the PBPs presented in section
V.B.1.a of this document were calculated using distributions that
reflect the range of energy use in the field.
Table V.8 presents the rebuttable-presumption payback periods for
the considered TSLs for dishwashers. While DOE examined the rebuttable-
presumption criterion, it also considered whether the standard levels
considered for the NOPR are economically justified through a more
detailed analysis of the economic impacts of those levels, pursuant to
42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to
the consumer, manufacturer, Nation, and environment. The results of
that analysis serve as the basis for DOE to definitively evaluate the
economic justification for a potential standard level, thereby
supporting or rebutting the results of any preliminary determination of
economic justification.
Table V.8--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
TSL
Product class -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(years)
-------------------------------------------------------------------------------
PC 1: Standard-Size............. 2.1 2.1 1.8 1.8 9.4
PC 2: Compact-Size.............. 0.0 4.6 0.0 4.6 4.6
----------------------------------------------------------------------------------------------------------------
* Based on the test procedure assumption of 184 cycles per year.
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of dishwashers. The following
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the NOPR TSD explains the analysis in
further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from amended energy
conservation standards. The following tables illustrate the estimated
financial impacts (represented by changes in INPV) of potential amended
energy conservation standards on manufacturers of dishwashers, as well
as the conversion costs that DOE estimates manufacturers of dishwashers
would incur at each TSL.
To evaluate the range of cash-flow impacts on the dishwasher
industry, DOE modeled two scenarios using different assumptions that
correspond to the range of anticipated market responses to amended
energy conservation standards: (1) a preservation of gross margin
percentage scenario; (2) a tiered scenario, as discussed in section
IV.J.2.d of this document. The preservation of gross margin percentage
applies a ``gross margin percentage'' of 19.4 percent for both
standard-size and compact-size product classes.\98\ This scenario
assumes that a manufacturer's per-unit dollar profit would increase as
MPCs increase in the standards cases and represents the upper-bound to
industry profitability under potential amended energy conservation
standards.
---------------------------------------------------------------------------
\98\ The gross margin percentage of 19.4 percent is based on a
manufacturer markup of 1.24.
---------------------------------------------------------------------------
The tiered scenario starts with the three different product
manufacturer markups in the no-new-standards case (baseline, ENERGY
STAR V. 6.0, and 2022 ENERGY STAR Most Efficient qualification
criteria). This scenario models reflects a concern about product
commoditization at higher efficiency levels as efficiency
differentiators are eliminated and manufacturer markups are reduced.
The tiered scenario results in the lower (or larger in magnitude) bound
to impacts of potential amended standards on industry.
Each of the modeled scenarios results in a unique set of cash flows
and corresponding INPV for each TSL. INPV is the sum of the discounted
cash flows to the industry from the NOPR publication year through the
end of the analysis period (2023-2056). The ``change in INPV'' results
refer to the
[[Page 32560]]
difference in industry value between the no-new-standards case and
standards case at each TSL. To provide perspective on the short-run
cash flow impact, DOE includes a comparison of free cash flow between
the no-new-standards case and the standards case at each TSL in the
year before amended standards would take effect. This figure provides
an understanding of the magnitude of the required conversion costs
relative to the cash flow generated by the industry in the no-new-
standards case.
Conversion costs are one-time investments for manufacturers to
bring their manufacturing facilities and product designs into
compliance with potential amended standards. As described in section
IV.J.2.c of this document, conversion cost investments occur between
the year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion costs
can have a significant impact on the short-term cash flow on the
industry and generally result in lower free cash flow in the period
between the publication of the final rule and the compliance date of
potential amended standards. Conversion costs are independent of the
manufacturer markup scenarios and are not presented as a range in this
analysis.
Table V.9--Manufacturer Impact Analysis Results for Dishwashers *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
Unit standards case TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................................... 2021$ Million.................... 713.6 664.4 to 707.0 657.7 to 701.1 578.7 to 624.1 572.0 to 618.2 305.8 to 371.1
Change in INPV................................ %................................ .............. (6.9) to (0.9) (7.8) to (1.8) (18.9) to (12.5) (19.8) to (13.4) (57.1) to (48.0)
Free Cash Flow (2026)......................... 2021$ Million.................... 56.0 51.7 47.8 5.7 1.7 (225.1)
Change in Free Cash Flow (2026)............... %................................ .............. (7.7) (14.8) (89.9) (96.9) (501.9)
Conversion Costs.............................. 2021$ Million.................... .............. 12.4 22.4 125.6 135.6 663.7
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses indicates negative (-) values.
At TSL 1, the standard represents EL 1 across both standard-size
and compact-size dishwashers and the current ENERGY STAR V. 6.0 level.
The change in INPV is expected to range from -6.9 to -0.9 percent. At
this level, free cash flow is estimated to decrease by 7.7 percent
compared to the no-new-standards case value of $56.0 million in the
year 2026, the year before the standards year. Currently, approximately
93 percent of domestic dishwasher shipments meet the efficiencies
required at TSL 1. For standard-size dishwashers, which account for
approximately 98 percent of annual shipments, 93 percent of shipments
meet the efficiencies required. For compact-size dishwashers, which
account for the remaining 2 percent of annual shipments, 87 percent of
shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers
include implementing electronic controls, soil sensing, multiple spray
arms, improved water filters, a separate drain pump, and tub
insulation. The design options DOE analyzed for compact-size
dishwashers include implementing improved controls. At this level,
capital conversion costs are minimal since the majority of products
already meet the efficiency levels required. As with all the analyzed
TSLs, conversion costs incorporate industry testing costs as
manufacturers implement the cleaning performance test and re-rate all
their existing, compliant models in accordance with the new appendix
C2. 88 FR 3234. DOE expects industry to incur some re-flooring costs
associated with standard-size dishwashers as manufacturers redesign
baseline products to meet the efficiency levels required by TSL 1. In
interviews, manufacturers stated that there are not re-flooring costs
associated with compact-size dishwashers as those are typically not on
display at big-box stores. DOE estimates capital conversion costs of
$0.9 million and product conversion costs of $11.4 million. Conversion
costs total $12.4 million.
Under the tiered manufacturer markup scenario, which is discussed
in IV.J.2.d of this document, the key driver of impacts to INPV at TSL
1 is the result of margin compression for both standard-size and
compact-size dishwashers as manufacturers forfeit premiums and cut into
margins as they try to maintain a competitively priced baseline
product. Although only a small fraction of products (7 percent of
shipments) would need to be redesigned at this level, the margin
compression under the tiered scenario has a disproportionately large
impact on INPV, since most of the market is ENERGY STAR V. 6.0
compliant in the no-new-standards case.
At TSL 2, the standard represents the current ENERGY STAR V. 6.0
level (EL 1) for standard-size dishwashers and the max-tech efficiency
level (EL 2) for compact-size dishwashers. The change in INPV is
expected to range from -7.8 to -1.8 percent. At this level, free cash
flow is estimated to decrease by 14.8 percent compared to the no-new-
standards case value of $56.0 million in the year 2026, the year before
the standards year. Currently, approximately 92 percent of domestic
dishwasher shipments meet the efficiencies required at TSL 2. As with
TSL 1, 93 percent of standard-size dishwasher shipments meet the
efficiencies required. For compact-size dishwashers, 21 percent of
shipments currently meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers are
the same as at TSL 1. The design options analyzed for compact-size
dishwashers include implementing the design options at TSL 1 as well as
permanent magnet motors, improved filters, hydraulic system
optimization, heater incorporated into base of tub, and reduced sump
volume. The increase in conversion costs from the prior TSL is entirely
due to the increased efficiency level required for compact-size
dishwashers. At TSL 2, all manufacturers of compact-size countertop
dishwashers with 4 or more place settings and in-sink dishwashers with
less than 4 place settings would need to redesign their products to
meet the efficiencies required, as DOE is not aware of any currently
available products in these two configurations that meet TSL 2.
Manufacturer feedback and the engineering analysis indicates that
redesigning these compact-size configurations to meet max-tech would
require significant investment, both in terms of engineering resources
and new tooling, relative to the size of the domestic compact-size
dishwasher market. While it is technologically feasible for compact-
size countertop dishwashers with 4 or more place
[[Page 32561]]
settings and in-sink dishwashers with less than 4 place settings to
meet TSL 2 (max-tech for compact-size dishwashers), manufacturers would
need to determine whether the shipments volumes justify the level of
investment required. DOE expects industry to incur the same re-flooring
costs as at TSL 1. DOE estimates capital conversion costs of $5.9
million and product conversion costs of $16.5 million. Conversion costs
total $22.4 million.
Under the tiered manufacturer markup scenario, the key driver of
impacts to INPV at TSL 2 is the result of margin compression for both
standard-size and compact-size dishwashers as manufacturers forfeit
premiums and cut into margins as they try to maintain a competitively
priced baseline product. In particular, because TSL 2 sets standards
for compact-size dishwashers at max-tech, manufacturers lose their
premium markup for high-efficiency compact-size products, contributing
to a reduction in future revenues and INPV.
At TSL 3, the standard represents the gap-fill efficiency level
between the current ENERGY STAR V. 6.0 level and ENERGY STAR Most
Efficient level (EL 2) for standard-size dishwashers and the current
ENERGY STAR V. 6.0 level (EL 1) for compact-size dishwashers. The
change in INPV is expected to range from -18.9 to -12.5 percent. At
this level, free cash flow is estimated to decrease by 89.9 percent
compared to the no-new-standards case value of $56.0 million in the
year 2026, the year before the standards year. Currently, approximately
11 percent of domestic dishwasher shipments meet the efficiencies
required at TSL 3. For standard-size dishwashers, 9 percent of current
shipments meet the efficiencies required. As with TSL 1, 87 percent of
compact-size dishwasher shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers
include implementing the design options at TSL 1 and TSL 2 as well as
improved control strategies, which could necessitate product redesign
to more closely control water temperature, water fill volumes, etc. The
design options analyzed for compact-size dishwashers are the same as
for TSL 1. The increase in conversion costs from the prior TSL is
entirely due to the increased efficiency level required for standard-
size dishwashers. In interviews, some manufacturers stated that meeting
TSL 3 would involve physical improvements to system elements to enable
tighter controls and better design tolerances, while maintaining
certain product attributes valued by their consumers. Although
manufacturers tended to agree that the key product attributes (in
addition to energy and water use and cleaning performance) included
drying performance, cycle duration, and noise levels, manufacturers
identified different priorities and internal targets for those metrics.
One manufacturer noted that maintaining the same normal cycle time
across their dishwasher portfolio was a key design parameter, as it was
part of their value proposition and marketing material. A different
manufacturer emphasized that maintaining drying performance,
particularly of plastic dishware, was a key concern for their consumer
base. These manufacturers stated that they may need new tooling and
some modifications to the assembly line to improve the system elements
to meet TSL 3 efficiencies while maintaining these product attributes.
DOE expects industry to incur more re-flooring costs compared to TSL 2.
DOE estimates capital conversion costs of $68.9 million and product
conversion costs of $56.7 million. Conversion costs total $125.6
million.
TSL 3 brings standards for standard-size dishwashers above current
ENERGY STAR V. 6.0 levels. Under the tiered scenario, the fraction of
products that are eligible for any additional premium markups above
baseline is further reduced as manufacturers sacrifice margins as they
seek to maintain a low-price-point baseline model.
At TSL 4, the standard represents the highest efficiency levels
providing positive LCC savings, which comprise the gap-fill efficiency
level between the current ENERGY STAR V. 6.0 level and ENERGY STAR Most
Efficient level (EL 2) for standard-size dishwashers and max-tech
efficiency level (EL 2) for compact-size dishwashers. The change in
INPV is expected to range from -19.8 to -13.4 percent. At this level,
free cash flow is estimated to decrease by 96.9 percent compared to the
no-new-standards case value of $56.0 million in the year 2026, the year
before the standards year. Currently, approximately 10 percent of
domestic dishwasher shipments meet the efficiencies required at TSL 4.
As with TSL 3, 9 percent of standard-size dishwasher shipments meet the
efficiencies required. As with TSL 2, 21 percent of compact-size
dishwasher shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers are
the same as at TSL 3. The design options analyzed for compact-size
dishwashers are the same as at TSL 2 and include implementing permanent
magnet motors, improved filters, hydraulic system optimization, heater
incorporated into base of tub, and reduced sump volume. The increase in
conversion costs from the prior TSL is entirely due to the increased
efficiency level required for compact-size dishwashers. As discussed
previously, all manufacturers of compact-size countertop dishwashers
with 4 or more place settings and in-sink dishwashers with less than 4
place settings would need to redesign their products to meet the
efficiencies required, as DOE is not aware of any currently available
products in these two configurations that meet TSL 4 (max-tech for
compact-size dishwashers). Manufacturer feedback and the engineering
analysis indicates that redesigning these compact-size dishwasher
configurations to meet TSL 4 would require significant investment, both
in terms of engineering resources and new tooling, relative to the size
of the domestic compact-size dishwasher market. DOE expects industry to
incur similar re-flooring costs compared to TSL 3. DOE estimates
capital conversion costs of $73.9 million and product conversion costs
of $61.7 million. Conversion costs total $135.6 million.
Under the tiered manufacturer markup scenario, one of the key
drivers of impacts to INPV at TSL 4 is the result of margin compression
for both standard-size and compact-size dishwashers as manufacturers
forfeit premiums and cut into margins as they try to maintain a
competitively priced baseline product. In particular, because TSL 4
sets standards for compact-size dishwashers at max-tech, manufacturers
lose their premium markups for high-efficiency compact-size products,
contributing to a reduction in future revenues and INPV.
At TSL 5, the standard represents the max-tech energy efficiency
for both product classes and corresponds to EL 4 for standard-size
dishwashers and EL 2 for compact-size dishwashers. The change in INPV
is expected to range from -57.1 to -48.0 percent. At this level, free
cash flow is estimated to decrease by 501.9 percent compared to the no-
new-standards case value of $56.0 million in the year 2026, the year
before the standards year. Currently, less than 1 percent of domestic
dishwasher shipments meet the efficiencies required at TSL 5. For
standard-size dishwashers, DOE estimates that no shipments currently
meet the efficiencies required. As with TSL 4, 21 percent of compact-
size
[[Page 32562]]
dishwasher shipments meet the efficiencies required.
The design options DOE analyzed for standard-size dishwashers
include design options considered at the lower efficiency levels (i.e.,
electronic controls, soil sensors, multiple spray arms, improved water
filters and control strategies, separate drain pump, tub insulation,
hydraulic system optimization, water diverter assembly, temperature
sensor, 3-phase variable speed motor, and flow meter) and includes
additional design options such as the use of stainless steel tub, in-
sump integrated heater, condensation drying, and control strategies.
The design options analyzed for compact-size dishwashers are the same
as at TSL 4. The increase in conversion costs from the prior TSL is
entirely due to the increased efficiencies required for standard-size
dishwashers.
All manufacturers interviewed stated that meeting max-tech would
necessitate significant platform redesign in order to meet the required
efficiencies and maintain the product attributes consumers desire.
Manufacturers noted that investments in new tooling, equipment and
production line modifications may be necessary to implement a range of
design options. Specifically, manufacturers discussed tooling for
additional spray arms, new sump tooling, new stamping equipment, door
opening systems, improved filtration systems, and new dish racks.
Manufacturers would likely need to convert all existing plastic tub
designs to stainless steel tubs, which would necessitate expanding
existing stainless steel tub production capacity and retiring plastic
injection equipment used for plastic tubs. None of the manufacturers
interviewed, which together account for approximately 90 percent of
dishwasher shipments, currently offer standard-size dishwashers that
meet max-tech. Therefore, most manufacturers expressed technical
uncertainty about the extent of the design changes and production line
updates that would be needed to meet max-tech and satisfy their
consumer base. Some manufacturers suggested they would explore new
water purification technology systems for water reuse. Other
manufacturers noted that meeting max-tech may necessitate new tub
architectures, which would require significant capital investment.
These manufacturers noted that if new technology was necessary (e.g.,
water purification systems) or if new tub architectures were required,
the 3-year compliance period may be insufficient to complete the
necessary product redesign and production facility updates. DOE
estimates capital conversion costs of $421.1 million and product
conversion costs of $242.6 million. Conversion costs total $663.7
million.
At TSL 5, the large conversion costs result in a free cash flow
dropping below zero in the years before the standards year. The
negative free cash flow calculation indicates manufacturers may need to
access cash reserves or outside capital to finance conversion efforts.
TSL 5 sets the standard for all products as high as technologically
feasible, leaving manufacturers no ability to differentiate products by
efficiency under the tiered manufacturer markup scenario. Thus, all
margins collapse to the baseline levels.
DOE seeks comments, information, and data on the capital conversion
costs and product conversion costs estimated for each TSL.
b. Direct Impacts on Employment
To quantitatively assess the potential impacts of amended energy
conservation standards on direct employment in the dishwasher 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 ASM,
results of the engineering analysis, and manufacturer interviews.
DOE calculated these values using statistical data from the 2020
ASM,\99\ BLS employee compensation data,\100\ results of the
engineering analysis, and manufacturer interviews.
---------------------------------------------------------------------------
\99\ U.S. Census Bureau, Annual Survey of Manufactures.
``Summary Statistics for Industry Groups and Industries in the U.S.
(2020).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2020-asm.html (last accessed July 15, 2022).
\100\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation. June 16, 2022. Available at: www.bls.gov/news.release/pdf/ecec.pdf (last accessed August 1, 2022).
---------------------------------------------------------------------------
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.
Total 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 approximately 78 percent of standard-size dishwashers
are produced domestically. DOE estimates that no compact-size
dishwashers are produced domestically. Therefore, overall, DOE
estimates that approximately 76 percent of all covered dishwashers sold
in the United States 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 proposed rule.
Non-production workers account for the remainder of the direct
employment figure. The non-production employees covers domestic workers
who are not directly involved in the production process, such as sales,
engineering, human resources, management, etc. Using the number of
domestic production workers calculated above, non-production domestic
employees are extrapolated by multiplying the ratio of non-production
workers in the industry compared to production employees. DOE assumes
that this employee distribution ratio remains constant between the no-
new-standards case and standards cases.
Using the GRIM, DOE estimates in the absence of new energy
conservation standards there would be 3,890 domestic workers for
standard-size dishwashers in 2027. Table V.10 shows the range of the
impacts of energy
[[Page 32563]]
conservation standards on U.S. manufacturing employment in the
standard-size dishwasher industry. As previously noted, DOE did not
identify any U.S. manufacturing facilities producing compact-size
dishwashers for the domestic market, and therefore does not present a
range of direct employment impacts. The discussion below provides a
qualitative evaluation of the range of potential impacts presented in
the table.
Table V.10--Direct Employment Impacts for Domestic Standard-Size Dishwasher Manufacturers in 2027 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Trial standard level
No-standards ------------------------------------------------------------------------------------
case 1 2 3 4 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2027 (Production Workers + 3,890 3,923 3,923 3,923 3,923 4,601
Non-Production Workers)..........................
Potential Changes in Direct Employment in 2027 *.. ............... (3,426) to 33 (3,426) to 33 (3,426) to 33 (3,426) to 33 (3,426) to 711
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses indicate negative numbers.
The direct employment impacts shown in Table V.10 represent the
potential domestic employment changes that could result following the
compliance date for the standard-size dishwashers in this proposal. The
upper bound estimate corresponds to an increase in the number of
domestic workers that would result from amended energy conservation
standards if manufacturers continue to produce the same scope of
covered products within the United States after compliance takes
effect.
To establish a conservative lower bound, DOE assumes all
manufacturers would shift production to foreign countries or would
shift to importing finished goods (versus manufacturing in-house). At
lower TSLs (i.e., TSL 1 through TSL 4), DOE believes the likelihood of
changes in production location due to amended standards are low due to
the relatively minor production line updates required. However, at max-
tech, both the complexity and cost of production facility updates
increases, manufacturers are more likely to revisit their production
location decisions. At max-tech, one manufacturer representing a large
portion of the market noted concerns about the level of investment and
indicated the potential need to relocate production lines in order to
remain competitive.
Additional detail on the analysis of direct employment can be found
in chapter 12 of the NOPR TSD. Additionally, the employment impacts
discussed in this section are independent of the employment impacts
from the broader U.S. economy, which are documented in chapter 16 of
the NOPR TSD.
c. Impacts on Manufacturing Capacity
As discussed in section V.B.2.a of this document, implementing the
different design options analyzed for this NOPR would require varying
levels of resources and investment. At higher efficiency levels,
manufacturers noted that balancing more stringent energy and water use
requirements while maintaining the product attributes their consumers
value, becomes increasingly challenging. All manufacturers interviewed,
which together account for approximately 90 percent of industry
shipments, noted that meeting the standard-size dishwasher max-tech
efficiencies and cleaning performance requirement while maintaining
internal targets for other product attributes such as drying
performance, cycle duration, and noise levels, would require
significant investment. None of the manufacturers interviewed currently
offer a max-tech product, and they expressed technical uncertainty
about the exact technologies and production line changes would be
needed to meet both the required efficiencies and their internal design
standards. In interviews, several manufacturers expressed concerns that
the 3-year time period between the announcement of the final rule and
the compliance date of the amended energy conservation standard might
be insufficient to design, test, and manufacture the necessary number
of products to meet consumer demand. These manufacturers noted that the
3-year time period would be particularly problematic if the standard
necessitated completely new tub architectures.
DOE seeks comment on whether manufacturers expect manufacturing
capacity constraints would limit product availability to consumers in
the timeframe of the amended standard compliance date (2027).
d. Impacts on Subgroups of Manufacturers
Using average cost assumptions to develop industry cash-flow
estimates may not capture the differential impacts among subgroups of
manufacturers. Small manufacturers, niche players, or manufacturers
exhibiting a cost structure that differs substantially from the
industry average could be affected disproportionately. DOE investigated
small businesses as a manufacturer subgroup that could be
disproportionally impacted by energy conservation standards and could
merit additional analysis. DOE did not identify any other adversely
impacted manufacturer subgroups for this rulemaking based on the
results of the industry characterization.
DOE analyzes the impacts on small businesses in a separate analysis
in section VI.B of this document as part of the Regulatory Flexibility
Analysis. In summary, the Small Business Administration (``SBA'')
defines a ``small business'' as having 1,500 employees or less for
NAICS 335220, ``Major Household Appliance Manufacturing.'' \101\ Based
on this classification, DOE did not identify any domestic OEMs that
qualify as a small business. For a discussion of the impacts on the
small business manufacturer subgroup, see the Regulatory Flexibility
Analysis in section VI.B of this document and chapter 12 of the NOPR
TSD.
---------------------------------------------------------------------------
\101\ 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 product-specific
regulatory actions of other Federal agencies that affect the
manufacturers of a covered product or equipment. While any one
regulation may not impose a significant burden on manufacturers, the
combined effects of several existing or impending regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the
[[Page 32564]]
impact of a single regulation may overlook this cumulative regulatory
burden. In addition to energy conservation standards, other regulations
can significantly affect manufacturers' financial operations. Multiple
regulations affecting the same manufacturer can strain profits and lead
companies to abandon product lines or markets with lower expected
future returns than competing products. For these reasons, DOE conducts
an analysis of cumulative regulatory burden as part of its rulemakings
pertaining to appliance efficiency.
For the cumulative regulatory burden analysis, DOE examines
Federal, product-specific regulations that could affect dishwasher
manufacturers that take effect approximately 3 years before or after
the 2027 compliance date. This information is presented in Table V.11.
The combined sum of total industry conversion costs as a percentage of
total product revenue during the conversion periods across all
rulemakings listed in Table V.11 is 2.8 percent.
In response to the January 2022 Preliminary Analysis, stakeholders
commented on the cumulative regulatory burden analysis. See section
IV.J.4 of this document for a summary of stakeholder comments and DOE's
initial responses.
Table V.11--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting
Dishwasher Manufacturers
----------------------------------------------------------------------------------------------------------------
Industry
Number of OEMs Industry conversion
Federal energy conservation Number of OEMs affected from Approx. conversion costs costs/product
standard * the rule ** standards year (millions $) revenue ***
(%)
----------------------------------------------------------------------------------------------------------------
Portable Air Conditioners 85 11 2 2025 $320.9 (2015$) 6.7
FR 1378 (January 10, 2020)..
Consumer Furnaces [dagger] 87 15 1 2029 150.6 (2020$) 1.4
FR 40590 (July 7, 2022).....
Commercial Water Heating 14 1 2026 34.6 (2020$) 4.7
Equipment [dagger] 87 FR
30610 (May 19, 2022)........
Consumer Clothes Dryers 15 11 .............. 149.7 (2020$) 1.8
[dagger] 87 FR 51734 (August
23, 2022)...................
Microwave Ovens [dagger] 87 18 10 2026 46.1 (2021$) 0.7
FR 52282 (August 24, 2022)..
Consumer Conventional Cooking 34 11 2027 183.4 (2021$) 1.2
Products 88 FR 6818 [dagger]
(February 1, 2023)..........
Residential Clothes Washers 19 10 2027 690.8 (2021$) 5.2
[dagger] 88 FR 13520 (March
3, 2023)....................
Refrigerators, Freezers, and 49 15 2027 1,323.6 (2021$) 3.8
Refrigerator-Freezers
[dagger] 88 FR 12452
(February 27, 2023).........
Miscellaneous Refrigeration 38 8 2029 126.9 (2021$) 3.1
Products [dagger] 88 FR
19382 (April 11, 2023)......
Room Air Conditioners 8 4 2026 24.8 0.4
[Dagger]....................
----------------------------------------------------------------------------------------------------------------
* 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 dishwashers 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 energy conservation
standard. The conversion period typically ranges from 3 to 5 years, depending on the rulemaking.
[dagger] These rulemakings are in the proposed rule stage and all values are subject to change until finalized.
[Dagger] At the time of issuance of this dishwasher proposed rule, this rulemaking has been issued and is
pending publication in the Federal Register. Once published, the room air conditioners final rule will be
available at: www.regulations.gov/docket/EERE-2014-BT-STD-0059.
DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of dishwashers associated with
multiple DOE standards or product-specific regulatory actions of other
Federal agencies.
3. National Impact Analysis
This section presents DOE's estimates of the NES and the NPV of
consumer benefits that would result from each of the TSLs considered as
potential amended standards.
a. Significance of Energy and Water Savings
To estimate the energy and water savings attributable to potential
amended standards for dishwashers, DOE compared their energy and water
consumption under the no-new-standards case to their anticipated energy
and water consumption under each TSL. The savings are measured over the
entire lifetime of products purchased in the 30-year period that begins
in the year of anticipated compliance with amended standards (2027-
2056). Table V.12 and Table V.13 presents DOE's projections of the
national energy and water savings for each TSL considered for
dishwashers. The savings were calculated using the approach described
in section IV.H.2 of this document.
[[Page 32565]]
Table V.12--Cumulative National Energy Savings for Dishwashers; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(quads)
-------------------------------------------------------------------------------
Source energy................... 0.05 0.07 0.29 0.32 1.18
FFC energy...................... 0.05 0.08 0.31 0.34 1.25
----------------------------------------------------------------------------------------------------------------
Table V.13--Cumulative National Water Savings for Dishwashers; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(trillion gallons)
-------------------------------------------------------------------------------
Water Savings................... 0.09 0.11 0.24 0.26 0.94
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \102\ 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 proposed
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.\103\ The review timeframe established in EPCA
is generally not synchronized with the product lifetime, product
manufacturing cycles, or other factors specific to dishwashers. Thus,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology. The NES and
NWS sensitivity analysis results based on a 9-year analytical period
are presented in Table V.14 and Table V.15. The impacts are counted
over the lifetime of dishwashers purchased in 2027-2035.
---------------------------------------------------------------------------
\102\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/ (last accessed
November 2, 2021).
\103\ 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.14--Cumulative National Energy Savings for Dishwashers; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(quads)
-------------------------------------------------------------------------------
Source energy................... 0.01 0.02 0.08 0.09 0.33
FFC energy...................... 0.01 0.02 0.09 0.09 0.35
----------------------------------------------------------------------------------------------------------------
Table V.15--Cumulative National Water Savings for Dishwashers; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
-------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(trillion gallons)
-------------------------------------------------------------------------------
Water Savings................... 0.02 0.03 0.07 0.07 0.26
----------------------------------------------------------------------------------------------------------------
The energy savings in the NOPR analyses differ from the energy
savings in the January 2022 Preliminary Analysis primarily due to the
updated product class market share distribution as presented in the
January 2022 Preliminary TSD. For these NOPR analyses, DOE updated
market share distribution using historical shipments
[[Page 32566]]
data from available literature.\104\ The market share for Product Class
2 decreased from 5 percent, used in the Preliminary Analyses, to 2
percent, used in the NOPR analyses. Additionally, DOE updated
historical shipments using data from AHAM's Major Appliance Annual
Trends 1989-2020 and updated shipment projections using AEO 2022
instead of AEO 2020.
---------------------------------------------------------------------------
\104\ Euromonitor International. 2021. Air treatment products in
the U.S. December. The report covers market shares for a number of
products including dishwashers.
---------------------------------------------------------------------------
As discussed, DOE updated its analysis, including efficiency
levels, based on more current information regarding shipments of
dishwashers, resulting in FFC energy savings of around 0.31 quads over
thirty years. Further, as also discussed in section III.D of this
document, DOE recently eliminated the numerical threshold for
determining significance of energy savings, reverting to its earlier
approach of doing so on a case-by-case basis. See 86 FR 70892. In this
NOPR, DOE proposes to adopt the energy conservation standards for
dishwashers at TSL 3 and refers stakeholders to section V.C of this
document where costs and benefits of the proposal are weighed.
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 dishwashers.
In accordance with OMB's guidelines on regulatory analysis,\105\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.13 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2027-2056.
---------------------------------------------------------------------------
\105\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003.
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed
October 28, 2021).
Table V.16--Cumulative Net Present Value of Consumer Benefits for Dishwashers; 30 Years of Shipments
[2027-2056]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
-------------------------------------------------------------------------------
3 percent....................... 0.27 0.31 2.77 2.81 (12.60)
7 percent....................... 0.09 0.08 1.11 1.10 (7.50)
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.14. The impacts are counted over the
lifetime of products purchased in 2027-2035. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.17--Cumulative Net Present Value of Consumer Benefits for Dishwashers; 9 Years of Shipments
[2027-2035]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
(billion 2021$)
-------------------------------------------------------------------------------
3 percent....................... 0.08 0.09 1.00 1.00 (5.37)
7 percent....................... 0.03 0.03 0.54 0.53 (4.10)
----------------------------------------------------------------------------------------------------------------
c. Indirect Impacts on Employment
It is estimated that that amended energy conservation standards for
dishwashers would reduce energy expenditures for consumers of those
products, with the resulting net savings being redirected to other
forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframe
(2027-2031), where these uncertainties are reduced.
The results suggest that the proposed standards would be likely to
have a negligible impact on the net demand for labor in the economy.
The net change in jobs is so small that it would be imperceptible in
national labor statistics and might be offset by other, unanticipated
effects on employment. Chapter 16 of the NOPR TSD presents detailed
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
As discussed in section III.F.1.d of this document, DOE has
tentatively concluded that the standards proposed in this NOPR would
not lessen the utility or performance of the dishwashers under
consideration in this proposed rulemaking. Manufacturers of these
products currently offer units that meet or exceed the proposed
standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.F.1.e
of this
[[Page 32567]]
document, the Attorney General determines the impact, if any, of any
lessening of competition likely to result from a proposed standard, and
transmits such determination in writing to the Secretary, together with
an analysis of the nature and extent of such impact. To assist the
Attorney General in making this determination, DOE has provided DOJ
with copies of this NOPR and the accompanying TSD for review. DOE will
consider DOJ's comments on the proposed rule in determining whether to
proceed to a final rule. DOE will publish and respond to DOJ's comments
in that document. DOE invites comment from the public regarding the
competitive impacts that are likely to result from this proposed rule.
In addition, stakeholders may also provide comments separately to DOJ
regarding these potential impacts. See the ADDRESSES section for
information to send comments to DOJ.
6. Need of the Nation To Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the NOPR TSD
presents the estimated impacts on electricity generating capacity,
relative to the no-new-standards case, for the TSLs that DOE considered
in this proposed rulemaking.
Energy conservation resulting from potential energy conservation
standards for dishwashers is expected to yield environmental benefits
in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V.15 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 III.D of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.18--Cumulative Emissions Reduction for Dishwashers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
TSL
Savings -------------------------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 2.3 3.2 11.4 12.3 46.1
CH4 (thousand tons)............. 0.1 0.1 0.6 0.7 2.4
N2O (thousand tons)............. 0.0 0.0 0.1 0.1 0.3
NOX (thousand tons)............. 1.8 2.4 7.6 8.2 30.8
SO2 (thousand tons)............. 0.3 0.6 3.3 3.6 13.3
Hg (tons)....................... 0.0 0.0 0.0 0.0 0.1
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 0.3 0.4 1.2 1.2 4.7
CH4 (thousand tons)............. 27.5 36.6 112.5 121.7 457.9
N2O (thousand tons)............. 0.0 0.0 0.0 0.0 0.0
NOX (thousand tons)............. 4.3 5.7 17.6 19.1 71.8
SO2 (thousand tons)............. 0.0 0.0 0.0 0.1 0.2
Hg (tons)....................... 0.0 0.0 0.0 0.0 0.0
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 2.6 3.6 12.6 13.6 50.8
CH4 (thousand tons)............. 27.5 36.8 113.1 122.3 460.3
N2O (thousand tons)............. 0.0 0.0 0.1 0.1 0.4
NOX (thousand tons)............. 6.1 8.1 25.2 27.3 102.5
SO2 (thousand tons)............. 0.3 0.6 3.4 3.7 13.5
Hg (tons)....................... 0.0 0.0 0.0 0.0 0.1
----------------------------------------------------------------------------------------------------------------
As part of the analysis for this rulemaking, DOE estimated monetary
benefits likely to result from the reduced emissions of CO2
that DOE estimated for each of the considered TSLs for dishwashers.
Section IV.L of this document discusses the SC-CO2 values
that DOE used. Table V.16 presents the value of CO2
emissions reduction at each TSL. The time-series of annual values is
presented for the proposed TSL in chapter 14 of the NOPR TSD.
Table V.19--Present Value of CO2 Emissions Reduction for Dishwashers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
---------------------------------------------------------------------------
Discount rate and statistics
TSL ---------------------------------------------------------------------------
5% 3% 2.5% 3%
---------------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
Million 2021$
---------------------------------------------------------------------------
1................................... 21.3 94.4 149.0 286.5
[[Page 32568]]
2................................... 29.8 132.1 208.3 400.6
3................................... 105.3 465.4 733.9 1,412.2
4................................... 113.8 503.1 793.2 1,526.3
5................................... 425.9 1,882.7 2,968.5 5,712.1
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 of this document, DOE estimated
monetary benefits likely to result from the reduced emissions of
CH4 and N2O that DOE estimated for each of the
considered TSLs for dishwashers. Table V.17 presents the value of the
CH4 emissions reduction at each TSL, and Table V.18 presents
the value of the N2O emissions reduction at each TSL.
Table V.20--Present Value of Methane Emissions Reduction for Dishwashers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
---------------------------------------------------------------------------
Discount rate and statistics
TSL ---------------------------------------------------------------------------
5% 3% 2.5% 3%
---------------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
Million 2021$
---------------------------------------------------------------------------
1................................... 10.7 32.9 46.3 87.0
2................................... 14.2 43.9 61.8 116.2
3................................... 43.8 135.1 190.0 357.3
4................................... 47.4 146.1 205.5 386.5
5................................... 178.3 549.7 773.2 1,454.4
----------------------------------------------------------------------------------------------------------------
Table V.21--Present Value of Nitrous Oxide Emissions Reduction for Dishwashers Shipped in 2027-2056
----------------------------------------------------------------------------------------------------------------
SC-N2O Case
---------------------------------------------------------------------------
Discount Rate and Statistics
TSL ---------------------------------------------------------------------------
5% 3% 2.5% 3%
---------------------------------------------------------------------------
Average Average Average 95th percentile
----------------------------------------------------------------------------------------------------------------
Million 2021$
---------------------------------------------------------------------------
1................................... 0.0 0.2 0.2 0.4
2................................... 0.1 0.3 0.4 0.7
3................................... 0.3 1.2 1.9 3.2
4................................... 0.3 1.3 2.0 3.5
5................................... 1.2 4.8 7.5 12.8
----------------------------------------------------------------------------------------------------------------
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 proposed 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 that the
proposed standards would be economically justified even without
inclusion of monetized benefits of reduced GHG emissions.
DOE also estimated the monetary value of the economic benefits
associated with SO2 emissions reductions anticipated to
result from the considered TSLs for dishwashers. The dollar-per-ton
values that DOE used are discussed in section IV.L of this document.
Table V.19 presents the present value for SO2 emissions
reduction for each TSL calculated using 7-percent and 3-percent
discount rates.
[[Page 32569]]
Table V.22--Present Value of SO2 Emissions Reduction for Dishwashers
Shipped in 2027-2056
------------------------------------------------------------------------
7% 3%
TSL discount discount
rate rate
------------------------------------------------------------------------
million 2021$
---------------------
1................................................. 5.3 13.9
2................................................. 10.2 26.9
3................................................. 62.8 164.8
4................................................. 67.8 177.8
5................................................. 249.7 654.5
------------------------------------------------------------------------
DOE also estimated the monetary value of the economic benefits
associated with NOX emissions reductions anticipated to
result from the considered TSLs for dishwashers. The dollar-per-ton
values that DOE used are discussed in section IV.L of this document.
Table V.19 presents the present value for NOX emissions
reduction for each TSL calculated using 7-percent and 3-percent
discount rates.
Table V.23--Present Value of NOX Emissions Reduction for Dishwashers
Shipped in 2027-2056
------------------------------------------------------------------------
7% 3%
TSL discount discount
rate rate
------------------------------------------------------------------------
million 2021$
---------------------
1................................................. 62.3 170.3
2................................................. 85.6 233.6
3................................................. 287.4 780.1
4................................................. 310.7 843.3
5................................................. 1,165.1 3,162.7
------------------------------------------------------------------------
The benefits of reduced CO2, CH4, and
N2O emissions are collectively referred to as climate
benefits. The benefits of reduced SO2 and NOX
emissions are collectively referred to as health benefits. For the time
series of estimated monetary values of reduced emissions, see chapter
14 of the NOPR TSD.
Not all the public health and environmental benefits from the
reduction of greenhouse gases, NOX, and SO2 are
captured in the values above, and additional unquantified benefits from
the reductions of those pollutants as well as from the reduction of
direct PM and other co-pollutants may be significant. DOE has not
included monetary benefits of the reduction of Hg emissions because the
amount of reduction is very small.
7. Other Factors
The Secretary of Energy, in determining whether a standard is
economically justified, may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) No
other factors were considered in this analysis.
8. Summary of Economic Impacts
Table V.21 presents the NPV values that result from adding the
monetized estimates of the potential economic, climate, and health
benefits resulting from reduced GHG, SO2, and NOX
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
dishwashers, and are measured for the lifetime of products shipped in
2027-2056. The climate benefits associated with reduced GHG emissions
resulting from the adopted standards are global benefits, and are also
calculated based on the lifetime of dishwashers shipped in 2027-2056.
Table V.24--Consumer NPV Combined With Climate and Health Benefits
[Billions 2021$]
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Using 3% discount rate for NPV of Consumer and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% d.r., Average SC-GHG case.... 0.5 0.6 3.9 4.0 (8.2)
3% d.r., Average SC-GHG case.... 0.6 0.7 4.3 4.5 (6.3)
2.5% d.r., Average SC-GHG case.. 0.7 0.8 4.6 4.8 (5.0)
3% d.r., 95th percentile SC-GHG 0.8 1.1 5.5 5.7 (1.6)
case...........................
----------------------------------------------------------------------------------------------------------------
Using 7% discount rate for NPV of Consumer and Health Benefits (billion 2021$)
----------------------------------------------------------------------------------------------------------------
5% d.r., Average SC-GHG case.... 0.2 0.2 1.6 1.6 (5.5)
3% d.r., Average SC-GHG case.... 0.3 0.4 2.1 2.1 (3.6)
2.5% d.r., Average SC-GHG case.. 0.3 0.4 2.4 2.5 (2.3)
3% d.r., 95th percentile SC-GHG 0.5 0.7 3.2 3.4 1.1
case...........................
----------------------------------------------------------------------------------------------------------------
The national operating cost savings are domestic U.S. monetary
savings that occur as a result of purchasing the covered dishwashers,
and are measured for the lifetime of products shipped in 2027-2056. The
benefits associated with reduced GHG emissions achieved as a result of
the adopted standards are also calculated based on the lifetime of
dishwashers shipped in 2027-2056.
C. Conclusion
When considering new or amended energy conservation standards, the
standards that DOE adopts for any type (or class) of covered product
must be designed to achieve the maximum improvement in energy
efficiency that the Secretary determines is technologically feasible
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining
whether a standard is economically justified, the Secretary must
determine whether the benefits of the standard exceed its burdens by,
to the greatest extent practicable, considering the seven statutory
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or
amended standard must also result in significant conservation of
energy. (42 U.S.C. 6295(o)(3)(B))
For this NOPR, DOE considered the impacts of amended standards for
dishwashers 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
[[Page 32570]]
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. For consumers opting not to
purchase a dishwasher, the energy consumption of hand-washing dishes is
accounted for when energy and water savings are quantified in the NIA
(see section 10.4.2 in chapter 10 of the NOPR TSD). Second, DOE
accounts for energy savings attributable only to products actually used
by consumers in the standards case; if a standard decreases the number
of products purchased by consumers, this decreases the potential energy
savings from an energy conservation standard. DOE provides estimates of
shipments and changes in the volume of product purchases in chapter 9
of the NOPR TSD. However, DOE's current analysis does not explicitly
control for heterogeneity in consumer preferences, preferences across
subcategories of products or specific features, or consumer price
sensitivity variation according to household income.\106\
---------------------------------------------------------------------------
\106\ P.C. Reiss and M.W. White. Household Electricity Demand,
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883.
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------
While DOE is not prepared at present to provide a fuller
quantifiable framework for estimating the benefits and costs of changes
in consumer purchase decisions due to an energy conservation standard,
DOE is committed to developing a framework that can support empirical
quantitative tools for improved assessment of the consumer welfare
impacts of appliance standards. DOE has posted a paper that discusses
the issue of consumer welfare impacts of appliance energy conservation
standards, and potential enhancements to the methodology by which these
impacts are defined and estimated in the regulatory process.\107\
---------------------------------------------------------------------------
\107\ 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 October 28, 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 Dishwashers Standards
Table V.25 and Table V.26 summarize the quantitative impacts
estimated for each TSL for dishwashers. The national impacts are
measured over the lifetime of dishwashers purchased in the 30-year
period that begins in the anticipated year of compliance with amended
standards (2027-2056). The energy savings, emissions reductions, and
value of emissions reductions refer to FFC results. DOE exercises its
own judgment in presenting monetized climate benefits as recommended in
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 February 2021 Interim Estimates
presented by the Interagency Working Group on the Social Cost of
Greenhouse Gases. The efficiency levels contained in each TSL are
described in section V.A of this document.
Table V.25--Summary of Analytical Results for Dishwasher TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings (quads)
----------------------------------------------------------------------------------------------------------------
Quads........................... 0.05 0.08 0.31 0.34 1.25
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction (Total FFC Emissions)
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....... 2.56 3.58 12.56 13.58 50.81
CH4 (thousand tons)............. 27.55 36.77 113.10 122.32 460.32
N2O (thousand tons)............. 0.01 0.02 0.09 0.10 0.36
NOX (thousand tons)............. 6.09 8.14 25.20 27.25 102.53
SO2 (thousand tons)............. 0.30 0.57 3.39 3.65 13.46
Hg (tons)....................... 0.00 0.00 0.02 0.02 0.08
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (3% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings. 0.42 0.59 2.92 3.09 4.03
Climate Benefits *.............. 0.13 0.18 0.60 0.65 2.44
Health Benefits **.............. 0.18 0.26 0.94 1.02 3.82
[[Page 32571]]
Total Benefits [dagger]......... 0.73 1.02 4.47 4.76 10.28
Consumer Incremental Product 0.15 0.28 0.15 0.28 16.62
Costs [Dagger].................
Consumer Net Benefits........... 0.27 0.31 2.77 2.81 (12.60)
Total Net Benefits.............. 0.58 0.74 4.32 4.48 (6.34)
----------------------------------------------------------------------------------------------------------------
Present Value of Monetized Benefits and Costs (7% discount rate, billion 2021$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings. 0.17 0.23 1.19 1.26 1.60
Climate Benefits *.............. 0.13 0.18 0.60 0.65 2.44
Health Benefits **.............. 0.07 0.10 0.35 0.38 1.41
Total Benefits [dagger]......... 0.36 0.51 2.14 2.29 5.45
Consumer Incremental Product 0.08 0.15 0.08 0.15 9.09
Costs [Dagger].................
Consumer Net Benefits........... 0.09 0.08 1.11 1.10 (7.50)
Total Net Benefits.............. 0.28 0.35 2.06 2.13 (3.64)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dishwashers shipped in 2027-2056. These results
include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056.
* Climate benefits are calculated using four different estimates of the 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 GHG 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.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V.26--Summary of Analytical Results for Dishwasher TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4 TSL 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Manufacturer Impacts:
Industry NPV (million 2021$) 664.4 to 707.0........ 657.7 to 701.1........ 578.7 to 624.1........ 572.0 to 618.2........ 305.8 to 371.1
(No-new-standards case INPV
= $713.6).
Industry NPV (% change)..... (6.9) to (0.9)........ (7.8) to (1.8)........ (18.9) to (12.5)...... (19.8) to (13.4)...... (57.1) to (48.0)
Consumer Average LCC Savings
(2021$):
PC 1: Standard-size $20................... $20................... $17................... $17................... ($96)
dishwashers.
PC 2: Compact-size $30................... $6.................... $30................... $6.................... $6
dishwashers.
Shipment-Weighted Average *. $20................... $20................... $18................... $17................... ($94)
Consumer Simple PBP (years):
PC 1: Standard-size 3.0................... 3.0................... 2.4................... 2.4................... 12.4
dishwashers.
PC 2: Compact-size 0.0................... 5.7................... 0.0................... 5.7................... 5.7
dishwashers.
Shipment-Weighted Average *. 3.0................... 3.1................... 2.3................... 2.5................... 12.2
Percent of Consumers that
Experience a Net Cost:
PC 1: Standard-size 3%.................... 3%.................... 3%.................... 3%.................... 94%
dishwashers.
PC 2: Compact-size 0%.................... 49%................... 0%.................... 49%................... 49%
dishwashers.
Shipment-Weighted Average *. 3%.................... 4%.................... 3%.................... 4%.................... 93%
--------------------------------------------------------------------------------------------------------------------------------------------------------
DOE first considered TSL 5, which represents the max-tech
efficiency levels for both product classes. Specifically, for a
standard-size dishwasher, this efficiency level includes design options
considered at the lower efficiency levels (i.e., electronic controls,
soil sensors, multiple spray arms, improved water filters and control
strategies, separate drain pump, tub insulation, hydraulic system
optimization, water diverter assembly, temperature sensor, 3-phase
variable-speed motor, and flow meter) and includes additional design
options such as the use of stainless steel tub, in-sump integrated
heater, condensation drying, and control strategies. For a compact-size
dishwasher, this efficiency level includes the design options
considered at the lower efficiency levels (i.e., improved control
strategies) and additionally includes the use of permanent magnet
motor, improved filters, hydraulic system optimization, heater
incorporated into base of tub, and reduced sump volume. TSL 5 would
save an estimated 1.25 quads of energy and 0.94 trillion gallons of
water, an amount DOE considers significant.\108\ Under TSL 5, the NPV
of consumer benefit would be -$7.5 billion using a discount rate of 7
percent, and -$12.6 billion using a discount rate of 3 percent.
---------------------------------------------------------------------------
\108\ Please see section III.E.2 of this document for a
discussion of factors that DOE considers in determining whether
energy savings are significant.
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 5 are 50.81 Mt of
CO2, 13.46 thousand tons of SO2, 102.53 thousand
tons of NOX, 0.08 tons of Hg, 460.32 thousand tons of
CH4, and 0.36 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 $2.44 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 5 is $1.41 billion using a 7-percent discount rate and $3.82
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
[[Page 32572]]
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 5 is -$7.50
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 5 is -$12.60 billion. The estimated
total NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
proposed standard level is economically justified.
At TSL 5, the average LCC impact is a savings of -$96 for standard-
size dishwashers and $6 for compact-size dishwashers. The simple
payback period is 12.4 years for standard-size dishwashers and 5.7
years for compact-size dishwashers. The fraction of consumers
experiencing a net LCC cost is 94 percent for standard-size dishwashers
and 49 percent for compact-size dishwashers. Notably, for the standard-
size product class, which as discussed represents 98 percent of the
market, TSL 5 (which includes EL 4 for this product class) would
increase the first cost by $135.
For the low-income consumer group, the average LCC impact is a
savings of -$28 for standard-size dishwashers and $50 for compact-size
dishwashers. The simple payback period is 5.5 years for standard-size
dishwashers and 2.6 years for compact-size dishwashers. The fraction of
low-income consumers experiencing a net LCC cost is 59 percent for
standard-size dishwashers and 28 percent for compact-size dishwashers.
For the senior-only households consumer group, the average LCC impact
is a savings of -$108 for standard-size dishwashers and -$10 for
compact-size dishwashers. The simple payback period is 14.9 years for
standard-size dishwashers and 6.8 years for compact-size dishwashers.
The fraction of senior-only consumers experiencing a net LCC cost is 96
percent for standard-size dishwashers and 56 percent for compact-size
dishwashers.
At TSL 5, the projected change in INPV ranges from a decrease of
$407.8 million to a decrease of $342.4 million, which correspond to
decreases of 57.1 percent and 48.0 percent, respectively. Industry
conversion costs could reach $663.7 million at this TSL, as
manufacturers work to redesign their portfolio of model offerings,
transition their standard-size dishwasher platforms entirely to
stainless steel tubs, and renovate manufacturing facilities to
accommodate changes to the production line and manufacturing processes.
DOE estimates that less than 1 percent of dishwasher shipments
currently meet the max-tech levels. Standard-size dishwashers account
for approximately 98 percent of annual shipments. Of the 19 standard-
size dishwasher OEMs, only one OEM, which accounts for approximately 4
percent of basic models in CCD, currently offers products that meet the
max-tech efficiencies required. All manufacturers interviewed, which
together account for approximately 90 percent of the industry
shipments, expressed uncertainty as to whether they could reliably meet
the standard-size dishwasher max-tech efficiencies and the cleaning
performance threshold and noted it would require a platform redesign
and significant investment in tooling, equipment, and production line
modifications. Many manufacturers would need to increase production
capacity of stainless steel tub designs. Some manufacturers noted that
a max-tech standard could necessitate new tub architectures.
For compact-size dishwashers, which account for the remaining 2
percent of annual shipments, DOE estimates that 21 percent of shipments
currently meet the required efficiencies. Of the five compact-size
dishwasher OEMs, three OEMs currently offer compact-size products that
meet max-tech. At TSL 5, compact-size countertop dishwashers with 4 or
more place settings and in-sink dishwashers with less than 4 place
settings are not currently available in the market. Meeting TSL 5 is
technologically feasible for those products; however, DOE expects that
it would take significant investment relative to the size of the
compact-size dishwasher market to redesign them to meet the max-tech
efficiencies.
Based on the above considerations, the Secretary tentatively
concludes that at TSL 5 for dishwashers, the benefits of energy and
water savings, emissions reductions, and the estimated monetary value
of the health benefits and climate benefits from emissions reductions
would be outweighed by the negative NPV of consumer benefits and the
impacts on manufacturers, including the large potential reduction in
INPV. At TSL 5, a majority of standard-size dishwashers (94 percent)
would experience a net cost and the average LCC savings would be
negative (-$96) for this product class. Additionally at TSL 5,
manufacturers would need to make significant upfront investments to
redesign product platforms and update manufacturing facilities. Some
manufacturers expressed concern that they would not be able to complete
product and production line updates within the 3-year conversion
period. Consequently, the Secretary has tentatively concluded that TSL
5 is not economically justified.
DOE next considered TSL 4, which represents the highest efficiency
levels providing positive LCC savings. TSL 4 comprises the gap-fill
efficiency level between the ENERGY STAR Most Efficient level and the
current ENERGY STAR V. 6.0 level (EL 2) for standard-size dishwashers
and the max-tech efficiency level for compact-size dishwashers.
Specifically, for a standard-size dishwasher, this efficiency level
includes design options considered at the lower efficiency levels
(i.e., electronic controls, soil sensors, multiple spray arms, improved
water filters, separate drain pump, and tub insulation) and
additionally includes the use of improved control strategies. For a
compact-size dishwasher, this efficiency level includes the design
options considered at the lower efficiency levels (i.e., improved
control strategies) and additionally includes the use of permanent
magnet motor, improved filters, hydraulic system optimization, heater
incorporated into base of tub, and reduced sump volume. TSL 4 would
save an estimated 0.34 quads of energy and 0.26 trillion gallons of
water, an amount DOE considers significant.\109\ Under TSL 4, the NPV
of consumer benefit would be $1.10 billion using a discount rate of 7
percent, and $2.81 billion using a discount rate of 3 percent.
---------------------------------------------------------------------------
\109\ Please see section III.E.2 of this document for a
discussion of factors that DOE considers in determining whether
energy savings are significant.
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 4 are 13.58 Mt of
CO2, 3.65 thousand tons of SO2, 27.25 thousand
tons of NOX, 0.02 tons of Hg, 122.32 thousand tons of
CH4, and 0.10 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 $0.65 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $0.38 billion using a 7-percent discount rate and $1.02
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 $2.13
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $4.48 billion. The estimated total
NPV is provided for additional information, however DOE
[[Page 32573]]
primarily relies upon the NPV of consumer benefits when determining
whether a proposed standard level is economically justified.
At TSL 4, the average LCC impact is a savings of $17 for standard-
size dishwashers and $6 for compact-size dishwashers. The simple
payback period is 2.4 years for standard-size dishwashers and 5.7 years
for compact-size dishwashers. The fraction of consumers experiencing a
net LCC cost is 3 percent for standard-size dishwashers and 49 percent
for compact-size dishwashers.
For the low-income consumer group, the average LCC impact is a
savings of $20 for standard-size dishwashers and $50 for compact-size
dishwashers. The simple payback period is 1.0 years for standard-size
dishwashers and 2.6 years for compact-size dishwashers. The fraction of
low-income consumers experiencing a net LCC cost is 2 percent for
standard-size dishwashers and 28 percent for compact-size dishwashers.
For the senior-only households consumer group, the average LCC impact
is a savings of $14 for standard-size dishwashers and -$10 for compact-
size dishwashers. The simple payback period is 2.9 years for standard-
size dishwashers and 6.8 years for compact-size dishwashers. The
fraction of senior-only consumers experiencing a net LCC cost is 4
percent for standard-size dishwashers and 56 percent for compact-size
dishwashers.
At TSL 4, the projected change in INPV ranges from a decrease of
$141.6 million to a decrease of $95.4 million, which correspond to
decreases of 19.8 percent and 13.4 percent, respectively. Industry
conversion costs could reach $135.6 million at this TSL as some
manufacturers of standard-size dishwashers redesign products to enable
improved controls and better design tolerances and manufacturers of
certain compact-size dishwashers redesign products to meet max-tech.
DOE estimates that approximately 10 percent of dishwasher shipments
currently meet the TSL 4 efficiencies, of which approximately 9 percent
of standard-size dishwasher shipments and 21 percent of compact-size
dishwasher shipments meet the required efficiencies. Compared to max-
tech, more manufacturers offer standard-size dishwashers that meet the
required efficiencies. Of the 19 OEMs offering standard-size products,
11 OEMs offer products that meet the efficiency level required. For
compact-size dishwashers, TSL 4 represents the same efficiency level as
for TSL 5. Just as with TSL 4, compact-size countertop dishwashers with
4 or more place settings and in-sink dishwashers with less than 4 place
settings are not currently available in the market at TSL 4 levels.
Meeting TSL 4 is technologically feasible for those products; however,
DOE expects that it would take significant investment relative to the
size of the compact-size dishwasher market for them to meet the max-
tech efficiencies.
Based upon the above considerations, the Secretary tentatively
concludes that at TSL 4 for dishwashers, the benefits of energy and
water savings, positive NPV of consumer benefits, 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 the senior-only households for the compact-size dishwasher
product class and the high percentage of consumers with net costs for
the compact-size dishwasher product class. Consequently, the Secretary
has tentatively concluded that TSL 4 is not economically justified.
DOE requests comment on whether there is any information or data on
costs and benefits for all households, and/or the sub-groups of low-
income and senior-only households that would affect the determination
that TSL 4 is not economically justified. DOE also requests information
on the income distribution of senior-only households with compact
dishwashers, as such households drive many of the differences in
outcomes between TSL 4 and other TSLs.
DOE then considered TSL 3, which comprises the gap-fill efficiency
level between the ENERGY STAR Most Efficient level and the current
ENERGY STAR V. 6.0 level (EL 2) for standard-size dishwashers and the
current ENERGY STAR V. 6.0 level (EL 1) for compact-size dishwashers.
Specifically, for a standard-size dishwasher, this efficiency level
includes design options considered at the lower efficiency levels
(i.e., electronic controls, soil sensors, multiple spray arms, improved
water filters, separate drain pump, and tub insulation) and
additionally includes the use of improved control strategies. For a
compact-size dishwasher, this efficiency level represents the use of
improved controls. TSL 3 would save an estimated 0.31 quads of energy
and 0.24 trillion gallons of water, an amount DOE considers
significant.\110\ Under TSL 3, the NPV of consumer benefit would be
$1.11 billion using a discount rate of 7 percent, and $2.77 billion
using a discount rate of 3 percent.
---------------------------------------------------------------------------
\110\ Please see section III.E.2 of this document for a
discussion of factors that DOE considers in determining whether
energy savings are significant.
---------------------------------------------------------------------------
The cumulative emissions reductions at TSL 3 are 12.56 Mt of
CO2, 3.39 thousand tons of SO2, 25.20 thousand
tons of NOX, 0.02 tons of Hg, 113.10 thousand tons of
CH4, and 0.09 thousand tons of N2O. The estimated
monetary value of the climate benefits from reduced GHG emissions
(associated with the average SC-GHG at a 3-percent discount rate) at
TSL 3 is $0.60 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is $0.35 billion using a 7-percent discount rate and $0.94
billion using a 3-percent discount rate.
Using a 7-percent discount rate for consumer benefits and costs,
health benefits from reduced SO2 and NOX
emissions, and the 3-percent discount rate case for climate benefits
from reduced GHG emissions, the estimated total NPV at TSL 3 is $2.06
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $4.32 billion. The estimated total
NPV is provided for additional information, however DOE primarily
relies upon the NPV of consumer benefits when determining whether a
proposed standard level is economically justified.
At TSL 3, the average LCC impact is a savings of $17 for standard-
size dishwashers and $30 for compact-size dishwashers. The simple
payback period is 2.4 years for standard-size dishwashers and 0.0 years
for compact-size dishwashers. The fraction of consumers experiencing a
net LCC cost is 3 percent for standard-size dishwashers and 0 percent
for compact-size dishwashers.
For the low-income consumer group, the average LCC impact is a
savings of $20 for standard-size dishwashers and $33 for compact-size
dishwashers. The simple payback period is 1.0 years for standard-size
dishwashers and 0.0 years for compact-size dishwashers. The fraction of
low-income consumers experiencing a net LCC cost is 2 percent for
standard-size dishwashers and 0 percent for compact-size dishwashers.
For the senior-only households consumer group, the average LCC impact
is a savings of $14 for standard-size dishwashers and $24 for compact-
size dishwashers. The simple payback period is 2.9 years for standard-
size dishwashers and 0.0 years for compact-size dishwashers. The
fraction of senior-only consumers experiencing a net LCC cost is 4
percent for standard-size dishwashers and 0 percent for compact-size
dishwashers.
[[Page 32574]]
At TSL 3, the projected change in INPV ranges from a decrease of
$134.9 million to a decrease of $89.5 million, which correspond to
decreases of 18.9 percent and 12.5 percent, respectively. Industry
conversion costs could reach $125.6 million at this TSL as some
manufacturers redesign standard-size products to enable improved
controls and better design tolerances.
DOE estimates that approximately 11 percent of dishwasher shipments
currently meet the TSL 3 efficiencies, of which approximately 9 percent
of standard-size dishwasher shipments and 87 percent of compact-size
shipments meet the required efficiencies. At this level, the decrease
in conversion costs compared to TSL 4 is entirely due to the lower
efficiency level required for compact-size dishwashers, as the
efficiency level required for standard-size dishwashers is the same as
for TSL 4 (EL 2). All of the compact-size dishwasher OEMs currently
offer products that meet TSL 3. At this level, DOE expects
manufacturers of compact-size dishwashers would implement improved
controls, which would likely require minimal upfront investment.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that a standard set at
TSL 3 for dishwashers would be economically justified. At this TSL, the
weighted-average LCC savings for both product classes is $18. The
weighted-average share of consumers with a net LCC cost for both
product classes is 3 percent. For both consumer sub-groups, the LCC
savings are positive and the net share of consumers with a net LCC cost
is below 5 percent for both product classes. The FFC national energy
and water savings are significant and the NPV of consumer benefits is
$2.77 billion and $1.11 billion using both a 3-percent and 7-percent
discount rate respectively. Notably, the benefits to consumers vastly
outweigh the cost to manufacturers. At TSL 3, the NPV of consumer
benefits, even measured at the more conservative discount rate of 7
percent, is over seven times higher than the maximum estimated
manufacturers' loss in INPV. The standard levels at TSL 3 are
economically justified even without weighing the estimated monetary
value of emissions reductions. When those emissions reductions are
included--representing $0.60 billion in climate benefits (associated
with the average SC-GHG at a 3-percent discount rate), and $0.94
billion (using a 3-percent discount rate) or $0.35 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes
stronger still.
The proposed standards are applicable to the regulated cycle type
(i.e., normal cycle); manufacturers can continue to provide currently
available additional, non-regulated cycle types (e.g., quick cycles,
pots and pans, heavy, delicates, etc.) for consumers that choose to
utilize them. Specifically, DOE expects quick cycles, which often clean
a load within 1 hour or less, and existing drying options would still
be available on dishwasher models that currently offer such cycle
types. DOE has no information that would suggest that any aspect of
this proposed rule would limit the other cycle options, especially
quick cycles. Additionally, in the January 2022 Preliminary TSD, DOE
provided data from its investigatory testing sample that determined
that cycle time is not substantively correlated with energy and water
consumption of the normal cycle.\111\ Based on these results, DOE
assumes that this proposed rule would not have any substantive impact
to normal cycle durations.
---------------------------------------------------------------------------
\111\ See section 5.5.1 of the January 2022 Preliminary TSD
available here: https://www.energy.gov/sites/default/files/2022-01/dw-tsd.pdf.
---------------------------------------------------------------------------
The test procedure in appendix C2, which includes provisions for a
minimum cleaning index threshold of 70 to validate the selected test
cycle, will go into effect at such time as compliance is required with
any amended energy conservation standards. At TSL 3, both standard-size
and compact-size dishwasher models achieving the efficiencies, as
measured by appendix C2, including the cleaning performance threshold,
are readily available on the market.
Although DOE considered proposed amended standard levels for
dishwashers by grouping the efficiency levels for each product class
into TSLs, DOE evaluates all analyzed efficiency levels in its LCC
analysis and all efficiency levels with positive LCC savings for the
NIA and MIA analysis. For both standard-size and compact-size
dishwashers, the proposed standard level represents the maximum energy
savings that does not result in a large percentage of consumers
experiencing a net LCC cost. The efficiency levels at the proposed
standard level result in positive LCC savings for both 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 tentatively concluded they are economically justified, as
discussed for TSL 3 in the preceding paragraphs.
Therefore, based on the above considerations, DOE proposes to adopt
the energy conservation standards for dishwashers at TSL 3. The
proposed amended energy conservation standards for dishwashers, which
are expressed in EAEU and per-cycle water consumption, shall not exceed
the values shown in Table V.27.
Table V.27--Proposed Amended Energy Conservation Standards for
Dishwashers
------------------------------------------------------------------------
Estimated annual Per-cycle water
Product class energy use (kWh/ consumption (gal/
year) \*\ cycle)
------------------------------------------------------------------------
PC 1: Standard-size Dishwashers 223 3.3
(>=8 place settings plus 6
serving pieces)..................
PC 2: Compact-size Dishwashers (<8 174 3.1
place settings plus 6 serving
pieces)..........................
------------------------------------------------------------------------
* Based on appendix C2.
2. Annualized Benefits and Costs of the Proposed Standards
The benefits and costs of the proposed standards can also be
expressed in terms of annualized values. The annualized net benefit is
(1) the annualized national economic value (expressed in 2021$) of the
benefits from operating products that meet the proposed standards
(consisting primarily of operating cost savings from using less energy,
minus increases in product purchase costs, and (2) the annualized
monetary value of the climate and health benefits from emission
reductions.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-
[[Page 32575]]
percent discount rate case for GHG social costs, the estimated cost of
the proposed standards for dishwashers is $8.6 million per year in
increased equipment costs, while the estimated annual benefits are
$125.8 million from reduced equipment operating costs, $34.6 million
from GHG reductions, and $37.0 million from reduced NOX and
SO2 emissions. In this case, the net benefit amounts to
$188.8 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for dishwashers is $8.5
million per year in increased equipment costs, while the estimated
annual benefits are $167.8 million from reduced equipment operating
costs, $34.6 million from GHG reductions, and $54.3 million from
reduced NOX and SO2 emissions. In this case, the
net benefit amounts to $248.1 million per year.
Table V.28--Annualized Monetized Benefits and Costs of Proposed Energy Conservation Standards for Dishwashers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2021$/year
--------------------------------------------------------
Category Low-net-benefits High-net-benefits
Primary estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 167.8 166.8 169.5
Climate Benefits *..................................... 34.6 33.8 35.3
Health Benefit **...................................... 54.3 53.1 55.4
Total Benefits [dagger]................................ 256.6 253.7 260.2
Consumer Incremental Product Costs [Dagger]............ 8.5 9.8 8.2
Net Benefits........................................... 248.1 243.8 251.9
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 125.8 125.0 127.0
Climate Benefits *..................................... 34.6 33.8 35.3
Health Benefit **...................................... 37.0 36.3 37.7
Total Benefits [dagger]................................ 197.3 195.1 199.9
Consumer Incremental Product Costs [Dagger]............ 8.6 9.7 8.3
Net Benefits........................................... 188.8 185.3 191.6
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dishwashers shipped in 2027-2056. These results
include benefits to consumers which accrue after 2056 from the products shipped in 2027-2056. 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 sections IV.F.1 and IV.H.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 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 GHG 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. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but the Department does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563, and 14094
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) and E.O. 14094, ``Modernizing Regulatory Review,'' 88
FR 21879 (April 11, 2023), 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 32576]]
costs that might result from technological innovation or anticipated
behavioral changes. For the reasons stated in the preamble, this
proposed regulatory action is consistent with these principles.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this proposed regulatory action does constitute 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 proposed
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 proposed rulemaking.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (``IRFA'')
for any rule that by law must be proposed for public comment, unless
the agency certifies that the rule, if promulgated, will not have a
significant economic impact on a substantial number of small entities.
As required by E.O. 13272, ``Proper Consideration of Small Entities in
Agency Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published
procedures and policies on February 19, 2003, to ensure that the
potential impacts of its rules on small entities are properly
considered during the rulemaking process. 68 FR 7990. DOE has made its
procedures and policies available on the Office of the General
Counsel's website (www.energy.gov/gc/office-general-counsel). DOE has
not prepared an IRFA for the products that are the subject of this
proposed rulemaking.
DOE reviewed this proposed rule under the provisions of the
Regulatory Flexibility Act and the procedures and policies published on
February 19, 2003. DOE certifies that the proposed rule, if adopted,
would not have significant economic impact on a substantial number of
small entities. The factual basis of this certification is set forth in
the following paragraphs.
For manufacturers of dishwashers, the SBA has set a size threshold,
which defines those entities classified as ``small businesses'' for the
purposes of the statute. DOE used the SBA's small business size
standards to determine whether any small entities would be subject to
the requirements of the rule. (See 13 CFR part 121.) The size standards
are listed by North American Industry Classification System (``NAICS'')
code and industry description and are available at www.sba.gov/document/support-table-size-standards. Manufacturing of dishwashers is
classified under NAICS code 335220,\112\ ``Major Household Appliance
Manufacturing.'' In 13 CFR 121.201, the SBA sets a threshold of 1,500
employees or fewer for an entity to be considered as a small business
for this category.
---------------------------------------------------------------------------
\112\ U.S. Small Business Administration. ``Table of Small
Business Size Standards.'' (Effective October 1, 2022). Available
at: www.sba.gov/document/support-table-size-standards (last accessed
November 21, 2022).
---------------------------------------------------------------------------
DOE conducted a focused inquiry into small business manufacturers
of the products covered by this rulemaking. DOE reviewed its Compliance
Certification Database,\113\ California Energy Commission's Modernized
Appliance Efficiency Database System,\114\ and ENERGY STAR's Product
Finder dataset \115\ to create a list of companies that import or
otherwise manufacture the products covered by this proposal. DOE then
consulted publicly available data to identify OEMs selling dishwashers
in the U.S. DOE relied on public data and subscription-based market
research tools (e.g., Dun & Bradstreet \116\) to determine company
location, headcount, and annual revenue. DOE screened out companies
that do not offer products covered by this rulemaking, do not meet
SBA's definition of a ``small business,'' or are foreign-owned and
operated.
---------------------------------------------------------------------------
\113\ U.S. Department of Energy Compliance Certification
Database, available at www.regulations.doe.gov/certification-data/products.html#q=Product_Group_s%3A* (last accessed June 2, 2022).
\114\ California Energy Commission Modernized Appliance
Efficiency Database System, available at
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx
(last accessed June 2, 2022).
\115\ ENERGY STAR Product Finder data set, available at
www.energystar.gov/productfinder (last accessed June 2, 2022).
\116\ The Dun & Bradstreet Hoovers subscription login is
accessible at app.dnbhoovers.com (last accessed November 1, 2022).
---------------------------------------------------------------------------
DOE identified 21 dishwasher OEMs. DOE did not identify any
domestic OEMs that qualify as a ``small business.'' Therefore, DOE did
not identify any companies that meet SBA's definition of a ``small
business.''
Based on the initial finding that there are no dishwasher
manufacturers who would qualify as small businesses, DOE certifies that
the proposed rule, if finalized, would not have a significant economic
impact on a substantial number of small entities and has not prepared
an IRFA for this rulemaking. DOE will transmit the certification and
supporting statement of factual basis to the Chief Counsel for Advocacy
of the Small Business Administration for review under 5 U.S.C. 605(b).
DOE requests comment on its initial conclusion that there are no
small business manufacturers of dishwashers.
C. Review Under the Paperwork Reduction Act
Manufacturers of dishwashers 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 dishwashers, 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 dishwashers. (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.
Notwithstanding any other provision of the law, no person is
required to respond to, nor shall any person be subject to a penalty
for failure to comply with, a collection of information subject to the
requirements of the PRA, unless that collection of information displays
a currently valid OMB Control Number.
D. Review Under the National Environmental Policy Act of 1969
DOE is analyzing this proposed regulation in accordance with the
National Environmental Policy Act of 1969 (``NEPA'') and DOE's NEPA
implementing regulations (10 CFR part 1021). DOE's regulations include
a categorical exclusion for rulemakings that establish energy
conservation
[[Page 32577]]
standards for consumer products or industrial product. 10 CFR part
1021, subpart D, appendix B5.1. DOE anticipates that this rulemaking
qualifies for categorical exclusion B5.1 because it is a rulemaking
that establishes energy conservation standards for consumer products or
industrial product, none of the exceptions identified in categorical
exclusion B5.1(b) apply, no extraordinary circumstances exist that
require further environmental analysis, and it otherwise meets the
requirements for application of a categorical exclusion. See 10 CFR
1021.410. DOE will complete its NEPA review before issuing the final
rule.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this proposed rule and has
tentatively determined that it would not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. EPCA governs
and prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297)
Therefore, no further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in section 3(a) and section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and determined
that, to the extent permitted by law, this proposed rule meets the
relevant standards of E.O. 12988.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C.
1531). For a proposed regulatory action likely to result in a rule that
may cause the expenditure by State, local, and Tribal governments, in
the aggregate, or by the private sector of $100 million or more in any
one year (adjusted annually for inflation), section 202 of UMRA
requires a Federal agency to publish a written statement that estimates
the resulting costs, benefits, and other effects on the national
economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal
agency to develop an effective process to permit timely input by
elected officers of State, local, and Tribal governments on a proposed
``significant intergovernmental mandate,'' and requires an agency plan
for giving notice and opportunity for timely input to potentially
affected small governments before establishing any requirements that
might significantly or uniquely affect them. On March 18, 1997, DOE
published a statement of policy on its process for intergovernmental
consultation under UMRA. 62 FR 12820. DOE's policy statement is also
available at www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
Although this proposed rule does not contain a Federal
intergovernmental mandate, it may require expenditures of $100 million
or more in any one year by the private sector. Such expenditures may
include: (1) investment in research and development and in capital
expenditures by dishwashers manufacturers in the years between the
final rule and the compliance date for the new standards and (2)
incremental additional expenditures by consumers to purchase higher-
efficiency dishwashers, starting at the compliance date for the
applicable standard.
Section 202 of UMRA authorizes a Federal agency to respond to the
content requirements of UMRA in any other statement or analysis that
accompanies the proposed rule. (2 U.S.C. 1532(c)) The content
requirements of section 202(b) of UMRA relevant to a private sector
mandate substantially overlap the economic analysis requirements that
apply under section 325(o) of EPCA and Executive Order 12866. The
SUPPLEMENTARY INFORMATION section of this NOPR and the TSD for this
proposed rule respond to those requirements.
Under section 205 of UMRA, the Department is obligated to identify
and consider a reasonable number of regulatory alternatives before
promulgating a rule for which a written statement under section 202 is
required. (2 U.S.C. 1535(a)) DOE is required to select from those
alternatives the most cost-effective and least burdensome alternative
that achieves the objectives of the proposed rule unless DOE publishes
an explanation for doing otherwise, or the selection of such an
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m),
this proposed rule would amend energy conservation standards for
dishwashers that are designed to achieve the maximum improvement in
energy efficiency that DOE has determined to be both technologically
feasible and economically justified, as required by 6295(o)(2)(A) and
6295(o)(3)(B). A full discussion of the alternatives considered by DOE
is presented in chapter 17 of the TSD for this proposed rule.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
[[Page 32578]]
Policymaking Assessment for any rule that may affect family well-being.
This proposed rule, if finalized, would not have any impact on the
autonomy or integrity of the family as an institution. Accordingly, DOE
has concluded that it is not necessary to prepare a Family Policymaking
Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this proposed rule, if finalized as
proposed, would not result in any takings that might require
compensation under the Fifth Amendment to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this NOPR under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgates or is expected to lead to promulgation of a
final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
proposes amended energy conservation standards for dishwashers, is not
a significant energy action because the proposed standards are not
likely to have a significant adverse effect on the supply,
distribution, or use of energy, nor has it been designated as such by
the Administrator at OIRA. Accordingly, DOE has not prepared a
Statement of Energy Effects on this proposed rule.
L. Information Quality
On December 16, 2004, OMB, in consultation with the Office of
Science and Technology Policy (``OSTP''), issued its Final Information
Quality Bulletin for Peer Review (``the Bulletin''). 70 FR 2664 (Jan.
14, 2005). The Bulletin establishes that certain scientific information
shall be peer reviewed by qualified specialists before it is
disseminated by the Federal Government, including influential
scientific information related to agency regulatory actions. The
purpose of the bulletin is to enhance the quality and credibility of
the Government's scientific information. Under the Bulletin, the energy
conservation standards rulemaking analyses are ``influential scientific
information,'' which the Bulletin defines as ``scientific information
the agency reasonably can determine will have, or does have, a clear
and substantial impact on important public policies or private sector
decisions.'' 70 FR 2664, 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a report describing that peer
review.\117\ 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. Further
evaluation under that process is expected to continue in 2022.
---------------------------------------------------------------------------
\117\ 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).
---------------------------------------------------------------------------
VII. Public Participation
A. Participation in the Webinar
The time and date the webinar meeting are listed in the DATES
section at the beginning of this document. Webinar registration
information, participant instructions, and information about the
capabilities available to webinar participants will be published on
DOE's website: https://www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=38&action=viewlive.
Participants are responsible for ensuring their systems are compatible
with the webinar software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has an interest in the topics addressed in this
document, or who is representative of a group or class of persons that
has an interest in these issues, may request an opportunity to make an
oral presentation at the webinar. Such persons may submit to
[email protected]. Persons who wish to speak
should include with their request a computer file in WordPerfect,
Microsoft Word, PDF, or text (ASCII) file format that briefly describes
the nature of their interest in this rulemaking and the topics they
wish to discuss. Such persons should also provide a daytime telephone
number where they can be reached.
C. Conduct of the Webinar
DOE will designate a DOE official to preside at the webinar/public
meeting and may also use a professional facilitator to aid discussion.
The meeting will not be a judicial or evidentiary-type public hearing,
but DOE will conduct it in accordance with section 336 of EPCA (42
U.S.C. 6306). A court reporter will be present to record the
proceedings and prepare a transcript. DOE reserves the right to
schedule the order of presentations and to establish the procedures
governing the conduct of the webinar. There shall not be discussion of
proprietary information, costs or prices, market share, or other
commercial matters regulated by U.S. anti-trust laws. After the webinar
and until the end of the comment period, interested parties may
[[Page 32579]]
submit further comments on the proceedings and any aspect of the
rulemaking.
The webinar will be conducted in an informal, conference style. DOE
will a general overview of the topics addressed in this rulemaking,
allow time for prepared general statements by participants, and
encourage all interested parties to share their views on issues
affecting this rulemaking. Each participant will be allowed to make a
general statement (within time limits determined by DOE), before the
discussion of specific topics. DOE will permit, as time permits, other
participants to comment briefly on any general statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this rulemaking. The
official conducting the webinar/public meeting will accept additional
comments or questions from those attending, as time permits. The
presiding official will announce any further procedural rules or
modification of the above procedures that may be needed for the proper
conduct of the webinar.
A transcript of the webinar will be included in the docket, which
can be viewed as described in the Docket section at the beginning of
this document. In addition, any person may buy a copy of the transcript
from the transcribing reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the public meeting, but no later than the
date provided in the DATES section at the beginning of this proposed
rule. Interested parties may submit comments, data, and other
information using any of the methods described in the ADDRESSES section
at the beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (``CBI'')). Comments submitted
through www.regulations.gov cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for the information
submitted. For information on submitting CBI, see the Confidential
Business Information section.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
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Submitting comments via email, hand delivery/courier, or postal
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Include your first and last names, email address, telephone number, and
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Include contact information each time you submit comments, data,
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or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit printed copies.
No telefacsimiles (``faxes'') will be accepted.
Comments, data, and other information submitted to DOE
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Campaign form letters. Please submit campaign form letters by the
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Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
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email two well-marked copies: one copy of the document marked
``confidential'' including all the information believed to be
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with the information believed to be confidential deleted. DOE will make
its own determination about the confidential status of the information
and treat it according to its determination.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
(1) DOE requests comment on specific technology options for
reducing standby power, including the type of technologies implemented
and the estimated improvement in standby power.
(2) DOE requests comment on the proposed baseline compact-size
dishwasher EAEU of 191 kWh/year for this NOPR.
(3) DOE requests feedback on the efficiency levels analyzed for
each product class in this proposal.
(4) DOE requests comment on the baseline MPCs and incremental MPCs
developed for each dishwasher product class.
[[Page 32580]]
(5) DOE requests comment on the efficiency characteristics used in
the consumer water heater rulemaking described here and encourages
comment in both rulemakings.
(6) DOE requests comment on the amount of water and energy used for
pre-rinsing dishes and flatware before their placement into a
dishwasher.
(7) DOE requests comment and information on dishwasher lifetime.
(8) DOE seeks data on the no-new-standards case efficiency
distribution for the compact-size product class, and the efficiency
distribution projection for both the standard-size and the compact-size
product classes during the analysis period (2027-2056).
(9) DOE seeks comment on the approach and inputs used to develop
no-new-standards case shipments projection,
(10) DOE requests comment on whether industry expects a compression
of markups due higher standards, as reflected in the tiered scenario
for manufacturer markups.
(11) DOE requests comment on how to address the climate benefits
and other non-monetized effects of the proposal.
(12) DOE seeks comments, information, and data on the capital
conversion costs and product conversion costs estimated for each TSL.
(13) DOE seeks comment on whether manufacturers expect
manufacturing capacity constraints would limit product availability to
consumers in the timeframe of the amended standard compliance date
(2027).
(14) DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of dishwashers associated with
multiple DOE standards or product-specific regulatory actions of other
Federal agencies.
(15) 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.
(16) DOE requests comment on its initial conclusion that there are
no small business manufacturers of dishwashers.
(17) DOE welcomes comments on any analytical approaches to modeling
distributional impacts on low-income, senior citizen, renters, or other
underrepresented groups who may be impacted by the proposed standards.
(18) DOE welcomes comments on the assumptions regarding market
size, conditions and dynamics. We welcome specific comment on impacts
on downstream industries and markets, including prices for microchips,
semiconductors, or other products related to the proposed standards.
(19) DOE welcomes comment any unaccounted benefits in this analysis
such as the benefits of saving time from handwashing dishes, saving
money on buying paper/plastic cups/plates/utensils and other benefits
from purchasing a dishwasher for households that are not currently in
the market related to the proposed standards.
(20) DOE welcomes comments on other related EERE rulemakings that
intersect with this rulemaking such as Consumer Water Heaters related
to the proposed standards.
Additionally, DOE welcomes comments on other issues relevant to the
conduct of this rulemaking that may not specifically be identified in
this document.
VIII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking and request for comment.
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, Small
businesses.
Signing Authority
This document of the Department of Energy was signed on May 1,
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 May 5, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE proposes to amend
part 430 of chapter II, subchapter D, of title 10 of the Code of
Federal Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Amend Sec. 430.32 by revising paragraph (f)(1) introductory text
and paragraph (f)(2).
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(f) * * *
(1) All dishwashers manufactured on or after May 30, 2013, and
before [date 3 years after date of publication of the final rule in the
Federal Register], shall meet the following standard--
* * * * *
(2) All dishwashers manufactured on or after [date 3 years after
date of publication of the final rule in the Federal Register], shall
not exceed the following standard--
------------------------------------------------------------------------
Estimated Per-cycle
annual energy water
Product class use (kWh/ consumption
year) (gal/cycle)
------------------------------------------------------------------------
Standard-size (>=8 place settings plus 6 223 3.3
serving pieces)........................
Compact-size (<8 place settings plus 6 174 3.1
serving pieces)........................
------------------------------------------------------------------------
[[Page 32581]]
Where the place settings are as specified in AHAM DW-1-2020
(incorporated by reference, see Sec. 430.3) and the test load is as
specified in section 2.4 of appendix C2 in subpart B of this part.
* * * * *
[FR Doc. 2023-09969 Filed 5-18-23; 8:45 am]
BILLING CODE 6450-01-P