[Federal Register Volume 88, Number 213 (Monday, November 6, 2023)]
[Proposed Rules]
[Pages 76510-76573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-24106]
[[Page 76509]]
Vol. 88
Monday,
No. 213
November 6, 2023
Part IV
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Energy Conservation Standards for
Dehumidifiers; Proposed Rule
Federal Register / Vol. 88 , No. 213 / Monday, November 6, 2023 /
Proposed Rules
[[Page 76510]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2019-BT-STD-0043]
RIN 1904-AE61
Energy Conservation Program: Energy Conservation Standards for
Dehumidifiers
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Notice of proposed rulemaking and announcement of public
meeting.
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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''),
prescribes energy conservation standards for various consumer products
and certain commercial and industrial equipment, including
dehumidifiers. EPCA also requires the U.S. Department of Energy
(``DOE'') to periodically determine whether more stringent standards
would be technologically feasible and economically justified, and would
result in significant energy savings. In this notice of proposed
rulemaking (``NOPR''), DOE proposes amended energy conservation
standards for dehumidifiers, and also announces a public meeting to
receive 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 January 5, 2024.
Meeting: DOE will hold a public meeting via webinar on Thursday,
December 14, 2023, from 1:00 p.m. to 4:00 p.m. See section VII of this
document, ``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 U.S. Department of Justice (``DOJ'')
contact listed in the ADDRESSES section on or before December 6, 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-0043. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2019-BT-STD-0043, by any of the
following methods:
Email: [email protected]. Include docket number
EERE-2019-BT-STD-0043 in the subject line of the message.
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.
Hand Delivery/Courier: Appliance and Equipment Standards Program,
U.S. Department of Energy, Building Technologies Office, 1000
Independence Avenue SW, Washington, DC 20585-0121. 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 IV of this document.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at www.regulations.gov. All documents in the
docket are listed in the www.regulations.gov index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2019-BT-STD-0043. 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-2J,
1000 Independence Avenue SW, Washington, DC 20585-0121. Email:
[email protected].
Mr. Peter Cochran, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 20585-0121.
Telephone: (202) 586-9496. 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 Dehumidifiers
III. General Discussion
A. Scope of Coverage
B. Test Procedure
C. Technological Feasibility
1. General
2. Maximum Technologically Feasible Levels
D. Energy Savings
1. Determination of Savings
2. Significance of Savings
E. Economic Justification
1. Specific Criteria
a. Economic Impact on Manufacturers and Consumers
b. Savings in Operating Costs Compared to Increase in Price (LCC
and PBP)
c. Energy Savings
d. Lessening of Utility or Performance of Products
e. Impact of Any Lessening of Competition
f. Need for National Energy Conservation
g. Other Factors
2. Rebuttable Presumption
IV. Methodology and Discussion of Related Comments
A. Market and Technology Assessment
1. Product Classes
2. Technology Options
a. Improved Compressor Efficiency
b. Washable Air Filters
c. Air-to-Air Heat Exchangers
d. Alternative Refrigerants
e. Low-Standby-Loss Electronic Controls
f. Multi-Circuited Evaporator and Secondary Condenser Coils
B. Screening Analysis
1. Screened-Out Technologies
2. Remaining Technologies
C. Engineering Analysis
1. Efficiency Analysis
[[Page 76511]]
a. Baseline Efficiency
b. Higher Efficiency Levels
2. Cost Analysis
3. Cost-Efficiency Results
D. Markups Analysis
E. Energy Use Analysis
F. Life-Cycle Cost and Payback Period Analysis
1. Product Cost
2. Installation Cost
3. Annual Energy Consumption
4. Energy Prices
5. Maintenance and Repair Costs
6. Product Lifetime
7. Discount Rates
8. Energy Efficiency Distribution in the No-New-Standards Case
9. Payback Period Analysis
G. Shipments Analysis
H. National Impact Analysis
1. Product Efficiency Trends
2. National Energy Savings
3. Net Present Value Analysis
I. Consumer Subgroup Analysis
J. Manufacturer Impact Analysis
1. Overview
2. Government Regulatory Impact Model and Key Inputs
a. Manufacturer Production Costs
b. Shipments Projections
c. Capital and Product Conversion Costs
d. Manufacturer Markup Scenarios
3. Manufacturer Interviews
a. Increases in Chassis Size
b. Refrigerant Regulation
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
2. Monetization of Other Emissions Impacts
M. Utility Impact Analysis
N. Employment Impact Analysis
V. Analytical Results and Conclusions
A. Trial Standard Levels
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
a. Life-Cycle Cost and Payback Period
b. Consumer Subgroup Analysis
c. Rebuttable Presumption Payback
2. Economic Impacts on Manufacturers
a. Industry Cash Flow Analysis Results
b. Direct Impacts on Employment
c. Impacts on Manufacturing Capacity
d. Impacts on Subgroups of Manufacturers
e. Cumulative Regulatory Burden
3. National Impact Analysis
a. Significance of Energy Savings
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 Dehumidifier
Standards
2. Annualized Benefits and Costs of the Proposed Standards
D. Reporting, Certification, and Sampling Plan
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866 and 13563
B. Review Under the Regulatory Flexibility Act
1. Description of Reasons Why Action Is Being Considered
2. Objectives of, and Legal Basis for, Rule
3. Description on Estimated Number of Small Entities Regulated
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
5. Duplication, Overlap, and Conflict With Other Rules and
Regulations
6. Significant Alternatives to the Rule
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. Attendance at the Public Meeting
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Public Meeting
D. Submission of Comments
E. Issues on Which DOE Seeks Comment
VIII. Approval of the Office of the Secretary
I. Synopsis of the Proposed Rule
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 dehumidifiers, the subject of
this proposed rulemaking.
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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 NOPR
including new proposed energy conservation standards (proceeding to a
final rule, as appropriate). (42 U.S.C. 6295(m))
In accordance with these and other statutory provisions discussed
in this document, DOE analyzed the benefits and burdens of four trial
standard levels (``TSLs'') for dehumidifiers. The TSLs and their
associated benefits and burdens are discussed in detail in sections V.A
through V.C of this document. As discussed in section V.C of this
document, DOE has tentatively determined that TSL 3 represents the
maximum improvement in energy efficiency that is technologically
feasible and economically justified. The proposed standards, which are
expressed in Integrated Energy Factor (``IEF''), or the volume of water
in liters (``L'') removed by a kilowatt hour (``kWh'') of energy, are
shown in Table I.1. These proposed standards, if adopted, would apply
to all dehumidifiers listed in Table I.1. manufactured in, or imported
into, the United States starting on the date 3 years after the
publication of the final rule for this proposed rulemaking.
[[Page 76512]]
Table I.1--Proposed Energy Conservation Standards for Dehumidifiers
------------------------------------------------------------------------
Minimum
integrated
Portable dehumidifier product capacity (pints/day) energy factor
(L/kWh)
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25.00 or less.......................................... 1.70
25.01-50.00............................................ 2.01
50.01 or more.......................................... 3.10
Whole-home dehumidifier product case volume (cubic
feet):
8.0 or less........................................ 2.22
More than 8.0...................................... 3.81
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A. Benefits and Costs to Consumers
Table I.2 presents DOE's evaluation of the economic impacts of the
proposed standards on consumers of dehumidifiers, 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
dehumidifiers, which is estimated to be 10 years for portable
dehumidifiers and 12 years for whole-home dehumidifiers (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.9 of this document). The simple PBP, which is
designed to compare specific efficiency levels, is measured relative
to the baseline product (see section IV.C of this document).
Table I.2--Impacts of Proposed Energy Conservation Standards on
Consumers of Dehumidifiers
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Average LCC Simple payback
Product class savings (2022$) period (years)
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Portable dehumidifiers, <=25.00 pints/ $42 0.9
day.................................
Portable dehumidifiers, 25.01-50.00 81 0.6
pints/day...........................
Portable dehumidifiers, >50.00 pints 31 4.8
per day.............................
Whole-home dehumidifiers, <=8.0 cubic 56 6.4
feet case volume....................
Whole-home dehumidifiers, >8.0 cubic 146 5.7
feet case volume....................
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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 2022
dollars.
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The industry net present value (INPV) is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2023-2057). Using a real discount rate of 8.4 percent,
DOE estimates that the INPV for manufacturers of dehumidifiers in the
case without amended standards is $158.3 million. Under the proposed
standards, the change in INPV is estimated to range from -3.3 percent
to -2.1 percent, which is approximately -$5.2 million to -$3.3 million.
In order to bring products into compliance with amended standards, it
is estimated that the industry would incur total conversion costs of
$6.9 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 dehumidifiers would save a significant amount of energy.
Relative to the case without amended standards, the lifetime energy
savings for dehumidifiers purchased in the 30-year period that begins
in the anticipated year of compliance with the amended standards (2028-
2057) amount to 0.33 quadrillion British thermal units (``Btu''), or
quads.\5\ This represents a savings of 5.8 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 dehumidifiers ranges from $1.26
billion (at a 7-percent discount rate) to $2.61 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
dehumidifiers purchased from 2028 through 2057.
In addition, the proposed standards for dehumidifiers 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 6.94 million metric tons
(``Mt'') \6\ of carbon dioxide (``CO2''), 1.76 thousand tons
of sulfur dioxide (``SO2''), 11.81 thousand tons of nitrogen
oxides (``NOX''), 51.94 thousand tons of methane
(``CH4''), 0.06 thousand tons of nitrous oxide
(``N2O''), and 0.01 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 2023 (``AEO2023''). AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the Inflation Reduction Act. See section IV.K of this
document for further discussion of AEO2023 assumptions that affect
air pollutant emissions.
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DOE estimates the value of climate benefits from a reduction in
greenhouse gases (``GHG'') using four different estimates of the social
cost (``SC'') of
[[Page 76513]]
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''). DOE used interim SC-GHG values (in terms of benefit per
ton of GHG avoided) developed by the Interagency Working Group on the
Social Cost of Greenhouse Gases (``IWG'').\8\ The derivation of these
values is discussed in section IV.L of this document. For
presentational purposes, the climate benefits associated with the
average SC-GHG at a 3-percent discount rate are estimated to be $0.40
billion. DOE does not have a single central SC-GHG point estimate and
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 IWG. (``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 Environmental Protection Agency,\9\ as discussed in section
IV.L of this document. DOE estimated the present value of the health
benefits would be $0.33 billion using a 7-percent discount rate, and
$0.74 billion using a 3-percent discount rate.\10\ DOE is currently
only monetizing health benefits from changes in ambient fine
particulate matter (PM2.5) concentrations from two
precursors (SO2 and NOX), and from changes in
ambient ozone from one precursor (for NOX), 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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\9\ U.S. EPA. Estimating the Benefit per Ton of Reducing
Directly Emitted PM2.5, PM2.5 Precursors and
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
\10\ DOE estimates the economic value of these emissions
reductions resulting from the considered trial standard levels
(``TSLs'') for the purpose of complying with the requirements of
Executive Order 12866.
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Table I.3 summarizes the monetized economic benefits and costs
expected to result from the proposed standards for dehumidifiers. 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 Dehumidifiers
[Trial Standard Level (``TSL'') 3]
------------------------------------------------------------------------
Billion ($2022)
------------------------------------------------------------------------
3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 2.75
Climate Benefits *..................................... 0.40
Health Benefits **..................................... 0.74
Total Benefits [dagger]................................ 3.89
Consumer Incremental Product Costs [Dagger]............ 0.14
Net Benefits........................................... 3.75
Change in Producer Cashflow (INPV) [Dagger][Dagger].... (0.005)-(0.003)
------------------------------------------------------------------------
7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings........................ 1.34
Climate Benefits * (3% discount rate).................. 0.40
Health Benefits **..................................... 0.33
Total Benefits [dagger]................................ 2.07
Consumer Incremental Product Costs [Dagger]............ 0.08
Net Benefits........................................... 1.99
Change in Producer Cashflow (INPV) [Dagger][Dagger].... (0.005)-(0.003)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with
dehumidifiers shipped in 2028-2057. These results include consumer,
climate, and health benefits that accrue after 2057 from the products
shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the
social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide
(SC-N2O) (model average at 2.5-percent, 3-percent, and 5-percent
discount rates; 95th percentile at a 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, but DOE does not have a single central SC-GHG point estimate and
emphasizes the importance and value of considering the benefits
calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as
installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life
cycle costs analysis and national impact analysis as discussed in
detail below. See sections IV.F and IV.H of this document. DOE's
national impacts analysis includes all impacts (both costs and
benefits) along the distribution chain beginning with the increased
costs to the manufacturer to manufacture the product and ending with
the increase in price experienced by the consumer. DOE also separately
conducts a detailed analysis on the impacts on manufacturers (i.e.,
manufacturer impact analysis, or ``MIA''). See section IV.J of this
document. In the detailed MIA, DOE models manufacturers' pricing
decisions based on assumptions regarding investments, conversion
costs, cashflow, and margins. The MIA produces a range of impacts,
which is the rule's expected impact on the INPV. The change in INPV is
the present value of all changes in industry cash flow, including
changes in production costs, capital expenditures, and manufacturer
profit margins. Change in INPV is calculated using the industry
weighted average cost of capital value of 8.4 percent that is
estimated in the manufacturer impact analysis (see chapter 12 of the
NOPR TSD for a complete description of the industry weighted average
cost of capital). For dehumidifiers, the change in INPV ranges from -
$5 million to -$3 million. DOE accounts for that range of likely
impacts in analyzing whether a trial standard level is economically
justified. See section V.C of this document. DOE is presenting the
range of impacts to the INPV under two markup scenarios: the
Preservation of Gross Margin scenario, which is the manufacturer
markup scenario used in the calculation of Consumer Operating Cost
Savings in this table; and the Preservation of Operating Profit Markup
scenario, where DOE assumed manufacturers would not be able to
increase per-unit operating profit in proportion to increases in
manufacturer production costs. DOE includes the range of estimated
INPV in the above table, drawing on the MIA explained further in
section IV.J of this document to provide additional context for
assessing the estimated impacts of this proposal to society, including
potential changes in production and consumption, which is consistent
with OMB's Circular A-4 and E.O. 12866. If DOE were to include the
INPV into the net benefit calculation for this proposed rule, the net
benefits would range from $3.74 billion to $3.75 billion at 3-percent
discount rate and would range from $1.98 billion to $1.99 billion at 7-
percent discount rate. DOE seeks comment on this approach.
[[Page 76514]]
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 2023, 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 2023. 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 cost savings are domestic private U.S.
consumer monetary savings that occur as a result of purchasing the
covered products and are measured for the lifetime of dehumidifiers
shipped between 2028 and 2057. The benefits associated with reduced
emissions achieved as a result of the proposed standards are also
calculated based on the lifetime of dehumidifiers shipped between 2028
and 2057. Total benefits for both the 3-percent and 7-percent cases are
presented using the average GHG social costs with a 3-percent discount
rate. Estimates of SC-GHG values are presented for all four discount
rates in section V.B.6 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 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 $8.55 million per year in increased equipment
costs, while the estimated annual benefits are $142.04 million in
reduced equipment operating costs, $22.85 million in climate benefits,
and $34.54 million in health benefits. In this case, the net benefit
would amount to $190.89 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards is $7.89 million per year in
increased equipment costs, while the estimated annual benefits are
$157.99 million in reduced operating costs, $22.85 million in climate
benefits, and $42.30 million in health benefits. In this case, the net
benefit would amount to $215.24 million per year.
Table I.4--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Dehumidifiers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-------------------------------------------------------
Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 157.99 153.04 163.15
Climate Benefits *...................................... 22.85 22.66 22.93
Health Benefits **...................................... 42.30 41.95 42.42
Total Benefits [dagger]................................. 223.14 217.65 228.50
Consumer Incremental Product Costs [Dagger]............. 7.89 7.94 7.77
Net Benefits............................................ 215.24 209.71 220.74
Change in Producer Cashflow............................. (0.5)-(0.3) (0.5)-(0.3) (0.5)-(0.3)
(INPV) [Dagger][Dagger].................................
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 142.04 138.10 146.50
Climate Benefits * (3% discount rate)................... 22.85 22.66 22.93
Health Benefits **...................................... 34.54 34.31 34.64
Total Benefits [dagger]................................. 199.44 195.07 204.06
Consumer Incremental Product Costs [Dagger]............. 8.55 8.58 8.44
Net Benefits............................................ 190.89 186.49 195.62
Change in Producer Cashflow (INPV) [Dagger][Dagger]..... (0.5)-(0.3) (0.5)-(0.3) (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
results include consumer, climate, and health benefits that accrue after 2057 from the products shipped in
2028-2057. The Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices
from the AEO 2023 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.3 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 DOE does not have a single central SC-GHG point estimate and
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, but DOE does not have a single central SC-GHG point estimate.
[Dagger][Dagger] Costs include incremental equipment costs as well as installation costs.
[[Page 76515]]
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
the increased costs to the manufacturer to manufacture the product and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
(i.e., manufacturer impact analysis, or ``MIA''). See section IV.J of this document. In the detailed MIA, DOE
models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs,
cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the INPV.
The change in INPV is the present value of all changes in industry cash flow, including changes in production
costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated
using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer
impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average
cost of capital). For dehumidifiers, the annualized change in INPV ranges from -$0.5 million to -$0.3 million.
DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically
justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit
Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to
provide additional context for assessing the estimated impacts of this proposal to society, including
potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866.
If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the
annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would
range from $190.4 million to $190.6 million at 7-percent discount rate. DOE seeks comment on this approach.
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, to a great extent, the
burdens of the proposed standards.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for dehumidifiers is $8.55 million per year in
increased product costs, while the estimated annual benefits are
$142.04 million in reduced product operating costs, $22.85 million in
climate benefits, and $34.54 million in health benefits. The net
benefit amounts to $190.89 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 substantial energy
consumption occur during periods of peak energy demand. The impacts of
these products on the energy infrastructure can be more pronounced than
products with relatively constant demand. 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 standards are projected to result in
estimated national energy savings of 0.33 quad full-fuel-cycle
(``FFC''), the equivalent of the primary annual energy use of 3.5
million homes. In addition, they are projected to reduce CO2
emissions by 6.94 Mt, SO2 emissions by 1.76 thousand tons,
NOX emissions by 11.81 thousand tons, CH4
emissions by 51.94 thousand tons, N2O emissions by 0.06
thousand tons, Hg emissions by 0.01 tons. Based on these findings, 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). The basis for these tentative conclusions is detailed in
the remainder of this document and the accompanying technical support
document (``TSD'').
DOE also considered more stringent energy efficiency levels as
potential standards and is still considering them in this rulemaking.
However, DOE has tentatively concluded that the potential burdens of
more stringent energy efficiency levels would outweigh the projected
benefits.
Based on consideration of the public comments DOE receives in
response to this document and related information collected and
analyzed during the course of this rulemaking effort, DOE may adopt
energy efficiency levels presented in this document that are either
higher or lower than the proposed standards, or some combination of
level(s) that incorporate the proposed standards in part.
II. Introduction
The following section briefly discusses the statutory authority
underlying this proposed rule as well as some of the relevant
historical background related to the establishment of standards for
dehumidifiers.
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 dehumidifiers,
the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed
initial energy conservation standards for these products. Id. EPCA
further provides that, not later than 6 years after the issuance of any
final rule establishing or amending a standard, DOE must publish either
a notice of determination that standards for the product do not need to
be amended, or a NOPR including new proposed energy conservation
standards (proceeding to a final rule, as appropriate). (42 U.S.C.
6295(m)(1))
The energy conservation program under EPCA consists essentially of
four parts: (1) testing, (2) labeling, (3) the establishment of Federal
energy conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293),
labeling provisions (42 U.S.C. 6294), energy conservation standards (42
U.S.C. 6295), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296).
Federal energy efficiency requirements for covered products
established under EPCA generally supersede State laws and regulations
concerning energy conservation testing, labeling, and standards. (42
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal
preemption for particular State laws or regulations, in accordance with
the procedures and other provisions set forth under EPCA. (42 U.S.C.
6297(d))
[[Page 76516]]
Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
or estimated annual operating cost of each covered product. (42 U.S.C.
6295(o)(3)(A) and 42 U.S.C. 6295(r)) Manufacturers of covered products
must use the prescribed DOE test procedure as the basis for certifying
to DOE that their products comply with the applicable energy
conservation standards adopted under EPCA and when making
representations to the public regarding the energy use or efficiency of
those products. (42 U.S.C. 6293(c) and 42 U.S.C. 6295(s)) Similarly,
DOE must use these test procedures to determine whether the products
comply with standards adopted pursuant to EPCA. (42 U.S.C. 6295(s)) The
DOE test procedures for dehumidifiers appear at title 10 of the Code of
Federal Regulations (``CFR'') part 430, subpart B, appendix X1.
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products, including dehumidifiers. 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) Furthermore, DOE may not adopt any
standard that would not result in the significant conservation of
energy. (42 U.S.C. 6295(o)(3))
Moreover, DOE may not prescribe a standard: (1) for certain
products, including dehumidifiers, if no test procedure has been
established for the product, or (2) if DOE determines by rule that the
standard is not technologically feasible or economically justified. (42
U.S.C. 6295(o)(3)(A)-(B)) In deciding whether a proposed standard is
economically justified, DOE must determine whether the benefits of the
standard exceed its burdens. (42 U.S.C. 6295(o)(2)(B)(i)) DOE must make
this determination after receiving comments on the proposed standard,
and by considering, to the greatest extent practicable, the following
seven statutory factors:
(1) The economic impact of the standard on manufacturers and
consumers of the products subject to the standard;
(2) The savings in operating costs throughout the estimated average
life of the covered products in the type (or class) compared to any
increase in the price, initial charges, or maintenance expenses for the
covered products that are likely to result from the standard;
(3) The total projected amount of energy (or as applicable, water)
savings likely to result directly from the standard;
(4) Any lessening of the utility or the performance of the covered
products likely to result from the standard;
(5) The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard;
(6) The need for national energy and water conservation; and
(7) Other factors the Secretary of Energy (``Secretary'') considers
relevant. (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
Further, EPCA 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 dehumidifiers
address standby mode and off mode energy use. In this proposed
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 final rule published on June 13, 2016 (``June 2016 Final
Rule''), DOE prescribed the current energy conservation standards for
dehumidifiers manufactured on and after June 13, 2019. 81 FR 38338.
These standards are set forth in DOE's regulations at 10 CFR
430.32(v)(2).
Table II.1--Federal Energy Conservation Standards for Dehumidifiers
------------------------------------------------------------------------
Minimum
integrated
Portable dehumidifier product capacity (pints/day) energy factor
(L/kWh)
------------------------------------------------------------------------
25.00 or less.......................................... 1.30
[[Page 76517]]
25.01-50.00............................................ 1.60
50.01 or more.......................................... 2.80
------------------------------------------------------------------------
Whole-home dehumidifier product case volume ...............
(cubic feet)
------------------------------------------------------------------------
8.0 or less............................................ 1.77
More than 8.0.......................................... 2.41
------------------------------------------------------------------------
2. History of Standards Rulemaking for Dehumidifiers
On June 4, 2021, DOE published a Request for Information (``June
2021 RFI'') in the Federal Register to collect data and information to
inform its decision, consistent with its obligations under EPCA, as to
whether the Department should proceed with an energy conservation
standards rulemaking for an amended energy conservation standard for
dehumidifiers. 86 FR 29964, 29965.
DOE published a notice of public meeting and availability of the
preliminary TSD on June 22, 2022 (``June 2022 Preliminary Analysis'').
87 FR 37240. DOE received comments in response to the June 2022
Preliminary Analysis from the interested parties listed in Table II.2.
Table II.2--June 2022 Preliminary Analysis Written Comments
----------------------------------------------------------------------------------------------------------------
Comment
Commenter(s) Abbreviation number in Commenter type
the docket
----------------------------------------------------------------------------------------------------------------
Appliance Standards Awareness Joint Commenters.......... 21 Efficiency Organizations.
Project, American Council for an
Energy-Efficient Economy,
National Consumer Law Center,
Natural Resources Defense
Council, Northwest Energy
Efficiency Alliance.
Association of Home Appliance AHAM...................... 22 Trade Association.
Manufacturers.
Madison Indoor Air Quality....... MIAQ...................... 20 Manufacturer.
----------------------------------------------------------------------------------------------------------------
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\13\
To the extent that interested parties have provided written comments
that are substantively consistent with any oral comments provided
during the July 19, 2022, public meeting, DOE cites the written
comments throughout this document. Any oral comments provided during
the webinar that are not substantively addressed by written comments
are summarized and cited separately throughout this document.
---------------------------------------------------------------------------
\13\ The parenthetical reference provides a reference for
information located in the docket of DOE's rulemaking to develop
energy conservation standards for dehumidifiers (Docket No. EERE-
2019-BT-STD-0043, 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
In accordance with section 3(a) of 10 CFR part 430, subpart C,
appendix A (``appendix A''), DOE notes that it is deviating from the
provision in appendix A regarding the pre-NOPR stages for an energy
conservation standards rulemaking. Section 6(a)(2) of appendix A states
that if the Department determines it is appropriate to proceed with a
rulemaking, the preliminary stages of a rulemaking to issue or amend an
energy conservation standard that DOE will undertake will include a
framework document and preliminary analysis, or an advance notice of
proposed rulemaking. While DOE published a preliminary analysis for
this proposed rulemaking, DOE did not publish a framework document in
conjunction with the preliminary analysis. 87 FR 37240. DOE notes,
however, chapter 2 of the June 2022 Preliminary TSD that accompanied
the June 2022 Preliminary Analysis--entitled Analytical Framework,
Comments from Interested Parties, and DOE Responses--describes the
general analytical framework that DOE uses in evaluating and developing
potential amended energy conservation standards. DOE also previously
published the June 2021 RFI, in which DOE identified and sought comment
on the analyses that would be conducted in support of an energy
conservation standards rulemaking for dehumidifiers. 86 FR 29964,
29965-29966. As such, publication of a separate framework document
would be largely redundant of previously published documents.
Section 6(f)(2) of appendix A specifies that the length of the
public comment period for a NOPR will vary depending upon the
circumstances of the particular proposed rulemaking, but will not be
less than 75 calendar days. For this NOPR, DOE has opted to instead
provide a 60-day comment period. DOE requested comment in the June 2021
RFI on the technical and economic analyses and provided stakeholders a
45-day comment period, after granting a 15-day comment period
extension. 86 FR 29964 and 86 FR 34639. Additionally, DOE provided a
60-day comment period for the June 2022 Preliminary Analysis. 87 FR
37240, 37241. The analytical methods used for this NOPR are similar to
those used in previous rulemaking documents. As such, DOE believes a
60-day comment period is appropriate and will provide interested
parties with a meaningful opportunity to comment on the proposed rule.
Section 8(d)(1) of appendix A specifies that test procedure rulemakings
establishing methodologies used to evaluate proposed energy
conservation standards will be finalized prior to publication of a NOPR
proposing new or amended energy conservation standards. Additionally,
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
[[Page 76518]]
comment period for (1) a NOPR proposing new or amended energy
conservation standards or (2) a notice of proposed determination that
standards do not need to be amended. In the dehumidifier test procedure
final rule published on July 26, 2023, (July 2023 Test Procedure Final
Rule), DOE amended the test procedures for dehumidifiers. 88 FR 48035.
DOE determined that the amendments adopted will not alter (i.e., will
not impact) the measured efficiency of dehumidifiers. Id. As such, the
requirement that the amended test procedure be finalized at least 180
days prior to the close of the comment period for this NOPR does not
apply.
III. General Discussion
DOE developed this proposal after considering oral and written
comments, data, and information from interested parties that represent
a variety of interests. The following discussion addresses issues
raised by these commenters.
A. Scope of Coverage
This NOPR covers those consumer products that meet the definition
of ``dehumidifier'' as codified at 10 CFR 430.2.
EPCA defines a dehumidifier as a product that is a self-contained,
electrically operated, and mechanically encased assembly, consisting of
a refrigerated surface (evaporator) that condenses moisture from the
atmosphere, a refrigerating system with an electric motor, an air-
circulating fan, and a means for collecting or disposing of the
condensate. (42 U.S.C. 6291(34)) In a final rule published on July 31,
2015 (``July 2015 Test Procedure Final Rule''), DOE clarified that this
definition of a dehumidifier, codified at 10 CFR 430.2, does not apply
to portable air conditioners, room air conditioners, or packaged
terminal air conditioners. 80 FR 45802, 45804-45805 (July 31, 2015).
DOE also added definitions for portable dehumidifiers and whole-home
dehumidifiers to 10 CFR 430.2. Portable dehumidifiers are designed to
operate within the dehumidified space without ducting attached,
although ducting may be attached optionally. Whole-home dehumidifiers
are designed to be installed with inlet ducting for return process air
and outlet ducting that supplies dehumidified process air to one or
more locations in the dehumidified space. 10 CFR 430.2 DOE further
established that dehumidifiers that are able to operate as both a
portable and whole-home dehumidifier would be tested and rated for both
configurations. 80 FR 45802, 45805-45806. See section IV.A.1 of this
document for discussion of the product classes analyzed in this NOPR.
B. Test Procedure
EPCA sets forth generally applicable criteria and procedures for
DOE's adoption and amendment of test procedures. (42 U.S.C. 6293)
Manufacturers of covered products must use these test procedures to
certify to DOE that their product complies with energy conservation
standards and to quantify the efficiency of their product. DOE's
current energy conservation standards for dehumidifiers are expressed
in terms of IEF in L/kWh. 10 CFR 430.32(v)(2) and 10 CFR part 430,
subpart B, appendix X1.
C. Technological Feasibility
1. General
In each energy conservation standards rulemaking, DOE conducts a
screening analysis based on information gathered on all current
technology options and prototype designs that could improve the
efficiency of the products or equipment that are the subject of the
proposed 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. See sections 6(b)(3)(i) and 7(b)(1) of
appendix A to 10 CFR part 430 subpart C (``appendix A'').
After DOE has determined that particular technology options are
technologically feasible, it further evaluates each technology option
in light of the following additional screening criteria: (1)
practicability to manufacture, install, and service; (2) adverse
impacts on product utility or availability; (3) adverse impacts on
health or safety; and (4) unique pathway proprietary technologies. See
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
dehumidifiers, particularly the designs DOE considered, those it
screened out, and those that are the basis for the standards considered
in this proposed rulemaking. For further details on the screening
analysis for this proposed rulemaking, see chapter 4 of the NOPR TSD.
2. Maximum Technologically Feasible Levels
When DOE proposes to adopt a new or 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 dehumidifiers, 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 proposed rulemaking
are described in section IV.C.1.b of this document and in chapter 5 of
the NOPR TSD.
D. Energy Savings
1. Determination of Savings
For each trial standard level (``TSL''), DOE projected energy
savings from application of the TSL to dehumidifiers purchased in the
30-year period that begins in the year of compliance with the proposed
standards (2028-2057).\14\ The savings are measured over the entire
lifetime of dehumidifiers purchased in the previous 30-year period. DOE
quantified the energy savings attributable to each TSL as the
difference in energy consumption between each standards case and the
no-new-standards case. The no-new-standards case represents a
projection of energy consumption that reflects how the market for a
product would likely evolve in the absence of amended energy
conservation standards.
---------------------------------------------------------------------------
\14\ Each TSL is composed of specific efficiency levels for each
product class. The TSLs considered for this NOPR are described in
section V.A of this document. DOE conducted a sensitivity analysis
that considers impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------
DOE used its national impact analysis (``NIA'') spreadsheet model
to estimate national energy savings (``NES'') from potential amended or
new standards for dehumidifiers. 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
[[Page 76519]]
fuels (i.e., coal, natural gas, petroleum fuels), and thus presents a
more complete picture of the impacts of energy conservation
standards.\15\ DOE's approach is based on the calculation of an FFC
multiplier for each of the energy types used by covered products or
equipment. For more information on FFC energy savings, see section
IV.H.1 of this document.
---------------------------------------------------------------------------
\15\ 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.\16\ 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.
---------------------------------------------------------------------------
\16\ Procedures, Interpretations, and Policies for Consideration
in New or Revised Energy Conservation Standards and Test Procedures
for Consumer Products and Commercial/Industrial Equipment, 86 FR
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------
As stated, the standard levels proposed in this document are
projected to result in national energy savings of 0.33 quad, the
equivalent of the primary annual energy use of 3.5 million homes. Based
on the amount of FFC savings, the corresponding reduction in emissions,
and the need to confront the global climate crisis, 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).
E. 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 proposed rulemaking.
a. Economic Impact on Manufacturers and Consumers
In determining the impacts of a potential new or amended standard
on manufacturers, DOE conducts an MIA, as discussed in section IV.J of
this document. DOE first uses an annual cash-flow approach to determine
the quantitative impacts. This step includes both a short-term
assessment--based on the cost and capital requirements during the
period between when a regulation is issued and when entities must
comply with the regulation--and a long-term assessment over a 30-year
period. The industry-wide impacts analyzed include (1) INPV, which
values the industry on the basis of expected future cash flows, (2)
cash flows by year, (3) changes in revenue and income, and (4) other
measures of impact, as appropriate. Second, DOE analyzes and reports
the impacts on different types of manufacturers, including impacts on
small manufacturers. Third, DOE considers the impact of standards on
domestic manufacturer employment and manufacturing capacity, as well as
the potential for standards to result in plant closures and loss of
capital investment. Finally, DOE takes into account cumulative impacts
of various DOE regulations and other regulatory requirements on
manufacturers.
For individual consumers, measures of economic impact include the
changes in LCC and PBP associated with new or amended standards. These
measures are discussed further in the following section. For consumers
in the aggregate, DOE also calculates the national net present value of
the consumer costs and benefits expected to result from particular
standards. DOE also evaluates the impacts of potential standards on
identifiable subgroups of consumers that may be affected
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and
PBP)
EPCA requires DOE to consider the savings in operating costs
throughout the estimated average life of the covered product in the
type (or class) compared to any increase in the price of, or in the
initial charges for, or maintenance expenses of, the covered product
that are likely to result from a standard. (42 U.S.C.
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP
analysis.
The LCC is the sum of the purchase price of a product (including
its installation) and the operating expense (including energy,
maintenance, and repair expenditures) discounted over the lifetime of
the product. The LCC analysis requires a variety of inputs, such as
product prices, product energy consumption, energy prices, maintenance
and repair costs, product lifetime, and discount rates appropriate for
consumers. To account for uncertainty and variability in specific
inputs, such as product lifetime and discount rate, DOE uses a
distribution of values, with probabilities attached to each value.
The PBP is the estimated amount of time (in years) it takes
consumers to recover the increased purchase cost (including
installation) of a more-efficient product through lower operating
costs. DOE calculates the PBP by dividing the change in purchase cost
due to a more stringent standard by the change in annual operating cost
for the year that standards are assumed to take effect.
For its LCC and PBP analysis, DOE assumes that consumers will
purchase the covered products in the first year of compliance with new
or amended standards. The LCC savings for the considered efficiency
levels are calculated relative to the case that reflects projected
market trends in the absence of new or amended standards. DOE's LCC and
PBP analysis is discussed in further detail in section IV.F of this
document.
c. Energy Savings
Although significant conservation of energy is a separate statutory
requirement for adopting an energy conservation standard, EPCA requires
DOE, in determining the economic justification of a standard, to
consider the total projected energy savings that are expected to result
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As
discussed in section III.D of this document, DOE uses the NIA
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
In establishing product classes and in evaluating design options
and the impact of potential standard levels, DOE evaluates potential
standards that would not lessen the utility or performance of the
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data
available to DOE, the standards proposed in this document would not
reduce the utility or performance of the products under consideration
in this proposed rulemaking.
[[Page 76520]]
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 DOJ provide its
determination on this issue. DOE will publish and respond to the
Attorney General's determination in the final rule. DOE invites comment
from the public regarding the competitive impacts that are likely to
result from this proposed rule. In addition, stakeholders may also
provide comments separately to DOJ regarding these potential impacts.
See the ADDRESSES section for information to send comments to DOJ.
f. Need for National Energy Conservation
DOE also considers the need for national energy and water
conservation in determining whether a new or amended standard is
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy
savings from the proposed standards are likely to provide improvements
to the security and reliability of the Nation's energy system.
Reductions in the demand for electricity also may result in reduced
costs for maintaining the reliability of the Nation's electricity
system. DOE conducts a utility impact analysis to estimate how
standards may affect the Nation's needed power generation capacity, as
discussed in section IV.M of this document.
DOE maintains that environmental and public health benefits
associated with the more efficient use of energy are important to take
into account when considering the need for national energy
conservation. The proposed standards are likely to result in
environmental benefits in the form of reduced emissions of air
pollutants and GHGs associated with energy production and use. DOE
conducts an emissions analysis to estimate how potential standards may
affect these emissions, as discussed in section IV.K of this document;
the estimated emissions impacts are reported in section V.B.6 of this
document. DOE also estimates the economic value of emissions reductions
resulting from the considered TSLs, as discussed in section IV.L of
this document.
g. Other Factors
In determining whether an energy conservation standard is
economically justified, DOE may consider any other factors that the
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To
the extent DOE identifies any relevant information regarding economic
justification that does not fit into the other categories described
previously, DOE could consider such information under ``other
factors.''
2. Rebuttable Presumption
As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a
rebuttable presumption that an energy conservation standard is
economically justified if the additional cost to the consumer of a
product that meets the standard is less than three times the value of
the first year's energy savings resulting from the standard, as
calculated under the applicable DOE test procedure. DOE's LCC and PBP
analyses generate values used to calculate the 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
proposed rulemaking with regard to dehumidifiers. 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 shipment projections and
calculates national energy savings and net present value of total
consumer costs and savings expected to result from potential energy
conservation standards. DOE uses the third spreadsheet tool, the
Government Regulatory Impact Model (``GRIM''), to assess manufacturer
impacts of potential standards. These three spreadsheet tools are
available on the DOE website for this proposed rulemaking:
www.regulations.gov/docket/EERE-2019-BT-STD-0043. 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 proposed 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
dehumidifiers. 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
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
[[Page 76521]]
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))
DOE currently defines separate energy conservation standards using
five dehumidifier product classes (10 CFR 430.32(v)(2)):
Portable dehumidifiers have three product classes based on the
product capacity: Product Class 1 are those with a capacity of 25.00
pints/day or less, Product Class 2 dehumidifiers have a capacity of
25.01 to 50.00 pints/day, and Product Class 3 dehumidifiers have a
capacity of 50.01 pints/day or more. Whole-home dehumidifiers have two
product classes based on product case volume: Product Class 4
dehumidifiers have a case volume of 8.0 cubic feet or less, and Product
Class 5 have a case volume of more than 8.0 cubic feet.
According to MIAQ, many of the units that are meant to be placed in
the crawlspace of a home meet the portable dehumidifier definition due
to their installation and configuration but have the same manufacturer
production cost (``MPC'') as whole-home dehumidifiers. MIAQ stated that
DOE did not clearly distinguish the difference between typical portable
dehumidifiers and portable crawlspace dehumidifiers in the June 2022
Preliminary Analysis and requested that DOE keep this difference in
mind when updating the TSD. (MIAQ, No. 20 at pp. 1-2)
Dehumidifiers are classified based on their ducting configuration
during consumer use, according to the definitions established in 10 CFR
430.2. Portable dehumidifiers operate in applications that require
space dehumidification without ducting. Whole-home dehumidifiers
operate with ducting, typically in conjunction with a heating,
ventilating, and air conditioning (``HVAC'') system. Dehumidifiers
installed in basement crawlspaces without ducting are classified as
portable dehumidifiers. DOE is not aware of any specific performance-
related feature that would justify a new product class for portable
dehumidifiers installed in basement crawlspaces. Therefore, when
conducting the engineering analysis, as discussed further in section
IV.C of this document and chapter 5 of the NOPR TSD, DOE considered the
MPCs of a variety of units in the largest portable dehumidifier product
class, Product Class 3.
2. Technology Options
In the preliminary market analysis and technology assessment, DOE
identified 16 technology options that would be expected to improve the
efficiency of dehumidifiers, as measured by the DOE test procedure.
Table IV.2--Technology Options for Dehumidifiers
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Microchannel heat exchangers.
2. Built-in hygrometer/humidistat.
3. Improved compressor efficiency.
4. Improved condenser and evaporator performance.
5. Improved controls.
6. Improved defrost methods.
7. Improved demand-defrost controls.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.
10. Low-standby-loss electronic controls.
11. Washable air filters.
12. Pre-cooling air-to-air heat exchangers.
13. Heat pipes.
14. Improved refrigeration system insulation.
15. Refrigerant-desiccant systems.
16. Alternative refrigerants.
------------------------------------------------------------------------
Several commenters provided feedback on some of these technology
options. These comments are summarized below, along with DOE's
responses.
a. Improved Compressor Efficiency
MIAQ stated that finding suitable high-efficiency compressors at
the capacities and price points needed for dehumidifiers is a
challenge, particularly with the transition to new refrigerants.
According to MIAQ, the whole-home and crawlspace dehumidifier industry
does not have sufficient volume to garner the full attention of
compressor manufacturers. (MIAQ, No. 20 at p. 2)
DOE has considered MIAQ's comments regarding high-efficiency
compressor availability, and for the reasons discussed in chapter 3 of
the NOPR TSD, expects that by the time that compliance is required with
any new dehumidifier standards, dehumidifier manufacturers will
transition to compressors utilizing R-32 in place of compressors
designed for the refrigerants currently in use. DOE acknowledges that
there is significant uncertainty regarding the availability of the
highest-efficiency single-speed compressors designed for operation with
R-32 refrigerant that were analyzed for the June 2022 Preliminary
Analysis, particularly in the smallest capacities. For this NOPR
analysis, DOE has limited the improved compressor efficiency technology
option to the maximum R-32 compressor efficiency that was observed
within its teardown sample of dehumidifiers, to ensure that such
compressors are already commercially available to the dehumidifier
industry. Furthermore, should this NOPR proceed to a final rule,
compliance with any amended standards would not be required until 3
years after a final rule is published. DOE expects that this 3-year
compliance period would provide adequate time for dehumidifier original
equipment manufacturers (``OEMs'') to source a sufficient supply of
more efficient R-32 compressors ahead of anticipated demand. DOE
expects that standards, if adopted, would therefore provide sufficient
time and regulatory certainty for manufacturers and compressor
suppliers to establish additional capacity in the supply chain, if
needed.
MIAQ reiterated its comment on the June 2022 Dehumidifier Test
Procedure NOPR \17\ that variable-speed compressors do not provide
sufficient energy savings to justify the significant increase in cost
required to implement this technology, especially in the consumer
product market. (MIAQ, No. 20 at p. 3)
---------------------------------------------------------------------------
\17\ See posted comment on www.regulations.gov, Docket No. EERE-
2019-BT-TP-0026-0008-0015.
---------------------------------------------------------------------------
In the June 2022 Preliminary Analysis, DOE considered variable-
speed compressors as part of the technology assessment, but took into
account only their full-load efficiency. As discussed in chapter 3 of
the preliminary TSD, the DOE test procedure at appendix X1 does not
attribute any partial-load efficiency improvements to variable-speed
dehumidifiers as the test procedures for room air conditioners and
portable air conditioners do for units with variable-speed compressors,
because variable-speed dehumidifiers must maintain a constant
evaporator temperature below the dew point regardless of the amount of
moisture present in the room. This provides no opportunity for energy
savings. DOE also noted the costs associated with implementing
variable-speed compressors and accounted for these costs in the
engineering analysis where appropriate.
Since publication of the June 2022 Preliminary Analysis, additional
market research, manufacturer interviews, and input from commenters led
DOE to understand that variable-speed compressors do not offer
efficiency benefits sufficient to justify the costs and design
challenges associated with implementing them for dehumidifiers.
Therefore, in the analysis for this NOPR, DOE did not consider
variable-speed compressors as a design option to improve compressor
efficiency. See chapter 3 of the NOPR TSD for
[[Page 76522]]
additional discussion about variable-speed compressors.
AHAM requested that DOE evaluate whether the use of variable-
frequency drives and similar high frequency components will lead to
increased nuisance tripping of ground-fault circuit-interrupters
(``GFCIs'') and associated cost implications. According to AHAM,
nuisance tripping may require a consumer to call an electrician to
change a breaker or replace a unit and could lead to less efficient
operation, as continuous dehumidification over time is more efficient
than interrupted dehumidification. (AHAM, No. 22 at p. 7)
DOE is aware that when implementing variable-frequency drives, as
for both variable-speed compressors and fan blower electronically
commutated motors (``ECMs''), it is possible that GFCI systems will
trip without a fault present, requiring a manual reset of the
dehumidifier by the consumer. However, DOE understands that GFCI
tripping, even for units with variable-speed drives, can generally be
mitigated through the use of best practices for reducing leakage
current, such as minimizing ECM cable length and ensuring that filtered
and unfiltered cables are separated to whatever extent possible to
reduce leakage current. Additionally, optimizing the variable-frequency
controller power filter to reduce total leakage current to levels below
the GFCI detection limits can prevent GFCI tripping. Furthermore, DOE
does not have any information on the prevalence of nuisance tripping
events or on the potential impact of such trips on consumer utility or
dehumidifier energy use. DOE notes that despite the potential for
nuisance tripping, a wide range of appliances on the market today,
including dehumidifiers, implement variable-frequency drives in their
designs. The inclusion of these variable-frequency drive designs in
units on the market suggests that they do not have a significant impact
on the consumer utility of these products. Therefore, DOE is continuing
to consider ECMs for fan blowers as a technology option for the NOPR
engineering analysis. However, for the reasons discussed above, DOE did
not consider variable-speed compressors as a technology option to
improve compressor efficiency in this NOPR analysis.
b. Washable Air Filters
MIAQ did not support the use of washable air filters and stated
that in a limited study washable filters were changed less frequently
than disposable filters, leading to reduced airflow and reduced
efficiency. (MIAQ, No. 20 at p. 3)
DOE understands that the efficiency impacts due to air filters are
dependent on regular consumer maintenance. As DOE noted in the
technology assessment in chapter 3 of the preliminary TSD, it is
difficult to predict the amount of energy savings that could be
realized with the addition of washable air filters, as it is dependent
on the specific dehumidifier model and use characteristics, and on the
degree to which the consumer takes advantage of this feature. DOE also
noted in the preliminary TSD that most dehumidifiers incorporate an air
filter and that most manufacturers design the air filters to be
removable and washable. Therefore, DOE did not consider washable air
filters as a design option to improve efficiency in the engineering
analysis for the June 2022 Preliminary Analysis. The information that
MIAQ provided regarding the efficiency impacts of washable air filters
further supports DOE's preliminary determination not to include
washable air filters as a design option in the engineering analysis,
and in light of the uncertainty and lack of sufficient data as to any
efficiency benefit associated with them and the prevalence of them in
dehumidifiers already on the market, DOE has tentatively removed from
consideration washable air filters as a technology option in this NOPR.
c. Air-to-Air Heat Exchangers
According to MIAQ, air-to-air heat exchangers add significant cost
and complexity to the design, MPC, and installation of the unit and
typically push the unit into the greater than 8 cubic foot category
where minimum efficiency values are considerably higher. (MIAQ, No. 20
at p. 3)
DOE considers the costs of design options in the engineering
analysis. Although DOE is aware that air-to-air heat exchangers are
implemented in many whole-home dehumidifiers with case volumes greater
than 8 cubic feet, DOE did not implement air-to-air heat exchangers as
a design option to achieve higher efficiency levels in the NOPR
engineering analysis because dehumidifiers with size constraints that
allow air-to-air heat exchangers already implement them and they
require too much case volume increase to implement for other units.
(See chapter 5 of the NOPR TSD for additional details.)
d. Alternative Refrigerants
The Joint Commenters supported DOE's decision to consider R-32
compressors as a design option for dehumidifiers due to their
significant potential to improve efficiencies, and agreed that R-32
will likely be acceptable for use in dehumidifiers by the time amended
standards come into effect. The Joint Commenters noted that in July
2022, the U.S. Environmental Protection Agency (``EPA'') proposed to
list R-32 as acceptable for use in new residential dehumidifiers.
(Joint Commenters, No. 21 at p. 1)
MIAQ requested that DOE consider the impact on efficiency that any
new refrigerant would have on dehumidifiers. Although some refrigerants
may provide efficiency improvements, optimizing the unit's performance
would require time and the assistance of component suppliers. (MIAQ,
No. 20 at p. 3)
DOE is aware that new refrigerant regulations from entities such as
the California Air Resource Board (``CARB'') are prompting an industry-
wide refrigerant changeover. Based on feedback received during the
manufacturer interview process, DOE expects that the process of
redesigning and optimizing dehumidifiers for new refrigerants such as
R-32 will be part of the typical new unit design process, not a result
of any amended standards that DOE may adopt. Additionally, DOE
estimates that the implementation of R-32 in dehumidifiers is unlikely
to result in an efficiency increase due to the refrigerant changeover
alone, although compressors designed for R-32 may be slightly more
efficient than compressors designed for R-410a due to other design
improvements. Therefore, given this industry-wide refrigerant
changeover expected to occur by the compliance date of any new
dehumidifier standards, in this NOPR analysis DOE considered the impact
of compressor improvements on overall dehumidifier efficiency only for
those compressors using R-32, assuming that manufacturers will already
have transitioned to refrigeration systems optimized for the new
refrigerant.
DOE requests comment on the effects of EPA and CARB regulations on
refrigerant choices and on whether changes in refrigerant will affect
manufacturer's ability to achieve the efficiency levels in the NOPR
analysis and the availability of high-efficiency R-32 compressors.
For further discussion of the cumulative regulatory burden, see
section V.B.2.e of this document.
e. Low-Standby-Loss Electronic Controls
According to AHAM, low standby-loss electronic controls save as
little as 1 watt of power and have a minimal impact to overall energy
savings that
[[Page 76523]]
does not warrant the cost of implementing this technology option, and
should therefore have been screened out by DOE. (AHAM, No. 22 at p. 4)
In the engineering analysis, DOE accounts for the cost relative to
the efficiency benefit of all technologies that pass the screening
analysis and are considered, as discussed. See chapter 3 of the NOPR
TSD for discussion of the potential efficiency benefits of low-standby-
loss electronic controls and chapter 5 of the NOPR TSD for further
discussion of the costs of this technology.
f. Multi-Circuited Evaporator and Secondary Condenser Coils
Since publication of the June 2022 Preliminary Analysis, DOE became
aware of at least one whole-home dehumidifier on the market that
implements a novel refrigeration loop design. This patented design
``causes part of the refrigerant within the system to evaporate and
condense twice in one refrigeration cycle, thereby increasing the
compressor capacity over typical systems without adding any additional
power to the compressor.'' \18\ DOE has observed that this technology
has resulted in a unit that is at least 4-percent more efficient than
any other unit available on the market and a significant reduction in
case volume compared to units with similar dehumidification capacities.
Therefore, DOE has included multi-circuited evaporator and secondary
condenser coil refrigerant systems as an additional technology option
for this NOPR. See chapter 3 of the NOPR TSD for additional discussion
of this technology.
---------------------------------------------------------------------------
\18\ U.S. Patent No. 10,845,069.
---------------------------------------------------------------------------
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.
10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
In summary, if DOE determines that a technology, or a combination
of technologies, fails to meet one or more of the listed five criteria,
it will be excluded from further consideration in the engineering
analysis. The reasons for eliminating any technology are discussed in
the following sections.
The subsequent sections include comments from interested parties
pertinent to the screening criteria, DOE's evaluation of each
technology option against the screening analysis criteria, and whether
DOE determined that a technology option should be excluded (``screened
out'') based on the screening criteria.
1. Screened-Out Technologies
In the June 2022 Preliminary Analysis, DOE screened out pre-cooling
air-to-air heat exchangers and heat pipes from the analysis for
portable dehumidifiers with capacities up to and including 50 pints/
day. DOE determined that these dehumidifiers could not accommodate the
significant increases in case size and weight required to implement
these technologies without a significant adverse effect on consumer
utility (screening criterion 3).
AHAM agreed that implementation of pre-cooling air-to-air heat
exchangers is applicable only to high-capacity portable dehumidifiers
in Product Class 3 and requested that DOE recognize that current
dehumidifier casings may not accommodate the increase in components and
product size associated with this technology option. (AHAM, No. 22 at
p. 4)
For the reasons given in the June 2022 Preliminary Analysis, DOE is
maintaining the same approach to air-to-air heat exchangers and heat
pipes in this NOPR analysis. See chapter 4 of the NOPR TSD for further
discussion.
DOE is also screening out multi-circuited evaporator and secondary
condenser coil refrigerant systems, a technology newly considered for
the NOPR per section IV.A.2.f of this document, because it represents a
unique-pathway proprietary technology. See chapter 4 of the NOPR TSD
for further discussion.
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 meet 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:
Table IV.3--Retained Design Options for Dehumidifiers
------------------------------------------------------------------------
-------------------------------------------------------------------------
1. Microchannel heat exchangers.
2. Built-in hygrometer/humidistat.
3. Improved compressor efficiency.
4. Improved condenser and evaporator performance.
5. Improved controls.
6. Improved defrost methods.
7. Improved demand-defrost controls.
8. Improved fan and fan-motor efficiency.
9. Improved flow-control devices.
[[Page 76524]]
10. Low-standby-loss electronic controls.
11. Pre-cooling air-to-air heat exchanger (high-capacity portable and
whole-home dehumidifiers only).
12. Heat pipes (high-capacity portable and whole-home dehumidifiers
only).
13. Improved refrigeration system insulation.
14. Refrigerant-desiccant systems.
15. Alternative refrigerants.
------------------------------------------------------------------------
DOE has initially determined that these technology options are
technologically feasible because they are being used or have previously
been used in commercially available products or working prototypes. DOE
also finds that all of the remaining technology options meet the other
screening criteria (i.e., practicable to manufacture, install, and
service and do not result in adverse impacts on consumer utility,
product availability, health, or safety, 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 dehumidifiers. There
are two elements to consider in the engineering analysis; the selection
of efficiency levels to analyze (i.e., the ``efficiency analysis'') and
the determination of product cost at each efficiency level (i.e., the
``cost analysis''). In determining the performance of higher-efficiency
products, DOE considers technologies and design option combinations not
eliminated by the screening analysis. For each product class, DOE
estimates the baseline cost, as well as the incremental cost for the
product at efficiency levels above the baseline. The output of the
engineering analysis is a set of cost-efficiency ``curves'' that are
used in downstream analyses (i.e., the LCC and PBP analyses and the
NIA).
1. Efficiency Analysis
DOE typically uses one of two approaches to develop energy
efficiency levels for the engineering analysis: (1) relying on observed
efficiency levels in the market (i.e., the efficiency-level approach),
or (2) determining the incremental efficiency improvements associated
with incorporating specific design options to a baseline model (i.e.,
the design-option approach). Using the efficiency-level approach, the
efficiency levels established for the analysis are determined based on
the market distribution of existing products (in other words, based on
the range of efficiencies and efficiency level ``clusters'' that
already exist on the market). Using the design option approach, the
efficiency levels established for the analysis are determined through
detailed engineering calculations and/or computer simulations of the
efficiency improvements from implementing specific design options that
have been identified in the technology assessment. DOE may also rely on
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended
using the design option approach to ``gap fill'' levels (to bridge
large gaps between other identified efficiency levels) and/or to
extrapolate to the max-tech level (particularly in cases where the max-
tech level exceeds the maximum efficiency level currently available on
the market).
In this proposed rulemaking, DOE relied on a combination of these
two methods in developing cost estimates at each efficiency level for
dehumidifiers, structured around the reverse engineering approach. For
each product class, DOE analyzed a few units from different
manufacturers to ensure the analysis was representative of various
designs on the market. The analysis involved reviewing publicly
available cost and performance information, physically disassembling
commercially available products and modeling equipment cost while
removing costs associated with non-efficiency related components or
features. From this information, DOE estimated the 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. See chapter 5 of the NOPR TSD for additional detail
on the dehumidifiers analyzed.
DOE analyzed six efficiency levels (``ELs'') as part of the
engineering analysis for portable dehumidifiers with capacities less
than or equal to 50 pints/day: (1) the current DOE standard (baseline);
(2) an intermediate level above the baseline but below the ENERGY
STAR[supreg] level, representing units that exist on the market above
the baseline but are not ENERGY STAR units (EL 1); (3) the ENERGY STAR
efficiency criterion (EL 2); (4) the level of the most efficient units
available on the market (EL 3); (5) an intermediate level below the
maximum technologically feasible (max-tech) efficiency that represents
the implementation of more efficient compressors and fan motors on the
market without any changes to the unit chassis (EL 4); and (6) the max-
tech efficiency (EL 5).
For portable dehumidifiers with capacities of 50.01 pints/day and
above, the distribution of efficiencies that are available on the
market and the technology options feasible for this product class
required DOE to analyze different efficiency levels, as follows: (1)
the current DOE standard (baseline); (2) an intermediate level above
the baseline but below the ENERGY STAR level, representing units that
exist on the market above the baseline but are not ENERGY STAR units
(EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an
intermediate level below max tech that represents the implementation of
more efficient compressors and fan motors on the market (EL 3); and (5)
the max-tech efficiency (EL 4).
For whole-home dehumidifiers with case volumes of 8 cubic feet or
below, likewise, the distribution of efficiencies that are available on
the market and the technology options feasible for this product class
required DOE to analyze different efficiency levels, as follows: (1)
the current DOE standard (baseline); (2) the ENERGY STAR efficiency
criterion (EL 1); (3) an intermediate level below max tech,
representing the level of the most efficient units available on the
market (EL 2); and (4) the max-tech efficiency (EL 3).
For whole-home dehumidifiers with case volumes larger than 8 cubic
feet, likewise, the distribution of efficiencies that are available on
the market and the technology options feasible for this product class
required DOE to analyze different efficiency levels, as follows: (1)
the current DOE standard (baseline); (2) an intermediate level above
the baseline but below the ENERGY STAR level, representing the level of
the most efficient units available on the market
[[Page 76525]]
(EL 1); (3) the ENERGY STAR efficiency criterion (EL 2); (4) an
intermediate level below max tech that represents the implementation of
more efficient compressors and fan motors on the market and some
increase to heat exchanger size relative to EL 2 (EL 3); and (5) the
max-tech efficiency (EL 4).
a. Baseline Efficiency
For each product/equipment 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/equipment class represents
the characteristics of a product/equipment 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 representative units for teardowns and the NOPR, DOE selected
three baseline units that fell within two of the five dehumidifier
product classes (Product Class 1 and Product Class 2) as reference
points for each analyzed product class, against which DOE measured
changes that would result from amended energy conservation standards to
support the engineering, LCC, and PBP analyses. Baseline units for two
of the other three product classes (Product Class 3 and Product Class
5) were not readily available on the market for analysis. Additionally,
as discussed in chapter 5 of the preliminary TSD, for whole-home
dehumidifiers with case volumes of 8 cubic feet or less, DOE does not
expect that efficiencies and overall designs have changed since the
previous standards rulemaking, given that the whole-home dehumidifier
standards adopted in the June 2016 Final Rule were the baseline level
at the time. For this reason, DOE did not select additional baseline
units in Product Class 4 for teardown as part of the NOPR analysis.
However, DOE found that higher-efficiency models could provide insight
into technologies that were likely to be implemented in baseline units
to improve efficiency. Therefore, for product classes where baseline
units were not available, DOE estimated the MPC of baseline units by
evaluating which design options would need to be removed from the
higher-efficiency unit analyzed in order to reduce its efficiency to
the baseline level. The baseline units in each of the analyzed product
classes represent the basic characteristics of equipment in that class.
MIAQ stated in response to the June 2022 Preliminary Analysis that
the current energy conservation standards for portable dehumidifier
product classes are not appropriate or in the best interest of the
Nation's energy consumption. According to MIAQ, the jump in baseline
efficiency from 1.60 L/kWh at the 25.01-50.00 pints/day capacity up to
2.80 L/kWh for larger-capacity units is too drastic and would force MPC
and manufacturer selling price (``MSP'') to escalate far above that of
smaller dehumidifiers. According to MIAQ, as consumers purchase
sufficient dehumidifier capacity match the latent load of their
dwelling, this could be through a more expensive, higher-efficiency
dehumidifier at an efficiency of 2.80 L/kWh or through multiple less-
expensive and less-efficient dehumidifiers at an efficiency of 1.30 L/
kWh. MIAQ stated that as MPC and MSP on these two types of units are
drastically different, anecdotal evidence indicates many consumers have
two or more dehumidifiers in their basement or crawlspace consuming
twice the power of a larger unit. Therefore, MIAQ requested that DOE
develop a new set of baseline efficiency levels for portable
dehumidifiers that create more parity in the MPCs and baseline
efficiencies for the product sizes. (MIAQ, No. 20 at pp. 3-4)
As noted, DOE analyzes the changes due to potential energy
conservation standards against the baseline for each product class. DOE
determined in the June 2016 Final Rule that the current standards were
technologically feasible and economically justified for each of the
five dehumidifier product classes (81 FR 38338, 38385-38388), and
models exist on the market at or above the current standard level in
each class. Therefore, DOE has evaluated baseline efficiency levels for
this NOPR analysis that correspond to the current energy conservation
standards for dehumidifiers. DOE notes that units with capacities
larger than 50 pints/day have inherent differences in design from those
with smaller capacities related to the different consumer utility they
provide. The larger dehumidifiers in Product Class 3 provide
dehumidification for large spaces, are more robustly constructed, and
are more efficient due to their greater size and capacity. The smaller
dehumidifiers are intended to dehumidify smaller spaces and provide
consumers with an affordable, lighter-weight, and more compact option
to dehumidify a targeted area. The current energy conservation
standards on which the baseline efficiency levels are based reflect
that consumers derive utility from the greater capacity, efficiency,
and robust construction of larger dehumidifiers and that smaller
dehumidifiers offer utility in the form of their smaller size and lower
cost. These differences in utility are borne out in the design
differences observed between these classes of dehumidifiers, with
larger dehumidifiers implementing more durable materials and larger
heat exchangers. These design differences lead to the cost differential
observed by manufacturers and consumers between larger and smaller
dehumidifiers. DOE developed the higher efficiency levels in each
product class based on the units currently on the market, external
efficiency criteria such as ENERGY STAR, and technological feasibility
of design options to improve dehumidifier efficiency. DOE then
evaluated the economic impacts of potential standards at each of these
efficiency levels, including incremental impacts on MPCs and MSPs in
each product class, as part of the NOPR analysis. DOE is not aware of
and lacks sufficient consumer usage data showing that consumers install
multiple smaller dehumidifiers in the same room instead of purchasing
one larger, more efficient dehumidifier as part of an average period of
use, and therefore did not model any product class switching as a
result of evaluated potential standards.
DOE requests comment regarding consumer's dehumidifier usage
patterns and whether consumers typically purchase multiple smaller
dehumidifiers to meet dehumidification requirements as opposed to a
single, higher capacity dehumidifier.
b. Higher Efficiency Levels
As discussed above, DOE modeled several efficiency levels above the
baseline for dehumidifiers in each product class, using a combination
of design options that varied by product class (for detailed discussion
of the design options used to model each efficiency level, see chapter
5 of the NOPR TSD). As part of DOE's analysis, the maximum available
efficiency level is the highest efficiency unit currently available on
the market. DOE also defines a ``max-tech'' efficiency level to
represent the maximum possible efficiency for a given product. At all
of these levels, DOE considered incremental compressor efficiency
improvements as a design option. In the June 2022 Preliminary Analysis,
DOE reviewed compressor manufacturer product catalogues to identify the
maximum technologically feasible R-32 compressor efficiency. However,
based on additional research and input from
[[Page 76526]]
manufacturer interviews, DOE understands that the most efficient
compressors listed in catalogues may not be widely available to all
dehumidifier manufacturers or available at the scale necessary to serve
the dehumidifier market at the anticipated date of compliance of any
new standards. This is especially true for the relatively small
manufacturers that produce dehumidifiers in Product Class 4 and Product
Class 5, given the specialized applications for these products and the
corresponding lower production volumes. To address this concern in the
NOPR analysis, DOE considered incremental compressor efficiency
increases for each product class only up to the highest R-32 single-
speed compressor efficiency observed in the teardown sample in that
class. This change ensures that the higher-efficiency compressors
considered as design options are widely available and technologically
feasible for all dehumidifier manufacturers to implement. As discussed
in chapter 5 of the NOPR TSD, DOE modeled replacing permanent split
capacitor (``PSC'') fan motors with more efficient ECMs, replacing
baseline single-speed compressors with the most efficient single-speed
compressors already available on the market, reducing standby power
using more efficient controls, and increasing the cabinet and heat
exchanger to the largest sizes feasible without impacting consumer
utility to improve efficiency. For all product classes, the max-tech
level identified exceeds any other regulatory or voluntary efficiency
criteria currently in effect.
DOE received the following comments related to the higher
efficiency levels modeled in the preliminary engineering analysis.
AHAM requested that DOE account for additional controls,
specifically variable-frequency drives that are required for ECMs in
the improved fan and fan motor efficiency technology option. According
to AHAM, in addition to the significant cost increase associated with
ECMs being a significant obstacle to widespread adoption in
dehumidifiers, additional controls would only further increase the cost
and require additional space within the product case, potentially
affecting the size and weight of the product. (AHAM, No. 22 at p. 5)
DOE is aware that ECMs require specialized control boards and
additional space within dehumidifier chassis to locate them and
considered this issue as part of the engineering analysis. DOE found
that there is a variable-speed dehumidifier on the market that
implements a variable-speed compressor, and this model has the same
chassis size as another comparable dehumidifier from the same
manufacturer that does not implement the variable-speed components and
functionality. DOE expects that a variable-speed dehumidifier would
have similar control requirements to one that implements ECMs.
Therefore, DOE tentatively finds that the implementation of ECMs for
fan blowers in dehumidifiers does not inherently necessitate a change
in chassis size.
According to AHAM and a survey of its members, employing the
technology options that DOE suggested in the preliminary TSD to meet
the analyzed efficiency levels for Product Classes 1, 2, and 3 would
require significant increases in both model weight and model
dimensions. For Product Classes 1 and 2, AHAM stated that an increase
of up to 30 percent in model weight and up to 59 percent in model
dimensions is required to meet EL 3, and an increase of up to 38
percent in model weight and up to 68 percent in model dimensions is
required to meet EL 4. For Product Class 3, AHAM stated that EL 2 would
require a product redesign and likely an increase in both weight and
dimension by unknown quantities. AHAM also stated that increased
product size and weight associated with implementing the technology
options specified in the preliminary TSD will affect the consumer
utility of dehumidifiers, specifically regarding portability. According
to AHAM, consumers must move or lift dehumidifiers when purchased and
when used in different spaces in their homes. Additionally,
manufacturers design models to meet a 51-pound weight threshold for a
one-person lift, a design parameter that not only reflects consumer
utility but also is a requirement under worker safety standards, parcel
delivery service fee structures, and other distribution requirements
that AHAM stated DOE should consider for all product classes. AHAM
urged DOE to assess impacts on product weight associated with increased
heat exchanger area and added tube rows in the improved condenser and
evaporator performance technology option. According to AHAM, an
increase in weight of the coil section could severely impact consumer
use in existing dehumidifier designs that require lifting the coil
section in order to access the water collection bucket. Additionally,
AHAM stated that its members specifically identified weight increases
associated with this technology option in meeting EL 3 for all product
classes. AHAM requested that DOE assess all potential cost increases
associated with the technology options that increase product size and/
or weight and noted its recommendation for a standard that does not go
beyond EL 2 for Product Class 1, a gap-fill analysis for Product Class
2, and no change in the standard for Product Class 3 to avoid these
negative impacts. (AHAM, No. 22 at pp. 2-5)
In the June 2022 Preliminary Analysis, DOE modeled the efficiency
levels below max-tech mentioned by AHAM by implementing more efficient
compressors without any additional design options. In DOE's assessment,
these higher-efficiency compressors would result in a slight weight
increase but would require no changes to the dehumidifier's chassis
size or any substantive change in overall weight. Additionally, based
on teardowns of other space conditioning products, DOE does not expect
that ECMs are heavier than the PSC motors currently used in
dehumidifiers. However, as AHAM suggested, DOE does expect weight
changes at the max-tech level associated with increasing the heat
exchanger size. DOE accounted for the effect of these weight changes
and changes to chassis size in its analysis of shipping costs, and
limited the maximum increase in heat exchanger size for portable
dehumidifiers in Product Classes 1 and 2 to dimensions already observed
on the market in these product classes to ensure the units analyzed
retained their consumer utility as smaller, portable units. Because
product weight changes due to heat exchanger size increases are
correlated with product dimensions, DOE does not expect that these
weight increases will result in units that are significantly heavier
than those currently on the market, such that any weight increases will
not adversely affect consumer utility. For Product Class 3, DOE's
market analysis suggests that most models in Product Class 3, even at
baseline efficiency, typically weigh roughly between 55 and 70 pounds,
already surpassing the 51-pound weight limit for a single-person lift
mentioned by AHAM. Therefore, Product Class 3 units already require two
people to lift and install, a requirement that would not be altered by
minor increases in chassis size and thus weight. However, a
significantly larger chassis size might become more unwieldy for two
people to lift. Accordingly, DOE limited the heat exchanger dimension
increases considered for Product Class 3 to 5 percent greater than
those observed in product teardowns in order to preclude any adverse
effects on consumer utility.
[[Page 76527]]
DOE further notes that portable dehumidifiers are typically equipped
with wheels that allow consumers to move them from room to room within
the home. While DOE is aware of a dehumidifier design that requires
consumers to lift the coil section to access the water bucket, the
design is not efficiency-related and is proprietary, and therefore DOE
did not consider this design in its analysis. In sum, DOE expects that
the NOPR analysis and any subsequent amended energy conservation
standards would not impact the design, weight, or dimensions of any
dehumidifier significantly, as the required chassis dimensions are
within the scope of those previously observed in dehumidifiers. For
these reasons, in the NOPR analysis DOE continued to consider design
options that increase the weight of dehumidifiers, limited to the
extent discussed by restrictions on the allowable chassis size
increases.
DOE requests comment on whether limiting needed chassis size
increases is sufficient to preserve consumer utility at the max-tech
level.
AHAM stated that while improved compressor efficiency can achieve
higher overall efficiency, changes in compressor technology may require
product redesigns in the form of additional safety components,
particularly with the transition to R-32 refrigerant. According to
AHAM, these additional safety components would make it more difficult
to implement other technology options that will require room within the
product casing. (AHAM, No. 22 at p. 5)
DOE is aware that the EPA's Significant New Alternatives Policy
(``SNAP'') regulations now allow the use of R-32 in new dehumidifiers,
provided that they comply with the relevant industry safety standard
\19\ to ensure new dehumidifiers are designed with the flammability of
R-32 in mind. See 88 FR 26382. However, DOE does not have information
regarding the sorts of design changes necessary to comply with this
standard. See section V.B.2.e of this document for discussion of how
DOE accounts for refrigerant transition costs in its cumulative
regulatory burden analysis.
---------------------------------------------------------------------------
\19\ 3rd edition, dated November 1, 2019, of Underwriters
Laboratories (``UL'') Standard 60335-2-40, ``Household and Similar
Electrical Appliances--Safety--Part 2-40: Particular Requirements
for Electrical Heat Pumps, Air Conditioners and Dehumidifiers''.
---------------------------------------------------------------------------
ASAP and the Joint Commenters encouraged DOE to evaluate at least
one intermediate efficiency level between EL 3 and EL 4 for Product
Classes 1 and 2 to address the large gap in efficiencies due to the
introduction of multiple design options at EL 4. The Joint Commenters
added that DOE could evaluate an intermediate level based on the
highest-efficiency compressors, or one reflecting all design options
except for increases in heat exchanger size. According to the Joint
Commenters, DOE may refer to the April 2022 NOPR for room air
conditioners in which the most efficient single-speed compressors were
associated with an increase in efficiency of 19 to 25 percent relative
to baseline units and an incremental cost of less than $15. (ASAP,
Public Meeting Transcript, No. 19 at pp. 19-20; Joint Commenters, No.
21 at p. 2)
In the June 2022 Preliminary Analysis for Product Classes 1 and 2,
DOE analyzed two efficiency levels above the ENERGY STAR level: the
maximum available efficiency on the market and the max-tech efficiency.
For Product Class 3 and for whole-home dehumidifiers, DOE analyzed the
max-tech efficiency level above the ENERGY STAR level and no other
intermediate levels, because there were no units on the market above
the ENERGY STAR efficiency. While conducting the analysis for this
NOPR, DOE noted the potential to add an efficiency level for all
product classes beyond the maximum available efficiency but below max
tech by using more efficient single-speed compressors and implementing
ECM technology. DOE used these design options to model a new
intermediate efficiency level, EL 4, for all product classes. The new
EL 4 level improves the efficiency by 35 to 63 percent relative to
baseline units with incremental costs between $83 and $119, depending
on product class. See chapter 5 of the NOPR TSD for additional
discussion of the new efficiency levels and incremental costs.
2. Cost Analysis
The cost analysis portion of the engineering analysis is conducted
using one or a combination of cost approaches. The selection of cost
approach depends on a suite of factors, including the availability and
reliability of public information, characteristics of the regulated
product, and the availability and timeliness of purchasing the product
on the market. The cost approaches are summarized as follows:
[squ] 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.
[squ] Catalog teardowns: In lieu of physically deconstructing a
product, DOE identifies each component using parts diagrams (e.g.,
available from manufacturer websites or appliance repair websites) to
develop the bill of materials for the product.
[squ] Price surveys: If neither a physical nor catalog teardown is
feasible (e.g., for tightly integrated products such as fluorescent
lamps, which are infeasible to disassemble and for which parts diagrams
are unavailable) or is cost-prohibitive and otherwise impractical
(e.g., for large commercial boilers), DOE conducts price surveys using
publicly available pricing data published on major online retailer
websites and/or by soliciting prices from distributors and other
commercial channels.
In the present case, DOE conducted the analysis using physical
teardowns. The resulting bill of materials provides the basis for the
MPC estimates.
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 corporate annual reports
filed by publicly traded manufacturers primarily engaged in appliance
manufacturing and whose combined product range includes dehumidifiers.
See section IV.J.2.d of this document or chapter 12 of the NOPR TSD for
additional information on the manufacturer markup.
In response to June 2022 Preliminary Analysis, MIAQ stated that
although the manufacturer markup of 1.45 used in the preliminary
analysis was historically accurate, it now overstates the current
market situation which is decreasing as costs continue to increase and
are unable to be passed onto the consumer. MIAQ also stated it would be
willing to share information on their current markup for dehumidifiers.
(MIAQ, No. 20 at p. 5)
For this NOPR analysis, DOE adjusted the estimated industry average
manufacturer markup from the 1.45 estimate published in the June 2022
Preliminary Analysis. DOE used market share weights to adjust the
manufacturer markup based on confidential feedback provided in
manufacturer interviews and a review of recent corporate annual reports
by public companies engaged in manufacturing dehumidifiers. DOE
estimates that the industry average manufacturer markup is 1.40 for all
product classes. See section IV.J.2.d of this document and chapter 12
of the NOPR TSD for additional information on the manufacturer markup.
[[Page 76528]]
AHAM stated that implementation of technology options that both
increase product efficiency and product size and/or weight runs counter
to manufacturer efforts to decrease product size and maximize shipping
container space in order to deliver products to consumers in a timely
manner while minimizing added costs due to ongoing supply chain and
logistics issues. AHAM requested that DOE avoid design options that
require increases in size and/or weight for these reasons and requested
that DOE account for these added costs in its analysis. (AHAM, No. 22
at p. 3)
In this NOPR, DOE's analysis includes the impact of changes in
dimensions on overseas container and domestic shipping rates. For
efficiency levels below max-tech, DOE does not find increases in
shipping costs, because chassis size and weight of the units are not
expected to change from the baseline at these efficiency levels. At
max-tech, there are increases in shipping costs due to the expected
increase in chassis size. Additional information about shipping costs
is available in section IV.F.1 of this document and chapter 8 of the
NOPR TSD.
3. Cost-Efficiency Results
The results of the engineering analysis are presented as cost-
efficiency data for each of the efficiency levels for each of the
product classes. DOE developed estimates of MPCs for each unit in the
teardown sample, and also performed additional modeling for each of the
teardown samples, to develop a comprehensive set of MPCs at each
efficiency level. DOE then consolidated the resulting MPCs for each of
DOE's teardown units and modeled units using a weighted average for
product classes in which DOE analyzed units from multiple
manufacturers. DOE's weighting factors were based on a market
penetration analysis for each of the manufacturers within each product
class. The resulting weighted-average incremental MPCs (i.e., the
additional costs manufacturers would likely incur by producing
dehumidifiers at each efficiency level compared to the baseline) are
provided in Tables 5.5.12 and 5.5.13 in chapter 5 of the NOPR TSD. See
chapter 5 of the NOPR TSD for additional detail on the engineering
analysis.
DOE requests comment on the incremental MPCs from the NOPR
engineering analysis.
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.
DOE developed baseline and incremental markups for each actor in
the distribution chain. Baseline markups are applied to the price of
products with baseline efficiency, while incremental markups are
applied to the 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.\20\
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\20\ Because the projected prices of standards-compliant
products are 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 in the short term, 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.
---------------------------------------------------------------------------
For portable dehumidifiers with capacities less than or equal to
50.0 pints/day, DOE assumed all sales were through the retail channel.
DOE developed baseline and incremental retail markups using data from
the 2017 Annual Retail Trade Survey for the ``electronics and appliance
stores'' sector.\21\ The whole-home dehumidifier distribution channel
reflects two additional markups to include wholesalers and contractors
used in the purchase of the larger dehumidifiers. DOE developed
wholesaler and contractor markups using U.S. Census Bureau data from
the 2017 Annual Wholesale Trade Report \22\ and the 2017 U.S. Economic
Census,\23\ respectively. For portable dehumidifiers with capacities
greater than 50.00 pints/day, DOE assumed 60 percent of shipments were
through the retail channel, and 40 percent of shipments were through
the whole-home dehumidifier distribution channel based on feedback from
manufacturer interviews.
---------------------------------------------------------------------------
\21\ US Census Bureau, Annual Retail Trade Survey. 2017.
www.census.gov/programs-surveys/arts.html.
\22\ US Census Bureau, Annual Retail Trade Survey. 2017.
www.census.gov/programs-surveys/arts.html.
\23\ US Census Bureau, 2017 Economic Census. www.census.gov/programs-surveys/economic-census/year/2017/economic-census-2017/data.html.
---------------------------------------------------------------------------
Chapter 6 of the NOPR TSD provides details on DOE's development of
markups for dehumidifiers.
E. Energy Use Analysis
The purpose of the energy use analysis is to determine the annual
energy consumption of dehumidifiers at different efficiencies in
representative U.S. single-family homes and multi-family residences,
and to assess the energy savings potential of increased dehumidifier
efficiency. The energy use analysis estimates the range of energy use
of dehumidifiers in the field (i.e., as they are actually used by
consumers). The energy use analysis provides the basis for other
analyses DOE performed, particularly assessments of the energy savings
and the savings in consumer operating costs that could result from
adoption of amended or new standards.
DOE used data from the EIA's 2020 Residential Energy Consumption
Survey (``RECS 2020'') \24\ to determine dehumidifier ownership and
usage across the United States. RECS 2020 represents the largest
nationally available dataset of installed residential appliance stock
of dehumidifiers in households (either portable or whole home) as well
as the number of portable units in each household. RECS also provides
dehumidifier usage information in the form of broad categories of
annual usage frequency as reported by the households. DOE estimated
monthly vapor density data for each household that reported owning a
portable dehumidifier by using corresponding outdoor temperature and
humidity information for the year 2020 provided by the National Oceanic
and Atmospheric Administration (NOAA).\25\ DOE used this vapor density
data in conjunction with the annual usage information to estimate the
respective annual operating hours of portable dehumidifiers for each
consumer sample as applicable.
---------------------------------------------------------------------------
\24\ U.S. Department of Energy-Energy Information
Administration. Residential Energy Consumption Survey. 2020.
www.eia.gov/consumption/residential/data/2020/.
\25\ Available at https://www.ncdc.noaa.gov/cdo-web/datatools/lcd.
---------------------------------------------------------------------------
DOE determined that portable dehumidifiers operated in active
(dehumidification) mode, fan-only mode, and standby mode while whole-
home dehumidifiers operated in active and standby modes only. To
estimate the annual dehumidifier energy consumption, DOE first
calculated the number of operating hours in each mode. For portable
dehumidifiers, DOE used available dehumidifier field
[[Page 76529]]
studies 26 27 that provided a relationship between vapor
density and daily operating hours. DOE estimated that portable
dehumidifiers operated in active mode for an average of 1,337 hours
annually. For whole-home dehumidifiers, based on data from the field
study, DOE estimated that, on average, 28 percent of the daily
operating hours were spent in active or dehumidification mode and the
remaining in standby mode. DOE paired these data with estimates of the
number of months that dehumidifiers may be used based on usage behavior
as reported in RECS 2020. DOE estimated that consumers leave the
dehumidifier to cycle on and off for the entire month or months of the
dehumidification season.
---------------------------------------------------------------------------
\26\ Willem, H., T. Burke, C. Dunham, B. Beraki, J. Lutz, M.
Melody, M. Nagaraju, C. Ni, S. Pratt, S. Price, and V. Tavares.
Using Field-Metered Data to Quantify Annual Energy Use of
Residential Portable Unit Dehumidifiers. 2013. Report No. LBNL-
6469e.
\27\ Burke, T. A., H. Willem, C. C. Ni, H. Stratton, C. Dunham
Whitehead, and R. Johnson. Whole-Home Dehumidifiers: Field-
Monitoring Study. 2014. Report No. LBNL-1003950E.
---------------------------------------------------------------------------
MIAQ stated that although dehumidifiers use the same vapor
compression refrigeration cycle as air conditioners, their operation is
much different and the latent load or run time is affected by many
variables. According to MIAQ, consumers typically do not manually
change the mode of operation or settings once a dehumidifier is
installed. (MIAQ, No. 20 at p. 4)
DOE agrees that there are differences in operation between
dehumidifiers and air conditioners. DOE's energy use analysis is based
on dehumidifier field studies that capture real world dehumidifier
operation in a variety of different operating conditions. The studies
used by DOE support MIAQ's assertion that consumers do not manually
change the mode of operation or settings once the dehumidifier is
installed.
MIAQ stated that more than 10 percent of households have more than
one dehumidifier, which indicates that consumers understand they can
purchase two smaller capacity units rather than one large capacity
unit. (MIAQ, No. 20 at p. 4)
Using RECS 2020, DOE estimates that 10.6 percent of portable
dehumidifier-owning households own multiple units, similar to the
estimate provided by MIAQ. DOE adjusted the consumer sample to account
for households with multiple units using the household weights derived
by RECS 2020 and the reported number of portable dehumidifiers in each
household.
Chapter 7 of the NOPR TSD provides details on DOE's energy use
analysis for dehumidifiers.
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
dehumidifiers. 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:
[squ] The LCC is the total consumer expense of an appliance or
product over the life of that product, consisting of total installed
cost (manufacturer selling price, distribution chain markups, sales
tax, and installation costs) plus operating costs (expenses for energy
use, maintenance, and repair). To compute the operating costs, DOE
discounts future operating costs to the time of purchase and sums them
over the lifetime of the product.
[squ] 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 dehumidifiers in the absence of
new or amended energy conservation standards. In contrast, the PBP for
a given efficiency level is measured relative to the baseline product.
For each considered efficiency level in each product class, DOE
calculated the LCC and PBP for a nationally representative set of U.S.
households. As stated previously, DOE developed household samples from
RECS 2020. For each sample household, DOE determined the energy
consumption for the dehumidifiers 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 dehumidifiers.
Inputs to the calculation of total installed cost include the cost
of the product--which includes MPCs, manufacturer markups, retailer and
distributor markups, and sales taxes--and installation costs. Inputs to
the calculation of operating expenses include annual energy
consumption, energy prices and price projections, repair and
maintenance costs, product lifetimes, and discount rates. DOE created
distributions of values for product lifetime, discount rates, and sales
taxes, with probabilities attached to each value, to account for their
uncertainty and variability.
The computer model DOE uses to calculate the LCC 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 dehumidifier user samples. The model
calculated the LCC for products at each efficiency level for 10,000
households per simulation run. The analytical results include a
distribution of 10,000 data points showing the range of LCC savings for
a given efficiency level relative to the no-new-standards case
efficiency distribution. In performing an iteration of the Monte Carlo
simulation for a given consumer, product efficiency is chosen based on
its probability. If the chosen product efficiency is greater than or
equal to the efficiency of the standard level under consideration, the
LCC calculation reveals that a consumer is not impacted by the standard
level. By accounting for consumers who already purchase more efficient
products, DOE avoids overstating the potential benefits from increasing
product efficiency.
DOE calculated the LCC and PBP for consumers of dehumidifiers as if
each were to purchase a new product in the expected year of required
compliance with new or amended standards. New and amended standards
would apply to dehumidifiers manufactured 3 years after the date on
which any new or amended standard is published. (42 U.S.C. 6295
(m)(4)(A)) At this time, DOE estimates publication of a final rule in
2025. Therefore, for purposes of its analysis, DOE used 2028 as the
first year of compliance with any amended standards for dehumidifiers.
Table IV.3 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
[[Page 76530]]
chapter 8 of the NOPR TSD and its appendices.
Table IV.4--Summary of Inputs and Methods for the LCC Analysis *
------------------------------------------------------------------------
Inputs Source/method
------------------------------------------------------------------------
Product Costs................ Derived by multiplying MPCs by
manufacturer, retailer, and contractor
markups and sales tax, as appropriate.
Used historical data to derive a price
scaling index to project product costs.
Applied price trend to electronic
controls used on products with variable-
speed blower motors.
Installation Costs........... Baseline installation cost determined
with data from RSMeans. Assumed no
change with efficiency level.
Annual Energy Use............ The total annual energy use derived from
power demand of each mode multiplied by
the hours per year in that mode. Average
number of hours based on field data.
Variability: Based on RECS 2020.
Energy Prices................ Electricity: Based on Edison Electric
Institute data for 2022.
Variability: Regional energy prices
determined for each census division.
Energy Price Trends.......... Based on AEO2023 electricity price
projections from 2022-2050; constant
value based on average of price for 2046-
2050 thereafter.
Repair and Maintenance Costs. Assumed no change with efficiency level.
Product Lifetime............. Weibull probability distribution based on
averages provided from manufacturer
interviews: 10 years for portable
dehumidifiers and 12 years for whole-
home dehumidifiers.
Discount Rates............... Approach involves identifying all
possible debt or asset classes that
might be used to purchase the considered
appliances or that might be affected
indirectly. Primary data source was the
Federal Reserve Board's Survey of
Consumer Finances.
Compliance Date.............. 2028.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
mentioned in this table are provided in the following sections and in
chapter 8 of the NOPR TSD.
1. Product Cost
To calculate consumer product costs, DOE multiplied the MPCs
developed in the engineering analysis by the markups described
previously (along with sales taxes). DOE used different markups for
baseline products and higher-efficiency products, because DOE applies
an incremental markup to the increase in MSP associated with higher-
efficiency products.
Economic literature and historical data suggest that the real costs
of many products may trend downward over time according to ``learning''
or ``experience'' curves. Experience curve analysis implicitly includes
factors such as efficiencies in labor, capital investment, automation,
materials prices, distribution, and economies of scale at an industry-
wide level. DOE developed two types of experience curves to project the
future dehumidifier prices. One is an overall price trend applied to
the cost of dehumidifier units excluding the cost of electronic
controls used for variable-speed blower fans, and the other is a
separate learning rate associated with the electronic controls used in
units with variable-speed blower fans. To derive the first type of
experience curve for portable dehumidifiers, DOE used historical
Producer Price Index (``PPI'') data between 1983 and 2014 for ``small
electric household appliances, except fans'' and data from the Bureau
of Labor Statistics (``BLS'') \28\ between 2014 and 2022 for ``small
electric household appliances manufacturing'' to construct a combined
price index that is most representative of portable dehumidifiers.
Inflation-adjusted price indices were calculated by dividing the PPI
series by the implicit gross domestic product (``GDP'') price deflator
for the same years. DOE assembled a time series of annual shipments of
portable dehumidifiers from AHAM and Appliance Magazine.\29\ For
efficiency levels that include variable-speed blowers, DOE applied a
different price trend to the controls portion of the variable-speed
blowers that contributes to the price increments moving from single-
speed blower to variable-speed blower. DOE used PPI data between 1967
and 2022 on ``semiconductors and related device manufacturing'' to
estimate the historic price trend of electronic components in the
controls. The regression performed as an exponential trend line fit
results in an R-square of 0.99, with an annual price decline rate of
6.3 percent. DOE applied the same learning parameters for whole-home
dehumidifiers. See chapter 8 of the NOPR TSD for further details on
this topic.
---------------------------------------------------------------------------
\28\ Product series IDs: PCU33521033521014 and PCU335210335210.
More information at www.bls.gov/ppi/.
\29\ Appliance Magazine. Appliance Historical Statistical
Review: 1954-2012. 2014. UBM Canon.
---------------------------------------------------------------------------
DOE included the cost to internationally ship and domestically
transport dehumidifier units to the United States. DOE calculated
shipping costs for the baseline and for higher efficiency levels that
have larger product dimensions that increase shipping costs.
2. Installation Cost
Installation cost includes labor, overhead, and any miscellaneous
materials and parts needed to install the product. In the June 2022
Preliminary Analysis, DOE assumed that there were no installation costs
for portable dehumidifiers given that consumers were directed by
manufacturer instructions to simply plug them in to a wall outlet for
operation. For whole-home dehumidifiers, DOE used data from RSMeans'
2022 Residential Cost Data to estimate installation costs for baseline
and more efficient units.
For this NOPR, DOE assumed that whole-home dehumidifier
installation costs do not increase with efficiency based on feedback
from manufacturer interviews. DOE used the baseline installation cost
for all efficiency levels for whole-home dehumidifiers. DOE maintained
the assumption of no installation costs for portable dehumidifiers.
DOE seeks available data on installation costs for baseline and
more efficient units.
3. Annual Energy Consumption
For each sampled household, DOE determined the energy consumption
for dehumidifiers at different efficiency levels using the approach
described
[[Page 76531]]
previously in section IV.E of this document.
4. Energy Prices
Because marginal electricity price more accurately captures the
incremental savings associated with a change in energy use from higher
efficiency, it provides a better representation of incremental change
in consumer costs than average electricity prices. Therefore, DOE
applied average electricity prices for the energy use of the product
purchased in the no-new-standards case, and marginal electricity prices
for the incremental change in energy use associated with the other
efficiency levels considered.
DOE derived electricity prices in 2022 using data from Edison
Electric Institute (``EEI'') Typical Bills and Average Rates reports.
Based upon comprehensive, industry-wide surveys, this semi-annual
report presents typical monthly electric bills and average kilowatt-
hour costs to the customer as charged by investor-owned utilities. For
the residential sector, DOE calculated electricity prices using the
methodology described in Coughlin and Beraki (2018).\30\ 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.
---------------------------------------------------------------------------
\30\ Coughlin, K. and B. Beraki. 2018. Residential Electricity
Prices: A Review of Data Sources and Estimation Methods. Lawrence
Berkeley National Laboratory. Berkeley, CA. Report No. LBNL-2001169.
ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------
To estimate energy prices in future years, DOE multiplied the 2022
energy prices by the projection of annual average price changes for
each of the nine census divisions from the Reference case in AEO2023,
which has an end year of 2050.\31\ To estimate energy prices after
2050, DOE assumed a constant 2050 value for all years.
---------------------------------------------------------------------------
\31\ EIA. Annual Energy Outlook 2023. Washington, DC. Available
at www.eia.gov/forecasts/aeo/ (accessed August 21, 2023).
---------------------------------------------------------------------------
5. Maintenance and Repair Costs
Repair costs are associated with repairing or replacing product
components that have failed in an appliance; maintenance costs are
associated with maintaining the operation of the product. Typically,
small incremental increases in product efficiency produce no, or only
minor, changes in repair and maintenance costs compared to baseline
efficiency products.
In the June 2022 Preliminary Analysis, DOE assumed that maintenance
and repair costs would not vary by efficiency level and did not include
them in the LCC analysis.
MIAQ stated that, in general, more efficient dehumidifiers are
typically made with more complex components which potentially increases
the failure probability and the skill level of the technician required
to conduct any repairs. (MIAQ, No. 20 at p. 5)
Feedback from manufacturer interviews (see section IV.J.3 of this
document) indicated that portable dehumidifiers do not require
maintenance costs that would change with efficiency and whole-home
dehumidifier consumers are more likely to replace rather than repair
their units. Based on this feedback, DOE assumed that portable
dehumidifier consumers are also more likely to replace a unit rather
than repair it, similar to whole-home units. For this NOPR analysis,
DOE did not include maintenance or repair costs for portable or whole-
home dehumidifiers. DOE assumes that filter change frequency and cost
would not change with efficiency for each product class. DOE notes that
higher failure rates for units with more complex technology could
potentially indicate a different lifetime for those units. However, DOE
is unaware of any data indicating differences in failure rates based on
the components used in more efficient dehumidifiers.
DOE seeks comment on the assumption that dehumidifier consumers are
most likely to replace a broken unit rather than repair it. DOE also
seeks available data on the filter change and repair frequency and
costs.
6. Product Lifetime
In the June 2022 Preliminary Analysis, DOE assumed a lifetime
distribution with an average age of 11 years for portable
dehumidifiers, based on the June 2016 Final Rule. 81 FR 38338, 38359.
In the absence of data specific to whole-home dehumidifiers, DOE
assumed that whole-home dehumidifiers would have a lifetime
distribution similar to residential packaged central air conditioners
that operate in humid climates. For whole-home dehumidifiers, DOE used
the lifetime distribution with an average lifetime of 18 years from the
Residential Central Air and Heat Pumps Direct Final Rule, published on
January 6, 2017. 82 FR 1786.
MIAQ stated that since dehumidifiers operate under different
conditions than air conditioning equipment, dehumidifiers may have a
shorter average lifetime due to increased freeze/thaw cycling,
corrosion from increased water saturation time, and component failure
from extreme intake air temperatures. MIAQ suggested a shorter 8- to
12-year lifetime as more applicable for dehumidifiers due to these
different conditions. (MIAQ, No. 20 at p. 2)
For this NOPR analysis, DOE has included the estimates from MIAQ
and other feedback from manufacturers in its lifetime distributions.
For portable dehumidifiers, DOE incorporated additional average
lifetime estimates from manufacturers indicating an average lifetime of
10 years. A previous estimate of an average lifetime of 12 years from
the Northeast Energy Star Lighting and Appliance is no longer available
online and thus not included in the lifetime estimates. For whole-home
units, as described by MIAQ, dehumidifiers are subject to different
operating conditions relative to other air conditioning equipment that
could lead to a different average lifetime. For whole-home
dehumidifiers, DOE used an average value of 12 years whole-home
dehumidifiers based on MIAQ's comments.
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
dehumidifiers 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.\32\ The LCC analysis estimates net present value over the
lifetime of the product, so the appropriate discount rate will reflect
the general opportunity cost of household funds, taking this time scale
into account. Given the long time horizon modeled in the LCC analysis,
the application of a marginal interest rate associated with an initial
source of funds is inaccurate. Regardless of the method of purchase,
consumers are expected to continue to rebalance their debt and asset
holdings over the LCC analysis period, based on the restrictions
consumers face in their debt payment requirements and the relative size
of the interest rates available on debts and assets. DOE estimates the
[[Page 76532]]
aggregate impact of this rebalancing using the historical distribution
of debts and assets.
---------------------------------------------------------------------------
\32\ 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; and 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
\33\ (``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.
---------------------------------------------------------------------------
\33\ U.S. Board of Governors of the Federal Reserve System.
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010,
2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed February 22, 2023).
---------------------------------------------------------------------------
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).
In the June 2022 Preliminary Analysis, DOE used shipments-weighted
efficiency data submitted by AHAM to estimate the efficiency
distribution for portable dehumidifiers. DOE used these data in
conjunction with the model counts from the Compliance Certification
Database (``CCD'') database to assign market share to efficiency levels
defined in the June 2022 Preliminary Analysis. DOE assumed an annual
efficiency improvement of 0.25 percent to develop the efficiency
distribution in the first year of compliance.
AHAM stated that model counts based on the CCD database are not an
accurate proxy to estimate the efficiency distribution for portable
dehumidifiers. AHAM suggested DOE use shipment-weighted data gathered
from AHAM members. AHAM also noted that data from AHAM members
indicated that 100 percent of shipments for Product Class 3 are at the
baseline efficiency level and the one model in CCD meeting EL 2 is a
whole-home dehumidifier. (AHAM, No. 22 at p. 7)
DOE thanks AHAM for providing shipments-weighted distributions and
has included the data for establishing the efficiency distribution of
portable dehumidifiers in 2022. DOE notes in response to AHAM's note on
current market efficiency distribution that the no-new-standards case
efficiency distribution used in the LCC is the projected efficiency
distribution in the compliance year (2028) and includes the impact of
market efficiency trends. For dehumidifiers, the efficiency trend
employed by DOE is based on historical market trends towards more
efficient products in response to ENERGY STAR criterion updates. The
current ENERGY STAR specification 5.0 criterion were adopted in 2019.
As indicated by ENERGY STAR shipments data, 94 percent of the
dehumidifier market met ENERGY STAR levels in 2021, compared to 88
percent in 2020 and 80 percent in 2019. On October 10, 2023, EPA
released the final recognition criteria for ENERGY STAR Most Efficient
2024, which meet or exceed the proposed standards in all product
classes.\34\ The expected publication of ENERGY STAR specification 6.0
for dehumidifiers in 2024 will likely continue to shift the
dehumidifier market toward more efficient products in the absence of a
standard. To account for this observed historical trend towards a
higher average market efficiency in the absence of a new standard, DOE
included an annual improvement of 0.25 percent in the average shipment-
weighted IEF, based on trends observed for room air conditioners \35\
and also used in the June 2016 Final Rule for dehumidifiers. For whole-
home dehumidifiers, in the absence of shipments-weighted data, DOE has
maintained the approach of using model counts from the CCD database for
the estimation of efficiency distributions and included an annual
improvement of 0.25 percent in average shipment-weighted IEF for the
no-new-standards case.
---------------------------------------------------------------------------
\34\ Available at https://www.energystar.gov/sites/default/files/asset/document/Dehumidifiers%20ENERGY%20STAR%20Most%20Efficient%202024%20Final%20Criteria.pdf.
\35\ Ganeshalingam, M., Ni, C., and Yang, H-C. 2021. A
Retrospective Analysis of the 2011 Direct Final Rule for Room Air
Conditioners. Lawrence Berkeley National Laboratory. LBNL-2001413.
---------------------------------------------------------------------------
DOE seeks data and comment on its efficiency distribution estimate
and the assumption of an annual efficiency improvement of 0.25 percent
and the expected market respond to updated ENERGY STAR 6.0
specifications.
The estimated market shares for the no-new-standards case for
dehumidifiers in 2028 are shown in Tables IV.4 and IV.5. See chapter 8
of the NOPR TSD for further information on the derivation of the
efficiency distributions.
Table IV.5--Market Share of Each Efficiency Level for Portable Dehumidifiers for the No-New-Standards Case in 2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class <=25.00 pints/day 25.01-50.00 pints/day >=50.01 pints/day
--------------------------------------------------------------------------------------------------------------------------------------------------------
Product class market share 19.5% 77.9% 1.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Integrated Integrated Integrated
EL energy factor Market share energy factor Market share energy factor Market share
(L/kWh) (%) (L/kWh) (%) (L/kWh) (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0....................................................... 1.30 0 1.60 0 2.80 86
1....................................................... 1.40 25 1.70 0 3.10 14
2....................................................... 1.57 66 1.80 87 3.30 0
3....................................................... 1.70 9 2.01 13 3.51 0
4....................................................... 1.94 0 2.07 0 3.67 0
5....................................................... 2.32 0 2.38 0 .............. ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 76533]]
Table IV.6--Market Share of Each Efficiency Level for Whole-Home Dehumidifiers for the No-New-Standards Case in
2028
----------------------------------------------------------------------------------------------------------------
Product class <=8.0 cu ft case volume >8.0 cu ft case volume
----------------------------------------------------------------------------------------------------------------
Product class market share 1.2% 0.3%
----------------------------------------------------------------------------------------------------------------
Integrated Integrated
EL energy factor Market share energy factor Market share
(L/kWh) (%) (L/kWh) (%)
----------------------------------------------------------------------------------------------------------------
0............................................... 1.77 8 2.41 54
1............................................... 2.09 14 2.70 46
2............................................... 2.22 74 3.30 0
3............................................... 2.39 4 3.81 0
4............................................... .............. .............. 4.17 0
----------------------------------------------------------------------------------------------------------------
The LCC Monte Carlo simulations draw from the efficiency
distributions and randomly assign an efficiency to the dehumidifiers
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.
9. Payback Period Analysis
The payback period is the amount of time (expressed in years) it
takes the consumer to recover the additional installed cost of more
efficient products, compared to baseline products, through energy cost
savings. Payback periods that exceed the life of the product mean that
the increased total installed cost is not recovered in reduced
operating expenses.
The inputs to the PBP calculation for each efficiency level are the
change in total installed cost of the product and the change in the
first-year annual operating expenditures relative to the baseline. DOE
refers to this as a ``simple PBP'' because it does not consider changes
over time in operating cost savings. The PBP calculation uses the same
inputs as the LCC analysis when deriving first-year operating costs.
As noted previously, EPCA establishes a rebuttable presumption that
a standard is economically justified if the Secretary finds that the
additional cost to the consumer of purchasing a product complying with
an energy conservation standard level will be less than three times the
value of the first year's energy savings resulting from the standard,
as calculated under the applicable test procedure. (42 U.S.C.
6295(o)(2)(B)(iii)) For each considered efficiency level, DOE
determined the value of the first year's energy savings by calculating
the energy savings in accordance with the applicable DOE test
procedure, and multiplying those savings by the average energy price
projection for the year in which compliance with the amended standards
would be required.
G. Shipments Analysis
DOE uses projections of annual product shipments to calculate the
national impacts of potential amended or new energy conservation
standards on energy use, NPV, and future manufacturer cash flows.\36\
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.
---------------------------------------------------------------------------
\36\ 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.
---------------------------------------------------------------------------
DOE's stock accounting model is calibrated based on historical
shipments for portable and whole-home dehumidifiers. In the June 2022
Preliminary Analysis, DOE used historical shipments provided by AHAM
for portable dehumidifiers and assumed that whole-home dehumidifiers
accounted for 1 percent of total dehumidifier shipments. In this NOPR
analysis, DOE included 2022 shipments estimates for whole-home
dehumidifiers based on feedback from manufacturers indicating whole-
home dehumidifiers shipments account for 1.6 percent of the total
dehumidifier market.
DOE's shipments model for dehumidifiers considers shipments to
replace existing units and to first-time owners. To determine
replacement shipments, DOE used survival probability distributions
based on average lifetime estimates of 10 years for portable
dehumidifiers and 12 years for whole-home dehumidifiers provided by
manufacturers. To estimate shipments to first-time owners, DOE used
projections of AEO2023 housing stock coupled with the historical
shipments data. DOE's shipments projections include shipments
reductions due to consumers that do not replace a failed unit.
DOE considers the impacts on shipments from changes in product
purchase price associated with higher energy efficiency levels using a
price elasticity. As in the June 2022 Preliminary Analysis, DOE employs
a price elasticity of -0.45 in its shipments model. These values are
based on analysis of aggregated data for five residential
appliances.\37\ 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.
---------------------------------------------------------------------------
\37\ Fujita, K. (2015) Estimating Price Elasticity using Market-
Level Appliance Data. Lawrence Berkeley National Laboratory, LBNL-
188289.
---------------------------------------------------------------------------
When comparing the first cost of the efficiency level selected for
PC1 and PC2 at each TSL, DOE considers that the difference of installed
cost in standards case is not significant enough to warrant a product
switching scenario that would result in a different market share
distribution from the no-new-standards case. Given the small overall
market share of PC3, DOE did not include a product switching scenario
in the analysis. DOE assumed that consumers are unlikely to purchase
multiple lower capacity units in place of a larger capacity unit as a
result of a standard.
DOE seeks comment on the assumption that dehumidifier consumers'
purchase decision are unlikely to change as a result of a standard.
H. National Impact Analysis
The NIA assesses the national energy savings (``NES'') and the NPV
from a national perspective of total consumer costs and savings that
would be expected to result from new or amended
[[Page 76534]]
standards at specific efficiency levels.\38\ (``Consumer'' in this
context refers to consumers of the product being regulated.) DOE
calculates the NES and NPV for the potential standard levels considered
based on projections of annual product shipments, along with the annual
energy consumption and total installed cost data from the energy use
and LCC analyses. For the present analysis, DOE projected the energy
savings, operating cost savings, product costs, and NPV of consumer
benefits over the lifetime of dehumidifiers sold from 2028 through
2057.
---------------------------------------------------------------------------
\38\ The NIA accounts for impacts in the 50 states and U.S.
territories.
---------------------------------------------------------------------------
DOE evaluates the impacts of new or amended standards by comparing
a case without such standards with standards-case projections. The no-
new-standards case characterizes energy use and consumer costs for each
product class in the absence of new or amended energy conservation
standards. For this projection, DOE considers historical trends in
efficiency and various forces that are likely to affect the mix of
efficiencies over time. DOE compares the no-new-standards case with
projections characterizing the market for each product class if DOE
adopted new or amended standards at specific energy efficiency levels
(i.e., the TSLs or standards cases) for that class. For the standards
cases, DOE considers how a given standard would likely affect the
market shares of products with efficiencies greater than the standard.
DOE uses a spreadsheet model to calculate the energy savings and
the national consumer costs and savings from each TSL. Interested
parties can review DOE's analyses by changing various input quantities
within the spreadsheet. The NIA spreadsheet model uses typical values
(as opposed to probability distributions) as inputs.
Table IV.6 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.7--Summary of Inputs and Methods for the National Impact
Analysis
------------------------------------------------------------------------
Inputs Method
------------------------------------------------------------------------
Shipments.............................. Annual shipments from shipments
model.
Compliance Date of Standard............ 2028.
Efficiency Trends...................... No-new-standards case: 0.25
percent annual increase in
efficiency.
Standards cases: Roll-up in
compliance year to meet
potential efficiency level.
Annual Energy Consumption per Unit..... Annual weighted-average values
are a function of energy use
at each TSL.
Total Installed Cost per Unit.......... Annual weighted-average values
are a function of cost at each
TSL.
Incorporates projection of
future product prices based on
historical data.
Annual Energy Cost per Unit............ Annual weighted-average values
as a function of the annual
energy consumption per unit
and energy prices.
Repair and Maintenance Cost per Unit... Annual values do not change
with efficiency level.
Energy Price Trends.................... AEO2023 projections to 2050 and
constant 2050 value
thereafter.
Energy Site-to-Primary and FFC A time-series conversion factor
Conversion. based on AEO2023.
Discount Rate.......................... 3 percent and 7 percent.
Present Year........................... 2023.
------------------------------------------------------------------------
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. 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. As described in section
IV.F.8 of this document, the efficiency trend used in the no-new-
standards case is based on historical market trends towards more
efficient product in response to ENERGY STAR specifications. To account
for the historical movement towards more efficient products in the
market in the absence of a standard, DOE included an annual improvement
of 0.25 percent in the average shipment-weighted IEF in each year of
the analysis period shipments projection in the no-new-standards case.
The approach is further described in chapter 10 of the NOPR TSD
For the standards cases, DOE used a ``roll-up'' scenario to
establish the shipment-weighted efficiency for the year that standards
are assumed to become effective (2028). In this scenario, the market
shares of products in the no-new-standards case that do not meet the
standard under consideration would ``roll up'' to meet the new standard
level, and the market share of products above the standard would remain
unchanged.
2. National Energy Savings
The national energy savings analysis involves a comparison of
national energy consumption of the considered products between each TSL
and the case with no new or amended energy conservation standards. DOE
calculated the national energy consumption by multiplying the number of
units (stock) of each product (by vintage or age) by the unit energy
consumption (also by vintage). DOE calculated annual NES based on the
difference in national energy consumption for the no-new standards case
and for each higher efficiency standard case. DOE estimated energy
consumption and savings based on site energy and converted the
electricity consumption and savings to primary energy (i.e., the energy
consumed by power plants to generate site electricity) using annual
conversion factors derived from AEO 2023. Cumulative energy savings are
the sum of the NES for each year over the timeframe of the analysis.
Use of higher-efficiency products is sometimes associated with a
direct rebound effect, which refers to an increase in utilization of
the product due to the increase in efficiency. DOE did not find any
data on the rebound effect specific to dehumidifiers and assumed no
rebound in the NOPR analysis.
[[Page 76535]]
In 2011, in response to the recommendations of a committee on
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy
Efficiency Standards'' appointed by the National Academy of Sciences,
DOE announced its intention to use FFC measures of energy use and
greenhouse gas and other emissions in the national impact analyses and
emissions analyses included in future energy conservation standards
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the
approaches discussed in the August 18, 2011, notice, DOE published a
statement of amended policy in which DOE explained its determination
that EIA's National Energy Modeling System (``NEMS'') is the most
appropriate tool for its FFC analysis and its intention to use NEMS for
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain,
multi-sector, partial equilibrium model of the U.S. energy sector \39\
that EIA uses to prepare its Annual Energy Outlook. The FFC factors
incorporate losses in production and delivery in the case of natural
gas (including fugitive emissions) and additional energy used to
produce and deliver the various fuels used by power plants. The
approach used for deriving FFC measures of energy use and emissions is
described in appendix 10B of the NOPR TSD.
---------------------------------------------------------------------------
\39\ For more information on NEMS, refer to The National Energy
Modeling System: An Overview 2018, DOE/EIA-0581(2018), April 2019.
Available at https://www.eia.gov/outlooks/aeo/nems/overview/pdf/0581(2018).pdf (last accessed February 22, 2023).
---------------------------------------------------------------------------
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
dehumidifier 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 2057, which is the end date of the projection
period, the average dehumidifier price is projected to drop 25 percent
relative to 2028. 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
dehumidifiers. In addition to the default price trend, DOE considered
two product price sensitivity cases: (1) a high price decline case and
(2) a low price decline case. In the high price decline case, DOE used
a faster price decline for the non-controls portion of the price
derived from the same combined price index PPI data for dehumidifiers
between 2005 and 2022. In the low price decline case, DOE used the same
combined price index PPI data for dehumidifiers between 1983 and 1998.
For both high and low price decline cases, DOE used the default price
decline for variable-speed blower controls. 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
AEO2023, 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 AEO2023
Reference case that have lower and higher economic growth. Those cases
have lower and higher energy price trends compared to the Reference
case. NIA results based on these cases are presented in appendix 10C of
the NOPR TSD.
In calculating the NPV, DOE multiplies the net savings in future
years by a discount factor to determine their present value. For this
NOPR, DOE estimated the NPV of consumer benefits using both a 3-percent
and a 7-percent real discount rate. DOE uses these discount rates in
accordance with guidance provided by the Office of Management and
Budget (``OMB'') to Federal agencies on the development of regulatory
analysis.\40\ 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.
---------------------------------------------------------------------------
\40\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at
https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------
I. Consumer Subgroup Analysis
In analyzing the potential impact of new or amended energy
conservation standards on consumers, DOE evaluates the impact on
identifiable subgroups of consumers that may be disproportionately
affected by a new or amended national standard. The purpose of a
subgroup analysis is to determine the extent of any such
disproportional impacts. DOE evaluates impacts on particular subgroups
of consumers by analyzing the LCC impacts and PBP for those particular
consumers from alternative standard levels. For this NOPR, DOE analyzed
the impacts of the considered standard levels on two subgroups: (1)
low-income households and (2) senior-only households. The analysis used
subsets of the RECS 2020 sample composed of households that meet the
criteria for the two subgroups. DOE used the LCC and PBP spreadsheet
model to estimate the impacts of the considered efficiency levels on
these subgroups. Chapter 11 in the NOPR TSD describes the consumer
subgroup analysis.
J. Manufacturer Impact Analysis
1. Overview
DOE performed an MIA to estimate the financial impacts of amended
energy conservation standards on manufacturers of dehumidifiers 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 proposed
rulemaking.
[[Page 76536]]
The key GRIM inputs include data on the industry cost structure, unit
production costs, product shipments, manufacturer markups, and
investments in R&D and manufacturing capital required to produce
compliant products. The key GRIM outputs are the INPV, which is the sum
of industry annual cash flows over the analysis period, discounted
using the industry-weighted average cost of capital, and the impact to
domestic manufacturing employment. The model uses standard accounting
principles to estimate the impacts of more-stringent energy
conservation standards on a given industry by comparing changes in INPV
and domestic manufacturing employment between a no-new-standards case
and the various standards cases (i.e., TSLs). To capture the
uncertainty relating to manufacturer pricing strategies following
amended standards, the GRIM estimates a range of possible impacts under
different manufacturer markup scenarios.
The qualitative part of the MIA addresses manufacturer
characteristics and market trends. Specifically, the MIA considers such
factors as a potential standard's impact on manufacturing capacity,
competition within the industry, the cumulative impact of other DOE and
non-DOE regulations, and impacts on manufacturer subgroups. The
complete MIA is outlined in chapter 12 of the NOPR TSD.
DOE conducted the MIA for this rulemaking in three phases. In Phase
1 of the MIA, DOE prepared a profile of the dehumidifier manufacturing
industry based on the market and technology assessment, preliminary
manufacturer interviews, and publicly available information. This
included a top-down analysis of dehumidifier 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 dehumidifier
manufacturing industry, including corporate annual reports, the U.S.
Census Bureau's Annual Survey of Manufactures (ASM),\41\ and reports
from Dun & Bradstreet.\42\
---------------------------------------------------------------------------
\41\ U.S. Census Bureau, Annual Survey of Manufactures.
``Summary Statistics for Industry Groups and Industries in the U.S
(2021).'' Available at: www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed March 3, 2023).
\42\ The Dun & Bradstreet Hoovers login is available at:
app.dnbhoovers.com (last accessed March 3, 2023).
---------------------------------------------------------------------------
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 dehumidifiers 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, markups, shipments, and industry
financial information as inputs. The GRIM models changes in costs,
distribution of shipments, investments, and manufacturer margins that
could result from an amended energy conservation standard. The GRIM
spreadsheet uses the inputs to arrive at a series of annual cash flows,
beginning in 2023 (the base year of the analysis) and continuing to
2057. DOE calculated INPVs by summing the stream of annual discounted
cash flows during this period. For manufacturers of dehumidifiers, DOE
used a real discount rate of 8.4 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 information gathered from industry stakeholders during
the course of manufacturer interviews. The GRIM results are presented
in section V.B.2 of this document. Additional details about the GRIM,
the discount rate, and other financial parameters can be found in
chapter 12 of the NOPR TSD.
a. Manufacturer Production Costs
Manufacturing more efficient equipment is typically more expensive
than manufacturing baseline equipment due to the use of more complex
components, which are typically more costly than baseline components.
The changes in the MPCs of covered products can affect the revenues,
gross margins, and cash flow of the industry.
DOE 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). In this proposed rulemaking, DOE relied on
a combination of the efficiency-level approach and the design-option
[[Page 76537]]
approach to develop cost estimates at each efficiency level for
dehumidifiers, structured around the reverse engineering approach. The
analysis involved reviewing publicly available cost and performance
information, physically disassembling commercially available products
and modeling equipment cost while removing costs associated with non-
efficiency related components or features. 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. For a complete description of the MPCs, see section
IV.C of this document or chapter 5 of the NOPR TSD.
b. Shipments Projections
The GRIM estimates manufacturer revenues based on total unit
shipment projections and the distribution of those shipments by
efficiency level. Changes in sales volumes and efficiency distributions
over time can significantly affect manufacturer finances. For this
analysis, the GRIM uses the NIA's annual shipment projections derived
from the shipments analysis from 2023 (the base year) to 2057 (the end
year of the analysis period). 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. DOE's stock accounting model is calibrated based on
historical shipments for portable and whole-home dehumidifiers. See
section IV.G of this document or chapter 9 of the NOPR TSD 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
equipment designs into compliance. DOE evaluated the level of
conversion-related expenditures that would be needed to comply with
each considered efficiency level in each product class. For the MIA,
DOE classified these conversion costs into two major groups: (1)
capital conversion costs; and (2) product conversion costs. Capital
conversion costs are investments in property, plant, and equipment
necessary to adapt or change existing production facilities such that
new compliant product designs can be fabricated and assembled. Product
conversion costs are investments in research, development, testing,
marketing, and other non-capitalized costs necessary to make product
designs comply with amended energy conservation standards.
DOE relied on feedback from manufacturer interviews and information
from the product teardown and engineering analyses to estimate the
capital investment required at each analyzed efficiency level. DOE
asked manufacturers to estimate the capital conversion costs (e.g.,
changes in production processes, equipment, and tooling) to implement
the various design options. The data generated from the product
teardown and engineering analyses were used to estimate the capital
investment in equipment and tooling required of OEMs at each efficiency
level, considering such factors as product design, raw materials,
purchased components, and fabrication method. Changes in equipment and
tooling were used to estimate capital conversion costs.
DOE relied on feedback from manufacturer interviews, the
engineering analysis, and model counts from DOE's Compliance
Certification Database (CCD) to evaluate the product conversion costs
industry would likely incur at the considered standard levels. In
interviews, DOE asked manufacturers to estimate the redesign effort and
engineering resources required at various efficiency levels to quantify
the product conversion costs. DOE integrated feedback from
manufacturers on redesign effort and staffing to estimate product
conversion cost. Manufacturer numbers were aggregated to protect
confidential information. DOE used model counts to scale the feedback
gathered in interviews to the overall dehumidifier industry.
In general, DOE assumes all conversion-related investments occur
between the year of publication of the final rule and the year by which
manufacturers must comply with the new standard. The conversion cost
figures used in the GRIM can be found in section V.B.2 of this
document. For additional information on the estimated capital and
product conversion costs, see chapter 12 of the NOPR TSD.
d. Manufacturer Markup Scenarios
MSPs include direct manufacturing production costs (i.e., labor,
materials, and overhead estimated in DOE's MPCs) and all non-production
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate
the MSPs in the GRIM, DOE applied manufacturer markups to the MPCs
estimated in the engineering analysis for each product class and
efficiency level. Modifying these manufacturer markups in the standards
case yields different sets of impacts on manufacturers. For the MIA,
DOE modeled two standards-case scenarios to represent uncertainty
regarding the potential impacts on prices and profitability for
manufacturers following the implementation of amended energy
conservation standards: (1) a preservation of gross margin percentage
scenario; and (2) a preservation of operating profit scenario. These
scenarios lead to different manufacturer markup values that, when
applied to the MPCs, result in varying revenue and cash flow impacts.
Under the preservation of gross margin percentage scenario, DOE
applied a single uniform ``gross margin percentage'' markup across all
efficiency levels, which assumes that manufacturers would be able to
maintain the same amount of profit as a percentage of revenues at all
efficiency levels within a product class. As manufacturer production
costs increase with efficiency, this scenario implies that the per-unit
dollar profit will increase. DOE assumed a gross margin percentage of
29 percent for all product classes.\43\ Manufacturers tend to believe
it is optimistic to assume that they would be able to maintain the same
gross margin percentage as their production costs increase,
particularly for minimally efficient products. Therefore, this scenario
represents an upper bound of industry profitability under an amended
energy conservation standard.
---------------------------------------------------------------------------
\43\ The gross margin percentage of 29 percent is based on a
manufacturer markup of 1.40.
---------------------------------------------------------------------------
In the preservation of operating profit scenario, as the cost of
production goes up under a standards case, manufacturers are generally
required to reduce their manufacturer markups to a level that maintains
base-case operating profit. DOE implemented this scenario in the GRIM
by lowering the manufacturer markups at each TSL to yield approximately
the same earnings before interest and taxes in the standards case as in
the no-new-standards case in the year after the expected compliance
date of the amended standards. The implicit assumption behind this
scenario is that the industry can only maintain its operating profit in
absolute dollars after the standard takes effect.
A comparison of industry financial impacts under the two markup
scenarios is presented in section V.B.2.a of this document.
[[Page 76538]]
3. Manufacturer Interviews
DOE interviewed manufacturers representing approximately 52 percent
of industry shipments. Participants included both foreign and domestic
OEMs with varying market shares and product class offerings.
In interviews, DOE asked manufacturers to describe their major
concerns regarding potential more stringent energy conservation
standards for dehumidifiers. The following section highlights
manufacturer concerns that helped inform the projected potential
impacts of an amended standard on the industry. Manufacturer interviews
are conducted under non-disclosure agreements (NDAs), so DOE does not
document these discussions in the same way that it does public comments
in the comment summaries and DOE's responses throughout the rest of
this document.
a. Increases in Chassis Size
In interviews, manufacturers expressed concern about efficiency
levels that would necessitate increasing the chassis size to
accommodate larger heat exchangers. First, these manufacturers stated
that increasing the chassis size would require significant capital
investment and engineering time to fully redesign their portfolio of
dehumidifier models. Second, manufacturers stated that increasing the
chassis size would add significant product costs, which would likely
lead to lower sales volumes if consumers are not willing to pay for the
higher upfront cost. Third, manufacturers of portable dehumidifiers
with overseas production facilities expressed concern that increasing
the chassis or cabinet size would negatively impact the loading
capacity of the shipping container and increase shipping costs.
Finally, some portable dehumidifier manufacturers expressed concern
that the 3-year compliance period would be insufficient to develop
cost-optimized models with new chassis designs to accommodate larger
heat exchangers across their entire product portfolio.
b. Refrigerant Regulation
In interviews, manufacturers noted that new refrigerant regulations
restrict the use of high-global warming potential (GWP) refrigerants in
dehumidifiers, which increases cumulative regulatory burden.
Specifically, during interviews, manufacturers discussed State
regulations, such as CARB's rulemaking prohibiting the use of
refrigerants with a GWP of 750 or greater starting January 1, 2023 for
self-contained, residential dehumidifiers and starting January 1, 2025
for whole-home dehumidifiers.44 45 Most manufacturers of
portable dehumidifiers noted that they would likely transition to R-32,
which is a classified as a flammable refrigerant.\46\ A whole-home
manufacturer expressed uncertainty about the choice of low-GWP
refrigerants but noted that the various alternative refrigerant options
being considered are also classified as flammable refrigerants. All
manufacturers interviewed stated that transitioning to a low-GWP
refrigerant requires notable engineering time and capital investment to
update production facilities to accommodate flammable refrigerants.
Some portable dehumidifier manufacturers with experience transitioning
other products (e.g., portable air conditioners) to make use of R-32
stated that the dehumidifier transition would be relatively
straightforward given their prior experience with R-32. In interviews,
manufacturers indicated that they had already started the development
process but were waiting on EPA to finalize its SNAP proposed rule
before starting production of dehumidifiers with low-GWP refrigerants.
EPA has since finalized the SNAP rule allowing for the use of R-32. See
88 FR 26382.
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\44\ State of California Air Resource Board, ``Prohibitions on
Use of Certain Hydrofluorocarbons in Stationary Refrigeration,
Chillers, Aerosols-Propellants, and Foam End-Uses Regulation.''
Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/frorevised.pdf (last accessed March
4, 2023).
\45\ In a public hearing to consider the proposed amendments to
the Prohibitions on the Use of Certain Hydrofluorocarbons in
Stationary Refrigeration, Chillers, Aerosols-Propellants, and Foam
End-Uses regulation, CARB stated that a whole home dehumidifier
would be regulated as ``Other Air-Conditioning Equipment'' with a
regulation effective date of January 1, 2025, and not as a
``Residential Dehumidifier,'' which is both self-contained and
portable. Public hearing date December 10, 2020. Agenda item number:
20-13-4. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/fsorrevised.pdf (last accessed March 4, 2023).
\46\ R-32 is classified as an A2L refrigerant. The A2L class
defines refrigerants that are nontoxic, but mildly flammable.
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4. Discussion of MIA Comments
In response to the June 2022 Preliminary Analysis, AHAM requested
that DOE consider the impacts of tariffs on manufacturers, noting that
manufacturers currently pay an additional 25 percent tariff under the
China Section 301 tariffs for importing dehumidifiers on top of
existing excise taxes and tariffs. According to AHAM, shipping costs
are also impacted due to the shortage in shipping containers and lack
of availability of transport to deliver manufactured products. (AHAM,
No. 22 at pp. 3-4)
Based on information from manufacturer interviews and a review of
model listings from DOE's CCD, DOE assumes nearly all portable units
with 25.00 pints/day or less (Product Class 1) and portable units with
25.01 to 50.00 pints/day (Product Class 2) are manufactured in Asia.
DOE also assumes that 50 percent of portable units greater than 50.00
pints/day (Product Class 3) and 20 percent of whole-home units (Product
Classes 4 and 5) are manufactured in Asia. Regarding U.S. tariffs on
Chinese imports, DOE is aware that the Section 301 tariffs on
dehumidifiers increased to 10 percent in September 2018 and to 25
percent in May 2019. As result of tariffs, DOE expects that
manufactures will begin to shift production of these products to
countries in East Asia and Southeast Asia not subject to Section 301
tariffs. However, due to uncertainty about the exact countries of
origin, DOE's engineering analysis continues to rely on data based on a
Chinese point of origin. To revise MPCs to account for points of origin
outside of China, DOE would require information on the countries of
manufacture and 5-year averages for key inputs used to develop
manufacturer production costs, such as fully-burdened production labor
wage rates and local raw material prices.
To better model the impact of Section 301 tariffs on dehumidifiers
that continue to be manufactured in China, DOE requires additional
information about the portion of products still manufactured there and
how the tariffs are absorbed by the entities along the room AC value
chain, such as the foreign OEMs, U.S. importers, retailers, and
consumers. Increases in retail price may affect consumer purchasing
decisions, as captured by the price sensitivity modeled in the
shipments analysis. Furthermore, DOE considers the costs of overseas
and domestic shipping in its calculation of consumer price used in the
LCC and PBP analyses.
AHAM stated that manufacturers will face significant retooling and
redesign costs if existing chassis sizes are insufficient to implement
the technology options specified in the June 2022 Preliminary Analysis.
(AHAM, No. 22 at p. 3)
DOE used results of the product teardown and engineering analyses
as well as feedback from confidential manufacturer interviews to
estimate the capital and product conversion costs required to reach
each analyzed efficiency level, which included design options that
would require a change in chassis size. See section IV.J.2.c of this
document for a discussion on the conversion cost methodology and
[[Page 76539]]
section V.B.2.a of this document for a description of conversion costs
by TSL.
MIAQ stated that in addition to small business manufacturers,
refrigerant desiccant dehumidifier manufacturers could also be
disproportionally affected by amended energy conservation standards for
dehumidifiers. (MIAQ, No. 20 at pp. 5-6)
At the time of this NOPR analysis, DOE is not aware of any consumer
refrigerant desiccant dehumidifiers currently available on the market.
However, DOE tentatively expects that manufacturers of refrigerant
desiccant dehumidifiers would follow a similar design path as pure
refrigerant-based whole-home dehumidifiers if they were to introduce
new models of consumer refrigerant desiccant dehumidifiers to the
market. Thus, DOE tentatively determined that the industry analysis
reasonably represents the potential impacts to refrigerant desiccant
dehumidifier manufacturers.
DOE requests comment on its tentative conclusion that refrigerant
desiccant dehumidifier manufacturers would be similarly impacted by
potential amended standards and therefore would not warrant a separate
subgroup analysis.
K. Emissions Analysis
The emissions analysis consists of two components. The first
component estimates the effect of potential energy conservation
standards on power sector and site (where applicable) combustion
emissions of CO2, NOX, SO2, and Hg.
The second component estimates the impacts of potential standards on
emissions of two additional greenhouse gases, CH4 and
N2O, as well as the reductions to emissions of other gases
due to ``upstream'' activities in the fuel production chain. These
upstream activities comprise extraction, processing, and transporting
fuels to the site of combustion.
The analysis of electric power sector emissions of CO2,
NOX, SO2, and Hg uses emissions factors intended
to represent the marginal impacts of the change in electricity
consumption associated with amended or new standards. The methodology
is based on results published for the AEO, including a set of side
cases that implement a variety of efficiency-related policies. The
methodology is described in appendix 13A in the NOPR TSD. The analysis
presented in this document uses projections from AEO2023. Power sector
emissions of CH4 and N2O from fuel combustion are
estimated using Emission Factors for Greenhouse Gas Inventories
published by the Environmental Protection Agency (EPA).\47\ FFC
upstream emissions, which include emissions from fuel combustion during
extraction, processing, and transportation of fuels, and ``fugitive''
emissions (direct leakage to the atmosphere) of CH4 and
CO2, are estimated based on the methodology described in
chapter 15 of the NOPR TSD.
---------------------------------------------------------------------------
\47\ 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 hour (MWh) or metric million British thermal unit
MMBtu of site energy savings. For power sector emissions, specific
emissions intensity factors are calculated by sector and end use. Total
emissions reductions are estimated using the energy savings calculated
in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
DOE's no-new-standards case for the electric power sector reflects
the AEO, which incorporates the projected impacts of existing air
quality regulations on emissions. AEO2023 reflects, to the extent
possible, laws and regulations adopted through mid-November 2022,
including the emissions control programs discussed in the following
paragraphs and the Inflation Reduction Act.\48\
---------------------------------------------------------------------------
\48\ For further information, see the Assumptions to AEO2023
report that sets forth the major assumptions used to generate the
projections in the Annual Energy Outlook 2023. Available at
www.eia.gov/outlooks/aeo/assumptions/ (last accessed August 21,
2023).
---------------------------------------------------------------------------
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.\49\ The AEO
incorporates implementation of CSAPR, including the update to the CSAPR
ozone season program emission budgets and target dates issued in 2016.
81 FR 74504 (Oct. 26, 2016). Compliance with CSAPR is flexible among
EGUs and is enforced through the use of tradable emissions allowances.
Under existing EPA regulations, any excess SO2 emissions
allowances resulting from the lower electricity demand caused by the
adoption of an efficiency standard could be used to permit offsetting
increases in SO2 emissions by another regulated EGU.
---------------------------------------------------------------------------
\49\ 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).
---------------------------------------------------------------------------
However, beginning in 2016, SO2 emissions began to fall
as a result of the Mercury and Air Toxics Standards (``MATS'') for
power plants. 77 FR 9304 (Feb. 16, 2012). 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 AEO2023.
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 AEO2023 data to
derive NOX
[[Page 76540]]
emissions factors for the group of States not covered by CSAPR.
The MATS limit mercury emissions from power plants, but they do not
include emissions caps and, as such, DOE's energy conservation
standards would be expected to slightly reduce Hg emissions. DOE
estimated mercury emissions reduction using emissions factors based on
AEO2023, 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 (``E.O.'') 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.
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).
DOE requests comment on how to address the climate benefits and
other 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 social cost (``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 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 E.O. 13990,
published in February 2021 by the IWG (``February 2021 SC-GHG TSD'').
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-GHG estimates presented in this NOPR were developed over
many years using a transparent process, the best science available at
the time of that process, peer-reviewed methodologies, and input from
the public. Specifically, in 2009, the IWG--which 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.\50\ 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 (``National
Academies'') 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.\51\
Shortly thereafter, in March 2017, President Trump issued E.O. 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
[[Page 76541]]
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.
---------------------------------------------------------------------------
\50\ 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.
\51\ National Academies of Sciences, Engineering, and Medicine.
Valuing Climate Damages: Updating Estimation of the Social Cost of
Carbon Dioxide. 2017. The National Academies Press: Washington, DC.
---------------------------------------------------------------------------
On January 20, 2021, President Biden issued E.O. 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 in the National Academies 2017 report. 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 that takes into consideration the advice
of the National Academies 2017 report 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 States. The
only way to achieve 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 underestimation
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 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,\52\ and recommended that
discount rate uncertainty and relevant aspects of intergenerational
ethical considerations be accounted for in selecting future discount
rates.
---------------------------------------------------------------------------
\52\ Interagency Working Group on Social Cost of Carbon, United
States Government. Technical Support Document: Social Cost of Carbon
for Regulatory Impact Analysis Under Executive Order 12866. 2010.
Available at www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last accessed April 15, 2022); Interagency Working
Group on Social Cost of Carbon, United States Government. Technical
Support Document: Technical Update of the Social Cost of Carbon for
Regulatory Impact Analysis Under Executive Order No. 12866. 2013.
Available at www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact (last accessed April 15, 2022);
Interagency Working Group on Social Cost of Greenhouse Gases, United
States Government. Technical Support Document: Technical Update on
the Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866. August 2016. Available at www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last
accessed January 18, 2022); Interagency Working Group on Social Cost
of Greenhouse Gases, United States Government. Addendum to Technical
Support Document on Social Cost of Carbon for Regulatory Impact
Analysis Under Executive Order 12866: Application of the Methodology
to Estimate the Social Cost of Methane and the Social Cost of
Nitrous Oxide. August 2016. www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed
January 18, 2022).
---------------------------------------------------------------------------
Furthermore, the damage estimates developed for use in the SC-GHG
are estimated in consumption-equivalent terms, and so an application of
OMB Circular A-4's guidance for regulatory analysis would then use the
consumption discount rate to calculate the SC-GHG. DOE agrees with this
assessment and will continue to follow developments in the literature
pertaining to this issue. DOE also notes that while OMB Circular A-4,
as published in 2003, recommends using 3-percent and 7-percent discount
rates as ``default'' values, Circular A-4 also reminds agencies that
``different regulations may call for different emphases in the
analysis, depending on the nature and complexity of the regulatory
issues and the sensitivity of the benefit and cost estimates to the key
assumptions.'' On discounting, Circular A-4 recognizes that ``special
ethical considerations arise when comparing benefits and costs across
generations,'' and Circular A-4 acknowledges that analyses may
appropriately ``discount future costs and consumption benefits . . . at
a lower rate than for intragenerational analysis.'' In the 2015
Response to Comments on the Social Cost of Carbon for Regulatory Impact
Analysis, OMB, DOE, and the other IWG members recognized that
``Circular A-4 is a living document'' and ``the use of 7 percent is not
considered appropriate for intergenerational discounting. There is wide
support for this view in the academic literature, and it is recognized
in Circular A-4 itself.'' Thus, DOE
[[Page 76542]]
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 ones 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 developed using a
transparent process, the science available at the time of that process,
and peer-reviewed methodologies. Those estimates were subject to public
comment in the context of dozens of proposed rulemakings as well as in
a dedicated public comment period in 2013.
There are a number of limitations and uncertainties associated with
the SC-GHG estimates. First, the current scientific and economic
understanding of discounting approaches suggests discount rates
appropriate for intergenerational analysis in the context of climate
change are likely to be less than 3 percent, near 2 percent, or
lower.\53\ 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 proposed rule likely underestimate the damages from GHG
emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------
\53\ 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
https://www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------
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.6 of this document.
a. Social Cost of Carbon
The SC-CO2 values used for this final rule were based on
the values developed for the IWG's February 2021 TSD, which are shown
in Table IV.7 in five-year increments from 2020 to 2050. The set of
annual values that DOE used, which was adapted from estimates published
by EPA,\54\ is presented in appendix 14A of the NOPR TSD. These
estimates are based on methods, assumptions, and parameters identical
to the estimates published by the IWG (which were based on EPA
modeling), and include values for 2051 to 2070. DOE expects additional
climate benefits to accrue for products still operating after 2070, but
a lack of available SC-CO2 estimates for emissions years
beyond 2070 prevents DOE from monetizing these potential benefits in
this analysis.
---------------------------------------------------------------------------
\54\ 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 February 21, 2023).
[[Page 76543]]
Table IV.8--Annual SC-CO2 Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
Discount rate and statistic
---------------------------------------------------------------
5% 3% 2.5% 3%
Year ---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
2020............................................ 14 51 76 152
2025............................................ 17 56 83 169
2030............................................ 19 62 89 187
2035............................................ 22 67 96 206
2040............................................ 25 73 103 225
2045............................................ 28 79 110 242
2050............................................ 32 85 116 260
----------------------------------------------------------------------------------------------------------------
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 2022$ 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 four cases using the specific discount rate that
had been used to obtain the SC-CO2 values in each case.
b. Social Cost of Methane and Nitrous Oxide
The SC-CH4 and SC-N2O values used for this
NOPR were based on the values developed for the February 2021 TSD.
Table IV.8 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
values.
Table IV.9--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050
[2020$ per metric ton]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SC-CH4 SC-N2O
-------------------------------------------------------------------------------------------------------------------------------
Discount rate and statistic Discount rate and statistic
-------------------------------------------------------------------------------------------------------------------------------
Year 5% 3% 2.5% 3% 5% 3% 2.5% 3%
-------------------------------------------------------------------------------------------------------------------------------
95th 95th
Average Average Average percentile Average Average Average percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................................................ 670 1,500 2,000 3,900 5,800 18,000 27,000 48,000
2025............................................................ 800 1,700 2,200 4,500 6,800 21,000 30,000 54,000
2030............................................................ 940 2,000 2,500 5,200 7,800 23,000 33,000 60,000
2035............................................................ 1,100 2,200 2,800 6,000 9,000 25,000 36,000 67,000
2040............................................................ 1,300 2,500 3,100 6,700 10,000 28,000 39,000 74,000
2045............................................................ 1,500 2,800 3,500 7,500 12,000 30,000 42,000 81,000
2050............................................................ 1,700 3,100 3,800 8,200 13,000 33,000 45,000 88,000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
DOE multiplied the CH4 and N2O emissions
reduction estimated for each year by the SC-CH4 and SC-
N2O estimates for that year in each of the cases. DOE
adjusted the values to 2022$ 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.
2. Monetization of Other Emissions Impacts
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.\55\ DOE used EPA's values
for PM2.5-related benefits associated with NOX
and SO2 and for ozone-related benefits associated with
NOX for 2025, 2030, and 2040, calculated with discount rates
of 3-percent and 7-percent. DOE used linear interpolation to define
values for the years not given in the 2025 to 2040 period; for years
beyond 2040, the values are held constant. DOE combined the EPA
regional benefit-per-ton estimates with regional information on
electricity consumption and emissions from AEO2023 to define weighted-
average national values for NOX and SO2 (see
appendix 14B of the NOPR TSD).
---------------------------------------------------------------------------
\55\ U.S. Environmental Protection Agency. Estimating the
Benefit per Ton of Reducing Directly-Emitted
PM2.5,PM2.5 Precursors and Ozone Precursors
from 21 Sectors. www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------
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 AEO2023. 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
AEO2023 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,
[[Page 76544]]
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
employees of manufacturers of the products subject to standards, their
suppliers, and related service firms. The MIA addresses those impacts.
Indirect employment impacts are changes in national employment that
occur due to the shift in expenditures and capital investment caused by
the purchase and operation of more-efficient appliances. Indirect
employment impacts from standards consist of the net jobs created or
eliminated in the national economy, other than in the manufacturing
sector being regulated, caused by (1) reduced spending by consumers on
energy, (2) reduced spending on new energy supply by the utility
industry, (3) increased consumer spending on the products to which the
new standards apply and other goods and services, and (4) the effects
of those three factors throughout the economy.
One method for assessing the possible effects on the demand for
labor of such shifts in economic activity is to compare sector
employment statistics developed by the Labor Department's Bureau of
Labor Statistics (``BLS''). BLS regularly publishes its estimates of
the number of jobs per million dollars of economic activity in
different sectors of the 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.\56\ 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.
---------------------------------------------------------------------------
\56\ 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 https://www.bea.gov/sites/default/files/methodologies/RIMSII_User_Guide.pdf (last
accessed February 22, 2023).
---------------------------------------------------------------------------
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'').\57\ 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.
---------------------------------------------------------------------------
\57\ 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 overestimate actual job impacts over the long
run for this rule. Therefore, DOE used ImSET only to generate results
for near-term timeframes (2028-2032), 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
dehumidifiers. It addresses the TSLs examined by DOE, the projected
impacts of each of these levels if adopted as energy conservation
standards for dehumidifiers, 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 new or 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 price elasticity of
consumer purchasing decisions that may change when different standard
levels are set.
In the analysis conducted for this NOPR, DOE analyzed the benefits
and burdens of four TSLs for dehumidifiers. DOE developed TSLs that
combine efficiency levels for each analyzed product class. TSL 1
represents the smallest incremental increase in analyzed efficiency
level above the baseline for each analyzed product class. TSL 2
corresponds to current ENERGY STAR[supreg] requirements for all product
classes. TSL 3 is an intermediate TSL that maintains positive average
LCC savings for all product classes while increasing stringency for
Product Classes 1, 2, 4, and 5. TSL 4 represents max-tech. 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.
In response to the June 2022 Preliminary Analysis, AHAM raised
concerns about the technological feasibility and the economic impact of
setting the amended energy conservation standard at EL 3 for all
portable product classes. AHAM also questioned whether DOE can justify
proposing a standard where a majority of energy savings come from one
product class. (AHAM, No. 22 at p. 8)
To clarify, DOE does not propose adopting standard levels at the
Preliminary Analysis stage. The current NOPR analysis has been updated
based on stakeholder feedback received in response to the June 2022
Preliminary Analysis, additional tear down of units to support the
engineering analysis, and manufacturer interviews. For this NOPR
analysis, DOE analyzed four trial standard levels and proposes a TSL
that DOE considers technologically feasible and economically justified
based on a multitude of factors (see section V.C.1 for discussion of
the benefits and burdens of TSLs considered in this NOPR).
Table V.1 presents the TSLs and the corresponding efficiency levels
that DOE has identified for potential
[[Page 76545]]
amended energy conservation standards for dehumidifiers.
Table V.1--Trial Standard Levels for Dehumidifiers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Portable Whole-home
-------------------------------------------------------------------------------------------------------------
PC1: <=25.00 pints/ PC2: 25.01-50.00 PC3: >50.00 pints/ PC4: <=8.0 cu. ft. PC5: >8.0 cu. ft.
TSL day pints/day day -------------------------------------------
------------------------------------------------------------------
IEF (L/ IEF (L/ IEF (L/ EL IEF (L/ EL IEF (L/
EL kWh) EL kWh) EL kWh) kWh) kWh)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1......................................... 1 1.40 1 1.70 1 3.10 1 2.09 1 2.70
2......................................... 2 1.57 2 1.80 2 3.30 1 2.09 2 3.30
3......................................... 3 1.70 3 2.01 1 3.10 2 2.22 3 3.81
4......................................... 5 2.32 5 2.38 4 3.67 3 2.39 4 4.17
--------------------------------------------------------------------------------------------------------------------------------------------------------
For Product Class 3, DOE found that EL 3 results in the largest
average LCC loss and the highest percent of consumers negatively
impacted consumers among considered efficiency levels. Similarly, for
Product Classes 1 and 2, EL 4 results in the smallest average LCC
savings and the highest percent of consumers negatively impacted among
considered efficiency levels. Therefore, DOE did not include these ELs
in the construction of TSLs.
B. Economic Justification and Energy Savings
1. Economic Impacts on Individual Consumers
DOE analyzed the economic impacts on dehumidifier 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
decreases. Inputs used for calculating the LCC and PBP include total
installed costs (i.e., product price plus installation costs), and
operating costs (i.e., annual energy use, energy prices, energy price
trends, repair costs, and maintenance costs). The LCC calculation also
uses product lifetime and a discount rate. Chapter [8] of the NOPR TSD
provides detailed information on the LCC and PBP analyses.
Table V.2 through Table V.11 show the LCC and PBP results for the
TSLs considered for each product class. In the first of each pair of
tables, the simple payback is measured relative to the baseline
product. In the second table, impacts are measured relative to the
efficiency distribution in the no-new-standards case in the compliance
year (see section IV.F.8 of this document). Because some consumers
purchase products with higher efficiency in the no-new-standards case,
the average savings are less than the difference between the average
LCC of the baseline product and the average LCC at each TSL. The
savings refer only to consumers who are affected by a standard at a
given TSL. Those who already purchase a product with efficiency at or
above a given TSL are not affected. Consumers for whom the LCC
increases at a given TSL experience a net cost.
Table V.2--Average LCC and PBP Results for Product Class 1: Portable Dehumidifiers
[<=25.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
Efficiency First Simple Average
TSL level IEF (L/kWh) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline 1.30 $279 $66 $569 $848 ........... 10.0
1............................................... 1 1.40 283 61 531 814 1.0 10.0
2............................................... 2 1.57 288 55 479 767 0.9 10.0
3............................................... 3 1.70 293 51 444 737 0.9 10.0
4 1.94 397 46 396 793 5.9 10.0
4............................................... 5 2.32 447 39 337 784 6.3 10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
[[Page 76546]]
Table V.3--Average LCC Savings Relative to the No-New-Standards Case for Product Class 1: Portable Dehumidifiers
[<=25.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percentage of
TSL Efficiency level Average LCC consumers that
savings \*\ \+\ experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1......................................................... 1 $0 0
2......................................................... 2 46 1
3......................................................... 3 42 3
4 (17) 70
4......................................................... 5 (9) 65
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
+ Parentheses denote negative (-) values.
Table V.4--Average LCC and PBP Results for Product Class 2: Portable Dehumidifiers
[25.01-50.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
Efficiency First Simple Average
TSL level IEF (L/kWh) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline 1.60 $315 $112 $968 $1,283 ........... 10.0
1............................................... 1 1.70 319 106 915 1,234 0.7 10.0
2............................................... 2 1.80 324 100 869 1,193 0.8 10.0
3............................................... 3 2.01 327 91 784 1,112 0.6 10.0
4 2.07 429 89 767 1,196 4.9 10.0
4............................................... 5 2.38 493 78 676 1,169 5.3 10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.5--Average LCC Savings Relative to the No-New-Standards Case for Product Class 2: Portable Dehumidifiers
[25.01-50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percentage of
TSL Efficiency level Average LCC consumers that
savings \*\ experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1......................................................... 1 $0 0
2......................................................... 2 0 0
3......................................................... 3 81 0
4 (13) 68
4......................................................... 5 14 60
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
Table V.6--Average LCC and PBP Results for Product Class 3: Portable Dehumidifiers
[>50.00 pints/day]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
Efficiency First Simple Average
TSL level IEF (L/kWh) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline 2.80 $1,043 $88 $765 $1,807 ........... 10.0
1,3............................................. 1 3.10 1,080 80 696 1,776 4.8 10.0
2............................................... 2 3.30 1,149 76 657 1,807 8.7 10.0
3 3.51 1,248 72 622 1,870 12.5 10.0
[[Page 76547]]
4............................................... 4 3.67 1,257 69 597 1,854 11.2 10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.7--Average LCC Savings Relative to the No-New-Standards Case for Product Class 3: Portable Dehumidifiers
[>50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percentage of
TSL Efficiency level Average LCC consumers that
savings \*\ \+\ experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1,3....................................................... 1 $31 33
2......................................................... 2 (4) 65
3 (67) 79
4......................................................... 4 (52) 74
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
+ Parentheses denote negative (-) values.
Table V.8--Average LCC and PBP Results for Product Class 4: Whole-Home Dehumidifiers
[<=8.0 cu ft case volume]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
Efficiency First Simple Average
TSL level IEF (L/kWh) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline 1.77 $2,733 $144 $1,441 $4,174 ........... 12.0
1,2............................................. 1 2.09 2,876 123 1,235 4,110 6.9 12.0
3............................................... 2 2.22 2,907 117 1,170 4,077 6.4 12.0
4............................................... 3 2.39 2,978 110 1,099 4,077 7.2 12.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.9--Average LCC Savings Relative to the No-New-Standards Case for Product Class 4: Whole-Home
Dehumidifiers
[<=8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percentage of
TSL Efficiency level Average LCC consumers that
savings \*\ experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1,2....................................................... 1 $63 4
3......................................................... 2 56 8
4......................................................... 3 12 56
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
[[Page 76548]]
Table V.10--Average LCC and PBP Results for Product Class 5: Whole-Home Dehumidifiers
[>8.0 cu ft case volume]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Average costs (2022$)
----------------------------------------------------
Efficiency First Simple Average
TSL level IEF (L/kWh) Installed year's Lifetime payback lifetime
cost operating operating LCC (years) (years)
cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline 2.41 $2,734 $115 $1,166 $3,901 ........... 12.0
1............................................... 1 2.70 2,797 104 1,053 3,850 5.6 12.0
2............................................... 2 3.30 2,816 87 882 3,698 2.9 12.0
3............................................... 3 3.81 2,954 77 778 3,731 5.7 12.0
4............................................... 4 4.17 3,077 71 720 3,796 7.8 12.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
baseline product.
Table V.11--Average LCC Savings Relative to the No-New-Standards Case for Product Class 5: Whole-Home
Dehumidifiers
[>8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
Life-cycle cost savings
-----------------------------------
Percentage of
TSL Efficiency level Average LCC consumers that
savings \*\ experience net
(2022$) cost (%)
----------------------------------------------------------------------------------------------------------------
1......................................................... 1 $53 19
2......................................................... 2 179 7
3......................................................... 3 146 38
4......................................................... 4 81 53
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
b. Consumer Subgroup Analysis
In the consumer subgroup analysis, DOE estimated the impact of the
considered TSLs on low-income households and senior-only households.
Table V.12 through Table V.16 compares the average LCC savings and PBP
at each efficiency level for the consumer subgroups with similar
metrics for the entire consumer sample for each product class. In most
cases, the average LCC savings and PBP for low-income households and
senior-only households at the considered efficiency levels are not
substantially different from the average for all households. Chapter 11
of the NOPR TSD presents the complete LCC and PBP results for the
subgroups.
Table V.12--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 1:
Portable Dehumidifiers
[<=25.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
households households All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
TSL 1................................................. $0 $0 $0
TSL 2................................................. $38 $43 $46
TSL 3................................................. $34 $39 $42
TSL 4................................................. ($37) ($22) ($9)
Payback Period (years):
TSL 1................................................. 1.2 1.1 1.0
TSL 2................................................. 1.1 1.0 0.9
TSL 3................................................. 1.1 1.0 0.9
TSL 4................................................. 7.6 6.9 6.3
Consumers with Net Benefit (%):
TSL 1................................................. 0% 0% 0%
TSL 2................................................. 23% 24% 24%
TSL 3................................................. 83% 89% 88%
TSL 4................................................. 27% 30% 35%
Consumers with Net Cost (%):
TSL 1................................................. 0% 0% 0%
TSL 2................................................. 1% 0% 1%
TSL 3................................................. 7% 2% 3%
TSL 4................................................. 73% 70% 65%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
[[Page 76549]]
Table V.13--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 2:
Portable Dehumidifiers
[25.01-50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
households households All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
TSL 1................................................. $0 $0 $0
TSL 2................................................. $0 $0 $0
TSL 3................................................. $65 $74 $81
TSL 4................................................. ($21) ($2) $14
Payback Period (years):
TSL 1................................................. 0.9 0.8 0.7
TSL 2................................................. 1.0 0.9 0.8
TSL 3................................................. 0.7 0.7 0.6
TSL 4................................................. 6.4 5.8 5.3
Consumers with Net Benefit (%):
TSL 1................................................. 0% 0% 0%
TSL 2................................................. 0% 0% 0%
TSL 3................................................. 87% 87% 87%
TSL 4................................................. 32% 35% 40%
Consumers with Net Cost (%):
TSL 1................................................. 0% 0% 0%
TSL 2................................................. 0% 0% 0%
TSL 3................................................. 0% 0% 0%
TSL 4................................................. 68% 65% 60%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
Table V.14--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 3:
Portable Dehumidifiers
[>50.00 pints/day]
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
households households All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
TSL 1................................................. $21 $25 $31
TSL 2................................................. ($19) ($13) ($4)
TSL 3................................................. $21 $25 $31
TSL 4................................................. ($76) ($66) ($52)
Payback Period (years):
TSL 1................................................. 5.6 5.3 4.8
TSL 2................................................. 10.0 9.5 8.7
TSL 3................................................. 5.6 5.3 4.8
TSL 4................................................. 12.9 12.3 11.2
Consumers with Net Benefit (%):
TSL 1................................................. 53% 51% 53%
TSL 2................................................. 29% 29% 35%
TSL 3................................................. 53% 51% 53%
TSL 4................................................. 17% 20% 26%
Consumers with Net Cost (%):
TSL 1................................................. 33% 34% 33%
TSL 2................................................. 71% 71% 65%
TSL 3................................................. 33% 34% 33%
TSL 4................................................. 83% 80% 74%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
Table V.15--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 4: Whole-
Home Dehumidifiers
[<=8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
households households All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
TSL 1................................................. $99 $70 $63
TSL 2................................................. $99 $70 $63
TSL 3................................................. $76 $60 $56
TSL 4................................................. $37 $14 $12
Payback Period (years):
TSL 1................................................. 4.8 6.8 6.9
TSL 2................................................. 4.8 6.8 6.9
[[Page 76550]]
TSL 3................................................. 4.4 6.3 6.4
TSL 4................................................. 4.9 7.1 7.2
Consumers with Net Benefit (%):
TSL 1................................................. 5% 4% 4%
TSL 2................................................. 5% 4% 4%
TSL 3................................................. 15% 14% 14%
TSL 4................................................. 48% 39% 40%
Consumers with Net Cost (%):
TSL 1................................................. 3% 4% 4%
TSL 2................................................. 3% 4% 4%
TSL 3................................................. 5% 8% 8%
TSL 4................................................. 40% 58% 56%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
Table V.16--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Product Class 5: Whole-
Home Dehumidifiers
[>8.0 cu ft case volume]
----------------------------------------------------------------------------------------------------------------
Low-income Senior-only
households households All households
----------------------------------------------------------------------------------------------------------------
Average LCC Savings (2022$): *
TSL 1................................................. $64 $51 $53
TSL 2................................................. $178 $179 $179
TSL 3................................................. $187 $147 $146
TSL 4................................................. $163 $82 $81
Payback Period (years):
TSL 1................................................. 3.8 5.5 5.6
TSL 2................................................. 2.0 2.9 2.9
TSL 3................................................. 3.9 5.6 5.7
TSL 4................................................. 5.3 7.6 7.8
Consumers with Net Benefit (%):
TSL 1................................................. 36% 33% 34%
TSL 2................................................. 89% 95% 93%
TSL 3................................................. 66% 62% 62%
TSL 4................................................. 55% 47% 47%
Consumers with Net Cost (%):
TSL 1................................................. 13% 20% 19%
TSL 2................................................. 3% 5% 7%
TSL 3................................................. 26% 38% 38%
TSL 4................................................. 37% 53% 53%
----------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
c. Rebuttable Presumption Payback
As discussed in section III.E.2 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. 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 dehumidifiers. In contrast,
the PBPs presented in section V.B.1.a were calculated using average
values derived from distributions that reflect the range of energy use
in the field.
Table V.17 presents the rebuttable-presumption payback periods for
the considered TSLs for dehumidifiers. While DOE examined the
rebuttable-presumption criterion, it considered whether the standard
levels considered for the NOPR are economically justified through a
more detailed analysis of the economic impacts of those levels,
pursuant to 42 U.S.C. 6295(o)(2)(B)(i), that considers the full range
of impacts to the consumer, manufacturer, Nation, and environment. The
results of that analysis serve as the basis for DOE to definitively
evaluate the economic justification for a potential standard level,
thereby supporting or rebutting the results of any preliminary
determination of economic justification.
[[Page 76551]]
Table V.17--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
Efficiency level
Product class ----------------------------------------------------------------
1 2 3 4 5
----------------------------------------------------------------------------------------------------------------
years
----------------------------------------------------------------------------------------------------------------
Product Class 1: Portable Dehumidifiers <=25.00 1.2 1.1 1.2 6.6 7.3
Pints/Day.....................................
Product Class 2: Portable Dehumidifiers 25.01- 0.9 1.0 0.8 5.4 6.1
50.00 Pints/Day...............................
Product Class 3: Portable Dehumidifiers >50.00 5.9 10.7 11.5 10.7 ...........
Pints/Day.....................................
Product Class 4: Whole-Home Dehumidifiers <=8.0 4.8 4.8 5.6 ........... ...........
cu ft Case Volume.............................
Product Class 5: Whole-Home Dehumidifiers >8.0 5.2 2.7 4.7 6.5 ...........
cu ft Case Volume.............................
----------------------------------------------------------------------------------------------------------------
2. Economic Impacts on Manufacturers
DOE performed an MIA to estimate the impact of amended energy
conservation standards on manufacturers of dehumidifiers. The following
section describes the expected impacts on manufacturers at each
considered TSL. Chapter 12 of the NOPR TSD explains the analysis in
further detail.
a. Industry Cash Flow Analysis Results
In this section, DOE provides GRIM results from the analysis, which
examines changes in the industry that would result from a standard. The
following tables summarize the estimated financial impacts (represented
by changes in INPV) of potential amended energy conservation standards
on manufacturers of dehumidifiers, as well as the conversion costs that
DOE estimates manufacturers of dehumidifiers would incur at each TSL.
The impact of potential amended energy conservation standards were
analyzed under two scenarios: (1) the preservation of gross margin
percentage; and (2) the preservation of operating profit, as discussed
in section IV.J.2.d of this document. The preservation of gross margin
percentages applies a ``gross margin percentage'' of 29 percent for all
product classes across all efficiency levels.\58\ 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.
---------------------------------------------------------------------------
\58\ The gross margin percentage of 29 percent is based on a
manufacturer markup of 1.40.
---------------------------------------------------------------------------
The preservation of operating profit scenario reflects
manufacturers' concerns about their inability to maintain margins as
MPCs increase to reach more-stringent efficiency levels. In this
scenario, while manufacturers make the necessary investments required
to convert their facilities to produce compliant equipment, operating
profit does not change in absolute dollars and decreases as a
percentage of revenue. The preservation of operating profit scenario
results in the lower bound to impacts of potential amended standards on
industry.
Each of the modeled scenarios results in a unique set of cash flows
and corresponding INPV for each TSL. INPV is the sum of the discounted
cash flows to the industry from the base year through the end of the
analysis period (2023-2057). The ``change in INPV'' results refer to
the difference in industry value between the no-new-standards case and
standards case at each TSL. To provide perspective on the short-run
cash flow impact, DOE includes a comparison of free cash flow between
the no-new-standards case and the standards case at each TSL in the
year before 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.18--Manufacturer Impact Analysis Dehumidifier Industry Results
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
Unit standards case TSL 1 TSL 2 TSL 3 TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
INPV.......................... 2022$ Million.......... 158.3 157.8 to 158.0..... 157.4 to 158.1.... 153.1 to 155.0.... 73.0 to 121.6
Change in INPV................ %...................... .............. (0.3) to (0.2)..... (0.6) to (0.2).... (3.3) to (2.1).... (53.9) to (23.2)
Free Cash Flow (2027)......... 2022$ Million.......... 12.6 12.4............... 12.4.............. 10.3.............. (18.2)
Change in Free Cash Flow %...................... .............. (1.5).............. (2.2)............. (18.4)............ (244.3)
(2027).
Product Conversion Costs...... 2022$ Million.......... .............. 0.6................ 0.8............... 6.9............... 20.9
Capital Conversion Costs...... 2022$ Million.......... .............. 0.0................ 0.0............... 0.0............... 53.1
Conversion Costs.............. 2022$ Million.......... - 0.6................ 0.8............... 6.9............... 73.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
At TSL 4, the standard represents the max-tech efficiency levels
for all product classes. The change in INPV is expected to range from -
53.9 to -23.2 percent. At this level, free cash flow is estimated to
decrease by 244.3 percent compared to the no-new-standards case value
of $12.6 million in the year 2027, the year before the standards year.
Currently, less than 1 percent of domestic dehumidifier shipments meet
the efficiencies required at TSL 4.
At max-tech, all product classes would require the most efficient
compressor observed in teardown
[[Page 76552]]
models, ECM blower fan with associated variable-speed driver, controls
with less inactive mode power consumption and the largest heat
exchangers observed in teardown models in each product class.
Increasing heat exchanger surface area would necessitate notable
changes to the chassis size of both portable and whole-home units as
most dehumidifier designs cannot accommodate a larger heat exchanger
within the existing cabinet structure. For the portable dehumidifier
classes, which together account for approximately 98 percent of
industry shipments, almost all manufacturers would need to make
significant investments to adjust equipment, molding, and tooling to
accommodate new dimensions across their entire product portfolio. None
of the 15 portable dehumidifier OEMs currently offer any models that
meet the max-tech efficiencies required. Product conversion costs at
this level are significant as manufacturers work to completely redesign
all existing models and develop new chassis designs to incorporate
larger heat exchangers and more efficient components. DOE estimates
capital conversion costs of $53.1 million and product conversion costs
of $20.9 million. Conversion costs total $73.9 million.
Compared to the market for portable dehumidifiers, the whole-home
dehumidifier market is low-volume and relatively concentrated. Whole-
home dehumidifiers account for approximately 2 percent of total
industry shipments. DOE identified three OEMs producing whole-home
dehumidifiers for the U.S. market. Of the two whole-home product
classes, whole-home dehumidifiers <=8.0 cu. ft. (Product Class 4)
account for approximately 85 percent of whole-home dehumidifier
shipments. Of the three whole-home OEMs identified, only one OEM
currently offers a Product Class 4 model that meets the max-tech level.
The remaining two OEMs would need to dedicate significant engineering
resources to redesign their entire product portfolio to include larger
heat exchangers, which would necessitate a change in dimensions and new
chassis design. One of the OEMs without any models that meet max-tech
is a small, domestic business with a significant market share of
Product Class 4 shipments. For the other whole-home product class, only
one OEM currently offers whole-home dehumidifiers >8.0 cu. ft. (Product
Class 5). This OEM does not currently offer any models that meet the
max-tech efficiency required. Given the limited number of whole-home
OEMs, the limited number of models currently available that meet the
max-tech efficiency levels, and the extent of the redesign required for
the OEMs without any max-tech product offerings, it is possible that
the 3-year 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.
At TSL 4, the large conversion costs result in a free cash flow
dropping below zero in the years before the standards year. The
negative free cash flow calculation indicates manufacturers may need to
access cash reserves or outside capital to finance conversion efforts.
At TSL 4, the shipment-weighted average MPC for all dehumidifiers
is expected to increase by 52.7 percent relative to the no-new-
standards case shipment-weighted average MPC for all dehumidifiers in
2028. Given the projected increase in production costs, DOE expects an
estimated 23.5 percent drop in shipments in the year the standard takes
effect relative to the no-new-standards case. In the preservation of
gross margin percentage scenario, the increase in cashflow from the
higher MSP is outweighed by the $73.9 million in conversion costs and
drop in annual shipments, causing a significant negative change in INPV
at TSL 4 under this scenario. Under the preservation of operating
profit scenario, the manufacturer markup decreases in 2029, the year
after the analyzed compliance year. This reduction in the manufacturer
markup, the $73.9 million in conversion costs incurred by
manufacturers, and the drop in annual shipments cause a significant
decrease in INPV at TSL 4 under the preservation of operating profit
scenario.
At TSL 3, the standard represents an intermediate TSL that
maintains positive average LCC savings for all products while
increasing stringency for Product Classes 1, 2, 4, and 5. The change in
INPV is expected to range from -3.3 to -2.1 percent. At this level,
free cash flow is estimated to decrease by 18.4 percent compared to the
no-new-standards case value of $12.6 million in the year 2027, the year
before the standards year. Currently, approximately 3 percent of
domestic dehumidifier shipments meet the efficiencies required at TSL
3.
For the portable dehumidifier classes <=50.00 pints/day (Product
Class 1 and Product Class 2), TSL 3 corresponds to EL3. For portable
dehumidifiers >50 pints/day, TSL 3 corresponds to EL1. For whole home
dehumidifiers <=8.0 cu. ft., TSL 3 corresponds to EL2. For whole home
dehumidifiers >8.0 cu. ft., TSL 3 corresponds to EL3. At this level,
DOE expects that all product classes would incorporate a higher
efficiency compressor compared to the current baseline. For the whole-
home dehumidifier classes, the analyzed design options also included
the addition of an ECM blower and a larger heat exchanger as compared
to baseline product offerings but to a lesser extent than what was
analyzed at max-tech. At this level, DOE does not expect manufacturers
of portable dehumidifiers to adopt new or larger chassis designs. As
such, DOE does not expect industry would incur capital conversion costs
since portable OEMs can likely achieve TSL 3 efficiencies without
changes to the heat exchanger and chassis design. Portable
dehumidifiers 25.01-50.00 pints/day (Product Class 2) accounts for
approximately 73 percent of industry shipments. Of the 15 portable
dehumidifier OEMs, around two OEMs currently offer Product Class 2
models that meet the efficiency required by TSL 3. Product conversion
costs may be necessary for developing, qualifying, sourcing, and
testing more efficient compressors. For whole-home dehumidifiers, DOE
expects some manufacturers would need to adopt new or larger chassis
designs to accommodate larger heat exchangers but not to the extent
required at max-tech. For whole-home designs, DOE expects that the size
differences would not necessitate capital investment since existing
machinery could likely still be used. Of the three whole-home OEMs, two
OEMs currently offer Product Class 4 models that meet the efficiency
required. As with TSL 4, whole-home manufacturers would likely need to
completely redesign non-compliant models. However, approximately 60
percent of basic model listings (around 32 unique basic models) already
meet the efficiency level required. DOE estimates total conversion
costs of $6.9 million, all of which are product conversion costs.
At TSL 3, the shipment-weighted average MPC for all dehumidifiers
is expected to increase by 1.6 percent relative to the no-new-standards
case shipment-weighted average MPC for all dehumidifiers in 2028. Given
the projected increase in production costs, DOE does not expect a
notable drop in shipments in the year the standard takes effect
relative to the no-new-standards case. In the preservation of gross
margin percentage scenario, the slight increase in cashflow from the
higher MSP is outweighed by the $6.9 million in conversion costs,
causing a slightly
[[Page 76553]]
negative change in INPV at TSL 3 under this scenario. Under the
preservation of operating profit scenario, the manufacturer markup
decreases in 2029, the year after the analyzed compliance year. This
reduction in the manufacturer markup and the $6.9 million in conversion
costs incurred by manufacturers cause a slightly negative change in
INPV at TSL 3 under the preservation of operating profit scenario.
At TSL 2, the standard represents efficiency levels consistent with
ENERGY STAR requirements for dehumidifiers. The change in INPV is
expected to range from -0.9 to -0.2 percent. At this level, free cash
flow is estimated to decrease by 2.2 percent compared to the no-new-
standards case value of $12.6 million in the year 2027, the year before
the standards year. Currently, approximately 89 percent of domestic
dehumidifier shipments meet the efficiencies required at TSL 2.
For all product classes, except for whole-home dehumidifiers <=8.0
cu. ft. (Product Class 4), TSL 2 corresponds to EL2. For Product Class
4, TSL 2 corresponds to EL1. The design options analyzed for most
product classes include incorporating incrementally more efficient
compressors, similar to TSL 3. For Product Class 5, DOE also expects
that manufacturers would need to increase the heat exchanger beyond
what would be required at baseline. At this level, DOE estimates that
most manufacturers can achieve TSL 2 efficiencies with relatively
simple component changes. For the largest portable dehumidifier class
(Product Class 2), all 15 OEMs have models that meet the efficiency
level required. For the largest whole-home dehumidifier class (Product
Class 4), all three OEMs have models that meet the efficiency level
required. Product conversion costs may be necessary for developing,
qualifying, sourcing, and testing more efficient compressors. DOE
estimates total conversion costs of $0.8 million, all of which are
product conversion costs.
At TSL 2, the shipment-weighted average MPC for all dehumidifiers
is expected to increase by 0.4 percent relative to the no-new-standards
case shipment-weighted average MPC for all dehumidifiers in 2028. Given
the projected increase in production costs, DOE does not expect a
notable drop in shipments in the year the standard takes effect
relative to the no-new-standards case. In the preservation of gross
margin percentage scenario, the slight increase in cashflow from the
higher MSP is outweighed by the $0.8 million in conversion costs,
causing a slightly negative change in INPV at TSL 2 under this
scenario. Under the preservation of operating profit scenario, the
manufacturer markup decreases in 2029, the year after the analyzed
compliance year. This reduction in the manufacturer markup and the $0.8
million in conversion costs incurred by manufacturers cause a slightly
negative change in INPV at TSL 2 under the preservation of operating
profit scenario.
At TSL 1, the standard represents the lowest analyzed efficiency
level above baseline for all product classes (EL1). The change in INPV
is expected to range from -0.4 to -0.1 percent. At this level, free
cash flow is estimated to decrease by 1.5 percent compared to the no-
new-standards case value of $12.6 million in the year 2027, the year
before the standards year. Currently, approximately 99 percent of
domestic dehumidifier shipments meet the efficiencies required at TSL
1.
For all product classes, TSL 1 corresponds to EL1. At TSL 1, DOE
analyzed implementing various design options for the range of directly
analyzed product classes. corresponds to EL2. For whole-home
dehumidifiers under 8.0 cubic feet, TSL 2 corresponds to EL1. The
design options analyzed included implementing incrementally more
efficient compressors compared to the current baseline, and, for whole
home dehumidifiers >8.0 cu. ft. (Product Class 5), the analyzed design
options also included implementing larger heat exchangers as compared
to the current baseline. At this level, there are no capital conversion
costs since most manufacturers can achieve TSL 1 efficiencies with
relatively simple component changes. Product conversion costs may be
necessary for developing, qualifying, sourcing, and testing more
efficient components. DOE estimates total conversion costs of $0.6
million, all of which is product conversion cost.
At TSL 1, the shipment-weighted average MPC for all dehumidifiers
is expected to increase by 0.1 percent relative to the no-new-standards
case shipment-weighted average MPC for all dehumidifiers in 2028. Given
the relatively small increase in production costs, DOE does not project
a notable drop in shipments in the year the standard takes effect. In
the preservation of gross margin percentage scenario, the minor
increase in cashflow from the higher MSP is slightly outweighed by the
$0.6 million in conversion costs, causing a slightly negative change in
INPV at TSL 1 under this scenario. Under the preservation of operating
profit scenario, manufacturers earn the same per-unit operating profit
as would be earned in the no-new-standards case, but manufacturers do
not earn additional profit from their investments. In this scenario,
the manufacturer markup decreases in 2029, the year after the analyzed
compliance year. This reduction in the manufacturer markup and the $0.6
million in conversion costs incurred by manufacturers cause a slightly
negative change in INPV at TSL 1 under the preservation of operating
profit scenario.
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 dehumidifier
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 2021 ASM,\59\ BLS employee
compensation data,\60\ results of the engineering analysis, and
manufacturer interviews.
---------------------------------------------------------------------------
\59\ U.S. Census Bureau, Annual Survey of Manufactures.
``Summary Statistics for Industry Groups and Industries in the U.S.
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed March 4, 2023).
\60\ U.S. Bureau of Labor Statistics. Employer Costs for
Employee Compensation--September 2022. December 15, 2022. Available
at www.bls.gov/news.release/pdf/ecec.pdf (last accessed March 4,
2023).
---------------------------------------------------------------------------
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,
[[Page 76554]]
retirement and savings, and legally required benefits.
The number of production employees is then multiplied by the U.S.
labor percentage to convert total production employment to total
domestic production employment. The U.S. labor percentage represents
the industry fraction of domestic manufacturing production capacity for
the covered products. This value is derived from manufacturer
interviews, equipment database analysis, and publicly available
information. The U.S. labor percentage varies by product class. Nearly
all portable units are manufactured outside of the United States.
Comparatively, DOE estimates that 80 percent of whole-home units are
manufactured in the United States. Overall, DOE estimates that 2
percent of all covered dehumidifiers units are manufactured
domestically.
The domestic production employees estimate covers production line
workers, including line supervisors, who are directly involved in
fabricating and assembling products within the OEM facility. Workers
performing services that are closely associated with production
operations, such as materials handling tasks using forklifts, are also
included as production labor. DOE's estimates only account for
production workers who manufacture the specific equipment covered by
this proposed rulemaking.
Non-production workers account for the remainder of the direct
employment figure. The non-production employees estimate covers
domestic workers who are not directly involved in the production
process, such as sales, engineering, human resources, and management.
Using the amount of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio
of non-production workers in the industry compared to production
employees. DOE assumes that this employee distribution ratio remains
constant between the no-new-standards case and standards cases.
Using the GRIM, DOE estimates in the absence of amended energy
conservation standards there would be 72 domestic production and non-
production workers of dehumidifiers in 2028. Table V.19 shows the range
of the impacts of potential amended energy conservation standards on
U.S. manufacturing employment in dehumidifier industry.
Table V.19--Direct Employment Impacts for Domestic Dehumidifier Manufacturers in 2028 *
--------------------------------------------------------------------------------------------------------------------------------------------------------
No-new-
standards case TSL 1 TSL 2 TSL 3 TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment in 2028 72 72...................... 72...................... 72..................... 64.
(Production Workers + Non-
Production Workers).
Potential Changes in Direct .............. (53) to 0............... (53) to 0............... (53) to 0.............. (53) to (8).
Employment in 2028*.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential employment impacts. Numbers in parentheses denote negative values.
The direct employment impacts shown in Table V.19 represent the
potential domestic employment changes that could result following the
compliance date of amended energy conservation standards. The upper
bound estimate corresponds to the change in the number of domestic
workers that would result from amended energy conservation standards if
manufacturers continued 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 with lower costs of labor. At lower
TSLs (i.e., TSL 1 through TSL 3), 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, as
amended standards increase in stringency and both the complexity and
cost of production facility updates increases, manufacturers are more
likely to revisit their production location decisions and/or their make
vs. buy decisions.
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
In interviews, some manufacturers expressed concern about
efficiency levels that would require increasing the chassis and heat
exchanger. These manufacturers asserted that since manufacturing larger
units requires longer production and processing time, increasing
chassis size could reduce their manufacturing capacity. Furthermore,
manufacturers expressed concern that the 3-year compliance period would
be insufficient to develop completely new, cost-optimized models across
their entire product portfolio if chassis size changes are required.
DOE notes that there could be technical resource constraints due to
overlapping regulations, particularly for whole-home dehumidifier
manufacturers. Whole-home dehumidifier manufacturers may face resource
constraints should DOE set more stringent standards that necessitate
the redesign of the majority of models given State (e.g., CARB) and
potential Federal refrigerant regulations requiring low-GWP
refrigerants over a similar compliance timeline.
DOE seeks comment on whether manufacturers expect manufacturing
capacity constraints or engineering resource constraints would limit
product availability to consumers in the timeframe of the amended
standard compliance date (2028).
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 proposed 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 or employees
[[Page 76555]]
or less for North American Industry Classification System (NAICS)
335210, ``Small Electrical Appliance Manufacturing'' and 1,250
employees or less for NAICS 333415, ``Air Conditioning and Warm Air
Heating Equipment and Commercial and Industrial Refrigeration Equipment
Manufacturing.'' 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.
e. Cumulative Regulatory Burden
One aspect of assessing manufacturer burden involves looking at the
cumulative impact of multiple DOE standards and the product-specific
regulatory actions of other Federal agencies that affect the
manufacturers of a covered product or equipment. While any one
regulation may not impose a significant burden on manufacturers, the
combined effects of several existing or impending regulations may have
serious consequences for some manufacturers, groups of manufacturers,
or an entire industry. Assessing the impact of a single regulation may
overlook this cumulative regulatory burden. In addition to energy
conservation standards, other regulations can significantly affect
manufacturers' financial operations. Multiple regulations affecting the
same manufacturer can strain profits and lead companies to abandon
product lines or markets with lower expected future returns than
competing products. For these reasons, DOE conducts an analysis of
cumulative regulatory burden as part of its rulemakings pertaining to
appliance efficiency.
DOE evaluates product-specific regulations that will take effect
approximately three years before or after the estimated 2028 compliance
date of any amended energy conservation standards for dehumidifiers.
This information is presented in Table V.20.
Table V.20--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Dehumidifier Original Equipment
Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry
Number of OEMs Industry conversion
Federal energy conservation standard Number of OEMs affected by Approx. standards compliance year conversion costs costs/product
* today's rule (millions $) revenue ***
** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consumer Furnaces [dagger] 87 FR 40590 15 3 2029..................................... $150.6 (2020$) 1.4
(July 7, 2022).
Consumer Clothes Dryers,[dagger] 87 FR 15 3 2027..................................... $149.7 (2020$) 1.8
51734 (August 23, 2022).
Microwave Ovens 88 FR 39912 (June 20, 2023) 18 1 2026..................................... $46.1 (2021$) 0.7
Consumer Conventional Cooking Products 88 34 1 2027..................................... $183.4 (2021$) 1.2
FR 6818 [dagger] (February 1, 2023).
Residential Clothes Washers [dagger] 88 FR 19 3 2027..................................... $690.8 (2021$) 5.2
13520 (March 3, 2023).
Refrigerators, Freezers, and Refrigerator- 49 3 2027..................................... $1,323.6 (2021$) 3.8
Freezers [dagger] 88 FR 12452 (February
27, 2023).
Room Air Conditioners 88 FR 34298 (May 26, 8 4 2026..................................... $24.8 (2021$) 0.4
2023).
Consumer Air Cleaners [Dagger] 88 FR 21752 43 2 2024 and 2026 [Dagger]................... $57.3 (2021$) 1.3
(April 11, 2023).
Miscellaneous Refrigeration Products 38 3 2029..................................... $126.9 (2021$) 3.1
[dagger] 88 FR 19382 (March 31, 2023).
Dishwashers [dagger] 88 FR 32514 (May 19, 22 3 2027..................................... $125.6 (2021$) 2.1
2023).
Consumer Water Heaters [dagger] 88 FR 49058 22 3 2030..................................... $228.1 (2022$) 1.3
(July 28, 2023).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule subject to cumulative regulatory burden.
** This column presents the number of OEMs producing dehumidifiers that are also listed as OEMs in the identified energy conservation standard subject
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 at the NOPR stage, and all values are subject to change until finalized through publication of a final rule.
[Dagger] The Direct Final Rule for Consumer Air Cleaners adopts an amended standard in 2024 and a higher amended standard in 2026. The conversion costs
are spread over a 3-year conversion period ending in 2025, with over 50 percent of the conversion costs occurring between 2024 and 2025.
[[Page 76556]]
DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of dehumidifiers associated with
multiple DOE standards or product-specific regulatory actions of other
Federal agencies.
Refrigerant Regulations
DOE evaluated the potential impacts of State and Federal
refrigerant regulations, such as CARB's rulemaking prohibiting the use
of refrigerants with a GWP of 750 or greater starting January 1, 2023
for self-contained, residential dehumidifiers and starting January 1,
2025 for whole-home dehumidifiers \61\ and EPA's final rule issued on
October 5, 2023, which restricts the use of HFCs that have a GWP of 700
or greater for residential dehumidifiers beginning January 1, 2025.\62\
Based on market research and information from manufacturer interviews,
DOE expects that dehumidifier manufacturers will transition to
flammable refrigerants (e.g., R-32) in response to refrigerant GWP
restrictions. DOE understands that switching from non-flammable to
flammable refrigerants requires time and investment to redesign
dehumidifiers and upgrade production facilities to accommodate the
additional structural and safety precautions required. DOE tentatively
expects manufacturers will need to transition to an A2L refrigerant to
comply with upcoming refrigerant regulations, prior to the expected
2028 compliance date of any potential energy conservation standards.
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\61\ State of California Air Resource Board, ``Prohibitions on
Use of Certain Hydrofluorocarbons in Stationary Refrigeration,
Chillers, Aerosols-Propellants, and Foam End-Uses Regulation.''
Amendments effective January 1, 2022. ww2.arb.ca.gov/sites/default/files/barcu/regact/2020/hfc2020/frorevised.pdf (last accessed March
4, 2023).
\62\ The final rule was issued on October 5, 2023 and is pending
publication in the Federal Register. A pre-publication version of
the EPA final rule is available at: www.epa.gov/system/files/documents/2023-10/technology-transitions-final-rule-2023-pre-publication.pdf. Once published, the final rule will be available
at: www.regulations.gov/docket/EPA-HQ-OAR-2021-0643.
---------------------------------------------------------------------------
Investments required to transition to flammable refrigerants in
response to State regulations or EPA's final rule, necessitates a level
of investment beyond typical annual R&D and capital expenditures. DOE
considers the cost associated with the refrigerant transition in its
GRIM to be independent of DOE actions related to any amended energy
conservation standards. DOE accounted for the costs associated with
redesigning dehumidifiers to make use of flammable refrigerants and
retrofitting production facilities to accommodate flammable
refrigerants in the GRIM in the no-new-standards case and standards
cases to reflect the cumulative regulatory burden from State and
Federal refrigerant regulation.\63\ DOE relied on manufacturer feedback
in confidential interviews and a report prepared for EPA \64\ to
estimate the industry refrigerant transition costs. Based on feedback,
DOE assumed that the transition to low-GWP refrigerants would require
industry to invest approximately $3.6 million in R&D and $7.1 million
in capital expenditures (e.g., investments in new charging equipment,
leak detection systems, etc.).
---------------------------------------------------------------------------
\63\ Although State regulations, such as CARB's, required the
use low-GWP refrigerants in California starting January 1, 2023, for
portable dehumidifiers, DOE assumed the refrigerant transition costs
would be incurred over the same time period as whole-home
dehumidifiers (2023 to 2024) since manufacturers likely waited for
EPA SNAP approval before investing in the transition to low-GWP
refrigerants for dehumidifiers. 88 FR 26382.
\64\ Report prepared for the U.S. Environmental Protection
Agency, prepared by RTI International, ``Global Non-CO2 Greenhouse
Gas Emission Projections & Marginal Abatement Cost Analysis:
Methodology Documentation'' (2019). Available at www.epa.gov/sites/default/files/2019-09/documents/nonco2_methodology_report.pdf.
---------------------------------------------------------------------------
DOE requests comments on the magnitude of costs associated with
transitioning dehumidifier products and production facilities to
accommodate low-GWP refrigerants that would be incurred between the
publication of this NOPR and the proposed compliance date of amended
standards. Quantification and categorization of these costs, such as
engineering efforts, testing lab time, certification costs, and capital
investments (e.g., new charging equipment), would enable DOE to refine
its analysis.
3. National Impact Analysis
This section presents DOE's estimates of the national energy
savings and the NPV of consumer benefits that would result from each of
the TSLs considered as potential amended standards.
a. Significance of Energy Savings
To estimate the energy savings attributable to potential amended
standards for dehumidifiers, DOE compared their energy consumption
under the no-new-standards case to their anticipated energy consumption
under each TSL. The savings are measured over the entire lifetime of
products purchased in the 30-year period that begins in the year of
anticipated compliance with amended standards (2028-2057). Table V.21
presents DOE's projections of the national energy savings for each TSL
considered for dehumidifiers. The savings were calculated using the
approach described in section IV.H of this document.
Table V.21--Cumulative National Energy Savings for Dehumidifiers; 30 Years of Shipments
[2028-2057]
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
quads
---------------------------------------------------------------
Primary energy.................................. 0.00 0.02 0.32 0.97
FFC energy...................................... 0.00 0.02 0.33 0.99
----------------------------------------------------------------------------------------------------------------
OMB Circular A-4 \65\ 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
---------------------------------------------------------------------------
\65\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
---------------------------------------------------------------------------
[[Page 76557]]
standards.\66\ The review timeframe established in EPCA is generally
not synchronized with the product lifetime, product manufacturing
cycles, or other factors specific to dehumidifiers. Thus, such results
are presented for informational purposes only and are not indicative of
any change in DOE's analytical methodology. The NES sensitivity
analysis results based on a 9-year analytical period are presented in
Table V.22. The impacts are counted over the lifetime of dehumidifiers
purchased in 2028-2036.
---------------------------------------------------------------------------
\66\ 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. (42 U.S.C.
6295(m)) 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.22--Cumulative National Energy Savings for Dehumidifiers; 9 Years of Shipments
[2028-2036]
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
quads
---------------------------------------------------------------
Primary energy.................................. 0.00 0.01 0.12 0.28
FFC energy...................................... 0.00 0.01 0.12 0.29
----------------------------------------------------------------------------------------------------------------
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 dehumidifiers.
In accordance with OMB's guidelines on regulatory analysis,\67\ DOE
calculated NPV using both a 7-percent and a 3-percent real discount
rate. Table V.23 shows the consumer NPV results with impacts counted
over the lifetime of products purchased in 2028-2057.
---------------------------------------------------------------------------
\67\ U.S. Office of Management and Budget. Circular A-4:
Regulatory Analysis. September 17, 2003. Available at https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf.
Table V.23--Cumulative Net Present Value of Consumer Benefits for Dehumidifiers; 30 Years of Shipments
[2028-2057]
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Billion 2022$
---------------------------------------------------------------
3 percent....................................... 0.02 0.07 2.61 2.21
7 percent....................................... 0.01 0.03 1.26 0.50
----------------------------------------------------------------------------------------------------------------
The NPV results based on the aforementioned 9-year analytical
period are presented in Table V.24. The impacts are counted over the
lifetime of products purchased in 2028-2036. As mentioned previously,
such results are presented for informational purposes only and are not
indicative of any change in DOE's analytical methodology or decision
criteria.
Table V.24--Cumulative Net Present Value of Consumer Benefits for Dehumidifiers; 9 Years of Shipments (2028-
2036)
----------------------------------------------------------------------------------------------------------------
Trial standard level
Discount rate ---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Billion 2022$
---------------------------------------------------------------
3 percent....................................... 0.01 0.04 1.16 0.55
7 percent....................................... 0.00 0.02 0.71 0.09
----------------------------------------------------------------------------------------------------------------
The previous results reflect the use of a default trend to estimate
the change in price for dehumidifiers over the analysis period (see
section IV.F.1 of this document). DOE also conducted a sensitivity
analysis that considered one scenario with a lower rate of price
decline than the reference case and one scenario with a higher rate of
price decline than the reference case. The results of these alternative
cases are presented in appendix 10C of the NOPR TSD. In the high-price-
decline case, the NPV of consumer benefits is higher than in the
default case. In the low-price-decline case, the NPV of consumer
benefits is lower than in the default case.
c. Indirect Impacts on Employment
DOE estimates that that amended energy conservation standards for
[[Page 76558]]
dehumidifiers would reduce energy expenditures for consumers of those
products, with the resulting net savings being redirected to other
forms of economic activity. These expected shifts in spending and
economic activity could affect the demand for labor. As described in
section IV.N of this document, DOE used an input/output model of the
U.S. economy to estimate indirect employment impacts of the TSLs that
DOE considered. There are uncertainties involved in projecting
employment impacts, especially changes in the later years of the
analysis. Therefore, DOE generated results for near-term timeframes
(2028-2032), 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 IV.C.1.b of this document, DOE has
tentatively concluded that the standards proposed in this NOPR would
not lessen the utility or performance of the dehumidifiers under
consideration in this rulemaking. Manufacturers of these products
currently offer units that meet or exceed the proposed standards.
5. Impact of Any Lessening of Competition
DOE considered any lessening of competition that would be likely to
result from new or amended standards. As discussed in section III.E.1.e
of this document, the Attorney General determines the impact, if any,
of any lessening of competition likely to result from a proposed
standard, and transmits such determination in writing to the Secretary,
together with an analysis of the nature and extent of such impact. To
assist the Attorney General in making this determination, DOE has
provided DOJ with copies of this NOPR and the accompanying TSD for
review. DOE will consider DOJ's comments on the proposed rule in
determining whether to proceed to a final rule. DOE will publish and
respond to DOJ's comments in that document. DOE invites comment from
the public regarding the competitive impacts that are likely to result
from this proposed rule. In addition, stakeholders may also provide
comments separately to DOJ regarding these potential impacts. See the
ADDRESSES section for information to send comments to DOJ.
6. Need of the Nation to Conserve Energy
Enhanced energy efficiency, where economically justified, improves
the Nation's energy security, strengthens the economy, and reduces the
environmental impacts (costs) of energy production. Reduced electricity
demand due to energy conservation standards is also likely to reduce
the cost of maintaining the reliability of the electricity system,
particularly during peak-load periods. Chapter 15 in the NOPR TSD
presents the estimated impacts on electricity generating capacity,
relative to the no-new-standards case, for the TSLs that DOE considered
in this rulemaking.
Energy conservation resulting from potential energy conservation
standards for dehumidifiers is expected to yield environmental benefits
in the form of reduced emissions of certain air pollutants and
greenhouse gases. Table V.25 provides DOE's estimate of cumulative
emissions reductions expected to result from the TSLs considered in
this rulemaking. The emissions were calculated using the multipliers
discussed in section IV.K of this document. DOE reports annual
emissions reductions for each TSL in chapter 13 of the NOPR TSD.
Table V.25--Cumulative Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
Trial standard level
---------------------------------------------------------------
1 2 3 4
----------------------------------------------------------------------------------------------------------------
Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.07 0.31 6.37 18.68
CH4 (thousand tons)............................. 0.00 0.02 0.41 1.19
N2O (thousand tons)............................. 0.00 0.00 0.06 0.16
NOX(thousand tons).............................. 0.03 0.14 2.97 8.50
SO2 (thousand tons)............................. 0.02 0.08 1.72 5.00
Hg (tons)....................................... 0.000 0.001 0.011 0.033
----------------------------------------------------------------------------------------------------------------
Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.01 0.03 0.57 1.69
CH4 (thousand tons)............................. 0.59 2.51 51.53 153.02
N2O (thousand tons)............................. 0.00 0.00 0.00 0.01
NOX (thousand tons)............................. 0.10 0.43 8.84 26.25
SO2 (thousand tons)............................. 0.00 0.00 0.04 0.10
Hg (tons)....................................... 0.000 0.000 0.000 0.000
----------------------------------------------------------------------------------------------------------------
Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.08 0.34 6.94 20.36
CH4 (thousand tons)............................. 0.60 2.53 51.94 154.20
N2O (thousand tons)............................. 0.00 0.00 0.06 0.17
NOX (thousand tons)............................. 0.14 0.57 11.81 34.74
SO2 (thousand tons)............................. 0.02 0.09 1.76 5.10
Hg (tons)....................................... 0.000 0.001 0.012 0.034
----------------------------------------------------------------------------------------------------------------
[[Page 76559]]
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 dehumidifiers.
Section IV.L of this document discusses the SC-CO2 values
that DOE used. Table V.26 presents the value of CO2
emissions reduction at each TSL for each of the SC-CO2
cases. The time-series of annual values is presented for the proposed
TSL in chapter 14 of the NOPR TSD.
Table V.26--Present Value of CO2 Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-CO2 case
---------------------------------------------------------------
Discount rate and statistics
---------------------------------------------------------------
TSL 5% 3% 2.5% 3%
---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
Billion 2022$
---------------------------------------------------------------
1............................................... 0.00 0.00 0.01 0.01
2............................................... 0.00 0.02 0.02 0.05
3............................................... 0.08 0.32 0.50 0.98
4............................................... 0.22 0.92 1.43 2.79
----------------------------------------------------------------------------------------------------------------
As discussed in section IV.L.2 of this document, DOE estimated the
climate benefits likely to result from the reduced emissions of methane
and N2O that DOE estimated for each of the considered TSLs
for dehumidifiers. Table V.27 presents the value of the CH4
emissions reduction at each TSL, and Table V.28 presents the value of
the N2O 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.27--Present Value of Methane Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-CH4 case
---------------------------------------------------------------
Discount rate and statistics
---------------------------------------------------------------
TSL 5% 3% 2.5% 3%
---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
Million 2022$
---------------------------------------------------------------
1............................................... 0.31 0.88 1.21 2.33
2............................................... 1.28 3.65 5.04 9.66
3............................................... 26.43 75.40 104.13 200.00
4............................................... 74.88 219.14 304.41 579.67
----------------------------------------------------------------------------------------------------------------
Table V.28--Present Value of Nitrous Oxide Emissions Reduction for Dehumidifiers Shipped in 2028-2057
----------------------------------------------------------------------------------------------------------------
SC-N2O case
---------------------------------------------------------------
Discount rate and statistics
---------------------------------------------------------------
TSL 5% 3% 2.5% 3%
---------------------------------------------------------------
95th
Average Average Average percentile
----------------------------------------------------------------------------------------------------------------
Million 2022$
---------------------------------------------------------------
1............................................... 0.00 0.01 0.02 0.03
2............................................... 0.01 0.05 0.07 0.12
3............................................... 0.25 0.96 1.47 2.56
4............................................... 0.69 2.71 4.17 7.20
----------------------------------------------------------------------------------------------------------------
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. 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 health benefits
associated with NOX and SO2 emissions reductions
[[Page 76560]]
anticipated to result from the considered TSLs for dehumidifiers. The
dollar-per-ton values that DOE used are discussed in section IV.L of
this document. Table V.29 presents the present value for NOX
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.30 presents similar results for
SO2 emissions reductions. The results in these tables
reflect application of EPA's low dollar-per-ton values, which DOE used
to be conservative. The time-series of annual values is presented for
the proposed TSL in chapter 14 of the NOPR TSD.
Table V.29--Present Value of NOX Emissions Reduction for Dehumidifiers
Shipped in 2028-2057
------------------------------------------------------------------------
3% Discount 7% Discount
TSL rate rate
------------------------------------------------------------------------
Million 2022$
-------------------------------
1....................................... 7.26 3.33
2....................................... 29.32 13.09
3....................................... 610.43 270.11
4....................................... 1,716.52 716.08
------------------------------------------------------------------------
Table V.30--Present Value of SO2 Emissions Reduction for Dehumidifiers
Shipped in 2028-2057
------------------------------------------------------------------------
3% Discount 7% Discount
TSL rate rate
------------------------------------------------------------------------
Million 2022$
-------------------------------
1....................................... 1.51 0.71
2....................................... 6.11 2.78
3....................................... 126.15 56.92
4....................................... 352.00 149.67
------------------------------------------------------------------------
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.31 presents the NPV values that result from adding the
estimates of the potential economic benefits resulting from reduced GHG
and NOX and SO2 emissions to the NPV of consumer
benefits calculated for each TSL considered in this rulemaking. The
consumer benefits are domestic U.S. monetary savings that occur as a
result of purchasing the covered products, and are measured for the
lifetime of products shipped in 2028-2057. The climate benefits
associated with reduced GHG emissions resulting from the adopted
standards are global benefits, and are also calculated based on the
lifetime of dehumidifiers shipped in 2028-2057.
Table V.31--Consumer NPV Combined With Present Value of Climate Benefits and Health Benefits
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Using 3% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.03 0.11 3.45 4.57
3% Average SC-GHG case.......................... 0.03 0.13 3.75 5.42
2.5% Average SC-GHG case........................ 0.03 0.14 3.95 6.02
3% 95th percentile SC-GHG case.................. 0.04 0.16 4.53 7.65
----------------------------------------------------------------------------------------------------------------
Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case.......................... 0.01 0.05 1.69 1.66
3% Average SC-GHG case.......................... 0.02 0.07 1.99 2.50
2.5% Average SC-GHG case........................ 0.02 0.08 2.19 3.10
3% 95th percentile SC-GHG case.................. 0.03 0.10 2.77 4.74
----------------------------------------------------------------------------------------------------------------
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
[[Page 76561]]
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
dehumidifiers at each TSL, beginning with the maximum technologically
feasible level, to determine whether that level was economically
justified. Where the max-tech level was not justified, DOE then
considered the next most efficient level and undertook the same
evaluation until it reached the highest efficiency level that is both
technologically feasible and economically justified and saves a
significant amount of energy.
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. This approach includes changes to
future shipments and INPV but does not include the forgone value to
consumers who are no longer expected to purchase a dehumidifier in the
standards case. 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.\68\
---------------------------------------------------------------------------
\68\ 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.\69\ 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.
---------------------------------------------------------------------------
\69\ Sanstad, A.H. Notes on the Economics of Household Energy
Consumption and Technology Choice. 2010. Lawrence Berkeley National
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed
February 22, 2023).
---------------------------------------------------------------------------
1. Benefits and Burdens of TSLs Considered for Dehumidifier Standards
Table V.32 and Table V.33 summarize the quantitative impacts
estimated for each TSL for dehumidifiers. The national impacts are
measured over the lifetime of dehumidifiers purchased in the 30-year
period that begins in the anticipated year of compliance with amended
standards (2028-2057). The energy savings, emissions reductions, and
value of emissions reductions refer to full-fuel-cycle results. The
efficiency levels contained in each TSL are described in section V.A of
this document.
Table V.32--Summary of Analytical Results for Dehumidifier TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 TSL 2 TSL 3 TSL 4
----------------------------------------------------------------------------------------------------------------
Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads........................................... 0.00 0.02 0.33 0.99
----------------------------------------------------------------------------------------------------------------
Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons)....................... 0.08 0.34 6.94 20.36
CH4 (thousand tons)............................. 0.60 2.53 51.94 154.20
N2O (thousand tons)............................. 0.00 0.00 0.06 0.17
NOX (thousand tons)............................. 0.14 0.57 11.81 34.74
SO2 (thousand tons)............................. 0.02 0.09 1.76 5.10
Hg (tons)....................................... 0.00 0.00 0.01 0.03
----------------------------------------------------------------------------------------------------------------
[[Page 76562]]
Present Value of Benefits and Costs (3% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.03 0.13 2.75 7.80
Climate Benefits *.............................. 0.00 0.02 0.40 1.14
Health Benefits **.............................. 0.01 0.04 0.74 2.07
Total Benefits [dagger]......................... 0.05 0.19 3.89 11.01
Consumer Incremental Product Costs [Dagger]..... 0.02 0.06 0.14 5.59
Consumer Net Benefits........................... 0.02 0.07 2.61 2.21
Total Net Benefits.............................. 0.03 0.13 3.75 5.42
----------------------------------------------------------------------------------------------------------------
Present Value of Benefits and Costs (7% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings................. 0.02 0.07 1.34 3.59
Climate Benefits *.............................. 0.00 0.02 0.40 1.14
Health Benefits **.............................. 0.00 0.02 0.33 0.87
Total Benefits [dagger]......................... 0.03 0.10 2.07 5.59
Consumer Incremental Product Costs [Dagger]..... 0.01 0.03 0.08 3.09
Consumer Net Benefits........................... 0.01 0.03 1.26 0.50
Total Net Benefits.............................. 0.02 0.07 1.99 2.50
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057.
* Climate benefits are calculated using four different estimates of the SC-CO2, SC-CH4 and SC-N2O. Together,
these represent the global SC-GHG. For presentational purposes of this table, the climate benefits associated
with the average SC-GHG at a 3-percent discount rate are shown, but 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 NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
continue to assess the ability to monetize other effects such as health benefits from reductions in direct
PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
percent discount rate, but DOE does not have a single central SC-GHG point estimate and emphasizes the
importance and value of considering the benefits calculated using all four sets of SC-GHG estimates.
[Dagger] Costs include incremental equipment costs as well as installation costs.
Table V.33--Summary of Analytical Results for Dehumidifier TSLs: Manufacturer and Consumer Impacts
----------------------------------------------------------------------------------------------------------------
Category TSL 1 * TSL 2 * TSL 3 * TSL 4 *
----------------------------------------------------------------------------------------------------------------
Manufacturer Impacts
----------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-new- 157.8 to 158.0 157.4 to 158.1 153.1 to 155.0 73.0 to 121.6
standards case INPV = $158.3)........
Industry NPV (% change)............... (0.3) to (0.2) (0.6) to (0.2) (3.3) to (2.1) (53.9) to (23.2)
----------------------------------------------------------------------------------------------------------------
Consumer Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00 $0 $46 $42 ($9)
Pints/Day............................
PC 2: Portable Dehumidifiers 25.01- $0 $0 $81 $14
50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00 $31 ($4) $31 ($52)
Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0 $63 $63 $56 $12
cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0 $53 $179 $146 $81
cu. ft. Case Volume..................
Shipment-Weighted Average *........... $1 $13 $71 $7
----------------------------------------------------------------------------------------------------------------
Consumer Simple PBP (years)
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00 1.0 0.9 0.9 6.3
Pints/Day............................
PC 2: Portable Dehumidifiers 25.01- 0.7 0.8 0.6 5.3
50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00 4.8 8.7 4.8 11.2
Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0 6.9 6.9 6.4 7.2
cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0 5.6 2.9 5.7 7.8
cu. ft. Case Volume..................
Shipment-Weighted Average *........... 0.9 1.0 0.8 5.6
----------------------------------------------------------------------------------------------------------------
Percent of Consumers That Experience a Net Cost
----------------------------------------------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00 0% 1% 3% 65%
Pints/Day............................
PC 2: Portable Dehumidifiers 25.01- 0% 0% 0% 60%
50.00 Pints/Day......................
PC 3: Portable Dehumidifiers >50.00 33% 65% 33% 74%
Pints/Day............................
PC 4: Whole-Home Dehumidifiers <=8.0 4% 4% 8% 56%
cu. ft. Case Volume..................
PC 5: Whole-Home Dehumidifiers >8.0 19% 7% 38% 53%
cu. ft. Case Volume..................
Shipment-Weighted Average *........... 0% 1% 1% 61%
----------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values.
* Weighted by shares of each product class in total projected shipments in 2022.
[[Page 76563]]
DOE first considered TSL 4, which represents the max-tech
efficiency levels. At this TSL, all product classes would require the
most efficient compressor found in DOE's physical teardowns of
commercially available models, an ECM blower fan with associated
variable-speed driver, controls with lower inactive mode power
consumption, and the largest heat exchangers observed from DOE's
physical teardowns of commercially available models in each product
class. TSL 4 would save an estimated 0.99 quads of energy, an amount
DOE considers significant. Under TSL 4, the NPV of consumer benefit
would be $0.50 billion using a discount rate of 7 percent, and $2.21
billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 4 are 20.36 Mt of
CO2, 5.10 thousand tons of SO2, 34.74 thousand
tons of NOX, 0.03 tons of Hg, 154.20 thousand tons of
CH4, and 0.17 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 $1.14 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 4 is $0.87 billion using a 7-percent discount rate and $2.07
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 $2.50
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 4 is $5.42 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.
Portable dehumidifiers in the CCD range in capacity from 1.7 to
104.3 pints per day and account for 98 percent of the current
dehumidifier shipments.\70\ Within the portable segment of the market,
there are three product classes differentiated by capacity range.
Portable dehumidifiers with capacities greater than 25.0 pints per day
and less than or equal to 50.0 pints per day (PC 2) have the largest
market share accounting for approximately 73 percent of portable
dehumidifier shipments. Portable dehumidifiers with capacities less
than or equal to 25.0 pints per day (PC 1) account for approximately 26
percent of portable dehumidifier shipments. Portable dehumidifiers with
capacities greater than 50.0 pints per day (PC 3) account for the
remaining 1 percent of portable dehumidifier shipments. Whole-home
dehumidifiers are categorized into two product classes based on case
volume and correspond to 2 percent of the total dehumidifier market.
Whole-home units range in case volume between 1.7 cu. ft. and 9.5 cu.
ft. Whole-home dehumidifiers with case volumes less than or equal to
8.0 cu. ft. (PC 4) account for 85 percent of whole-home dehumidifier
shipments in 2022.
---------------------------------------------------------------------------
\70\ Current shipments estimates refer to the 2022 shipments
distribution in the no-new-standards case. See section IV.F.8 of
this document for details on the energy efficiency distribution in
the no-new-standards case.
---------------------------------------------------------------------------
For portable dehumidifiers at TSL 4, the average LCC impact is a
savings of $14 for PC 2, a net cost of $9 for PC 1 and $52 for PC 3.
The simple payback period is 6.3 years for PC 1, 5.3 years for PC 2,
and 11.2 years for PC 3. Notably, the simple payback period for PC 3
exceeds the expected average lifetime of 10 years for portable
dehumidifiers. The fraction of consumers experiencing a net LCC cost is
65 percent for PC 1, 60 percent for PC 2, and 74 percent for PC 3. For
whole-home dehumidifiers, the average LCC impact is a savings of $12
for PC 4 and $81 for PC 5. The simple payback is 7.2 years for PC 4 and
7.8 years for PC 5. The fraction of consumers experiencing a net LCC
cost is 56 percent for PC 4 and 53 percent for PC 5. Weighted across
the market share for all five product classes, a majority of
dehumidifier consumers (61 percent) would experience a net cost.
An analysis of RECS 2020 indicates that 97 percent of low-income
households that own a dehumidifier own a portable unit. Assuming the
low-income sample has a similar market distribution in portable
dehumidifier capacities as the national sample, DOE estimates that
approximately 25 percent of low-income dehumidifier consumers purchase
units in PC 1 and 71 percent in PC 2. At TSL 4, low-income households
experience an average net LCC cost of $37 for PC 1 and $21 for PC 2.
The percentage of low-income consumers who experience a net LCC cost is
73 percent for PC 1 and 68 percent for PC 2. Low-income households will
experience an installed cost increase of $169 for PC 1 (60 percent
price increase relative to baseline unit) and $179 for PC 2 (57 percent
price increase relative to baseline unit). The simple payback period
for low-income households is 7.6 years for PC 1 and 6.4 years for PC 2.
At TSL 4, the projected change in INPV ranges from a decrease of
$85.3 million to a decrease of $36.8 million, which corresponds to
decreases of 53.9 percent and 23.2 percent, respectively. DOE estimates
that industry must invest $73.9 million to completely redesign nearly
all models to accommodate larger heat exchangers and new chassis
designs.
Overall, DOE estimates that less than 1 percent of current industry
shipments meet the efficiencies required at TSL 4. A max-tech standard
would require significant investment. Most manufacturers would need to
incorporate larger heat exchangers, which would necessitate increasing
chassis dimensions of both portable and whole-home units since most
dehumidifiers cannot accommodate a larger heat exchanger within the
existing cabinet structure. For the portable dehumidifier classes,
which together account for nearly 98 percent of industry shipments,
most manufacturers would need to make significant investments to adjust
equipment and tooling to accommodate new dimensions across their entire
product portfolio. DOE estimates that no portable dehumidifier
shipments currently meet the max-tech efficiencies. Of the 15 portable
dehumidifier OEMs, none currently offer any models that meet the max-
tech efficiencies. Whole-home dehumidifiers account for the remaining 2
percent of industry shipments. DOE estimates that approximately 3
percent of whole-home dehumidifier shipments meet max-tech
efficiencies. DOE identified only three OEMs producing whole-home
dehumidifiers for the U.S. market. Of those three whole-home OEMs, only
one currently offers a PC 4 model that meets the max-tech level. The
other two OEMs would therefore need to dedicate significant engineering
resources to redesign their entire product portfolio to include larger
heat exchangers, which would necessitate a change in dimensions and
chassis designs. For product class 5, only one OEM manufacturers whole-
home dehumidifiers greater than 8.0 cu. ft. (PC 5). This OEM does not
currently offer any models that meet the max-tech efficiency required.
Given the limited number of whole-home OEMs, the limited number of
models currently available that meet the max-tech efficiency levels,
and the extent of the redesign required for the OEMs without any max-
tech product offerings, there is uncertainty whether whole-home
products would remain sufficiently available to meet consumer demand at
[[Page 76564]]
the compliance date of amended standards set at TSL 4. At this TSL, DOE
expects an estimated 23-percent drop in shipments compared to the no-
new-standards case shipments in the year the standard takes effect
(2028), as some consumers may forgo or delay purchasing a new
dehumidifier due to the increased upfront cost of standards-compliant
models.
The Secretary tentatively concludes that at TSL 4 for
dehumidifiers, the benefits of energy savings, positive NPV of consumer
benefits, emission reductions, and the estimated monetary value of the
emissions reductions would be outweighed by the economic burden on a
majority of consumers, and the impacts on manufacturers, including the
large conversion costs, profit margin impacts that could result in a
large reduction in INPV, and the lack of manufacturers currently
offering products meeting the efficiency levels required at this TSL.
Across all product classes, a majority of dehumidifier consumers (61
percent) would experience a net LCC cost. Additionally, the average LCC
savings would be negative for PC 1 and PC 3. DOE's consumer subgroup
analysis indicates that both low-income and senior-only households
would experience larger economic burdens compared to the national
population. All portable dehumidifier product classes, which account
for 97 percent of dehumidifiers in low-income households and 98 percent
in senior-only households, have a negative average LCC savings and
majority of consumers experience a net cost. For PC 2 which accounts
for 71 percent of the low-income market share of all dehumidifiers, the
average net LCC cost is $21 and 68 percent of the low-income consumers
would experience a net cost. Weighted across all product classes, the
average low-income consumer would experience a net LCC cost of $23 and
69 percent of low-income consumers would experience a net cost at TSL
4. The average senior-only household would experience a net LCC cost of
$8 and 66 percent of consumers experiencing a net cost. The potential
reduction in INPV could be as high as 53.9 percent. The drop in
industry value and reduction in free cash flow after the compliance
year is driven by a range of factors, but most notably the changes are
driven by conversion cost investments manufacturers must make to
redesign and produce more efficient products. Most manufacturers would
need to dedicate significant capital and engineering resources to
develop new chassis designs to accommodate larger heat exchangers. Due
to the limited amount of engineering resources each manufacturer has,
it is unclear if most manufacturers will be able to redesign their
entire product offerings of dehumidifiers covered by this rulemaking in
the 3-year compliance period. Consequently, the Secretary has
tentatively concluded that TSL 4 is not economically justified.
DOE then considered TSL 3, which represents efficiency level 3 for
PC 1, PC 2, and PC 5, efficiency level 1 for PC 3, and efficiency level
2 for PC 4. At this level, DOE expects that all product classes would
incorporate a higher efficiency compressor. For PC 4 and 5, technology
options include the addition of an ECM blower and a larger heat
exchanger. TSL 3 would save an estimated 0.33 quads of energy, an
amount DOE considers significant. Under TSL 3, the NPV of consumer
benefit would be $1.26 billion using a discount rate of 7 percent, and
$2.61 billion using a discount rate of 3 percent.
The cumulative emissions reductions at TSL 3 are 6.94 Mt of
CO2, 1.76 thousand tons of SO2, 11.81 thousand
tons of NOX, 0.01 tons of Hg, 51.94 thousand tons of
CH4, and 0.06 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 $0.40 billion. The estimated monetary value of the health
benefits from reduced SO2 and NOX emissions at
TSL 3 is $0.33 billion using a 7-percent discount rate and $0.74
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 $1.99
billion. Using a 3-percent discount rate for all benefits and costs,
the estimated total NPV at TSL 3 is $3.75 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.
For portable dehumidifiers at TSL 3, the average LCC impact is a
savings of $42 for PC 1, $81 for PC 2, and $31 for PC 3. The simple
payback period is 0.9 years for PC 1, 0.6 years for PC 2, and 4.8 years
for PC 3. The fraction of consumers experiencing a net LCC cost is 3
percent for PC 1, 0 percent for PC 2, and 33 percent for PC 3. For
whole-home dehumidifiers, the average LCC savings is $56 for PC 4 and
$146 for PC 5. The simple payback period is 6.4 years for PC 4 and 5.7
years for PC 5. The fraction of consumers experiencing a net LCC cost
is 8 percent for PC 4 and 38 percent for PC 5. Weighting across all
product classes, 1 percent of dehumidifier consumers would experience a
net cost. The average LCC savings are positive for all product classes
for the national consumer samples as well as for the low-income and
senior-only consumer samples. At TSL 3, the percentage of low-income
households that experience a net LCC cost is 7 percent for PC 1 and 0
percent for PC 2.
At TSL 3, the projected change in INPV ranges from a decrease of
$5.2 million to a decrease of $3.3 million, which correspond to
decreases of 3.3 percent and 2.1 percent, respectively. DOE estimates
that industry must invest $6.9 million to comply with standards set at
TSL 3. DOE estimates that approximately 3 percent of industry shipments
currently meet the efficiency levels analyzed at TSL 3.
DOE estimates that approximately 2 percent of portable dehumidifier
shipments currently meet the TSL 3 efficiency levels. At this level,
manufacturers would likely incur product conversion costs to qualify,
source, and test more efficient compressors. However, DOE does not
expect portable dehumidifier manufacturers would need to adopt new or
larger chassis designs because the proposed levels may be met through
component swaps in existing chassis designs. Thus, DOE does not expect
manufacturers would incur notable capital conversion costs to meet the
efficiencies required. For whole-home dehumidifiers, DOE expects some
manufacturers would need to adopt new or larger chassis designs to
accommodate larger heat exchangers but not to the extent required at
max-tech. For whole-home dehumidifier designs, DOE expects that the
size differences would not necessitate capital investment since
existing machinery could likely still be used. DOE estimates that 78
percent of PC 4 shipments (which account for 85 percent of whole-home
dehumidifier shipments) meet the efficiency level required. Of the
three whole-home dehumidifier OEMs, two OEMs currently offer PC 4
models that meet the efficiency required. As with TSL 4, whole-home
dehumidifier manufacturers would likely need to completely redesign
models that do not meet the required efficiencies. However,
approximately 60 percent of PC 4 basic model listings (around 32 unique
basic models), representing the full range of
[[Page 76565]]
existing sizes of PC 4 models (1.7 to 6.6 cu. ft.), already meet the
efficiency level required.
After considering the analysis and weighing the benefits and
burdens, the Secretary has tentatively concluded that a standard set at
TSL 3 for dehumidifiers would be economically justified. At this TSL,
the average LCC savings for all product classes are positive. An
estimated 1 percent of portable dehumidifier (PC 1, PC 2, and PC 3) and
13 percent of whole-home dehumidifier (PC 4 and PC 5) consumers
experience a net cost. The FFC national energy savings are significant
and the NPV of consumer benefits is positive using both a 3-percent and
7-percent discount rate. Notably, the benefits to consumers vastly
outweigh the cost to manufacturers. At TSL 3, the NPV of consumer
benefits, even measured at the more conservative discount rate of 7
percent, is approximately 242 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 $0.40 billion in climate benefits (associated
with the average SC-GHG at a 7-percent discount rate), and $0.74
billion (using a 3-percent discount rate) or $0.33 billion (using a 7-
percent discount rate) in health benefits--the rationale becomes
stronger still.
As stated, DOE conducts the walk-down analysis to determine the TSL
that represents the maximum improvement in energy efficiency that is
technologically feasible and economically justified as required under
EPCA. The walk-down is not a comparative analysis, as a comparative
analysis would result in the maximization of net benefits instead of
energy savings that are technologically feasible and economically
justified, which would be contrary to the statute. 86 FR 70892, 70908.
Although DOE has not conducted a comparative analysis to select the
proposed energy conservation standards, DOE notes that as compared to
TSL 4, TSL 3 has shorter payback periods, smaller percentages of
consumer experiencing a net cost, higher LCC savings for all product
classes, a lower maximum decrease in INPV, and lower manufacturer
conversion costs.
Although DOE considered proposed amended standard levels for
dehumidifiers by grouping the efficiency levels for each product class
into TSLs, DOE evaluates all analyzed efficiency levels in its
analysis. For portable dehumidifiers with capacities less than or equal
to 50.0 pints per day, which account for 97 percent of the dehumidifier
market, TSL 3 represents the maximum energy savings that does not
result in a large percentage of consumers experiencing a net LCC cost.
Efficiency levels above the proposed standard have lower LCC savings
and a significantly larger percentage of consumers that experience a
net cost. For portable dehumidifiers with capacities greater than 50.0
pints per day, which accounts for 1.1 percent of the dehumidifier
market, TSL 3 corresponds to EL 1, the only efficiency level with
positive LCC savings and a majority of consumers either not impacted or
positively impacted by the proposed standard. For whole-home
dehumidifiers, which represent 1.6 percent of the dehumidifier market,
TSL 3 corresponds to efficiency levels one level below the max-tech
efficiency level. For PC 4, which accounts for approximately 85 of the
whole-home dehumidifier shipments, one OEM (out of the three whole-home
OEMs) currently offers one model that meets the max-tech level. Given
the limited number of whole-home OEMs, the limited number of models
currently available that meet the max-tech efficiency level, and the
extent of the redesign required for the OEMs without any max-tech
product offerings, there is a risk that the 3-year 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 whole-home products to meet
consumer demand. For PC 5, a majority of consumers would experience
negative LCC savings at the max-tech efficiency level. At the proposed
TSL, the LCC savings are higher and the percent negatively impacted
consumers are lower compared to the max-tech efficiency level.
Therefore, based on the previous considerations, DOE proposes to
adopt the energy conservation standards for dehumidifiers at TSL 3. The
proposed amended energy conservation standards for dehumidifiers, which
are expressed as IEF, are shown in Table V.34.
Table V.34--Proposed Amended Energy Conservation Standards for
Dehumidifiers
------------------------------------------------------------------------
Minimum
integrated
energy factor
Product class (L/kWh)
----------------
TSL 3
------------------------------------------------------------------------
PC 1: Portable Dehumidifiers <=25.00 Pints/Day......... 1.70
PC 2: Portable Dehumidifiers 25.01-50.00 Pints/Day..... 2.01
PC 3: Portable Dehumidifiers >50.00 Pints/Day.......... 3.10
PC 4: Whole-Home Dehumidifiers <=8.0 cu. ft. Case 2.22
Volume................................................
PC 5: Whole-Home Dehumidifiers >8.0 cu. ft. Case Volume 3.81
------------------------------------------------------------------------
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 2022$) 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.
Table V.35 shows the annualized values for dehumidifiers under TSL
3, expressed in 2022$. The results under the primary estimate are as
follows.
Using a 7-percent discount rate for consumer benefits and costs and
NOX and SO2 reduction benefits, and a 3-percent
discount rate case for GHG social costs, the estimated cost of the
proposed standards for dehumidifiers is $8.55 million per year in
increased equipment costs, while the estimated annual benefits are
$142.04 million from reduced equipment operating
[[Page 76566]]
costs, $22.85 million from GHG reductions, and $34.54 million from
reduced NOX and SO2 emissions. In this case, the
net benefit amounts to $190.89 million per year.
Using a 3-percent discount rate for all benefits and costs, the
estimated cost of the proposed standards for dehumidifiers is $7.89
million per year in increased equipment costs, while the estimated
annual benefits are $157.99 million in reduced operating costs, $22.85
million from GHG reductions, and $42.30 million from reduced
NOX and SO2 emissions. In this case, the net
benefit amounts to $215.24 million per year.
Table V.35--Annualized Benefits and Costs of Proposed Energy Conservation Standards for Dehumidifiers
[TSL 3]
----------------------------------------------------------------------------------------------------------------
Million 2022$/year
-------------------------------------------------------
Primary Low-net-benefits High-net-benefits
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 157.99 153.04 163.15
Climate Benefits *...................................... 22.85 22.66 22.93
Health Benefits **...................................... 42.30 41.95 42.42
Total Benefits [dagger]................................. 223.14 217.65 228.50
Consumer Incremental Product Costs [Dagger]............. 7.89 7.94 7.77
Net Benefits............................................ 215.24 209.71 220.74
Change in Producer Cashflow (INPV [Dagger][Dagger])..... (0.5)-(0.3) (0.5)-(0.3) (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings......................... 142.04 138.10 146.50
Climate Benefits * (3% discount rate)................... 22.85 22.66 22.93
Health Benefits **...................................... 34.54 34.31 34.64
Total Benefits [dagger]................................. 199.44 195.07 204.06
Consumer Incremental Product Costs [Dagger]............. 8.55 8.58 8.44
Net Benefits............................................ 190.89 186.49 195.62
Change in Producer Cashflow (INPV [Dagger][Dagger])..... (0.5)-(0.3) (0.5)-(0.3) (0.5)-(0.3)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with dehumidifiers shipped in 2028-2057. These
results include benefits to consumers which accrue after 2057 from the products shipped in 2028-2057. The
Primary, Low Net Benefits, and High Net Benefits Estimates utilize projections of energy prices from the
AEO2023 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.3 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 DOE does not have a single central SC-GHG point estimate and
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, but DOE does not have a single central SC-GHG point estimate.
[Dagger] Costs include incremental equipment costs as well as installation costs.
[Dagger][Dagger] Operating Cost Savings are calculated based on the life cycle costs analysis and national
impact analysis as discussed in detail below. See sections IV.F and IV.H of this document. DOE's national
impacts analysis includes all impacts (both costs and benefits) along the distribution chain beginning with
the increased costs to the manufacturer to manufacture the product and ending with the increase in price
experienced by the consumer. DOE also separately conducts a detailed analysis on the impacts on manufacturers
(i.e., manufacturer impact analysis, or ``MIA''). See section IV.J of this document. In the detailed MIA, DOE
models manufacturers' pricing decisions based on assumptions regarding investments, conversion costs,
cashflow, and margins. The MIA produces a range of impacts, which is the rule's expected impact on the INPV.
The change in INPV is the present value of all changes in industry cash flow, including changes in production
costs, capital expenditures, and manufacturer profit margins. The annualized change in INPV is calculated
using the industry weighted average cost of capital value of 8.4 percent that is estimated in the manufacturer
impact analysis (see chapter 12 of the NOPR TSD for a complete description of the industry weighted average
cost of capital). For dehumidifiers, the annualized change in INPV ranges from -$0.5 million to -$0.3 million.
DOE accounts for that range of likely impacts in analyzing whether a trial standard level is economically
justified. See section V.C of this document. DOE is presenting the range of impacts to the INPV under two
markup scenarios: the Preservation of Gross Margin scenario, which is the manufacturer markup scenario used in
the calculation of Consumer Operating Cost Savings in this table; and the Preservation of Operating Profit
Markup scenario, where DOE assumed manufacturers would not be able to increase per-unit operating profit in
proportion to increases in manufacturer production costs. DOE includes the range of estimated annualized
change in INPV in the above table, drawing on the MIA explained further in section IV.J of this document to
provide additional context for assessing the estimated impacts of this proposal to society, including
potential changes in production and consumption, which is consistent with OMB's Circular A-4 and E.O. 12866.
If DOE were to include the INPV into the annualized net benefit calculation for this proposed rule, the
annualized net benefits would range from $214.8 million to $214.9 million at 3-percent discount rate and would
range from $190.4 million to $190.6 million at 7-percent discount rate.
[[Page 76567]]
D. Reporting, Certification, and Sampling Plan
Manufacturers, including importers, must use product-specific
certification templates to certify compliance to DOE. For
dehumidifiers, the certification template reflects the general
certification requirements specified at 10 CFR 429.12. As discussed in
the previous paragraphs, DOE is not proposing to amend the product-
specific certification requirements for these products.
VI. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866, 13563 and 14094
E.O. 12866, ``Regulatory Planning and Review,'' as supplemented and
reaffirmed by E.O. 13563, ``Improving Regulation and Regulatory
Review,'' 76 FR 3821 (Jan. 21, 2011) and amended by 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 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 constitutes a
``significant regulatory action'' within the scope of section 3(f)(1)
of E.O. 12866. Accordingly, pursuant to section 6(a)(3)(C) of E.O.
12866, DOE has provided to OIRA an assessment, including the underlying
analysis, of benefits and costs anticipated from the 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 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
prepared the following IRFA for the products that are the subject of
this rulemaking.
For manufacturers of dehumidifiers, 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
portable dehumidifiers is classified under NAICS 335210, ``Small
Electrical Appliance Manufacturing'' and manufacturing of whole-home
dehumidifiers is classified under NAICS 333415, ``Air Conditioning and
Warm Air Heating Equipment and Commercial and Industrial Refrigeration
Equipment Manufacturing.'' For NAICS 335210, the SBA sets a threshold
of 1,500 employees or less and for NAICS 333415, the SBA sets a
threshold of 1,250 employees or less, for an entity to be considered as
a small business for these categories. For the purpose of this IRFA,
DOE used the higher employee limit of 1,500 in order to establish a
more inclusive threshold for what determines a ``small business.''
1. Description of Reasons Why Action Is Being Considered
DOE is proposing amended energy conservation standards for
dehumidifiers. 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
dehumidifiers, the subject of this document. (42 U.S.C. 6295(cc)) In a
final rule published on June 13, 2016, DOE prescribed the current
energy conservation standards for dehumidifiers manufactured on and
after June 13, 2019. 81 FR 38338. EPCA 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)) This propose
rulemaking is in accordance with DOE's obligations under EPCA.
2. Objectives of, and Legal Basis for, Rule
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 dehumidifiers,
the subject of this document. (42 U.S.C. 6295(cc)) EPCA prescribed
energy conservation standards for these products. Id. EPCA further
provides that, not later than 6 years after the issuance of any final
rule establishing or
[[Page 76568]]
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))
3. Description on Estimated Number of Small Entities Regulated
DOE conducted a market assessment using public information and
subscription-based company reports to identify potential small
manufacturers. DOE began its assessment by compiling a product database
of dehumidifier models available in the United States. To develop a
comprehensive product database of dehumidifier basic models, DOE
reviewed its Compliance Certification Database (CCD),\71\ supplemented
by information from California Energy Commission's Modernized Appliance
Efficiency Database System (MAEDbS),\72\ EPA's ENERGY STAR Product
Finder data set,\73\ individual company websites, and prior
dehumidifier rulemakings. DOE then reviewed the comprehensive product
database to identify the original equipment manufacturers (OEMs) of the
dehumidifier models identified. DOE consulted publicly available data,
such as manufacturer websites, manufacturer specifications and product
literature, import/export logs (e.g., bills of lading from Panjiva
\74\), and basic model numbers, to identify OEMs of covered
dehumidifiers. DOE further relied on public data and subscription-based
market research tools (e.g., Dun & Bradstreet reports \75\) to
determine company, location, headcount, and annual revenue. DOE
screened out companies that do not offer products covered by this
rulemaking, do not meet the SBA's definition of a ``small business,''
or are foreign-owned and operated.
---------------------------------------------------------------------------
\71\ U.S. Department of Energy's Compliance Certification
Database is available at: www.regulations.doe.gov/certification-data/#q=Product_Group_s%3A* (Last accessed February 21, 2023).
\72\ California Energy Commission's Modernized Appliance
Efficiency Database System is available at:
cacertappliances.energy.ca.gov/Pages/Search/AdvancedSearch.aspx.
(Last accessed February 21, 2023.)
\73\ U.S. Environmental Protection Agency's ENERGY STAR Product
Finder data set is available at: www.energystar.gov/productfinder/
(Last accessed February 21, 2023.)
\74\ S&P Global. Panjiva Market Intelligence is available at:
panjiva.com/import-export/United-States (Last accessed May 5, 2022).
\75\ The Dun & Bradstreet Hoovers subscription login is
available at app.dnbhoovers.com. (Last accessed March 23, 2023).
---------------------------------------------------------------------------
Based on its review, DOE identified 20 OEMs that sell dehumidifiers
in the United States. DOE then determined that of the 20 OEMs, 19 were
either large OEMs or are foreign owned and operated. Therefore, DOE
tentatively determined that one company is a small, domestic
manufacturer that meets the SBA's definition of a ``small business''
(i.e., the company has 1,500 employees or less) and manufactures
products covered by this rulemaking. This small business manufactures
whole-home dehumidifiers <=8.0 cubic feet (Product Class 4).
DOE reached out to this small business and invited them to
participate in voluntary interviews. However, this small business did
not consent to participate in the voluntary interviews conducted in
support of the NOPR analysis. DOE also requested information about
small businesses and potential impacts on small businesses while
interviewing larger manufacturers.
4. Description and Estimate of Compliance Requirements Including
Differences in Cost, if Any, for Different Groups of Small Entities
DOE reviewed its product database and identified 35 basic models of
whole-home dehumidifiers with a capacity of under 8.0 cubic feet
(Product Class 4) manufactured by this small, domestic OEM. Of those 35
models, 23 models currently meet the TSL 3 efficiency level. Should
this small business choose to redesign the 12 models that do not
currently meet the proposed amended standard, DOE estimates that the
small business would need to invest $337,000 in product conversion
costs to redesign all 12 models to incorporate higher efficiency
compressors, ECM blowers, and larger heat exchangers. 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's
engineering analysis indicates manufacturers would likely be able to
produce compliant products with existing machinery, and, therefore, DOE
tentatively does not expect meeting the proposed standard would require
new equipment or tooling. DOE's analysis focused on the investments
associated with amended standards; investments associated with changes
in regulations by other State or Federal agencies (i.e., refrigerant
regulations) are not attributed to amended standards. Based on annual
revenue estimates from Dun & Bradstreet, DOE estimated the company's
annual revenue to be $221 million. The total conversion costs of
$337,000 are less than 0.1 percent of company revenue over the 3-year
conversion period.
DOE seeks comments, information, and data on the number of small
businesses in the industry, the names of those small businesses, and
their market shares by product class. DOE also requests comment on the
potential impacts of the proposed standards on small manufacturers.
5. Duplication, Overlap, and Conflict With Other Rules and Regulations
DOE is not aware of any rules or regulations that duplicate,
overlap, or conflict with the proposed rule.
6. Significant Alternatives to the Rule
The discussion in the previous section analyzes impacts on small
businesses that would result from DOE's proposed rule, represented by
TSL 3. In reviewing alternatives to the proposed rule, DOE examined
energy conservation standards set at lower efficiency levels. While TSL
1 and TSL 2 would reduce the impacts on small business manufacturers,
it would come at the expense of a reduction in energy savings. TSL 1
achieves 98 percent lower energy savings compared to the energy savings
at TSL 3. TSL 2 achieves 95 percent lower energy savings compared to
the energy savings at TSL 3.
Based on the presented discussion, establishing standards at TSL 3
balances the benefits of the energy savings at TSL 3 with the potential
burdens placed on dehumidifier manufacturers, including small business
manufacturers. Accordingly, DOE does not propose one of the other TSLs
considered in the analysis, or the other policy alternatives examined
as part of the regulatory impact analysis and included in chapter 17 of
the NOPR TSD.
Additional compliance flexibilities may be available through other
means. EPCA provides that a manufacturer whose annual gross revenue
from all of its operations does not exceed $8 million may apply for an
exemption from all or part of an energy conservation standard for a
period not longer than 24 months after the effective date of a final
rule establishing the standard. (42 U.S.C. 6295(t)) Additionally,
manufacturers subject to DOE's energy efficiency standards may apply to
DOE's Office of Hearings and Appeals for exception relief under certain
circumstances. Manufacturers should refer to 10 CFR part 430, subpart
E, and 10 CFR part 1003 for additional details.
[[Page 76569]]
C. Review Under the Paperwork Reduction Act
Manufacturers of dehumidifiers 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 dehumidifiers, 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 dehumidifiers.
(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 standards for consumer products or industrial equipment.
10 CFR part 1021, subpart D, appendix B5.1. DOE anticipates that this
rulemaking qualifies for categorical exclusion B5.1 because it is a
rulemaking that establishes energy conservation standards for consumer
products or industrial equipment, none of the exceptions identified in
categorical exclusion B5.1(b) apply, no extraordinary circumstances
exist that require further environmental analysis, and it otherwise
meets the requirements for application of a categorical exclusion. See
10 CFR 1021.410. DOE will complete its NEPA review before issuing the
final rule.
E. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735. DOE has examined this proposed rule and has
tentatively determined that it would not have a substantial direct
effect on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government. EPCA governs
and prescribes Federal preemption of State regulations as to energy
conservation for the products that are the subject of this proposed
rule. States can petition DOE for exemption from such preemption to the
extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297)
Therefore, no further action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 7, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 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.
This rule does not contain a Federal intergovernmental mandate, nor
is it expected to require expenditures of $100 million or more in any
one year by the private sector. As a result, the analytical
requirements of UMRA do not apply.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires
[[Page 76570]]
Federal agencies to issue a Family Policymaking Assessment for any rule
that may affect family well-being. This rule would not have any impact
on the autonomy or integrity of the family as an institution.
Accordingly, DOE has concluded that it is not necessary to prepare a
Family Policymaking Assessment.
I. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (Mar. 15,
1988), DOE has determined that this proposed rule would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
J. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review
most disseminations of information to the public under information
quality guidelines established by each agency pursuant to general
guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452
(Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446
(Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving
Implementation of the Information Quality Act (April 24, 2019), DOE
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has
reviewed this NOPR under the OMB and DOE guidelines and has concluded
that it is consistent with applicable policies in those guidelines.
K. Review Under Executive Order 13211
E.O. 13211, ``Actions Concerning Regulations That Significantly
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22,
2001), requires Federal agencies to prepare and submit to OIRA at OMB,
a Statement of Energy Effects for any proposed significant energy
action. A ``significant energy action'' is defined as any action by an
agency that promulgates or is expected to lead to promulgation of a
final rule, and that (1) is a significant regulatory action under
Executive Order 12866, or any successor order; and (2) is likely to
have a significant adverse effect on the supply, distribution, or use
of energy, or (3) is designated by the Administrator of OIRA as a
significant energy action. For any proposed significant energy action,
the agency must give a detailed statement of any adverse effects on
energy supply, distribution, or use should the proposal be implemented,
and of reasonable alternatives to the action and their expected
benefits on energy supply, distribution, and use.
DOE has tentatively concluded that this regulatory action, which
proposes amended energy conservation standards for dehumidifiers, 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.\76\ 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 DOE's analyses. DOE is in the
process of evaluating the resulting report.\77\
---------------------------------------------------------------------------
\76\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last
accessed DATE).
\77\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------
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: www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=24. 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
proposed rule, 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 proposed 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
[[Page 76571]]
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 submit further comments on the proceedings and any aspect
of the proposed 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 propose 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 propose
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
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comment or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, 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
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email two well-marked copies: one copy of the document marked
``confidential'' including all the information believed to be
confidential, and one copy of the document marked ``non-confidential''
with the information believed to be confidential deleted. DOE will make
its own determination about the confidential status of the information
and treat it according to its determination.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
E. Issues on Which DOE Seeks Comment
Although DOE welcomes comments on any aspect of this proposal, DOE
is particularly interested in receiving comments and views of
interested parties concerning the following issues:
(1) DOE requests comment on the effects of EPA and CARB regulations
on refrigerant choices and on whether changes in refrigerant will
affect manufacturer's ability to achieve the efficiency levels in the
NOPR analysis and the availability of high-efficiency R-32 compressors.
(2) DOE requests comment regarding consumer's dehumidifier usage
patterns and whether consumers typically purchase multiple smaller
dehumidifiers to meet dehumidification
[[Page 76572]]
requirements as opposed to a single, higher capacity dehumidifier.
(3) DOE requests comment on whether limiting needed chassis size
increases are sufficient to preserve consumer utility at the max-tech
level.
(4) DOE requests comment on the incremental MPCs from the NOPR
engineering analysis.
(5) DOE seeks available data on installation costs for baseline and
more efficient units.
(6) DOE seeks comment on the assumption that dehumidifier consumers
are most likely to replace a broken unit rather than repair it. DOE
also seeks available data on the repair frequency.
(7) DOE seeks data and comment on its efficiency distribution
estimate and the assumption of an annual efficiency improvement of 0.25
percent and the expected market respond to updated ENERGY STAR 6.0
specifications.
(8) DOE requests comment on its tentative conclusion that
refrigerant desiccant dehumidifier manufacturers would be similarly
impacted by potential amended standards and therefore would not warrant
a separate subgroup analysis.
(9) DOE requests comment on how to address the climate benefits and
other effects of the proposal.
(10) DOE seeks comments, information, and data on the capital
conversion costs and product conversion costs estimated for each TSL.
(11) DOE seeks comment on whether manufacturers expect
manufacturing capacity constraints or engineering resource constraints
would limit product availability to consumers in the timeframe of the
amended standard compliance date (2028).
(12) DOE requests information regarding the impact of cumulative
regulatory burden on manufacturers of dehumidifiers associated with
multiple DOE standards or product-specific regulatory actions of other
Federal agencies.
(13) DOE requests comments on the magnitude of costs associated
with transitioning dehumidifier products and production facilities to
accommodate low-GWP refrigerants that would be incurred between the
publication of this NOPR and the proposed compliance date of amended
standards. Quantification and categorization of these costs, such as
engineering efforts, testing lab time, certification costs, and capital
investments (e.g., new charging equipment), would enable DOE to refine
its analysis.
(14) DOE seeks comments, information, and data on the number of
small businesses in the industry, the names of those small businesses,
and their market shares by product class. DOE also requests comment on
the potential impacts of the proposed standards on small manufacturers.
(15) 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 announcement of public meeting.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Small businesses.
Signing Authority
This document of the Department of Energy was signed on October 27,
2023, by Jeffrey Marootian, Principal Deputy Assistant Secretary for
Energy Efficiency and Renewable Energy, pursuant to delegated authority
from the Secretary of Energy. That document with the original signature
and date is maintained by DOE. For administrative purposes only, and in
compliance with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of the Department of Energy. This administrative
process in no way alters the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on October 27, 2023.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy
For the reasons stated in the preamble, DOE is proposing to amend
part 430 of Chapter II of Title 10, 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 (v) to read as follows:
Sec. 430.32 Energy and water conservation standards and their
compliance dates.
* * * * *
(v) Dehumidifiers. (1) Dehumidifiers manufactured on or after June
13, 2019, and before [date 3 years after date of publication of the
final rule], shall have an integrated energy factor that meets or
exceeds the following values:
------------------------------------------------------------------------
Minimum
integrated
Portable dehumidifier product capacity (pints/day) energy factor
(liters/kWh)
------------------------------------------------------------------------
25.00 or less........................................... 1.30
25.01-50.00............................................. 1.60
50.01 or more........................................... 2.80
------------------------------------------------------------------------
Whole-home dehumidifier product case volume ..............
(cubic feet)
------------------------------------------------------------------------
8.0 or less............................................. 1.77
More than 8.0........................................... 2.41
------------------------------------------------------------------------
(2) Dehumidifiers manufactured on or after [date 3 years after date
of publication of the final rule], shall have an integrated energy
factor that meets or exceeds the following values:
[[Page 76573]]
------------------------------------------------------------------------
Minimum
integrated
Portable dehumidifier product capacity (pints/day) energy factor
(liters/kWh)
------------------------------------------------------------------------
25.00 or less........................................... 1.70
25.01-50.00............................................. 2.01
50.01 or more........................................... 3.10
------------------------------------------------------------------------
Whole-home dehumidifier product case volume ..............
(cubic feet)
------------------------------------------------------------------------
8.0 or less............................................. 2.22
More than 8.0........................................... 3.81
------------------------------------------------------------------------
* * * * *
[FR Doc. 2023-24106 Filed 11-3-23; 8:45 am]
BILLING CODE 6450-01-P