[Federal Register Volume 89, Number 52 (Friday, March 15, 2024)]
[Rules and Regulations]
[Pages 19026-19126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04736]



[[Page 19025]]

Vol. 89

Friday,

No. 52

March 15, 2024

Part II





Department of Energy





-----------------------------------------------------------------------





10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Residential Clothes Washers; Direct Final Rule

  Federal Register / Vol. 89, No. 52 / Friday, March 15, 2024 / Rules 
and Regulations  

[[Page 19026]]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2017-BT-STD-0014]
RIN 1904-AF58


Energy Conservation Program: Energy Conservation Standards for 
Residential Clothes Washers

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

ACTION: Direct final rule.

-----------------------------------------------------------------------

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 residential 
clothes washers (``RCWs''). In this direct final rule, the U.S. 
Department of Energy (``DOE'') is adopting amended energy conservation 
standards for RCWs. DOE has determined that the amended energy 
conservation standards for these products would result in significant 
conservation of energy and are technologically feasible and 
economically justified.

DATES: The effective date of this rule is July 15, 2024. If adverse 
comments are received by July 3, 2024, and DOE determines that such 
comments may provide a reasonable basis for withdrawal of the direct 
final rule under 42 U.S.C. 6295(o), a timely withdrawal of this rule 
will be published in the Federal Register. If no such adverse comments 
are received, compliance with the amended standards established for 
RCWs in this direct final rule is required on and after March 1, 2028. 
Comments regarding the likely competitive impact of the standards 
contained in this direct final rule should be sent to the Department of 
Justice contact listed in the ADDRESSES section on or before April 15, 
2024.

ADDRESSES: The docket for this rulemaking, which includes Federal 
Register notices, public meeting attendee lists and transcripts, 
comments, and other supporting documents/materials, is available for 
review at www.regulations.gov. All documents in the docket are listed 
in the www.regulations.gov index. However, not all documents listed in 
the index may be publicly available, such as information that is exempt 
from public disclosure.
    The docket web page can be found at www.regulations.gov/docket/EERE-2017-BT-STD-0014. The docket web page contains instructions on how 
to access all documents, including public comments, in the docket.
    For further information on how to submit a comment or review other 
public comments and the docket, contact the Appliance and Equipment 
Standards Program staff at (202) 287-1445 or by email: 
[email protected].
    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 standards contained in this direct 
final rule. Interested persons may contact the Antitrust 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 direct final rule.

FOR FURTHER INFORMATION CONTACT: Dr. Carl Shapiro, U.S. Department of 
Energy, Office of Energy Efficiency and Renewable Energy, Building 
Technologies Office, EE-5B, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (202) 287-5649. Email: 
[email protected].
    Ms. Amelia Whiting, U.S. Department of Energy, Office of the 
General Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC 
20585-0121. Telephone: (240) 586-2588. Email: 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Synopsis of the Direct Final Rule
    A. Benefits and Costs to Consumers
    B. Impact on Manufacturers
    C. National Benefits and Costs
    D. Conclusion
II. Introduction
    A. Authority
    B. Background
    1. Current Standards
    2. Current Test Procedure
    3. The Joint Agreement
III. General Discussion
    A. Scope of Coverage
    B. Fairly Representative of Relevant Points of View
    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
    B. Screening Analysis
    1. Screened-Out Technologies
    2. Remaining Technologies
    C. Engineering Analysis
    1. Metric Translations
    2. Efficiency Analysis
    a. Baseline Efficiency Levels
    b. Higher Efficiency Levels
    c. Semi-Automatic
    3. Cost Analysis
    4. Cost-Efficiency Results
    D. Markups Analysis
    E. Energy and Water Use Analysis
    F. Life-Cycle Cost and Payback Period Analysis
    1. Product Cost
    2. Installation Cost
    3. Annual Energy and Water Consumption
    4. Energy and Water Prices
    a. Energy Prices
    b. Water and Wastewater Prices
    5. Maintenance and Repair Costs
    6. Product Lifetime
    7. Discount Rates
    8. Energy Efficiency Distribution in the No-New-Standards Case
    9. Payback Period Analysis
    G. Shipments Analysis
    H. National Impact Analysis
    1. Product Efficiency Trends
    2. National Energy and Water Savings
    3. Net Present Value Analysis
    I. Consumer Subgroup Analysis
    1. Low-Income Households
    2. Senior-Only Households
    3. Well-Water Households
    J. Manufacturer Impact Analysis
    1. Overview
    2. Government Regulatory Impact Model and Key Inputs
    a. Manufacturer Production Costs
    b. Shipments Projections
    c. Capital and Product Conversion Costs
    d. Manufacturer Markup Scenarios
    3. 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
    c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis
    N. Employment Impact Analysis
    O. Regulatory Impact Analysis
    P. Other Comments
    1. Commerce Clause
    2. Test Cloth
    3. National Academy of Sciences Report
V. Analytical Results and Conclusions
    A. Trial Standard Levels

[[Page 19027]]

    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy and Water Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    a. Performance Characteristics
    b. Continued Availability of Small-Capacity Clothes Washers
    c. Design Characteristics
    d. Conclusion
    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 Residential 
Clothes Washer Standards
    2. Annualized Benefits and Costs of the Adopted Standards
VI. Severability
VII. Procedural Issues and Regulatory Review
    A. Review Under Executive Orders 12866, 13563, and 14094
    B. Review Under the Regulatory Flexibility Act
    C. Review Under the Paperwork Reduction Act
    D. Review Under the National Environmental Policy Act of 1969
    E. Review Under Executive Order 13132
    F. Review Under Executive Order 12988
    G. Review Under the Unfunded Mandates Reform Act of 1995
    H. Review Under the Treasury and General Government 
Appropriations Act, 1999
    I. Review Under Executive Order 12630
    J. Review Under the Treasury and General Government 
Appropriations Act, 2001
    K. Review Under Executive Order 13211
    L. Information Quality
    M. Congressional Notification
VIII. Approval of the Office of the Secretary

I. Synopsis of the Direct Final 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 consumer (residential) \3\ 
clothes washers (``RCWs''), the subject of this direct final rule. (42 
U.S.C. 6292(a)(7))
---------------------------------------------------------------------------

    \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.
    \3\ DOE uses the ``residential'' nomenclature and ``RCW'' 
abbreviation for consumer clothes washers in order to distinguish 
from the ``CCW'' abbreviation used for commercial clothes washers, 
which are also regulated equipment under EPCA.
---------------------------------------------------------------------------

    Pursuant to EPCA, any new or amended energy conservation standard 
must, among other things, be designed to achieve the maximum 
improvement in energy efficiency that DOE determines is technologically 
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A)) 
Furthermore, the new or amended standard must result in significant 
conservation of energy. (42 U.S.C. 6295(o)(3)(B))
    In light of the above and under the authority provided by 42 U.S.C. 
6295(p)(4), DOE is issuing this direct final rule amending energy 
conservation standards for RCWs.
    The adopted standard levels in this direct final rule were proposed 
in a letter submitted to DOE jointly by groups representing 
manufacturers, energy and environmental advocates, consumer groups, and 
a utility. This letter, titled ``Energy Efficiency Agreement of 2023'' 
(hereafter, the ``Joint Agreement'' \4\), recommends specific energy 
conservation standards for RCWs that, in the commenters' view, would 
satisfy the EPCA requirements in 42 U.S.C. 6295(o). DOE subsequently 
received letters of support for the Joint Agreement from States 
including New York, California, and Massachusetts \5\ and utilities 
including San Diego Gas and Electric (``SDG&E'') and Southern 
California Edison (``SCE'') \6\ advocating for the adoption of the 
recommended standards.
---------------------------------------------------------------------------

    \4\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505.
    \5\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0506.
    \6\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0507.
---------------------------------------------------------------------------

    In accordance with the direct final rule provisions at 42 U.S.C. 
6295(p)(4), DOE has determined that the recommendations contained in 
the Joint Agreement are compliant with 42 U.S.C. 6295(o). As required 
by 42 U.S.C. 6295(p)(4)(A)(i), DOE is also simultaneously publishing a 
notice of proposed rulemaking (``NOPR'') that contains identical 
standards to those adopted in this direct final rule. Consistent with 
the statute, DOE is providing a 110-day public comment period on the 
direct final rule. (42 U.S.C. 6295(p)(4)(B)) If DOE determines that any 
comments received provide a reasonable basis for withdrawal of the 
direct final rule under 42 U.S.C. 6295(o) or any other applicable law, 
DOE will publish the reasons for withdrawal and continue the rulemaking 
under the NOPR. (42 U.S.C. 6295(p)(4)(C)) See section II.A of this 
document for more details on DOE's statutory authority.
    The amended standards that DOE is adopting in this direct final 
rule are the efficiency levels recommended in the Joint Agreement 
(shown in Table I.1). The standards are expressed in terms of energy 
efficiency ratio (``EER''), measured in pounds per kilowatt-hour per 
cycle (``lb/kWh/cycle''), and water efficiency ratio (``WER''), 
measured in pounds per gallon per cycle (``lb/gal/cycle''), as 
determined in accordance with DOE's clothes washer test procedure 
codified at title 10 of the Code of Federal Regulations (``CFR''), part 
430, subpart B, appendix J (``appendix J''). The EER metric includes 
active mode, inactive mode, and off mode energy use. The amended 
standards recommended in the Joint Agreement are represented as trial 
standard level (``TSL'') 2 in this document and described in section 
V.A of this document. The Joint Agreement's standards for RCWs apply to 
all products listed in Table I.1 manufactured in, or imported into, the 
United States starting on March 1, 2028.

Table I.1--Energy Conservation Standards for Residential Clothes Washers
                   [Compliance starting March 1, 2028]
------------------------------------------------------------------------
                                      Minimum energy     Minimum water
           Product class             efficiency ratio   efficiency ratio
                                      (lb/kWh/cycle)     (lb/gal/cycle)
------------------------------------------------------------------------
Automatic Clothes Washers:

[[Page 19028]]

 
    Top-Loading Ultra-Compact                    3.79               0.29
     (less than 1.6 ft\3\
     capacity)....................
    Top-Loading Standard-Size (1.6               4.27               0.57
     ft\3\ or greater capacity)
     with an average cycle time of
     30 minutes or greater........
    Front-Loading Compact (less                  5.02               0.71
     than 3.0 ft\3\ capacity) *...
    Front-Loading Standard-Size                  5.52               0.77
     (3.0 ft\3\ or greater
     capacity) with an average
     cycle time of 45 minutes or
     greater......................
Semi-Automatic Clothes Washers....               2.12               0.27
------------------------------------------------------------------------
* The standards in this table do not apply to front-loading clothes
  washers with a capacity greater than or equal to 1.6 ft\3\ and less
  than 3.0 ft\3\ with an average cycle time of less than 45 minutes.

A. Benefits and Costs to Consumers

    Table I.2 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of RCWs, as measured by the average 
life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\7\ The average LCC savings are positive for all product 
classes, and the PBP is less than the average lifetime of RCWs, which 
is estimated to be 13.4 years (see section IV.F.6 of this document).
---------------------------------------------------------------------------

    \7\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.8 of this document). The simple PBP, which is 
designed to compare specific efficiency levels, is measured relative 
to the baseline product (see section IV.F.9 of this document).

Table I.2--Impacts of Adopted Energy Conservation Standards on Consumers
                     of Residential Clothes Washers
------------------------------------------------------------------------
                                       Average LCC       Simple payback
           Product class             savings (2022$)     period (years)
------------------------------------------------------------------------
Automatic Clothes Washers:
    Top-Loading Ultra-Compact                     n.a               n.a.
     (less than 1.6 ft\3\
     capacity) *..................
    Top-Loading Standard-Size (1.6               $111                6.2
     ft\3\ or greater capacity)...
    Front-Loading Compact (less                     9                9.3
     than 3.0 ft\3\ capacity).....
    Front-Loading Standard-Size                    46                1.4
     (3.0 ft\3\ or greater
     capacity)....................
Semi-Automatic Clothes Washers....                284                0.5
------------------------------------------------------------------------
* The entry ``n.a.'' means not applicable because the adopted standard
  is at the baseline level.

    DOE's analysis of the impacts of the adopted standards on consumers 
is described in section IV.F of this document.

B. Impact on Manufacturers 8
---------------------------------------------------------------------------

    \8\ All monetary values in this document are expressed in 2022 
dollars and, where appropriate, are discounted to 2024 unless 
explicitly stated otherwise.
---------------------------------------------------------------------------

    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year (2024) through 
the end of the analysis period, which is 30 years from the analyzed 
compliance date.\9\ Using a real discount rate of 9.3 percent, DOE 
estimates that the INPV for manufacturers of RCWs in the case without 
amended standards is $1,707.9 million.\10\ Under the adopted standards, 
which align with the efficiency levels recommended in the Joint 
Agreement (represented by TSL 2, hereafter, the ``Recommended TSL'') 
for RCWs, DOE estimates the change in INPV to range from -16.3 percent 
to -8.6 percent, which is -$278.3 million to -$146.9 million. In order 
to bring products into compliance with amended standards, it is 
estimated that industry will incur total conversion costs of $320.0 
million.
---------------------------------------------------------------------------

    \9\ DOE's analysis period extends 30-years from the compliance 
year. The analysis period ranges from 2024-2056 for the no-new-
standards case and all TSLs, except for TSL 2 (the Recommended TSL). 
The analysis period for the Recommended TSL ranges from 2024-2057 
due to the 2028 compliance year.
    \10\ The no-new-standards case INPV of $1,707.9 million reflects 
the sum of discounted free cash flows from 2024-2056 (from the 
reference year to 30 years after the 2027 compliance date) plus a 
discounted terminal value.
---------------------------------------------------------------------------

    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in sections IV.J and V.B.2 of this document.

C. National Benefits and Costs 11
---------------------------------------------------------------------------

    \11\ All monetary values in this document are expressed in 2022 
dollars and, where appropriate, are discounted to 2024 unless 
explicitly stated otherwise.
---------------------------------------------------------------------------

    DOE's analyses indicate that the adopted energy conservation 
standards for RCWs would save a significant amount of energy and water. 
Relative to the case without amended standards, the lifetime energy and 
water savings for RCWs purchased in the 30-year period that begins in 
the anticipated year of compliance with the amended standards (2028-
2057), amount to 0.67 quadrillion British thermal units (``Btu''), or 
quads of energy and 1.89 trillion gallons of water, respectively.\12\ 
This represents a savings of 3.1 percent relative to the energy use of 
these products in the case without amended standards (referred to as 
the ``no-new-standards case'').
---------------------------------------------------------------------------

    \12\ 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.
---------------------------------------------------------------------------

    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for RCWs ranges from $3.28 billion (at a 7-
percent discount rate) to $8.71 billion (at a 3-percent discount rate). 
This NPV expresses the

[[Page 19029]]

estimated total value of future operating-cost savings minus the 
estimated increased product costs and installation costs for RCWs 
purchased during the period 2028-2057.
    In addition, the adopted standards for RCWs are projected to yield 
significant environmental benefits. DOE estimates that the standards 
will result in cumulative emission reductions (over the same period as 
for energy savings) of 13.96 million metric tons (``Mt'') \13\ of 
carbon dioxide (``CO2''), 3.65 thousand tons of sulfur 
dioxide (``SO2''), 27.74 thousand tons of nitrogen oxides 
(``NOX''), 124.57 thousand tons of methane 
(``CH4''), 0.12 thousand tons of nitrous oxide 
(``N2O''), and 0.02 tons of mercury (``Hg'').\14\ The 
estimated cumulative reduction in CO2 emissions through 2030 
amounts to 0.46 Mt, which is equivalent to the emissions resulting from 
the annual electricity use of more than 89 thousand homes.
---------------------------------------------------------------------------

    \13\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \14\ 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 effect 
air pollutant emissions.
---------------------------------------------------------------------------

    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO2 (``SC-CO2''), the social cost of 
methane (``SC-CH4''), and the social cost of nitrous oxide 
(``SC-N2O''). Together these represent the social cost of 
GHG (``SC-GHG''). DOE used interim SC-GHG values (in terms of benefit 
per ton of GHG avoided) developed by an Interagency Working Group on 
the Social Cost of Greenhouse Gases (``IWG'').\15\ 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 $0.84 
billion. DOE does not have a single central SC-GHG point estimate and 
it emphasizes the importance and value of considering the benefits 
calculated using all four sets of SC-GHG estimates.
---------------------------------------------------------------------------

    \15\ 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''). Available at 
www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
---------------------------------------------------------------------------

    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions, using benefit per ton estimates 
from the Environmental Protection Agency,\16\ as discussed in section 
IV.L of this document. DOE estimated the present value of the health 
benefits would be $0.73 billion using a 7-percent discount rate, and 
$1.62 billion using a 3-percent discount rate.\17\ 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.
---------------------------------------------------------------------------

    \16\ U.S. Environmental Protection Agency (``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.
    \17\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
---------------------------------------------------------------------------

    Table I.3 summarizes the monetized benefits and costs expected to 
result from the amended standards for RCWs. 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 Adopted Energy
         Conservation Standards for Residential Clothes Washers
------------------------------------------------------------------------
                                                         Billion $2022
------------------------------------------------------------------------
                            3% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................              17.92
Climate Benefits *...................................               0.84
Health Benefits **...................................               1.62
                                                      ------------------
    Total Benefits [dagger]..........................              20.38
Consumer Incremental Product Costs [Dagger]..........               9.20
                                                      ------------------
    Net Monetized Benefits...........................               8.71
Change in Producer Cash Flow (INPV [Dagger][Dagger]).      (0.28)-(0.15)
------------------------------------------------------------------------
                            7% discount rate
------------------------------------------------------------------------
Consumer Operating Cost Savings......................               8.65
Climate Benefits * (3% discount rate)................               0.84
Health Benefits **...................................               0.73
                                                      ------------------
    Total Benefits [dagger]..........................              10.22
Consumer Incremental Product Costs [Dagger]..........               5.37
                                                      ------------------
    Net Monetized Benefits...........................               3.28
Change in Producer Cash Flow (INPV [Dagger][Dagger]).      (0.28)-(0.15)
------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs
  shipped in 2028-2057. These results include consumer, climate, and
  health benefits that accrue after 2057 from the products shipped in
  2028-2057.

[[Page 19030]]

 
* 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; however, DOE
  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 IWG.
** Health benefits are calculated using benefit-per-ton values for NOX
  and SO2. DOE is currently only monetizing (for SO2 and NOX) PM2.5
  precursor health benefits and (for NOX) ozone precursor health
  benefits, but will continue to assess the ability to monetize other
  effects, such as health benefits from reductions in direct PM2.5
  emissions. See section IV.L of this document for more details.
[dagger] Total and net benefits include those consumer, climate, and
  health benefits that can be quantified and monetized. For presentation
  purposes, total and net benefits for both the 3-percent and 7-percent
  cases are presented using the average SC-GHG with 3-percent discount
  rate, but DOE does not have a single central SC-GHG point estimate.
  DOE emphasizes the importance and value of considering the benefits
  calculated using all four sets of SC-GHG estimates.
[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, cash flow, 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 9.3 percent that is
  estimated in the MIA (see chapter 12 of the direct final rule
  technical support document (``TSD'') for a complete description of the
  industry weighted average cost of capital). For RCWs, the change in
  INPV ranges from -$279 million to -$147 million. DOE accounts for that
  range of likely impacts in analyzing whether a TSL is economically
  justified. See section V.C of this document. DOE is presenting the
  range of impacts to the INPV under two manufacturer 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
  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
  change in INPV in the previous 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 direct final rule to
  society, including potential changes in production and consumption,
  which is consistent with Office of Management and Budget (``OMB'')
  Circular A-4 and Executive Order (``E.O.'') 12866. If DOE were to
  include the change in INPV into the net benefit calculation for this
  direct final rule, the net benefits would range from $8.43 billion to
  $8.56 billion at 3-percent discount rate and would range from $3.00
  billion to $3.13 billion at 7-percent discount rate. Parentheses ()
  indicate negative values.

    The benefits and costs of the adopted 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.\18\
---------------------------------------------------------------------------

    \18\ To convert the time-series of costs and benefits into 
annualized values, DOE calculated a present value in 2024, the year 
used for discounting the NPV of total consumer costs and savings. 
For the benefits, DOE calculated a present value associated with 
each year's shipments in the year in which the shipments occur 
(e.g., 2020 or 2030), and then discounted the present value from 
each year to 2024. Using the present value, DOE then calculated the 
fixed annual payment over a 30-year period, starting in the 
compliance year, that yields the same present value.
---------------------------------------------------------------------------

    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of RCWs shipped in 
2028-2057. The benefits associated with reduced emissions achieved as a 
result of the adopted standards are also calculated based on the 
lifetime of RCWs shipped in 2028-2057. Total benefits for both the 3-
percent and 7-percent cases are presented using the average GHG social 
costs with 3-percent discount rate. Estimates of total benefits values 
are presented for all four SC-GHG discount rates in section V.B.6 of 
this document.
    Table I.4 presents the total estimated monetized benefits and costs 
associated with the adopted standard, expressed in terms of annualized 
values. The results under the primary estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards adopted 
in this rule is $530.1 million per year in increased equipment costs, 
while the estimated annual benefits are $853.9 million in reduced 
equipment operating costs, $46.9 million in climate benefits, and $71.9 
million in health benefits. In this case, the net benefit would amount 
to $442.5 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $513.1 million per year in increased 
equipment costs, while the estimated annual benefits are $998.9 million 
in reduced operating costs, $46.9 million in climate benefits, and 
$90.3 million in health benefits. In this case, the net benefit would 
amount to $623.0 million per year.

          Table I.4--Annualized Benefits and Costs of Adopted Standards for Residential Clothes Washers
                                                   [2028-2057]
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           998.9           957.2         1,020.9
Climate Benefits *..............................................            46.9            45.2            47.5
Health Benefits **..............................................            90.3            87.1            91.6
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................         1,136.1         1,089.5         1,160.0
Consumer Incremental Product Costs [Dagger].....................           513.1           551.8           468.6
                                                                 -----------------------------------------------

[[Page 19031]]

 
    Net Benefits................................................           623.0           537.7           691.4
Change in Producer Cash Flow (INPV [Dagger][Dagger])............       (27)-(14)       (27)-(14)       (27)-(14)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           853.9           821.2           871.7
Climate Benefits * (3% discount rate)...........................            46.9            45.2            47.5
Health Benefits **..............................................            71.9            69.6            72.8
                                                                 -----------------------------------------------
    Total Benefits [dagger].....................................           972.6           935.9           992.0
Consumer Incremental Product Costs [Dagger].....................           530.1           564.6           489.5
                                                                 -----------------------------------------------
    Net Benefits................................................           442.5           371.3           502.5
Change in Producer Cash Flow (INPV [Dagger][Dagger])............       (27)-(14)       (27)-(14)       (27)-(14)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs 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
  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 it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the 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
  (MIA). See section IV.J of this document. In the detailed MIA, DOE models manufacturers' pricing decisions
  based on assumptions regarding investments, conversion costs, cash flow, 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 9.3 percent that is estimated in the MIA (see chapter 12 of the direct final rule TSD for a
  complete description of the industry weighted average cost of capital). For RCWs, the annualized change in
  INPV ranges from -$27 million to -$14 million. DOE accounts for that range of likely impacts in analyzing
  whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of
  impacts to the INPV under two manufacturer 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 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 direct
  final rule 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 annualized change in INPV into the annualized
  net benefit calculation for this direct final rule, the annualized net benefits, using the primary estimate,
  would range from $596 million to $609 million at 3-percent discount rate and would range from $415 million to
  $428 million at 7-percent discount rate. Parentheses () indicate negative values.

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

D. Conclusion

    DOE has determined that the Joint Agreement was submitted jointly 
by interested persons that are fairly representative of relevant points 
of view, in accordance with 42 U.S.C. 6295(p)(4)(A). After considering 
the recommended standards and weighing the benefits and burdens, DOE 
has determined that the recommended standards are in accordance with 42 
U.S.C. 6295(o), which contains the criteria for prescribing new or 
amended standards. Specifically, the Secretary of Energy 
(``Secretary'') has determined that the adoption of the recommended 
standards would result in the significant conservation of energy and 
water and is the maximum improvement in energy efficiency that is 
technologically feasible and economically justified. In determining 
whether the recommended standards are economically justified, the 
Secretary has determined that the benefits of the recommended standards 
exceed the burdens. The Secretary has further concluded that the 
recommended standards, when considering the benefits of energy and 
water savings, positive NPV of consumer benefits, emission reductions, 
the estimated monetary value of the emissions reductions, and positive 
average LCC savings, would yield benefits that outweigh the negative 
impacts on some consumers and on manufacturers, including the 
conversion costs that could result in a reduction in INPV for 
manufacturers.

[[Page 19032]]

    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reduction benefits, and a 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
standards for RCWs is $495.4 million per year in increased product 
costs, while the estimated annual benefits are $798.0 million in 
reduced product operating costs, $45.5 million in climate benefits, and 
$67.2 million in health benefits. The net benefit amounts to $415.2 
million per year. DOE notes that the net benefits are substantial even 
in the absence of the climate benefits,\19\ and DOE would adopt the 
same standards in the absence of such benefits.
---------------------------------------------------------------------------

    \19\ The information on climate benefits is provided in 
compliance with Executive Order 12866.
---------------------------------------------------------------------------

    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.\20\ 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.
---------------------------------------------------------------------------

    \20\ 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 0.67 quads FFC, the equivalent of 
the primary annual energy use of 4.5 million homes. In addition, they 
are projected to reduce cumulative CO2 emissions by 13.96 
Mt. Based on these findings, DOE has determined the energy savings from 
the standard levels adopted in this direct final rule are 
``significant'' within the meaning of 42 U.S.C. 6295(o)(3)(B). A more 
detailed discussion of the basis for these conclusions is contained in 
the remainder of this document and the accompanying TSD.\21\
---------------------------------------------------------------------------

    \21\ The TSD is available in the docket for this rulemaking at 
www.regulations.gov/docket/EERE-2017-BT-STD-0014.
---------------------------------------------------------------------------

    Under the authority provided by 42 U.S.C. 6295(p)(4), DOE is 
issuing this direct final rule amending the energy conservation 
standards for RCWs. Consistent with this authority, DOE is also 
simultaneously publishing elsewhere in this Federal Register a NOPR 
proposing standards that are identical to those contained in this 
direct final rule. See 42 U.S.C. 6295(p)(4)(A)(i).

II. Introduction

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

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 RCWs, the 
subject of this document. (42 U.S.C. 6292(a)(7)) EPCA prescribed energy 
conservation standards for these products (42 U.S.C. 6295(g)(2) and 
(g)(9)(A)), and directed DOE to conduct future rulemakings to determine 
whether to amend these standards. (42 U.S.C. 6295(g)(4) and (g)(9)(B)) 
EPCA further provides that, not later than 6 years after the issuance 
of any final rule establishing or amending a standard, DOE must publish 
either a notice of determination that standards for the product do not 
need to be amended, or a NOPR including new proposed energy 
conservation standards (proceeding to a final rule, as appropriate). 
(42 U.S.C. 6295(m)(1))
    In establishing energy conservation standards with both energy and 
water use performance standards for RCWs manufactured after January 1, 
2011, Congress also directed DOE to ``determin[e] whether to amend'' 
those standards. (42 U.S.C. 6295(g)(9)(B)) Congress's directive, in 
section 6295(g)(9)(B), to consider whether ``to amend the standards in 
effect for RCWs'' refers to ``the standards'' established in the 
immediately preceding paragraph, 6295(g)(9)(A). There, Congress 
established energy conservation standards with both energy and water 
use performance standards for RCWs. Indeed, the energy and water use 
performance standards for RCWs (both top-loading and front-loading) are 
each contained within a single subparagraph. See id. Everything in 
section 6295(g)(9) suggests that Congress intended both of those twin 
standards to be evaluated when it came time, ``[n]ot later than 
December 13, 2011,'' to consider amending them. (Id. 6295(g)(9)(B)(i)) 
Accordingly, DOE understands its authority, under 6295(g)(9)(B), to 
include consideration of amended energy and water use performance 
standards for RCWs.
    DOE similarly understands its authority under 42 U.S.C. 6295(m) to 
amend ``standards'' for covered products to include amending both the 
energy and water use performance standards for RCWs. Neither section 
6295(g)(9)(B) nor section 6295(m) limit their application to ``energy 
use standards.'' Rather, they direct DOE to consider amending ``the 
standards,'' 42 U.S.C. 6295(g)(9)(B), or simply ``standards,'' id. 
6295(m)(1)(B), which may include both energy use standards and water 
use standards.
    Finally, DOE is promulgating these standards as a direct final rule 
pursuant to 42 U.S.C. 6295(p)(4). That section also extends broadly to 
any ``energy or water conservation standard'' without qualification. 
Thus, pursuant to section 6295(p)(4), DOE may, so long as the other 
relevant conditions are satisfied, promulgate a direct final rule that 
includes water use performance standards for a covered product like 
RCWs, where Congress has already established energy and water use 
performance standards.
    DOE is aware that the definition of ``energy conservation 
standard,'' in section 6291(6), expressly references water use only for 
four products specifically named: showerheads, faucets, water closets, 
and urinals. See id. However, DOE does not read the language in 6291(6) 
as fully delineating the scope of DOE's authority under EPCA. Rather, 
as is required of agencies in applying a statute, individual 
provisions, including section 6291(6) of EPCA, must be read in the 
context of the statute as a whole.
    The energy conservation program was initially limited to addressing 
the energy use, meaning electricity and fossil fuels, of 13 covered 
products. (See sections 321 and 322 of the Energy and Policy 
Conservation Act, Pub. L. 94-163, 89 Stat. 871 (December 22, 1975)) 
Since its inception, Congress has expanded the scope of the energy 
conservation program several times, including by adding covered 
products, prescribing energy conservation standards for various 
products, and by addressing water use for certain covered products. For 
example, in the Energy Policy Act of 1992, Congress amended the list of 
covered products in 42 U.S.C. 6292 to include showerheads, faucets, 
water closets and urinals and expanded DOE's authority to regulate 
water use for these products. (See sec. 123, Energy Policy Act of 1992, 
Pub. L. 102-486, 106 Stat. 2776 (Oct. 24, 1992)) When it did so, 
Congress also made corresponding changes to the definition of 
``consumer

[[Page 19033]]

product'' (42 U.S.C. 6291(1)), the definition of ``energy conservation 
standard'' (42 U.S.C. 6291(6)), the section governing the promulgation 
of test procedures (42 U.S.C. 6293), the criteria for prescribing new 
or amended energy conservation standards (42 U.S.C. 6295(o)), and 
elsewhere in EPCA.
    Later, Congress further expanded the scope of the energy 
conservation program several times. For instance, Congress added 
products and standards directly to 42 U.S.C. 6295, the section of EPCA 
that contains statutorily prescribed standards as well as DOE's 
standard-setting authorities. See 42 U.S.C. 6295(a) (stating that the 
``purposes of this section are to--(1) provide Federal energy 
conservation standards applicable to covered products; and (2) 
authorize the Secretary to prescribe amended or new energy conservation 
standards for each type (or class) of covered product.''). When 
Congress added these new standards and standard-setting authorities to 
42 U.S.C. 6295 after the Energy Policy Act of 1992, it often did so 
without making any conforming changes to other provisions in EPCA, 
e.g., sections 6291 or 6292. For example, in the Energy Policy Act of 
2005, Congress prescribed standards by statute, or gave DOE the 
authority to set standards for, battery chargers, external power 
supplies, ceiling fans, ceiling fan light kits, beverage vending 
machines, illuminated exit signs, torchieres, low voltage dry-type 
distribution transformers, traffic signal modules and pedestrian 
modules, certain lamps, dehumidifiers, and commercial prerinse spray 
valves in 42 U.S.C. 6295 without updating the list of covered products 
in 42 U.S.C. 6292. (See sec. 135, Energy Policy Act of 2005, 119 Stat. 
594 (Aug. 8, 2005))
    Congress also expanded the scope of the energy conservation program 
by directly adding water use performance standards for certain products 
to 42 U.S.C. 6295. For example, in the Energy Policy Act of 2005, 
Congress added a water use performance standard (but no energy use 
performance standard) for commercial prerinse spray valves (``CPSVs'') 
and did so without updating the list of covered products in 42 U.S.C. 
6292 to include CPSVs and without adding CPSVs to the list of 
enumerated products with water use performance standards in the 
``energy conservation standard'' definition in 42 U.S.C. 6291(6). In 
the Energy Independence and Security Act of 2007 (``EISA 2007''), 
Congress amended 42 U.S.C. 6295 by prescribing standards for RCWs and 
dishwashers that included both energy and water use performance 
standards. (See sec. 301, EISA 2007, Pub. L. 110-140, 121 Stat. 1492 
(Dec. 19, 2007)) Again, when it did so, Congress did not add these 
products to the list of enumerated products with water use performance 
standards in the definition of ``energy conservation standard'' in 42 
U.S.C. 6291(6).
    In considering how to treat these products and standards that 
Congress has directly added to 42 U.S.C. 6295 without making conforming 
changes to the rest of the statute, including the list of covered 
products in 42 U.S.C. 6292, and the water-use products in the 
definition of an ``energy conservation standard,'' DOE construes the 
statute as a whole. When Congress added products and standards directly 
to 42 U.S.C. 6295 it must have meant those products to be covered 
products and those standards to be energy conservation standards, given 
that the purpose of 42 U.S.C. 6295 is to provide ``energy conservation 
standards applicable to covered products'' and to ``authorize the 
Secretary to prescribe amended or new energy conservation standards for 
each type (or class) of covered product.'' Elsewhere in EPCA, the 
statute's references to covered products and energy conservation 
standards can only be read coherently as including the covered products 
and energy conservation standards Congress added directly to section 
6295, even if Congress did not make conforming edits to 6291 or 6292. 
For example, manufacturers are prohibited from ``distribut[ing] in 
commerce any new covered product which is not in conformity with an 
applicable energy conservation standard.'' (42 U.S.C. 6302(a)(5) 
(emphasis added)) It would defeat congressional intent to allow a 
manufacturer to distribute a product, e.g., a CPSV or ceiling fan, that 
violates an applicable energy conservation standard that Congress 
prescribed simply because Congress added the product directly to 42 
U.S.C. 6295 without also updating the list of covered products in 42 
U.S.C. 6292(a). In addition, preemption in EPCA is based on ``the 
effective date of an energy conservation standard established in or 
prescribed under section 6295 of this title for any covered product.'' 
(42 U.S.C. 6297(c) (emphasis added)) Nothing in EPCA suggests that 
standards Congress adopted in 6295 lack preemptive effect, merely 
because Congress did not make conforming amendments to 6291, 6292, or 
6293.
    It would similarly defeat congressional intent for a manufacturer 
to be permitted to distribute a covered product, e.g., a clothes washer 
or dishwasher, that violates a water use performance standard because 
Congress added the standard to 42 U.S.C. 6295 without also updating the 
definition of energy conservation standard in 42 U.S.C. 6291(6). By 
prescribing directly, in 6295(g)(9), energy conservation standards for 
RCWs that include both energy and water use performance standards, 
Congress intended that energy conservation standards for RCWs include 
both energy use and water use.
    DOE recognizes that some might argue that Congress's specific 
reference in section 6291(6) to water standards for showerheads, 
faucets, water closets, and urinals could ``create a negative 
implication'' that energy conservations standards for other covered 
products may not include water use standards. See Marx v. Gen. Revenue 
Corp., 568 U.S. 371, 381 (2013). ``The force of any negative 
implication, however, depends on context.'' Id.; see also NLRB v. SW 
Gen., Inc., 580 U.S. 288, 302 (2017) (``The expressio unius canon 
applies only when circumstances support a sensible inference that the 
term left out must have been meant to be excluded.'' (Alterations and 
quotation marks omitted)). In this context, the textual and structural 
cues discussed above show that Congress did not intend to exclude from 
the definition of energy conservation standard the water use 
performance standards that it specifically prescribed, and directed DOE 
to amend, in section 6295. To conclude otherwise would negate the plain 
text of 6295(g)(9). Furthermore, to the extent the definition of energy 
conservation standards in section 6291(6), which was last amended in 
the Energy Policy Act of 1992, could be read as in conflict with the 
energy and water use performance standards prescribed by Congress in 
EISA 2007, any such conflict should be resolved in favor of the more 
recently enacted statute. See United States v. Estate of Romani, 523 
U.S. 517, 530-31 (1998) (``[A] specific policy embodied in a later 
Federal statute should control our construction of the priority 
statute, even though it had not been expressly amended.''). 
Accordingly, based on a complete reading of the statute, DOE has 
determined that products and standards added directly to 42 U.S.C. 6295 
are appropriately considered ``covered products'' and ``energy 
conservation standards'' for the purposes of applying the various 
provisions in EPCA.
    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

[[Page 19034]]

EPCA specifically include definitions (42 U.S.C. 6291), test procedures 
(42 U.S.C. 6293), labeling provisions (42 U.S.C. 6294), energy 
conservation standards (42 U.S.C. 6295), and the authority to require 
information and reports from manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption in limited instances for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under EPCA. (See 42 U.S.C. 6297(d))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered product. (42 U.S.C. 
6295(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 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 RCWs appear at 10 CFR part 430, 
subpart B, appendices J (``appendix J'') and J2 (``appendix J2'').
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including RCWs. Any new or 
amended standard for a 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)) Furthermore, DOE may not adopt any standard that would 
not result in the significant conservation of energy. (42 U.S.C. 
6295(o)(3)(B))
    Moreover, DOE may not prescribe a standard if DOE determines by 
rule that the standard is not technologically feasible or economically 
justified. (42 U.S.C. 6295(o)(3)(B)) In deciding whether a proposed 
standard is economically justified, DOE must determine whether the 
benefits of the standard exceed its burdens. (42 U.S.C. 
6295(o)(2)(B)(i)) DOE must make this determination after receiving 
comments 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 considers relevant.

    (42 U.S.C. 6295(o)(2)(B)(i)(I)-(VII))
    Further, EPCA, as codified, establishes a rebuttable presumption 
that a standard is economically justified if the Secretary finds that 
the additional cost to the consumer of purchasing a product complying 
with an energy conservation standard level will be less than three 
times the value of the energy savings during the first year that the 
consumer will receive as a result of the standard, as calculated under 
the applicable test procedure. (42 U.S.C. 6295(o)(2)(B)(iii))
    EPCA, as codified, also contains what is known as an ``anti-
backsliding'' provision, which prevents the Secretary from prescribing 
any amended standard that either increases the maximum allowable energy 
use or decreases the minimum required energy efficiency of a covered 
product. (42 U.S.C. 6295(o)(1)) Also, the Secretary may not prescribe 
an amended or new standard if interested persons have established by a 
preponderance of the evidence that the standard is likely to result in 
the unavailability in the United States in any covered product type (or 
class) of performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as those generally available in the United States. (42 U.S.C. 
6295(o)(4))
    EPCA specifies requirements when promulgating an energy 
conservation standard for a covered product that has two or more 
subcategories. A rule prescribing an energy conservation standard for a 
type (or class) of product must specify a different standard level for 
a type or class of products that has the same function or intended use 
if DOE determines that products within such group: (A) consume a 
different kind of energy from that consumed by other covered products 
within such type (or class); or (B) have a capacity or other 
performance-related feature which other products within such type (or 
class) do not have and such feature justifies a higher or lower 
standard. (42 U.S.C. 6295(q)(1)) In determining whether a performance-
related feature justifies a different standard for a group of products, 
DOE considers such factors as the utility to the consumer of such a 
feature and other factors DOE deems appropriate. (Id.) Any rule 
prescribing such a standard must include an explanation of the basis on 
which such higher or lower level was established. (42 U.S.C. 
6295(q)(2))
    Additionally, pursuant to the amendments contained in the EISA 
2007, Public Law 110-140, final rules for new or amended energy 
conservation standards promulgated after July 1, 2010, are 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 RCWs address standby mode and off mode energy use, as do the 
amended standards adopted in this direct final rule.
    Finally, EISA 2007 amended EPCA, in relevant part, to grant DOE 
authority to issue a final rule (i.e., a ``direct final rule'') 
establishing an energy conservation standard upon receipt of a 
statement submitted jointly by interested persons that are fairly 
representative of relevant points of view (including representatives of 
manufacturers of covered products, States, and efficiency advocates), 
as determined by the Secretary, that contains recommendations with 
respect to an energy or water conservation standard. (42 U.S.C. 
6295(p)(4)) Pursuant to 42 U.S.C. 6295(p)(4), the Secretary must also 
determine whether a jointly-submitted recommendation for an energy or 
water conservation standard satisfies 42 U.S.C. 6295(o) or 42 U.S.C. 
6313(a)(6)(B), as applicable.

[[Page 19035]]

    The direct final rule must be published simultaneously with a NOPR 
that proposes an energy or water conservation standard that is 
identical to the standard established in the direct final rule, and DOE 
must provide a public comment period of at least 110 days on the 
proposal. (42 U.S.C. 6295(p)(4)(A)-(B)) While DOE typically provides a 
comment period of 60 days on proposed standards, for a NOPR 
accompanying a direct final rule, DOE provides a comment period of the 
same length as the comment period on the direct final rule--i.e., 110 
days. Based on the comments received during this period, the direct 
final rule will either become effective, or DOE will withdraw it not 
later than 120 days after its issuance if: (1) one or more adverse 
comments is received, and (2) DOE determines that those comments, when 
viewed in light of the rulemaking record related to the direct final 
rule, may provide a reasonable basis for withdrawal of the direct final 
rule under 42 U.S.C. 6295(o). (42 U.S.C. 6295(p)(4)(C)) Receipt of an 
alternative joint recommendation may also trigger a DOE withdrawal of 
the direct final rule in the same manner. (Id.)
    DOE has previously explained its interpretation of its direct final 
rule authority. In a final rule amending the Department's ``Procedures, 
Interpretations and Policies for Consideration of New or Revised Energy 
Conservation Standards for Consumer Products'' at 10 CFR part 430, 
subpart C, appendix A (``Process Rule'' or ``appendix A''), DOE noted 
that it may issue standards recommended by interested persons that are 
fairly representative of relative points of view as a direct final rule 
when the recommended standards are in accordance with 42 U.S.C. 6295(o) 
or 42 U.S.C. 6313(a)(6)(B), as applicable. 86 FR 70892, 70912 (Dec. 13, 
2021). But the direct final rule provision in EPCA does not impose 
additional requirements applicable to other standards rulemakings, 
which is consistent with the unique circumstances of rules issued 
through consensus agreements under DOE's direct final rule authority. 
Id. DOE's discretion remains bounded by its statutory mandate to adopt 
a standard that results in the maximum improvement in energy efficiency 
that is technologically feasible and economically justified--a 
requirement found in 42 U.S.C. 6295(o). Id. As such, DOE's review and 
analysis of the Joint Agreement is limited to whether the recommended 
standards satisfy the criteria in 42 U.S.C. 6295(o).

B. Background

1. Current Standards
    In a direct final rule published on May 31, 2012 (``May 2012 Direct 
Final Rule''), DOE prescribed the current energy conservation standards 
for RCWs manufactured on or after January 1, 2018. 77 FR 32308.\22\ 
These standards are set forth in DOE's regulations at 10 CFR 
430.32(g)(4). These standards are consistent with a prior joint 
proposal submitted to DOE by interested parties representing 
manufacturers, energy and environmental advocates, and consumer 
groups.\23\ The current standards are defined in terms of a minimum 
allowable integrated modified energy factor (``IMEF''), measured in 
cubic feet per kilowatt-hour per cycle (``ft\3\/kWh/cycle''), and 
maximum allowable integrated water factor (``IWF''), measured in 
gallons per cycle per cubic foot (``gal/cycle/ft\3\''), as measured 
according to appendix J2.
---------------------------------------------------------------------------

    \22\ DOE published a confirmation of effective date and 
compliance date for the direct final rule on October 1, 2012. 77 FR 
59719.
    \23\ Available at www.regulations.gov/document/EERE-2008-BT-STD-0019-0032.

 Table II.1--Federal Energy Efficiency Standards for Residential Clothes
                                 Washers
------------------------------------------------------------------------
                               Minimum integrated
                                 modified energy     Maximum integrated
        Product class          factor (ft\3\/kWh/    water factor (gal/
                                     cycle)             cycle/ft\3\)
------------------------------------------------------------------------
Top-Loading, Compact (less                    1.15                  12.0
 than 1.6 ft\3\ capacity)...
Top-Loading, Standard (1.6                    1.57                   6.5
 ft\3\ or greater capacity).
Front-Loading, Compact (less                  1.13                   8.3
 than 1.6 ft\3\ capacity)...
Front-Loading, Standard (1.6                  1.84                   4.7
 ft\3\ or greater capacity).
------------------------------------------------------------------------

    For top-loading semi-automatic clothes washers, a design standard 
currently applies, which requires such products to have an unheated 
rinse water option. 10 CFR 430.32(g)(1).
2. Current Test Procedure
    As discussed, DOE's current energy conservation standards for RCWs 
are expressed in terms of IMEF and IWF as measured using appendix J2. 
(See 10 CFR 430.32(g)(4))
    In a final rule published on June 1, 2022 (``June 2022 TP Final 
Rule''), DOE finalized a new test procedure (TP) at appendix J, which 
defines new energy efficiency metrics: an energy efficiency ratio 
(i.e., EER) and a water efficiency ratio (i.e., WER). 87 FR 33316, 
33319. EER is defined as the quotient of the weighted-average load size 
divided by the total clothes washer energy consumption per cycle, with 
such energy consumption expressed as the sum of (1) the machine 
electrical energy consumption, (2) the hot water energy consumption, 
(3) the energy required for removal of the remaining moisture in the 
wash load, and (4) the combined low-power mode energy consumption. 10 
CFR part 430 subpart B, appendix J, section 1. WER is defined as the 
quotient of the weighted-average load size divided by the total 
weighted per-cycle water consumption for all wash cycles in gallons. 
Id. For both EER and WER, a higher value indicates more efficient 
performance. The standards enacted by this direct final rule are 
expressed in terms of the EER and WER metrics as measured according to 
the newly established test procedure contained in appendix J.
---------------------------------------------------------------------------

    \24\ The signatories to the Joint Agreement include AHAM, 
American Council for an Energy-Efficient Economy, Alliance for Water 
Efficiency, Appliance Standards Awareness Project, Consumer 
Federation of America, Consumer Reports, Earthjustice, National 
Consumer Law Center, Natural Resources Defense Council, Northwest 
Energy Efficiency Alliance, and Pacific Gas and Electric Company. 
Members of AHAM's Major Appliance Division that make the affected 
products include: Alliance Laundry Systems, LLC; Asko Appliances AB; 
Beko US Inc.; Brown Stove Works, Inc.; BSH Home Appliances 
Corporation; Danby Products, Ltd.; Electrolux Home Products, Inc.; 
Elicamex S.A. de C.V.; Faber; Fotile America; GE Appliances, a Haier 
Company; L'Atelier Paris Haute Design LLG; LG Electronics; Liebherr 
USA, Co.; Midea America Corp.; Miele, Inc.; Panasonic Appliances 
Refrigeration Systems (PAPRSA) Corporation of America; Perlick 
Corporation; Samsung Electronics America Inc.; Sharp Electronics 
Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The Middleby 
Corporation; U-Line Corporation; Viking Range, LLC; and Whirlpool 
Corporation.
---------------------------------------------------------------------------

3. The Joint Agreement
    On September 25, 2023, DOE received a joint statement (i.e., the 
Joint Agreement) recommending standards

[[Page 19036]]

for RCWs, that was submitted by groups representing manufacturers, 
energy and environmental advocates, consumer groups, and a utility.\24\ 
In addition to the recommended standards for RCWs, the Joint Agreement 
also included separate recommendations for several other covered 
products.\25\ And, while acknowledging that DOE may implement these 
recommendations in separate rulemakings, the Joint Agreement also 
stated that the recommendations were recommended as a complete package 
and each recommendation is contingent upon the other parts being 
implemented. DOE understands this to mean that the Joint Agreement is 
contingent upon DOE initiating rulemaking processes to adopt all of the 
recommended standards in the agreement. That is distinguished from an 
agreement where issuance of an amended energy conservation standard for 
a covered product is contingent on issuance of amended energy 
conservation standards for the other covered products. If the Joint 
Agreement were so construed, it would conflict with the anti-
backsliding provision in 42 U.S.C. 6295(o)(1), because it would imply 
the possibility that, if DOE were unable to issue an amended standard 
for a certain product, it would have to withdraw a previously issued 
standard for one of the other products. The anti-backsliding provision, 
however, prevents DOE from withdrawing or amending an energy 
conservation standard to be less stringent. As a result, DOE will be 
proceeding with individual rulemakings that will evaluate each of the 
recommended standards separately under the applicable statutory 
criteria.
---------------------------------------------------------------------------

    \25\ The Joint Agreement contained recommendations for 6 covered 
products: refrigerators, refrigerator-freezers, and freezers; 
residential clothes washers; consumer clothes dryers; dishwashers; 
consumer conventional cooking products; and miscellaneous 
refrigeration products.
---------------------------------------------------------------------------

    A court decision issued after DOE received the Joint Agreement is 
also relevant to this rule. On March 17, 2022, various States filed a 
petition seeking review of a final rule revoking two final rules that 
established product classes for residential dishwashers with a cycle 
time for the normal cycle of 60 minutes or less, top-loading RCWs and 
certain classes of consumer clothes dryers with a cycle time of less 
than 30 minutes, and front-loading RCWs with a cycle time of less than 
45 minutes (collectively, ``short cycle product classes''). The 
petitioners argued that the final rule revoking the short cycle product 
classes violated EPCA and was arbitrary and capricious. On January 8, 
2024, the United States Court of Appeals for the Fifth Circuit granted 
the petition for review and remanded the matter to DOE for further 
proceedings consistent with the Fifth Circuit's opinion. See Louisiana 
v. United States Department of Energy, 90 F.4th 461 (5th Cir. 2024).
    On February 14, 2024, following the Fifth Circuit's decision in 
Louisiana v. United States Department of Energy, DOE received a second 
joint statement from this same group of stakeholders in which the 
signatories reaffirmed the Joint Agreement, stating that the 
recommended standards represent the maximum levels of efficiency that 
are technologically feasible and economically justified.\26\ In the 
letter, the signatories clarified that ``short-cycle'' product classes 
for RCWs, consumer clothes dryers, and dishwashers did not exist at the 
time that the signatories submitted their recommendations and it is 
their understanding that these classes also do not exist at the current 
time. Accordingly, the parties clarified that the Joint Agreement did 
not address short-cycle product classes. The signatories also stated 
that they did not anticipate that the recommended energy conservation 
standards in the Joint Agreement will negatively affect features or 
performance, including cycle time, for RCWs.
---------------------------------------------------------------------------

    \26\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    The Joint Agreement recommends amended standard levels for RCWs as 
presented in Table II.2. (Joint Agreement, No. 505 at p. 9) Details of 
the Joint Agreement recommendations for other products are provided in 
the Joint Agreement posted in the docket.\27\
---------------------------------------------------------------------------

    \27\ The Joint Agreement is available in the docket at 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0505.

          Table II.2--Recommended Amended Energy Conservation Standards for Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                             Minimum energy         Minimum water
              Product class               efficiency ratio (lb/ efficiency ratio (lb/       Compliance date
                                               kWh/cycle)            gal/cycle)
----------------------------------------------------------------------------------------------------------------
Top-Loading, Ultra-Compact (less than                     3.79                  0.29  March 1, 2028.
 1.6 ft\3\ capacity).
Top-Loading, Standard-Size (1.6 ft\3\ or                  4.27                  0.57
 greater capacity).
Front-Loading, Compact (less than 1.6                     5.02                  0.71
 ft\3\ capacity).
Front-Loading, Standard-Size (1.6 ft\3\                   5.52                  0.77
 or greater capacity).
Semi-Automatic Clothes Washers..........                  2.12                  0.27
----------------------------------------------------------------------------------------------------------------

    When the Joint Agreement was submitted, DOE was conducting a 
rulemaking to consider amending the standards for RCWs. As part of that 
process, DOE published a NOPR and announced a public meeting on March 
3, 2023 (``March 2023 NOPR''), seeking comment on its proposed amended 
standards to inform its decision consistent with its obligations under 
EPCA and the Administrative Procedure Act (``APA''). 88 FR 13520. The 
March 2023 NOPR proposed amended standards defined in terms of the EER 
and WER metrics as measured according to appendix J. Id. at 88 FR 
13522. The March 2023 NOPR also proposed to re-establish a product 
class, and establish new performance standards, for semi-automatic 
clothes washers. Id. at 88 FR 13541.\28\ The March 2023 NOPR TSD is 
available at: www.regulations.gov/document/EERE-2017-BT-STD-0014-0058.
---------------------------------------------------------------------------

    \28\ Top-loading semi-automatic clothes washers were subject to 
a design standard requiring an unheated rinse water option, as 
established by section 5(g) of the National Appliance Energy 
Conservation Act of 1987, Public Law 100-12.
---------------------------------------------------------------------------

    Although DOE is adopting the Joint Agreement as a direct final rule 
and no longer proceeding with its own rulemaking, DOE did consider 
relevant comments, data, and information obtained during that 
rulemaking process in determining whether the recommended standards 
from the Joint Agreement are in accordance with 42 U.S.C. 6295(o). Any 
discussion of comments, data, or information in this direct final rule 
that were obtained during DOE's prior rulemaking will include a 
parenthetical reference that

[[Page 19037]]

provides the location of the item in the public record.\29\
---------------------------------------------------------------------------

    \29\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for residential clothes washers. 
(Docket No. EERE-2017-BT-STD-0014, which is maintained at 
www.regulations.gov) The references are arranged as follows: 
(commenter name, comment docket ID number at page number of that 
document).
---------------------------------------------------------------------------

III. General Discussion

    DOE is issuing this direct final rule after determining that the 
recommended standards submitted in the Joint Agreement meet the 
requirements in 42 U.S.C. 6295(p)(4). More specifically, DOE has 
determined that the recommended standards were submitted by interested 
persons that are fairly representative of relevant points of view and 
the recommended standards satisfy the criteria in 42 U.S.C. 6295(o).
    On March 17, 2022, various States filed a petition seeking review 
of a final rule revoking two final rules that established product 
classes for residential dishwashers with a cycle time for the normal 
cycle of 60 minutes or less, top-loading RCWs and certain classes of 
consumer clothes dryers with a cycle time of less than 30 minutes, and 
front-loading RCWs with a cycle time of less than 45 minutes 
(collectively, ``short cycle product classes''). The petitioners argued 
that the final rule revoking the short cycle product classes violated 
EPCA and was arbitrary and capricious. On January 8, 2024, the United 
States Court of Appeals for the Fifth Circuit granted the petition for 
review and remanded the matter to DOE for further proceedings 
consistent with the Fifth Circuit's opinion. See Louisiana v. United 
States Department of Energy, 90 F.4th 461 (5th Cir. 2024).
    Following the Fifth Circuit's decision, the signatories to the 
Joint Agreement submitted a second letter to DOE, which stated that 
Joint Recommendation did not ``address'' ``short-cycle product 
classes.'' \30\ That is because, as the letter explained, such product 
classes ``did not exist'' at the time of the Joint Agreement.
---------------------------------------------------------------------------

    \30\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    In a recently issued request for information (``RFI''),\31\ DOE is 
commencing a rulemaking process on remand from the Fifth Circuit (the 
``Remand Proceeding'') by soliciting further information, relevant to 
the issues identified by the Fifth Circuit, regarding any short cycle 
product classes. In that Remand Proceeding, DOE will conduct the 
analysis required by 42 U.S.C. 6295(q)(1)(B) to determine whether any 
short-cycle products have a ``capacity or other performance-related 
feature [that] . . . justifies a higher or lower standard from that 
which applies (or will apply) to other products. . . .''
---------------------------------------------------------------------------

    \31\ See www1.eere.energy.gov/buildings/appliance_standards/standards.aspx?productid=68.
---------------------------------------------------------------------------

    The current standards applicable to any products within the scope 
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(g). 
Consistent with the Joint Parties' letter, short-cycle products are not 
subject to the amended standards adopted by this direct final rule 
(``DFR''). If the short-cycle products that DOE will consider in the 
Remand Proceeding were subject to these standards, that would have the 
practical effect of limiting the options available in the Remand 
Proceeding. That is because EPCA's anti-backsliding provision precludes 
DOE from prescribing any amended standard ``which increases the maximum 
allowable energy use'' of a covered product. 42 U.S.C. 6295(o)(1). 
Accordingly, were the products at issue in the Remand Proceeding also 
subject to the amended standards adopted here, the Department could 
only reaffirm the standards adopted in this direct final rule or adopt 
more stringent standards.
    The Joint Agreement specifies the product classes for RCWs: semi-
automatic; top-loading, ultra-compact; top-loading, standard-size; 
front-loading, compact; and front-loading, standard-size. Although 
these product classes were not further divided by cycle time, DOE 
understands them to exclude top-loading standard-size RCWs with an 
average cycle time of less than 30 minutes, and front-loading standard-
size RCWs with an average cycle time of less than 45 minutes. As noted 
above, any such ``short-cycle'' RCWs will be considered in the Remand 
Proceeding; the current standards applicable to such ``short-cycle'' 
RCWs are unchanged by this rule.
    Under the direct final rule authority at 42 U.S.C. 6295(p)(4), DOE 
evaluates whether recommended standards are in accordance with criteria 
contained in 42 U.S.C. 6295(o). DOE does not have the authority to 
revise recommended standards submitted under the direct final rule 
provision in EPCA. Therefore, DOE did not analyze any additional 
product classes beyond those product classes included in the Joint 
Agreement. That is, DOE has not separately considered or established 
amended standards applicable to any short-cycle product classes. In the 
event that DOE establishes short-cycle product classes, pursuant to the 
rulemaking on remand from the Fifth Circuit, DOE will necessarily 
consider what amended standards ought to apply to any such product 
classes and will do so in conformance with EPCA.
    DOE notes that the data and analysis used to support this direct 
final rule includes information for standard-size, top-loading and 
front-loading clothes washers that is not distinguished by cycle time 
and is representative of all clothes washers currently on the market 
today. To the extent that any short cycle products were included in 
this data and analysis, DOE believes the amount of such data is 
negligible.

A. Scope of Coverage

    Before discussing how the Joint Agreement meets the requirements 
for issuing a direct final rule, it is important to clarify the scope 
of coverage for the recommended standards. EPCA does not define the 
term ``clothes washer.'' (See 42 U.S.C. 6291) DOE has defined a 
``clothes washer'' as a consumer product designed to clean clothes, 
utilizing a water solution of soap and/or detergent and mechanical 
agitation or other movement, and must be one of the following classes: 
automatic clothes washers, semi-automatic clothes washers, and other 
clothes washers. 10 CFR 430.2. This direct final rule covers those 
consumer products that meet the definition of ``clothes washer,'' as 
codified at 10 CFR 430.2.
    An ``automatic clothes washer'' is a class of clothes washer that 
has a control system which is capable of scheduling a preselected 
combination of operations, such as regulation of water temperature, 
regulation of the water fill level, and performance of wash, rinse, 
drain, and spin functions without the need for user intervention 
subsequent to the initiation of machine operation. Some models may 
require user intervention to initiate these different segments of the 
cycle after the machine has begun operation, but they do not require 
the user to intervene to regulate the water temperature by adjusting 
the external water faucet valves. Id.
    A ``semi-automatic clothes washer'' is a class of clothes washer 
that is the same as an automatic clothes washer except that user 
intervention is required to regulate the water temperature by adjusting 
the external water faucet valves. Id. ``Other clothes washer'' means a 
class of clothes washer that is not an automatic or semi-automatic 
clothes washer. Id.
    See section IV.A.1 of this document for discussion of the product 
classes analyzed in this direct final rule.

B. Fairly Representative of Relevant Points of View

    Under the direct final rule provision in EPCA, recommended energy

[[Page 19038]]

conservation standards must be submitted by interested persons that are 
fairly representative of relevant points of view (including 
representatives of manufacturers of covered products, States, and 
efficiency advocates) as determined by DOE. (42 U.S.C. 6295(p)(4)(A)) 
With respect to this requirement, DOE notes that the Joint Agreement 
included a trade association, the Association of Home Appliance 
Manufacturers (``AHAM''), which represents 12 manufacturers of 
RCWs.\32\ The Joint Agreement also included environmental and energy-
efficiency advocacy organizations, consumer advocacy organizations, and 
a gas and electric utility company. Additionally, DOE received a letter 
in support of the Joint Agreement from the States of New York, 
California, and Massachusetts (see comment No. 506). DOE also received 
a letter in support of the Joint Agreement from the gas and electric 
utility, SDG&E, and the electric utility, SCE (see comment No. 507). As 
a result, DOE has determined that the Joint Agreement was submitted by 
interested persons who are fairly representative of relevant points of 
view.
---------------------------------------------------------------------------

    \32\ These companies include: Alliance Laundry Systems, LLC; 
Asko Appliances AB; Beko US Inc.; BSH Home Appliances Corporation; 
Danby Products, Ltd.; Electrolux Home Products, Inc.; GE Appliances, 
a Haier Company; LG Electronics; Midea America Corp.; Miele, Inc.; 
Samsung Electronics America Inc.; and Whirlpool Corporation.
---------------------------------------------------------------------------

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 
rulemaking. As the first step in such an analysis, DOE develops a list 
of technology options for consideration in consultation with 
manufacturers, design engineers, and other interested parties. DOE then 
determines which of those means for improving efficiency are 
technologically feasible. DOE considers technologies incorporated in 
commercially available products or in working prototypes to be 
technologically feasible. Sections 6(b)(3)(i) and 7(b)(1) of the 
Process Rule.
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety and (4) unique-pathway proprietary technologies. 
Section 7(b)(2)-(5) of the Process Rule. Section IV.B of this document 
discusses the results of the screening analysis for RCWs, particularly 
the designs DOE considered, those it screened out, and those that are 
the basis for the standards considered in this rulemaking. For further 
details on the screening analysis for this rulemaking, see chapter 4 of 
the direct final rule TSD.
2. Maximum Technologically Feasible Levels
    When DOE 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(o)(2)(A)) 
Accordingly, in the engineering analysis, DOE determined the maximum 
technologically feasible (``max-tech'') improvements in energy 
efficiency for RCWs, using the design parameters for the most efficient 
products available on the market or in working prototypes. The max-tech 
levels that DOE determined for this rulemaking are described in section 
IV.C of this document and in chapter 5 of the direct final rule TSD.

D. Energy Savings

1. Determination of Savings
    For each TSL, DOE projected energy savings from application of the 
TSL to RCWs purchased in the 30-year period that begins in the year of 
compliance with the amended standards (2027-2056 for all TSLs except 
the Recommended TSL, i.e., TSL 2, and 2028-2057 for TSL 2).\33\ The 
savings are measured over the entire lifetime of products purchased in 
the 30-year analysis period. DOE quantified the energy savings 
attributable to each TSL as the difference in energy consumption 
between each standards case and the no-new-standards case. The no-new-
standards case represents a projection of energy consumption that 
reflects how the market for a product would likely evolve in the 
absence of amended energy conservation standards.
---------------------------------------------------------------------------

    \33\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate national energy savings (``NES'') and national water 
savings (``NWS'') from potential amended standards for RCWs. The NIA 
spreadsheet model (described in section IV.H of this document) 
calculates energy savings in terms of site energy, which is the energy 
directly consumed by products at the locations where they are used. For 
electricity, DOE reports national energy savings in terms of primary 
energy savings, which is the savings in the energy that is used to 
generate and transmit the site electricity. For natural gas, the 
primary energy savings are considered to be equal to the site energy 
savings. DOE also calculates NES in terms of FFC energy savings. The 
FFC metric includes the energy consumed in extracting, processing, and 
transporting primary fuels (i.e., coal, natural gas, petroleum fuels), 
and thus presents a more complete picture of the impacts of energy 
conservation standards.\34\ DOE's approach is based on the calculation 
of an FFC multiplier for each of the energy types used by covered 
products or equipment. For more information on FFC energy savings, see 
section IV.H.2 of this document.
---------------------------------------------------------------------------

    \34\ 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.\35\ 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.
---------------------------------------------------------------------------

    \35\ 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).
---------------------------------------------------------------------------

    Accordingly, DOE evaluates the significance of energy savings on a 
case-by-case basis, taking into account the significance of cumulative 
FFC national energy savings, the cumulative FFC emissions reductions, 
and the need to confront the global climate crisis, among other 
factors.
    As stated, the standard levels adopted in this direct final rule 
are projected to result in national energy savings of 0.67 quads, the 
equivalent of the primary annual energy use of 4.5 million homes. Based 
on the amount of FFC savings, the corresponding reduction in emissions,

[[Page 19039]]

and the need to confront the global climate crisis, DOE has determined 
the energy savings from the standard levels adopted in this direct 
final rule are ``significant'' within the meaning of 42 U.S.C. 
6295(o)(3)(B).

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 rulemaking.
a. Economic Impact on Manufacturers and Consumers
    In determining the impacts of potential new or amended standards 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 payback period (``PBP'') associated with new or 
amended standards. These measures are discussed further in the 
following section. For consumers in the aggregate, DOE also calculates 
the national net present value of the consumer costs and benefits 
expected to result from particular standards. DOE also evaluates the 
impacts of potential standards on identifiable subgroups of consumers 
that may be affected disproportionately by a standard.
b. Savings in Operating Costs Compared to Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating cost (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered products in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section IV.H of this document, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In evaluating design options and the impact of potential standard 
levels, DOE evaluates potential standards that would not lessen the 
utility or performance of the considered products. (42 U.S.C. 
6295(o)(2)(B)(i)(IV)) Based on data available to DOE, the standards 
adopted in this document would not reduce the utility or performance of 
the products under consideration in this rulemaking.
e. Impact of Any Lessening of Competition
    EPCA directs DOE to consider the impact of any lessening of 
competition, as determined in writing by the Attorney General, that is 
likely to result from a standard. (42 U.S.C. 6295(o)(2)(B)(i)(V)) It 
also directs the Attorney General to determine the impact, if any, of 
any lessening of competition likely to result from a standard and to 
transmit such determination to the Secretary within 60 days of the 
publication of a proposed rule, together with an analysis of the nature 
and extent of the impact. (42 U.S.C. 6295(o)(2)(B)(ii)) DOE will 
transmit a copy of this direct final rule to the Attorney General with 
a request that the Department of Justice (``DOJ'') provide its 
determination on this issue. DOE will consider DOJ's comments on the 
rule in determining whether to withdraw the direct final rule. DOE will 
also publish and respond to the DOJ's comments in the Federal Register 
in a separate document.
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 adopted standards are likely to provide improvements 
to the security and reliability of the Nation's energy system. 
Reductions in the demand for electricity also may result in reduced 
costs for maintaining the reliability of the Nation's electricity 
system. DOE conducts a utility impact analysis to estimate how 
standards may affect the Nation's needed power generation capacity, as 
discussed in section IV.M of this document.
    DOE maintains that environmental and public health benefits 
associated with the more efficient use of energy are important to take 
into account when considering the need for national energy 
conservation. The adopted standards are likely to result in 
environmental

[[Page 19040]]

benefits in the form of reduced emissions of air pollutants and 
greenhouse gases (``GHGs'') associated with energy production and use. 
DOE conducts an emissions analysis to estimate how potential standards 
may affect these emissions, as discussed in section IV.K of this 
document; the estimated emissions impacts are reported in section V.B.6 
of this document. DOE also estimates the economic value of emissions 
reductions resulting from the considered TSLs, as discussed in section 
IV.L of this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To 
the extent DOE identifies any relevant information regarding economic 
justification that does not fit into the other categories described 
previously, DOE could consider such information under ``other 
factors.''
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential amended 
energy conservation standards would have on the payback period for 
consumers. These analyses include, but are not limited to, the 3-year 
payback period contemplated under the rebuttable-presumption test. In 
addition, DOE routinely conducts an economic analysis that considers 
the full range of impacts to consumers, manufacturers, the Nation, and 
the environment, as required under 42 U.S.C. 6295(o)(2)(B)(i). The 
results of this analysis serve as the basis for DOE's evaluation of the 
economic justification for a potential standard level (thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification). The rebuttable presumption payback calculation 
is discussed in section IV.F of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to RCWs. Separate subsections address each 
component of DOE's analyses, including relevant comments DOE received 
during its separate rulemaking to amend the energy conservation 
standards for RCWs prior to receiving the Joint Agreement.
    DOE used several analytical tools to estimate the impact of the 
standards considered in this document. The first tool is a spreadsheet 
that calculates the LCC savings and PBP of potential amended or new 
energy conservation standards. The national impacts analysis uses a 
second spreadsheet set that provides shipments projections and 
calculates national energy savings and net present value of total 
consumer costs and savings expected to result from potential energy 
conservation standards. DOE uses the third spreadsheet tool, the 
Government Regulatory Impact Model (``GRIM''), to assess manufacturer 
impacts of potential standards. These three spreadsheet tools are 
available on the DOE website for this rulemaking: www.regulations.gov/docket/EERE-2017-BT-STD-0014. Additionally, DOE used output from the 
latest version of the U.S. Energy Information Administration (``EIA'') 
Annual Energy Outlook (``AEO'') for the emissions and utility impact 
analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly-available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) identification of 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 RCW. The key findings of DOE's market assessment 
are summarized in the following sections. See chapter 3 of the direct 
final rule TSD for further discussion of the market and technology 
assessment.
1. Product Classes
    The Joint Agreement specifies the five product classes for RCWs. 
(Joint Agreement, No. 505 at p. 9) In this direct final rule, DOE is 
adopting the product classes from the Joint Agreement, as listed in 
Table IV.1.

 Table IV.1--Joint Agreement Residential Clothes Washer Product Classes
------------------------------------------------------------------------
                              Product class
-------------------------------------------------------------------------
Automatic Clothes Washers:
    Top-Loading Ultra-Compact (less than 1.6 ft\3\ capacity).
    Top-Loading Standard-Size (1.6 ft\3\ or greater capacity).
    Front-Loading Compact (less than 3.0 ft\3\ capacity).
    Front-Loading Standard-Size (3.0 ft\3\ or greater capacity).
Semi-Automatic Clothes Washers.
------------------------------------------------------------------------

    DOE further notes that product classes established through EPCA's 
direct final rule authority are not subject to the criteria specified 
at 42 U.S.C. 6295(q)(1) for establishing product classes. Nevertheless, 
in accordance with 42 U.S.C. 6295(o)(4)--which is applicable to direct 
final rules--DOE has concluded that the standards adopted in this 
direct final rule will not result in the unavailability in any covered 
product type (or class) of performance characteristics, features, 
sizes, capacities, and volumes that are substantially the same as those 
generally available in the United States currently.\36\ DOE's findings 
in this regard are discussed in detail in section V.B.4 of this 
document.
---------------------------------------------------------------------------

    \36\ EPCA specifies that DOE may not prescribe an amended or new 
standard if the Secretary finds (and publishes such finding) that 
interested persons have established by a preponderance of the 
evidence that the standard is likely to result in the unavailability 
in the United States in any covered product type (or class) of 
performance characteristics (including reliability), features, 
sizes, capacities, and volumes that are substantially the same as 
those generally available in the United States at the time of the 
Secretary's finding. (42 U.S.C. 6295(o)(4)).
---------------------------------------------------------------------------

2. Technology Options
    In this direct final rule, DOE considered the technology options 
listed in Table IV.2, consistent with the table of technology options 
presented in the March 2023 NOPR. See 88 FR 13520, 13541. DOE notes 
that it did not receive any comments regarding the technology options 
analyzed in the March 2023 NOPR.
    In general, technology options for RCWs may reduce energy use 
alone, water use alone, or both energy and water use together. Because 
the energy used to heat any hot water consumed by the RCW is included 
as part of the EER metric, technologies that decrease hot water use 
also inherently decrease energy use. In Table IV.2, the technology 
options that reduce energy use alone are those indicated as methods for 
decreasing machine energy, drying energy, and standby energy. One

[[Page 19041]]

technology option--spray rinse--reduces water use alone, listed among 
the methods for decreasing water use.\37\ The technology options that 
reduce both energy and water use together are the remaining three 
options among the methods for decreasing water use, as well as those 
indicated as methods for reducing water heating energy.
---------------------------------------------------------------------------

    \37\ Since nearly all RCWs use only cold water in the rinse 
portion of the cycle (i.e., generally no hot water is used in the 
rinse portion of the cycle), spray rinse reduces water use without 
any corresponding reduction in energy use.
---------------------------------------------------------------------------

    Chapter 3 of the TSD for this direct final rule includes a detailed 
list and descriptions of all technology options identified for RCWs, 
including a discussion of how each technology option reduces energy use 
only, water use only, or both energy and water use together.

     Table IV.2--Technology Options for Residential Clothes Washers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Methods for Decreasing Water Use: *
    Adaptive water fill controls.
    Hardware features enabling lower water levels.
    Spray rinse.
    Polymer bead cleaning.
Methods for Decreasing Machine Energy:
    More efficient motor.
    Direct drive motor.
Methods for Decreasing Water Heating Energy:
    Wash temperature decrease.
    Ozonated laundering.
Methods for Decreasing Drying Energy:
    Hardware features enabling spin speed increase.
    Spin time increase.
Methods for Decreasing Standby Energy:
    Lower standby power components.
Methods for Increasing Overall Efficiency:
    Capacity increase.
------------------------------------------------------------------------
* Most of the methods for decreasing water use are also methods for
  decreasing water heating energy, since less hot water is used.

B. Screening Analysis

    DOE uses the following 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 sum, 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 subsequent sections of this document discuss 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. The results of the 
screening analysis are discussed in greater detail in chapter 4 of the 
TSD for this direct final rule.
1. Screened-Out Technologies
    DOE partially screened out capacity increase as a technology 
option. Specifically, DOE screened out any capacity increase that would 
require a corresponding increase in cabinet width larger than 27 
inches, on the basis of the practicability to install and service RCWs 
with cabinet widths larger than 27 inches. DOE recognizes that products 
with a width greater than 27 inches may not be able to fit through many 
standards-size interior doorways.
    DOE also screened out ozonated laundering and polymer bead cleaning 
on the basis of their practicability to install, manufacture, and 
service. Polymer bead cleaning is also a unique-pathway proprietary 
technology. DOE also screened out electrolytic disassociation of water 
on the basis that this technology could have impacts on product utility 
or availability. Chapter 3 of the TSD for this direct final rule 
includes a detailed description of each of these technology options.
    DOE notes that the results of the screening analysis conducted for 
this direct final rule align with the screening analysis DOE conducted 
for the March 2023 NOPR. See 88 FR 13520, 13542-13453. In the March 
2023 NOPR, DOE sought comment on whether any additional technology 
options should be screened out on the basis of any of the screening 
criteria. Id. at 88 FR 13543. In conducting the screening analysis for 
this direct final rule, DOE considered comments it had received in 
response to the March 2023 NOPR.
    Fisher et al.\38\ commented that the proposed standards are not 
technologically feasible because they would require manufacturers to 
overhaul many design features that have the potential to impact 
performance.\39\ (Fisher et al., No. 463 at pp. 2-3)
---------------------------------------------------------------------------

    \38\ ``Fisher et al.'' refers to a joint comment from Travis 
Fisher, Rachael Wilfong, and Kevin Dayaratna. Although these 
individual commenters are associated with The Heritage Foundation, 
the comment states that the views expressed in it should not be 
construed as representing any official position of The Heritage 
Foundation. (Fisher et al., No. 463 at p. 1).
    \39\ DOE did not include Fisher et al.'s comments about spin-
time increase and wash temperature decrease in top-loading standard-
size RCWs at the proposed standard level because the adopted 
standard level in this direct final rule is different than what was 
proposed in the March 2023 NOPR.
---------------------------------------------------------------------------

    In response to Fisher et al.'s comment regarding technological 
feasibility due to potential impacts on certain aspects of clothes 
washer performance, DOE has concluded that the standards adopted in 
this direct final rule are technologically feasible as the technologies 
used to achieve the adopted standards are widely incorporated in 
commercial products already. Sections 6(b)(3)(i) and 7(b)(1) of the 
Process Rule. Furthermore, DOE has determined through analysis of test 
data that the standards adopted in this direct final rule will not 
lessen the utility or performance of the RCWs under consideration in 
this rulemaking, as discussed further in section V.B.4 of this 
document.
    NEEA et al.\40\ supported the inclusion in the analysis of larger 
wash baskets for top-loading models at higher efficiency levels, 
assuming common sense limitations to ensure similar installation 
locations. (NEEA et al., No. 455 at p. 5)
---------------------------------------------------------------------------

    \40\ ``NEEA et al.'' refers to a joint comment from Northwest 
Energy Efficiency Alliance (``NEEA''), Commonwealth Edison Company, 
and Natural Resources Defense Council.
---------------------------------------------------------------------------

    Appliance Standards Awareness Project (``ASAP''), American Council 
for an Energy-Efficient Economy (``ACEEE''), and the New York State 
Energy Research and Development Authority (``NYSERDA'') commented that, 
contrary to concerns raised at DOE's public meeting, manufacturers

[[Page 19042]]

have increased top-loading RCW capacity from 3.8 ft\3\ to 5.3 ft\3\ 
without a meaningful increase in cabinet dimensions, which supports DOE 
screening out from the analysis any capacity increase that would 
increase cabinet widths. (ASAP, ACEEE, and NYSERDA, No. 458 at p. 4)
    Samsung Electronics America, Inc. (``Samsung'') commented that the 
necessary technological advancements and solutions identified by DOE 
are readily available and accessible, which aligned with DOE's 
assessment of the technological feasibility of the standards proposed 
in the March 2023 NOPR. (Samsung, No. 461 at p. 4)
    Strauch commented that direct-drive or brushless permanent magnet 
(``BPM'') motors will increase RCW cost and decrease reliability. 
(Strauch, No. 430 at p. 2)
    DOE notes that the incremental cost of higher-efficiency design 
options is considered as part of the engineering analysis, from which 
DOE derives its cost efficiency ``curves.'' DOE's analysis specifically 
accounts for the increased cost of implementing direct drive and BPM 
motors to improve efficiency. (See section IV.C.4 of this document and 
chapter 5 of the direct final rule TSD) In response to Strauch's 
comment asserting that direct drive and BPM motors will decrease 
reliability, DOE does not have any data on the comparative reliability 
of RCWs that use various motor technologies. However, as discussed 
further in section IV.F.5 of this document, DOE's analysis does 
incorporate an assumption of increased repair costs for higher 
efficiency RCWs. DOE additionally notes that multiple RCW manufacturers 
offer warranties specifically for the direct drive motor component of 
the clothes washer ranging from 10-year \41\ or 20-year \42\ warranties 
to lifetime \43\ warranties--indicative of manufacturers' expectation 
of the relatively high reliability of these components.
---------------------------------------------------------------------------

    \41\ See, for example, www.maytag.com/services/limited-10-year-warranty.html.
    \42\ See, for example, www.samsung.com/latin_en/microsite/20-years-warranty/.
    \43\ See, for example, www.kenmore.com/warranty-information/#washers.
---------------------------------------------------------------------------

    Whirlpool Corporation (``Whirlpool'') commented that DOE's proposal 
may create consumer accessibility issues for shorter-than-average 
consumers and consumers with disabilities or limited mobility, as they 
may struggle to reach the bottom of larger-capacity RCWs, which 
manufacturers will have to deepen to satisfy the standards proposed in 
the March 2023 NOPR, because the width of cabinets cannot be increased 
beyond standard doorway clearance. (Whirlpool, No. 462 at p. 9) 
Whirlpool commented that people of average and below-average height may 
not be able to access the bottom of deeper-basket top-loading RCWs 
without bringing their feet off the ground, which could create a fall 
hazard and possible soft-tissue compression of the chest and abdominal 
area. (Id. at p. 10) Whirlpool commented that some people could be 
forced to shift to a front-loading configuration, further increasing 
the ownership cost and eliminating any potential operating cost savings 
for many consumers. (Id.) Whirlpool asserted that larger-capacity top-
loading RCWs would be ineligible for compliance with the Americans with 
Disabilities Act, due to strict requirements for height and depth of 
units. (Id.) Whirlpool also commented that there is a loss of utility 
as some consumers do not want or need to use larger load sizes as well 
as installation problems related to smaller doorways and basements. 
(Whirlpool, Public Transcript, No. 91 at pp. 82-83)
    Mannino,\44\ in referencing Whirlpool's comment during the public 
webinar that people have a hard time reaching the bottom of larger 
tubs,\45\ added that many customers have a step stool next to their 
RCWs that they must stand on to get waist-high so they can bend over 
far enough to take their clothes out. (Mannino, Public Webinar 
Transcript, No. 91 at p. 84)
---------------------------------------------------------------------------

    \44\ ``Mannino'' refers to comments made by Michael Mannino 
representing Appliance Service Systems during the public webinar 
held March 28, 2023.
    \45\ Whirlpool, Public Webinar Transcript, No. 91 at pp. 8283.
---------------------------------------------------------------------------

    DOE notes that, as discussed in section V.B.4.b of this document, 
for this direct final rule DOE has re-evaluated its assumption from the 
March 2023 NOPR that capacity increase would be required to meet the 
standards proposed in the March 2023 NOPR for top-loading standard-size 
RCWs. For this direct final rule, DOE has conducted additional analysis 
that indicates that the amended standards can be met by all capacities 
currently available on the market without the need to implement the 
design option of increasing capacity. Therefore, manufacturers will 
continue to be able to offer the same range of capacities as are 
currently available on the market. In chapter 5 of the direct final 
rule TSD, DOE provides example design pathways that manufacturers could 
use to achieve higher efficiency without increasing capacity as a 
design option, such that DOE does not expect it will raise 
accessibility concerns.
    Whirlpool further commented that DOE must work closely with the 
Consumer Product Safety Commission (``CPSC'') to understand their work 
and ensure that RCWs can safely withstand high spin speeds under 
spontaneous unbalanced load conditions, given that the standards 
proposed in the March 2023 NOPR would effectively mandate higher spin 
speeds. (Id. at p. 13) AHAM noted that although higher spin speeds are 
an available option to increase efficiency, UL formed a working group 
to address recalls that happened with vertical axis clothes washers and 
instantaneous out-of-balance events that happened in the field. AHAM 
commented that DOE must coordinate with the CPSC as it considers 
certain technology options because manufacturers will need to dedicate 
resources to ensure that increased spin speeds do not decrease product 
safety. (AHAM, No. 464 at p. 17)
    Representatives Latta et al.\46\ commented that increased spin 
speeds to meet amended standards could increase the potential for load 
imbalance issues. (Representatives Latta et al., No. 456 at pp. 2-3)
---------------------------------------------------------------------------

    \46\ ``Representatives Latta et al.'' refers to a joint comment 
from the following members of the U.S. House of Representatives: 
Robert E. Latta (OH), H. Morgan Griffith (VA), Russ Fulcher (ID), 
Rick W. Allen (GA), and Greg Pence (IN).
---------------------------------------------------------------------------

    DOE only considered spin increase as a design option insofar as it 
is already demonstrated in RCWs available on the market. The prevalence 
of high-speed spin features currently available on the market is 
indicative that RCWs can be designed to safely withstand such spin 
speeds. DOE notes that models at the Recommended TSL would also require 
faster spin speeds compared to the baseline, and the Recommended TSL is 
supported by the Joint Commenters, which includes manufacturers with 
commercially available products that meet or exceed these levels being 
safely used today by consumers. As previously discussed, on February 
14, 2024, DOE received a second joint statement from the same group of 
stakeholders that submitted the Joint Agreement (of which Whirlpool is 
a member) in which the signatories reaffirmed the standards recommended 
in the Joint Agreement.\47\ In particular, the letter states that the 
joint stakeholders do not anticipate the recommended standards will 
negatively affect features or performance.
---------------------------------------------------------------------------

    \47\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    AHAM commented that high-frequency components (e.g., variable-speed 
motors) in higher-efficiency RCWs contribute to RCWs losing power

[[Page 19043]]

due to so-called ``nuisance tripping'' of the electrical outlet. (AHAM, 
No. 464 at pp. 17-22) Specifically, AHAM explained that arc-fault 
circuit-interrupters (``AFCIs'') are devices required by the National 
Electrical Code and local building codes that trip and disable 
appliances when they detect certain electrical signals, including 
conducted emissions. (Id. at p. 17) AHAM commented that many AFCI 
manufacturers implement more stringent tripping thresholds than those 
recommended by the Federal Communications Commission or the National 
Electrical Manufacturers Association, and that the variability in AFCI 
tripping thresholds among AFCI manufacturers creates a major challenge 
for home appliance manufacturers in making products more efficient, 
noting that AFCI manufacturers are not required to publicize changes to 
the tripping thresholds or update the relevant industry standard with 
this information. (Id. at pp. 17-18) AHAM commented that DOE must not 
endanger manufacturers' ability to address this issue by pushing RCWs 
towards use of components that generate higher frequency conducted 
emissions, such as variable-speed motors. (Id. at p. 19) AHAM requested 
that DOE consider how updated standards will impact manufacturers' 
ability to meet the specifications required to prevent AFCI nuisance 
tripping, quantify this impact, and adjust its analysis accordingly. 
(Id.)
    AHAM further commented on similar issues regarding ground-fault 
circuit interrupters (``GFCIs''), which are also devices required by 
the National Electrical Code that trip and disable appliances when they 
detect a ground-fault. (Id. at p. 20) AHAM commented that while 
appliance manufacturers can add filters to help avoid nuisance 
tripping, doing so increases energy consumption and does not solve the 
root cause, which AHAM states is highly variable GFCI tripping 
thresholds at high frequencies. (Id.) AHAM noted that the latest 
Underwriters Laboratory (``UL'') standard for GFCIs \48\ does not 
define the electrical amperage tripping threshold for frequencies other 
than 60 Hertz. (Id. at p. 21) AHAM commented that UL has conducted a 
study that verified that components operating at high frequencies 
contribute to nuisance tripping, even when no electrical hazard exists. 
(Id. at p. 20) The UL study referenced by AHAM explored the root causes 
of reported interoperability incidents (i.e., nuisance tripping) 
between certain GFCIs and home appliances, including RCWs. (Id. at pp. 
59-68) The UL study referenced by AHAM noted that its results were used 
in a proposal to add a GFCI interoperability test to the UL standard 
for appliances that are plugged into GFCIs,\49\ and that the results 
from the study are anticipated to facilitate the development of new 
performance requirements for UL 943 for frequencies other than 60 
Hertz. (Id.)
---------------------------------------------------------------------------

    \48\ UL 943 is the standard for Ground-Fault Circuit-
Interrupters.
    \49\ UL 101 is the standard for Leakage Current for Utilization 
Equipment.
---------------------------------------------------------------------------

    AHAM requested that DOE use its expertise and resources to properly 
investigate what it characterizes as the technological incompatibility 
between high-frequency components and AFCIs/GFCIs and suggested that 
DOE adjust its analysis and quantify the impact from nuisance tripping. 
(Id. at p. 22)
    In response to AHAM's concern regarding high-frequency components' 
impact on nuisance tripping, DOE emphasizes that it only considered 
design options that are already demonstrated in RCWs available on the 
market. DOE is aware of the potential for ``nuisance tripping'' of GFCI 
circuit protectors by high-frequency components such as variable-speed 
motors. However, DOE understands that nuisance tripping can generally 
be mitigated through the use of best practices for reducing leakage 
current, such as minimizing electrical cable lengths 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 further prevent 
GFCI tripping. To the extent that the use of additional electronic 
components is needed in conjunction with the use of design options with 
high-frequency components (such as variable-speed motors), and to the 
extent that such additional electronic components are provided in RCWs 
currently on the market that make use of such design options, DOE's 
teardown analysis captures any additional cost associated with such 
components.
    DOE notes that despite any potential for nuisance tripping, a wide 
range of appliances on the market today, including clothes washers, 
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. DOE notes that variable-speed motors have been used in 
RCWs for over a decade \50\ and observes the widespread usage of 
variable-speed motors in RCWs currently on the market, as discussed 
further in chapter 5 of the direct final rule TSD. DOE is not aware of 
widespread issues with the currently available products that would 
warrant exclusion from consideration. Further, as indicated by the 
Joint Agreement of which AHAM was a signatory, products at the standard 
level being adopted in this direct final rule are widely available, 
have significant market share--as the adopted standard represents the 
ENERGY STAR level--and manufacturers have not indicated consumer 
dissatisfaction with the clothes washers commercially available today.
---------------------------------------------------------------------------

    \50\ See, for example, discussion of variable-speed motors in 
chapter 5 of the TSD accompanying the energy conservation standards 
May 2012 Direct Final Rule. Available at www.regulations.gov/document/EERE-2008-BT-STD-0019-0047.
---------------------------------------------------------------------------

2. Remaining Technologies
    Through a review of each technology, DOE concludes that all of the 
other identified technologies listed in Table IV.3 meet all screening 
criteria to be examined further as design options in DOE's direct final 
rule analysis. In summary, DOE did not screen out the following 
technology options:

   Table IV.3--Retained Design Options for Residential Clothes Washers
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Methods for Decreasing Water Use *
    Adaptive water fill controls.
    Hardware features enabling lower water levels.
    Spray rinse.
Methods for Decreasing Machine Energy
    More efficient motor.
    Direct drive motor.
Methods for Decreasing Water Heating Energy
    Wash temperature decrease.
Methods for Decreasing Drying Energy
    Hardware features enabling spin speed increase.
    Spin time increase.
Methods for Decreasing Standby Energy
    Lower standby power components.
Methods for Increasing Overall Efficiency
    Capacity increase (without requiring a cabinet width increase).
------------------------------------------------------------------------
* Most of the methods for decreasing water use are also methods for
  decreasing water heating energy, since less hot water is used.

    As discussed, technology options for RCWs may reduce energy use 
alone, water use alone, or both energy and water use together. The 
technology options that reduce energy use alone are those indicated as 
methods for decreasing machine energy, drying energy, and standby 
energy. Spray rinse, indicated as one of the methods for reducing water 
use, reduces water use alone. The technology options that reduce both 
energy and water use

[[Page 19044]]

together are the remaining two options among the methods for decreasing 
water use, as well as those indicated as methods for reducing water 
heating energy.
    DOE determined that these technology options are technologically 
feasible because they are being used or have previously been used in 
commercially-available products or working prototypes. DOE also finds 
that all of the remaining technology options meet the other screening 
criteria (i.e., practicable to manufacture, install, and service and do 
not result in adverse impacts on consumer utility, product 
availability, health, or safety). For additional details, see chapter 4 
of the direct final rule TSD.

C. Engineering Analysis

    The purpose of the engineering analysis is to establish the 
relationship between the efficiency and cost of RCWs. 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. Metric Translations
    As discussed in section II.B.2 of this document, the June 2022 TP 
Final Rule established a new test procedure, appendix J, which 
established new EER and WER efficiency metrics. 87 FR 33316. Appendix J 
also incorporates a number of revisions that affect the per-cycle 
energy and water use in comparison to results obtained under the 
current appendix J2 test procedure. See 10 CFR part 430, subpart B, 
appendix J. In the March 2023 NOPR, DOE identified efficiency levels 
initially in terms of the existing IMEF and IWF metrics and used a 
translation equation to convert the identified IMEF and IWF levels into 
corresponding EER and WER levels as the basis for the proposed amended 
standards. 88 FR 13520, 13545. The translation equation was based on 
testing performed by DOE on a representative sample of RCW models. Id. 
at 88 FR 13555-13559.
    In this direct final rule, DOE used the same translation equations 
presented in the March 2023 NOPR to translate efficiency levels from 
the appendix J2 metrics (i.e., IMEF and IWF) into the appendix J 
metrics (i.e., EER and WER).
2. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design option approach to interpolate to define ``gap fill'' 
levels (to bridge large gaps between other identified efficiency 
levels) and/or to extrapolate to the ``max-tech'' level (particularly 
in cases where the ``max-tech'' level exceeds the maximum efficiency 
level currently available on the market).
    For this direct final rule, DOE used an efficiency-level approach, 
supplemented with the design-option approach for certain ``gap fill'' 
efficiency levels. The efficiency-level approach is appropriate for 
RCWs given the availability of certification data to determine the 
market distribution of existing products and to identify efficiency 
level ``clusters'' that already exist on the market.
    In conducting the efficiency analysis for the automatic clothes 
washer product classes, DOE first identified efficiency levels in terms 
of the current IMEF and IWF metrics defined in appendix J2 that are the 
most familiar to interested parties. DOE also initially determined the 
cost-efficiency relationships based on these metrics. Following that, 
DOE translated each efficiency level into its corresponding EER and WER 
values using the translation equations developed for each product 
class, as discussed previously in section IV.C.1 of this document.
    For the semi-automatic product class, for which reliable 
certification data is unavailable, DOE tested a representative sample 
of units to appendix J and used that set of data points to determine 
the baseline and higher efficiency levels, as described further in 
section IV.C.2.c of this document.
    The efficiency levels that DOE considered in the engineering 
analysis are attainable using technologies currently available on the 
market in RCWs. DOE used the results of the testing and teardown 
analyses to determine a representative set of technologies and design 
strategies that manufacturers use to achieve each higher efficiency 
level. This information provides interested parties with additional 
transparency of assumptions and results, and the ability to perform 
independent analyses for verification. Chapter 5 of the direct final 
rule TSD describes the methodology and results of the analysis used to 
derive the cost-efficiency relationships.
a. Baseline Efficiency Levels
    For each product class, DOE generally selects a baseline model as a 
reference point for each class, and measures changes resulting from 
potential energy conservation standards against the baseline. The 
baseline model in each product class represents the characteristics of 
a product typical of that class (e.g., capacity, physical size). 
Generally, a baseline model is one that just meets current energy 
conservation standards, or, if no standards are in place, the baseline 
is typically the most common or least efficient unit on the market.
    In defining the baseline efficiency levels for this direct final 
rule, DOE considered comments it had received in response to the 
baseline efficiency levels proposed in the March 2023 NOPR.
    In the March 2023 NOPR, DOE analyzed the baseline efficiency levels 
shown in Table IV.4 for each automatic product class. 88 FR 13520, 
13546. The semi-automatic product class is discussed separately in 
section IV.C.2.c of this document.

[[Page 19045]]



                                         Table IV.4--Baseline Efficiency Levels Analyzed in the March 2023 NOPR
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Minimum IMEF (ft  Maximum IWF (gal/   Minimum EER (lb/   Minimum WER (lb/
                Product class                           Description             \3\/kWh/cycle)     cycle/ft \3\)        kWh/cycle)         gal/cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact (<1.6 ft \3\).....  Current DOE standard..........               1.15               12.0               3.79               0.29
Top-Loading Standard-Size (>=1.6 ft \3\)....  Current DOE standard..........               1.57                6.5               3.50               0.38
Front-Loading Compact (<3.0 ft \3\).........  Current DOE standard for front-              1.84                4.7               4.41               0.53
                                               loading standard-size (>=1.6
                                               ft \3\) *.
Front-Loading Standard-Size (>=3.0 ft \3\)..  ENERGY STAR v. 7.0 **.........               2.38                3.7               5.02               0.64
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Although the current DOE standard for front-loading compact (<1.6 ft \3\) is 1.13 IMEF/8.3 IWF, no front-loading units are currently on the market
  with a capacity <1.6 ft \3\. The baseline efficiency level proposed in the March 2023 NOPR reflected the currently applicable standard for front-
  loading RCWs with capacities between 1.6 and 3.0 ft \3\.
** Although the current DOE standard for front-loading standard-size (>=1.6 ft \3\) is 1.84 IMEF/4.7 IWF, at the time of analysis, the least efficient
  front-loading standard-size RCW available on the market had an efficiency rating of 2.38 IMEF/3.7 IWF. DOE noted in the March 2023 NOPR that although
  DOE's Compliance Certification Database (``CCD'') includes front-loading standard-size RCWs that are rated at the current standard level of 1.84 IMEF,
  it had determined through testing that these units perform significantly above their rated value at the current standard level. 88 FR 13520, 13545.

    In the March 2023 NOPR, DOE discussed an alternate approach it was 
considering for defining the baseline levels. Id. at 88 FR 13561. The 
baseline efficiency levels defined in the March 2023 NOPR represented 
an IMEF-to-EER translation based on ``consistent spin'' performance 
\51\ across all the cycle settings required for testing. DOE observed 
through testing, however, that some units on the market are designed 
such that only the cycle setting required for measuring the remaining 
moisture content (``RMC'') under appendix J2 (i.e., the Cold/Cold cycle 
with maximum load size) is optimized \52\ to achieve a favorable RMC 
value; on such units, the spin portion of the cycle is significantly 
faster or longer on the Cold/Cold setting with a maximum load size than 
for the other temperature settings or load sizes that are tested as 
part of the energy test. Id. at 88 FR 13556. As discussed in the March 
2023 NOPR, comments submitted by a manufacturer suggested that, were 
DOE to amend standards based on appendix J, manufacturers that 
currently use ``Cold/Cold optimized spin'' would likely increase the 
spin speeds or spin durations across all temperature settings to match 
the spin behavior of the Cold/Cold temperature setting; i.e., such 
units would be redesigned to exhibit ``consistent spin'' performance to 
provide the lowest possible (i.e., best possible) RMC measurement under 
appendix J. Id. at 88 FR 13557. Under the alternate approach to 
defining the baseline efficiency levels discussed in the March 2023 
NOPR, DOE would define the baseline efficiency levels based on a 
translation between appendix J2 and appendix J metrics without 
consideration of any changes to spin implementations as a result of 
adopting the new appendix J test procedure. Id. at 88 FR 13561. DOE 
referred to this in the March 2023 NOPR as the ``unadjusted'' baseline 
approach. Id. Using this approach, the baseline level presented in the 
March 2023 NOPR would instead be considered efficiency level (``EL'') 
1.
---------------------------------------------------------------------------

    \51\ In the March 2023 NOPR, DOE discussed its observation of 
various approaches used by manufacturers for the final spin portion 
of the wash cycle across all the cycle setting required for testing. 
88 FR 13520, 13561. DOE used the term ``consistent spin'' to refer 
to units in which the characteristics of the spin cycle (e.g., spin 
speed, spin time) are consistent across temperature selections. Id. 
at 88 FR 13556. On such units, RMC values measured on Warm/Cold, 
Hot/Cold, and Extra Hot/Cold cycles are substantially similar to the 
RMC value measured on the Cold/Cold cycle. Id.
    \52\ DOE used the term ``Cold/Cold optimized spin'' in the March 
2023 NOPR to refer to units in which the spin cycle is optimized on 
the Cold/Cold setting with maximum load size. Id.
---------------------------------------------------------------------------

    DOE sought comment on the baseline efficiency levels analyzed in 
the March 2023 NOPR for each product class. Id. at 88 FR 13546. DOE 
also sought comment on whether it should consider defining an 
``unadjusted'' baseline efficiency level based on a translation between 
appendix J2 and appendix J metrics without consideration of any changes 
to spin implementations as a result of adopting the appendix J test 
procedure. Id. at 88 FR 13561.
    AHAM agreed with DOE's proposal to establish the baseline at the 
current DOE standard for top-loading standard-size RCWs and at the 
current standard for front-loading standard-size RCWs for the front-
loading compact product class. (AHAM, No. 464 at pp. 16-17)
    AHAM opposed DOE's proposal to establish the baseline for front-
loading standard-size RCWs at the ENERGY STAR v. 7.0 level and instead 
recommended establishing the baseline at the current DOE standard. (Id. 
at p. 17) AHAM commented that even if DOE tested some products that 
meet higher levels of efficiency than their rated values, that may not 
universally be the case; and that even if it is, the DOE standard does 
continue to represent the baseline, as those products are designed in 
order to ensure they meet the current energy conservation standard. 
(Id.) AHAM further commented that DOE's approach does not match the 
intent of establishing the baseline, which is to identify the least-
efficient product and set the baseline at that level. (Id.) As such, 
AHAM recommended that DOE establish the baseline at the current DOE 
standard for front-loading standard-size products. (Id.)
    In response to AHAM's comment regarding the definition of the 
baseline level for front-loading standard-size RCWs, DOE is adopting 
AHAM's recommended approach for this direct final rule and defining the 
baseline level for the front-loading standard-size product class as the 
current DOE standard (corresponding to 1.84 IMEF/5.7 IWF).\53\
---------------------------------------------------------------------------

    \53\ In this direct final rule (``DFR''), DOE labels the EL 
corresponding to the current DOE standard as ``DFR Baseline'' and 
the EL corresponding to ENERGY STAR v. 7.0 as ``NOPR Baseline.''
---------------------------------------------------------------------------

    The California Investor-Owned Utilities (``CA IOUs'') \54\ 
recommended that DOE use an ``unadjusted'' baseline efficiency level as 
presented in appendix 5A of the March 2023 NOPR TSD and update the 
market share distributions by including a ``consistent spin'' 
implementation technology option reflecting the existing market. (CA 
IOUs, No. 460 at pp. 3-4) The CA IOUs stated that they acknowledge the 
challenges of transitioning to the new test procedure's energy and 
water metrics, but maintain that assuming all

[[Page 19046]]

units will adopt the ``consistent spin'' implementation method and that 
incorporating this assumption as the baseline for each product class 
does not represent real-world usage. (Id.) The CA IOUs recommended DOE 
use the least efficient tested EER in its test sample to define the 
baseline efficiency level and that DOE may apply consistent spin 
implementation and the associated cost and energy savings as a 
technology improvement at EL 1. (Id. at p. 4) The CA IOUs noted that 
this method would respect DOE's expectation that manufacturers adopt a 
consistent spin profile in response to appendix J. (Id.) The CA IOUs 
commented that this approach should also result in updates to the 
efficiency distribution for all product classes where DOE found units 
with a non-consistent spin implementation. (Id.) The CA IOUs stated the 
same market distribution calculations and adjustments should be 
implemented for top-loading standard-size, front-loading compact, and 
semi-automatic product classes since all were found to have products 
with non-consistent spin implementation in DOE's testing. (Id.) The CA 
IOUs further stated that these adjustments to DOE's analysis will 
accurately represent energy savings from this rulemaking by properly 
characterizing existing products and their variety of spin 
implementations. (Id. at pp. 4-5) The CA IOUs requested that, should 
DOE decline to adopt the proposed methodology, DOE clarify its position 
on the inclusion of the costs associated with the spin improvements. 
(Id. at p. 5) The CA IOUs requested that DOE ensure uniformity in its 
treatment of consistent spin profiles to account for both or none of 
the savings and costs. (Id.)
---------------------------------------------------------------------------

    \54\ The ``CA IOUs'' includes Pacific Gas and Electric Company, 
SDG&E, and SCE.
---------------------------------------------------------------------------

    In response to the CA IOUs' recommendation to use the 
``unadjusted'' baseline approach to define the baseline efficiency 
levels, DOE has further evaluated this approach and determined that DOE 
would not be able to reliably extrapolate its test results to the 
entire market to determine how market shares would need to be 
apportioned between an ``unadjusted'' baseline level and the baseline 
level defined in the March 2023 NOPR using the translation equations. 
More specifically, although DOE identified units in its test sample 
with ``Cold/Cold optimized'' spin characteristic, DOE was not able to 
determine a consistent pattern of implementation of this 
characteristic--either among manufacturers or product platforms--that 
could be used to extrapolate to the entire RCW market. For example, 
DOE's test results indicated that some individual manufacturers use 
different spin characteristics across their RCW model offerings (e.g., 
using ``consistent spin'' on some models, while using ``Cold/Cold 
optimized spin'' on other model), and in some cases across different 
individual models within the same product family (e.g., among front-
loading standard-size models designed and built on the same underlying 
product platform). DOE recognizes that by not explicitly accounting for 
changes to spin implementation at the baseline level for some portion 
of the market, any incremental energy savings attributable to the 
change in test procedure to appendix J are not accounted for in DOE's 
assessment of the total energy savings resulting from the amended 
standards enacted by this direct final rule. Regarding DOE's accounting 
of any costs associated with such changes in spin implementation, DOE 
is not assigning any additional manufacturing cost to the baseline 
level with respect to this issue. The design changes incorporated into 
DOE's cost-efficiency curves at the amended standard level already 
include any necessary structural improvements that would potentially be 
required to convert a product from using a ``Cold/Cold optimized'' spin 
implementation to a ``consistent spin'' implementation (e.g., more 
robust bearings or suspension to accommodate increased spin speeds).
b. Higher Efficiency Levels
    To establish higher efficiency levels for the analysis, DOE 
reviewed data in DOE's CCD to evaluate the range of efficiencies for 
RCWs currently available on the market.\55\
---------------------------------------------------------------------------

    \55\ DOE's Compliance Certification Database is available at 
www.regulations.doe.gov/certification-data. Analysis conducted May 
2023.
---------------------------------------------------------------------------

    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 in each product class. (42 
U.S.C. 6295(p)(1)) DOE typically determines max-tech levels based on 
technologies that are either commercially available or have been 
demonstrated as working prototypes. If the max-tech design meets DOE's 
screening criteria, DOE considers the design in further analysis.
    In defining the higher efficiency levels for this direct final 
rule, DOE considered comments it had received in response to the higher 
efficiency levels proposed in the March 2023 NOPR.
    In the March 2023 NOPR, DOE tentatively determined that the max-
tech efficiency level for each RCW product class corresponds to the 
maximum available level for each product class. 88 FR 13520, 13546. In 
other words, DOE did not define or analyze any efficiency levels higher 
than those currently available on the market. Id.
    As noted, EPCA requires that any new or amended energy conservation 
standard be designed to achieve the maximum improvement in energy 
efficiency that is technologically feasible. (42 U.S.C. 6295(o)(2)(A)) 
For RCWs, a determination of technological feasibility must encompass 
not only an achievable reduction in energy and/or water consumption, 
but also the ability of the product to perform its intended function 
(i.e., wash clothing) at reduced energy or water levels.\56\ Attributes 
that are relevant to consumers encompass multiple aspects of RCW 
operation such as stain removal, solid particle removal, rinsing 
effectiveness, fabric gentleness, cycle time, noise, vibration, and 
others. Each of these attributes may be affected by energy and water 
efficiency levels, and achieving better performance in one attribute 
may require a tradeoff with one or more other attributes. DOE does not 
have the means to be able to determine whether a product that uses less 
water or energy than the maximum efficiency level available on the 
market would represent a viable (i.e., technologically feasible) 
product that would satisfy consumer expectations regarding all the 
other aspects of RCW performance that are not measured by the DOE test 
procedure. As far as DOE is aware, the complexity of the 
interdependence among all these attributes precludes being able to use 
a computer model or other similar means to predict changes in these 
product attributes as a result of reduced energy and water levels. 
Rather, as far as DOE is aware, such determinations are made in an 
iterative fashion through extensive product testing as part of 
manufacturers' design processes.
---------------------------------------------------------------------------

    \56\ As an extreme example, DOE could consider a hypothetical 
RCW that reduces its water consumption to near-zero, but such a 
product would not be viable for washing clothing, given current 
technology.
---------------------------------------------------------------------------

    DOE sought comment on the higher efficiency levels analyzed in the 
March 2023 NOPR for each product class. Id. at 88 FR 13549.
    DOE did not receive any comments regarding the higher efficiency 
levels analyzed in the March 2023 NOPR.
    At each higher efficiency level, both energy use and water use 
decrease through the implementation of

[[Page 19047]]

combinations of design options that individually either reduce energy 
use alone, reduce water use alone, or reduce both energy and water use 
together, as discussed previously in section IV.A.2 of this document. 
Chapter 5 of the direct final rule TSD provides a detailed discussion 
of the specific design changes that DOE believes manufacturers would 
typically use to meet each higher efficiency level considered in this 
engineering analysis, including a discussion of whether such design 
changes would reduce energy use only, water use only, or reduce both 
energy and water use together.
    In this direct final rule, DOE analyzed the higher efficiency 
levels shown in Tables IV.5 through IV.8, consistent with the levels 
analyzed in the March 2023 NOPR.

                                          Table IV.5--Top-Loading Ultra-Compact (<1.6 ft\3\) Efficiency Levels
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          IMEF (ft \3\ /kWh/   IWF (gal/cycle/ft
                  EL                      Efficiency level description          cycle)               \3\)         EER (lb/kWh/cycle)  WER (lb/gal/cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............................  Current DOE standard.............               1.15                12.0                3.79                0.29
--------------------------------------------------------------------------------------------------------------------------------------------------------


                      Table IV.6--Top-Loading Standard-Size (>=1.6 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                        Efficiency
         EL               level       IMEF (ft \3\/kWh/  IWF (gal/cycle/ft     EER (lb/kWh/       WER (lb/gal/
                       description          cycle)              \3\)              cycle)             cycle)
----------------------------------------------------------------------------------------------------------------
Baseline...........  Current DOE                   1.57                6.5               3.50               0.38
                      standard.
1..................  Gap fill.......               1.82                5.4               3.89               0.47
2..................  ENERGY STAR v.                2.06                4.3               4.27               0.57
                      8.1.
3..................  2015-2017                     2.38                3.7               4.78               0.63
                      Consortium for
                      Energy
                      Efficiency
                      (``CEE'') Tier
                      1.
4..................  Maximum                       2.76                3.2               5.37               0.67
                      available
                      (2016/2017
                      ENERGY STAR
                      Most
                      Efficient).
----------------------------------------------------------------------------------------------------------------


                        Table IV.7--Front-Loading Compact (<3.0 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                        Efficiency
         EL               level       IMEF (ft \3\/kWh/  IWF (gal/cycle/ft     EER (lb/kWh/       WER (lb/gal/
                       description          cycle)              \3\)              cycle)             cycle)
----------------------------------------------------------------------------------------------------------------
Baseline...........  Current DOE                   1.84                4.7               4.41               0.53
                      standard for
                      front-loading
                      standard-size
                      (>=1.6 ft \3\).
1..................  ENERGY STAR v.                2.07                4.2               4.80               0.62
                      8.1 level for
                      units <=2.5 ft
                      \3\.
2..................  2023 ENERGY                   2.20                3.7               5.02               0.71
                      STAR Most
                      Efficient for
                      units <=2.5 ft
                      \3\.
3..................  Gap fill.......               2.50                3.5               5.53               0.75
4..................  Maximum                       2.76                3.2               5.97               0.80
                      available
                      (ENERGY STAR
                      v. 8.1 level
                      for units >2.5
                      ft \3\).
----------------------------------------------------------------------------------------------------------------


                     Table IV.8--Front-Loading Standard-Size (>=3.0 ft\3\) Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                    Efficiency level  IMEF (ft \3\/kWh/  IWF (gal/cycle/ft     EER (lb/kWh/       WER (lb/gal/
        EL             description          cycle)              \3\)              cycle)             cycle)
----------------------------------------------------------------------------------------------------------------
DFR Baseline......  Current DOE                    1.84                4.7               4.31               0.38
                     standard.
NOPR Baseline.....  ENERGY STAR v.                 2.38                3.7               5.02               0.64
                     7.0.
1.................  Gap fill........               2.60                3.5               5.31               0.69
2.................  ENERGY STAR v.                 2.76                3.2               5.52               0.77
                     8.1.
3.................  2023 ENERGY STAR               2.92                3.2               5.73               0.77
                     Most Efficient.
4.................  Maximum                        3.10                2.9               5.97               0.85
                     available.
----------------------------------------------------------------------------------------------------------------

c. Semi-Automatic
    As discussed in section IV.A.1 of this document, this direct final 
rule re-establishes a separate product class for semi-automatic clothes 
washers and establishes performance-based standards for semi-automatic 
clothes washers. In considering the definition of efficiency levels for 
semi-automatic clothes washers for this direct final rule, DOE used the 
same methodology it had proposed in the March 2023 NOPR.
    As discussed in the March 2023 NOPR, given the lack of specificity 
in appendix J2 regarding the testing of semi-automatic clothes washers, 
and the significant differences in testing between appendix J2 versus 
appendix J for semi-automatic clothes washers, DOE tentatively 
determined that it could not develop an accurate correlation between 
appendix J2 metrics (i.e., IMEF and IWF) and appendix J metrics (i.e., 
EER and WER) for semi-automatic clothes washers. Id. at 88 FR 13549. 
Therefore, DOE proposed to define efficiency levels in terms of EER and 
WER directly rather than first defining efficiency levels in terms of 
IMEF and IWF and then developing translation equations to translate 
those levels to EER and WER. Id. As discussed in the March 2023 NOPR, 
DOE determined efficiency levels for the semi-automatic clothes washer 
product class by testing a representative sample of models on the 
market and observing the range of EER and WER results. Id.

[[Page 19048]]

DOE sought comment on the efficiency levels analyzed in the March 2023 
NOPR for semi-automatic RCWs. Id.
    DOE did not receive any comments regarding the efficiency levels 
analyzed in the March 2023 NOPR for semi-automatic RCWs. In this direct 
final rule, DOE used the efficiency levels defined in the March 2023 
NOPR for semi-automatic RCWs.
    Table IV.9 shows the efficiency levels for the semi-automatic 
product class. See chapter 5 of the direct final rule TSD for more 
details.

                                  Table IV.9--Semi-Automatic Efficiency Levels
----------------------------------------------------------------------------------------------------------------
                                                                               EER (lb/kWh/       WER (lb/gal/
                  EL                       Efficiency level description           cycle)             cycle)
----------------------------------------------------------------------------------------------------------------
Baseline..............................  Minimum available.................               1.60               0.17
1.....................................  Gap fill..........................               2.12               0.27
2.....................................  Maximum available.................               2.51               0.36
----------------------------------------------------------------------------------------------------------------

3. 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:
     Physical teardowns: Under this approach, DOE physically 
dismantles a commercially available product, component-by-component, to 
develop a detailed bill of materials for the product.
     Catalog teardowns: In lieu of physically deconstructing a 
product, DOE identifies each component using parts diagrams (available 
from manufacturer websites or appliance repair websites, for example) 
to develop the bill of materials for the product.
     Price surveys: If neither a physical nor catalog teardown 
is feasible (for example, for tightly integrated products such as 
fluorescent lamps, which are infeasible to disassemble and for which 
parts diagrams are unavailable) or cost-prohibitive and otherwise 
impractical (e.g., large commercial boilers), DOE conducts price 
surveys using publicly available pricing data published on major online 
retailer websites and/or by soliciting prices from distributors and 
other commercial channels.
    In the present case, DOE conducted the analysis using the physical 
teardown approach. For each product class, DOE tore down a 
representative sample of models spanning the entire range of efficiency 
levels, as well as multiple manufacturers within each product class. 
DOE aggregated the results so that the cost-efficiency relationship 
developed for each product class reflects DOE's assessment of a market-
representative ``path'' to achieve each higher efficiency level. The 
resulting bill of materials provides the basis for the manufacturer 
production cost (``MPC'') estimates.
    To account for manufacturers' profit margin, DOE applies a 
multiplier (the manufacturer markup) to the MPC. The resulting 
manufacturer selling price (``MSP'') is the price at which the 
manufacturer distributes a unit into commerce. DOE developed an average 
manufacturer markup by examining the annual Securities and Exchange 
Commission (``SEC'') 10-K reports filed by publicly-traded 
manufacturers primarily engaged in appliance manufacturing and whose 
combined product range includes RCWs.\57\ See chapter 12 of the TSD for 
this direct final rule for additional detail on the manufacturer 
markup.
---------------------------------------------------------------------------

    \57\ U.S. Securities and Exchange Commission, Electronic Data 
Gathering, Analysis, and Retrieval (EDGAR) system. Available at 
www.sec.gov/edgar/search/ (last accessed June 30, 2023).
---------------------------------------------------------------------------

4. Cost-Efficiency Results
    In developing the baseline and incremental MPCs for each defined 
product class for this direct final rule, DOE considered comments it 
had received in response to the cost-efficiency results presented in 
the March 2023 NOPR.
    As discussed in the March 2023 NOPR, in support of this rulemaking, 
DOE conducted teardowns on 47 RCW models, which covered the entire 
range of efficiency levels within each analyzed product class. See 
chapter 5 of the March 2023 NOPR TSD.
    DOE sought comment in the March 2023 NOPR on the baseline and 
incremental MPCs developed for each product class. Id. at 88 FR 13553.
    ASAP, ACEEE, and NYSERDA commented that they believe DOE is likely 
overestimating incremental cost increases, especially for top-loading 
standard-size RCWs. (ASAP, ACEEE, and NYSERDA, No. 458 at p. 2) ASAP, 
ACEEE, and NYSERDA stated that while DOE assumes in the engineering 
analysis that baseline top-loading RCWs have enameled baskets and that 
units meeting the standards proposed in the March 2023 NOPR would have 
stainless steel baskets, NEEA market research found that almost two-
thirds of baseline top-loading standard-size RCW sales already include 
stainless steel baskets, including half of the least-expensive baseline 
models. (Id.) ASAP, ACEEE, and NYSERDA further commented that DOE has 
historically overestimated cost increases from energy efficiency 
standards, and they noted that a 2022 Spurlock & Fujita study \58\ 
concluded that baseline RCW prices stayed flat while efficiency 
increased by 30 percent, demonstrating that efficiency standards for 
RCWs benefit all consumers and that low-income consumers were not 
priced out of the market. (Id. at pp. 2-3) ASAP, ACEEE, and NYSERDA 
commented that historical trends suggest that any incremental increases 
in first cost experienced by customers will likely be smaller than 
those estimated by DOE. (Id. at p. 3)
---------------------------------------------------------------------------

    \58\ C.A. Spurlock & K.S. Fujita, ``Equity implications of 
market structure and appliance energy efficiency regulation,'' 
Energy Policy, 2022, Vol. 165, 112943.
---------------------------------------------------------------------------

    In response to the comment from ASAP, ACEEE, and NYSERDA regarding 
the prevalence of stainless steel wash baskets at the baseline level, 
in this direct final rule, DOE has updated its approach to calculating 
the baseline MPC for top-loading standard-size RCWs to reflect a 
market-weighted average of the use of stainless steel wash baskets 
versus enameled steel at the baseline level. DOE used information 
derived through confidential manufacturer interviews to determine the 
market weightings of each basket type. DOE has determined that using a 
market-weighted average provides a more accurate representation of the 
industry-average MPC at the baseline level for the top-loading 
standard-size product class.
    In response to the comment from ASAP, ACEEE, and NYSERDA that DOE 
has historically overestimated cost

[[Page 19049]]

increases from amended standards, DOE notes that the MPCs developed as 
part of the engineering analysis reflect observations of technologies 
as they are implemented on the market at the time of the analysis. As 
discussed further in chapter 5 of the direct final rule TSD, DOE takes 
into account that certain component-level costs would generally be 
lower on a per-unit basis due to higher production volumes that would 
result if DOE were to establish standards at a particular higher 
efficiency level.\59\ To the extent that the actual cost of an improved 
baseline product brought to market in compliance with amended standards 
is less than the cost predicted by DOE in a prior rulemaking analysis, 
DOE notes that product cost reductions may not necessarily be related 
to efficiency redesigns even if implemented at the same time as 
efficiency-related design changes. For example, throughout the home 
appliance industry, DOE has observed a trend of greater use of plastic 
components to replace components that were previously made of metal or 
other more expensive materials. Manufacturers may also implement 
product redesigns that require fewer parts, therefore resulting in 
shorter assembly times and lower manual labor costs. DOE further notes 
that manufacturers may choose to implement such non-efficiency design 
changes at the same time as efficiency-related design changes in order 
to minimize the number of product redesigns. DOE often does not have 
insights into future non-efficiency related design changes being 
considered by manufacturers. Furthermore, trends that may have occurred 
in the past that resulted in cost reductions (e.g., increased used of 
plastic components) would be expected to reach a ``saturation point'' 
and would therefore not be expected to continue indefinitely into the 
future. For these reasons, it would be inappropriately speculative, and 
therefore unjustifiable, for DOE to assume that non-efficiency related 
product cost reductions realized in the past would continue to be 
realized in the future in conjunction with future product redesigns 
prompted by amended efficiency standards.
---------------------------------------------------------------------------

    \59\ In general, higher product volumes result in lower per-unit 
costs for each part.
---------------------------------------------------------------------------

    AHAM commented that the changes to load sizes in new appendix J 
will increase the inherent RMC in the loads, while the standards 
proposed in the March 2023 NOPR require RMC to be extremely low at the 
end of the cycle. (AHAM, No. 464 at p. 2) AHAM stated that in order to 
meet the standards proposed in the March 2023 NOPR using the updated 
test procedure, manufacturers will need to increase spin speed and high 
spin speed plateau times. (Id.) AHAM further commented that the changes 
to spin speed and time would drive motor, structure, and possible other 
design changes (such as larger counterweights in front-loading RCWs). 
(Id.) AHAM further commented that the changes to tested temperature 
settings in new appendix J will force cycle redesigns such as lowering 
the warmest warm temperature and other changes that add significant 
cost to maintain current levels of performance. (Id.)
    In response to AHAM's comment regarding the impacts of the new test 
procedure on tested values, DOE notes that the translation equations 
developed to translate IMEF efficiency levels into EER efficiency 
levels inherently account for all the changes between the two test 
procedures, including the change in load size and the tested 
temperature settings.\60\ The application of these translation 
equations is such that the translated EER level corresponding to a 
given IMEF level represents the same level of stringency as the IMEF 
level, even though the underlying RMC value may be different and/or the 
tested temperature selections may be weighted differently. As such, DOE 
has determined that the estimated costs associated with achieving 
higher efficiency levels in terms of IMEF and IWF are representative of 
the costs associated with achieving the corresponding EER and WER 
levels as determined through application of the translation equations.
---------------------------------------------------------------------------

    \60\ As discussed in section IV.C.1 of this document, these 
translation equations were developed by testing a representative 
sample of RCWs to both the appendix J test procedure and the 
appendix J2 test procedure, and correlating the results.
---------------------------------------------------------------------------

    Finally, for this direct final rule, DOE updated the underlying raw 
material prices used in its cost model to reflect current raw material 
prices, which resulted in slight changes to the MPC values in 
comparison to the values used in the March 2023 NOPR. Table IV.10 
presents the baseline MPCs for each product class as determined for 
this direct final rule. Tables IV.11 through IV.14 provide the 
incremental MPCs for each higher efficiency level for each product 
class as determined for this direct final rule. As discussed, no 
automatic top-loading compact RCWs are available on the market that 
exceed the baseline level. Accordingly, DOE did not consider any higher 
efficiency levels for this product class.

           Table IV.10--Baseline Manufacturer Production Costs
                                 [2022$]
------------------------------------------------------------------------
                                                         Manufacturer
                    Product class                       production cost
------------------------------------------------------------------------
Top-Loading Ultra-Compact (less than 1.6 ft \3\                  $340.99
 capacity)..........................................
Top-Loading Standard-Size (1.6 ft \3\ or greater                  263.56
 capacity)..........................................
Front-Loading Compact (less than 3.0 ft \3\                       307.19
 capacity)..........................................
Front-Loading Standard-Size (3.0 ft \3\ or greater                438.11
 capacity)..........................................
Semi-Automatic......................................              177.77
------------------------------------------------------------------------


   Table IV.11--Incremental Manufacturer Production Costs for Top-Loading Standard-Size (>=1.6 ft \3\) Product
                                                      Class
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
             EL                    IMEF             IWF             EER             WER        Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline....................            1.57             6.5            3.50            0.38  ..................
1...........................            1.82             5.4            3.89            0.47              $49.55
2...........................            2.06             4.3            4.27            0.57               91.83

[[Page 19050]]

 
3...........................            2.38             3.7            4.78            0.63               99.90
4...........................            2.76             3.2            5.37            0.67              103.41
----------------------------------------------------------------------------------------------------------------


   Table IV.12--Incremental Manufacturer Production Costs for Front-Loading Compact (<3.0 ft\3\) Product Class
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
             EL                    IMEF             IWF             EER             WER        Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline....................            1.84             4.7            4.41            0.53  ..................
1...........................            2.07             4.2            4.80            0.62              $33.27
2...........................            2.20             3.7            5.02            0.71               57.03
3...........................            2.50             3.5            5.53            0.75               79.67
4...........................            2.76             3.2            5.97            0.80               81.29
----------------------------------------------------------------------------------------------------------------


  Table IV.13--Incremental Manufacturer Production Costs for Front-Loading Standard-Size (>=3.0 ft\3\) Product
                                                      Class
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
             EL                    IMEF             IWF             EER             WER        Incremental cost
----------------------------------------------------------------------------------------------------------------
DFR Baseline................            1.84             4.7            4.31            0.38  ..................
NOPR Baseline...............            2.38             3.7            5.02            0.64               $0.00
1...........................            2.60             3.5            5.31            0.69               24.33
2...........................            2.76             3.2            5.52            0.77               42.03
3...........................            2.92             3.2            5.73            0.77               48.86
4...........................            3.10             2.9            5.97            0.85               58.27
----------------------------------------------------------------------------------------------------------------


             Table IV.14--Incremental Manufacturer Production Costs for Semi-Automatic Product Class
                                                     [2022$]
----------------------------------------------------------------------------------------------------------------
                             EL                                     EER             WER        Incremental cost
----------------------------------------------------------------------------------------------------------------
Baseline....................................................            1.60            0.17  ..................
1...........................................................            2.12            0.27               $8.35
2...........................................................            2.51            0.36               13.58
----------------------------------------------------------------------------------------------------------------

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
    For RCWs, the main parties in the post-manufacturer distribution 
chain are retailers/distributors and consumers.
    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.\61\
---------------------------------------------------------------------------

    \61\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    For the March 2023 NOPR, DOE relied on economic data from the U.S. 
Census Bureau to estimate average baseline and incremental markups.\62\
---------------------------------------------------------------------------

    \62\ U.S. Census Bureau, Annual Wholesale Trade Survey. 2017. 
Available at www.census.gov/awts (last accessed May 2, 2023).
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding the markups analysis conducted for the March 2023 NOPR. The 
approach for determining markups in this direct final rule was the same 
approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, AHAM commented that it, along 
with AHRI and other stakeholders, disputes DOE's distinction between 
markups from manufacturers to end customers for the base case and those 
for costs added to meet proposed standards. (AHAM, No. 464 at p. 34) 
AHAM presented data, including quotes from retailers, which AHAM 
believes contradicts DOE's process and theory, arguing that it lacks 
empirical evidence and relies on discredited theories. (Id.) AHAM 
commented that DOE's theory is inconsistent with the data DOE presents, 
as the price of RCWs has decreased over time while retailer gross

[[Page 19051]]

margins have remained constant. (Id.) AHAM asserted that DOE cannot 
disregard data that contradicts its analysis and must take these 
comments into account to avoid arbitrary and capricious rulemaking. 
(Id. at p. 35)
    DOE's incremental markup approach assumes that an increase in 
operating profits, which is implied by keeping a fixed markup when the 
product price goes up, is unlikely to be viable over time in a 
reasonably competitive market like household appliance retailers. The 
Herfindahl-Hirschman Index (``HHI'') reported by the 2017 Economic 
Census indicates that the household appliance stores sector (North 
American Industry Classification System (``NAICS'') 443141) is a 
competitive marketplace.\63\ DOE recognizes that actors in the 
distribution chains are likely to seek to maintain the same markup on 
appliances in response to changes in manufacturer selling prices after 
an amendment to energy conservation standards. However, DOE believes 
that retail pricing is likely to adjust over time as those actors are 
forced to readjust their markups to reach a medium-term equilibrium in 
which per-unit profit is relatively unchanged before and after 
standards are implemented.
---------------------------------------------------------------------------

    \63\ 2017 Economic Census, Selected sectors: Concentration of 
largest firms for the U.S. Available at www.census.gov/data/tables/2017/econ/economic-census/naics-sector-44-45.html.
---------------------------------------------------------------------------

    DOE acknowledges that markup practices in response to amended 
standards are complex and varying with business conditions. However, 
DOE's analysis necessarily only considers changes in appliance 
offerings that occur in response to amended standards and isolates the 
effect of amended standards from other factors. Obtaining data on 
markup practices in the situation described above is very challenging. 
Hence, DOE continues to maintain that its assumption that standards do 
not facilitate a sustainable increase in profitability is reasonable.
    Chapter 6 of the direct final rule TSD provides details on DOE's 
development of markups for RCWs.

E. Energy and Water Use Analysis

    The purpose of the energy and water use analysis is to determine 
the annual energy and water consumption of RCWs at different 
efficiencies in representative U.S. single-family homes, multi-family 
residences, and mobile homes, and to assess the energy savings 
potential of increased RCW efficiency. The energy and water use 
analysis estimates the range of energy and water use of RCWs in the 
field (i.e., as they are actually used by consumers). The energy and 
water use analysis provides the basis for other analyses DOE performed, 
particularly assessments of the energy and water savings and the 
savings in consumer operating costs that could result from adoption of 
amended or new standards.
    To establish a reasonable range of energy and water consumption in 
the field for RCWs, DOE primarily used data from 2020 Residential 
Energy Conservation Survey (``RECS'').\64\ RECS is a national sample 
survey of housing units that collects statistical information on the 
consumption of and expenditures for energy in housing units along with 
data on energy-related characteristics of the housing units and 
occupants. The 2020 RECS collected data on 18,496 housing units and was 
constructed by EIA to be a national representation of the household 
population in the United States. DOE's assumptions for establishing an 
RCW sample included the following considerations:
---------------------------------------------------------------------------

    \64\ U.S. Department of Energy--Energy Information 
Administration, Residential Energy Consumption Survey: 2020 Public 
Use Data Files, 2020. Available at www.eia.gov/consumption/residential/data/2020/ (last accessed June 28, 2023).
---------------------------------------------------------------------------

     The household had a clothes washer.
     Clothes washer use was greater than zero.
    DOE divided the sample of households into five sub-samples to 
characterize the product classes being analyzed: top-loading ultra-
compact RCWs; automatic, top-loading standard-size RCWs; automatic, 
front-loading compact RCWs; automatic, front-loading standard-size 
RCWs; and semi-automatic RCWs. For ultra-compact, compact, and semi-
automatic clothes washers, DOE developed a sub-sample consisting of 
households from multi-family buildings, manufactured homes, and single-
family homes with less than 1,000 square feet and no garage or 
basement, since DOE reasoned that such products are most likely to be 
found in these housing types.
    The energy and water use analysis requires DOE to establish a range 
of total annual usage or annual number of cycles in order to estimate 
annual energy and water consumption by a clothes washer unit. DOE 
unutilized data from the 2020 RECS, which provided information on the 
number of laundry loads washed (clothes washer cycles) per week for 
sample households. The average annual energy and water consumption were 
then calculated, reflecting an average annual weighted usage of 210 
cycles per year (206 cycles for top-loading RCWs and 217 cycles for 
front-loading RCWs).
    For each sample household, DOE estimated the field-based annual 
energy and water use of the clothes washer by multiplying the annual 
number of clothes washer cycles for each household by the per-cycle 
energy and water use values established by the engineering analysis 
(using the DOE test procedure) for each considered efficiency level. 
Per-cycle clothes washer energy use is calculated in the test procedure 
as the sum of per-cycle machine energy use associated with the clothes 
washer (including the energy used to heat water and remove moisture 
from clothing),\65\ and combined low-power-mode energy use.
---------------------------------------------------------------------------

    \65\ The per-cycle energy consumption associated with a given 
clothes washer has three components: energy used for heating water, 
operating the machine, and drying the clothes.
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding the energy and water use analysis conducted for the March 
2023 NOPR. The approach used for this direct final rule is largely the 
same as the approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, Whirlpool commented that DOE 
appears to double-count the savings for drying energy between the RCW 
standard analysis and the consumer clothes dryer standard analysis. 
(Whirlpool, No. 462 at p. 14) Whirlpool noted that DOE's RCW analysis 
assumed an RMC of 37 percent and 33 percent were needed to meet the 
standard levels proposed in the March 2023 NOPR (for top-loading and 
front-loading, respectively), whereas the clothes dryer test procedure 
at 10 CFR part 430, subpart B, appendix D2 (``appendix D2''), assumes 
an initial moisture content of 57.5 percent. (Id.) Whirlpool commented 
that this effectively accounts for a significantly higher moisture 
content of the clothes going into the clothes dryer than would be 
allowed for coming out of the clothes washer under the standards for 
RCWs proposed in the March 2023 NOPR. (Id.) Whirlpool suggested that 
DOE choose which appliance (clothes washers or clothes dryers) should 
include the reduction of RMC in its analysis, and that the analysis for 
the other standard should not also account for it. (Id.) Whirlpool 
commented that the current approach may hurt consumers who may not get 
the full savings they are expecting and significantly impact the 
economic analysis, selection of efficiency levels, and whether the 
level is economically justified. (Id.)
    AHAM commented that DOE is overestimating the expected energy 
savings between clothes washers and

[[Page 19052]]

clothes dryers by assuming an RMC at the proposed standard of 37 
percent for top-loading standard-size RCWs and of 33 percent for front-
loading standard-size RCWs, which is lower than the initial moisture 
content of 57.5 percent in the clothes dryers test procedure. (AHAM, 
No. 464 at p. 23) AHAM commented that DOE is therefore assuming that 
the drying cycle requires more energy than is needed. (Id.) AHAM 
commented that these assumptions overestimate the savings that many 
consumers will experience when purchasing a laundry pair and that DOE 
should better estimate the savings by considering the pair purchase 
rate and usage of older clothes washers with possibly higher RMC values 
after the standard goes into effect. (Id.)
    To the greatest extent possible, DOE avoids double-counting between 
the RCW standards analysis and the consumer clothes dryer standards 
analysis, as explained by the following. Amended RCW standards result 
in less total moisture needing to be removed from the clothing in a 
clothes dryer, whereas amended consumer clothes dryer standards result 
in a less energy-intensive process for removing that moisture. As such, 
the drying energy savings associated with amended RCW standards 
represent savings experienced through shorter drying times (due to the 
clothing being ``less wet'' after the completion of the wash cycle due 
to faster spin speeds), whereas the drying energy savings associated 
with amended consumer clothes dryer standards represents savings 
attributable to improvements to the inherent efficiency of the drying 
process itself. Pertaining to this RCW standards analysis, the clothes 
dryer energy savings associated with reduced RMC values--essentially 
resulting in shorter drying cycles--would be experienced by consumers 
regardless of whether a consumer purchases a new clothes dryer 
alongside a new RCW or continues to use their existing clothes dryer.
    For RCWs, the embedded assumptions and usage factors defined in the 
test procedure for calculating drying energy are intended to reflect 
the characteristics of the current installed stock of consumer clothes 
dryers on a nationally representative basis. Similarly, for clothes 
dryers, the assumed initial moisture content value defined in the 
clothes dryer test procedure is intended to reflect the characteristics 
of the current installed stock of RCWs on a nationally representative 
basis. DOE regularly reevaluates these assumptions and usage factors as 
part of its test procedure rulemakings--and adjusts each value when 
warranted--to ensure that each respective test procedure produces test 
results that are nationally representative as the markets for these 
products evolve over time, in part due to amended energy conservation 
standards.
    Alliance for Water Efficiency (``AWE'') recommended that DOE 
evaluate energy embedded in the water that will be saved as a result of 
the proposed standard. (AWE, No. 444 at p. 4) AWE stated that it has 
developed a tool for evaluating the water savings, costs, and benefits 
of urban water conservation programs and for projecting future demands 
that provides a range of estimates for embedded water and wastewater 
energy. (Id.) AWE recommended that DOE use the estimates from AWE's 
conservation tracking tool for calculating the energy embedded in the 
water and noted that DOE could also adjust this based on the 
assumptions it is currently using for private wells. (Id.)
    DOE has previously determined that EPCA does not direct DOE to 
consider the energy used for water treatment and delivery. In the May 
2012 Direct Final Rule, DOE noted that EPCA directs DOE to consider 
``the total projected amount of energy, or as applicable, water, 
savings likely to result directly from the imposition of the 
standard.'' 77 FR 32308, 32346 (quoting 42 U.S.C. 
6295(o)(2)(B)(i)(III)). In the May 2012 Direct Final Rule, DOE 
interpreted ``directly from the imposition of the standard'' to include 
energy used in the generation, transmission, and distribution of fuels 
used by appliances. Unlike the energy used for water treatment and 
delivery, both DOE's current accounting of primary energy savings and 
the full-fuel-cycle measure are directly linked to the energy used by 
appliances. Id.
    ASAP, ACEEE, and NYSERDA noted that data found in the 2016 
Residential End Uses of Water (``REUW'') report suggest that DOE may be 
significantly underestimating the average number of RCW loads per year. 
(ASAP, ACEEE, and NYSERDA, No. 458 at p. 3)
    AWE recommended that DOE use actual data from 2016 REUW or other 
actual end-use data for its assumptions about RCW loads per year. (AWE, 
No. 444 at p. 3) AWE stated that there are often large gaps between 
consumer survey responses and actual behavior when it comes to fixture 
and appliance uses, and therefore data from reports like 2016 REUW or 
other sources, such as smart metering companies, could be more reliable 
than the 2015 RECS. (Id.) AWE recommended that DOE consider using 
actual customer end use beyond the EIA's survey data and, in the 
absence of data from additional sources, DOE should use 285 loads per 
year based on actual data from 2016 REUW, instead of 234 load per year. 
(Id.)
    DOE has reviewed the 2016 REUW report, published by the Water 
Research Foundation, which analyzed RCW end-use data from detailed log 
data from 737 households. However, DOE noticed a significant disparity 
between the annual clothes washer usage reported in this report 
compared to the latest data from the 2020 RECS. Specifically, as noted 
by AWE, the 2016 REUW shows an average of 285 loads per year compared 
to an average of 210 cycles per year determined based on the 2020 RECS. 
DOE acknowledges that RECS is based on household reported frequency of 
average clothes washer usage per week rather than on contemporaneous 
logs taken by households, which could be more reliable on an individual 
basis. However, unlike the 2016 REUW \66\ or any other field metered 
consumer end-use data that DOE is aware of, the 2020 RECS consists of a 
nationally representative sample of housing units including more than 
10,000 households that report RCW usage.
---------------------------------------------------------------------------

    \66\ The 2016 REUW only covered the following States: Colorado, 
Arizona, Georgia, Texas, Washington, and Florida.
---------------------------------------------------------------------------

    Although stakeholders suggested that the cycles per year determined 
based on RECS may be underestimated, the 2020 RECS is the most 
comprehensive and most current data source available on this topic, 
and, as such, DOE is adopting the lower usage reported in the latest 
RECS. This approach results in a conservative estimate for energy and 
water savings.
    Representatives Latta et al. commented that DOE's energy savings 
analysis assumes consumers will wash full loads because they have 
larger RCWs, and asserted that DOE offers little evidence to suggest 
consumers will modify their behavior by washing larger loads to achieve 
the full efficiency benefits of owning large-capacity clothes washers. 
(Representatives Latta et al., No. 456 at p. 2)
    Whirlpool commented that the assumption made by DOE that larger 
RCWs lead to energy savings is incorrect. (Whirlpool, No. 462 at pp. 8-
9) Whirlpool asserted that many consumers do laundry based on the size 
of their laundry basket or on a regular schedule, disregarding the 
RCW's available capacity; despite load sensing technology, larger RCWs 
may be less efficient for the same load size compared to smaller ones; 
some consumers may not fill the wash basket completely, compromising 
the benefits

[[Page 19053]]

of larger capacity RCWs for better cleaning. (Id.)
    ASAP, ACEEE, and NYSERDA noted that DOE's per-cycle energy and 
water use analysis is based on the test procedure, which assumes that 
load sizes are larger for larger machines. (ASAP, ACEEE, and NYSERDA, 
No. 458 at p. 3) ASAP, ACEEE, and NYSERDA stated that by assuming that 
tub capacity would increase from 4.0 to 4.7 ft\3\ in response to the 
standards for top-loading standard-size RCWs proposed in the March 2023 
NOPR, DOE's energy and water use analysis thereby assumes that 
consumers wash 15 percent more clothing annually under the proposed 
standard. (Id.) ASAP, ACEEE, and NYSERDA asserted that this assumption 
that tub capacity would increase and lead to more clothing washed 
annually seems unlikely and has the effect of reducing overall energy, 
water, and cost savings in the downstream analysis. (Id.)
    The energy and water use values associated with each efficiency 
level in the energy use analysis are derived from testing conducted 
according to the new appendix J test procedure, as described by ASAP, 
ACEEE, and NYSERDA. Indeed, for the top-loading standard-size 
efficiency levels for which DOE has modeled as increase in tub size as 
a design option path, the associated energy and water use estimates are 
based on the assumed use of larger load sizes--as defined by the test 
procedure--while assuming the same number of annual cycles (i.e., 206 
cycles for top-loading RCWs) at each efficiency level. 87 FR 33316, 
33330-33334 DOE acknowledges that this analytical framework reflects 
more clothing being washed annually in units with larger tub 
capacities. Under this methodology, maintaining the same volume of 
annual clothing washed at the efficiency levels where capacity 
increases could be modeled by either reducing the number of annual 
cycles, or assuming the same load size is used in the larger-capacity 
units as for the smaller-capacity units, or some combination of both. 
DOE notes that data from historical RECS indicates that the average use 
of each RCW has steadily declined from 292 cycles in 2005, 282 cycles 
in 2009, 235 cycles in 2015, to 210 cycles in the 2020 RECS. This 
decline in usage trend aligns with a significant increase in washing 
machine capacity, which grew from shipments-weighted 2.52 ft\3\ to 4.25 
ft\3\ between 1991 and 2020, according to data submitted by AHAM. The 
data indicate that on average the volume of clothing washed by U.S. 
households has remained constant over the past 15 years and consumers 
generally are capitalizing on the larger capacity of RCWs to conduct 
fewer, but fuller loads.\67\ Additionally, the 2020 RECS estimate of 
210 cycles per year reflects the range of RCW capacities within the 
stock, as well as the range of load sizes consumers use for their 
laundry. As the RECS data does not include information about household 
washing machine capacities and load sizes, utilizing a single weighted 
average annual usage across efficiency levels leads to conservative 
estimates for energy and water savings when compared to using higher 
annual usage cycles for the baseline and lower annual usage cycles for 
higher efficiency levels. DOE assumes that household washing volumes 
remain constant, leading to fewer laundry cycles with the use of a 
larger RCW.
---------------------------------------------------------------------------

    \67\ In this direct final rule, DOE has not studied whether 
there is any correlation between the declining annual usage of 
clothes washers and other potential factors, such as changes in 
detergent formulations, changes in types of clothing, or changes in 
household dynamics.
---------------------------------------------------------------------------

    Chapter 7 of the direct final rule TSD provides details on DOE's 
energy use analysis for RCWs.

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 
RCWs. The effect of new or amended energy conservation standards on 
individual consumers usually involves a reduction in operating cost and 
an increase in purchase cost. DOE used the following two metrics to 
measure consumer impacts:
     The LCC is the total consumer expense of an appliance or 
product over the life of that product, consisting of total installed 
cost (manufacturer selling price, distribution chain markups, sales 
tax, and installation costs) plus operating costs (expenses for energy 
and water use, maintenance, and repair). To compute the operating 
costs, DOE discounts future operating costs to the time of purchase and 
sums them over the lifetime of the product.
     The PBP is the estimated amount of time (in years) it 
takes consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
at higher efficiency levels by the change in annual operating cost for 
the year that amended or new standards are assumed to take effect.
    For any given efficiency level, DOE measures the change in LCC 
relative to the LCC in the no-new-standards case, which reflects the 
estimated efficiency distribution of RCWs 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 
residential housing units. As stated previously, DOE developed 
household samples from the 2020 RECS. For each sample household, DOE 
determined the energy and water consumption for the RCWs and the 
appropriate energy and water prices. By developing a representative 
sample of households, the analysis captured the variability in energy 
and water consumption and energy and water prices associated with the 
use of RCWs.
    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 and water 
consumption, energy and water 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 RCW user samples. For this 
rulemaking, the Monte Carlo approach is implemented in MS Excel 
together with the Crystal Ball\TM\ add-on.\68\ The model calculated the 
LCC for products at each efficiency level for 10,000 housing units per 
simulation run. The analytical results include a distribution of 10,000 
data points showing the range of LCC savings for a given efficiency 
level relative to the no-new-standards case efficiency distribution. In 
performing an iteration of the Monte Carlo simulation for a given 
consumer, product efficiency is chosen based on its probability. If the 
chosen product efficiency is greater than

[[Page 19054]]

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

    \68\ Crystal Ball\TM\ is commercially available software tool to 
facilitate the creation of these types of models by generating 
probability distributions and summarizing results within Excel, 
available at www.oracle.com/technetwork/middleware/crystalball/overview/index.html (last accessed July 6, 2023).
---------------------------------------------------------------------------

    DOE calculated the LCC and PBP for consumers of RCWs as if each 
were to purchase a new product in the first year of required compliance 
with amended standards. Amended standards apply to RCWs manufactured 3 
years after the date on which any amended standard is published. (42 
U.S.C. 6295(m)(4)(A)(i)) Therefore, DOE used 2027 as the first year of 
compliance with any considered TSLs for RCWs, except for the 
Recommended TSL. For the Recommended TSL, DOE used 2028 as the first 
year of compliance.
    Table IV.15 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the direct final rule TSD and its appendices.

 Table IV.15--Summary of Inputs and Methods for the LCC and PBP Analysis
                                    *
------------------------------------------------------------------------
              Inputs                            Source/method
------------------------------------------------------------------------
Product Cost......................  Derived by multiplying MPCs by
                                     manufacturer and retailer markups
                                     and sales tax, as appropriate. Used
                                     historical data to derive a price
                                     scaling index to project product
                                     costs.
Installation Costs................  Baseline installation cost
                                     determined with data from RS Means
                                     Residential Cost Data 2022. Assumed
                                     no change with efficiency level.
Annual Energy and Water Use.......  Per cycle energy and water use
                                     multiplied by the cycles per year.
                                     Average number of cycles based on
                                     field data. Variability: Based on
                                     the 2020 RECS.
Energy and Water Prices...........  Electricity: Based on EIA's Form 861
                                     data for 2022.
                                    Variability: Regional energy prices
                                     determined for 9 Census Divisions.
                                    Water: Based on 2020 Raftelis
                                     Financial Consultants (``RFC'')/
                                     American Water Works Association
                                     (``AWWA'') Survey.
                                    Variability: Regional water prices
                                     determined for 4 Census Regions.
Energy and Water Price Trends.....  Based on AEO2023 price projections.
                                    Water: Forecasted using Bureau of
                                     Labor Statistics (``BLS'') historic
                                     water price index information.
Repair and Maintenance Costs......  Repair costs vary by product class
                                     and vary between ENERGY STAR and
                                     non-ENERGY STAR RCWs.
Product Lifetime..................  Average: 13.4 years.
Discount Rates....................  Approach involves identifying all
                                     possible debt or asset classes that
                                     might be used to purchase the
                                     considered appliances, or might be
                                     affected indirectly. Primary data
                                     source was the Federal Reserve
                                     Board's Survey of Consumer
                                     Finances.
Compliance Date...................  TSL 1, TSL 3, and TSL 4: 2027.
                                    TSL 2 (Recommended TSL): 2028.
------------------------------------------------------------------------
* Not used for PBP calculation. References for the data sources
  mentioned in this table are provided in the sections following the
  table or in chapter 8 of the direct final rule TSD.

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the RCW 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.
    In the March 2023 NOPR, DOE performed a random assignment of 
efficiency levels to consumers in its Monte Carlo sample. 88 FR 13520, 
13564. While DOE acknowledges that economic factors may play a role 
when consumers decide on what type of RCW to install, assignment of RCW 
product efficiency for a given installation, based solely on economic 
measures such as life-cycle cost or simple payback period, most likely 
would not fully and accurately reflect actual real-world installations. 
There are a number of market failures discussed in the economics 
literature that illustrate how purchasing decisions with respect to 
energy efficiency are unlikely to be perfectly correlated with energy 
use, as described below. DOE maintains that the method of assignment, 
which is in part random, is a reasonable approach, because it simulates 
behavior in the RCW product market, where market failures result in 
purchasing decisions not being perfectly aligned with economic 
interests, and is more realistic than relying only on apparent cost-
effectiveness criteria derived from the limited information in RECS. 
DOE further emphasizes that its approach does not assume that all 
purchasers of RCW products make economically irrational decisions 
(i.e., the lack of a correlation is not the same as a negative 
correlation). By using this approach, DOE acknowledges the uncertainty 
inherent in the data and minimizes any bias in the analysis by using 
random assignment, as opposed to assuming certain market conditions 
that are unsupported given the available evidence.
    The following discussion provides more detail about the various 
market failures that affect RCW product purchases. First, consumers are 
motivated by more than simple financial trade-offs. There are consumers 
who are willing to pay a premium for more energy-efficient products 
because they are environmentally conscious.\69\ There are also several 
behavioral factors that can influence the purchasing decisions of 
complicated multi-attribute products, such as RCW products. For 
example, consumers (or decision makers in an organization) are highly 
influenced by choice architecture, defined as the framing of the 
decision, the surrounding circumstances of the purchase, the 
alternatives available, and how they are presented for any given choice 
scenario.\70\ The same consumer or decision maker may make different 
choices depending on the characteristics of the decision context (e.g., 
the timing of the purchase, competing demands for funds), which have 
nothing to do with the characteristics of the alternatives themselves 
or their prices. Consumers or decision makers also face a variety of 
other behavioral phenomena including

[[Page 19055]]

loss aversion, sensitivity to information salience, and other forms of 
bounded rationality.\71\ Thaler, who won the Nobel Prize in Economics 
in 2017 for his contributions to behavioral economics, and Sunstein 
point out that these behavioral factors are strongest when the 
decisions are complex and infrequent, when feedback on the decision is 
muted and slow, and when there is a high degree of information 
asymmetry.\72\ These characteristics describe almost all purchasing 
situations of appliances and equipment, including RCWs. The 
installation of a new or replacement RCW product is done very 
infrequently, as evidenced by the mean lifetime of 13.4 years. Further, 
if the purchaser of the RCW is not the entity paying the energy costs 
(e.g., a building owner and tenant), there may be little to no feedback 
on the purchase. Additionally, there are systematic market failures 
that are likely to contribute further complexity to how products are 
chosen by consumers, as explained in the following paragraphs. The 
first of these market failures--the split-incentive or principal-agent 
problem--is likely to significantly affect RCWs. The principal-agent 
problem is a market failure that results when the consumer that 
purchases the equipment does not internalize all of the costs 
associated with operating the equipment. Instead, the user of the 
product, who has no control over the purchase decision, pays the 
operating costs. There is a high likelihood of split-incentive problems 
in the case of rental properties where the landlord makes the choice of 
what RCW product to install, whereas the renter is responsible for 
paying water and energy bills.
---------------------------------------------------------------------------

    \69\ Ward, D.O., Clark, C.D., Jensen, K.L., Yen, S.T., & 
Russell, C.S. (2011): ``Factors influencing willingness-to pay for 
the ENERGY STAR[supreg] label,'' Energy Policy, 39 (3), 1450-1458 
(available at: www.sciencedirect.com/science/article/abs/pii/S0301421510009171) (last accessed August 1, 2023).
    \70\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014). 
``Choice Architecture'' in The Behavioral Foundations of Public 
Policy, Eldar Shafir (ed).
    \71\ Thaler, R.H., and Bernartzi, S. (2004). ``Save More 
Tomorrow: Using Behavioral Economics in Increase Employee Savings,'' 
Journal of Political Economy 112(1), S164-S187. See also Klemick, 
H., et al. (2015), ``Heavy-Duty Trucking and the Energy Efficiency 
Paradox: Evidence from Focus Groups and Interviews,'' Transportation 
Research Part A: Policy & Practice, 77, 154-166 (providing evidence 
that loss aversion and other market failures can affect otherwise 
profit-maximizing firms).
    \72\ Thaler, R.H., and Sunstein, C.R. (2008). Nudge: Improving 
Decisions on Health, Wealth, and Happiness. New Haven, CT: Yale 
University Press.
---------------------------------------------------------------------------

    In addition to the split-incentive problem, there are other market 
failures that are likely to affect the choice of RCW product efficiency 
made by consumers. For example, unplanned replacements due to 
unexpected failure of equipment such as RCW products are strongly 
biased toward like-for-like replacement (i.e., replacing the non-
functioning product with a similar or identical product). Time is a 
constraining factor during unplanned replacements, and consumers may 
not consider the full range of available options on the market, despite 
their availability. The consideration of alternative product options is 
far more likely for planned replacements and installations in new 
construction.
    Additionally, Davis and Metcalf \73\ conducted an experiment 
demonstrating that, even when consumers are presented with energy 
consumption information, the nature of the information available to 
consumers (e.g., from EnergyGuide labels) results in an inefficient 
allocation of energy efficiency across households with different usage 
levels. Their findings indicate that households are likely to make 
decisions regarding the efficiency of the air conditioning equipment of 
their homes that do not result in the highest net present value for 
their specific usage pattern (i.e., their decision is based on 
imperfect information and, therefore, is not necessarily optimal). 
Also, most consumers did not properly understand the labels 
(specifically whether energy consumption and cost estimates were 
national averages or specific to their State). As such, consumers did 
not make the most informed decisions.
---------------------------------------------------------------------------

    \73\ Davis, L.W., and G.E. Metcalf (2016): ``Does better 
information lead to better choices? Evidence from energy-efficiency 
labels,'' Journal of the Association of Environmental and Resource 
Economists, 3(3), 589-625 (available at: www.journals.uchicago.edu/doi/full/10.1086/686252) (last accessed August 1, 2023).
---------------------------------------------------------------------------

    In part because of the way information is presented, and in part 
because of the way consumers process information, there is also a 
market failure consisting of a systematic bias in the perception of 
equipment energy usage, which can affect consumer choices. Attari et 
al.\74\ show that consumers tend to underestimate the energy use of 
large energy-intensive appliances (such as air conditioners, 
dishwashers, and consumer clothes dryers), but overestimate the energy 
use of small appliances (such as light bulbs). Therefore, it is 
possible that consumers systematically underestimate the energy use 
associated with RCWs, resulting in less cost-effective purchases.
---------------------------------------------------------------------------

    \74\ Attari, S.Z., M.L. DeKay, C.I. Davidson, and W. Bruine de 
Bruin (2010): ``Public perceptions of energy consumption and 
savings.'' Proceedings of the National Academy of Sciences 107(37), 
16054-16059 (available at: www.pnas.org/content/107/37/16054) (last 
accessed August 1, 2023).
---------------------------------------------------------------------------

    These market failures affect a sizeable share of the consumer 
population. A study by Houde \75\ indicates that there is a significant 
subset of consumers that appear to purchase appliances without taking 
into account their energy efficiency and operating costs at all.
---------------------------------------------------------------------------

    \75\ Houde, S. (2018): ``How Consumers Respond to Environmental 
Certification and the Value of Energy Information,'' The RAND 
Journal of Economics, 49 (2), 453-477 (available at: 
onlinelibrary.wiley.com/doi/full/10.1111/1756-2171.12231) (last 
accessed August 1, 2023).
---------------------------------------------------------------------------

    The existence of market failures in the residential sector is well 
supported by the economics literature and by a number of case studies. 
If DOE developed an efficiency distribution that assigned RCW product 
efficiency in the no-new-standards case solely according to energy use 
or economic considerations such as life-cycle cost or payback period, 
the resulting distribution of efficiencies within the consumer sample 
would not reflect any of the market failures or behavioral factors 
above. Thus, DOE concludes such a distribution would not be 
representative of the RCW product market. Further, even if a specific 
household is not subject to the market failures above, the purchasing 
decision of RCW product efficiency can be highly complex and influenced 
by a number of factors (e.g., aesthetics) not captured by the building 
characteristics available in the RECS sample. These factors can lead to 
households or building owners choosing an RCW product efficiency that 
deviates from the efficiency predicted using only energy use or 
economic considerations such as life-cycle cost or payback period.
    There is a complex set of behavioral factors, with sometimes 
opposing effects, affecting the RCW product market. It is impractical 
to model every consumer decision incorporating all of these effects at 
this extreme level of granularity given the limited available data. 
Given these myriad factors, DOE estimates the resulting distribution of 
such a model, if it were possible, would be very scattered with high 
variability. It is for this reason DOE utilizes a random distribution 
(after accounting for efficiency market share constraints) to 
approximate these effects. The methodology is not an assertion of 
economic irrationality, but instead, it is a methodological 
approximation of complex consumer behavior. The analysis is neither 
biased toward high or low energy savings. The methodology does not 
preferentially assign lower-efficiency RCW products to households in 
the no-new-standards case where savings from the rule would be 
greatest, nor does it preferentially assign lower-efficiency RCW 
products to households in the no-new-standards case where savings from 
the rule would be smallest. Some consumers were assigned the RCW 
products that they would have chosen if they had engaged in perfect 
economic considerations when purchasing the products. Others were 
assigned less-efficient RCW products

[[Page 19056]]

even where a more-efficient product would eventually result in life-
cycle savings, simulating scenarios where, for example, various market 
failures prevent consumers from realizing those savings. Still others 
were assigned RCW products that were more efficient than one would 
expect simply from life-cycle costs analysis, reflecting, say, 
``green'' behavior, whereby consumers ascribe independent value to 
minimizing harm to the environment.
    For this direct final rule, DOE considered comments it had received 
regarding the LCC analysis conducted for the March 2023 NOPR. The LCC 
approach used for this direct final rule is largely the same as the 
approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, AHAM commented that DOE's 
reliance on the RECS database in its analysis is introducing outlier 
values into its LCC analysis. (AHAM, No. 464 at p. 36) AHAM commented 
that the documentation of the 2015 RECS reveals uncertainties, errors, 
and approximations within its data, making it difficult to determine 
the accuracy of consumption projections for individual housing units. 
(Id. at p. 37) AHAM therefore cautioned DOE against relying on 
potentially inaccurate outlier values, noting that this concern is 
highlighted by the significant difference between the mean and median 
LCC savings at any standard level, where these measures should ideally 
be closely aligned. (Id.) AHAM urged DOE to use median values instead 
of mean values to mitigate these data issues. (Id.)
    As described in section IV.E of this document., DOE's energy and 
water use analysis for this direct final rule is derived based on 2020 
RECS, which provides household's clothes washer loads information 
ranging from 1 cycle to 30 cycles per week. The field-based annual 
energy and water use for each household then feed into the LCC 
analysis. DOE notes that there is no indication that any of households 
in the RECS sample represent non-valid data that should be excluded as 
an outlier. Excluding minimum and maximum values from the field-based 
usage statistics would result in a less accurate representation of the 
actual energy and water consumption patterns exhibited by households 
participating in the survey. However, as a standardized approach, DOE 
presents all statistical results of LCC savings in chapter 8 of its TSD 
(i.e., box plots). This approach allows stakeholders to observe the 
full range of LCC savings and understand the distribution of results, 
enabling a more informed evaluation of the potential impacts of 
proposed standards. In addition, DOE's decision on amended standards is 
not solely determined by (mean) LCC savings. While LCC savings play a 
role, they may be considered alongside other critical factors, 
including the percentage of negatively impacted consumers, the simple 
payback period, and the overall impact on manufacturers.
    AHAM commented that DOE should focus on conducting a purchase 
decision analysis instead of relying on outcomes and long-term cost 
analyses. (AHAM, No. 464 at p. 33) AHAM commented that the basis for 
regulation lies in identifying consumer and systemic market failures, 
where consumer failure refers to making ``incorrect'' decisions due to 
a lack of information. (Id.) AHAM suggested that modeling efforts 
should prioritize identifying rational decisions, as it is unreasonable 
to predict actual outcomes given the numerous unpredictable factors 
that can influence them. (Id.) AHAM commented on the importance of 
considering the actual conditions and expectations of purchasers in 
DOE's LCC model, separate from the broader economic impact analysis. 
(Id. at p. 34) AHAM suggested that the LCC model should assess the 
extent of market failure by comparing the actual rate of energy-
efficient product purchases with the rate that rational consumers would 
choose. (Id.)
    In response to the March 2023 NOPR, an anonymous commenter stated 
that the proposed rule change makes questionable assumptions about 
consumer behavior, particularly the expectation that consumers will buy 
their RCWs within the first year, which might skew the cost-benefit 
analysis. (Anonymous, No. 391 at p. 1)
    First, DOE notes that the LCC analysis currently relies on market 
data on the distribution of efficiency of products to assign products 
with varying efficiency performance to each household when compliance 
with the standard becomes required. This approach is intended to 
simulate the range of individual outcomes likely to result from the 
hypothetical setting of a revised energy conservation standard at 
various levels of efficiency when the data needed to develop a product-
specific consumer choice model are currently unavailable. DOE does not 
negate the consumer decision theory established in the broad behavioral 
economic field; rather, this is a methodological decision made by DOE 
after considering the existence of various systematic market failures 
(e.g., information asymmetries, bounded rationality, principal-agent 
relationship, etc.) and their implication in rational versus actual 
purchase behavior. The outcome of the LCC is not considered in 
isolation, but in the context of the broader set of analyses, including 
the NIA. Additionally, DOE's shipment analysis takes into account 
consumers' sensitivity to higher purchase prices under a considered 
TSL. DOE assumes that when market impacts occur, some consumers would 
prefer to repair or purchase a used unit rather than buy a new clothes 
washer when amended standards take effect. This approach ensures that 
the national cost-benefit results are neither skewed nor biased. See 
chapter 9 of the direct final rule TSD for details.
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.\76\ To derive the learning rate parameter for RCWs, DOE 
obtained historical Producer Price Index (``PPI'') data for ``household 
laundry equipment'' between 1948 and 2016 and ``major household 
appliance: primary products'' between 2016 and 2022 from the Bureau of 
Labor Statistics' (``BLS'') to form a time series price index 
representing household laundry equipment from 1948 to 2022.\77\ These 
two PPI series are the most current and disaggregated price index that 
includes RCWs, and DOE assumes that the price trend estimated from the 
household laundry equipment PPI is representative of that for RCWs. 
Inflation-adjusted price indices were calculated by dividing the PPI 
series by the gross

[[Page 19057]]

domestic product index from Bureau of Economic Analysis for the same 
years. The estimated learning rate (defined as the fractional reduction 
in price expected from each doubling of cumulative production) is 17.2 
percent. See chapter 8 of the direct final rule TSD for further details 
on this topic.
---------------------------------------------------------------------------

    \76\ Taylor, M. and Fujita, K.S. Accounting for Technological 
Change in Regulatory Impact Analyses: The Learning Curve Technique. 
LBNL-6195E. Lawrence Berkeley National Laboratory, Berkeley, CA. 
April 2013. Available at escholarship.org/uc/item/3c8709p4#page-1.
    \77\ ``Household laundry equipment'' PPI (PCU3352203352204) is 
available through May 2016, and ``major household appliance: primary 
products'' PPI (PCU335220335220P) is available from May 2016 to 
present. See more information at www.bls.gov/ppi/ (last accessed 
June 13, 2023).
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding the methodology for calculating consumer product costs that 
was presented in the March 2023 NOPR. The approach used for this direct 
final rule is largely the same as the approach DOE had used for the 
March 2023 NOPR analysis.
    In response to the March 2023 NOPR, AHAM commented that DOE's 
application of a ``learning or experience curve'' to reduce expected 
extra manufacturing costs required to meet proposed standard levels 
lacks a solid theoretical foundation. (AHAM, No. 464 at p. 35) AHAM 
commented that the approach, based solely on empirical relationships, 
demands clear alignment with the actual products under consideration, 
with a necessity to adjust equations when data changes shape. (Id. at 
pp. 35-36) AHAM commented that DOE's justification that continued use 
of learning rates is justified by past price declines is DOE confusing 
past correlation with future causation and questions the basis for 
forward projection. (Id. at p. 36) AHAM further opposed the proposed 
continuous function form of future trends, particularly given signs of 
data ``flattening'' in DOE's learning curve equation and that all 
recent data is above the line drawn by the equation. AHAM commented 
that such ``learning'' should not be projected beyond labor and 
materials costs, given it does not logically apply to overheads, sales, 
marketing, general and administrative costs, or depreciation and 
financing costs. (Id. at p. 36)
    DOE notes that there is considerable empirical evidence of 
consistent price declines for appliances in the past few decades. 
Several studies examined refrigerator retail prices during different 
periods of time and showed that prices had been steadily falling while 
efficiency had been increasing, for example Dale et al. (2009) \78\ and 
Taylor et al. (2015).\79\ Given the limited data availability on 
historical manufacturing costs broken out by different components, DOE 
utilized the Producer Price Index (``PPI'') published by the BLS as a 
proxy for manufacturing costs to represent the analyzed product as a 
whole. Thus, DOE applied the price learning to the entire costs and did 
not consider the applicability of learning on individual cost 
components. While products may experience varying degrees of price 
learning during different product stages, DOE modeled the average 
learning rate based on the full historical PPI series to capture the 
overall price evolution in relation to the cumulative shipments. DOE 
also conducted sensitivity analyses that are based on a particular 
segment of the PPI data for household laundry products manufacturing to 
investigate the impact of alternative product price projections in the 
LCC (constant price) and NIA (high price learning and constant price) 
of this direct final rule. For details of the sensitivity results, see 
appendix 8F and appendix 10C of the direct final rule TSD.
---------------------------------------------------------------------------

    \78\ Dale, L., C. Antinori, M. McNeil, James E. McMahon, and K. 
S. Fujita. Retrospective evaluation of appliance price trends. 
Energy Policy. 2009. 37 (2) pp. 597-605. doi.org/10.1016/j.enpol.2008.09.087.
    \79\ Taylor, M., C. A. Spurlock, and H.-C. Yang. Confronting 
Regulatory Cost and Quality Expectations. An Exploration of 
Technical Change in Minimum Efficiency Performance Standards. 2015. 
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United 
States). Report No. LBNL-1000576. Available at www.osti.gov/biblio/1235570/ (last accessed June 30, 2023).
---------------------------------------------------------------------------

    Representatives Latta et al. expressed concern at the consumer cost 
impact of the proposed standards, noting that top-loading standard-size 
RCWs currently on the market meeting the standard proposed in the March 
2023 NOPR have a manufacturer's suggested retail price (``MSRP'') of 
over $1,000, a price that Representatives Latta et al. characterized as 
out of reach for many consumers and that is over $400 higher than the 
MSRP of entry-level models. (Representatives Latta et al., No. 456 at 
p. 2)
    DOE notes that in most cases--and in particular for top-loading 
standard-size RCWs--the MSRP of an existing model at a certain higher 
efficiency level does not reflect the consumer purchase price that 
would be expected if DOE were to enact an amended standard at that 
higher efficiency level, for two main reasons. First, current models at 
higher efficiency levels are produced at significantly lower shipment 
volumes than baseline models, which generally results in higher per-
unit costs for each component part for the higher efficiency models. 
Second, higher efficiency models are often ``bundled'' with non-
efficiency related features that add additional cost to the product and 
contribute to the overall higher MSRP. Because of these drawbacks to 
using MSRP as the basis for evaluating the economic justification of a 
higher standard, DOE instead uses a reverse-engineering approach--
combined with a detailed analysis of markups--to estimate the impact on 
consumer purchase price that would be expected as a result of an 
amended standard. As discussed in sections IV.C.3 and IV.D of this 
document, DOE evaluates the cost impact to consumers by developing 
incremental MPC costs and multiplying the MPCs by various markups to 
develop the consumer purchase price. This approach allows DOE to 
account for any economies of scale that would result from producing 
more efficient RCWs at larger shipment volumes and to isolate the cost 
of any non-efficiency-related features that are often bundled with 
higher-efficiency RCWs on the market today.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. DOE used data from 
2022 RS Means Residential Cost Data to estimate the baseline 
installation cost for RCWs.\80\ DOE found no evidence that installation 
costs would be impacted with increased efficiency levels.
---------------------------------------------------------------------------

    \80\ RS Means Company Inc., RS Means Residential Cost Data 
(2022). Available at https://rsmeans.com/.
---------------------------------------------------------------------------

3. Annual Energy and Water Consumption
    For each sampled household, DOE determined the energy and water 
consumption for an RCW at different efficiency levels using the 
approach described previously in section IV.E of this document.
4. Energy and Water Prices
a. Energy Prices
    Because marginal electricity and gas prices more accurately capture 
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 and gas prices. 
Therefore, DOE applied average electricity and gas prices for the 
energy use of the product purchased in the no-new-standards case, and 
marginal electricity and gas prices for the incremental change in 
energy use associated with the other efficiency levels considered.
    DOE derived electricity prices in 2022 using data from Edison 
Electric Institute (``EEI'') Typical Bills and Average Rates reports 
for summer and winter 2022.\81\

[[Page 19058]]

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).\82\
---------------------------------------------------------------------------

    \81\ Edison Electric Institute. Typical Bills and Average Rates 
Report. Winter 2022, Summer 2022. Available at www.eei.org/resourcesandmedia/products/Pages/Products.aspx.
    \82\ Coughlin, K. and B. Beraki. 2018. Residential Electricity 
Prices: A Review of Data Sources and Estimation Methods. Lawrence 
Berkeley National Lab. Berkeley, CA. Report No. LBNL-2001169. 
Available at ees.lbl.gov/publications/residential-electricity-prices-review.
---------------------------------------------------------------------------

    DOE's methodology allows electricity prices to vary by sector, 
region and season. In the analysis, variability in electricity prices 
is chosen to be consistent with the way the consumer economic and 
energy use characteristics are defined in the LCC analysis.
    DOE obtained data for calculating regional prices of natural gas 
from the EIA publication, Natural Gas Navigator.\83\ This publication 
presents monthly volumes of natural gas deliveries and average prices 
by State for residential, commercial, and industrial customers. DOE 
used the complete annual data for 2022 to calculate an average annual 
price for each census division. Residential natural gas prices were 
adjusted by applying seasonal marginal price factors to reflect a 
change in a consumer's bill associated with a change in energy 
consumed.
---------------------------------------------------------------------------

    \83\ U.S. Department of Energy-Energy Information 
Administration. Natural Gas Navigator 2022. Available at 
www.eia.gov/naturalgas/data.php.
---------------------------------------------------------------------------

    DOE assigned average prices to each household in the LCC sample 
based on its location and its baseline electricity and gas consumption. 
For sampled households who were assigned a product efficiency greater 
than or equal to the considered level for a standard in the no-new-
standards case, DOE assigned marginal prices to each household based on 
its location and the decremented electricity and gas consumption. In 
the LCC sample, households could be assigned to one of nine census 
divisions. See chapter 8 of the direct final rule TSD for details.
    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.\84\ To estimate price trends after 2050, 
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

    \84\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed June 20, 2023).
---------------------------------------------------------------------------

b. Water and Wastewater Prices
    DOE obtained residential water and wastewater price data from the 
Water and Wastewater Rate Survey conducted by Raftelis Financial 
Consultants and the American Water Works Association.\85\ The survey 
covers approximately 194 water utilities and 140 wastewater utilities 
analyzing each industry (water and wastewater) separately. For each 
water or wastewater utility, DOE calculated the average-price-per-unit 
volume by dividing the total volumetric cost by the volume delivered. 
DOE also calculated the marginal price by dividing the incremental cost 
by the increased volume charged at each consumption level.
---------------------------------------------------------------------------

    \85\ Raftelis Financial Consultants, Inc. 2020 RFC/AWWA Water 
and Wastewater Rate Survey. 2021. Charlotte, NC, Kansas City, MO, 
and Pasadena, CA.
---------------------------------------------------------------------------

    The samples that DOE obtained of the water and wastewater utilities 
is too small to calculate regional prices for all U.S. Census 
divisions. Therefore, DOE calculated regional costs for water and 
wastewater service at the Census region level (Northeast, South, 
Midwest, and West) by weighting each State in a region by its 
population.
    For this direct final rule analysis, DOE has updated its 
methodology for developing water prices for consumers who rely on a 
private well water system, instead of the public supply system in 
consideration of stakeholder comments received in response to the March 
2023 NOPR DOE primarily considered well maintenance costs and pump 
operating costs when developing the average water price. Conversely, 
DOE only considered pump operating costs when developing the marginal 
price for well users. As a result, the estimated average and marginal 
water prices for well users are $1.24 and $0.39 per thousand gallons, 
respectively. For septic tank users, DOE considered only the septic 
tank maintenance cost when determining the average price and excluded 
the marginal cost component, as any marginal costs are likely to be 
negligible. DOE is unable to develop Census-region-level well water and 
septic tank prices due to the limitation of available data. As a 
result, the same values were used for each Census region.
    To determine the current percentage of the U.S. population served 
by private wells and septic tanks, DOE used historical American Housing 
Survey (``AHS'') data from 1990 to 2021 to develop a projection for 
2027, the effective year of potential new standards for RCWs except for 
the Recommended TSL.\86\ The effective year of the Recommended TSL is 
2028.
---------------------------------------------------------------------------

    \86\ The U.S. Census Bureau. The American Housing Survey. Years 
1970-2021. Available at www.census.gov/programs-surveys/ahs.html 
(last accessed June 12, 2023).
---------------------------------------------------------------------------

    DOE then conducted random simulations \87\ to determine the sample 
of households in rural areas served by private wells and septic tanks. 
Based on the estimated sample, well water prices and septic tank prices 
were assigned to sampled households accordingly. Furthermore, DOE 
estimated the septic tank user population and assigned corresponding 
septic tank prices to households relying on public water systems.
---------------------------------------------------------------------------

    \87\ DOE utilized random simulations to more accurately assess 
the distribution of households in rural areas using private wells 
and septic tanks. These simulations were designed to randomly assign 
users of well water and septic tanks, based on the estimated 
percentage of the well water and septic tank user population in each 
census region, thereby incorporating uncertainties and 
variabilities.
---------------------------------------------------------------------------

    To estimate the future trend for public water and wastewater 
prices, DOE used data on the historic trend in the national water price 
index (U.S. city average) from 1988 through 2022 provided by the Labor 
Department's BLS.\88\ DOE extrapolated the future trends based on the 
linear growth from 1988 to 2022. DOE used the extrapolated trend to 
forecast prices through 2050. To estimate the price trend after 2050, 
DOE used a constant value derived from the average values from 2046 
through 2050.
---------------------------------------------------------------------------

    \88\ U.S. Department of Labor-Bureau of Labor Statistics, 
Consumer Price Indexes, Item: Water and sewerage maintenance, Series 
Id: CUSR0000SEHG01, U.S. city average, 2022. Washington, DC. 
Available at www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------

    To estimate the future trend for well water and septic tank prices, 
DOE used data on the historic trend in the overall national consumer 
price index (``CPI'') from 1988 through 2022 provided by the Labor 
Department's BLS.\89\ DOE extrapolated the future trends based on the 
linear growth from 1988 to 2022. DOE used the extrapolated trend to 
forecast prices through 2050. To estimate the price trend after 2050, 
DOE used a constant value derived from the average values from 2046 
through 2050.
---------------------------------------------------------------------------

    \89\ U.S. Department of Labor-Bureau of Labor Statistics, 
Consumer Price Indexes, All Items, Series Id: CUUR0000SA0, U.S. city 
average, 2022. Washington, DC. Available at www.bls.gov/cpi/home.htm#data.
---------------------------------------------------------------------------

    In response to the March 2023 NOPR, AHAM commented that it 
previously suggested that DOE should consider the actual water costs 
for households on well systems, acknowledge that there are no 
incremental costs for consumers

[[Page 19059]]

using septic systems, and treat these consumers as a separate subgroup 
instead of averaging them into composite water and sewer costs. AHAM 
noted that while DOE implemented AHAM's recommendation on sewer costs, 
it disregarded the other two suggestions without explanation. (AHAM, 
No. 464 at pp. 37-38)
    As discussed, DOE agrees with AHAM that consumers using septic 
systems have near-zero marginal costs for wastewater and has updated 
the analysis accordingly. As discussed in section IV.I.3 of this 
document, DOE has also included an analysis of well-water users in the 
consumer subgroup analysis.
    AHAM commented that it opposed DOE's use of ``economic value of 
water'' in the LCC model. According to AHAM, private well users pay the 
actual marginal cost of water, primarily the electricity for pumping, 
not an ``economic value''. AHAM noted that while there are embedded 
costs for drilling a well, these costs are sunk and the marginal cost 
is electricity. AHAM suggested that if DOE insists on the ``economic 
value'', DOE should define it, demonstrate how well-water use reduces 
water availability, and quantify the actual ``economic value'' of lost 
well water. (AHAM, No. 464, at p. 38) AHAM further stated that even if 
there is an ``economic value'', it should be considered in the NIA, not 
the LCC. (Id. at p. 39)
    DOE agrees with AHAM that ``economic value of water'' is not the 
actual price that well users would pay. Hence, for this direct final 
rule, DOE has adjusted its methodology regarding water price for well 
users and septic tank price. To derive well water price, DOE conducted 
a comprehensive literature review and took into consideration the 
inputs provided by AHAM. As a result, DOE estimated the average water 
price for well users to be $1.24 per thousand gallons, with a marginal 
price of $0.39 per thousand gallons representing the electricity cost 
for pumping as suggested by AHAM. Regarding septic tank price, DOE 
estimated the average cost to be $1.30 per thousand gallons and 
excluded the marginal cost component, as it may be negligible or close 
to $0 per thousand gallons. For details of the well water and septic 
tank prices, see chapter 8 of the direct final rule TSD. In addition, 
in the LCC, DOE has explicitly assigned well water and septic users 
randomly to the rural population based on estimated population and 
given them well and/or septic specific prices; DOE is no longer using 
composite water and sewer costs applied to the entire sample. As such, 
well and/or septic users are now fully accounted for in the LCC sample.
    AWE commented that it is unclear why DOE referred to the water and 
sewerage maintenance item from the CPI to determine future price trends 
for water and sewage. AWE stated that DOE's methodology for price 
trends regarding RCWs deviates from the methodology DOE proposed 
regarding dishwashers. AWE recommended that DOE use the RFC/AWWA Water 
and Wastewater Rate Survey for both dishwashers and RCWs because the 
RFC/AWWA survey is more accurate and representative of price trend data 
between 1998 and 2020. (AWE, No. 444 at pp. 2-3)
    RFC/AWWA provides water and wastewater rates survey data every two 
years for U.S. water and wastewater utilities. For each of the RFC/AWWA 
surveys, utilities in the sample respond voluntarily to the survey 
questions, with a limited number of overlapping utilities in each 
survey year. For this reason, it is possible that the annual change in 
rates may be affected by which utilities respond to the survey. In 
addition, the rate data are reported in usage tiers set by each utility 
and not on actual household water consumption.
    The BLS Water and Sewer CPI sample represents 600 to 700 quotes for 
water or sewer service, and the sample is consistent for four years, 
which reduces the possible year over year bias as compared to RFC/AWWA. 
Additionally, the Water and Sewer CPI was estimated based on consumer 
water bills that were related to household water consumption. 
Therefore, DOE concludes that the BLS' CPI water and sewer data better 
reflect the nationally representative price trends. DOE therefore used 
the CPI for water and sewer for its public utilities' water and 
wastewater price trend forecast for this direct final rule.
    DOE used a similar methodology to develop future water and 
wastewater prices in its dishwasher standard rulemaking as it used in 
the March 2023 NOPR analysis. The only difference between the two 
standards rulemaking analyses is that for RCWs, DOE used a constant 
value derived from the average values from 2046 through 2050 to 
estimate the price trend after 2050, whereas in the dishwashers NOPR, 
published May 19, 2023 (88 FR 32514), DOE used the 2050 value for the 
price trend after 2050.\90\ As described previously, for this direct 
final rule, DOE has used the same approach as the March 2023 NOPR for 
water and wastewater (including well water and septic tank) price 
trends after 2050.
---------------------------------------------------------------------------

    \90\ Additional details regarding the dishwasher analysis are 
provided in the NOPR TSD, available at www.regulations.gov/document/EERE-2019-BT-STD-0039-0032.
---------------------------------------------------------------------------

5. Maintenance and Repair Costs
    Repair costs are associated with repairing or replacing product 
components that have failed in an appliance; maintenance costs are 
associated with maintaining the operation of the product. Typically, 
small incremental increases in product efficiency entail no, or only 
minor, changes in repair and maintenance costs compared to baseline 
efficiency products.
    For RCWs, DOE determined the repair cost associated with loading 
type and clothes washer capacity commonly found on an appliance repair 
website.\91\ DOE estimated the average repair cost for an RCW is about 
$241, ranging from $123 to $294 over the product lifetime and then 
converted to annual cost. For maintenance cost, DOE conducted a 
literature review of maintenance cost available from a variety of 
sources, including online resources. DOE estimated the annual 
maintenance cost for an RCW is approximately $27, including costs of 
clothes washer cleaners and of running clothes washer cleaning cycles.
---------------------------------------------------------------------------

    \91\ Fixr, How Much Does It Cost to Repair a Washing Machine? 
Available at www.fixr.com/costs/washing-machine-repair#washing-machine-repair-cost-by-type-of-repair.
---------------------------------------------------------------------------

    Typically, small incremental increases in product efficiency 
produce no, or only minor, changes in repair and maintenance costs 
compared to baseline efficiency products. For this direct final rule 
analysis, DOE estimated that for repair costs, there is a cost 
difference between an ENERGY STAR and non-ENERGY STAR RCW of 
approximately $47 for a front-loading RCW and $34 for a top-loading 
RCW, based on information aggregated from manufacturer interviews. For 
maintenance costs, DOE assumed that there is no change with efficiency 
level for RCWs.\92\
---------------------------------------------------------------------------

    \92\ Based on literature reviews, DOE found that manufacturers 
recommend monthly self-cleaning for RCWs, regardless of the clothes 
washer's loading type and efficiency level.
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding its determination of maintenance and repair costs in the 
March 2023 NOPR. The approach used for this direct final rule is 
largely the same as the approach DOE had used for the March 2023 NOPR 
analysis.
    In response to the March 2023 NOPR, Representatives Latta et al. 
commented that additional product complexity to

[[Page 19060]]

meet amended standard levels could drive higher repair costs. 
(Representatives Latta et al., No. 456 at pp. 2-3)
    As discussed in the March 2023 NOPR, DOE implemented higher repair 
costs for ENERGY STAR qualified and above ENERGY STAR qualified RCWs 
compared to the baseline models based on information obtained through 
manufacturer interviews. These same inputs have been used in the 
current direct final rule analysis. DOE estimated the cost difference 
between an ENERGY STAR and non-ENERGY STAR RCW of approximately $34 for 
a top-loading and $47 for a front-loading RCW. See section 8.3.5 of 
chapter 8 of the direct final rule TSD for details.
    The National Multifamily Housing Council (``NMHC'') and National 
Apartment Association (``NAA'') recommended that DOE reevaluate the 
costs and ongoing operations and maintenance impacts of longer cycle 
times, multiple wash cycles, and increased stress on the equipment. 
(NMHC and NAA, No. 451 at pp. 3-4)
    CEI \93\ commented that expensive repairs, including ones within 
the first 3 years of purchase, are no longer uncommon, and that 
consumers will often not undertake repairs that cost half or more of 
the price of a new machine. CEI noted that these problems are likely to 
be exacerbated by the standards proposed in the March 2023 NOPR. (CEI, 
No. 454 at p. 3)
---------------------------------------------------------------------------

    \93\ ``CEI'' includes the comments of the Competitive Enterprise 
Institute (``CEI'') and Michael Mannino.
---------------------------------------------------------------------------

    CEI asserted that repair costs would likely increase, leading 
consumers to refrain from repairs under the proposed rule if they cost 
half or more of the price of a new machine. However, CEI did not 
provide additional supporting data for DOE to consider to suggest that 
the repair price would be higher than what was used in the March 2023 
NOPR and for this direct final rule analysis. As described in section 
IV.F.5 of this document, DOE has estimated a slight increase in 
retirement for RCWs before reaching 4 years of age using the latest 
2020 RECS and AHS data.
    As stated in section V.B.4 of this document, at TSL 2--the 
standards level adopted in this direct final rule--DOE's data 
demonstrates no negative impact on consumer utility, including cycle 
time. For further discussion of performance as it relates to amended 
standards, see section V.B.4.a of this document.
6. Product Lifetime
    Product lifetime is the age at which an appliance is retired from 
service. To determine estimates for RCW lifetime, DOE conducted an 
analysis of standard-capacity RCW lifetime in the field based on a 
combination of shipments data and data on the ages of the clothes 
washer products reported in the household stock from RECS conducted in 
2001, 2005, 2009, 2015, and 2020.\94\
---------------------------------------------------------------------------

    \94\ U.S. Department of Energy--Energy Information 
Administration, Residential Energy Consumption Survey (``RECS''), 
Multiple Years (1990, 1993, 1997, 2001, 2005, 2009, 2015, and 2020). 
Available at www.eia.gov/consumption/residential/.
---------------------------------------------------------------------------

    The data allowed DOE to estimate a survival function, which 
provided an average appliance lifetime of approximately 14 years. From 
the 2015 RECS to the 2020 RECS, there was a 3.6 percent increase in the 
number of RCWs under 5 years of age, and an additional 0.7 percent of 
RCWs lasting beyond 15 years. Therefore, for this direct final rule, 
DOE has slightly updated its estimated average lifetime for RCWs to 
13.4 years, with a distribution that includes 1.4 percent more RCWs 
retiring before reaching 4 years and 2.9 percent more RCWs remaining 
after 15 years and up to 30 years, compared to the Weibull lifetime 
probability distribution used in the March 2023 NOPR.
    For this direct final rule, DOE considered comments it had received 
regarding its estimation of product lifetime in the March 2023 NOPR. 
The approach used for this direct final rule is largely the same as the 
approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, NEEA et al. commented in 
support of using a 13.7-year product lifetime. (NEEA et al., No. 455 at 
p. 5)
    The AGs of TN et al.\95\ commented that DOE's lack of consideration 
of the reduced lifetime and associated costs of a more complex product 
is not appropriate. Additionally, the AGs of TN et al. argued that a 
major component of the product's lifetime energy use is the energy 
consumed in manufacturing the product and that decreased water and 
energy use almost always come at the cost of increased complexity, with 
attendant increased maintenance costs and decreased lifespan. As such, 
the AGs of TN et al. state that DOE ignored lifecycle energy use and 
lifecycle cost and failed to consider an important aspect of the 
problem. (AGs of TN et al., No. 438 at p. 6 (citing Motor Vehicle Mfrs. 
Ass'n, 463 U.S. at 43))
---------------------------------------------------------------------------

    \95\ The ``AGs of TN et al.'' include the attorneys general 
(``AGs'') of Tennessee, Alabama, Arkansas, Florida, Georgia, Idaho, 
Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, 
Nebraska, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, and 
West Virginia.
---------------------------------------------------------------------------

    In response to the March 2023 NOPR, Representatives Latta et al. 
commented that additional product complexity to meet amended standard 
levels could drive shorter product lifespans. (Representatives Latta et 
al., No. 456 at pp. 2-3)
    CEI commented that DOE does not acknowledge that its rules have 
shortened the useful lives of clothes washers and other appliances and 
that DOE also ignores the resulting adverse environmental impacts, 
which include the greater energy and other resources that go into 
manufacturing additional clothes washers as well as additional landfill 
and other disposal requirements for discarded units.\96\ (CEI, No. 454 
at pp. 6-7) CEI asserted that the decline in RCW reliability and useful 
lifetime, especially since the 2007 standards, has been evident to 
those servicing machines over that time span. (Id. at pp. 2-3)
---------------------------------------------------------------------------

    \96\ DOE did not address CEI's comments about the greater energy 
and other resources that go into manufacturing additional RCWs as 
well as additional landfill and disposal costs for discarded units 
because it is outside the scope of a standards rulemaking.
---------------------------------------------------------------------------

    In the public webinar, Whirlpool commented that the average 
lifespan of an RCW should not only be based on historical data, as the 
additional stresses placed on the mechanical components (due to the 
combination of higher resistance and less water, which creates more 
tension, torque, and wear on the motor) could pose as a challenge in 
reaching the 13.7-year lifespan in the future. (Whirlpool, Public 
Webinar Transcript, No. 91 at pp. 35-36)
    In the public webinar, Mannino stated that most clothes washers 
fail after three to four years. Mannino asked how DOE arrived at its 
estimate. (Mannino, Public Webinar Transcript, No. 91 at p. 32)
    DOE also received comments from 23 additional individual commenters 
expressing concerns regarding the standards' impact on the product's 
lifetime.
    DOE notes that it does not have data to corroborate a causal 
connection between the stringency of efficiency standards and the 
expected service lifetime of RCWs. Moreover, commenters have not 
provided DOE additional information or data that demonstrates that 
more-efficient clothes washers have shorter or longer product lifetimes 
than less-efficient clothes washers. As a result, DOE has not 
identified differences in lifetime based on differences in efficiency.

[[Page 19061]]

    As stated, DOE updated the Weibull lifetime distribution used for 
this direct final rule based on the recent data from RECS and AHS. The 
updated data indicates a slightly shorter lifetime and delayed 
replacement of RCWs than was considered in the March 2023 NOPR based on 
previous RECS and other data sources.
    Furthermore, as discussed in chapter 5 of the TSD for this direct 
final rule, the incremental MPCs developed in this analysis reflect 
units currently available on the market. Therefore, to the extent that 
units on the market incorporate more robust mechanical components (such 
as bearings, motors, etc.), DOE's analysis already accounts for the 
cost of these components at higher efficiency levels.
    See chapter 8 of the direct final rule TSD for further details.
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 RCWs 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.\97\ The LCC analysis estimates net present value over the 
lifetime of the product, so the appropriate discount rate will reflect 
the general opportunity cost of household funds, taking this time scale 
into account. Given the long time horizon modeled in the LCC, the 
application of a marginal interest rate associated with an initial 
source of funds is inaccurate. Regardless of the method of purchase, 
consumers are expected to continue to rebalance their debt and asset 
holdings over the LCC analysis period, based on the restrictions 
consumers face in their debt payment requirements and the relative size 
of the interest rates available on debts and assets. DOE estimates the 
aggregate impact of this rebalancing using the historical distribution 
of debts and assets.
---------------------------------------------------------------------------

    \97\ The implicit discount rate is inferred from a consumer 
purchase decision between two otherwise identical goods with 
different first cost and operating cost. It is the interest rate 
that equates the increment of first cost to the difference in net 
present value of lifetime operating cost, incorporating the 
influence of several factors: transaction costs; risk premiums and 
response to uncertainty; time preferences; interest rates at which a 
consumer is able to borrow or lend. The implicit discount rate is 
not appropriate for the LCC analysis because it reflects a range of 
factors that influence consumer purchase decisions, rather than the 
opportunity cost of the funds that are used in purchases.
---------------------------------------------------------------------------

    To establish residential discount rates for the LCC analysis, DOE 
identified all relevant household debt or asset classes in order to 
approximate a consumer's opportunity cost of funds related to appliance 
energy cost savings. It estimated the average percentage shares of the 
various types of debt and equity by household income group using data 
from the Federal Reserve Board's triennial Survey of Consumer Finances 
\98\ (``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 direct final rule TSD for further details 
on the development of consumer discount rates.
---------------------------------------------------------------------------

    \98\ The Federal Reserve Board, Survey of Consumer Finances 
(1995, 1998, 2001, 2004, 2007, 2010, 2013, 2016, and 2019). 
Available at www.federalreserve.gov/econres/scfindex.htm.
---------------------------------------------------------------------------

8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the energy efficiency distribution of top-loading 
standard-size, front-loading compact, and front-loading standard-size 
RCWs for 2027 and 2028, DOE used shipments-weighted energy efficiency 
ratio (``SWEER'') for 2020 as a starting point, based on information 
provided by AHAM. (AHAM, No. 54 at pp. 2-3) To project the trend in 
efficiency, DOE considered recent trends in DOE's RCW CCD and the 
potential effect of labeling programs such as ENERGY STAR on RCWs. DOE 
estimated an annual efficiency improvement of 0.4 and 0.1 percent for 
top-loading standard-size and front-loading (compact and standard-size) 
clothes washers, respectively. For semi-automatic clothes washers, DOE 
used the CCD database to develop a product efficiency distribution 
under the no-new-standards case.
    The estimated market shares for the no-new-standards case for RCWs 
are shown in Tables IV.16 through IV.19. See chapter 8 of the direct 
final rule TSD for further information on the derivation of the 
efficiency distributions.

                   Table IV.16--No-New-Standards Case Market Share in 2027: Top-Loading and Semi-Automatic Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Top-loading ultra-compact        Top-loading standard-size              Semi-Automatic
                                                      --------------------------------------------------------------------------------------------------
                   Efficiency level                     EER (lb/   WER (lb/              EER (lb/   WER (lb/              EER (lb/   WER (lb/
                                                          kWh/       gal/    Share (%)     kWh/       gal/    Share (%)     kWh/       gal/    Share (%)
                                                         cycle)     cycle)                cycle)     cycle)                cycle)     cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............................................       3.79       0.29        100       3.50       0.38       61.0       1.60       0.17       21.0
1....................................................  .........  .........  .........       3.89       0.47        5.9       2.12       0.27       71.0
2....................................................  .........  .........  .........       4.27       0.57       27.4       2.51       0.36        8.0
3....................................................  .........  .........  .........       4.78       0.63        4.7  .........  .........  .........
4....................................................  .........  .........  .........       5.37       0.67        1.0  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table IV.17--No-New-Standards Case Market Share in 2027: Front-Loading Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Front-loading compact                              Front-loading standard-size
                                             -----------------------------------------------------------------------------------------------------------
              Efficiency level                  EER (lb/kWh/      WER (lb/gal/                        EER (lb/kWh/      WER (lb/gal/
                                                   cycle)            cycle)           Share (%)          cycle)            cycle)           Share (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
DFR Baseline................................  ................  ................  ................              4.31              0.38                 0

[[Page 19062]]

 
NOPR Baseline...............................              4.41              0.53                 0              5.02              0.64               2.0
1...........................................              4.80              0.62              38.7              5.31              0.69               5.6
2...........................................              5.02              0.71              45.8              5.52              0.77              45.1
3...........................................              5.53              0.75              14.5              5.73              0.77              38.0
4...........................................              5.97              0.80               1.0              5.97              0.85               9.2
--------------------------------------------------------------------------------------------------------------------------------------------------------


                   Table IV.18--No-New-Standards Case Market Share in 2028: Top-Loading and Semi-Automatic Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Top-loading ultra-compact        Top-loading standard-size              Semi-automatic
                                                      --------------------------------------------------------------------------------------------------
                   Efficiency level                     EER (lb/   WER (lb/              EER (lb/   WER (lb/              EER (lb/   WER (lb/
                                                          kWh/       gal/    Share (%)     kWh/       gal/    Share (%)     kWh/       gal/    Share (%)
                                                         cycle)     cycle)                cycle)     cycle)                cycle)     cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline.............................................       3.79       0.29        100       3.50       0.38       59.5       1.60       0.17       21.0
1....................................................  .........  .........  .........       3.89       0.47        6.7       2.12       0.27       71.0
2....................................................  .........  .........  .........       4.27       0.57       27.4       2.51       0.36        8.0
3....................................................  .........  .........  .........       4.78       0.63        5.4  .........  .........  .........
4....................................................  .........  .........  .........       5.37       0.67        1.1  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------


                           Table IV.19--No-New-Standards Case Market Share in 2028: Front-Loading Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Front-loading compact                              Front-loading standard-size
                                             -----------------------------------------------------------------------------------------------------------
              Efficiency level                  EER (lb/kWh/      WER (lb/gal/                        EER (lb/kWh/      WER (lb/gal/
                                                   cycle)            cycle)           Share (%)          cycle)            cycle)           Share (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
DFR Baseline................................  ................  ................  ................              4.31              0.38               0.0
NOPR Baseline...............................              4.41              0.53               0.0              5.02              0.64               2.0
1...........................................              4.80              0.62              38.8              5.31              0.69               5.4
2...........................................              5.02              0.71              45.2              5.52              0.77              45.0
3...........................................              5.53              0.75              14.9              5.73              0.77              38.4
4...........................................              5.97              0.80               1.1              5.97              0.85               9.2
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency to the RCW 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.
    An anonymous commenter expressed concerns regarding the LCC and PBP 
associated with the proposed rule change to increase energy efficiency 
of RCWs. (Anonymous, No. 391 at p. 1) The anonymous commenter 
questioned the time it would take for the benefits to outweigh the 
costs, as the proposed rule suggests net positive outcomes over a 
period of less than the average product lifespan of 13 years, but also 
notes the 30-year timeframe for the cost-benefit analysis in asking how 
long until the benefits will be recognizable. The anonymous commented 
sought clarity on when the benefits will become noticeable and raises 
logistical concerns about the implementation of the rule change. (Id.)
    As described in section V.B.1.a of this document (see Tables V.4 
through V.12), the simple payback period for top-loading and front-
loading standard-size RCWs is 6.2 years and 1.4 years, respectively, 
which is less than half of estimated lifetime, i.e., 13.4 years. The 
30-year timeframe used to calculate cumulative operating costs in the 
LCC analysis, is determined based on product lifetimes with Weibull 
probability distributions.
    DOE notes that the estimated simple payback period can be subject 
to change depending on several factors, such as households' RCW usage 
and utility bill rates, including energy and water price rates. In 
general, if a household runs their RCW more frequently at higher energy 
and water rates, it will result in a shorter payback period and vice 
versa.

[[Page 19063]]

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.\99\ 
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.
---------------------------------------------------------------------------

    \99\ 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.
---------------------------------------------------------------------------

    To project RCW shipments under the no-new-standards case, DOE 
utilized historical shipments data from AHAM. DOE estimated RCW 
shipments by projecting shipments into two market segments: (1) 
replacement of existing RCWs; (2) new housing.
    To project RCW replacement shipments, DOE developed retirement 
functions from RCW lifetime estimates and applied them to the existing 
products in the housing stock, which are tracked by vintage. To 
estimate shipments to new housing units, DOE used projections of new 
housing starts coupled with RCWs' saturation data. In other words, to 
project the shipments for new housing units for any given year, DOE 
multiplied the housing projections by the estimated saturation of RCWs 
for new housing units. For new housing completions and mobile home 
placements, DOE used recorded data through 2022,\100\ and adopted the 
projections from AEO2023 for 2023-2050. DOE used the data contained in 
the 2020 RECS to characterize ownership of RCWs in households across 
various housing types, including multi-family housing.
---------------------------------------------------------------------------

    \100\ U.S. Census. Characteristics of New Housing. Available at 
www.census.gov/construction/chars/.
---------------------------------------------------------------------------

    DOE aggregated the above two market segments for any given year 
during the analysis period \101\ (2027-2056) and divided total RCW 
shipments into its five product classes. For this direct final rule, 
DOE estimated the market share between top-loading and front-loading 
RCWs based on shipments trends and forecast data by clothes washer 
loading type provided by AHAM between 2010 and 2024.\102\ To project 
market share between top-loading and front-loading RCWs after 2024, the 
2012-2024 average is used for all years. DOE estimated market share for 
top-loading and front-loading RCWs would remain at 73.5 percent and 
26.5 percent, respectively. DOE then disaggregated the top-loading RCW 
market share into three product classes (i.e., ultra-compact, standard-
size, and semi-automatic) and front-loading into two product classes 
(i.e., compact and standard-size). In addition, DOE assumed the annual 
growth rate for semi-automatic and top-loading ultra-compact clothes 
washers would be at 0.2 percent. Table IV.20 shows the estimated market 
share and shipments for each product class.
---------------------------------------------------------------------------

    \101\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2057.
    \102\ AHAM, 2022 AHAM Data Trends & Forecasts, August 10, 2022.

                    Table IV.20--Market Share and Shipments by Product Class in 2027 and 2028
----------------------------------------------------------------------------------------------------------------
                                                          Market share in
                     Product class                         2027 and 2028    Shipments in 2027  Shipments in 2028
                                                                (%)              (million)          (million)
----------------------------------------------------------------------------------------------------------------
Top-Loading, Ultra-Compact.............................                0.6               0.06               0.07
Top-Loading, Standard-Size.............................               71.3               7.73               7.83
Front-Loading, Compact.................................                1.6               0.18               0.18
Front-Loading, Standard-Size...........................               24.8               2.69               2.73
Semi-Automatic.........................................                1.6               0.17               0.17
                                                        --------------------------------------------------------
    Total..............................................                100              10.84              10.98
----------------------------------------------------------------------------------------------------------------

    To project RCW shipments under a standards case, DOE used a price 
elasticity parameter, which relates the incremental total installed 
cost to total RCW shipments, and an efficiency elasticity parameter, 
which relates the change in the operating cost to RCW shipments. Both 
types of elasticity relate changes in demand to changes in the 
corresponding characteristic (price or efficiency). A regression 
analysis estimated these terms separately from each other and found 
that the price elasticity of demand for several appliances is on 
average -0.45.\103\ Thus, for example, a price increase of 10 percent 
would result in a shipments decrease of 4.5 percent, all other factors 
held constant. The same regression analysis found that the efficiency 
elasticity is estimated to be on average 0.2 (i.e., a 10-percent 
efficiency improvement, equivalent to a 10-percent decrease in 
operating costs, would result in a shipments increase of 2 percent, all 
else being equal).
---------------------------------------------------------------------------

    \103\ Fujita, S., Estimating Price Elasticity using Market-Level 
Appliance Data. LBNL-188289 (August 2015). Available at eta-publications.lbl.gov/sites/default/files/lbnl-188289.pdf.
---------------------------------------------------------------------------

    DOE assumed when market impact occurs (i.e., when shipments drop 
under a standards case), the affected consumers would either repair 
their product or purchase a used RCW rather than a new one. In the 
repair scenario, the model assumes that the product's life is extended 
by approximately 5 years. In the used product scenario, the model 
assumes the remaining average lifetime for a used RCW is 7 years. 
Therefore, this market impact effectively influences the decision 
between repairing or replacing the product, as well as the decision 
between purchasing a used clothes washer or a new one.
    For this direct final rule, DOE considered comments it had received 
regarding its shipments analysis for the March 2023 NOPR. The approach 
used for this direct final rule is largely the same as the approach DOE 
had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, The CA IOUs commented that they 
agree that the relative market share for top-loading RCWs from 2012 on 
has remained reasonably stagnant, but they also noted that the relative 
market share for top-loading RCWs was more fluid before 2012. (CA IOUs, 
No. 460 at p. 7) The CA IOUs stated that relative market share 
movements from front-loading to top-loading RCWs correlate with DOE 
compliance dates for amended energy conservation standards. (Id.) The 
CA IOUs noted that the standard levels

[[Page 19064]]

proposed in the March 2023 NOPR are the first significant change in 
relative installed cost between top-loading and front-loading RCWs 
since 2007, and based on prior trends, the CA IOUs expect the front-
loading RCW relative market share to increase. (Id. at p. 8) The CA 
IOUs recommended that DOE should amend the top-loading and front-
loading market shares to reflect some expected shift from top-loading 
to front-loading RCWs based on the correlation of first-cost to market 
share relative to past energy conservation standard compliance dates. 
(Id.)
    Electrolux Home Products, Inc. (``Electrolux'') commented that data 
from the September 2021 TSD \104\ showed a projected market share loss 
for front-loading RCWs due to the standard at EL 3 proposed in the 
March 2023 NOPR. (Electrolux, No. 449 at p. 2) Electrolux further 
commented that these market trends between top-loading and front-
loading RCWs should play a more significant role in the energy analysis 
due to the extensive energy and water savings that can be realized by 
consumers transitioning from top-loading RCWs to more efficient front-
loading RCWs. (Id.) Electrolux requested that DOE set standards for 
front-loading RCWs at a better value than proposed in the March 2023 
NOPR in order to reduce the expanding energy gap with top-loading RCWs. 
(Id.)
---------------------------------------------------------------------------

    \104\ Available at www.regulations.gov/document/EERE-2017-BT-STD-0014-0030.
---------------------------------------------------------------------------

    As stated in the March 2023 NOPR, DOE acknowledges the challenge of 
lacking historical retail pricing, sales data, and energy consumption 
data for top-loading and front-loading RCWs. These data are crucial for 
developing a regression model that accurately projects the market share 
between the two loading types of RCWs. In this direct final rule, DOE 
is not adopting the standards level proposed in the March 2023 NOPR. 
Instead, DOE is adopting a standards level that is one level below the 
efficiency level proposed in the March 2023 NOPR level for top-loading 
standard-size RCWs. Under the adopted standards, the incremental 
equipment price from the baseline model to an ENERGY STAR-rated top-
loading standard-size RCW is $146, while the price difference between 
the adopted standard level top-loading RCW and the adopted standard 
level front-loading RCW is $227. Therefore, DOE does not expect that 
the adopted standards will drive consumers to shift from the top-
loading to the front-loading RCW market because front-loading RCWs will 
continue to be more expensive. In line with the approach taken in the 
March 2023 NOPR, DOE assumed a frozen scenario for market shifting 
(i.e., no market shifting) under the standards case in this direct 
final rule. 88 FR 13520, 13571.
    See chapter 9 of the direct final rule TSD for details.

H. National Impact Analysis

    The NIA assesses the national energy savings (``NES''), national 
water savings (``NWS''), and the NPV from a national perspective of 
total consumer \105\ costs and savings that would be expected to result 
from new or amended standards at specific efficiency levels.\106\ DOE 
calculates the NES, NWS, and NPV for the potential standard levels 
considered based on projections of annual product shipments, along with 
the annual energy and water consumption and total installed cost data 
from the energy and water use and LCC analyses. For the present 
analysis, DOE projected the energy and water savings, operating cost 
savings, product costs, and NPV of consumer benefits over the lifetime 
of RCWs sold from 2027 through 2056 for all TSLs other than 2028 
through 2057 for TSL 2 (the Recommended TSL detailed in the Joint 
Agreement).
---------------------------------------------------------------------------

    \105\ ``Consumer'' in this context refers to consumers of the 
product being regulated.
    \106\ 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.21 summarizes the inputs and methods DOE used for the NIA 
analysis for the direct final rule. Discussion of these inputs and 
methods follows the table. See chapter 10 of the direct final rule TSD 
for further details.

   Table IV.21--Summary of Inputs and Methods for the National Impact
                                Analysis
------------------------------------------------------------------------
              Inputs                               Method
------------------------------------------------------------------------
Shipments.........................  Annual shipments from shipments
                                     model.
Compliance Date of Standard.......  TSL 1, TSL 3, and TSL 4: 2027
                                    TSL 2 (Recommended TSL): 2028.
Efficiency Trends.................  No-new-standards case: Annual
                                     shipments-weighted efficiency
                                     improvement of 0.4 percent for top-
                                     loading standard-size and 0.1
                                     percent for both front-loading
                                     compact and standard-size clothes
                                     washers.
                                    Standard cases: ``Roll up''
                                     equipment to meet potential
                                     efficiency level.
Annual Energy and Water             Annual weighted-average values are a
 Consumption per Unit.               function of energy use at each TSL.
Total Installed Cost per Unit.....  Annual weighted-average values are a
                                     function of cost at each TSL.
                                    Incorporates projection of future
                                     product prices based on historical
                                     data.
Annual Energy Cost per Unit.......  Annual weighted-average values as a
                                     function of the annual energy and
                                     water consumption per unit and
                                     energy prices.
Repair and Maintenance Cost per     Annual values change between non-
 Unit.                               ENERGY STAR and ENERGY STAR
                                     efficiency levels.
Energy and Water Price Trends.....  AEO2023 projections (to 2050) and
                                     constant value based on average
                                     between 2046-2050 thereafter.
                                    Historical PPI extrapolated
                                     projection (to 2050) and constant
                                     value based on average between 2046-
                                     2050 thereafter.

[[Page 19065]]

 
Energy Site-to-Primary and FFC      A time-series conversion factor
 Conversion.                         based on AEO2023.
Discount Rate.....................  3 percent and 7 percent.
Present Year......................  2024.
------------------------------------------------------------------------

1. Product Efficiency Trends
    A key component of the NIA is the trend in energy efficiency 
projected for the no-new-standards case and each of the standards 
cases. Section IV.F.8 of this document describes how DOE developed an 
energy efficiency distribution for the no-new-standards case, which 
yields a shipment-weighted average efficiency, for each of the 
considered product classes for the year of anticipated compliance with 
an amended standard. To project the trend in efficiency absent amended 
standards for RCWs over the entire shipments projection period, DOE 
considered recent trends in its CCD data and the potential effect of 
programs such as ENERGY STAR. As discussed in section IV.F.8 of this 
document, DOE estimated an annual efficiency improvement of 0.4 percent 
and 0.1 percent for top-loading standard-size and front-loading 
(compact and standard-size) RCWs, respectively.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2027 or 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. See chapter 10 of the direct final rule TSD for 
details.
2. National Energy and Water Savings
    The national energy and water savings analysis involves a 
comparison of national energy and water consumption of the considered 
products between each potential standards case (``TSL'') and the case 
with no amended energy conservation standards. DOE calculated the 
national energy and water consumption by multiplying the number of 
units (stock) of each product (by vintage or age) by the unit energy 
and water consumption (also by vintage). DOE calculated annual NES and 
NWS based on the difference in national energy and water consumption 
for the no-new-standards case and for each higher efficiency standard 
case. DOE estimated energy consumption and savings based on site energy 
and converted the electricity consumption and savings to primary energy 
(i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from AEO2023. 
Cumulative energy and water savings are the sum of the NES and NWS for 
each year over the timeframe of the analysis.
    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 notification, 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 \107\ 
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 and 13A of the direct final rule TSD.
---------------------------------------------------------------------------

    \107\ For more information on NEMS, refer to The National Energy 
Modeling System: An Overview 2009, DOE/EIA-0581(2009), October 2009. 
Available at www.eia.gov/forecasts/aeo/index.cfm (last accessed June 
24, 2023).
---------------------------------------------------------------------------

    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.
    For this direct final rule, DOE considered comments it had received 
in response to the March 2023 NOPR regarding potential rebound effects.
    In response to the March 2023 NOPR, AHAM commented that changes to 
water level requirements would cause perceptions of inadequate cleaning 
performance and lead consumers to take actions (e.g., using alternative 
wash options with extra water or re-washing clothes) that cause real 
energy performance to diverge from DOE's projections. AHAM suggested 
that DOE include such effects in the analysis of total energy and water 
savings by adjusting upwards over time the average per unit energy and 
water consumption. (AHAM, No. 464 at pp. 2-3) AHAM stated that although 
there may not yet be data demonstrating a rebound effect because 
current standards have not yet caused such an effect, standards that 
are excessively stringent--such as those DOE proposed in the March 2023 
NOPR--could cause a rebound effect. (Id. at p. 24)
    Whirlpool commented that the proposed standards would cause 
consumers to alter their purchasing behavior due to the perceived loss 
of utility, poor performance, and increased up-front cost of RCWs 
meeting the proposed standards. (Whirlpool, No. 462 at p. 5) 
Specifically, Whirlpool commented that consumers may delay purchases 
and repair older, less efficient appliances past their normal, expected 
life. (Id.) Whirlpool commented that this shift in behavior will likely 
have the opposite impact on energy use that DOE anticipates, as 
consumers will continue to use their older and less efficient 
appliances instead of purchasing newer, more efficient models. (Id.) 
Whirlpool commented that DOE overestimated the total energy and water 
savings from the proposed standard because consumers may compensate for 
decreased utility and functionality by opting for more energy- and 
water-intensive washing options, washing loads multiple times to make 
up for loss in performance or wash clothes multiple times to recover 
lost performance. (Id. at p. 13)
    CEI noted that consumer behavior resulting from performance-related 
deficiencies may well lead to increased water use for some consumers. 
(CEI, No. 454 at p. 5)
    The AGs of TN et al. commented that DOE's dismissal of Whirlpool's 
observation that ``decreasing water

[[Page 19066]]

levels and wash temperatures would negatively impact consumer 
perceptions that their clothes washers are working correctly'' and 
DOE's defense that manufacturers had not provided quantitative data 
regarding ``human reactions'' is unjustified and that DOE should 
attempt the task of modeling consumer reactions. The AGs of TN et al. 
argued that DOE ignored the comment and that in doing so, DOE 
``entirely fail[s] to consider an important aspect of the problem.'' 
(AGs of TN et al., No. 438 at p. 6 (citing Motor Vehicle Mfrs. Ass'n of 
U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983))
    DOE also received comments from over 50 individual commenters 
expressing concern that amended standards could lead to more energy- 
and water-intensive usage of RCWs, thereby counteracting any energy or 
water savings resulting from amended standards.
    As discussed further in section V.B.4.a of this document, in 
response to the March 2023 NOPR, AHAM and manufacturers presented data 
and information indicating that there are uncertainties regarding 
potential impacts on certain aspects of product performance at the 
standard levels proposed in the March 2023 NOPR (i.e., TSL 3) that 
could lead consumers to opt for more energy- and water-intensive 
washing, and that changes to consumer usage patterns to mitigate such 
impacts could jeopardize the energy and water savings that would be 
achieved at the proposed efficiency levels.
    DOE notes that in response to the March 2023 NOPR, manufacturers 
did not provide any specific data nor express any specific concerns 
regarding clothes washer performance at TSL 2 (i.e., the Recommended 
TSL corresponding to the standards level adopted in this direct final 
rule). DOE's own data demonstrates no negative impact at TSL 2 on the 
cleaning performance, wash temperature, and mechanical action scores of 
RCWs, indicating there would be no loss of consumer utility at TSL 2. 
Furthermore, as previously discussed, on February 14, 2024, DOE 
received a second joint statement from the same group of stakeholders 
that submitted the Joint Agreement (including AHAM, and Whirlpool as a 
member) in which the signatories reaffirmed the standards recommended 
in the Joint Agreement.\108\ In particular, the letter states that the 
stakeholders do not anticipate the recommended standards will 
negatively affect features or performance, and that DOE's test data 
shows, and industry experience agrees, that the recommended standard 
levels for RCWs can maintain good cleaning performance and do not 
preclude the ability to provide high wash temperatures. For further 
discussion of clothes washer performance as it relates to amended 
standards, see section V.B.4.a of this document.
---------------------------------------------------------------------------

    \108\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    DOE acknowledges that this conclusion is contrary to its 
assumptions in the final rule that it published on December 16, 2020 
(``December 2020 Final Rule''). 85 FR 81359. There, DOE assumed that 
consumers might need to re-run their clothes washers or clothes dryers 
through multiple cycles ``to adequately clean or dry their clothing.'' 
Id. at 85 FR 81365. In this rulemaking, DOE has found no evidence 
suggesting that consumers are running their RCW multiple times at TSL 2 
(i.e., the Recommended TSL), which corresponds to the current ENERGY 
STAR efficiency level for both top-loading and front-loading standard-
size RCW product classes. This is supported by data presented in 
section IV.E of this document and comments from Water Demand Management 
(``WaterDM''). (WaterDM, No. 508 at p. 3) According to the historical 
RECS data, average consumer usage of RCWs has steadily declined from 
292 cycles per year per RCW in the 2005 RECS to 210 cycles per year per 
RCW in the 2020 RECS, while the average household size has remained 
essentially unchanged during the same period (average of 3 household 
members). This indicates a significant downward trend in the average 
number of cycles run on each RCW over the past 15 years, despite the 
implementation of RCW energy conservation standards. These include the 
first standard, Tier 1, introduced in 2004, followed by Tier 2 in 2007, 
and the current amended standard, Tier 1 in 2015 and Tier 2 in 2018. 
Additionally, data from WaterDM corroborates this trend, showing a 
decline in the average number of clothes washer loads per household per 
day from 0.81 in 1999 to 0.71 in 2023, despite the decrease in water 
use per load from 41 gallons to 25 gallons and increase in capacity of 
clothes washer during the same period. The amount of water used per 
pound of clothes washed has decreased during this time and yet there is 
no evidence that cleaning performance was negatively impacted (through 
the usage of multiple cycles to clean a given load of clothes). These 
data indicate that amended energy conservation standards have not 
resulted in consumers re-running loads of laundry purportedly due to 
reduced cleaning performance.
    Given that there is no evidence of any previous RCW standard 
increasing RCW cycles per year, and in fact, instead cycles per year 
have decreased over time through multiple standards, DOE determines 
that a standard at TSL 2 would not be expected to lead consumers to opt 
for more energy- and water-intensive washing.
    To better understand and quantify the uncertainties of any impacts 
of potential standards at TSL 3 and TSL 4 on consumer behavior, for 
this direct final rule, DOE has conducted a sensitivity analysis of 
possible increased use of the ``deep fill'' option on top-loading 
standard-size RCWs at CEE Tier 1 (TSL 3) and max-tech (TSL 4), which 
are more stringent TSLs than being adopted in this direct final rule. 
Specifically, DOE considered the possibility that consumers might opt 
for more energy- and water-intensive washing using the deep fill option 
available on their top-loading RCWs. DOE assumed that in this case 
consumers would choose to wash their loads with more water, resulting 
in less energy and water savings compared to the standard projections. 
The sensitivity analysis compares the energy and water savings, as well 
as the NPV, between scenarios with and without the deep fill usage 
option, quantifying the impact of altered consumer behavior on the 
analytical results. The analysis does not model a change for product 
classes lacking a deep fill option, like front-loading RCWs, nor does 
it consider aspects of consumer behavior unrelated to usage intensity, 
such as the delayed replacement of older clothes washers.
    The overall FFC national energy savings decrease by approximately 2 
percent and national water savings decrease by less than 2 percent, 
compared to the default case. For details on the NIA sensitivity 
analysis results, see appendix 10E of the direct final rule TSD.
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 and water 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

[[Page 19067]]

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 RCW 
price trends based on historical PPI data. DOE applied the same trends 
to project prices for each product class at each considered efficiency 
level. By 2056, which is the end date of the projection period, the 
average RCW price is projected to drop 17.2 percent relative to 2022. 
Non-energy efficiency related features are excluded from the 
manufacturer production cost, therefore, the decline in price does not 
include any price adders associated with non-energy efficiency related 
features. DOE is not aware if such data exists and notes that the 
projected drop in price may not reflect real market prices. DOE's 
projection of product prices is described in appendix 10C of the direct 
final rule TSD.
    To evaluate the effect of uncertainty regarding the price trend 
estimates, DOE investigated the impact of different product price 
projections on the consumer NPV for the considered TSLs for RCWs. In 
addition to the default price trend, DOE considered two product price 
sensitivity cases: (1) a high price-decline case based on PPI data for 
the period 1980-2022 and (2) a constant price trend at the 2022 value. 
Compared to the default price trend, which exhibits an annual price 
decline rate of 0.58 percent, the high price-decline case exhibits an 
annual decline rate of 1.15 percent, and the constant price case 
exhibits no annual decline. For the Recommended TSL under the high-
price decline case, consumer NPV increases by 10 percent and 14 percent 
given discount rates of 3 percent and 7 percent, respectively. Under 
the constant price case, consumer NPV decreases by 12 percent and 16 
percent given discount rates of 3 percent and 7 percent, respectively. 
The derivation of these price trends and the results of these 
sensitivity cases are described in appendix 10C of the direct final 
rule TSD.
    The energy and water cost savings are calculated using the 
estimated energy and water savings in each year and the projected price 
of the appropriate form of energy and water. 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 2046-2050 average was 
used for all years. To estimate water prices in future years, DOE 
multiplied the average national water prices by the projection of 
annual national-average residential water price changes in the 
extrapolated future water price trend, which is based on the historical 
water price index from 1988 to 2022. 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 direct final rule TSD.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
direct final rule, DOE estimated the NPV of consumer benefits using 
both a 3-percent and a 7-percent real discount rate. DOE uses these 
discount rates in accordance with guidance provided by the Office of 
Management and Budget (``OMB'') to Federal agencies on the development 
of regulatory analysis.\109\ 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.
---------------------------------------------------------------------------

    \109\ United States Office of Management and Budget. Circular A-
4: Regulatory Analysis. September 17, 2003. Section E. Available at 
www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed June 24, 2023).
---------------------------------------------------------------------------

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 direct final rule, DOE analyzed the impacts of the 
considered standard levels on three subgroups: (1) low-income 
households, (2) senior-only households, and (3) well-water households. 
The analysis used subsets of the 2020 RECS sample composed of 
households that meet the criteria for the considered subgroups. DOE 
used the LCC and PBP spreadsheet model to estimate the impacts of the 
considered efficiency levels on these subgroups. Chapter 11 in the 
direct final rule TSD describes the consumer subgroup analysis. The 
sections below discuss the individual subgroups, and additional details 
are found in chapter 11 of the direct final rule TSD.
1. Low-Income Households
    Low-income households are significantly more likely to be renters 
or to live in subsidized housing units, compared to households that are 
not low-income. In these cases, the landlord purchases the equipment 
and may pay the energy bill as well.
    For this direct final rule analysis, DOE divided low-income 
households into three sub-subgroups: (1) renters who pay energy bill; 
(2) renters who do not pay energy bill; and (3) homeowners. The 2020 
RECS includes data on whether a household pays for the energy bill, 
allowing DOE to categorize households in the analysis narrowly,\110\ 
excluding any costs or benefits that are accrued by either a landlord 
or subsidized housing agency. This allows DOE to determine in a more 
accurate manner whether low-income households are disproportionately 
affected by an amended energy conservation standard. Table IV.22 shows 
the distribution of low-income household clothes washer users with 
respect to whether they rent or own and whether they pay the energy 
bill.
---------------------------------------------------------------------------

    \110\ The energy bill includes fuel type of electricity, natural 
gas, or propane consumed by a household.

[[Page 19068]]



                                Table IV.22--Characterization of Low-Income Households in the Sample for Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Percentage of low-income sample
                                      -----------------------------------------------------------------
                                                                       Semi-automatic,                      Impact of higher       Impact of first cost
         Type of household *            Top-loading,   Front-loading,    top-loading,   Front-loading,    efficiency on energy           increase
                                       standard- size  standard- size   ultra-compact     compact (%)             bill
                                             (%)             (%)             (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Renters (Pay for Energy Bill) **.....              40              43               50              57  Full/Partial savings...  None.***
Renters (Do Not Pay for Energy Bill)                4               4                5               8  None...................  None.***
 **.
Owners...............................              56              53               45              36  Full/Partial savings...  Full.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* RECS 2020 lists three categories: (1) Owned or being bought by someone in your household (here classified as ``Owners'' in this table); (2) Rented
  (here classified as ``Renters'' in this table); (3) Occupied without payment of rent (also classified as ``Renters'' in this table). Renters include
  occupants in subsidized housing including public housing, subsidized housing in private properties, and other households that do not pay rent. RECS
  2020 does not distinguish homes in subsidized or public housing.
** RECS 2020 lists four categories for each of the fuels used by a household: (1) Household is responsible for paying for all used in this home; (2) All
  used in this home is included in the rent or condo fee; (3) Some is paid by the household, some is included in the rent or condo fee; and 4) Paid for
  some other way. ``Do Not Pay for Energy Bill'' includes only category (2). Partial energy bill savings would occur in cases of category (3).
*** Low-income renters typically do not purchase a clothes washer. Therefore, it is unclear if the renters would be asked to pay the full or partial of
  the total installed cost. As a result, DOE estimated there would be no impact of first cost increase for low-income renters and occupants in public
  housing and other households that do not pay rent.

    For this direct final rule, DOE considered comments it had received 
regarding its consideration of low-income households in the March 2023 
NOPR. DOE notes that although several of the comments discussed below 
are from AHAM, as previously discussed, on February 14, 2024, DOE 
received a second joint statement from the same group of stakeholders 
that submitted the Joint Agreement (including AHAM) in which the 
signatories reaffirmed the standards recommended in the Joint 
Agreement.\111\ In particular, the letter states that ``the recommended 
standards represent the maximum levels of efficiency that are 
technologically feasible and economically justified'' (emphasis added). 
The approach used for this direct final rule is largely the same as the 
approach DOE had used for the March 2023 NOPR analysis.
---------------------------------------------------------------------------

    \111\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    In response to the March 2023 NOPR, AHAM stated that an updated 
energy conservation standard should be aligned with DOE's analytical 
principles and Executive Order 13985, which requires agencies to assess 
whether its programs and policies perpetuate systemic barriers to 
opportunities and benefits for people in underserved communities. AHAM 
comment that it is inappropriate to concentrate the negative impacts of 
the standard on low-income and traditionally underserved communities 
and that these consumers cannot pay more for more efficient RCWs and 
assume they will get a payback over time on their electric bill. (AHAM, 
No. 464 at pp. 11-12) AHAM commented the highest savings a renter would 
receive on their monthly bill under the standards proposed in the March 
2023 NOPR for top-loading standard-size RCWs, according to DOE's 
analysis, would be 82 cents. (Id. at p. 32) AHAM further commented that 
the increased upfront costs attributable to the standards proposed in 
the March 2023 NOPR are high enough that they will likely be noticed by 
a landlord or a builder and, based on the comments by the associations 
representing those stakeholders, AHAM stated that those costs are 
likely to be passed onto renters, offsetting any savings. (Id. at p. 
33)
    Whirlpool commented that many low-income households are renters and 
that DOE has no evidence for its assumption that renters will benefit 
from operational savings with no cost impacts. (Whirlpool, No. 462 at 
p. 6) Whirlpool stated that landlords pass along their costs to 
consumers to the extent they are able, or elect to delay their purchase 
of a new clothes washer. (Id. at pp. 6-7) Whirlpool commented that DOE 
must account for the impact of increased product costs on rental costs 
for consumers. (Id. at p. 7)
    CEI commented that the March 2023 NOPR discussion of consumer sub-
groups misses the possibility of adverse impacts on low-income 
households. (CEI, No. 454 at p. 5) CEI commented that landlords will 
not absorb the higher purchase price of compliant RCWs, but instead 
will include the cost in rental rates, harming low-income renters. 
(Id.)
    According to the RECS clothes washer sample, around 47 percent of 
low-income households that have a clothes washer are renters. In most 
cases, the property owner would purchase a new clothes washer. While 
the owner might seek to pass on some of the cost in the rent, the 
ability to do so is constrained to some extent by lease agreements that 
set rents for a specific period and larger market forces that influence 
rent levels in particular locations. In such circumstances, renters who 
pay the utility bill would see a significant net benefit from a higher-
efficiency RCW over the product lifetime, and this is seen in the 
results of DOE's analysis (see chapter 11 of the direct final rule 
TSD). DOE notes that there continues to be a lack of data to 
corroborate the notion that landlords pass on some, or all, of 
increased appliance costs to tenants. However, for this direct final 
rule, DOE implemented a scenario assuming that landlords would pass 
some of the incremental RCW costs to renters in the LCC. The results 
indicate that this scenario would not impact DOE's decision on amended 
standards. For details of the sensitivity results, see appendix 11A of 
the direct final rule TSD.
    AHAM commented that DOE has not established that there is a 
significant proportion of split incentive issues between tenants and 
landlords. (AHAM, No. 464 at p. 26) AHAM commented that continuing to 
assert the presence of a split incentive situation without any 
supporting data is arbitrary and capricious stating that no states 
require landlords to provide clothes washers and a significant portion 
of rental housing would have to have clothes washers provided by 
landlords, which DOE has not established. (Id.) AHAM stated that the 
maximum potential universe of low-income households where a split 
incentive might exist is a small fraction of all low-income households. 
(Id.) AHAM stated that a split incentive may exist in only a small 
fraction of low-income households, noting that using 2020 RECS, only 30

[[Page 19069]]

percent of low-income households with clothes washers and who pay their 
utilities are renters. (Id. at p. 26) AHAM noted that only 13 percent 
of those households live in housing units with two or more units and 
eight percent live in buildings with five or more units. (Id.) AHAM 
further noted that when low-income households live in units where the 
landlord provides clothes washers, they are most likely to be in multi-
family buildings, and most likely in apartment buildings with five or 
more units because anecdotal experience is that clothes washers are 
rarely provided in single family rental units. (Id. at p. 27) AHAM 
concluded that the maximum percentage of low-income households with 
landlord supplied clothes washers is less than 10 percent of all low-
income households. (Id.)
    CEI commented that DOE overestimated the percentage of low-income 
households who are renters rather than homeowners. (CEI, No. 454 at p. 
5)
    The CA IOUs supported DOE's decision to divide the low-income 
subgroup into renters and non-renters. (CA IOUs, No. 460 at p. 6) The 
CA IOUs noted that renters have a lower share of ENERGY STAR appliances 
than non-renters, partially due to the split incentive market failure 
where landlords are responsible for purchasing major home appliances 
while renters are responsible for paying utility bills. (Id.)
    The existence of a split incentive across a substantial number of 
U.S. households, in which a tenant pays for the cost of electricity 
while the building owner furnishes appliances, has been identified 
through a number of studies of residential appliance and equipment use 
broadly, and for clothes washers in low-income settings in specific. 
Building from early work including Jaffe and Stavins (1994),\112\ 
Murtishaw and Sathaye (2006) \113\ discussed the presence of landlord-
tenant split incentives (i.e., the ``principal-agent problem'') in the 
context of refrigeration, water heating, space heating, and lighting in 
rental housing. While the study did not focus on the low-income 
household, they estimated that 35 percent of total residential site 
energy use is subject to split incentives based on these four products 
alone. In the specific context of clothes washers, Spurlock and Fujita 
(2022) \114\ estimated that while clothes washers are more common for 
households above the poverty line, the majority of households at or 
below the threshold have a clothes washer in their home; 87 percent of 
low-income individuals who rented their homes were found to pay the 
electricity bill resulting from their energy use, such that they were 
likely subject to a scenario in which their landlord purchased the 
appliance, but they paid the operating costs. Spurlock and Fujita 
(2022), Houde and Spurlock (2016),\115\ and citations therein (e.g., 
Davis 2012) \116\ also further elaborated on split incentives in rental 
housing and their association with generally lower efficiency among the 
appliances used by renters.
---------------------------------------------------------------------------

    \112\ A.B. Jaffe and R.N. Stavins (1994) The energy-efficiency 
gap What does it mean?
    Energy Policy, 22 (10) 804-810, available at doi.org/10.1016/0301-4215(94)90138-4.
    \113\ Murtishaw, S., & Sathaye, J. (2006). Quantifying the 
Effect of the Principal-Agent Problem on US Residential Energy Use. 
Lawrence Berkeley National Laboratory. Available at 
escholarship.org/uc/item/6f14t11t.
    \114\ C.A. Spurlock and K.S. Fujita (2022), Equity implications 
of market structure and appliance energy efficiency regulation, 
Energy Policy, 165 (112943), available at doi.org/10.1016/j.enpol.2022.112943.
    \115\ S. Houde, C.A. Spurlock (2016), Minimum Energy Efficiency 
Standards for Appliances: Old and New Economic Rationales. Economics 
of Energy & Environmental Policy, 5(2), 65-84. Available at 
www.jstor.org/stable/26189506.
    \116\ L.W. Davis (2012), Evaluating the slow adoption of energy 
efficient investments: are renters less likely to have energy 
efficient appliances? The Design and Implementation of US Climate 
Policy, University of Chicago Press (2012), pp. 301-316.
---------------------------------------------------------------------------

    With regard to AHAM's assertion that the maximum percent of low-
income households with landlord-provided clothes washers is less than 
10 percent of all low-income households, DOE notes that AHAM's 
assertion only considers households with incomes under $34,000, who 
have clothes washers in their units, and who pay their energy bills. 
This differs from DOE's definition of low-income households, which is 
based on poverty thresholds established by the U.S. Census Bureau.\117\ 
As described in chapter 11 of the direct final rule TSD, DOE defines 
low-income households by varying poverty thresholds based on household 
size and the number of related children under 18 years old. 
Consequently, using the same 2020 RECS data, DOE's analysis indicates 
that low-income renters who have an RCW and pay their energy bills 
constitute roughly 40 percent of all low-income households. 
Furthermore, within this group, approximately 43 percent reside in 
single-family houses, 20 percent in buildings with 2 to 4 units, and 25 
percent in buildings with 5 or more units. As a result, DOE's analysis 
concludes that there is a substantial fraction of split-incentive issue 
among low-income households.
---------------------------------------------------------------------------

    \117\ U.S. Census Bureau, How the Census Bureau Measures 
Poverty, available at www.census.gov/topics/income-poverty/poverty/guidance/poverty-measures.html.
---------------------------------------------------------------------------

    AHAM commented that low-income consumers typically purchase entry-
level RCWs, the proposed rule \118\ would disproportionately and 
negatively affect low-income households and lead them to incur debt, 
purchase a used clothes washer, repair a current one, or use the 
laundromat--meaning they will be forced to spend more time doing 
laundry than other consumers or will not actually conserve water and 
energy or save money. (AHAM, No. 464 at p. 11)
---------------------------------------------------------------------------

    \118\ DOE notes that the standards adopted in this direct final 
rule are the same as those proposed standards in the March 2023 NOPR 
for three of the five product classes, but are less stringent than 
the standards proposed in the March 2023 NOPR for the other two 
product classes.
---------------------------------------------------------------------------

    AHAM commented that it commissioned Bellomy Research to conduct a 
study focusing on the impact of higher appliance prices on low-income 
households.\119\ (AHAM, No. 464 at p. 27) AHAM commented that the study 
found that 52 percent of households earning under $50,000 annually 
would resort to buying a used clothes washer or delay purchasing one 
due to cost. (Id.) AHAM further commented that 72 percent of households 
with incomes below $25,000 would not pay more upfront for a more 
energy-efficient clothes washer that would save them in energy bills 
over the next ten years. These households were 1.7 times more likely to 
have a top-loading clothes washer with an agitator and one-third as 
likely to own a front-loading clothes washer. (Id. at p. 28) AHAM 
additionally commented that, 73 percent of households earning under 
$25,000 would experience negative to extremely negative impacts from 
being forced to buy a new clothes washer. (Id.) AHAM commented that 
these findings contradict DOE's theoretical analysis and highlight the 
need for government initiatives that recognize and mitigate impacts on 
underserved communities. (Id. at p. 27)
---------------------------------------------------------------------------

    \119\ The Bellomy Research study was sponsored by Whirlpool. 
(Whirlpool, No. 462 at p. 6)
---------------------------------------------------------------------------

    Representatives Latta et al. commented that low-income consumers in 
particular are least likely to be able to afford new appliances. 
(Representatives Latta et al., No. 456 at pp. 1-2) Representatives 
Latta et al. stated that DOE's analysis fails to consider the 
unintended consequences of upfront cost increases, including high 
interest rate financing and lost energy savings from delayed 
replacement of older, less-efficient appliances. (Id.)

[[Page 19070]]

    Salman cited concerns with DOE's proposed standards for RCWs,\120\ 
over costs, particularly the impact on low-income households. (Salman, 
No. 446 at p. 1)
---------------------------------------------------------------------------

    \120\ DOE notes that the standards adopted in this direct final 
rule are the same as those proposed March 2023 NOPR for three of the 
five product classes, but are less stringent than the standards 
proposed in the March 2023 NOPR for the other two product classes.
---------------------------------------------------------------------------

    DOE's low-income LCC subgroup analysis uses inputs specific to low-
income consumers to estimate the impact of adopted standards. There is 
evidence that prior efficiency standards, by acting on a market 
substantially more complex than the simplified model of perfect 
competition, have aligned with improvements in efficiency (and in some 
cases additional product attributes) while maintaining a constant price 
for ``entry-level'' products. For example, Spurlock and Fujita (2022) 
examined appliance point of sales data and noted that the 2004 and 2007 
RCW efficiency standards were associated with 30-percent increase in 
product efficiency contemporaneous with no change in average price 
within the baseline market segment (i.e., ``entry-level'' RCWs).
    DOE notes that, while unable to review the specific survey 
instrument and resulting dataset, this summary of AHAM survey findings 
implies that the framing does not reflect the context of a revised 
minimum energy conservation standard. Specifically, these are impacts 
AHAM is claiming would occur based on the full cost of a new RCW and 
are not specifically relevant to the potential increased incremental 
cost of purchasing a new RCW in a standards case. The incremental cost, 
which is substantially less than the full cost of an RCW, varies 
depending on the considered standard levels. Additionally, as described 
in section IV.G of this document, DOE implemented an extended repair 
scenario and a second-hand market scenario to capture the market impact 
resulting from consumers' sensitivity to increased clothes washer 
prices.
    AHAM commented that DOE's approach to assessing the cost of 
appliances for low-income households, which uses a static balance 
sheet, fails to consider capital availability and non-financial costs 
faced by these households, such as missed payments on essential 
expenses like food and housing. (AHAM, No. 464 at p. 29) AHAM presented 
data showing that the lowest 30 percent income groups have no 
discretionary income to save, making it impossible for them to 
rebalance their balance sheets after making a purchase. AHAM commented 
that DOE does not provide a theory or explanation for how low-income 
households with negative discretionary cash flow can realistically 
rebalance their balance sheets, undermining the accuracy of DOE's 
predictions. AHAM commented on disparities between DOE's projections 
and interest rates and data from sources like the Bureau of Consumer 
Financial Protection, suggesting that DOE's estimates are not reliable. 
(Id. at p. 30) AHAM commented that regardless of income, savings as low 
as the projected savings in this rule are not enough to be noticed on 
the monthly flow of funds, will not provide an opportunity to rebalance 
a balance sheet, and do not constitute a benefit to consumers. (AHAM, 
No. 464 at p. 32)
    AHAM commented that DOE should undertake a full study of the 
effects of standards on low-income households beyond simply restating 
its belief that the balance sheet approach is appropriate in the face 
of comments and data demonstrating the inaccuracy of this belief. 
(AHAM, No. 464 at p. 31) AHAM further commented that DOE's assumption 
that consumers pay the water and sewer bill directly is an unproven 
and, often, incorrect, assumption. (Id. at p. 32)
    Strauch expressed concern that future dollar savings are not 
accessible for immediate purchase, making it unaffordable for 
individuals with limited incomes or fixed budgets. (Strauch, No. 430 at 
p. 2)
    DOE notes that the LCC is not predicting a purchase decision. 
Rather, it estimates the net present value of the financial impact of a 
given standard level over the lifetime of the product (e.g., 13 years) 
assuming the standard-compliant product has already been installed, and 
allows for comparison of this value across different hypothetical 
minimum efficiency levels. It is applied to future-year energy costs 
and non-energy operations and maintenance costs in order to calculate 
the net present value of the appliance to a household at the time of 
installation. The consumer discount rate reflects the opportunity cost 
of receiving energy cost savings in the future, rather than at the time 
of purchase and installation. The opportunity cost of receiving 
operating cost savings in future years, rather than in the first year 
of the modeled period, is dependent on the rate of return that could be 
earned if invested into an interest-bearing asset or the interest cost 
accrual avoided by paying down debt. Consumers in all income groups 
generally hold a variety of assets (e.g., certificates of deposit, 
stocks, bonds) and debts (e.g., mortgage, credit cards, vehicle loan), 
which vary in amount over time as consumers allocate their earnings, 
make new investments, etc. Thus, the consumer discount rate is 
estimated as a weighted average of the rates and proportions of the 
various types of assets and debts held by households in each income 
group, as reported by the Survey of Consumer Finances. Furthermore, DOE 
notes that the Survey of Consumer Finances shows that consumers across 
all income groups generally rebalance their assets and debts over time.
    Whirlpool commented that DOE's analysis appears to not account for 
the fact that a significant portion of consumers, especially low-income 
consumers, finance their appliance purchases, either through personal 
loans, in-house financing, rent-to-own, or by putting purchases on 
their credit cards. Whirlpool commented that it wasn't clear if DOE 
included the likely financing and actual rates paid by consumers in the 
analysis. Whirlpool commented that many more consumers than DOE 
anticipates may end up saving no money (and may spend more money) as a 
result of the proposed rule.\121\ (Whirlpool, No. 462 at p. 6)
---------------------------------------------------------------------------

    \121\ DOE notes that the standards adopted in this direct final 
rule are the same as those proposed March 2023 NOPR for three of the 
five product classes, but are less stringent than the standards 
proposed in the March 2023 NOPR for the other two product classes.
---------------------------------------------------------------------------

    As discussed, the LCC analysis estimates the net present value of 
the financial impact of a given standard level over the lifetime of the 
product. In the case of top-loading standard-size RCWs, the price 
differential between EL 3 and baseline is $160. When a consumer 
purchased the more efficient unit on a credit card with a 25 percent 
APR, it would amount to an additional financing cost of about $3 per 
month in the first year of leaving the balance on the card. While the 
compound interest could start to accumulate if the balance was left 
unpaid for an extended period of time, it would be an unusual case as 
the Survey of Consumer Finances shows that consumers across all income 
groups generally rebalance their assets and debts.
    AHAM commented that DOE's analysis overstates the operating costs 
savings from reduced water use in washing machines, as many households, 
especially in multi-family buildings, don't directly pay for water and 
sewer, as costs are often covered by landlords or included in common 
charges. AHAM commented that condominium owners bear the cost of 
efficient clothes washers, but don't see direct water bill savings 
because water and sewer

[[Page 19071]]

chargers are included in many condominium fees, possibly leading to 
negative life cycle cost savings. AHAM suggested that DOE should 
separately analyze multi-family housing units that do not directly pay 
for water and sewer costs. (AHAM, No. 464 at pp. 39-40)
    Whirlpool commented that many consumers in living arrangements 
where water is not sub-metered (e.g., multi-family housing) are low-
income renters, so DOE's estimated reduction in the cost of water is 
likely inapplicable. (Whirlpool, No. 462 at p. 6)
    AHAM and Whirlpool identified two groups of consumers who may not 
see water bill savings as a result of an amended standard: (1) 
condominium owners in multi-family buildings where water and sewer 
costs are included in common charges and (2) low-income renters in 
multi-family housing where water is not sub-metered and/or costs are 
covered by landlords.
    DOE notes that RECS does not identify whether or not a household 
pays its water bill. With regard to the first group, if assuming that 
owners in multi-family buildings who are identified in RECS as not 
paying their energy bill also do not pay their water bill, this group 
represents less than 0.5 percent of the national sample, indicating a 
relatively small group. With regard to the second group, in DOE's low-
income subgroup analysis, DOE assumes that households that do not pay 
their energy bill also do not pay their water bill and therefore do not 
accrue any operating cost savings from considered standards. Therefore, 
this issue is already accounted for in the subgroup results.
2. Senior-Only Households
    Annual clothes washer usage for senior-only households is 
significantly less than the full household sample because the household 
size for senior-only families is typically either one or two people. A 
household size equal to or larger than three members accounts for less 
than 1 percent of senior-only households. Therefore, as described in 
section V.B.1 of this document, the percentage of senior-only RCW 
consumers experiencing a net cost at TSL 2 (the Recommended TSL) is 
greater (35 percent for top-loading standard-size RCWs) than in the 
full LCC sample (27 percent for top-loading standard-size RCWs). The 
simple payback period for senior-only households at TSL 2 is 1.7 years 
longer than in the full LCC sample.
    For this direct final rule, DOE considered comments it had received 
regarding its consideration of senior-only households in the March 2023 
NOPR. The approach used for this direct final rule is largely the same 
as the approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, Strauch expressed concern that 
senior households are unlikely to recover the added cost of energy-
efficient products during their lifetime. (Strauch, No. 430 at p. 2) 
Strauch commented that even existing rebate programs do not 
sufficiently offset the increased up-front cost, particularly for 
senior households who may not benefit from these savings. (Id.)
    Strauch did not provide supporting data to demonstrate that senior 
households are unlikely to recover from increased purchase price at the 
adopted standard level over the course of their lifetime. DOE is not 
able to perform an analysis on seniors who might not be able to recoup 
the savings due to their age. However, DOE has described in section 
V.B.1 of this document, at the Recommended TSL, the positive average 
LCC savings across all product classes for senior consumers--except for 
front-loading compact RCWs for which about more than 70 percent of 
senior consumers have positive cost savings--outweigh the negative 
average LCC savings of $1 for front-loading compact RCWs for senior 
consumers.
3. Well-Water Households
    In response to the March 2023 NOPR, AHAM commented that DOE should 
analyze well water households as a separate group due to substantial 
cost differences compared to municipal water users, noting that well 
water costs are about 6 percent of the combined cost of municipal water 
and sewer. AHAM commented that for top-loading standard-size RCWs at EL 
3, using the real cash costs for water and sewer, the mean and median 
LCC savings are negative, resulting in a net cost for about 60 percent 
of these households. AHAM commented that the actual cash costs also 
reveal negative LCC savings for most front-loading compact clothes 
washer households and about half of front-loading standard-size clothes 
washer households. AHAM commented that DOE should therefore adjust its 
proposals acknowledging the burden on this group. (AHAM, No. 464 at p. 
39)
    Whirlpool commented that the March 2023 NOPR does not adequately 
consider the cost impacts on consumers residing in rural households. 
Whirlpool commented that many rural households use well and septic 
systems for which the cost of water and sewer is very low, leading to 
less savings than DOE anticipates. Additionally, Whirlpool stated that 
the water used by RCWs using well water has no societal benefit from 
water reductions because they are ultimately replenished by 
groundwater. (Whirlpool, No. 462 at pp. 5-6) Representatives Latta et 
al. commented that DOE overestimates savings for many rural consumers 
who use a well and septic system, for which water operating cost 
savings from the proposed standard are essentially zero. 
(Representatives Latta et al., No. 456 at p. 2)
    As described in section IV.F.4 of this document, for this direct 
final rule, DOE has made adjustments to its method for estimating well 
water and septic costs. The updated average well water and septic tank 
prices is 8.8 percent \122\ of the combined cost of municipal water and 
sewer costs. In addition, DOE has specifically assigned well water 
price and septic tank price to well users instead of using the 
composite water and wastewater prices. This means that the national LCC 
analysis accounts for the potential financial burden on households 
using well water systems, and it acknowledges that some well water 
users might experience increased costs under the amended efficiency 
standards. In addition, DOE presents results for the well user subgroup 
in chapter 11 of the TSD.
---------------------------------------------------------------------------

    \122\ DOE's estimate is higher than that provided by AHAM (i.e., 
6 percent) because DOE factored in maintenance costs for septic 
systems, whereas AHAM did not.
---------------------------------------------------------------------------

    Chapter 11 in the direct final rule TSD describes the consumer 
subgroup analysis.

J. Manufacturer Impact Analysis

1. Overview
    DOE performed an MIA to estimate the financial impacts of amended 
energy conservation standards on manufacturers of RCWs and to estimate 
the potential impacts of such standards on direct 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.

[[Page 19072]]

    The quantitative part of the MIA primarily relies on the Government 
Regulatory Impact Model (``GRIM''), an industry cash flow model with 
inputs specific to this rulemaking. The key GRIM inputs include data on 
the industry cost structure, unit production costs, product shipments, 
manufacturer markups, and investments in R&D and manufacturing capital 
required to produce compliant products. The key GRIM outputs are the 
INPV, which is the sum of industry annual cash flows over the analysis 
period, discounted using the industry-weighted average cost of capital, 
and the impact to domestic manufacturing employment. The model uses 
standard accounting principles to estimate the impacts of more-
stringent energy conservation standards on a given industry by 
comparing changes in INPV and domestic manufacturing employment between 
a no-new-standards case and the various standards cases. To capture the 
uncertainty relating to manufacturer pricing strategies following 
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 direct final rule TSD.
    DOE conducted the MIA for this rulemaking in three phases. In Phase 
1 of the MIA, DOE prepared a profile of the RCW manufacturing industry 
based on the market and technology assessment and publicly-available 
information. This included a top-down analysis of RCW 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 RCW manufacturing 
industry, including company filings of form 10-K from the SEC,\123\ 
corporate annual reports, the U.S. Census Bureau's Annual Survey of 
Manufactures (``ASM''),\124\ and reports from Dun & Bradstreet.\125\
---------------------------------------------------------------------------

    \123\ U.S. Securities and Exchange Commission, Electronic Data 
Gathering, Analysis, and Retrieval (EDGAR) system. Available at 
www.sec.gov/edgar/search/ (last accessed June 30, 2023).
    \124\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S. 
(2022).'' Available at www.census.gov/programs-surveys/asm/data/tables.html (last accessed June 30, 2023).
    \125\ The Dun & Bradstreet Hoovers login is available at 
app.dnbhoovers.com (last accessed June 30, 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 RCWs 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. 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 chapter 12 
of the direct final rule TSD.
2. Government Regulatory Impact Model and Key Inputs
    DOE uses the GRIM to quantify the changes in cash flow due to new 
or amended standards that result in a higher or lower industry value. 
The GRIM uses a standard, annual discounted cash-flow analysis that 
incorporates manufacturer costs, manufacturer markups, shipments, and 
industry financial information as inputs. The GRIM models changes in 
costs, distribution of shipments, investments, and manufacturer margins 
that could result from an amended energy conservation standard. The 
GRIM spreadsheet uses the inputs to arrive at a series of annual cash 
flows, beginning in 2024 (the base year of the analysis) and continuing 
30 years after the analyzed compliance year.\126\ DOE calculated INPVs 
by summing the stream of annual discounted cash flows during this 
period. For manufacturers of RCWs, DOE used a real discount rate of 9.3 
percent, which was derived from industry financials and then modified 
according to feedback received during manufacturer interviews.
---------------------------------------------------------------------------

    \126\ For the no-new-standards case and all TSLs except the 
Recommended TSL, the analysis period ranges from 2024-2056. For the 
Recommended TSL, the analysis period ranges from 2024-2057.
---------------------------------------------------------------------------

    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 new or 
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, results of the shipments analysis, and information gathered 
from industry stakeholders during the course of manufacturer 
interviews. The GRIM results are presented in section V.B.2 of this 
document. Additional details about the GRIM, the discount rate, and 
other financial parameters can be found in chapter 12 of the direct 
final rule TSD.
a. Manufacturer Production Costs
    Manufacturing more efficient products is typically more expensive 
than manufacturing baseline products due to the use of more complex 
components, which are typically more costly than baseline components. 
The changes in the MPCs of covered products can affect the revenues, 
gross margins, and cash flow of the industry. DOE conducted this 
analysis using the

[[Page 19073]]

physical teardown approach. The resulting bill of materials provides 
the basis for the MPC estimates. In this rulemaking, DOE relies on an 
efficiency-level approach, supplemented with the design-option approach 
for certain ``gap fill'' efficiency levels. The efficiency-level 
approach is appropriate for RCWs, given the availability of 
certification data to determine the market distribution of existing 
products and to identify efficiency level ``clusters'' that already 
exist on the market. For a complete description of the MPCs, see 
section IV.C of this document and chapter 5 of the direct final rule 
TSD.
b. Shipments Projections
    The GRIM estimates manufacturer revenues based on total unit 
shipment projections and the distribution of those shipments by 
efficiency level. Changes in sales volumes and efficiency mix over time 
can significantly affect manufacturer finances. For this analysis, the 
GRIM uses the NIA's annual shipment projections derived from the 
shipments analysis from the base year (2024) to the end of the analysis 
period (30 years after the analyzed compliance date \127\). See section 
IV.G of this document and chapter 9 of the direct final rule TSD for 
additional details.
---------------------------------------------------------------------------

    \127\ Id.
---------------------------------------------------------------------------

c. Capital and Product Conversion Costs
    New or amended energy conservation standards could cause 
manufacturers to incur conversion costs to bring their production 
facilities and product designs into compliance. DOE evaluated the level 
of conversion-related expenditures that would be needed to comply with 
each considered efficiency level in each product class. For the MIA, 
DOE classified these conversion costs into two major groups: (1) 
capital conversion costs; and (2) product conversion costs. Capital 
conversion costs are investments in property, plant, and 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 new or amended energy conservation standards.
    DOE relied on information derived from manufacturer interviews, the 
engineering analysis, and product teardowns to evaluate the level of 
capital and product conversion costs manufacturers would likely incur 
at the various TSLs. During interviews, DOE asked manufacturers to 
estimate the capital conversion costs (e.g., changes in production 
processes, equipment, and tooling) required to meet the various 
efficiency levels. DOE also asked manufacturers to estimate the 
redesign effort, engineering resources, and marketing expenses required 
at various efficiency levels to quantify the product conversion costs. 
Based on manufacturer feedback, DOE also estimated ``re-flooring'' 
costs associated with replacing obsolete display models in big-box 
stores (e.g., Lowe's, Home Depot, Best Buy) due to higher standards. 
Some manufacturers stated that with a new product release, big-box 
retailers discount outdated display models, and manufacturers share any 
losses associated with discounting the retail price. The estimated re-
flooring costs for each efficiency level were incorporated into the 
product conversion cost estimates, as DOE modeled the re-flooring costs 
as a marketing expense. DOE also estimated industry costs associated 
with re-rating basic models in accordance with appendix J, as detailed 
in the June 2022 TP Final Rule. 87 FR 33316. Manufacturer data were 
aggregated to better reflect the industry as a whole and to protect 
confidential information. DOE then scaled up the aggregate capital and 
product conversion cost feedback from interviews to estimate total 
industry conversion costs.
    DOE adjusted the conversion cost estimates developed in support of 
the March 2023 NOPR to 2022$ for this analysis.
    In general, DOE assumes all conversion-related investments occur 
between the year of publication of the direct final rule and the year 
by which manufacturers must comply with the new standard. 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 direct final rule 
TSD.
d. Manufacturer Markup Scenarios
    MSPs include direct manufacturing production costs (i.e., labor, 
materials, and overhead estimated in DOE's MPCs) and all non-production 
costs (i.e., SG&A, R&D, and interest), along with profit. To calculate 
the MSPs in the GRIM, DOE applied a multiplier (the manufacturer 
markup) 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'' 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 
18 percent for all product classes.\128\ Manufacturers tend to believe 
it is optimistic to assume that they would be able to maintain the same 
gross margin percentage as their production costs increase, 
particularly for minimally efficient products. Therefore, this scenario 
represents a high bound of industry profitability under an amended 
energy conservation standard.
---------------------------------------------------------------------------

    \128\ The gross margin percentage of 18 percent is based on a 
manufacturer markup of 1.22.
---------------------------------------------------------------------------

    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.\129\ The implicit assumption behind this 
scenario is that the industry can only maintain its operating profit in 
absolute dollars after the standard takes effect.
---------------------------------------------------------------------------

    \129\ For TSL 2 (the Recommended TSL), the modeled compliance 
date is 2028. For the remaining TSLs, the modeled compliance date is 
2027.
---------------------------------------------------------------------------

    A comparison of industry financial impacts under the two scenarios 
is presented in section V.B.2.a of this document.
3. Discussion of MIA Comments
    For this direct final rule, DOE considered comments it had received

[[Page 19074]]

regarding its manufacturer impact analysis presented in the March 2023 
NOPR. The approach used for this direct final rule is largely the same 
as the approach DOE had used for the March 2023 NOPR analysis.
    In response to the March 2023 NOPR, AHAM stated that it cannot 
comment on the accuracy of DOE's approach for including how 
manufacturers would potentially recover costs and investments due to 
amended standards, but AHAM stated its support for DOE's intent in the 
microwave ovens energy conservation standards rulemaking to include 
those conversion costs and investments in the actual costs of products 
and retail prices.\130\ (AHAM, No. 464 at p. 40) AHAM urged DOE to 
apply the same conceptual approach used in the microwave ovens 
rulemaking in this RCW rulemaking and all future rulemakings. (Id.)
---------------------------------------------------------------------------

    \130\ Technical Support Document: Energy Efficiency Program For 
Commercial And Industrial Equipment: Microwave Ovens. Available at 
www.regulations.gov/document/EERE-2017-BT-STD-0023-0022.
---------------------------------------------------------------------------

    DOE models different standards-case manufacturer markup scenarios 
to represent uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of amended 
energy conservation standards. The analyzed manufacturer markup 
scenarios vary by rulemaking as they are meant to reflect the potential 
range of financial impacts for manufacturers of the specific covered 
product or equipment. As discussed in section IV.J.2.d of this 
document, for RCWs, DOE modeled two standards-case manufacturer markup 
scenarios to represent the uncertainty regarding the potential impacts 
on prices and profitability for manufacturers following the 
implementation of amended energy conservation standards. For the March 
2023 NOPR, DOE applied the preservation of gross margin percentage 
scenario to reflect an upper bound of industry profitability and a 
preservation of operating profit scenario to reflect a lower bound of 
industry profitability under amended standards. 88 FR 13520, 13576-
13577 DOE used these scenarios to reflect the range of realistic 
profitability impacts under more-stringent standards. Manufacturing 
more efficient RCWs is generally more expensive than manufacturing 
baseline RCWs, as reflected by the MPCs estimated in the engineering 
analysis. Under the preservation of gross margin scenario for RCWs, 
incremental increases in MPCs at higher efficiency levels result in an 
increase in per-unit dollar profit per unit sold. In interviews, 
multiple manufacturers asserted that they would likely need to reduce 
manufacturer markups under more stringent standards to remain 
competitive in the marketplace. Therefore, the preservation of gross 
margin scenario represents the upper bound of industry profitability 
under amended standards. Applying the approach used in the microwave 
ovens rulemaking (i.e., a conversion cost recovery scenario) would 
result in manufacturers increasing manufacturer markups under amended 
standards. Based on information gathered during confidential interviews 
in support of the March 2023 NOPR and a review of financial statements 
of companies engaged in manufacturing RCWs, DOE does not expect that 
the RCW industry would increase manufacturer markups as a direct result 
of amended standards absent non-energy efficiency-related features. 
Furthermore, in response to the March 2023 NOPR, DOE did not receive 
any public or confidential data indicating that industry would increase 
manufacturer markups in response to more stringent standards. 
Therefore, DOE used the two manufacturer markup scenarios from the 
March 2023 NOPR for this direct final rule analysis.
    AHAM commented that laundry products (RCWs and consumer clothes 
dryers) are designed and used in pairs. (AHAM, No. 464 at p. 44) AHAM 
encouraged DOE to issue final rules for RCWs and consumer clothes 
dryers on the same date so that the compliance dates for these products 
are aligned. (Id.) AHAM stated that there will be an additional design 
cycle for either or both clothes washers and clothes dryers if the 
effective dates for the two products are out of sync. (Id.) AHAM 
commented that the existing DOE analysis does not capture this 
situation, which creates a significant technical and financial burden 
for manufacturers. (Id.) AHAM commented that coordinated compliance 
dates would greatly reduce burden on manufacturers and retailers. (Id.)
    DOE is adopting the Recommended TSL in this direct final rule. The 
Joint Agreement included recommendations for other appliance standards 
rulemakings: RCWs; consumer clothes dryers; consumer conventional 
cooking products; dishwashers; refrigerators, refrigerator-freezers, 
and freezers; and miscellaneous refrigeration products. The signatories 
indicate that the Joint Agreement for the six rulemakings should be 
considered as a joint recommendation of standards, to be adopted in its 
entirety. (Joint Agreement, No. 505 at p. 3) The Joint Agreement 
specifies a compliance date of March 1, 2028, for both RCWs and 
consumer clothes dryers. (Id.) Therefore, DOE did not adjust its 
conversion cost estimates to account for the time and investments 
associated with an additional design cycle as DOE assumed the 
compliance dates for RCWs and consumer clothes dryers would align.
    Representatives Latta et al. urged DOE to evaluate options to 
address the cumulative regulatory impact on domestic appliance 
manufacturers of the unprecedented number of recently proposed 
standards, which also include consumer clothes dryers, consumer 
conventional cooking products, refrigerators, refrigerator-freezers, 
and freezers--with more to come. (Representatives Latta et al., No. 456 
at p. 3) Representatives Latta et al. recommended that, given the 
serious concerns and ongoing uncertainty in the market, DOE should work 
with appliance manufacturers to incorporate their feedback before 
moving to finalize new efficiency standards. (Id.)
    NMHC and NAA commented that this rulemaking comes as part of a 
series of similar rulemakings DOE is proposing to change performance 
standards for essential residential appliances. (NMHC and NAA, No. 451 
at p. 4) NMHC and NAA stated that DOE took over 100 actions related to 
energy efficiency standards in 2022 and noted that DOE's August 2021 
Report to Congress on Energy Conservation Standards Activity showed DOE 
had promulgated 71 energy conservation standards rulemakings since the 
last report in July 2019. (Id.) NMHC and NAA commented that they are 
concerned the number of changes for marginal efficiency gains will 
outpace the ability of the manufacturing sector and supplier partners 
to alleviate existing product shortages and delays, while creating new 
barriers to cost-effective and timely appliance procurement. (Id.) 
Accordingly, NMHC and NAA recommended DOE consider the collective 
impacts of these requirements. (Id.)
    AHAM also urged DOE to consider cumulative regulatory burden in its 
analysis and decision-making process. (AHAM, No. 464 at p. 41) AHAM 
commented that the nature of EPCA's requirements that energy 
conservation standards be reviewed every 6 years creates a never-ending 
cycle in which manufacturers need to constantly update or redesign 
products to meet new or amended standards. (Id.) AHAM commented that 
many home appliance rulemakings will likely have compliance dates in 
2027. (Id.) AHAM noted that the proposed levels for RCWs, 
refrigerators, refrigerator-freezers

[[Page 19075]]

and freezers, consumer conventional cooking products, miscellaneous 
refrigeration products, room air conditioners, and microwave ovens will 
require significant redesign of products. (Id. at p. 42) AHAM asserted 
that engineers will therefore need to spend all their time redesigning 
products, test technicians will spend their time conducting testing to 
support re-design and certify products, and other will speed 
significant time on business planning, marketing, labeling, etc.--
pulling resources from other development efforts. (Id.) AHAM commented 
that manufacturers will also need to re-tool factories as a result of 
standards for some of these rulemakings. (Id.) AHAM commented that 
since there is a short lead-in compliance period under EPCA and that 
compliance will likely be required in a similar timeframe, there is 
significant regulatory burden for the home appliance industry. (Id.) 
AHAM asserted that DOE's analysis does not adequately account for 
cumulative regulatory burden. (Id.) AHAM encouraged DOE to acknowledge 
the cumulative regulatory burden its proposals place on industry. (Id.) 
AHAM stated that DOE needs to acknowledge the cumulative regulatory 
burden its proposals place on industry and suggested DOE could reduce 
cumulative regulatory burden by spacing out the timing of final rules, 
allowing more lead-time by delaying the publication of final rules in 
the Federal Register after they have been issued, and reducing the 
stringency of standards such that fewer products would require 
redesign. (Id.) AHAM encouraged DOE to incorporate combined conversion 
costs across rulemakings into the GRIM in order to quantify cumulative 
regulatory burden, and to consider the potential impact of these 
rulemakings more broadly on the economy and on inflation. (Id.)
    Regarding stakeholders' requests to consider cumulative regulatory 
burden in its analysis and decision-making process, DOE analyzes 
cumulative regulatory burden in accordance with section 13(g) of the 
Process Rule. For this direct final rule, DOE examined Federal, 
product-specific regulations that could affect RCW manufacturers that 
take effect approximately 3 years before or after the 2028 compliance 
date. Table V.20 in section V.B.2.e of this document presents the DOE 
energy conservations standards that would impact manufacturers of RCWs 
in the 2025 to 2031 timeframe. As shown in Table V.20, DOE considers 
the potential cumulative regulatory burden from other DOE energy 
conservation standards rulemakings for consumer clothes dryers, 
consumer conventional cooking products, refrigerators, refrigerator-
freezers, and freezers, miscellaneous refrigeration products, room air 
conditioners, and microwave ovens in this direct final rule analysis.
    Regarding AHAM's suggestion about spacing out the timing of final 
rules for home appliance rulemakings to reduce regulatory burden, DOE 
has statutory requirements under EPCA on the timing of rulemakings. For 
RCWs, consumer clothes dryers, consumer conventional cooking products, 
dishwashers, refrigerators, refrigerator-freezers and freezers, 
miscellaneous refrigeration products, and room air conditioners, 
amended standards apply to covered products manufactured 3 years after 
the date on which any new or amended standard is published. (42 U.S.C. 
6295(m)(4)(A)(i)) For miscellaneous refrigeration products, amended 
standards apply 5 years after the date on which any new or amended 
standard is published. (42 U.S.C. 6295(l)(2)) However, the multi-
product Joint Agreement recommends alternative compliance dates. As 
discussed in section II.B.3 of this document, the Joint Agreement 
recommendations are in accordance with the statutory requirements of 42 
U.S.C. 6295(p)(4) for the issuance of a direct final rule DOE. 
Therefore, as compared to the EPCA-required lead time of 3-years, RCW 
manufacturers have more lead time to meet amended standards at the 
Recommend TSL.
    Regarding the pace of DOE's activity on energy conservation 
rulemakings, DOE has statutory requirements under EPCA on the timing of 
appliance rulemakings. For RCWs, 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)) Regarding 
incorporating the combined conversion costs across rulemakings into the 
GRIM, DOE is concerned that combined results would make it more 
difficult to discern the direct impact of the amended standard on 
covered manufacturers, particularly for rulemakings where there is only 
partial overlap of manufacturers. If DOE were to combine the conversion 
costs from multiple regulations, as requested, it would be appropriate 
to match the combined conversion costs with the combined revenues of 
the regulated products. For rulemakings with only a partial overlap of 
manufacturers, conversion costs would be spread over a larger revenue 
base and result in less severe INPV impacts when evaluated on a percent 
change basis.
    Whirlpool commented that DOE's analysis fails to consider 
significant costs to both manufacturers and consumers, as well as the 
likely diminution in market competition and product utility and 
performance. (Whirlpool, No. 462 at p. 4) Whirlpool stated that DOE 
must consider all costs that manufacturers must bear to develop and 
market products that meet the proposed standard and that the proposed 
standard will result in wholesale removal of certain products and 
features from the market.\131\ (Id.) Whirlpool commented that the 
standards proposed in the March 2023 NOPR would reduce competition by 
narrowing the range of RCWs available, including functionally phasing 
out small- and mid-size top-loading RCWs, while making it difficult to 
distinguish them based on features, such as traditional agitators. (Id. 
at p. 14) Whirlpool also expressed concern that product consolidation 
could cause industry consolidation. (Id.)
---------------------------------------------------------------------------

    \131\ DOE notes that the standards adopted in this direct final 
rule are the same as the proposed in the March 2023 NOPR for three 
of the five product classes, but are less stringent than the 
standards proposed in the March 2023 NOPR for the other two product 
classes.
---------------------------------------------------------------------------

    Fisher et al. commented that by regulating based on one or two 
characteristics, and by prioritizing energy efficiency over other 
compelling factors, DOE is stifling the free market, hindering broader 
innovation, and discouraging the production of products that consumers 
actually want to buy. (Fisher et al., No. 463 at p. 4) Fisher et al. 
commented that EPCA specifically calls for DOE to consider the impact 
of lessening competition--which is likely given the significantly 
higher standards for RCWs--and prevents the Secretary from implementing 
or amending a standard that will cause the unavailability in the United 
States of any covered product type (or class). Fisher et al. stated 
that given that DOE is proposing significantly higher standard for 
different classes of RCWs, it is possible for these regulations to 
impact competition, unintended, or otherwise.\132\ (Id. at p. 3) 
Additionally, Fisher et al. added that energy efficiency regulations 
adversely affect lower-income consumers, which is a consumer

[[Page 19076]]

subgroup that DOE targets as part of its analysis in the March 2023 
NOPR and a group already harmed by consistently high inflation. (Id. at 
p. 5) Fisher et al. commented that the proposed standards are not 
economically justified and should be thrown out stating that they have 
the potential to substantially impact competition and the availability 
of products. (Id.)
---------------------------------------------------------------------------

    \132\ DOE notes that the standards adopted in this direct final 
rule are the same as the proposed in the March 2023 NOPR for three 
of the five product classes, but are less stringent than the 
standards proposed in the March 2023 NOPR for the other two product 
classes.
---------------------------------------------------------------------------

    Regarding the impact on product utility and consumer features, DOE 
considers features that provide consumer utility in its analysis of 
energy conservation standards (see section V.B.4 of this document for 
additional details). Specifically, one of the seven statutory factors 
for prescribing amended standards for covered products, such as RCWs, 
includes evaluating the impact of potential standard levels to ensure 
that amended standards would not lessen the utility or performance of 
the considered products (see section III.E.1 of this document for a 
discussion of how DOE has addressed each of those seven factors in this 
rulemaking). Regarding the potential loss of features such as 
traditional agitators, DOE notes that the adopted standards for RCWs do 
not preclude the ability to offer agitators. See section V.B.4.c of 
this document for additional details.
    Regarding concerns that amended standards would phase out small- 
and mid-size top-loading RCWs, DOE modeled incremental increases in 
capacity for top-loading standard-size RCWs based on the most common 
design strategy currently used by manufacturers at these efficiency 
levels as well as information gathered during manufacturer interviews 
about the likely design path to improve efficiency. As discussed 
further in section V.B.4.b of this document, DOE's engineering analysis 
indicates that the efficiencies required by the Recommended TSL are 
technically achievable across the entire capacity range of top-loading 
standard-size RCWs. Therefore, while the MPCs for the top-loading 
standard-size product class reflect increases in capacity at EL 2, EL 
3, and EL 4, meeting the Recommended TSL (corresponding to EL 2 for the 
top-loading standard-size product class) is technologically feasible at 
smaller capacities. Thus, the Recommended TSL does not require 
manufacturers to increase the capacity of small- and mid-size models. 
Such units can feasibly achieve the adopted standard level through the 
use of other available design options. In chapter 5 of the direct final 
rule TSD, DOE provides example design pathways that manufacturers could 
use to achieve higher efficiency without increasing capacity as a 
design option.
    Regarding the impact on competition, DOE notes that it will provide 
DOJ with copies of this direct final rule and TSD for review to 
determine the impact, if any, of any lessening of competition likely to 
result from a standard. DOE will consider DOJ's comments on the rule in 
determining whether to withdraw the direct final rule. See section 
V.B.5 of this document for additional details. DOE also notes that the 
majority of RCW original equipment manufacturers (``OEMs'') already 
offer RCWs that meet the Recommended TSL. Of the nine OEMs with top-
loading standard-size products, six OEMs offer models that meet the 
Recommended TSL efficiencies. These six OEMs of top-loading standard-
size RCWs collectively account for over 95 percent of overall top-
loading standard-size RCW shipments. Of the seven OEMs with front-
loading standard-size products, six OEMs offer models that meet the 
Recommended TSL efficiencies. These six OEMs of front-loading standard-
size RCWs collectively account for over 98 percent of overall front-
loading standard-size RCW shipments. Given that most companies already 
offer products that meet the Recommended TSL, DOE does not anticipate 
amended standards would significantly lessen the level of competition 
in the RCW market.
    Representatives Latta et al. expressed concern about the negative 
impact of the standards proposed in the March 2023 NOPR on the U.S. 
home appliance manufacturing industry, as the TSD estimates that the 
standards proposed in the March 2023 NOPR for RCWs could eliminate 
8,121 American jobs as manufacturers reassess their production 
locations. (Representatives Latta et al., No. 456 at p. 3) 
Representatives Latta et al. commented that DOE should take no actions 
that cause harm to the domestic manufacturing industry and result in a 
significant loss of American jobs. (Id.)
    Regarding the potential for a reduction in direct employment as a 
result of amended standards, DOE notes that the standards adopted in 
this direct final rule are the same as the proposed in the March 2023 
NOPR for three of the five product classes, but are less stringent than 
the standards proposed in the March 2023 NOPR for the other two product 
classes. DOE provides a range of potential quantitative impacts to 
direct employment and a discussion of the potential qualitative impacts 
to direct employment in section V.B.2.b of this document. The upper 
bound of the direct employment analysis corresponds to an increase in 
the number of domestic workers that results from amended energy 
conservation standards if manufacturers continue to produce the same 
scope of covered products within the United States after compliance 
takes effect. To establish a conservative lower bound of direct 
employment impacts, DOE assumes all manufacturers would shift 
production to foreign countries. The estimated 8,121 domestic 
production worker jobs cited by Representatives Latta et al. reflected 
the conservative lower bound should all manufacturers move production 
facilities outside of the United States. As stated in the March 2023 
NOPR, at lower TSLs, DOE believes the likelihood of changes in 
production location due to amended standards are low due to the 
relatively minor production line updates required. Compared to the 
levels proposed in the March 2023 NOPR, DOE is adopting lower 
efficiency levels for top-loading and front-loading standard-size 
product classes. In confidential interviews conducted in advance of the 
March 2023 NOPR, DOE's contractors discussed the potential impact of 
more stringent standards on production location decisions under non-
disclosure agreements (``NDAs''). See appendix 12A of the direct final 
rule TSD for a blank copy of the interview guide. During confidential 
interviews, manufacturers did not express concerns about the need to 
relocate production facilities to remain competitive at the Recommended 
TSL (i.e., TSL 2). Nearly all OEMs already manufacture top-loading and 
front-loading standard-size RCWs that meet the adopted levels in 
domestic manufacturing facilities. Of the nine OEMs with top-loading 
standard-size products, six OEMs offer models that meet TSL 2 
efficiencies. These six OEMs that currently offer top-loading standard-
size RCW models that meet TSL 2 efficiencies collectively account for 
over 95 percent of overall top-loading standard-size RCW shipments. Of 
the seven OEMs with front-loading standard-size products, six OEMs 
offer models that meet TSL 2 efficiencies.
    Salman commented that amended standards could disproportionately 
affect small manufacturers, including training and hiring costs, and 
potentially endanger jobs. Salman further commented that ``low-
skilled'' workers would be particularly affected by this, and that 
industry consolidation may result. (Salman, No. 446 at pp. 1-2) Salman 
recommended that DOE provide financial support that helps them 
transform their machinery and retrain their workforce. (Id. at p. 2)
    DOE discusses the potential impacts of amended standards on the one 
small

[[Page 19077]]

domestic original equipment manufacturer (``OEM'') of RCWs in the NOPR 
published elsewhere in this issue of the Federal Register and chapter 
12 of the direct final rule TSD. Regarding the potential for industry 
consolidation, as discussed in section III.E.1.e of this document, DOE 
will transmit a copy of this direct final rule to the Attorney General 
with a request that DOJ provide its determination on this issue. DOE 
will consider DOJ's comments on the rule in determining whether to 
withdraw the direct final rule. DOE will also publish and respond to 
the DOJ's comments in the Federal Register in a separate document. 
Additionally, DOE analyzes the potential impacts of amended standards 
on U.S. direct employment for the overall RCW industry in section 
V.B.2.b of this document.
    Regarding the suggestion for DOE to provide financial support to 
small manufacturers, additional compliance flexibilities may be 
available to small manufacturers 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.

K. Emissions Analysis

    The emissions analysis consists of two components. The first 
component estimates the effect of potential energy conservation 
standards on power sector and site (where applicable) combustion 
emissions of CO2, NOX, SO2, and Hg. 
The second component estimates the impacts of potential standards on 
emissions of two additional greenhouse gases, CH4 and 
N2O, as well as the reductions in emissions of other gases 
due to ``upstream'' activities in the fuel production chain. These 
upstream activities comprise extraction, processing, and transporting 
fuels to the site of combustion.
    The analysis of electric power sector emissions of CO2, 
NOX, SO2, and Hg uses emissions intended to 
represent the marginal impacts of the change in electricity consumption 
associated with amended or new standards. The methodology is based on 
results published for the AEO, including a set of side cases that 
implement a variety of efficiency-related policies. The methodology is 
described in appendix 13A in the direct final rule TSD. The analysis 
presented in this document uses projections from 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).\133\
---------------------------------------------------------------------------

    \133\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed June 12, 
2022).
---------------------------------------------------------------------------

    The on-site operation of RCWs involves combustion of fossil fuels 
and results in emissions of CO2, NOX, 
SO2, CH4, and N2O where these products 
are used. Site emissions of these gases were estimated using Emission 
Factors for Greenhouse Gas Inventories and, for NOX and 
SO2, emissions intensity factors from an EPA 
publication.\134\
---------------------------------------------------------------------------

    \134\ U.S. Environmental Protection Agency. External Combustion 
Sources. In Compilation of Air Pollutant Emission Factors. AP-42. 
Fifth Edition. Volume I: Stationary Point and Area Sources. Chapter 
1. Available at www.epa.gov/air-emissions-factors-and-quantification/ap-42-compilation-air-emissions-factors#Proposed/ 
(last accessed June 12, 2022).
---------------------------------------------------------------------------

    FFC upstream emissions, which include emissions from fuel 
combustion during extraction, processing, and transportation of fuels, 
and ``fugitive'' emissions (direct leakage to the atmosphere) of 
CH4 and CO2, are estimated based on the 
methodology described in chapter 15 of the direct final rule TSD.
    The emissions intensity factors are expressed in terms of physical 
units per megawatt hour (``MWh'') or Million British Thermal Units 
(``MMBtu'') of site energy savings. For power sector emissions, 
specific emissions intensity factors are calculated by sector and end 
use. Total emissions reductions are estimated using the energy savings 
calculated in the national impact analysis.
1. Air Quality Regulations Incorporated in DOE's Analysis
    DOE's no-new-standards case for the electric power sector reflects 
the AEO, which incorporates the projected impacts of existing air 
quality regulations on emissions. 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 certain provisions of the Inflation Reduction Act.\135\
---------------------------------------------------------------------------

    \135\ 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. Available at www.eia.gov/outlooks/aeo/assumptions/ (last accessed June 24, 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.\136\ 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, for states subject to SO2 
emissions limits under CSAPR, 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.
---------------------------------------------------------------------------

    \136\ CSAPR requires states to address annual emissions of 
SO2 and NOX, precursors to the formation of 
fine particulate matter (``PM2.5'') pollution, in order 
to address the interstate transport of pollution with respect to the 
1997 and 2006 PM2.5 National Ambient Air Quality 
Standards (``NAAQS''). CSAPR also requires certain states to address 
the ozone season (May-September) emissions of NOX, a 
precursor to the formation of ozone pollution, in order to address 
the interstate transport of ozone pollution with respect to the 1997 
ozone NAAQS. 76 FR 48208 (Aug. 8, 2011). EPA subsequently issued a 
supplemental rule that included an additional five states in the 
CSAPR ozone season program; 76 FR 80760 (Dec. 27, 2011) 
(Supplemental Rule), and EPA issued the CSAPR Update for the 2008 
ozone NAAQS. 81 FR 74504 (Oct. 26, 2016).
---------------------------------------------------------------------------

    However, beginning in 2016, SO2 emissions began to fall 
as a result of the Mercury and Air Toxics Standards (``MATS'') for 
power plants.\137\ 77 FR 9304 (Feb. 16, 2012). The final rule 
establishes power plant emission standards for mercury, acid gases, and 
non-mercury metallic toxic pollutants. 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

[[Page 19078]]

permit offsetting increases in SO2 emissions by another 
regulated EGU. Therefore, energy conservation standards that decrease 
electricity generation will generally reduce SO2 emissions. 
DOE estimated SO2 emissions reduction using emissions 
factors based on AEO2023.
---------------------------------------------------------------------------

    \137\ In order to continue operating, coal power plants must 
have either flue gas desulfurization or dry sorbent injection 
systems installed. Both technologies, which are used to reduce acid 
gas emissions, also reduce SO2 emissions.
---------------------------------------------------------------------------

    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. Depending on the configuration of the power sector in the 
different regions and the need for allowances, however, NOX 
emissions might not remain at the limit in the case of lower 
electricity demand. That would mean that 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. Standards would be expected to reduce 
NOX emissions in the States not covered by CSAPR. DOE used 
AEO2023 data to derive NOX emissions factors for the group 
of States not covered by CSAPR.
    The MATS limit mercury emissions from power plants, but they do not 
include emissions caps and, as such, DOE's energy conservation 
standards would be expected to slightly reduce Hg emissions. DOE 
estimated mercury emissions reduction using emissions factors based on 
AEO2023, which incorporates the MATS.

L. Monetizing Emissions Impacts

    As part of the development of this direct final rule, for the 
purpose of complying with the requirements of Executive Order 12866, 
DOE considered the estimated monetary benefits from the reduced 
emissions of CO2, CH4, N2O, 
NOX, and SO2 that are expected to result from 
each of the TSLs considered. In order to make this calculation 
analogous to the calculation of the NPV of consumer benefit, DOE 
considered the reduced emissions expected to result over the lifetime 
of products shipped in the projection period for each TSL. This section 
summarizes the basis for the values used for monetizing the emissions 
benefits and presents the values considered in this direct final rule.
    To monetize the benefits of reducing 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.
1. Monetization of Greenhouse Gas Emissions
    DOE estimates the monetized benefits of the reductions in emissions 
of CO2, CH4, and N2O by using a 
measure of the SC of each pollutant (e.g., SC-CO2). These 
estimates represent the monetary value of the net harm to society 
associated with a marginal increase in emissions of these pollutants in 
a given year, or the benefit of avoiding that increase. These estimates 
are intended to include (but are not limited to) climate-change-related 
changes in net agricultural productivity, human health, property 
damages from increased flood risk, disruption of energy systems, risk 
of conflict, environmental migration, and the value of ecosystem 
services.
    DOE exercises its own judgment in presenting monetized climate 
benefits as required by applicable Executive orders, and DOE would 
reach the same conclusion presented in this direct final rule in the 
absence of the social cost of greenhouse gases. That is, the social 
costs of greenhouse gases, whether measured using the February 2021 
interim estimates presented by the Interagency Working Group on the 
Social Cost of Greenhouse Gases or by another means,\138\ did not 
affect the rule ultimately adopted by DOE.
---------------------------------------------------------------------------

    \138\ See section IV.L.3 of this document which describes the 
sensitivity analysis DOE conducted using EPA's updated 2023 SC-GHG 
estimates.
---------------------------------------------------------------------------

    DOE estimated the global social benefits of CO2, 
CH4, and N2O reductions using SC-GHG values that 
were based on the interim values 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''). The SC-GHG 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, the SC-GHG 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-GHG therefore, reflects the societal value of reducing emissions 
of the gas in question by one metric ton. The SC-GHG 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 for this rule, which was developed using the interim estimates. 
DOE continues to evaluate recent developments in the scientific 
literature, including the updated 2023 SC-GHG estimates published by 
EPA in December 2023 within their rulemaking on oil and natural gas 
sector sources.\139\
---------------------------------------------------------------------------

    \139\ Available at www.epa.gov/system/files/documents/2023-12/eo12866_oil-and-gas-nsps-eg-climate-review-2060-av16-final-rule-20231130.pdf.
---------------------------------------------------------------------------

    The SC-GHG estimates presented here were developed over many years, 
using transparent process, peer-reviewed methodologies, the best 
science available at the time of that process, and with input from the 
public. Specifically, in 2009, the IWG, which included 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

[[Page 19079]]

al.\140\ and underwent a standard double-blind peer review process 
prior to journal publication. In 2015, as part of the response to 
public comments received to a 2013 solicitation for comments on the SC-
CO2 estimates, the IWG announced a National Academies of 
Sciences, Engineering, and Medicine review of the SC-CO2 
estimates to offer advice on how to approach future updates to ensure 
that the estimates continue to reflect the best available science and 
methodologies. In January 2017, the National Academies released their 
final report, Valuing Climate Damages: Updating Estimation of the 
Social Cost of Carbon Dioxide, and recommended specific criteria for 
future updates to the SC-CO2 estimates, a modeling framework 
to satisfy the specified criteria, and both near-term updates and 
longer-term research needs pertaining to various components of the 
estimation process.\141\ Shortly thereafter, in March 2017, President 
Trump issued Executive Order 13783, which disbanded the IWG, withdrew 
the previous TSDs, and directed agencies to ensure SC-CO2 
estimates used in regulatory analyses are consistent with the guidance 
contained in OMB's Circular A-4, ``including with respect to the 
consideration of domestic versus international impacts and the 
consideration of appropriate discount rates'' (E.O. 13783, section 
5(c)). Benefit-cost analyses following E.O. 13783 used SC-GHG estimates 
that attempted to focus on the U.S.-specific share of climate change 
damages as estimated by the models and were calculated using two 
discount rates recommended by Circular A-4, 3 percent and 7 percent. 
All other methodological decisions and model versions used in SC-GHG 
calculations remained the same as those used by the IWG in 2010 and 
2013, respectively.
---------------------------------------------------------------------------

    \140\ Marten, A. L., E. A. Kopits, C. W. Griffiths, S. C. 
Newbold, and A. Wolverton. Incremental CH4 and 
N2O mitigation benefits consistent with the U.S. 
Government's SC-CO2 estimates. Climate Policy. 2015. 
15(2): pp. 272-298.
    \141\ 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. 
Available at nap.nationalacademies.org/catalog/24651/valuing-climate-damages-updating-estimation-of-the-social-cost-of.
---------------------------------------------------------------------------

    On January 20, 2021, President Biden issued Executive Order 13990, 
which re-established the IWG and directed it to ensure that the U.S. 
Government's estimates of the social cost of carbon and other 
greenhouse gases reflect the best available science and the 
recommendations 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 
rulemaking. The E.O. instructs the IWG to undertake a fuller update of 
the SC-GHG estimates that takes into consideration the advice in 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 an efficient allocation of resources for emissions 
reduction on a global basis--and so benefit the U.S. and its citizens--
is for all countries to base their policies on global estimates of 
damages. As a member of the IWG involved in the development of the 
February 2021 SC-GHG TSD, DOE agrees with this assessment and, 
therefore, in this 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 SC-GHG TSD, 
existing estimates are both incomplete and an underestimate of total 
damages that accrue to the citizens and residents of the U.S. because 
they do not fully capture the regional interactions and spillovers 
discussed above, nor do they include all of the important physical, 
ecological, and economic impacts of climate change recognized in the 
climate change literature. As noted in the February 2021 SC-GHG TSD, 
the IWG will continue to review developments in the literature, 
including more robust methodologies for estimating a U.S.-specific SC-
GHG value, and explore ways to better inform the public of the full 
range of carbon impacts. As a member of the IWG, DOE will continue to 
follow developments in the literature pertaining to this issue.
    Second, the IWG found that the use of the social rate of return on 
capital (7 percent under current OMB Circular A-4 guidance) to discount 
the future benefits of reducing GHG emissions inappropriately 
underestimates the impacts of climate change for the purposes of 
estimating the SC-GHG. Consistent with the findings of the National 
Academies 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,\142\ and recommended 
that

[[Page 19080]]

discount rate uncertainty and relevant aspects of intergenerational 
ethical considerations be accounted for in selecting future discount 
rates.
---------------------------------------------------------------------------

    \142\ Interagency Working Group on Social Cost of Carbon. Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866. 2010. United States Government. Available at: www.epa.gov/sites/default/files/2016-12/documents/scc_tsd_2010.pdf (last 
accessed April 15, 2022); Interagency Working Group on Social Cost 
of Carbon. Technical Update of the Social Cost of Carbon for 
Regulatory Impact Analysis Under Executive Order No. 12866. 78 FR 
70586 (November 16, 2013). Available at: www.federalregister.gov/documents/2013/11/26/2013-28242/technical-support-document-technical-update-of-the-social-cost-of-carbon-for-regulatory-impact 
(last accessed April 15, 2022); Interagency Working Group on Social 
Cost of Greenhouse Gases, United States Government. Technical 
Support Document: Technical Update on the Social Cost of Carbon for 
Regulatory Impact Analysis-Under Executive Order 12866. August 2016. 
Available at: www.epa.gov/sites/default/files/2016-12/documents/sc_co2_tsd_august_2016.pdf (last accessed January 18, 2022); 
Interagency Working Group on Social Cost of Greenhouse Gases, United 
States Government. Addendum to Technical Support Document on Social 
Cost of Carbon for Regulatory Impact Analysis under Executive Order 
12866: Application of the Methodology to Estimate the Social Cost of 
Methane and the Social Cost of Nitrous Oxide. August 2016. Available 
at: www.epa.gov/sites/default/files/2016-12/documents/addendum_to_sc-ghg_tsd_august_2016.pdf (last accessed January 18, 
2022).
---------------------------------------------------------------------------

    Furthermore, the damage estimates developed for use in the SC-GHG 
are estimated in consumption-equivalent terms, and so an application of 
OMB Circular A-4's guidance for regulatory analysis would then use the 
consumption discount rate to calculate the SC-GHG. DOE agrees with this 
assessment and will continue to follow developments in the literature 
pertaining to this issue. DOE also notes that while OMB Circular A-4, 
as published in 2003, recommends using 3-percent and 7-percent discount 
rates as ``default'' values, Circular A-4 also reminds agencies that 
``different regulations may call for different emphases in the 
analysis, depending on the nature and complexity of the regulatory 
issues and the sensitivity of the benefit and cost estimates to the key 
assumptions.'' On discounting, Circular A-4 recognizes that ``special 
ethical considerations arise when comparing benefits and costs across 
generations,'' and Circular A-4 acknowledges that analyses may 
appropriately ``discount future costs and consumption benefits. . .at a 
lower rate than for intragenerational analysis.'' In the 2015 Response 
to Comments on the Social Cost of Carbon for Regulatory Impact 
Analysis, OMB, DOE, and the other IWG members recognized that 
``Circular A-4 is a living document'' and ``the use of 7 percent is not 
considered appropriate for intergenerational discounting. There is wide 
support for this view in the academic literature, and it is recognized 
in Circular A-4 itself.'' Thus, DOE concludes that a 7-percent discount 
rate is not appropriate to apply to value the social cost of greenhouse 
gases in the analysis presented 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 SC-GHG 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 
[regulatory impact analyses] with other cost and benefits estimates 
that may use different discount rates.'' The National Academies 
reviewed several options, including ``presenting all discount rate 
combinations of other costs and benefits with [SC-GHG] estimates.''
    As a member of the IWG involved in the development of the February 
2021 SC-GHG TSD, DOE agrees with the above assessment and will continue 
to follow developments in the literature pertaining to this issue. 
While the IWG works to assess how best to incorporate the latest, peer 
reviewed science to develop an updated set of SC-GHG estimates, it set 
the interim estimates to be the most recent estimates developed by the 
IWG prior to the group being disbanded in 2017. The estimates rely on 
the same models and harmonized inputs and are calculated using a range 
of discount rates. As explained in the February 2021 SC-GHG TSD, the 
IWG has recommended that agencies revert to the same set of four values 
drawn from the SC-GHG distributions based on three discount rates as 
were used in regulatory analyses between 2010 and 2016 and were subject 
to public comment. For each discount rate, the IWG combined the 
distributions across models and socioeconomic emissions scenarios 
(applying equal weight to each) and then selected a set of four values 
recommended for use in benefit-cost analyses: an average value 
resulting from the model runs for each of three discount rates (2.5 
percent, 3 percent, and 5 percent), plus a fourth value, selected as 
the 95th percentile of estimates based on a 3 percent discount rate. 
The fourth value was included to provide information on potentially 
higher-than-expected economic impacts from climate change. As explained 
in the February 2021 SC-GHG TSD, and DOE agrees, this update reflects 
the immediate need to have an operational SC-GHG for use in regulatory 
benefit-cost analyses and other applications that was developed using a 
transparent process, peer-reviewed methodologies, and the science 
available at the time of that process. Those estimates were subject to 
public comment in the context of dozens of proposed rulemakings as well 
as in a dedicated public comment period in 2013.
    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.\143\ 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 SC-GHG TSD, the IWG has recommended 
that, taken together, the limitations suggest that the interim SC-GHG 
estimates used in this direct final rule likely underestimate the 
damages from GHG emissions. DOE concurs with this assessment.
---------------------------------------------------------------------------

    \143\ Interagency Working Group on Social Cost of Greenhouse 
Gases. 2021. Technical Support Document: Social Cost of Carbon, 
Methane, and Nitrous Oxide Interim Estimates under Executive Order 
13990. February. United States Government. Available at 
www.whitehouse.gov/briefing-room/blog/2021/02/26/a-return-to-science-evidence-based-estimates-of-the-benefits-of-reducing-climate-pollution/.
---------------------------------------------------------------------------

    DOE's derivations of the SC-CO2, SC-N2O, and 
SC-CH4 values used for this direct final rule are discussed 
in the following sections, and the results of DOE's analyses estimating 
the benefits of the reductions in emissions of these GHGs are presented 
in section V.B.6 of this document.
a. Social Cost of Carbon
    The SC-CO2 values used for this direct final rule were 
based on the values developed for the February 2021 SC-GHG TSD, which 
are shown in Table IV.23 in five-year increments from 2020 to 2050. The 
set of annual values that DOE used, which was adapted from estimates 
published by EPA,\144\ is

[[Page 19081]]

presented in appendix 14A of the direct final rule 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.
---------------------------------------------------------------------------

    \144\ 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).

                    Table IV.23--Annual SC-CO Values From 2021 Interagency Update, 2020-2050
                                            [2020$ per Metric Ton CO]
----------------------------------------------------------------------------------------------------------------
                                                                    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 gross domestic product (``GDP'') from the Bureau of 
Economic Analysis. To calculate a present value of the stream of 
monetary values, DOE discounted the values in each of the four cases 
using the specific discount rate that had been used to obtain the SC-
CO2 values in each case.
    For this direct final rule, DOE considered comments it had received 
regarding its approach for monetizing greenhouse gas emissions in the 
March 2023 NOPR. The approach used for this direct final rule is 
largely the same as the approach DOE had used for the March 2023 NOPR 
analysis.
    In response to the March 2023 NOPR, the AGs of TN et al. commented 
that DOE's misguided use of the SC-GHG estimates is a significant 
problem with the proposed standards. (AGs of TN et al., No. 438 at p. 
1) The AGs of TN et al. attached as evidence their comment letter in 
response to DOE's proposed standards for consumer conventional cooking 
products, in which they expressed detailed concerns about the IWG 
estimates. The AGs of TN et al. noted that the reversal of the 
preliminary injunction that a coalition of States received in Louisiana 
v. Biden, 585 F. Supp. 3d 840 (W.D. La. 2022) does not change the 
criticisms in the aforementioned comment letter. (AGs of TN et al., No. 
438 at p. 2)
    CEI reiterated its comments in response to a NOPR for residential 
furnaces published on July 7, 2022, which noted numerous flaws with the 
IWG 2021 estimates, nearly all of which serve to overstate the 
calculated benefits of avoided emissions. CEI commented that IWG used 
improperly low discount rates, relied on climate models that have 
consistently overstated actual warming and on baseline emission 
scenarios that assume an increasingly coal-centric global energy system 
through 2100 and beyond, while downplaying the capacity for adaptation 
to mitigate climate impacts. (CEI, No. 454 at pp. 6-7) CEI stated the 
other questionable assumptions, including the claimed climate benefits 
out 300 years into the future and the use of global rather than 
national benefits, are skewed toward inflating the end result. (Id. at 
p. 7)
    Fisher et al. commented that researchers at the Heritage Foundation 
found that under very reasonable assumptions, these models can offer a 
plethora of different estimates of the social cost of carbon (``SCC''), 
ranging from extreme damages to overall benefits. Fisher et al. stated 
that this research makes it apparent that the vast potential estimates 
of the SCC suggest that the economic impact of climate change is highly 
questionable. Fisher et al. commented that the variability in the SCC 
that is used to justify this rule renders the rule as arbitrary and 
capricious. (Fisher et al., No. 463 at p. 6)
    Strauch stated that the social cost of carbon is a dubious concept, 
suggesting that its validity is increasingly doubted due to 
discrepancies between climate models and observed temperatures. 
(Strauch, No. 430 at p. 3)
    DOE notes that the standards in this direct final rule are not 
based on the SC-GHG and that DOE would issue the same standards even in 
the absence of the climate benefits.
    The IWG's SC-GHG estimates were developed over many years, using a 
transparent process, peer-reviewed methodologies, the best science 
available at the time of that process, and with input from the public. 
A number of criticisms raised in the comment letter attached by the AGs 
of TN et al. were addressed by the IWG in its February 2021 SC-GHG TSD, 
and previous parts of this section summarized the IWG's conclusions on 
key issues, including the question of discount rates cited by CEI. The 
IWG's 2016 TSD and the 2017 National Academies report provide detailed 
discussions of the ways in which the modeling underlying the 
development of the SC-GHG estimates addressed quantified sources of 
uncertainty. In the February 2021 SC-GHG TSD, the IWG stated that the 
models used to produce the interim estimates do not include all of the 
important physical, ecological, and economic impacts of climate change 
recognized in the climate change literature. For these same impacts, 
the science underlying their ``damage functions'' lags behind the most 
recent research. In the judgment of the IWG, these and other 
limitations suggest that the range of four interim SC-GHG estimates 
presented in the TSD likely underestimate societal damages from GHG 
emissions. The IWG is in the

[[Page 19082]]

process of assessing how best to incorporate the latest peer-reviewed 
science and the recommendations of the National Academies to develop an 
updated set of SC-GHG estimates.
    AHAM objected to DOE using the social cost of carbon and other 
monetization of emissions reductions benefits in its analysis of the 
factors EPCA requires DOE to balance in determining the appropriate 
standard. AHAM stated that while it may be acceptable for DOE to 
continue its current practice of examining the social cost of carbon 
and monetization of other emissions reductions benefits as 
informational so long as the underlying interagency analysis is 
transparent and vigorous, the monetization analysis should not impact 
the TSL DOE selects as a new or amended standard. AHAM commented that 
it is inappropriate for DOE to rely upon the highly subjective and 
ever-changing monetization estimates in justifying an energy 
conservation standard. (AHAM, No. 464 at p. 46) Additionally, AHAM 
stated they do not necessarily object to DOE considering the benefits, 
they object to DOE relying upon those benefits to justify a rule given 
the uncertain and ever-evolving nature of those estimates. AHAM 
commented that EPCA requires DOE to balance the factors, such that DOE 
must consider EPCA's factors together and achieve a balance of impacts 
and benefits. (Id.)
    The AGs of TN et al. stated that the rote application of the IWG 
estimates is inappropriate. (AGs of TN et al., No. 438 at p. 2) The AGs 
of TN et al. stated that even if it is important to take into account 
emissions reductions when considering the need for national energy 
conservation, the IWG estimates are unlawful and poor methods for doing 
so. The AGs of TN et al. commented that the IWG's SC-GHG estimates are 
fundamentally flawed and are an unreliable metric on which to base 
administrative action. The AGs of TN et al. requested that DOE revisit 
its reliance on those numbers in this and other standards. (Id.)
    As stated in section III.F.1.f of this document, DOE accounts for 
the environmental and public health benefits associated with the more 
efficient use of energy, including those connected to global climate 
change, as they are important to take into account when considering the 
need for national energy conservation. (See 42 U.S.C. 
6295(o)(2)(B)(i)(IV)) In addition, Executive Order 13563, which was re-
affirmed on January 21, 2021, stated that each agency must, among other 
things: ``select, in choosing among alternative regulatory approaches, 
those approaches that maximize net benefits (including potential 
economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity).'' For these reasons, DOE 
includes the monetized value of emissions reductions in its evaluation 
of potential standard levels. While the benefits associated with 
reduction of GHG emissions inform DOE's evaluation of potential 
standards, the action of proposing or adopting specific standards is 
not ``based on'' the SC-GHG values, as DOE would reach the same 
conclusion regarding the economic justification of standards presented 
in this direct final rule without considering the social cost of 
greenhouse gases. At the Recommended TSL, the average LCC savings for 
all product classes is positive. In addition, 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. Even when measured 
at the more conservative discount rate of 7 percent, the NPV of 
consumer benefits is over 11 times higher than the maximum estimated 
manufacturers' loss in INPV.
    Fisher et al. commented that even assuming the climate has the 
highest sensitivity to CO2 emissions under the variety of 
possibilities envisioned by the Intergovernmental Panel on Climate 
Change (``IPCC''), the proposed standards do not have any tangible 
impacts on global temperatures, and therefore the DOE should refrain 
from considering environmental impacts in its assessment of the 
proposed standards. (Fisher et al., No. 463 at p. 7)
    In the context of global CO2 emissions, any single 
policy action is likely to have a relatively small impact. As long as 
that impact can be quantified in a reasonable manner, however, it is 
consistent with sound regulatory analysis to include such impacts. As 
noted above, while the benefits associated with reduction of GHG 
emissions inform DOE's evaluation of potential standards, the action of 
proposing or adopting specific standards is not ``based on'' the SC-GHG 
values, as DOE would reach the same conclusion regarding the economic 
justification of standards presented in this direct final rule without 
considering the social cost of greenhouse gases.
b. Social Cost of Methane and Nitrous Oxide
    The SC-CH4 and SC-N2O values used for this 
direct final rule were based on the values developed for the February 
2021 SC-GHG TSD. Table IV.24 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 direct final 
rule TSD. To capture the uncertainties involved in regulatory impact 
analysis, DOE has determined it is appropriate to include all four sets 
of SC-CH4 and SC-N2O values, as recommended by 
the IWG. DOE derived values after 2050 using the approach described 
above for the SC-CO2.

                                           Table IV.24--Annual SC-CH4 and SC-N2O Values From 2021 Interagency Update, 2020-2050 (2020$ per Metric Ton)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              SC-CH4                                                          SC-N2O
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                                    Discount Rate and Statistic                                     Discount Rate and Statistic
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                              Year                                      5%              3%             2.5%             3%              5%              3%             2.5%             3%
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       95th                                                            95th
                                                                      Average         Average         Average       percentile        Average         Average         Average       percentile
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2020............................................................             670            1500            2000            3900            5800           18000           27000           48000
2025............................................................             800            1700            2200            4500            6800           21000           30000           54000
2030............................................................             940            2000            2500            5200            7800           23000           33000           60000
2035............................................................            1100            2200            2800            6000            9000           25000           36000           67000
2040............................................................            1300            2500            3100            6700           10000           28000           39000           74000
2045............................................................            1500            2800            3500            7500           12000           30000           42000           81000
2050............................................................            1700            3100            3800            8200           13000           33000           45000           88000
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19083]]

    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.
c. Sensitivity Analysis Using Updated 2023 SC-GHG Estimates
    In December 2023, EPA issued a new set of SC-GHG (``2023 SC-GHG'') 
estimates in connection with a final rulemaking under the Clean Air 
Act.\145\ For this rulemaking, DOE used these updated 2023 SC-GHG 
values to conduct a sensitivity analysis of the value of GHG emissions 
reductions associated with alternative standards for RCWs. This 
sensitivity analysis provides an expanded range of potential climate 
benefits associated with amended standards. The final year of the 2023 
SC-GHG estimates is 2080; therefore, DOE did not monetize the climate 
benefits of GHG emissions reductions occurring after 2080.
---------------------------------------------------------------------------

    \145\ Available at: www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------

    The overall climate benefits are larger when using the higher, 
updated 2023 SC-GHG estimates, compared to the climate benefits using 
the older IWG SC-GHG estimates. However, DOE's conclusion that the 
standards are economically justified remains the same regardless of 
which SC-GHG estimates are used.
    The results of the sensitivity analysis are presented in appendix 
14C of the direct final rule TSD.
2. Monetization of Other Emissions Impacts
    For this direct final rule, DOE estimated the monetized value of 
NOX and SO2 emissions reductions from electricity 
generation using benefit per ton estimates for that sector from the 
EPA's Benefits Mapping and Analysis Program.\146\ DOE used EPA's values 
for PM2.5-related benefits associated with NOX 
and SO2 and for ozone-related benefits associated with 
NOX for 2025 and 2030, and 2040, calculated with discount 
rates of 3 percent and 7 percent. DOE used linear interpolation to 
define values for the years not given in the 2025 to 2040 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 direct final rule TSD).
---------------------------------------------------------------------------

    \146\ 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. 
Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

    DOE also estimated the monetized value of NOX and 
SO2 emissions reductions from site use of natural gas in 
RCWs using benefit per ton estimates from the EPA's Benefits Mapping 
and Analysis Program. Although none of the sectors covered by EPA 
refers specifically to residential and commercial buildings, the sector 
called ``area sources'' would be a reasonable proxy for residential and 
commercial buildings.\147\ The EPA document provides high and low 
estimates for 2025 and 2030 at 3- and 7-percent discount rates.\148\ 
DOE used the same linear interpolation and extrapolation as it did with 
the values for electricity generation.
---------------------------------------------------------------------------

    \147\ ``Area sources'' represents all emission sources for which 
states do not have exact (point) locations in their emissions 
inventories. Because exact locations would tend to be associated 
with larger sources, ``area sources'' would be fairly representative 
of small dispersed sources like homes and businesses.
    \148\ ``Area sources'' are a category in the 2018 document from 
EPA, but are not used in the 2021 document cited previously. 
Available at www.epa.gov/sites/default/files/2018-02/documents/sourceapportionmentbpttsd_2018.pdf.
---------------------------------------------------------------------------

    DOE multiplied the site emissions reduction (in tons) in each year 
by the associated $/ton values, and then discounted each series using 
discount rates of 3 percent and 7 percent as appropriate.

M. Utility Impact Analysis

    The utility impact analysis estimates 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 
direct final rule TSD.
    The output of this analysis is a set of time-dependent coefficients 
that capture the change in electricity generation, primary fuel 
consumption, installed capacity and power sector emissions due to a 
unit reduction in demand for a given end use. These coefficients are 
multiplied by the stream of electricity savings calculated in the NIA 
to provide estimates of selected utility impacts of potential new or 
amended energy conservation standards.

N. Employment Impact Analysis

    DOE considers employment impacts in the domestic economy as one 
factor in selecting a standard. Employment impacts from new or amended 
energy conservation standards include both direct and indirect impacts. 
Direct employment impacts are any changes in the number of employees of 
manufacturers of the products subject to standards, 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 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.\149\ There are many reasons for these 
differences, including wage differences and the fact that the utility 
sector is more capital-

[[Page 19084]]

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

    \149\ 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/resources/methodologies/RIMSII-user-guide (last accessed July 1, 
2021).
---------------------------------------------------------------------------

    DOE estimated indirect national employment impacts for the standard 
levels considered in this direct final rule using an input/output model 
of the U.S. economy called Impact of Sector Energy Technologies version 
4 (``ImSET'').\150\ 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.
---------------------------------------------------------------------------

    \150\ Livingston, O. V., S. R. Bender, M. J. Scott, and R. W. 
Schultz. ImSET 4.0: Impact of Sector Energy Technologies Model 
Description and User's Guide. 2015. Pacific Northwest National 
Laboratory: Richland, WA. PNNL-24563.
---------------------------------------------------------------------------

    DOE notes that ImSET is not a general equilibrium forecasting 
model, and that the uncertainties involved in projecting employment 
impacts, especially changes in the later years of the analysis. Because 
ImSET does not incorporate price changes, the employment effects 
predicted by ImSET may over-estimate actual job impacts over the long 
run for this rule. Therefore, DOE used ImSET only to generate results 
for near-term timeframes (2027-2031), where these uncertainties are 
reduced. For more details on the employment impact analysis, see 
chapter 16 of the direct final rule TSD.

O. Regulatory Impact Analysis

    For any regulatory action that the Administrator of the Office of 
Information and Regulatory Affairs (``OIRA'') within OMB determines is 
a significant regulatory action under section 3(f)(1) of E.O. 12866, 
section 6(a)(3)(C) of E.O. 12866 requires Federal agencies to provide 
an assessment, including the underlying analysis, of costs and benefits 
of potentially effective and reasonably feasible alternatives to the 
planned regulation, identified by the agencies or the public (including 
improving the current regulation and reasonably viable non-regulatory 
actions), and an explanation why the planned regulatory action is 
preferable to the identified potential alternatives. 58 FR 51735, 
51741. As discussed further in section VII.A of this document, OIRA has 
determined that this final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f)(1) 
of E.O. 12866, as amended by E.O. 14094. Accordingly, DOE conducted a 
regulatory impact analysis (``RIA'') for this direct final rule.
    As part of the RIA, DOE identifies major alternatives to standards 
that represent feasible policy options to reduce the energy and water 
consumption of the covered product. DOE evaluates each alternative in 
terms of its ability to achieve significant energy and water savings at 
a reasonable cost, and compares the effectiveness of each alternative 
to the effectiveness of the finalized standard. DOE recognizes that 
voluntary or other non-regulatory efforts by manufacturers, utilities, 
and other interested parties can substantially affect energy and water 
efficiency or reduce energy and water consumption. DOE bases its 
assessment on the recorded impacts of any such initiatives to date, but 
also considers information presented by interested parties regarding 
the impacts current initiatives may have in the future. Further details 
regarding the RIA are provided in chapter 17 of the direct final rule 
TSD.
    NMHC and NAA commented that the proposed rulemaking accompanies a 
series of similar rulemakings DOE is proposing, all seeking to change 
the performance standards for essential residential appliances. (NMHC 
and NAA, No. 451 at p. 4) NMHC and NAA recommended that DOE consider 
the collective impacts of these requirements and recognize that, in 
practice, the effect of individual pricing increases is magnified when 
housing providers must manage cost escalations across multiple products 
at once. (Id.)
    While EPCA does not specifically require DOE to consider the 
cumulative burden of standards on appliance purchasers when evaluating 
the economic justification of specific standards, DOE is sympathetic to 
the potential for such a burden. DOE is aware that the compliance dates 
of revised standards for a number of major appliances (clothes washers, 
consumer clothes dryers, dishwashers, and consumer conventional cooking 
products) are in 2027 or 2028, and those for refrigerators are in 2029 
or 2030. However, consumers' replacement of older appliances with 
standards-compliant ones would occur gradually over time. In addition, 
the incremental cost increase of the adopted standards is relatively 
small on a percentage basis for most of these appliances.
    Strauch commented that DOE's analysis does not appear to address 
the cumulative regulatory burden on consumers, commenting that consumer 
choice is diminished as many rulemakings are being pushed out in a 
short time frame. (Strauch, No. 430 at p. 3) Salman commented that DOE 
providing vouchers to low-income families to purchase new, energy 
efficient RCWs could lower the short-term cost barrier and facilitate 
wider adoption of sustainable laundry solutions. (Salman, No. 446 at p. 
2)
    AWE recommended that the Federal Government increase funding, 
rebates, direct install programs, tax credits, and other incentives to 
replace older, less-efficient RCWs. (AWE, No. 444 at p. 6) AWE 
recommended that DOE use whatever authorities and funding available to 
help minimize additional up-front costs for consumers and accelerate 
the replacement of older RCWs. (Id.) AWE stated that, according to data 
from the REU 2016 study, rebates offered by local water utilities for 
RCWs have resulted in significant water savings since 1999. (Id.)
    As discussed, E.O. 12866 directs DOE to assess potentially 
effective and reasonably feasible alternatives to the planned 
regulation, and to provide an explanation why the planned regulatory 
action is preferable to the identified potential alternatives. As part 
of the RIA, DOE analyzed five non-regulatory policy alternatives to the 
finalized standards for RCWs, including consumer rebates, consumer tax 
credits, manufacturer tax credits, voluntary energy efficiency targets, 
and bulk government purchases. The energy saving benefits from the 
alternative policies, range from 0.01 percent to 9.5 percent of the 
benefits from the Recommended TSL. Chapter 17 of the direct final rule 
TSD provides DOE's analysis of the impacts of these alternatives to the 
planned regulation.
    Notwithstanding the requirements of E.O. 12866, as discussed, DOE 
is required by EPCA to establish or amend standards for a covered 
product that are designed to achieve the maximum improvement in energy 
efficiency, which the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6295(o)(2)(A)) DOE has 
determined that amended standards enacted by this direct final rule 
achieve the maximum

[[Page 19085]]

improvement in energy efficiency that is technologically feasible and 
economically justified.

P. Other Comments

    As discussed previously, DOE considered relevant comments, data, 
and information obtained during its own rulemaking process in 
determining whether the recommended standards from the Joint Agreement 
are in accordance with 42 U.S.C. 6295(o). And while some of those 
comments were directed at specific aspects of DOE's analysis of the 
Joint Agreement under 42 U.S.C. 6295(o), others were more generally 
applicable to DOE's energy conservation standards rulemaking program as 
a whole. The ensuing discussion focuses on these general comments 
concerning energy conservation standards issued under EPCA.
1. Commerce Clause
    The AGs of TN et al. commented that DOE's approach to Congress's 
Commerce Clause is improper because precedent dictates that Congress 
can only regulate intrastate activity under the Commerce Clause when 
that activity ``substantially affects interstate commerce.'' (AGs of TN 
et al., No. 438 at p. 3) The AGs of TN et al. commented that for the 
proposed standards to reach the intrastate market for RCWs, DOE must 
show that the intrastate activity covered by 42 U.S.C. 6291(17) and 
6302(5) substantially affects the interstate market for those products 
and the proposed standards show no constitutional basis for applying 
the standards to intrastate commerce in RCWs. (Id. at pp. 3-4) The AGs 
of TN et al. added that if such an analysis showed the intrastate 
market did not substantially affect the interstate market (and so was 
not properly the subject of Federal regulation), then DOE would be 
obligated to redo its cost-benefit analysis since the proposed 
standards would apply to a more limited set of products--those 
traveling interstate. Additionally, the AGs of TN et al. stated that 
even if DOE finds that intrastate commerce in clothes washers 
substantially affects interstate commerce, it should still exclude 
purely intrastate activities from any promulgated standard. (Id. at p. 
4)
    The AGs of TN et al. commented that the involvement of water 
conservation and water efficiency adds to the issue. (Id.) The AGs of 
TN et al. cited two cases involving State water rights and commented 
that because the proposed standards regulate water use, they trench on 
the States' authority in that area. (Id.) The AGs of TN et al. 
commented that since the proposed standards involve the regulation of 
consumer goods and water use, fields traditionally belonging to the 
States, it suggests that EPCA does not provide DOE such sweeping 
authority. (Id. at p. 5) The AGs of TN et al. commented that all 
intrastate activity should be excluded from the proposed standards, 
even if such activity substantially affects interstate commerce in 
RCWs. (Id.)
    New York State Public Service Commission (``NYS PSC'') recommended 
that DOE reject arguments from commenters who suggest that DOE lacks 
the authority to implement the proposed standards for RCWs, stating 
that (1) the United States Constitution empowers Congress, and (2) 
violate the concept of the separation of powers. (NYS PSC, No. 450 at 
p. 4) NYS PSC stated that the U.S. Constitution empowers Congress to 
enact legislation to regulate interstate commerce and it is well-
settled that objects that move in interstate commerce are subject to 
Federal regulation and within Congress's authority to provide that 
objects moving in interstate commerce meet certain standards. NYS PSC 
added that there is no support for the notion that the delegation of 
authority to DOE to set energy efficiency standards runs afoul of the 
constitutional prohibition on executive agencies exercising legislative 
powers under either the ``nondelegation'' doctrine or ``major 
questions'' doctrine; noting that there is an ``intelligible 
principle'' provided by Congress to guide DOE's regulations and an 
express command from Congress to regulate this field of economic 
activity. (Id.)
    DOE also received 13 comments from individual commenters 
questioning DOE's authority to promulgate energy efficiency standards.
    In response to the AGs of TN et al., DOE believes the scope of the 
standard proposed in the March 2023 NOPR and the amended standard 
adopted in this direct final rule properly includes all RCWs 
distributed in commerce for personal use or consumption because 
intrastate activity regulated by 42 U.S.C. 6291(17) and 6302 is 
inseparable from and substantially affects interstate commerce. DOE has 
clear authority under EPCA to regulate the energy use of a variety of 
consumer products and certain commercial and industrial equipment, 
including the subject RCWs. See 42 U.S.C. 6295. Based on this statutory 
authority, DOE has a long-standing practice of issuing standards with 
the same scope as the standards in this direct final rule. For example, 
DOE has maintained a similar scope of products (except for the 
differentiation of a semi-automatic product class \151\ and the suds-
saving product class \152\) in the direct final rule that amended the 
current standards for RCWs, which was published on May 31, 2012 (77 FR 
32308), and the prior final rule that amended standards for RCWs, which 
published on January 12, 2001 (66 FR 3314). DOE disagrees with the AGs 
of TN et al.'s contention that the Commerce clause, the Tenth 
Amendment, States' water rights, or any canons of statutory 
construction limit DOE's clear and long-standing authority under EPCA 
to adopt the standard, including its scope, in this direct final rule. 
A further discussion regarding the AGs of TN et al.'s federalism 
concerns can be found at section VII.E of this document.
---------------------------------------------------------------------------

    \151\ The May 2012 Direct Final Rule for RCWs removed the semi-
automatic product class because DOE was not aware of any RCWs on the 
market at that time. 77 FR 32308, 32317.
    \152\ Similarly, the suds-saving product class was removed in 
the May 2012 Direct Final Rule because DOE did not identify any RCWs 
in that product class on the market at that time. Id.
---------------------------------------------------------------------------

2. Test Cloth
    Both appendix J and appendix J2 require that testing on clothes 
washers be conducted using specialized test cloth that conforms to the 
specifications outlined in 10 CFR part 430, subpart B, appendix J3 
(``appendix J3''). These specifications include fiber content, thread 
count, fabric weight, and weave type, among other requirements. Test 
cloth is manufactured in batches called ``lots,'' which are quantities 
of test cloth that have been manufactured with the same batches of 
cotton and polyester during one continuous process.
    In response to the March 2023 NOPR, AHAM \153\ commented that 
manufacturers of RCWs do not have an adequate supply of uniform test 
cloth to evaluate redesigns for the potential new standards. (AHAM, No. 
503 at p. 4) AHAM further commented that Lot 25A, the latest lot of 
test cloth produced for the clothes washer industry, fails to meet the 
defined specifications for thread diameter, and the weave is 
inconsistent with the specification cloth used by manufacturers during 
product testing for the past 8 years. (Id.)
---------------------------------------------------------------------------

    \153\ AHAM's supplemental comment (No. 503) was received 64 days 
after the comment submission deadline. DOE generally will not 
consider late filed comments, but may exercise its discretion to do 
so where necessary and appropriate. In this case, DOE is considering 
AHAM's comment because its tardiness has not disrupted DOE's 
consideration of this matter and because the comment regards a 
subject important to this matter.
---------------------------------------------------------------------------

    DOE is currently working closely with industry via the AHAM Test 
Cloth Task Force in its evaluation of the suitability

[[Page 19086]]

of Lot 25A as well as to develop short-term and long-term solutions to 
mitigate any potential concerns regarding the availably of test cloth 
for the clothes washer industry.
3. National Academy of Sciences Report
    The National Academies of Sciences, Engineering, and Medicine 
(``NAS'') periodically appoint a committee to peer review the 
assumptions, models, and methodologies that DOE uses in setting energy 
conservation standards for covered products and equipment. The most 
recent such peer review was conducted in a series of meetings in 2020, 
and NAS issued the report \154\ in 2021 detailing its findings and 
recommendations on how DOE can improve its analyses and align them with 
best practices for cost-benefit analysis.
---------------------------------------------------------------------------

    \154\ National Academies of Sciences, Engineering, and Medicine. 
2021. Review of Methods Used by the U.S. Department of Energy in 
Setting Appliance and Equipment Standards. Washington, DC: The 
National Academies Press. Available at doi.org/10.17226/25992 (last 
accessed August 2, 2023).
---------------------------------------------------------------------------

    AHAM stated that despite previous requests from AHAM and others, 
DOE has failed to review and incorporate the recommendations of the NAS 
report, instead indicating that it will conduct a separate rulemaking 
process without such a process having been initiated. (AHAM, No. 464 at 
pp. 24-25) AHAM further stated that DOE seems to be ignoring the 
recommendations in the NAS Report and even conducting analysis that is 
opposite to the recommendations. AHAM commented that DOE cannot 
continue to perpetuate the errors in its analytical approach that have 
been pointed out by stakeholders and the NAS report as to do so will 
lead to arbitrary and capricious rules. (Id.)
    As discussed, the rulemaking process for establishing new or 
amended standards for covered products and equipment are specified at 
appendix A to subpart C of 10 CFR part 430, and DOE periodically 
examines and revises these provisions in separate rulemaking 
proceedings. The recommendations in the NAS report, which pertain to 
the processes by which DOE analyzes energy conservation standards, will 
be considered by DOE in a separate rulemaking process.

V. Analytical Results and Conclusions

    The following section addresses the results from DOE's analyses 
with respect to the considered energy conservation standards for RCWs. 
It addresses the TSLs examined by DOE, the projected impacts of each of 
these levels if adopted as energy conservation standards for RCWs, and 
the standards levels that DOE is adopting in this direct final rule. 
Additional details regarding DOE's analyses are contained in the direct 
final rule TSD supporting this document.

A. Trial Standard Levels

    In general, DOE typically evaluates potential new or 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 direct final rule, DOE analyzed 
the benefits and burdens of four TSLs for RCWs. DOE developed TSLs that 
combine efficiency levels for each analyzed product class. DOE presents 
the results for the TSLs in this document, while the results for all 
efficiency levels that DOE analyzed are in the direct final rule TSD.
    Tables V.1 through V.3 present the TSLs and the corresponding 
efficiency levels that DOE has identified for potential amended energy 
conservation standards for RCWs. TSL 4 represents the maximum 
technologically feasible (``max-tech'') energy and water efficiency for 
all product classes. TSL 3 represents the ENERGY STAR Most-Efficient 
level for front-loading RCWs and CCE Tier 1 for top-loading RCWs. TSL 
2--which corresponds to the Recommended TSL in the Joint Agreement--
represents the ENERGY STAR Most Efficient level for front-loading 
compact RCWs, and ENERGY STAR v. 8.1 for top-loading and front-loading 
standard-size RCWs. TSL 1 represents EL 1 across all product classes.

                                      Table V.1--Trial Standard Levels for Top-Loading Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Top-loading, ultra-compact                                Top-loading, standard-size
                                     -------------------------------------------------------------------------------------------------------------------
                 TSL                                                       EER (lb/kWh/    WER (lb/gal/     Efficiency     EER (lb/kWh/    WER (lb/gal/
                                               Efficiency level               cycle)          cycle)           level          cycle)          cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................  Baseline..........................            3.79            0.29               1            3.89            0.47
2...................................  Baseline..........................            3.79            0.29               2            4.27            0.57
3...................................  Baseline..........................            3.79            0.29               3            4.78            0.63
4...................................  Baseline..........................            3.79            0.29               4            5.37            0.67
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                     Table V.2--Trial Standard Levels for Front-Loading Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Front-loading, compact                       Front-loading, standard-size
                                                         -----------------------------------------------------------------------------------------------
                           TSL                              Efficiency     EER (lb/kWh/    WER (lb/gal/     Efficiency     EER (lb/kWh/    WER (lb/gal/
                                                               level          cycle)          cycle)           level          cycle)          cycle)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................................               1            4.80            0.62               1            5.31            0.69
2.......................................................               2            5.02            0.71               2            5.52            0.77
3.......................................................               2            5.02            0.71               3            5.73            0.77
4.......................................................               4            5.97            0.80               4            5.97            0.85
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 19087]]


                 Table V.3--Trial Standard Levels for Semi-Automatic Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                                                  Semi-automatic
                                                                 -----------------------------------------------
                               TSL                                  Efficiency     EER (lb/kWh/    WER (lb/gal/
                                                                       level          cycle)          cycle)
----------------------------------------------------------------------------------------------------------------
1...............................................................               1            2.12            0.27
2...............................................................               1            2.12            0.27
3...............................................................               1            2.12            0.27
4...............................................................               2            2.51            0.36
----------------------------------------------------------------------------------------------------------------

    While representative ELs were included in the TSLs, DOE considered 
all efficiency levels as part of its analysis.\155\
---------------------------------------------------------------------------

    \155\ Efficiency levels that were analyzed for this direct final 
rule are discussed in section IV.C.2 of this document. Results by 
efficiency level are presented in TSD chapters 8, 10, and 12.
---------------------------------------------------------------------------

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on RCW consumers by looking at 
the effects that potential amended standards at each TSL would have on 
the LCC and PBP. DOE also examined the impacts of potential standards 
on selected consumer subgroups. These analyses are discussed in the 
following sections.
a. Life-Cycle Cost and Payback Period
    In general, higher-efficiency products affect consumers in two 
ways: (1) purchase price increases and (2) annual operating costs 
decrease. Inputs used for calculating the LCC and PBP include total 
installed costs (i.e., product price plus installation costs), and 
operating costs (i.e., annual energy use, energy prices, energy price 
trends, repair costs, and maintenance costs). The LCC calculation also 
uses product lifetime and a discount rate. Chapter 8 of the direct 
final rule TSD provides detailed information on the LCC and PBP 
analyses.
    Tables V.4 through V.12 show the LCC and PBP results for the TSLs 
considered for each product class. In the first of each pair of tables, 
the simple payback is measured relative to the baseline product. In the 
second table, the impacts are measured relative to the efficiency 
distribution in the no-new-standards case in the compliance year (see 
section IV.F.8 of this document). Because some consumers purchase 
products with higher efficiency in the no-new-standards case, the 
average savings are less than the difference between the average LCC of 
the baseline product and the average LCC at each TSL. The savings refer 
only to consumers who are affected by a standard at a given TSL. Those 
who already purchase a product with efficiency at or above a given TSL 
are not affected. Consumers for whom the LCC increases at a given TSL 
experience a net cost.

                            Table V.4--Average LCC and PBP Results for Top-Loading Ultra-Compact Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Average costs 2022$
                                                     ----------------------------------------------------------------  Simple  payback       Average
            TSL                 Efficiency level                       First year's      Lifetime                           years        lifetime years
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
1, 3, 4...................  Baseline................            $840             $84            $913          $1,753  ................              13.4
2 **......................  Baseline................             836              84             919           1,755  ................              13.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year of 2028.


                            Table V.5--Average LCC and PBP Results for Top-Loading Standard-Size Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Average costs 2022$
                                                     ----------------------------------------------------------------  Simple  payback       Average
            TSL                 Efficiency level                       First year's      Lifetime                           years        lifetime years
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Baseline................            $690            $174          $1,917          $2,607  ................              13.4
1.........................  1.......................             770             156           1,715           2,485               4.4              13.4
2 **......................  2.......................             833             151           1,661           2,494               6.2              13.4
3.........................  3.......................             851             146           1,598           2,448               5.7              13.4
4.........................  4.......................             856             143           1,569           2,425               5.4              13.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year of 2028.


[[Page 19088]]


 Table V.6--Average LCC Savings Relative to the No-New-Standards Case for Top-Loading Standard-Size Residential
                                                 Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                                                   Percent of
                          TSL                             Efficiency level     Average LCC       consumers that
                                                                            savings \*\ 2022$   experience  net
                                                                                                      cost
----------------------------------------------------------------------------------------------------------------
1......................................................                  1               $122                 16
2 **...................................................                  2                111                 27
3......................................................                  3                116                 28
4......................................................                  4                133                 26
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


                              Table V.7--Average LCC and PBP Results for Front-Loading Compact Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Average costs 2022$
                                                     ----------------------------------------------------------------  Simple payback   Average lifetime
            TSL                 Efficiency level                       First year's      Lifetime                           years             years
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            Baseline................            $774             $93          $1,024          $1,798  ................              13.4
1.........................  1.......................             827              88             959           1,786               9.6              13.4
2 **......................  2.......................             861              84             918           1,779               9.3              13.4
3.........................  2.......................             865              84             913           1,778               9.5              13.4
4.........................  4.......................             904              77             838           1,742               8.0              13.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year of 2028.


   Table V.8--Average LCC Savings Relative to the No-New-Standards Case for Front-Loading Compact Residential
                                                 Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                                                   Percent of
                          TSL                             Efficiency level     Average LCC       consumers that
                                                                            savings \*\ 2022$    experience net
                                                                                                      cost
----------------------------------------------------------------------------------------------------------------
1......................................................                  1                 $0                  0
2**....................................................                  2                  9                 21
3......................................................                  2                  8                 22
4......................................................                  4                 38                 35
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


                           Table V.9--Average LCC and PBP Results for Front-Loading Standard-Size Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Average costs 2022$
                                                     ----------------------------------------------------------------  Simple  payback       Average
            TSL                 Efficiency level                       First year's      Lifetime                           years        lifetime years
                                                      Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                            DFR Baseline............          $1,027            $172          $1,922          $2,948  ................              13.4
                            NOPR Baseline...........           1,027             137           1,510           2,536  ................              13.4
1.........................  1.......................           1,066             131           1,445           2,511               0.9              13.4
2 **......................  2.......................           1,088             125           1,389           2,477               1.4              13.4
3.........................  3.......................           1,105             123           1,359           2,464               1.6              13.4
4.........................  4.......................           1,120             118           1,303           2,423               1.7              13.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year of 2028.


[[Page 19089]]


      Table V.10--Average LCC Savings Relative to the No-New-Standards Case for Front-Loading Standard-Size
                                           Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                                                   Percent of
                          TSL                             Efficiency level     Average LCC       consumers that
                                                                            savings \*\ 2022$    experience net
                                                                                                      cost
----------------------------------------------------------------------------------------------------------------
1......................................................                  1                $26                  1
2 **...................................................                  2                 46                  2
3......................................................                  3                 15                 20
4......................................................                  4                 49                 16
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


                                 Table V.11--Average LCC and PBP Results for Semi-Automatic Residential Clothes Washers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Average costs 2022$
                                                         ----------------------------------------------------------------     Simple          Average
             TSL                   Efficiency level                        First year's      Lifetime                      payback years  lifetime years
                                                          Installed cost  operating cost  operating cost        LCC
--------------------------------------------------------------------------------------------------------------------------------------------------------
                              Baseline..................            $525            $134          $1,456          $1,981  ..............            13.4
1, 3........................  1.........................             538             107           1,156           1,694             0.5            13.4
2 **........................  1.........................             536             107           1,164           1,700             0.5            13.4
4...........................  2.........................             547              95           1,023           1,569             0.6            13.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: The results for each TSL are calculated assuming that all consumers use products at that efficiency level. The PBP is measured relative to the
  baseline product.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year of 2028.


  Table V.12--Average LCC Savings Relative to the No-New-Standards Case for Semi-Automatic Residential Clothes
                                                     Washers
----------------------------------------------------------------------------------------------------------------
                                                                                   Life-cycle cost savings
                                                                           -------------------------------------
                                                                                                   Percent of
                          TSL                             Efficiency level     Average LCC       consumers that
                                                                             savings\*\ 2022$    experience net
                                                                                                      cost
----------------------------------------------------------------------------------------------------------------
1, 3...................................................                  1               $280                 0%
2 **...................................................                  1                284                  0
4......................................................                  2                188                  0
----------------------------------------------------------------------------------------------------------------
* The savings represent the average LCC for affected consumers.
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.

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. 
Tables V.13 through 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 RCW product class. In most 
cases, the average LCC savings for low-income households at the 
considered efficiency levels are higher and payback periods are lower 
relative to the results for all households across all product classes. 
However, LCC savings for senior-only households are significantly 
different when compared to the average for all households across all 
product classes, i.e., lower LCC savings and longer payback periods. 
Chapter 11 of the direct final rule TSD presents the complete LCC and 
PBP results for the subgroups.

 Table V.13--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Top-Loading Standard-
                                        Size Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                    Low-income      Senior-only     Well-users
                                                    households      households      households    All households
----------------------------------------------------------------------------------------------------------------
                                           Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................            $149             $73             $22            $122
TSL 2 **........................................             162              48            (31)             111
TSL 3...........................................             156              59               6             116
TSL 4...........................................             176              72              38             133
----------------------------------------------------------------------------------------------------------------

[[Page 19090]]

 
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................             2.5             6.0             8.3             4.4
TSL 2 **........................................             3.5             8.4            13.5             6.2
TSL 3...........................................             3.2             7.7            10.9             5.7
TSL 4...........................................             3.0             7.3             9.1             5.4
----------------------------------------------------------------------------------------------------------------
                                         Consumers with Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................              47              39              27              45
TSL 2 **........................................              45              30              16              39
TSL 3...........................................              71              57              44              67
TSL 4...........................................              77              64              56              73
----------------------------------------------------------------------------------------------------------------
                                           Consumers with Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................              10              22              33              16
TSL 2 **........................................              16              35              50              27
TSL 3...........................................              17              37              50              28
TSL 4...........................................              16              35              43              26
----------------------------------------------------------------------------------------------------------------
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


 Table V.14--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Front-Loading Compact
                                           Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                    Low-income      Senior-only     Well-users
                                                    households      households      households    All households
----------------------------------------------------------------------------------------------------------------
                                           Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................              $0              $0              $0              $0
TSL 2 **........................................              39             (1)            (13)               9
TSL 3...........................................              38             (2)            (13)               8
TSL 4...........................................              75              21              24              38
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................             2.7            12.2            16.3             9.6
TSL 2 **........................................             2.6            11.8            16.6             9.3
TSL 3...........................................             2.6            12.0            16.6             9.5
TSL 4...........................................             2.2            10.0            11.1             8.0
----------------------------------------------------------------------------------------------------------------
                                         Consumers with Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................               0               0               0               0
TSL 2 **........................................              27              14               8              17
TSL 3...........................................              27              14               8              17
TSL 4...........................................              75              56              55              64
----------------------------------------------------------------------------------------------------------------
                                           Consumers with Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................               0               0               0               0
TSL 2 **........................................               7              25              31              21
TSL 3...........................................               7              25              31              22
TSL 4...........................................              13              43              44              35
----------------------------------------------------------------------------------------------------------------
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


Table V.15--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Front-Loading Standard-
                                        Size Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                    Low-income      Senior-only     Well-users
                                                    households      households      households    All households
----------------------------------------------------------------------------------------------------------------
                                           Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................             $38              $5            ($1)              26
TSL 2 **........................................              60              21           (0.4)              46
TSL 3...........................................              19               8              11              15

[[Page 19091]]

 
TSL 4...........................................              55              31              18              49
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................             0.5             1.2             2.2             0.9
TSL 2 **........................................             0.7             1.9             3.3             1.4
TSL 3...........................................             0.8             2.1             3.5             1.6
TSL 4...........................................             0.8             2.3             3.8             1.7
----------------------------------------------------------------------------------------------------------------
Consumers with Net Benefit (%)..................................................................................
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................               1               1               1               1
TSL 2 **........................................               5               4               2               5
TSL 3...........................................              34              27              33              31
TSL 4...........................................              72              68              58              75
----------------------------------------------------------------------------------------------------------------
                                           Consumers with Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1...........................................               1               1               1               1
TSL 2 **........................................               1               3               5               2
TSL 3...........................................              13              24              18              20
TSL 4...........................................              12              23              33              16
----------------------------------------------------------------------------------------------------------------
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.


     Table V.16--Comparison of LCC Savings and PBP for Consumer Subgroups and All Households; Semi-Automatic
                                           Residential Clothes Washers
----------------------------------------------------------------------------------------------------------------
                                                    Low-income      Senior-only     Well-users
                                                    households      households      households    All households
----------------------------------------------------------------------------------------------------------------
                                           Average LCC Savings (2022$)
----------------------------------------------------------------------------------------------------------------
TSL 1, 3........................................            $307            $211            $166            $280
TSL 2 **........................................             310             214             167             284
TSL 4...........................................             204             141             116             188
----------------------------------------------------------------------------------------------------------------
                                             Payback Period (years)
----------------------------------------------------------------------------------------------------------------
TSL 1, 3........................................             0.2             0.7             0.8             0.5
TSL 2 **........................................             0.2             0.6             0.8             0.5
TSL 4...........................................             0.2             0.7             0.9             0.6
----------------------------------------------------------------------------------------------------------------
                                         Consumers with Net Benefit (%)
----------------------------------------------------------------------------------------------------------------
TSL 1, 3........................................              19              21              21              21
TSL 2 **........................................              19              21              21              21
TSL 4...........................................              83              92              90              92
----------------------------------------------------------------------------------------------------------------
                                           Consumers with Net Cost (%)
----------------------------------------------------------------------------------------------------------------
TSL 1, 3........................................               0               0               0               0
TSL 2 **........................................               0               0               0               0
TSL 4...........................................               0               0               2               0
----------------------------------------------------------------------------------------------------------------
** All the TSLs except TSL 2 (the Recommended TSL) have a compliance year of 2027. TSL 2 has a compliance year
  of 2028.

c. Rebuttable Presumption Payback
    As discussed in section III.E.2 of this document, EPCA establishes 
a rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for a product 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. 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 procedures for RCWs. In contrast, the 
PBPs presented in section V.B.1 of this document were calculated using 
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 RCWs. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for this rule are economically justified through a more 
detailed analysis of the economic impacts of those levels, pursuant to 
42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to 
the consumer, manufacturer, Nation, and environment. The results of 
that analysis serve as the basis for DOE to

[[Page 19092]]

definitively evaluate the economic justification for a potential 
standard level, thereby supporting or rebutting the results of any 
preliminary determination of economic justification.

                               Table V.17--Rebuttable-Presumption Payback Periods
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Product class                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               years
----------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact *.....................            n.a.            n.a.            n.a.            n.a.
Top-Loading Standard-Size.......................             3.7             5.1             4.6             4.2
Front-Loading Compact...........................             6.5             6.7             6.8             5.8
Front-Loading Standard-Size.....................             0.9             1.3             1.5             1.6
Semi-Automatic..................................             0.3             0.3             0.3             0.4
----------------------------------------------------------------------------------------------------------------
* The entry ``n.a.'' means not applicable because the evaluated standard is the baseline.

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of RCWs. The next section 
describes the expected impacts on manufacturers at each considered TSL. 
Chapter 12 of the direct final rule TSD explains the analysis in 
further detail.
a. Industry Cash Flow Analysis Results
    In this section, DOE provides GRIM results from the analysis, which 
examines changes in the industry that would result from a standard. The 
following tables summarize the estimated financial impacts (represented 
by changes in INPV) of potential amended energy conservation standards 
on manufacturers of RCWs, as well as the conversion costs that DOE 
estimates manufacturers of RCWs 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 
percentage applies a ``gross margin percentage'' of 18 percent for all 
product classes and all efficiency levels.\156\ 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.
---------------------------------------------------------------------------

    \156\ The gross margin percentage of 18 percent is based on a 
manufacturer markup of 1.22.
---------------------------------------------------------------------------

    The preservation of operating profit scenario reflects 
manufacturers' concerns about their inability to maintain margins as 
MPCs increase to reach more-stringent efficiency levels. In this 
scenario, while manufacturers make the necessary investments required 
to convert their facilities to produce compliant products, operating 
profit does not change in absolute dollars and decreases as a 
percentage of revenue. The preservation of operating profit scenario 
results in the lower (or more severe) bound to impacts of potential 
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 (30 years from the analyzed compliance year).\157\ 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.
---------------------------------------------------------------------------

    \157\ The analysis period ranges from 2024 to 2056 for the no-
new-standards case and all TSLs, except for TSL 2 (the Recommended 
TSL). The analysis period for TSL 2 ranges from 2024 to 2057 due to 
the 2028 compliance year.
---------------------------------------------------------------------------

    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 direct final rule and the year by which 
manufacturers must comply with the amended standard. The conversion 
costs can have a significant impact on the industry's short-term cash 
flow and generally result in lower free cash flow in the period between 
the publication of the direct 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 Results for Residential Clothes Washers
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                No-new-
                                               Unit            standards              TSL 1                         TSL 2                         TSL 3                         TSL 4
                                                                 case
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
INPV...............................  2022$ millions.........     1,707.9  1,639.0 to 1,710.7..........  1,429.6 to 1,560.9..........  1,053.8 to 1,234.5..........  535.8 to 738.2.
Change in INPV *...................  %......................  ..........  (4.0) to 0.2................  (16.3) to (8.6).............  (38.3) to (27.7)............  (68.6) to (56.8).
Free Cash Flow (2026) **...........  2022$ millions.........   *** 136.6  113.2.......................  29.9........................  (166.7).....................  (428.8).
Change in Free Cash Flow (2026) **.  %......................  ..........  (17.1)......................  (97.8)......................  (222.0).....................  (413.9).
Product Conversion Costs...........  2022$ millions.........  ..........  27.3........................  91.9........................  197.5.......................  253.2.
Capital Conversion Costs...........  2022$ millions.........  ..........  31.8........................  228.1.......................  527.1.......................  1,068.0.
Total Conversion Costs.............  2022$ millions.........  ..........  59.0........................  320.0.......................  724.6.......................  1,321.2.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Parentheses denote negative (-) values.
** TSL 2 (the Recommended TSL) represents the change in free cash flow in 2027, a year before the 2028 compliance date.

[[Page 19093]]

 
*** In 2027, the no-new-standards free cash flow is $136.4 million.

    The majority of the INPV impacts are associated with standard-size 
product classes because top-loading standard-size and front-loading 
standard-size RCWs comprise approximately 96 percent of the total RCW 
domestic shipments. More specifically, the majority of the INPV impacts 
are associated with top-loading RCWs due to the high volume of 
shipments, the high percentage of shipments at minimum efficiency, and 
the likely design paths required to meet more stringent standards. Top-
loading RCWs account for approximately 74 percent of current standard-
size RCW shipments in 2027. DOE's shipments analysis estimates 
approximately 66 percent of top-loading shipments are currently at the 
baseline efficiency level. Additionally, the engineering analysis, 
informed by conversations with manufacturers, indicates that the likely 
design path to meet the efficiencies required at TSL 3 and TSL 4 would 
require notable capital investments. In particular, many manufacturers 
would likely increase tub capacity of top-loading standard-size units 
with capacities of less than 4.7 ft\3\ to meet these higher 
efficiencies. In contrast, DOE's shipments analysis assumes no front-
loading RCW shipments are at the DFR Baseline efficiency level and 
DOE's engineering analysis suggests that increases in tub capacity 
would not be required for front-loading RCW models to reach max-tech. 
Thus, as DOE considers increasingly stringent TSLs, the top-loading 
standard-size product class tends to drive industry investments and 
negative INPV impacts. See chapter 5 of the direct final rule TSD for a 
detailed discussion of design paths to reach higher efficiencies.
    At TSL 1, the standard represents the least stringent efficiencies 
(EL 1) for all product classes. The change in INPV is expected to range 
from -4.0 to 0.2 percent. At this level, free cash flow is estimated to 
decrease by 17.1 percent compared to the no-new-standards case value of 
$136.6 million in the year 2026, the year before the 2027 standards 
year. DOE's shipments analysis estimates approximately 54 percent of 
current shipments meet this level.\158\
---------------------------------------------------------------------------

    \158\ Current shipments refer to annual product shipments in 
2024 from the shipments analysis.
---------------------------------------------------------------------------

    At TSL 1, DOE expects most manufacturers would incur limited 
conversion costs to reach the efficiencies required. The conversion 
costs primarily stem from changes required for top-loading standard-
size RCWs. DOE's shipments analysis estimates approximately 34 percent 
of current top-loading standard-size RCWs meet this level (EL 1). In 
contrast, nearly all the front-loading standard-size RCWs currently 
meet the efficiencies required at this level. Industry capital 
conversion costs include tooling updates and costs associated with 
transitioning models with porcelain wash baskets to stainless steel 
wash baskets. Product conversion costs may be necessary for product 
development and testing. DOE expects industry to incur some re-flooring 
costs. DOE estimates capital conversion costs of $31.8 million and 
product conversion costs of $27.3 million. Conversion costs total $59.0 
million.
    At TSL 1, the shipment-weighted average MPC for all RCWs is 
expected to increase by 6.4 percent relative to the no-new-standards 
case shipment-weighted average MPC for all RCWs in 2027. In the 
preservation of gross margin percentage scenario, the slight increase 
in cashflow slightly outweighs the $59.0 million in conversion costs, 
causing a minor positive change in INPV at TSL 1 under this scenario. 
Under the preservation of operating profit scenario, the manufacturer 
markup decreases in 2028, the year after the analyzed 2027 compliance 
year. This reduction in the manufacturer markup and the $59.0 million 
in conversion costs incurred by manufacturers cause a slightly negative 
change in INPV at TSL 1 under the preservation of operating profit 
scenario.
    At TSL 2 (i.e., the Recommended TSL), the standard represents the 
ENERGY STAR v. 8.1 efficiency levels for the front-loading and top-
loading standard-size product classes, the ENERGY STAR Most Efficient 
level for the front-loading compact product class, and a gap fill level 
for the semi-automatic product class. The change in INPV is expected to 
range from -16.3 to -8.6 percent. At this level, free cash flow is 
estimated to decrease by 97.8 percent compared to the no-new-standards 
case value of $136.4 million in the year 2027, the year before the 
Recommended TSL standards year. DOE's shipments analysis estimates 
approximately 49 percent of current shipments meet this level. For the 
top-loading standard-size RCWs, front-loading compact RCWs, and front-
loading standard-size RCWs, TSL 2 corresponds to EL 2. For the 
remaining product classes, the efficiencies required at TSL 2 are the 
same as TSL 1. For top-loading standard-size RCWs, approximately 31 
percent of current shipments meet the efficiencies required by TSL 2. 
However, most manufacturers with top-loading standard-size models offer 
products at or above the efficiencies required. Of the nine OEMs with 
top-loading standard-size products, six OEMs offer models that meet the 
efficiencies required. To meet TSL 2, DOE expects manufacturers would 
incorporate wash plate designs, direct drive motors, and hardware 
features enabling spin speed increases into top-loading standard-size 
RCWs. Beyond these design options, some manufacturers may choose to 
increase the tub capacities of certain top-loading standard-size RCWs 
(i.e., models with capacities of less than 4.4 ft\3\) to meet the TSL 2 
efficiencies.\159\ Increasing RCW capacity could require a new cabinet, 
tub, and drum designs, which would necessitate costly investments in 
manufacturing equipment and tooling. For front-loading standard-size 
RCWs, approximately 92 percent of shipments meet the efficiencies 
required by TSL 2. Of the seven OEMs with front-loading standard-size 
products, six OEMs offer models that meet the efficiencies required. 
Product conversion costs may be necessary for designing, prototyping, 
and testing new or updated platforms. Additionally, DOE expects 
industry to incur more re-flooring costs compared to the prior TSL as 
more display units would need to be replaced. DOE estimates capital 
conversion costs of $228.1 million and product conversion costs of 
$91.9 million. Conversion costs total $320.0 million.
---------------------------------------------------------------------------

    \159\ See section V.B.4.b of this document for further 
discussion of DOE's determination of alternate pathways that could 
be used to achieve higher efficiency levels that would not require 
an increase in capacity.
---------------------------------------------------------------------------

    At TSL 2, the shipment-weighted average MPC for all RCWs is 
expected to increase by 12.1 percent relative to the no-new-standards 
case shipment-weighted average MPC for all RCWs in 2028. In the 
preservation of gross margin percentage scenario, the increase in 
cashflow is outweighed by the $320.0 million in conversion costs, 
causing a negative change in INPV at TSL 2 under this scenario. Under 
the preservation of operating profit scenario, the manufacturer markup 
decreases in 2029, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $320.0 million in 
conversion costs incurred by manufacturers cause a moderate negative 
change in INPV at TSL 2 under

[[Page 19094]]

the preservation of operating profit scenario.
    At TSL 3, the standard represents the ENERGY STAR Most Efficient 
level for the front-loading product classes, the CEE Tier 1 level for 
the top-loading standard-size product class, and a gap fill level for 
the semi-automatic product class. The change in INPV is expected to 
range from -38.3 to -27.7 percent. At this level, free cash flow is 
estimated to decrease by 222.0 percent compared to the no-new-standards 
case value of $136.6 million in the year 2026, the year before the 2027 
standards year. DOE's shipments analysis estimates approximately 18 
percent of current shipments meet this level.
    For the front-loading and top-loading standard-size product 
classes, TSL 3 corresponds to EL 3. For the remaining product classes, 
TSL 3 corresponds to the same efficiency level as TSL 2. At this level, 
the increase in conversion costs is mainly driven by the top-loading 
standard-size product class. Currently, approximately 3 percent of top-
loading standard-size shipments meet TSL 3 efficiencies. Of the nine 
OEMs with top-loading standard-size products, only two offer models 
that meet the efficiencies required at TSL 3. The remaining seven OEMs 
would need to redesign all their existing top-loading standard-size 
platforms to meet this level.
    To meet TSL 3, top-loading RCW designs would likely need to 
incorporate hardware features to enable faster spin speeds. These 
hardware updates may include reinforced wash baskets, more robust 
suspension and balancing system, and more advanced sensors. An 
increasing portion of top-loading standard-size RCWs (i.e., those 
models with capacities less than 4.7 ft\3\) may choose to increase tub 
capacity.\160\ Increasing RCW capacity could require new cabinet, tub, 
and drum designs. The changes would necessitate investments in new 
equipment and tooling. DOE expects industry to incur more re-flooring 
costs compared to prior TSLs as more display units would need to be 
replaced. DOE estimates capital conversion costs of $527.1 million and 
product conversion costs of $197.5 million. Conversion costs total 
$724.6 million.
---------------------------------------------------------------------------

    \160\ See section V.B.4.b of this document for further 
discussion of DOE's determination of alternate pathways that could 
be used to achieve higher efficiency levels that would not require 
an increase in capacity.
---------------------------------------------------------------------------

    At TSL 3, 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 3, the shipment-weighted average MPC for all RCWs is 
expected to increase by 14.4 percent relative to the no-new-standards 
case shipment-weighted average MPC for all RCWs in 2027. In the 
preservation of gross margin percentage scenario, the increase in 
cashflow is outweighed by the $724.6 million in conversion costs, 
causing a large change in INPV at TSL 3 under this scenario. Under the 
preservation of operating profit scenario, the manufacturer markup 
decreases in 2028, the year after the analyzed compliance year. This 
reduction in the manufacturer markup and the $724.6 million in 
conversion costs incurred by manufacturers cause a significant negative 
change in INPV at TSL 3 under the preservation of operating profit 
scenario.
    At TSL 4, the standard represents the max-tech energy and water 
efficiencies for all product classes. The change in INPV is expected to 
range from -68.6 to -56.8 percent. At this level, free cash flow is 
estimated to decrease by 413.9 percent compared to the no-new-standards 
case value of $136.6 million in the year 2026, the year before the 2027 
standards year. DOE's shipments analysis estimates approximately 4 
percent of current shipments meet this level.
    As previously discussed, the max-tech efficiencies required for 
standard-size RCWs drive the increase in conversion costs from the 
prior TSLs. Currently, less than 1 percent of top-loading standard-size 
RCW shipments and approximately 9 percent of front-loading standard-
size RCW shipments meet max-tech levels. Out of the nine top-loading 
standard-size OEMs, only one offers models that meet the efficiencies 
required by TSL 4. Out of the seven front-loading standard-size OEMs, 
only two offer models that meet the efficiencies required by TSL 4. 
Max-tech would require most manufacturers to significantly redesign 
their RCW platforms. DOE expects most standard-size RCW manufacturers 
would need to further increase spin speeds as compared to prior TSLs. 
An increasing portion of top-loading standard-size RCWs (i.e., models 
with capacities of less than 5.0 ft\3\) may choose to increase tub 
capacity to achieve the RMC values required at this level.\161\ In 
interviews, two manufacturers stated that max-tech levels would require 
a total renovation of existing production facilities. Some 
manufacturers further stated that their product portfolio would be 
limited due to the lack of differentiation possible under a max-tech 
standard, which would potentially limit their ability to serve certain 
consumer segments and hurt profitability. DOE expects industry would 
incur approximately the same re-flooring costs as TSL 3 since few 
models exist at the higher levels. At TSL 4, reaching max-tech 
efficiency levels is a billion-dollar investment for industry. DOE 
estimates capital conversion costs of $1,068.0 million and product 
conversion costs of $253.2 million. Conversion costs total $1,321.2 
million.
---------------------------------------------------------------------------

    \161\ See section V.B.4.b of this document for further 
discussion of DOE's determination of alternate pathways that could 
be used to achieve higher efficiency levels that would not require 
an increase in capacity.
---------------------------------------------------------------------------

    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 RCWs is 
expected to increase by 15.9 percent relative to the no-new-standards 
case shipment-weighted average MPC for all RCWs in 2027. In the 
preservation of gross margin percentage scenario, the increase in 
cashflow is outweighed by the $1,321.2 million in conversion costs, 
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 2028, the year after the analyzed 
compliance year. This reduction in the manufacturer markup and the 
$1,321.2 million in conversion costs incurred by manufacturers cause a 
significant negative change in INPV at TSL 4 under the preservation of 
operating profit scenario.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of amended energy 
conservation standards on direct employment in the RCWs 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. For the direct final rule, 
DOE used the most up-to-date information available. DOE calculated 
these values using statistical data from the 2021 ASM,\162\ BLS

[[Page 19095]]

employee compensation data,\163\ results of the engineering analysis, 
and manufacturer interviews conducted in support of the March 2023 
NOPR.
---------------------------------------------------------------------------

    \162\ 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/programs-surveys/asm/data/tables.html (last accessed June 30, 2023).
    \163\ U.S. Bureau of Labor Statistics. ``Employer Costs for 
Employee Compensation--March 2023.'' June 16, 2023. Available at 
www.bls.gov/news.release/archives/ecec_06162023.pdf (last accessed 
June 30, 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 BLS 
employee compensation data to determine the fully burdened wage ratio. 
The fully burdened wage ratio factors in paid leave, supplemental pay, 
insurance, retirement and savings, and legally required benefits.
    The number of production employees is then multiplied by the U.S. 
labor percentage to convert total production employment to total 
domestic production employment. The U.S. labor percentage represents 
the industry fraction of domestic manufacturing production capacity for 
the covered product. This value is derived from manufacturer 
interviews, product database analysis, and publicly available 
information. DOE estimates that 92 percent of RCWs are produced 
domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling products within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this direct final rule.
    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.\164\ 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.
---------------------------------------------------------------------------

    \164\ The comprehensive description of production and non-
production workers is available at ``Definitions and Instructions 
for the Annual Survey of Manufacturers, MA-10000'' (pp. 13-14), 
www2.census.gov/programs-surveys/asm/technical-documentation/questionnaire/2021/instructions/MA_10000_Instructions.pdf (last 
accessed June 30, 2023).
---------------------------------------------------------------------------

    Using the GRIM, DOE estimates that in the absence of new energy 
conservation standards, there would be 9,070 domestic production and 
non-production workers for RCWs in 2027. Table V.19 shows the range of 
the impacts of energy conservation standards on U.S. manufacturing 
employment in the RCW industry. The following discussion provides a 
qualitative evaluation of the range of potential impacts presented in 
Table V.19.

               Table V.19--Domestic Direct Employment Impacts for Residential Clothes Washer Manufacturers in the Analyzed Compliance Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            No-new-standards
                                                                  case              TSL 1              TSL 2              TSL 3              TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Direct Employment........................................          *** 9,070             10,400             11,821             11,785             11,857
(Production Workers + Non-Production Workers) in 2027 **.
Potential Changes in Direct Employment Workers *.........  .................      (8,097)-1,330      (8,097)-2,638      (8,097)-2,715      (8,097)-2,787
--------------------------------------------------------------------------------------------------------------------------------------------------------
* DOE presents a range of potential direct employment impacts. Numbers in parentheses indicate negative numbers.
** TSL 2 (the Recommended TSL) represents the direct employment in 2028.
*** In 2028, the no-new-standards case direct employment estimate is 9,183.

    The direct employment impacts shown in Table V.19 represent the 
potential domestic employment changes that could result following the 
compliance date for the RCWs covered in this rulemaking. The upper 
bound estimate corresponds to an increase in the number of domestic 
workers that results from amended energy conservation standards if 
manufacturers continue to produce the same scope of covered products 
within the United States after compliance takes effect. To establish a 
conservative lower bound, DOE assumes all manufacturers would shift 
production to foreign countries. At lower TSLs, 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. At max-tech, manufacturers representing a large portion of 
the market noted concerns about the level of investment, about the 
potential need to relocate production lines in order to remain 
competitive, and about the conversion period of 3 years being 
insufficient to make the necessary manufacturing line updates. At the 
Recommended TSL (i.e., TSL 2), DOE expects that the likelihood of 
changes in production location as a direct result of amended standards 
are relatively low. Nearly all OEMs already produce top-loading 
standard-size and front-loading standard-size RCWs that meet the TSL 2 
efficiencies in U.S. manufacturing facilities. Of the nine OEMs with 
top-loading standard-size products, six OEMs offer models that meet TSL 
2 efficiencies. These six OEMs that currently offer top-loading 
standard-size RCW models that meet TSL 2 efficiencies collectively 
account for over 95 percent of overall top-loading standard-size RCW 
shipments.

[[Page 19096]]

Of the seven OEMs with front-loading standard-size products, six OEMs 
offer models that meet TSL 2 efficiencies.
    Additional detail on the analysis of direct employment can be found 
in chapter 12 of the direct final rule 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 direct final rule TSD.
c. Impacts on Manufacturing Capacity
    As discussed in section V.B.2.a of this document, meeting the 
efficiencies required for each TSL would require varying levels of 
resources and investment. A standard level requiring notably faster 
spin speeds, namely TSL 3 and TSL 4, would necessitate product redesign 
to account for the increased spin speeds as well as the noise, 
vibration, and fabric care concerns related to the spin speeds required 
to meet these higher TSLs. These updates may include designing and 
manufacturing reinforced wash baskets, instituting a more robust 
suspension and balancing system, increasing the number of sensors, and 
incorporating more advanced sensors. For top-loading standard-size 
RCWs, manufacturers could potentially choose to increase tub capacity 
of smaller models to meet the efficiencies required at higher TSLs. 
Many manufacturers would need to invest in new tooling and equipment to 
either produce entirely new wash basket lines or ramp up production of 
their existing larger-capacity wash baskets. Based on a review of 
current CCD model listings and manufacturer feedback during 
confidential interviews, DOE's engineering analysis reflects a design 
path in which TSL 2 is achieved with a capacity increase from 4.0 ft\3\ 
to 4.4 ft\3\, TSL 3 is achieved with a capacity increase to 4.7 ft\3\, 
and TSL 4 is achieved with a capacity increase to 5.0 ft\3\ for the 
top-loading standard-size product class. In interviews, some 
manufacturers expressed concerns--particularly at max-tech--that the 3-
year period between the announcement of a final rule and the compliance 
date of the amended energy conservation standard might be insufficient 
to update production facilities and design, test, and manufacture the 
necessary number of products to meet demand. For the remaining TSLs, 
including TSL 2 (the Recommended TSL), most manufacturers could likely 
maintain manufacturing capacity levels and continue to meet market 
demand under amended energy conservation standards. Furthermore, at the 
Recommended TSL, manufacturers will have a 4-year period between the 
announcement of the direct final rule and the compliance date of the 
amended energy conservation standards. Thus, DOE does not expect 
manufacturers will face long-term capacity constraints due to the 
standard levels detailed in this direct final rule.
d. Impacts on Subgroups of Manufacturers
    Using average cost assumptions to develop industry cash-flow 
estimates may not capture the differential impacts among subgroups of 
manufacturers. Small manufacturers, niche players, or manufacturers 
exhibiting a cost structure that differs substantially from the 
industry average could be affected disproportionately. DOE investigated 
small businesses as a manufacturer subgroup that could be 
disproportionally impacted by energy conservation standards and could 
merit additional analysis. DOE did not identify any other adversely 
impacted manufacturer subgroups for this rulemaking based on the 
results of the industry characterization.
    DOE analyzes the impacts on small businesses in a separate analysis 
for the standards proposed in the NOPR published elsewhere in this 
issue of the Federal Register and in chapter 12 of the direct final 
rule TSD. In summary, the Small Business Administration (``SBA'') 
defines a ``small business'' as having 1,500 employees or less for 
NAICS 335220, ``Major Household Appliance Manufacturing.'' \165\ Based 
on this classification, DOE identified one domestic OEM that qualifies 
as a small business. For a discussion of the impacts on the small 
business manufacturer subgroup, see chapter 12 of the direct final rule 
TSD.
---------------------------------------------------------------------------

    \165\ U.S. Small Business Administration. ``Table of Small 
Business Size Standards.'' (Effective March 17, 2023) Available at 
www.sba.gov/document/support-table-size-standards (last accessed 
June 30, 2023).
---------------------------------------------------------------------------

e. Cumulative Regulatory Burden
    One aspect of assessing manufacturer burden involves looking at the 
cumulative impact of multiple DOE standards and the regulatory actions 
of other Federal agencies and States that affect the manufacturers of a 
covered product or equipment. While any one regulation may not impose a 
significant burden on manufacturers, the combined effects of several 
existing or impending regulations may have serious consequences for 
some manufacturers, groups of manufacturers, or an entire industry. 
Multiple regulations affecting the same manufacturer can strain profits 
and lead companies to abandon product lines or markets with lower 
expected future returns than competing products. For these reasons, DOE 
conducts an analysis of cumulative regulatory burden as part of its 
rulemakings pertaining to appliance efficiency.
    For the cumulative regulatory burden analysis, DOE examines 
Federal, product-specific regulations that could affect RCW 
manufacturers that take effect approximately 3 years before or after 
the 2028 compliance date. This information is presented in Table V.20.

  Table V.20--Compliance Dates and Expected Conversion Expenses of Federal Energy Conservation Standards Affecting Residential Clothes Washer Original
                                                                 Equipment Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Industry
                                                             Number of OEMs    Number of OEMs   Approx. standards       Industry       conversion costs/
            Federal energy conservation standard                    *         affected by this   compliance year    conversion costs   equipment revenue
                                                                                  rule **                              (Millions)           *** (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Portable Air Conditioners..................................               9                  2               2025              $320.9                6.7
85 FR 1378.................................................                                                                   (2015$)
(January 10, 2020).........................................
Consumer Clothes Dryers[dagger]............................              15                 13               2027              $149.7                1.8
87 FR 51734................................................                                                                   (2020$)
(August 23, 2022)..........................................

[[Page 19097]]

 
Miscellaneous Refrigeration Products[dagger]...............              38                  6               2029              $126.9                3.1
88 FR 19382................................................                                                                   (2021$)
(March 31, 2023)...........................................
Automatic Commercial Ice Makers[dagger]....................              23                  1               2027               $15.9                0.6
88 FR 30508................................................                                                                   (2022$)
(May 11, 2023).............................................
Dishwashers[dagger]........................................              21                 12               2027              $125.6                2.1
88 FR 32514................................................                                                                   (2021$)
(May 19, 2023).............................................
Refrigerated Bottled or Canned Beverage Vending                           5                  1               2028                $1.5                0.2
 Machines[dagger]..........................................                                                                   (2022$)
88 FR 33968................................................
(May 25, 2023).............................................
Room Air Conditioners......................................               8                  4               2026               $24.8                0.4
88 FR 34298................................................                                                                   (2021$)
(May 26, 2023).............................................
Microwave Ovens............................................              18                 10               2026               $46.1                0.7
88 FR 39912................................................                                                                   (2021$)
(June 20, 2023)............................................
Commercial Water Heating Equipment.........................              15                  1               2026               $42.7                5.3
88 FR 69686................................................                                                                   (2022$)
(October 6, 2023)..........................................
Consumer Water Heaters[dagger].............................              22                  3               2030              $228.1                1.3
88 FR 49059................................................                                                                   (2022$)
(July 28, 2023)............................................
Consumer Boilers[dagger]...................................              24                  1               2030               $98.0               3.6%
88 FR 55128................................................                                                                   (2022$)
(August 14, 2023)..........................................
Dehumidifiers[dagger]......................................              20                  4               2028                $6.9                0.4
88 FR 76510................................................                                                                   (2022$)
(November 6, 2023).........................................
Consumer Furnaces..........................................              15                  1               2029              $162.0                1.8
88 FR 87502................................................                                                                   (2022$)
(December 18, 2023)........................................
Commercial Refrigerators, Refrigerator-Freezers, and                     83                  3               2028              $226.4                1.6
 Freezers[dagger]..........................................                                                                   (2022$)
88 FR 70196................................................
(October 10, 2023).........................................
Refrigerators, Refrigerator-Freezers, and Freezers.........              63                 11           2029 and              $830.3                1.3
89 FR 30262................................................                                          2030[Dagger]             (2022$)
(January 17, 2024).........................................
Consumer Conventional Cooking Products.....................              35                  8               2028               $66.7                0.3
89 FR 11434................................................                                                                   (2022$)
(February 14, 2024)........................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* This column presents the total number of OEMs identified in the energy conservation standard rule that is contributing to cumulative regulatory
  burden.
** This column presents the number of OEMs producing RCWs that are also listed as OEMs in the identified energy conservation standard that is
  contributing to cumulative regulatory burden.
*** This column presents industry conversion costs as a percentage of equipment 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.

[[Page 19098]]

 
[dagger] These rulemakings are at the NOPR stage, and all values are subject to change until finalized through publication of a final rule.
[Dagger] For the refrigerators, refrigerator-freezers, and freezers energy conservation standards direct final rule, the compliance year (2029 or 2030)
  varies by product class.

    As shown in Table V.20, the rulemakings with the largest overlap of 
RCW OEMs include consumer clothes dryers, consumer conventional cooking 
products, dishwashers, refrigerators, refrigerator-freezers, and 
freezers, and miscellaneous refrigeration products, which are all part 
of the multi-product Joint Agreement submitted by interested 
parties.\166\ As detailed in the Joint Agreement, the signatories 
indicated that their recommendations should be considered a ``complete 
package.'' The signatories further stated that ``each part of this 
agreement is contingent upon the other parts being implemented.'' 
(Joint Agreement, No. 505 at p. 3)
---------------------------------------------------------------------------

    \166\ The microwave ovens energy conservation standards final 
rule (88 FR 39912), which has 10 overlapping OEMs, was published 
prior to the joint submission of the multi-product Joint Agreement.
---------------------------------------------------------------------------

    The multi-product Joint Agreement states the ``jointly recommended 
compliance dates will achieve the overall energy and economic benefits 
of this agreement while allowing necessary lead-times for manufacturers 
to redesign products and retool manufacturing plants to meet the 
recommended standards across product categories.'' (Joint Agreement, 
No. 505 at p. 2) The staggered compliance dates help mitigate 
manufacturers' concerns about their ability to allocate sufficient 
resources to comply with multiple concurrent amended standards and 
about the need to align compliance dates for products that are 
typically designed or sold as matched pairs (such as RCWs and consumer 
clothes dryers). See section IV.J.3 of this document for stakeholder 
comments about cumulative regulatory burden. See Table V.21 for a 
comparison of the estimated compliance dates based on EPCA-specified 
timelines and the compliance dates detailed in the Joint Agreement.

                     Table V.21--Expected Compliance Dates for Multi-Product Joint Agreement
----------------------------------------------------------------------------------------------------------------
                                                   Estimated compliance
                   Rulemaking                       year based on EPCA    Compliance year in the joint agreement
                                                       requirements
----------------------------------------------------------------------------------------------------------------
Consumer Clothes Dryers........................                     2027  2028.
RCWs...........................................                     2027  2028.
Consumer Conventional Cooking Products.........                     2027  2028.
Dishwashers....................................                     2027  2027.*
Refrigerators, Refrigerator-Freezers, and                           2027  2029 or 2030 depending on the product
 Freezers.                                                                 class.
Miscellaneous Refrigeration Products...........                     2029  2029.
----------------------------------------------------------------------------------------------------------------
* Estimated compliance year. The Joint Agreement states, ``3 years after the publication of a final rule in the
  Federal Register.'' (Joint Agreement, No. 505 at p. 2)

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 and Water Savings
    To estimate the energy and water savings attributable to potential 
amended standards for RCWs, DOE compared their energy and water 
consumption under the no-new-standards case to their anticipated energy 
and water consumption under each TSL. The savings are measured over the 
entire lifetime of products purchased in the 30-year period that begins 
in the year of anticipated compliance with amended standards (2027-
2056).\167\ Tables V.22 and V.23 present DOE's projections of the 
national energy and water savings for each TSL considered for RCWs. The 
savings were calculated using the approach described in section IV.H of 
this document.
---------------------------------------------------------------------------

    \167\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2057.

      Table V.22--Cumulative National Energy Savings for Residential Clothes Washers; 30 Years of Shipments
                                                  [2027-2056] *
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.56            0.64            1.29            2.03
FFC energy......................................            0.58            0.67            1.34            2.12
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.


[[Page 19099]]


      Table V.23--Cumulative National Water Savings for Residential Clothes Washers; 30 Years of Shipments
                                                  [2027-2056] *
----------------------------------------------------------------------------------------------------------------
                                                                     Trial standard level
                                             -------------------------------------------------------------------
                                                     1                2                3                4
----------------------------------------------------------------------------------------------------------------
                                                                       trillion gallons
                                             -------------------------------------------------------------------
Water Savings...............................            1.16             1.89             2.33             2.73
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    OMB Circular A-4 \168\ requires agencies to present analytical 
results, including separate schedules of the monetized benefits and 
costs that show the type and timing of benefits and costs. Circular A-4 
also directs agencies to consider the variability of key elements 
underlying the estimates of benefits and costs. For this rulemaking, 
DOE undertook a sensitivity analysis using 9 years, rather than 30 
years, of product shipments. The choice of a 9-year period is a proxy 
for the timeline in EPCA for the review of certain energy conservation 
standards and potential revision of and compliance with such revised 
standards.\169\ The review timeframe established in EPCA is generally 
not synchronized with the product lifetime, product manufacturing 
cycles, or other factors specific to RCWs. Thus, such results are 
presented for informational purposes only and are not indicative of any 
change in DOE's analytical methodology. The NES and NWS sensitivity 
analysis results based on a 9-year analytical period are presented in 
Tables V.24 and V.25. The impacts are counted over the lifetime of RCWs 
purchased during the period 2027-2035.\170\
---------------------------------------------------------------------------

    \168\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars/ (last accessed June 24, 2023). 
DOE used the prior version of Circular A-4 (2003) as a result of the 
effective date of the new version.
    \169\ 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.
    \170\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2036.

      Table V.24--Cumulative National Energy Savings for Residential Clothes Washers; 9 Years of Shipments
                                                  [2027-2035] *
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                               quads
                                                 ---------------------------------------------------------------
Primary energy..................................            0.23            0.27            0.46            0.66
FFC energy......................................            0.24            0.28            0.48            0.69
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2036.


       Table V.25--Cumulative National Water Savings for Residential Clothes Washers; 9 Years of Shipments
                                                  [2027-2035] *
----------------------------------------------------------------------------------------------------------------
                                                                     Trial standard level
                                             -------------------------------------------------------------------
                                                     1                2                3                4
----------------------------------------------------------------------------------------------------------------
                                                                       trillion gallons
                                             -------------------------------------------------------------------
Water Savings...............................            0.47             0.71             0.84             0.95
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2036.

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 RCWs. In 
accordance with OMB's guidelines on regulatory analysis,\171\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.26 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased during the period 2027-
2056.\172\
---------------------------------------------------------------------------

    \171\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. September 17, 2003. Available at: 
obamawhitehouse.archives.gov/omb/circulars_a004_a-4 (last accessed 
July 1, 2021).
    \172\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2057.

[[Page 19100]]



   Table V.26--Cumulative Net Present Value of Consumer Benefits for Residential Clothes Washers; 30 Years of
                                                    Shipments
                                                  [2027-2056] *
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           billion 2022$
                                                 ---------------------------------------------------------------
3 percent.......................................            8.48            8.71           14.68           21.12
7 percent.......................................            3.78            3.28            5.96            8.76
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.27. The impacts are counted over the 
lifetime of products purchased during the period 2027-2035.\171\ 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.27--Cumulative Net Present Value of Consumer Benefits for Residential Clothes Washers; 9 Years of
                                                    Shipments
                                                  [2027-2035] *
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                  Discount rate                  ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                                                           billion 2022$
                                                 ---------------------------------------------------------------
3 percent.......................................            4.03            4.37            6.57            8.79
7 percent.......................................            2.24            2.11            3.45            4.75
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    The previous results reflect the use of a default trend to estimate 
the change in price for RCWs over the analysis period (see section 
IV.F.1 of this document). DOE also conducted a sensitivity analysis 
that considered one scenario with a higher rate of price decline than 
the reference case and one scenario with no price decline. The results 
of these alternative cases are presented in appendix 10C of the direct 
final rule TSD. In the high-price-decline case, the NPV of consumer 
benefits is higher than in the default case. In the no-price-decline 
case, the NPV of consumer benefits is lower than in the default case.
c. Indirect Impacts on Employment
    DOE estimates that amended energy conservation standards for RCWs 
will reduce energy and water expenditures for consumers of those 
products, with the resulting net savings being redirected to other 
forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2027-2031),\173\ where these uncertainties are reduced.
---------------------------------------------------------------------------

    \173\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2032.
---------------------------------------------------------------------------

    The results suggest that the adopted standards are likely to have a 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the direct final rule TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As stated, EPCA, as codified, contains the provision that 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))
    As discussed in the following sections, DOE has concluded that the 
standards adopted in this direct final rule will not lessen the utility 
or performance of the RCWs under consideration in this rulemaking. 
Manufacturers of these products currently offer units that meet or 
exceed the adopted standards.
a. Performance Characteristics
    EPCA authorizes DOE to design test procedures that measure energy 
efficiency, energy use, water use, or estimated annual operating cost 
of a covered product during a representative average use cycle or 
period of use. (42 U.S.C. 6293(b)(3)) Representative average use of a 
clothes washer reflects, in part, a consumer using the clothes washer 
to achieve an acceptable level of cleaning performance. DOE recognizes 
that in general, a consumer-acceptable level of cleaning performance 
can be easier to achieve through the use of higher amounts of energy 
and water use during the clothes washer cycle. Conversely, maintaining 
acceptable cleaning performance can be more difficult as energy and 
water levels are reduced. As such, improving one aspect of clothes 
washer performance, such as reducing energy and/or water use as a 
result of energy conservation standards, may require manufacturers to 
make a

[[Page 19101]]

trade-off with one or more other aspects of performance, such as 
cleaning performance, depending on which performance characteristics 
are prioritized by the manufacturer. Currently, DOE's test procedures 
address the energy and water efficiency of clothes washers, but do not 
prescribe a method for testing clothes washer cleaning performance or 
other consumer-relevant attributes of performance.
    DOE has identified through its market research certain high-
efficiency RCWs that achieve equal or better cleaning performance than 
lower-efficiency RCWs in third-party performance reviews. For example, 
in the March 2023 NOPR, DOE referenced performance ratings published by 
Consumer Reports,\174\ which DOE recognizes is one popular resource for 
consumers seeking independent reviews of consumer products. 88 FR 
13520, 13599. According to information provided on its website, the 
test method used by Consumer Reports appears to be similar in nature to 
AHAM's cleaning performance test procedure, but inconsistent with the 
test conditions prescribed by DOE's appendix J test procedure; \175\ 
nevertheless, its test results provide an objective measure of the 
performance capabilities for products currently on the market. Id.
---------------------------------------------------------------------------

    \174\ Consumer Reports ratings of clothes washers. Available at: 
www.consumerreports.org/appliances/washing-machines/ (last accessed 
September 23, 2022).
    \175\ Consumer Reports describes its washing performance test as 
reflecting the degree of color change to swatches of fabric that 
were included in an 8-pound test load of mixed cotton items using 
the unit's ``most aggressive'' normal cycle.
---------------------------------------------------------------------------

    In the March 2023 NOPR, DOE sought comment on whether the Consumer 
Reports test produces cleaning performance results that are 
representative of an average use cycle as measured by the DOE test 
procedure. Id. DOE also sought comment on how relative cleaning 
performance results would vary if tested under test conditions 
consistent with the DOE appendix J test procedure. Id. DOE received no 
comments in response to these specific requests for comment.
    In addition to considering the Consumer Reports ratings, in support 
of the March 2023 NOPR, DOE conducted performance testing on a 
representative sample of top-loading standard-size and front-loading 
standard-size units, which collectively represent around 98 percent of 
RCW shipments. Id. at 88 FR 13599. DOE provided the detailed results of 
its testing in a performance characteristics test report made available 
in the docket for this rulemaking. In particular, DOE evaluated wash 
temperatures, stain removal, mechanical action (i.e., ``wear and 
tear''), and cycle duration across the range of efficiency levels 
considered in the analysis. Specifically, DOE evaluated wash 
temperatures and cycle time based on test data performed according to 
DOE's new appendix J test procedure; additionally, DOE evaluated 
cleaning performance and fabric care based on additional testing 
performed according to the soil/stain removal and mechanical action 
tests specified in AHAM's HLW-2-2020 test method: Performance 
Evaluation Procedures for Household Clothes Washers (``AHAM HLW-2-
2020''). Id. The AHAM HLW-2-2020 test method does not prescribe 
specific test conditions for performing the test (e.g., inlet water 
temperatures conditions, load size, test cycle, or wash/rinse 
temperature selection). Id. For each RCW in its test sample, DOE tested 
the Hot Wash/Cold Rinse (``Hot'') temperature selection \176\ in the 
Normal cycle \177\ using the large load size \178\ specified in 
appendix J, as well as using the inlet water temperatures and ambient 
conditions specified in appendix J. Id. at 88 FR 13600. DOE 
specifically analyzed the Hot cycle with the large load size because 
(1) DOE's understanding at the time of the March 2023 NOPR was that the 
Hot temperature selection would be the temperature selection most 
likely targeted for reduced wash temperature as a design option for 
achieving a higher energy efficiency rating; (2) the large load size is 
more challenging to clean than the small load size; and (3) all units 
in the test sample offer a Hot temperature selection (allowing for 
consistent comparison across units). Id. DOE stated in the March 2023 
NOPR that it expects that the Hot temperature selection with the large 
load size is the cycle combination most likely to experience the types 
of performance compromises described by AHAM and manufacturers. Id. In 
sum, DOE selected the most conservative assumptions for its performance 
testing investigation to allow DOE to better understand the potential 
impacts on performance at various efficiency levels for RCWs. Id.
---------------------------------------------------------------------------

    \176\ Figure 2.12.1.2 of appendix J provides a flow chart 
defining the Hot Wash/Cold Rinse temperature selection. Generally, 
the Hot Wash/Cold Rinse temperature selection corresponds to the 
hottest available wash temperature less than 140 [deg]F, with 
certain exceptions as provided in Figure 2.12.1.2.
    \177\ Section 1 of appendix J defines the Normal cycle as the 
cycle recommended by the manufacturer (considering manufacturer 
instructions, control panel labeling, and other markings on the 
clothes washer) for normal, regular, or typical use for washing up 
to a full load of normally soiled cotton clothing.
    \178\ Table 5.1 of appendix J defines the small and large load 
sizes to be tested according to the clothes washer's measured 
capacity.
---------------------------------------------------------------------------

    In the March 2023 NOPR, DOE requested comment on its use of the Hot 
temperature selection with the large load size to evaluate potential 
impacts on clothes washer performance as a result of amended standards. 
Id.
    AHAM commented that the warm wash (``Warm'') temperature selection 
would be the selection most likely targeted for reduced wash 
temperature as a design option for achieving higher efficiency--rather 
than Hot, as DOE asserted in the March 2023 NOPR--because the Warm 
setting is more heavily weighted in the test procedure due to its 
larger usage factor. (AHAM, No. 464 at pp. 4-5)
    In response to AHAM's comment, DOE acknowledges that each degree of 
temperature reduction on the Warm temperature setting would provide a 
greater improvement to measured efficiency than each degree of 
temperature reduction on the Hot temperature setting, given the higher 
usage factor of the Warm temperature setting in the DOE test 
procedures. Despite this, DOE notes that the Hot temperature setting--
which on the large majority of clothes washers provides the highest 
temperature available in the Normal cycle--would be the temperature 
setting that provides the highest level of cleaning performance for 
soils and stains that require heated water for adequate removal.\179\ 
As such, testing the Hot setting \180\ provides a measure of the 
maximum soil and stain removal performance that can be achieved in the 
Normal cycle for soils and stains that require heated water for 
adequate removal. Measuring the maximum soil and stain removal 
performance of a clothes washer provides an indication of how the 
maximum performance of a clothes washer may be impacted at different 
efficiency levels. For these reasons, DOE has determined that an 
analysis of cleaning performance using the Hot temperature setting 
\181\ is appropriate for determining whether the highest level of 
performance that can be achieved by the clothes washer on the Normal 
cycle would be negatively impacted at higher standard levels.
---------------------------------------------------------------------------

    \179\ On models that provide an ``Extra Hot'' temperature 
setting in the Normal cycle, the Extra Hot setting would be expected 
to provide the highest cleaning performance of such soils and 
stains.
    \180\ Or, alternatively, the Extra Hot setting on clothes 
washers that provide an Extra Hot setting in the Normal cycle.
    \181\ Or, alternatively, the Extra Hot setting on clothes 
washers that provide an Extra Hot setting in the Normal cycle.

---------------------------------------------------------------------------

[[Page 19102]]

    Additionally, as discussed in detail in the March 2023 NOPR, DOE 
also performed the Soil/Stain Removal test and Mechanical Action test 
specified in industry standard AHAM HLW-2-2020. 88 FR 13520, 13600. The 
Soil/Stain Removal test evaluates the performance of household clothes 
washers in removing representative soils and stains from fabric. Id. 
The Mechanical Action test measures the amount of ``wear and tear'' 
applied by the clothes washer to the textiles. Id.
    DOE requested comment on its use of the Soil/Stain Removal test and 
Mechanical Action test specified in AHAM HLW-2-2020 as the basis for 
evaluating performance-related concerns expressed by AHAM and 
manufacturers. Id.
    The performance characteristics test report that accompanied the 
March 2023 NOPR provides detailed test results in table and graphical 
format. Id. The discussion throughout the remainder of this section 
summarizes the key preliminary conclusions from the test results as 
presented in the March 2023 NOPR. Id.
    To evaluate whether more-stringent standards may reduce water 
temperatures below the 85 [deg]F threshold and thus potentially 
decrease cleaning performance for fatty soils, DOE analyzed the wash 
temperature of the hottest temperature selection available in the 
Normal cycle for each RCW in the test sample. Id. For front-loading 
standard-size RCWs, DOE's test data showed no identifiable correlation 
between efficiency and the hottest available wash temperature in the 
Normal cycle. Id. At the proposed standard level (i.e., NOPR TSL 4, 
corresponding to EL 3), considering units both slightly higher and 
slightly lower than EL 3, the hottest available wash temperature in the 
Normal cycle ranged from around 70 [deg]F to around 140 [deg]F. Id. 
This closely matched the range of the hottest wash temperatures 
available on units at lower efficiency levels, which ranged from around 
80 [deg]F to around 155 [deg]F. Id. Notably, at EL 3, multiple models 
from multiple manufacturers provided wash temperatures higher than the 
85 [deg]F threshold and would therefore be able to dissolve and clean 
fatty soils. Id.
    For top-loading standard-size RCWs, DOE's test data showed that for 
units at EL 2 and below, the hottest available wash temperature in the 
Normal cycle ranged from around 70 [deg]F to around 110 [deg]F. Id. At 
EL 3 (considering units both slightly higher and slightly lower than EL 
3), the hottest available wash temperature in the Normal cycle ranged 
from around 80 [deg]F to around 100 [deg]F. Id. Several models from 
multiple manufacturers demonstrated temperatures higher than the 85 
[deg]F threshold and would therefore be able to dissolve and clean 
fatty soils. Id.
    Based on this data, DOE tentatively concluded that the proposed 
standard level (i.e., NOPR TSL 4), would not require a substantive 
reduction in hot water temperature on the hottest temperature selection 
in the Normal cycle, and would not preclude the ability to provide wash 
temperatures above the 85 [deg]F threshold. Id.
    In the March 2023 NOPR, DOE requested comment on its wash 
temperature data presented in the performance characteristics test 
report and on its tentative conclusions derived from this data. Id. DOE 
requested any additional data that DOE should consider about wash 
temperatures at the proposed standard level. Id.
    To evaluate whether more-stringent standards would result in a 
decrease in stain removal performance, DOE conducted the Soil/Stain 
Removal test specified in AHAM HLW-2-2020 using the Hot temperature 
selection with the largest load size, as described. Id. In particular, 
one of the stains evaluated in the AHAM HLW-2-2020 Soil/Stain Removal 
test is sebum--an oily, waxy substance produced by skin glands.\182\ 
Id. For front-loading standard-size RCWs, DOE's test data showed no 
observable correlation between efficiency and the total cleaning score 
as measured by the AHAM test method.\183\ Id. At EL 3 (considering 
units both slightly higher and slightly lower than EL 3), total 
cleaning scores ranged from around 86 to around 99 (higher is better). 
Id. At lower efficiency levels, total cleaning scores ranged from 
around 90 to around 96. Id.
---------------------------------------------------------------------------

    \182\ The standardized soil/stain strips used in the AHAM HLW-2-
2020 test consist of square test fabric swatches carrying five 
different types of stains: red wine, chocolate and milk, blood, 
carbon black/mineral oil, and pigment/sebum.
    \183\ The Total Cleaning Score represents cleaning performance--
as measured by the amount of stain removed from the standardized 
soil/stain strips--as a percentage of the cleaning performance 
achieved by a reference ``maximum'' wash cycle performed on a 
reference clothes washer. The Total Cleaning Score may be less than 
or greater than 100%. A higher Total Cleaning Score represents 
better cleaning performance.
---------------------------------------------------------------------------

    For top-loading standard-size RCWs, DOE's test data showed that for 
units at EL 2 and below, total cleaning scores ranged from around 90 to 
around 98. Id. DOE discussed in the March 2023 NOPR that the clustering 
of data at or above a score of 90 (as measured on the Hot temperature 
selection with the large load size) likely represents a market-
representative threshold of stain removal performance as measured with 
this cycle configuration. Id. DOE's total cleaning scores at EL 3 for 
stain removal also included a score of 90, which indicated that 
manufacturers can produce RCWs at EL 3, while maintaining a level of 
stain removal that is market-representative. Id. at 88 FR 13601. DOE 
also looked at the implementation of prioritizing hardware design 
options over reduced wash temperatures. Id. When hardware design 
options are implemented, DOE's analysis suggested that the proposed 
standard level would not preclude the ability to provide total cleaning 
scores for top-loading units equally as high as the highest scores 
currently achieved by units at lower efficiency levels. Id.
    In the March 2023 NOPR, DOE requested comment on its stain removal 
data presented in the performance characteristics test report and on 
its conclusions derived from this data. Id. In particular, DOE 
requested comment on whether the clustering of data at or above a score 
of 90 (as measured on the Hot temperature selection with the large load 
size) corresponds to a market-representative threshold of stain removal 
performance as measured with this cycle configuration. Id. DOE 
additionally requested comment on its analysis indicating that 
implementing additional hardware design options, rather than reducing 
wash temperatures, on EL 2 units could enable total cleaning scores at 
EL 3 that are equally as high as the highest scores currently achieved 
by units at lower efficiency levels. Id.
    To evaluate whether more-stringent standards would result in an 
increase in wear and tear on clothing, DOE conducted the Mechanical 
Action test specified in AHAM HLW-2-2020 concurrently with the Soil/
Stain Removal test as described. Id. at 88 FR 13601.
    For top-loading standard-size RCWs, DOE's test data showed that 
units at EL 3 have lower (i.e., better) mechanical action scores than 
baseline-rated units, indicating that the higher-efficiency units 
provide less wear and tear than the baseline units in the test sample. 
Id. Specifically, at EL 3, mechanical action scores ranged from around 
150 to around 175, closely matching the range at EL 2, which ranged 
from around 150 to around 170. Id. At lower efficiency levels, 
mechanical action scores ranged from around 190 to around 230. Id. The 
data suggested that the better mechanical action scores at the higher 
efficiency levels may correlate with the use of wash plates (i.e., 
impellers) at those levels, compared to the use of

[[Page 19103]]

traditional agitators at the lower efficiency levels. Id.
    For front-loading standard-size RCWs, DOE's test data showed that 
for units at or below EL 2, mechanical action scores range from around 
135 to around 180. Id. At EL 3 (considering units both slightly higher 
and slightly lower than EL 3), mechanical action scores ranged from 
around 160 to around 210. Id. Although some units at EL 3 had higher 
(i.e., worse) mechanical action scores than the lower-efficiency units, 
the low end of the range was less than (i.e., better than) some of the 
baseline-rated units. Id. DOE stated in the March 2023 NOPR that it was 
not aware of any industry-accepted threshold for acceptable mechanical 
action performance, and there was no significant clustering of DOE's 
data to suggest any particular market-representative threshold. Id.
    Based on this data from the March 2023 NOPR, DOE tentatively 
concluded that the proposed standard level (i.e., NOPR TSL 4) would not 
preclude the ability to provide mechanical action scores comparable to 
the scores for units at lower efficiency levels. Id.
    DOE requested comment on its mechanical action data presented in 
the performance characteristics test report and on its conclusions 
derived from this data. Id. In particular, DOE requested comment on 
whether there is a market-representative threshold of mechanical action 
performance as measured on the Hot temperature selection using the 
large load size. Id. DOE also requested comment on whether better 
mechanical action scores at higher top-loading efficiency levels are 
attributable to the use of wash plates rather than traditional 
agitators in those higher-efficiency units. Id.
    To evaluate whether more-stringent standards would result in an 
increase in cycle time, DOE measured the average cycle time as defined 
in appendix J for each unit in the test sample. Id. For both top-
loading standard-size and front-loading standard-size RCWs, DOE's test 
data showed no observable correlation between efficiency and average 
cycle time. Id. For top-loading standard-size RCWs, the average cycle 
time for the entire product class was around 50 minutes, as measured 
according to the appendix J test procedure. Id. At EL 3 (considering 
units both slightly higher and slightly lower than EL 3), cycle time 
ranged from around 35 minutes to around 65 minutes. Id. This closely 
matched the range of units at lower efficiency levels, which ranged 
from around 35 minutes to around 70 minutes. Id. For front-loading 
standard-size RCWs, the average cycle time for the entire product class 
was around 45 minutes, as measured according to the appendix J test 
procedure. Id. At EL 3 (considering units both slightly higher and 
slightly lower than EL 3), cycle time ranged from around 40 minutes to 
around 55 minutes. Id. This closely matched the range of units at lower 
efficiency levels, which ranged from around 35 minutes to around 65 
minutes. Id.
    Based on this data, DOE tentatively concluded that the proposed 
standard level (i.e., NOPR TSL 4), would not result in an increase in 
average cycle time as measured by appendix J. Id.
    In the March 2023 NOPR, DOE requested comment on its cycle time 
data presented in the performance characteristics test report and on 
its conclusions derived from this data. Id.
    In summary, DOE tentatively concluded in the March 2023 NOPR that 
the proposed standard level (i.e., NOPR TSL 4) can be achieved with key 
performance attributes (e.g., wash temperatures, stain removal, 
mechanical action, and cycle duration) that are largely comparable to 
the performance of lower-efficiency units available on the market 
today. Id. Based on DOE's testing of models that currently meet the 
proposed standards, DOE stated in the March 2023 NOPR that it would not 
expect performance to be compromised at the proposed standard level. 
Id.
    In the March 2023 NOPR, DOE sought comment on its testing and 
assessment of performance attributes (i.e., wash temperatures, stain 
removal, mechanical action, and cycle duration), particularly at the 
proposed standard level (i.e., NOPR TSL 4). Id. DOE sought additional 
data that stakeholders would like DOE to consider on performance 
attributes at NOPR TSL 4 efficiencies as well as the current minimum 
energy conservation standards. Id.
    ASAP, ACEEE, and NYSERDA supported DOE's performance testing 
methodology and agreed with DOE that clothes washer performance 
(including wash temperature, stain removal, mechanical action, and 
cycle time) would not be negatively impacted by the standards proposed 
in the March 2023 NOPR. (ASAP, ACEEE, and NYSERDA, No. 458 at pp. 3-4) 
ASAP, ACEE, and NYSERDA noted that manufacturers have previously 
commented that reducing water temperatures below 85 [deg] F could make 
it difficult to remove fatty soils from both, but that DOE's analysis 
demonstrates that by prioritizing hardware improvements in meeting the 
proposed standards for top-loading units could provide cleaning 
performance equivalent to the highest performance achieved by units at 
lower efficiency levels. (Id. at p. 4) ASAP, ACEEE, and NYSERDA 
commented that, in agreement with DOE testing results, Consumer Reports 
ratings indicate that efficient top-loading models, using impellers 
rather than agitators, generally perform better than less-efficient 
units. (Id.) ASAP, ACEEE, and NYSERDA further commented that top-
loading models meeting the proposed standard have lower (i.e., better) 
mechanical action scores than baseline units, indicating that the 
higher-efficiency machines cause less wear and tear on clothing than 
inefficient baseline unit. (Id.)
    NEEA et al. commented that NEEA research, Consumer Reports testing, 
and consumer ratings on national retailers' websites confirm that top-
loading RCWs that meet NOPR TSL 5 have excellent cleaning performance 
and receive high ratings from consumers, demonstrating no correlation 
between efficiency and cleaning performance. (NEEA et al., No. 455 at 
pp. 3-4)
    The CA IOUs supported DOE's conclusion that RCWs meeting NOPR TSL 4 
will maintain their cleaning performance. (CA IOUs, No. 460 at p. 8) 
The CA IOUs commented that DOE's testing and analysis provide 
sufficient justification that along with sustained cleaning 
performance, the standard levels proposed in the March 2023 NOPR will 
not increase clothing wear and tear, or require longer average cycle 
times. (Id. at p. 10)
    Samsung supported DOE's efforts and detailed testing and analysis 
to consider the impact of the standard levels proposed in the March 
2023 NOPR on performance. (Samsung, No. 461 at p. 3) Samsung commented 
that DOE's testing, data, and results support the proposed levels at 
NOPR TSL 4, providing a systematic and comprehensive evaluation of 
potential impacts on key performance metrics. (Id.) Samsung commented 
that DOE's performance test data show that there is no loss in cleaning 
performance or increase in wear and tear when comparing top-loading 
machines with agitators and wash plates. (Id. at p. 4)
    CEI commented that neither the March 2023 NOPR nor the accompanying 
TSD mention mold, but that mold accumulation in RCWs--rare in pre-2007-
standards models--is now a common problem, particularly in front-
loading models. (Id. at p. 4) CEI listed unpleasant odors, compromised 
clothes washer performance, and stains on washed items as outcomes of 
mold and commented that the situation requires many consumers to 
periodically run the clothes washer empty with a cleaning

[[Page 19104]]

agent designed to eliminate mold. (Id.) CEI added that such cleaning 
agents have become strong sellers, which is evidence of how widespread 
the mold issue has become and that this process of washing the clothes 
washer adds to energy and water use. (Id.) CEI commented that rather 
than acknowledge this issue, the standard levels proposed in the March 
2023 NOPR increase the energy and water restrictions that caused the 
mold problem in the first place. (Id.)
    During the public webinar, Mannino commented that cleaning 
performance and mold concerns started in the 2000s. (Mannino, Public 
Webinar Transcript, No. 91 at p. 85) Mannino expressed concern that 
after three to five years of use clothes no longer smell or look clean 
after a clothes washer cycle and that these problems may not appear 
when testing brand new models. (Id. at pp. 62-63)
    With regard to concerns about mold accumulation and odors, 
commenters have not presented any evidentiary basis for asserting that 
such concerns are a result of energy conservation standards applicable 
to RCWs. DOE understands that front-loading clothes washers are 
inherently more prone to retaining moisture--which in turn may 
contribute to the growth of mold or other odor-causing buildup--in 
components such as the rubber gasket that seals the front door opening, 
which by necessity has a complex geometry with folds and crevices that 
can retain moisture when the clothes washer is not in use. DOE notes 
that the ``first generation'' of front-loading clothes washers was 
widely introduced to the U.S. market in the early 2000s, prior to the 
establishment of any performance-based energy conservation standards 
for front-loading clothes washers. DOE is aware that at least four 
major RCW manufacturers have settled class-action litigation suits 
regarding concerns over mold and odors in these first-generation 
product lines sold on the market during the 2000s.\184\ DOE is also 
aware that in response to such concerns, manufacturers implemented a 
variety of design strategies in their ``second generation'' front-
loading designs to prevent the growth of mold or other odor-causing 
buildup. In particular, DOE has observed through market research and 
reverse-engineering teardowns the use of the following such design 
strategies in front-loading models currently on the market: drain holes 
in the bottom of the rubber door gasket; air vents connecting interior 
spaces within the clothes washer to the outside air; internal fans that 
circulate air through the wash drum after cycle completion; the use of 
antimicrobial materials for certain internal components exposed to 
moisture; and door hinge designs that keep the door slightly ajar when 
not in use. DOE is not aware of any data, nor have any interested 
parties provided such data, to indicate that mold or odor concerns--to 
the extent that such concerns may persist despite the aforementioned 
product design innovations--would be any more prevalent at higher 
efficiency levels than at the current standard levels.
---------------------------------------------------------------------------

    \184\ (1) In re: LG Front Load Washing Machine Class Action 
Litigation, Case No. 2:08-cv-00051-MCA-LDW, U.S. District Court for 
the District of New Jersey, applicable to certain models purchased 
between 2002 and 2006; (2) In re: Whirlpool Corp. Front-Loading 
Washers Settlement, Case No. 1:08-WP-65000, U.S. District Court for 
the Northern District of Ohio, applicable to certain models 
purchased between 2001 and 2010; (3) Grasso, et al. v. Electrolux 
Home Products Inc., Case No. 8:16-cv-00911, U.S. District Court for 
the Middle District of Florida, applicable to certain models 
purchased between 2004 and 2011; and (4) Cobb v. BSH Home Appliances 
Corporation, Case No. 8:10-cv-00711, U.S. District Court for the 
Central District of California, applicable to certain models 
purchased between 2004 and 2011.
---------------------------------------------------------------------------

    CEI stated that EPCA does not prioritize efficiency above all else 
and that EPCA prohibits setting an efficiency standard that would 
sacrifice any desired product characteristic. (CEI, No. 454 at pp. 2-3) 
CEI commented that a reduction in the quality of RCWs has already 
occurred due to previous efficiency standards applied by DOE in 1994, 
2004, 2007, 2015, and 2018, noting that the standards in 2007 and 
beyond have been particularly problematic and that several respects of 
RCW quality have declined since then. (Id. at p. 3) CEI commented that 
problems stem from the fact that compliant models must use considerably 
less water per cycle, and that the traditional agitator in many models 
has been replaced by what CEI characterizes as more-efficient, but 
less-effective alternatives. (Id.) CEI commented that these problems 
would be exacerbated by the proposed rule, which would require further 
reductions in energy and water use. (Id.) CEI commented that DOE had 
not acknowledged adverse impacts of its earlier standards and continues 
to ignore real-world evidence that consumer utility has suffered. (Id.)
    During the public webinar, Mannino commented that consumers in some 
cases load larger capacity top-loading RCWs completely to the top with 
clothing, which causes the clothing to not come out clean. (Mannino, 
Public Webinar Transcript, No. 91 at p. 84)
    Strauch expressed concern about negative impacts to RCW performance 
with higher efficiency levels. (Strauch, No. 430 at p. 1) Strauch 
specifically expressed concern about lower wash temperatures, higher 
spin speeds, and increased spin duration as a result of the standards 
proposed in the March 2023 NOPR. (Id.) Strauch further expressed 
concern about decreased utility and performance at the proposed 
standard level and stated that the proposal should therefore be 
reconsidered. (Id. at p. 3) Additionally, DOE received comments from 
around 120 individual commenters expressing concerns regarding cleaning 
performance. Of these, 11 individuals emphasized what they described as 
the burden of cleaning very dirty loads. DOE also received comments 
from around 50 individuals expressing specific concerns about extended 
cycle time.
    Representatives Latta et al. commented that the standards proposed 
in the March 2023 NOPR \185\ would likely lead to longer and faster 
spin speeds, with resulting negative consequences for consumers 
including longer cycle times, increased noise, and increased wrinkling 
and tangling. (Representatives Latta et al., No. 456 at p. 2)
---------------------------------------------------------------------------

    \185\ DOE notes that the standards adopted in this direct final 
rule are the same as the proposed in the March 2023 NOPR for three 
of the five product classes, but are less stringent than the 
standards proposed in the March 2023 NOPR for the other two product 
classes.
---------------------------------------------------------------------------

    Representatives Latta et al. further expressed concern that the 
impact of the standards proposed in the March 2023 NOPR on product 
performance were not adequately reviewed and addressed by DOE as 
required under EPCA. (Id. at p. 2) Representatives Latta et al. 
commented that to meet the standards proposed in the March 2023 NOPR, 
manufacturers would likely produce units that reduce water use and 
water temperatures, which could result in reduced cleaning and rinsing 
performance. (Id.) Representatives Latta et al. stated faster spin 
speeds would also drive greater potential for load imbalance issues, 
and increased product complexity could drive higher costs and shorter 
product lifespans. (Id. at pp. 2-3)
    GE Appliances (``GEA'') commented that the standards proposed in 
the March 2023 NOPR will lead to increased cycle times. (GEA, No. 457 
at p. 3) GEA commented that DOE's analysis shows the RMC requirements 
resulting from the standards proposed in the March 2023 NOPR will 
require higher spin speed (which takes greater time for the clothes 
washer to reach) and longer spin times. (Id.) GEA pointed out that DOE 
previously recognized the importance of cycle time to consumer

[[Page 19105]]

satisfaction and used cycle time impact as a factor in evaluating 
standards impact and should do so in this rulemaking as well. (Id.)
    GEA further commented that the increased spin speeds required by 
the standards proposed in the March 2023 NOPR will lead to a higher 
incidence of canceled cycles because all modern top-loading RCWs use 
software monitoring of machine performance to assure safety during the 
spin cycle by detecting out-of-balance loads. (Id.) GEA commented that 
the standards proposed in the March 2023 NOPR will require 
exceptionally high spin speeds for top-loading RCWs--likely at least 
900 RPM--and when an out-of-balance condition occurs, the machine will 
first attempt to rebalance the load though the ability to do so can be 
limited. (Id.) GEA commented that if an out-of-balance condition 
continues to exist, the wash cycle will be canceled before it is 
complete, leading either to a higher RMC than intended or truly wet 
clothes that a consumer is likely to rewash. (Id.)
    AHAM commented that there is a correlation between several cleaning 
scores and tested IMEF in DOE's test data, contrary to DOE's 
statements. (AHAM, No. 464 at p. 3) AHAM commented that DOE did not 
evaluate whether there is a correlation between water use/efficiency 
and cleaning performance. (Id.) AHAM noted that the two top-loading 
RCWs in DOE's test sample that meet the standards proposed in the March 
2023 NOPR have the lowest cleaning scores in the test sample. (Id. at 
p. 4) AHAM further commented that DOE should not rely primarily on 
modeled data to conclude that higher ELs will not negatively impact 
cleaning performance, particularly in light of AHAM's data, which 
demonstrate the opposite. (Id.) AHAM acknowledged that it is possible 
to address performance challenges using expensive technology options 
present in the most fully featured products currently on the market, 
but that DOE did not account for those costs in its analysis. (Id. at 
p. 10) AHAM commented that low-income consumers should not have to 
sacrifice performance to meet their price requirements. (Id.)
    AHAM provided data indicating that there is a decrease in cleaning 
performance by about 5 points for both the Warm and Hot temperature 
settings when the wash temperature is decreased by around 30 [deg]F to 
what AHAM characterizes as the temperatures that would be required 
under the proposed standards. (Id. at p. 5)
    AHAM commented that it believes decreased water levels are likely 
to be the largest contributor to decreased performance, in part because 
the standards proposed in the March 2023 NOPR would make equal load 
distribution more difficult, leading to more frequent out-of-balance 
loads. (Id. at p. 5) AHAM noted that an increase in out-of-balance 
loads would increase water usage on some percentage of loads in top-
loading RCWs designed to meet the standards proposed in the March 2023 
NOPR, which would undercut DOE's projected savings. (Id.) AHAM also 
commented that load turnover will be significantly decreased as a 
result of the lower water levels and provided data from manufacturers 
that indicated an 86-87-percent difference in load turnover between a 
unit meeting current standards and a prototype meeting DOE's minimum 
WER for top-loading standard-size RCWs. (Id. at pp. 5-6) AHAM stated 
that it will be harder to remove soils from the full load without 
sufficient turnover of the load. (Id. at p. 7)
    AHAM further provided manufacturer testing data that showed the 
impact of low load turnover and of the standards proposed in the March 
2023 NOPR on the ability of an RCW to remove larger particles (such as 
mud, sand, hair, and vomit). (Id. at p. 7) AHAM indicated that the test 
unit modified to meet the proposed standards required a 10-minute 
increase in cycle time to achieve cleaning performance scores 
comparable to (but still under) that of a unit meeting the current 
standards. (Id.) AHAM commented, with supporting photographs, that a 
modified unit meeting the proposed standards was unable to remove muddy 
towel sediment despite the increase in cycle time, creating a potential 
health issue when consumers attempt to wash out soils like vomit. (Id. 
at pp. 8-9)
    AHAM commented that there is significant consumer push-back on 
reduced water quantity and motion, and their perceived effect on wash 
performance. (Id. at p. 10) AHAM asserted that consumers who perceive 
that their clothes washers do not use enough water complain to 
manufacturers, rely more on higher water cycles, or engage in ``hacks'' 
such as manually adding more water to wet the clothes prior to the 
start of the cycle and that these practices are counter to DOE's energy 
and water efficiency goals. (Id. at pp. 10-11) AHAM commented that not 
enough time has elapsed to demonstrate that the water level per cycle 
is a distinct feature of value to consumers, but that low water levels 
are a product characteristic that significant portions of consumers 
dislike. (Id. at p. 11)
    Whirlpool commented that the standards proposed in the March 2023 
NOPR would lessen the utility and performance of clothes washers, 
particularly for small- and mid-sized RCWs. (Whirlpool, No. 462 at p. 
7) Whirlpool commented that the proposal would result in fewer product 
features and model types, reducing the utility of numerous clothes 
washers, degrading their overall performance, fundamentally altering 
consumer choices, and changing how consumers will do their laundry. 
(Id.)
    Whirlpool commented that DOE's performance evaluation in the March 
2023 NOPR lacks comprehensive analysis on noise and vibration, 
wrinkling, tangling, rinse performance, particulate removal and 
residues, water level, and load motion. (Id. at p. 11) Whirlpool 
further commented that the March 2023 NOPR also fails to provide 
justification for the limited performance evaluation, ignoring several 
performance metrics that Whirlpool claims matter most to consumers. 
(Id.)
    Whirlpool commented that DOE's data does not support the conclusion 
that performance will be satisfactory or reach consumer-acceptable 
limits for the evaluated performance metrics at the standard level 
proposed in the March 2023 NOPR. (Id. at p. 11) Whirlpool further 
commented that DOE's analysis does not address the capacity of high-
performing models that exist at higher efficiency levels. (Id. at pp. 
11-12) Whirlpool commented that DOE's analysis only examines the 
performance of currently available models and does not include expense. 
(Id. at p. 12) Whirlpool commented that there is a consumer-relevant 
difference in retail price between the premium models that DOE 
evaluated and the cost DOE estimated for the purchase of an RCW meeting 
the standard level proposed in the March 2023 NOPR. (Id.)
    Whirlpool commented that providing a consumer-acceptable level of 
load motion is one of the biggest challenges to redesigning a top-
loading RCW to meet the standards proposed in the March 2023 NOPR. (Id. 
at p. 12) Whirlpool commented that based on its own consumer testing, 
Whirlpool supported AHAM's data that the rollover rate falls below the 
minimum consumer acceptance threshold to meet the standards proposed in 
the March 2023 NOPR. (Id.) Whirlpool commented that a test cycle 
designed to meet the proposed standards failed to meet the consumer-
acceptance threshold for load motion by over 82 percent and only offers 
13 percent of the load motion compared to a model certified at the

[[Page 19106]]

current standard (which exceeds the threshold by 200 percent). (Id.)
    Whirlpool commented that faster spin speeds would create consumer-
perceptible challenges with wrinkling and tangling from fabric becoming 
compressed. (Id. at pp. 12-13) Whirlpool further commented that 
consumers may believe their clothes never got wet as they may observe 
dry spots on their clothes at the end of the cycle due to enhanced 
moisture extraction, with lower water levels reinforcing that 
perception. (Id.)
    DOE greatly appreciates the test data and information submitted by 
AHAM and individual manufacturers for DOE's review. This additional 
data and information provided has helped inform DOE's evaluation of 
potential amended standards for RCWs. Specifically, the additional data 
and information provided by AHAM indicates that there are uncertainties 
regarding potential impacts on certain aspects of product performance 
at the standard levels proposed in the March 2023 NOPR and that changes 
to consumer usage patterns to mitigate such impacts could jeopardize 
the energy and water savings that would be achieved at the proposed 
efficiency levels.
    As discussed in section V.C of this document, DOE is finalizing the 
amended standard level at TSL 2, the Recommended TSL. For both top-
loading and front-loading standard-size RCWs, TSL 2 corresponds to EL 
2, which is equivalent to the current ENERGY STAR qualification 
criteria for each product class. DOE notes that this amended standard 
level for both top-loading and front-loading standard-size RCWs is less 
stringent than the level proposed in the March 2023 NOPR (i.e., TSL 3), 
which corresponded to EL 3 for both product classes.
    As discussed in the March 2023 NOPR, DOE tentatively concluded that 
the proposed standard level for top-loading standard-size RCWs could be 
achieved with key performance attributes (e.g., wash temperatures, 
stain removal, mechanical action, and cycle duration) that are largely 
comparable to the performance of lower-efficiency units available on 
the market today. 88 FR 13520, 13601. Specifically, with regard to wash 
temperatures, DOE tentatively concluded that the proposed standard 
level would not require a substantive reduction in hot water 
temperatures and, in particular, would not preclude the ability to 
provide wash temperatures above the important 85 [deg]F threshold 
mentioned by manufacturers. Id. at 88 FR 13600. With regard to stain 
removal, DOE tentatively concluded that a market-representative level 
of performance can be maintained at EL 3, and that maintaining the 
highest level of performance currently achieved at lower efficiency 
levels would be technically achievable at EL 3. Id. at 88 FR 13601. 
With regard to mechanical action, DOE tentatively concluded that the 
proposed standard level would not require preclude the ability to 
provide mechanical action scores comparable to the scores for units at 
lower efficiency levels. Id. With regard to cycle time, DOE tentatively 
concluded that the proposed standard level would not result in an 
increase in average cycle time. Id.
    However, manufacturers presented additional data suggesting that 
other attributes of clothes washer performance not specifically 
evaluated by DOE may be negatively impacted at TSLs 3 and 4 for 
particularly heavily soiled clothing loads, given current design 
technologies and approaches. DOE understands that consumers expect that 
a clothes washer provides a consumer-acceptable level of cleaning 
performance across a range of potential clothing loads. DOE further 
understands that consumers that experience any such negative impacts on 
product performance could potentially alter their usage patterns, for 
example by using more energy-intensive settings more frequently (e.g., 
Extra-Hot temperature setting); using more water-intensive cycle 
options (e.g., Deep Fill option; extra rinse cycles); using non-
regulated cycles (e.g., Heavy Duty cycle); or re-washing clothing that 
has not been cleaned sufficiently. Such changes to consumer usage 
patterns may counteract the energy and water savings that DOE has 
estimated would be achieved at TSLs 3 and 4. As discussed previously in 
section IV.H.2 of this document, DOE conducted a sensitivity analysis 
on the potential impact to energy and water savings that would result 
from changes to consumer usage patterns at TSL 3 and TSL 4.
    Conversely, at TSL 2 (i.e., the Recommended TSL corresponding to 
the standards level adopted in this direct final rule), DOE's data 
demonstrates no negative impact on the performance or cycle time of 
both top-loading and front-loading RCWs. Specifically, for top-loading 
standard-size RCWs, DOE's test data show wash temperatures in the 
Normal cycle as high as 110 [deg]F at EL 2, matching the highest wash 
temperatures observed in units at lower efficiency levels. DOE test 
data for top-loading standard-size RCWs also indicate cleaning scores 
as high as 98 at EL 2, representing the highest scores among DOE's 
entire test sample, and higher than the scores observed at lower 
efficiency levels. Regarding mechanical action, DOE's test data show 
that for top-loading standard-size RCWs at EL 2, the mechanical action 
scores range from around 150 to around 170--significantly lower (i.e., 
better) than the range at lower efficiency levels. DOE's test data 
further show that for top-loading standard-size RCWs, the range of 
cycle times at EL 2 is no higher than for units at lower efficiency 
levels. Specifically, among units in DOE's test sample that meet or 
exceed EL 2, cycle time ranges from around 35 minutes to around 65 
minutes. This closely matches the range of units at lower efficiency 
levels, which range from around 35 minutes to around 70 minutes.
    For front-loading standard-size RCWs, DOE's test data showed no 
identifiable correlation between efficiency and the hottest available 
wash temperature in the Normal cycle. Among units that meet or exceed 
EL 2, the hottest available wash temperatures in the Normal cycle range 
from around 70 [deg]F to around 140 [deg]F. This closely matches the 
range of the hottest wash temperatures available on units at lower 
efficiency levels, which ranged from around 80 [deg]F to around 155 
[deg]F. DOE's test data also shows no observable correlation between 
efficiency and cleaning score. Among units that meet or exceed EL 2, 
cleaning scores range from around 86 to around 99. At lower efficiency 
levels, total cleaning scores ranged from around 90 to around 96. 
Regarding mechanical action, DOE's test data shows that at EL 2, 
mechanical action scores range from around 160 to around 195 (lower is 
better), compared to a range of around 135 to around 180 for units at 
lower efficiency levels. DOE's test data further show that for front-
loading standard-size RCWs, the range of cycle times at EL 2 is no 
higher than for units at lower efficiency levels. Specifically, among 
units in DOE's test sample that meet or exceed EL 2, cycle time ranges 
from around 40 minutes to around 55 minutes. This closely matches the 
range of units at lower efficiency levels, which range from around 35 
minutes to around 65 minutes.
    DOE notes that in response to the March 2023 NOPR, manufacturers 
did not provide any specific data nor express any specific concerns 
regarding clothes washer performance at TSL 2 (corresponding to EL 2). 
Based on the information available, including DOE test results as 
summarized in the preceding paragraphs, DOE concludes that no lessening 
of product utility or performance would occur at TSL 2. As previously 
discussed, on February 14, 2024, DOE received a second joint

[[Page 19107]]

statement from the same group of stakeholders that submitted the Joint 
Agreement in which the signatories reaffirmed the standards recommended 
in the Joint Agreement.\186\ In particular, the letter states that 
DOE's test data show, and industry experience agrees, that the 
recommended standard levels for RCWs can maintain good cleaning 
performance and do not preclude the ability to provide high wash 
temperatures.
---------------------------------------------------------------------------

    \186\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    The test data presented in the March 2023 NOPR contradict certain 
conclusions and presumptions made by DOE in previous rulemakings with 
regards to cycle times. In particular, in a NOPR published on August 
13, 2020 (``August 2020 NOPR''), which preceded the December 2020 Final 
Rule, DOE stated its presumption that the shortest possible cycle times 
currently available on the market represent the models for which 
manufacturers have prioritized cycle time while maintaining adequate 
performance across the other performance aspects; and that based on 
this presumption, the current energy conservation standards may be 
precluding manufacturers from bringing models to the market with 
substantially shorter cycle times. 85 FR 49297, 49305; reiterated at 85 
FR 81359, 81361. DOE further asserted that offering products with 
shorter cycle times would require more per-cycle energy and/or water 
use than would be permitted under the current standards in order to 
maintain the same level of performance in other areas (e.g., cleaning, 
noise, etc.). Id.
    DOE has determined, contrary to the August 2020 NOPR's assumptions, 
that current energy conservation standards have not prevented the sale 
of RCWs with shorter cycle times. DOE's test data presented in the 
March 2023 NOPR indicates no discernable correlation between efficiency 
level and cycle time for either top-loading standard-size or front-
loading standard-size RCWs (i.e., the RCW product classes subject to 
the December 2020 Final Rule). Indeed, for top-loading standard-size 
RCWs, the most efficient model in DOE's test sample has the same cycle 
time of 48 minutes as the least efficient minimally-compliant model in 
DOE's test sample. The models with the lowest cycle times of 35 and 36 
minutes achieve higher efficiency levels EL 1 and EL 3, respectively. 
Similarly, for front-loading standard-size RCWs, the most efficient 
model in DOE's test sample has a cycle time of 41 minutes, 
substantially similar to the baseline unit with a cycle time of 36 
minutes. The model with the lowest cycle time of 33 minutes achieves 
higher efficiency level EL 1. Based on this data, DOE reaches a 
different conclusion than was reached in the December 2020 Final Rule. 
In particular, noting that DOE's data shows no discernable correlation 
between efficiency and cycle time, this data does not support DOE's 
prior assertion that the current energy conservation standards may be 
precluding manufacturers from bringing models to the market with 
substantially shorter cycle times, or DOE's prior presumption that 
offering products with shorter cycle times would require more per-cycle 
energy and/or water use than would be permitted under the current 
standards.
    Furthermore, in the second joint statement submitted February 14, 
2024, by the signatories of the Joint Agreement, the signatories 
acknowledge that DOE's investigative testing shows that cycle times at 
the recommended levels for RCWs are the same as RCWs on the market 
today.
    Finally, for the reasons discussed above, DOE has also determined 
that the standards adopted in this rule will not require increased 
cycle times.
    As discussed, the adopted standards level for standard-size RCWs 
corresponds to the ENERGY STAR level for each product class. The ENERGY 
STAR certified product list indicates a wide range of models currently 
available on the market at this level. Currently, approximately 31 
percent of all top-loading standard-size shipments meet this level. Of 
the nine OEMs offering top-loading standard-size RCWs, six OEMs offer 
166 basic models that meet the final standard level. These six OEMs 
that currently offer top-loading standard-size RCW models that meet the 
final standard level collectively account for over 95 percent of 
overall top-loading standard-size RCW shipments. Currently, 
approximately 92 percent of all front-loading standard-size shipments 
meet this level. Of the seven OEMs with front-loading standard-size 
products, six OEMs offer 169 basic models (representing approximately 
89 percent of all front-loading standard-size basic models).
    Samsung recommended that DOE formalize its performance test plan or 
a similar approach to qualify the test cycle, similar to the approach 
used in the recently finalized dishwasher test procedure. (Samsung, No. 
461 at p. 3) Samsung commented that ensuring products perform their 
basic functions during energy tests is of utmost importance, and if 
manufacturers compromise performance to achieve higher efficiency, it 
may diminish consumer trust in the U.S. Federal Trade Commission 
(``FTC'') EnergyGuide label and DOE minimum efficiency standards. (Id.) 
Samsung stated that the modes of operation tested, typically the 
default mode, must demonstrate a minimum level of acceptable 
functionality, because if the tested default mode fails to meet 
expectations, the consumer may resort to using more energy-consuming 
modes, defeating the purpose of energy efficiency standards. (Id.)
    EPCA authorizes DOE to design test procedures that measure energy 
efficiency, energy use, water use (in the case of showerheads, faucets, 
water closets and urinals), or estimated annual operating cost of a 
covered product during a representative average use cycle or period of 
use. (42 U.S.C. 6293(b)(3)) As discussed, DOE's test procedures address 
the energy and water efficiency of RCWs, but do not prescribe a method 
for testing clothes washer cleaning performance or other consumer-
relevant attributes of performance.
    DOE's test procedure for clothes washers requires testing using the 
Normal cycle,\187\ and consequently compliance with the applicable 
standards is determined based on the measured energy and water use of 
the Normal cycle. As the clothes washer market continuously evolves to 
higher levels of efficiency--either as a result of mandatory minimum 
standards or in response to voluntary programs such as ENERGY STAR--it 
becomes increasingly more important that DOE ensures that its test 
procedure continues to reflect representative use. As such, the Normal 
cycle that is used to test the clothes washer for energy and water 
performance must be one that provides a consumer-acceptable level of 
cleaning performance, even as efficiency increases.
---------------------------------------------------------------------------

    \187\ As discussed, the Normal cycle is defined as the cycle 
recommended by the manufacturer (considering manufacturer 
instructions, control panel labeling, and other markings on the 
clothes washer) for normal, regular, or typical use for washing up 
to a full load of normally soiled cotton clothing. Section 1 of 
appendix J.
---------------------------------------------------------------------------

    DOE has previously considered in the June 2022 TP Final Rule 
whether to propose amendments to the test procedure to define what 
constitutes ``washing up to a full load of normally soiled cotton 
clothing'' (i.e., the cleaning performance) to ensure that DOE's 
clothes washer test procedure accurately and fully tests clothes 
washers during a representative average use cycle. 87 FR 33316, 33352. 
After evaluating the existing ENERGY STAR

[[Page 19108]]

test procedure for determining clothes washer cleaning performance and 
the industry test method AHAM HLW-2-2020, DOE determined in the June 
2022 TP Final Rule that it was unable to assess whether the additional 
burden that would be introduced by these cleaning performance test 
methods would be outweighed by the benefits of incorporating either 
test. Id. Although test procedure development is outside the scope of 
this rulemaking, DOE continues to evaluate the merits of establishing a 
cleaning performance test method for clothes washers. DOE would 
consider any proposals regarding cleaning performance test methods 
under a separate test procedure rulemaking.
b. Continued Availability of Small-Capacity Clothes Washers
    In the March 2023 NOPR, DOE discussed how its engineering analysis 
accompanying the March 2023 NOPR indicated that increases in capacity 
would likely be required to achieve higher efficiency levels beyond EL 
1 for the top-loading standard-size product class.\188\ 88 FR 13520, 
13540. In chapter 5 of the TSD accompanying the March 2023 NOPR, DOE 
discussed its findings that at EL 2, top-loading standard-size RCWs 
currently on the market have capacities of approximately 4.4 ft\3\ (an 
increase compared to a typical capacity of 4.0 ft\3\ at EL 1); units at 
EL 3 have capacities of approximately 4.7 ft\3\; and units at EL 4 have 
capacities of approximately 5.0 ft\3\. (See section 5.5.3.2 of the NOPR 
TSD)
---------------------------------------------------------------------------

    \188\ DOE notes that it did not model the use of capacity 
increase as a design option for any other product classes in the 
March 2023 NOPR, having tentatively determined that capacity 
increase is not necessary to achieve higher efficiencies for those 
product classes. 88 FR 13520, 13543.
---------------------------------------------------------------------------

    Whirlpool commented that DOE's proposal will effectively phase out 
small- and mid-sized capacity ``standard-size'' RCWs. (Whirlpool, No. 
462 at p. 7) Whirlpool commented that the standards proposed in the 
March 2023 NOPR fail to account for the inherent benefit that large-
capacity RCWs receive in the calculation of efficiency metrics. (Id.) 
Whirlpool further commented that it is unaware of any top-loading RCWs 
currently available on the market that are at 4.7 ft\3\ and meet the 
proposed EL 3 standards, contradictory to DOE's assumption. (Id. At p. 
8) Whirlpool commented that lower-income consumers and consumers with 
limited space cannot afford to accommodate physically larger RCWs and 
that smaller-capacity units also tend to be more affordable. (Id.) 
Whirlpool stated that it has previously offered RCWs with capacities 
exceeding 6.0 ft\3\, but many consumers had difficulty installing these 
in their homes due to the increase in physical dimensions and trouble 
accessing the bottom of the clothes washer basket. (Id.) Whirlpool 
added that the elimination of small- and mid-size capacity RCWs would 
be extremely harmful to U.S. manufacturers, as an overwhelming majority 
of sales are for RCWs smaller than 4.7 ft\3\. (Id.) Whirlpool further 
commented that for small RCWs to extract the same amount of water, 
faster spin speeds are required because of the smaller basket size, but 
are limited by safety considerations. (Id. At p. 13)
    Whirlpool further commented that larger-capacity RCWs can more 
easily meet the standards proposed in the March 2023 NOPR with better 
RMC and therefore fewer additional technology options added to the 
product, lesser performance degradation, and lower incremental product 
costs than small- or mid-sized RCWs. (Id. At p. 12) Whirlpool commented 
that a small- to mid-size RCW would need to increase spin speed to 
dramatically reduce moisture extraction during the spin phase and would 
need to implement other technology options (lower water temperatures, 
lower water levels, and more efficient controls) compared to a larger-
capacity RCW. (Id.)
    Representatives Latta et al. expressed concern that the standards 
proposed in the March 2023 NOPR are biased in favor of larger-capacity 
RCWs and eliminates a consumer's choice to buy smaller RCWs that better 
meet their needs and space requirements. (Representatives Latta et al., 
No. 456 at p. 2) Representatives Latta et al. commented that the TSD 
indicates RCW capacities would need to be increased to meet the new 
standards--with top-loading RCW capacity increasing to 4.7 ft\3\ or 
more--which creates potential accessibility challenges due to the 
increased height of the machine. (Id.)
    AHAM commented that products with smaller capacities provide a 
utility to consumers because they can be used in tighter spaces, can be 
moved from place to place, or can be used together with a standard-size 
RCW. (AHAM, No. 464 at p. 14) AHAM stated its agreement with DOE's 
statement in the RFI published on August 2, 2019, that these products, 
because of their smaller size, cannot achieve the same levels of 
efficiency as larger products. (Id.) AHAM commented that increases in 
capacity for top-loading RCWs are required to achieve higher efficiency 
levels beyond EL 1, demonstrating that a capacity bias still exists in 
the new EER and WER metrics. (Id. At pp. 12-13) AHAM commented that DOE 
must ensure that it accounts for that bias in order to ensure that 
small- and average-sized capacities are not eliminated from the market 
or overly burdened. (Id.) AHAM noted that front-loading RCWs have 
technological limitations such as drum diameter and volume and top-
loading RCWs have the unique installation and usage conditions that 
limit the attainable efficiency of smaller units. (Id. At pp. 14-15) 
AHAM commented that capacity itself is an option DOE projects will be 
used to increase efficiency and that the larger the capacity, the 
easier it is to incorporate various other technology options as well. 
(Id.) AHAM commented that under EPCA, capacity provides consumer 
utility and is an appropriate basis for establishing product class and 
that the standards proposed in the March 2023 NOPR will decrease the 
ability of manufacturers to provide smaller capacities, despite DOE's 
claim that it has addressed the capacity bias inherent in the test 
procedure. (Id. (citing 42 U.S.C. 6295(q))) AHAM commented that DOE 
must do more to ensure utility associated with various capacities is 
not lost as a result of its standards, particularly because once DOE 
finalizes standards, there is no opportunity to fix the problem due to 
EPCA's anti-backsliding provision. (Id. (citing 42 U.S.C. 6295(o)(1))).
    EPCA prohibits DOE from prescribing an amended or new standard that 
is likely to result in the unavailability in the United States in any 
covered product type (or class) of performance characteristics 
(including reliability), features, sizes, capacities, and volumes that 
are substantially the same as those generally available in the United 
States at the time of the Secretary's finding. (42 U.S.C. 6295(o)(4))
    DOE notes that its observations and tentative determinations in the 
March 2023 NOPR regarding top-loading RCW capacity were based on DOE's 
observations of models currently on the market, which are subject to 
the current IMEF and IWF metrics as measured under the current appendix 
J2 test procedure. Under the current metrics, the lack of lower-
capacity units at higher efficiency levels suggests that increasing 
capacity is required to achieve higher efficiency levels beyond EL 1. 
Accordingly, the ``path'' that DOE modeled for achieving higher 
efficiency levels incorporated increases in capacity at EL 2, EL 3, and 
EL 4, reflecting the existing market.
    However, DOE notes that the new EER and WER metrics defined in 
appendix J, by measuring efficiency on a per-pound

[[Page 19109]]

of clothing basis rather than a per-cubic foot of capacity basis, 
significantly reduce the inherent large-capacity bias provided by the 
current IMEF and IWF metrics.\189\ As such, under the new EER and WER 
metrics, smaller-capacity units will no longer be inherently 
disadvantaged in comparison to larger-capacity units and will be able 
to achieve higher levels of efficiency than are achievable under the 
current IMEF and IWF metrics. As a result, DOE expects that the new EER 
and WER metrics will significantly reduce the correlation between RCW 
capacity and efficiency (i.e., DOE expects that manufacturers will no 
longer need to increase capacity as a necessary means for achieving 
higher efficiency levels).
---------------------------------------------------------------------------

    \189\ In the June 2022 TP Final Rule, DOE noted that under the 
current metrics in appendix J2, energy use (i.e., the denominator of 
the IMEF equation) scales with weighted-average load size, whereas 
capacity (i.e., the numerator of the IMEF equation) scales with 
maximum load size. 87 FR 33316, 33349. This provides an inherent 
numerical advantage to large-capacity clothes washers that is 
disproportionate to the efficiency advantage that can be achieved 
through ``economies of scale'' associated with washing larger loads. 
Id. This relationship applies similarly to water efficiency through 
the IWF equation. Id.
---------------------------------------------------------------------------

    Furthermore, as previously discussed, on February 14, 2024, DOE 
received a second joint statement from the same group of stakeholders 
that submitted the Joint Agreement (including AHAM, of which Whirlpool 
is a member) in which the signatories reaffirmed the standards 
recommended in the Joint Agreement.\190\ In particular, the letter 
states that the stakeholders do not anticipate the recommended 
standards will negatively affect features, which DOE assumes would also 
include capacity.
---------------------------------------------------------------------------

    \190\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    For this direct final rule, DOE updated its engineering analysis to 
show multiple ``paths'' that manufacturers could take to reach higher 
efficiency levels, based on the use of the new EER and WER metrics. 
Specifically, for top-loading standard-size RCWs, DOE modeled multiple 
approaches that manufacturers could use to achieve higher efficiency 
levels under the new metrics, without increasing capacity. In 
particular, the updated analysis shows viable pathways to achieve the 
amended standards enacted by this direct final rule for top-loading 
standard-size units of any capacity. Through this analysis, DOE has 
determined that an increase in capacity is not required as a means for 
achieving the amended standards enacted by this direct final rule. 
Accordingly, DOE has also determined that the amended standards would 
not preclude the availability of smaller-capacity RCWs on the market.
    Chapter 5 of the direct final rule TSD provides tables of the 
representative breakdown among machine energy use, heating energy use, 
drying energy use, and low-power-mode energy use for each of these 
approaches to achieving the higher efficiencies of top-loading 
standard-size product classes.
c. Design Characteristics
    This section discusses comments received from manufacturers 
regarding certain design characteristics: consumer control over water 
levels, porcelain wash baskets, and agitators. DOE notes that as 
previously discussed, on February 14, 2024, DOE received a second joint 
statement from the same group of stakeholders that submitted the Joint 
Agreement (including AHAM, of which GEA and Whirlpool are members) in 
which the signatories reaffirmed the standards recommended in the Joint 
Agreement.\191\ In particular, the letter states that the stakeholders 
do not anticipate the recommended standards will negatively affect 
features or performance, which DOE assumes would include those design 
characteristics considered here.
---------------------------------------------------------------------------

    \191\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

Consumer Control Over Water Levels
    DOE discussed in chapter 5 of the NOPR TSD that most typically, 
current baseline top-loading standard-size RCWs provide both manual and 
automatic (adaptive) water fill controls; or user-adjustable automatic 
controls, which enable the user to customize the amount of water used 
during the wash cycle. Some units may provide only manual controls or 
only automatic water fill control. (See section 5.5.3.2 of the NOPR 
TSD)
    In response to the March 2023 NOPR, GEA commented that its consumer 
research has shown that consumers rate the ability to control the water 
level in their clothes washers in the top quartile of attributes they 
value, and that the standards proposed in the March 2023 NOPR will 
result in the elimination of manual consumer control over water levels 
in top-loading RCWs. (GEA, No. 457 at p. 2) GEA explained they 
completed consumer preference research and the manual consumer control 
feature is in the top quartile for attributes consumers value in 
washing machines across all potential features, including durability, 
warranty coverage, product life, and wash performance. (Id.) 
Additionally, GEA stated that the standards proposed in the March 2023 
NOPR will reduce the amount of water used per-load in a top-loading RCW 
and will result in a visible difference to consumers. (Id. at p. 3)
    DOE also received comments from around 40 individual commenters 
expressing concerns that the standards proposed in the March 2023 NOPR 
would reduce RCW water levels.
    DOE notes that the amended standards enacted by this direct final 
rule for top-loading standard-size RCWs do not preclude the ability to 
offer consumer control over water levels, as demonstrated by the 
current availability of top-loading standard-size RCWs at the adopted 
standard level that offer a variety of cycle options that allow the 
consumer to modulate water levels, including but not limited to Deep 
Fill,\192\ Deep Wash,\193\ Water Plus,\194\ Extra Rinse,\195\ 
Prewash,\196\ and Pre Soak.\197\
---------------------------------------------------------------------------

    \192\ See for example, Maytag MVW7232HC at www.maytag.com/washers-and-dryers/washers/top-load-washers/p.smart-top-load-washer-with-extra-power-button-5.3-cu.-ft.mvw7232hc.html?.
    \193\ See for example, LG WT7400CV at www.lg.com/us/washers-dryers/lg-wt7400cv-top-load-washer.
    \194\ Id.
    \195\ See for example, Kenmore 21652 at www.kenmore.com/products/kenmore-2621652n-21652-top-load-27-washer-white/.
    \196\ Id.
    \197\ See for example Samsung WA50R5200AW at www.samsung.com/us/home-appliances/washers/top-load/wa5200-5-0-cu--ft--top-load-washer-with-active-waterjet-wa50r5200aw-us/.
---------------------------------------------------------------------------

Porcelain Baskets
    DOE discussed in chapter 5 of the NOPR TSD that the baseline top-
loading standard-size RCW design uses an enameled steel (i.e., 
porcelain) wash basket, and that manufacturers would need to switch to 
a stainless steel wash basket at EL 1 to accommodate the faster spin 
speeds required to achieve EL 1 efficiency. (See section 5.5.3.2 of the 
NOPR TSD)
    In response to the March 2023 NOPR, Whirlpool commented that the 
proposed standards will remove porcelain baskets from the market. 
(Whirlpool, No. 462 at p. 11)
    Strauch commented in opposition of the loss of porcelain drums at 
the proposed standard level. (Strauch, No. 430 at p. 2)
    DOE evaluated the use of a stainless steel wash basket (as one of 
the hardware changes enabling spin speed increase) within its screening 
analysis--the purpose of which is to determine which design options to 
retain as the basis for considering higher efficiency levels. This 
change in wash basket

[[Page 19110]]

material meets all five screening criteria as described in section IV.B 
of this document. Specifically, stainless steel wash baskets are 
technologically feasible; practicable to manufacture, install, and 
service on the scale necessary to serve the relevant market at the time 
of the compliance date of the standard; do not have a significant 
adverse impact on the product's utility; do not have a significant 
adverse impact on the product's safety; and are not a proprietary 
technology. Furthermore, DOE is not aware of any distinct consumer 
utility provided by the use of porcelain wash baskets, nor have any 
commenters identified any such consumer utility. For these reasons, DOE 
considers the use of stainless steel wash baskets to be a viable 
approach for improving energy and/or water efficiency and to therefore 
be considered as a ``design option'' in the subsequent engineering 
analysis.
    To the extent that manufacturers currently produce porcelain wash 
baskets, DOE accounts for the product redesign and capital investments 
associated with transitioning models with porcelain wash baskets to 
stainless steel wash baskets in the MIA. DOE also accounts for the 
potential stranded assets that may result from amending standards, 
including the early retirement of equipment and tooling associated with 
producing porcelain wash baskets. See chapter 12 of the direct final 
rule TSD for additional information on conversion costs and stranded 
assets.
Agitators
    The inner drum of a baseline top-loading standard-size RCW 
typically contains a vertically oriented agitator in the center of the 
drum, which undergoes a twisting motion. The motion of the agitator, 
which is powered by an electric motor, circulates the clothes around 
the center of the wash basket. Some agitators have a corkscrew-like 
design that also circulates the clothing vertically from the bottom to 
the top of the basket. Higher-efficiency top-loading RCWs typically use 
a disk-shaped ``wash plate,'' rather than a vertical agitator, to move 
the clothes within the basket. The rotation of the wash plate 
underneath the clothing circulates the clothes throughout the wash 
drum.
    In the March 2023 NOPR, DOE proposed to adopt an amended standard 
for top-loading, standard-size RCWs that corresponded to the CEE Tier 1 
level. As discussed in the March 2023 NOPR, DOE's market analysis 
indicated that top loading models currently on the market at the CEE 
Tier 1 level use wash plates (i.e., do not have agitators). 88 FR 
13520, 13602. DOE stated in the March 2023 NOPR that it was aware of 
top-loading RCWs without an agitator that achieve equal or better 
cleaning performance than top-loading RCWs with a traditional-style 
agitator in Consumer Reports performance reviews. Id.
    DOE sought comment on any aspects of cleaning performance that 
provide differentiation between the use of an agitator or a wash plate 
that are not reflected in the Consumer Reports washing performance 
ratings evaluated in the March 2023 NOPR. 88 FR 13520, 13602. DOE 
sought comment on whether any lessening of the utility or performance 
of top-loading standard-size RCWs, in accordance with 42 U.S.C. 
6295(o)(2)(B)(i)(IV), would result from a potential standard that would 
preclude the use of a traditional agitator. Id. In particular, DOE 
sought information and data on how such utility or performance would be 
measured or evaluated. Id.
    GEA commented that the standards proposed in the March 2023 NOPR 
would eliminate the use of traditional agitators in top-loading RCWs. 
(Id. at pp. 2-3) GEA noted that agitators in top-loading RCWs are such 
an important feature that GEA includes it as a specific filter for 
consumers on its website, as do major retailers. (Id.)
    Whirlpool commented that the standards proposed in the March 2023 
NOPR would remove key consumer-friendly features like agitators from 
the market. (Whirlpool, No. 462 at p. 11) Whirlpool commented that the 
elimination of agitators would be concerning, as shipment data show 
that the majority of consumers greatly prefer agitators for top-loading 
RCWs. (Id.) Whirlpool further commented that there is a strong consumer 
perception that performance is enhanced by the presence of a 
traditional agitator due to observed load motion. (Id.) Whirlpool 
asserted that agitators encourage even distribution of the loads and 
minimize out-of-balance conditions. (Id.)
    Strauch commented in opposition of the loss of agitators at the 
proposed standard level. (Strauch, No. 430 at p. 2)
    During the public webinar, Mannino commented that consumers are 
saying they do not see as much load turnover in large RCWs with wash 
plates compared to RCWs with agitators and noted that in one 
technician's experience, RCWs with agitators have better cleaning 
performance. (Id. at p. 85)
    Representatives Latta et al. commented that the standards proposed 
in the March 2023 NOPR would likely result in the elimination of 
consumer-desired features such as agitators. (Representatives Latta et 
al., No. 456 at p. 2)
    DOE notes that the standards adopted in this direct final rule for 
RCWs do not preclude the ability to offer agitators. All major top-
loading standard-size RCW manufacturers offer models at the ENERGY STAR 
level--which is equivalent to the amended standard level enacted by 
this direct final rule--that include an agitator.\198\
---------------------------------------------------------------------------

    \198\ See, for example, GE PTW705BPTDG at www.geappliances.com/appliance/GE-Profile-5-3-cu-ft-Capacity-Washer-with-Smarter-Wash-Technology-and-FlexDispense-PTW705BPTDG; Kenmore 29152 at 
www.kenmore.com/products/kenmore-29152-4-4-cu-ft-energy-star-174-he-top-load-washer-w-triple-action-agitator-white/; LG WT7155CW at 
www.lg.com/us/washers-dryers/lg-wt7155cw-top-load-washer; Maytag 
MVW7230HW at www.maytag.com/washers-and-dryers/washers/top-load-washers/p.smart-capable-top-load-washer-with-extra-power-button-5.2-cu.-ft.mvw7230hw.html; and Samsung WA49B5205AW at www.samsung.com/us/home-appliances/washers/top-load/4-9-cu--ft--capacity-top-load-washer-with-activewave--agitator-and-active-waterjet-in-white-wa49b5205aw-us/.
---------------------------------------------------------------------------

d. Conclusion
    For the reasons discussed in the previous sections, and based on 
the additional confirming statements from the Joint Agreement 
signatories, DOE has concluded that the standards adopted in this 
direct final rule will not lessen the utility or performance of the 
RCWs under consideration in this rulemaking.
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, EPCA directs the Attorney General of the United 
States (``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 in writing 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. To assist the Attorney General 
in making this determination, DOE will provide the DOJ with copies of 
this direct final rule and the TSD for review.
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

[[Page 19111]]

due to energy conservation standards is also likely to reduce the cost 
of maintaining the reliability of the electricity system, particularly 
during peak-load periods. Chapter 15 in the direct final rule TSD 
presents the estimated impacts on electricity generating capacity, 
relative to the no-new-standards case, for the TSLs that DOE considered 
in this rulemaking.
    Energy conservation resulting from potential energy conservation 
standards for RCWs is expected to yield environmental benefits in the 
form of reduced emissions of certain air pollutants and greenhouse 
gases. Table V.28 provides DOE's estimate of cumulative emissions 
reductions expected to result from the TSLs considered in this 
rulemaking. The emissions were calculated using the multipliers 
discussed in section IV.K of this document. DOE reports annual 
emissions reductions for each TSL in chapter 13 of the direct final 
rule TSD.

Table V.28--Cumulative Emissions Reduction for Residential Clothes Washers Shipped During the Period 2027-2056 *
----------------------------------------------------------------------------------------------------------------
                                                                       Trial standard level
                                                 ---------------------------------------------------------------
                                                         1               2               3               4
----------------------------------------------------------------------------------------------------------------
                                         Electric Power Sector Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            11.6            12.6            28.1            49.9
CH4 (thousand tons).............................             0.8             0.9             1.7             2.6
N2O (thousand tons).............................             0.1             0.1             0.2             0.4
NOX (thousand tons).............................             6.7             7.0            17.0            32.8
SO2 (thousand tons).............................             3.1             3.6             6.8            10.1
Hg (tons).......................................             0.0             0.0             0.0             0.1
----------------------------------------------------------------------------------------------------------------
                                               Upstream Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................             1.2             1.3             3.1             5.8
CH4 (thousand tons).............................           116.0           123.7           292.5           551.8
N2O (thousand tons).............................             0.0             0.0             0.0             0.0
NOX (thousand tons).............................            19.3            20.7            48.5            90.9
SO2 (thousand tons).............................             0.1             0.1             0.1             0.2
Hg (tons).......................................             0.0             0.0             0.0             0.0
----------------------------------------------------------------------------------------------------------------
                                               Total FFC Emissions
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................            12.9            14.0            31.2            55.8
CH4 (thousand tons).............................           116.7           124.6           294.1           554.5
N2O (thousand tons).............................             0.1             0.1             0.2             0.4
NOX (thousand tons).............................            26.0            27.7            65.5           123.7
SO2 (thousand tons).............................             3.2             3.6             7.0            10.3
Hg (tons).......................................             0.0             0.0             0.0             0.1
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    As part of the analysis for this rule, DOE estimated monetary 
benefits likely to result from the reduced emissions of CO2 
that DOE estimated for each of the considered TSLs for RCWs. Section 
IV.L of this document discusses the estimated SC-CO2 values 
that DOE used. Table V.29 presents the value of CO2 
emissions reduction at each TSL for each of the SC-CO2 
cases. The time-series of annual values is presented for the selected 
TSL in chapter 14 of the direct final rule TSD.

 Table V.29--Present Value of CO2 Emissions Reduction for Residential Clothes Washers Shipped During the Period
                                                   2027-2056 *
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CO2 case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
                                                                           million 2022$
                                                 ---------------------------------------------------------------
1...............................................             152             615             947           1,873
2...............................................             160             655           1,011           1,993
3...............................................             354           1,456           2,250           4,427
4...............................................             618           2,563           3,971           7,790
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.


[[Page 19112]]

    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 RCWs. Table V.30 presents the value of the CH4 emissions 
reduction at each TSL, and Table V.31 presents the value of the 
N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the selected TSL in chapter 14 of the 
direct final rule TSD.

   Table V.30--Present Value of Methane Emissions Reduction for Residential Clothes Washers Shipped During the
                                               Period 2027-2056 *
----------------------------------------------------------------------------------------------------------------
                                                                            SC-CH4 case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
                                                                           million 2022$
                                                 ---------------------------------------------------------------
1...............................................              62             174             239             462
2...............................................              65             184             253             487
3...............................................             152             432             595           1,144
4...............................................             280             806           1,115           2,135
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.


  Table V.31--Present Value of Nitrous Oxide Emissions Reduction for Residential Clothes Washers Shipped During
                                             the Period 2027-2056 *
----------------------------------------------------------------------------------------------------------------
                                                                            SC-N2O case
                                                 ---------------------------------------------------------------
                                                                   Discount rate and statistics
                                                 ---------------------------------------------------------------
                       TSL                              5%              3%             2.5%             3%
                                                 ---------------------------------------------------------------
                                                                                                       95th
                                                      Average         Average         Average       Percentile
----------------------------------------------------------------------------------------------------------------
                                                                           million 2022$
                                                 ---------------------------------------------------------------
1...............................................             0.5             1.8             2.8             4.9
2...............................................             0.5             2.0             3.1             5.4
3...............................................             1.1             4.0             6.1            10.7
4...............................................             1.6             6.2             9.5            16.5
----------------------------------------------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    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, however, that the adopted standards would be economically 
justified even without inclusion of monetized benefits of reduced GHG 
emissions.
    DOE also estimated the monetary value of the economic benefits 
associated with NOX and SO2 emissions reductions 
anticipated to result from the considered TSLs for RCWs. The dollar-
per-ton values that DOE used are discussed in section IV.L of this 
document. Table V.32 presents the present value for NOX 
emissions reduction for each TSL calculated using 7-percent and 3-
percent discount rates, and Table V.33 presents similar results for 
SO2 emissions reductions. The results in these tables 
reflect application of EPA's low dollar-per-ton values, which DOE used 
to be conservative. The time-series of annual values is presented for 
the selected TSL in chapter 14 of the direct final rule TSD.

  Table V.32--Present Value of NOX Emissions Reduction for Residential
          Clothes Washers Shipped During the Period 2027-2056 *
------------------------------------------------------------------------
                TSL                  7% Discount rate   3% Discount rate
------------------------------------------------------------------------
                                                million 2022$
                                   -------------------------------------
1.................................                593              1,279
3.................................                608              1,357
4.................................              1,349              3,030
5.................................              2,329              5,379
------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.


[[Page 19113]]


  Table V.33--Present Value of SO2 Emissions Reduction for Residential
          Clothes Washers Shipped During the Period 2027-2056 *
------------------------------------------------------------------------
                TSL                  7% Discount rate   3% Discount rate
------------------------------------------------------------------------
                                                million 2022$
                                   -------------------------------------
1.................................                112                235
3.................................                120                263
4.................................                229                498
5.................................                324                718
------------------------------------------------------------------------
* The analysis period for TSL 2 (the Recommended TSL) is 2028-2057.

    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.34 presents the NPV values that result from adding the 
estimates of the economic benefits resulting from reduced GHG, 
NOX, and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this rulemaking. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered products, and are measured for the 
lifetime of products shipped in 2027-2056.\199\ 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 RCWs shipped during the period 2027-2056.\200\
---------------------------------------------------------------------------

    \199\ The analysis period for TSL 2 (the Recommended TSL) is 
2028-2057.
    \200\ Id.

          Table V.34--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$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................            10.2            10.6            18.7            28.1
3% Average SC-GHG case..........................            10.8            11.2            20.1            30.6
2.5% Average SC-GHG case........................            11.2            11.6            21.1            32.3
3% 95th percentile SC-GHG case..................            12.3            12.8            23.8            37.2
----------------------------------------------------------------------------------------------------------------
                   Using 7% discount rate for Consumer NPV and Health Benefits (billion 2022$)
----------------------------------------------------------------------------------------------------------------
5% Average SC-GHG case..........................             4.7             4.2             8.0            12.3
3% Average SC-GHG case..........................             5.3             4.8             9.4            14.8
2.5% Average SC-GHG case........................             5.7             5.3            10.4            16.5
3% 95th percentile SC-GHG case..................             6.8             6.5            13.1            21.4
----------------------------------------------------------------------------------------------------------------

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered product 
must be designed to achieve the maximum improvement in energy 
efficiency that the Secretary determines is technologically feasible 
and economically justified. (42 U.S.C. 6295(o)(2)(A)) In determining 
whether a standard is economically justified, the Secretary must 
determine whether the benefits of the standard exceed its burdens by, 
to the greatest extent practicable, considering the seven statutory 
factors discussed previously. (42 U.S.C. 6295(o)(2)(B)(i)) The new or 
amended standard must also result in significant conservation of 
energy. (42 U.S.C. 6295(o)(3)(B))
    For this direct final rule, DOE considered the impacts of amended 
standards for RCWs 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

[[Page 19114]]

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.
    It is important to recognize that while DOE is promulgating two 
separate regulatory actions for energy efficiency standards for RCWs 
and consumer clothes dryers, clothes washers and dryers are 
complementary products, and they are sometimes sold and purchased 
together as joint goods. This type of consumer purchasing behavior is 
not typical of DOE energy efficiency standards. These products are 
available in a variety of combinations and the efficiency and/or 
product class of one product does not restrict the efficiency and/or 
product class of the other. The efficiency levels are independent of 
each other. Hence, DOE does not directly model the joint purchasing 
decision of clothes washers and dryers in this rule. It is possible 
that if only one machine fails, consumers could replace one machine or 
could replace both machines jointly. If consumers replace both machines 
when one fails, aggregate lifecycle costs would be the combination of 
impacts as presented in both final rules.
    Consumers value a variety of attributes in RCWs. These attributes 
can factor into consumer purchasing decisions along with installation 
and operating cost. For example, DOE understands certain consumers make 
purchasing decisions on non-efficiency attributes such as color or 
other visual features such as control panel layout, which may overlap 
with efficiency considerations related to and a potential preference 
for mechanical over electronic controls.
    One specific attribute related to the joint use of clothes washers 
and dryers worth noting is the moisture content of clothes as consumers 
wash and dry them. DOE recognizes that amended RCW standards could 
result in less total moisture needing to be removed from the clothing 
in a clothes dryer, whereas amended consumer clothes dryer standards 
could result in a less energy-intensive process for removing that 
moisture. As explained in section IV.E of this document, the amended 
dryer test procedure in appendix D2 includes incoming RMC values (i.e., 
a starting lower moisture content for the load) that are more 
representative of the resulting moisture content seen in high-
efficiency clothes washers. Due to the uniqueness of the Joint 
Recommendation where the clothes washer and dryer proposals and 
compliance dates were aligned, the consumer clothes dryer rulemaking 
encompasses these lower initial moisture values as a starting point for 
the energy use analysis, so the effect of faster spin speeds resulting 
in less ``wet'' clothes is already captured by DOE. The relative 
comparison of efficiency levels for a given product would remain the 
same, even if the baseline energy consumption were adjusted due to an 
increase in efficiency in the complementary product.
    General considerations for consumer welfare and preferences as well 
as the special cases of complementary goods are areas DOE plans to 
explore in a forthcoming RFI related to the agency's updates to its 
overall analytic framework.
    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 forego the 
purchase of a product in the standards case, this decreases sales for 
product manufacturers, and the impact on manufacturers attributed to 
lost revenue is included in the MIA. Second, DOE accounts for energy 
savings attributable only to products actually used by consumers in the 
standards case; if a standard decreases the number of products 
purchased by consumers, this decreases the potential energy savings 
from an energy conservation standard. DOE provides estimates of 
shipments and changes in the volume of product purchases in chapter 9 
of the direct final rule TSD. However, DOE's current analysis does not 
explicitly control for heterogeneity in consumer preferences, 
preferences across subcategories of products or specific features, or 
consumer price sensitivity variation according to household 
income.\201\
---------------------------------------------------------------------------

    \201\ 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.
---------------------------------------------------------------------------

1. Benefits and Burdens of TSLs Considered for Residential Clothes 
Washer Standards
    Tables V.35 and V.36 summarize the quantitative impacts estimated 
for each TSL for RCWs. The national impacts are measured over the 
lifetime of RCWs purchased in the 30-year period that begins in the 
anticipated year of compliance with amended standards (2027-2056 for 
all TSLs except TSL 2, i.e., the ``Recommended TSL'' for RCWs, and 
2028-2057 for TSL 2). The energy savings, emissions reductions, and 
value of emissions reductions refer to full-fuel-cycle results. DOE is 
presenting monetized benefits of GHG emissions reductions in accordance 
with the applicable Executive orders and DOE would reach the same 
conclusion presented in this document in the absence of the social cost 
of greenhouse gases, including the Interim Estimates presented by the 
Interagency Working Group. The efficiency levels contained in each TSL 
are described in section V.A of this document.

         Table V.35--Summary of Analytical Results for Residential Clothes Washer TSLs: National Impacts
----------------------------------------------------------------------------------------------------------------
                    Category                           TSL 1           TSL 2           TSL 3           TSL 4
----------------------------------------------------------------------------------------------------------------
                                     Cumulative FFC National Energy Savings
----------------------------------------------------------------------------------------------------------------
Quads...........................................            0.58            0.67            1.34            2.12
----------------------------------------------------------------------------------------------------------------
                                       Cumulative FFC Emissions Reduction
----------------------------------------------------------------------------------------------------------------
CO2 (million metric tons).......................           12.88           13.96           31.22           55.77
CH4 (thousand tons).............................          116.74          124.57          294.14          554.46
N2O (thousand tons).............................            0.11            0.12            0.24            0.38

[[Page 19115]]

 
NOX (thousand tons).............................           26.03           27.74           65.47          123.66
SO2 (thousand tons).............................            3.18            3.65            6.97           10.33
Hg (tons).......................................            0.02            0.02            0.05            0.07
----------------------------------------------------------------------------------------------------------------
                      Present Value of Benefits and Costs (3% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................           12.99           17.92           26.18           34.19
Climate Benefits *..............................            0.79            0.84            1.89            3.38
Health Benefits **..............................            1.51            1.62            3.53            6.10
                                                 ---------------------------------------------------------------
    Total Benefits [dagger].....................           15.30           20.38           31.60           43.66
Consumer Incremental Product Costs [Dagger].....            4.51            9.20           11.50           13.07
                                                 ---------------------------------------------------------------
    Consumer Net Benefits.......................            8.48            8.71           14.68           21.12
        Total Net Benefits......................           10.79           11.18           20.10           30.59
----------------------------------------------------------------------------------------------------------------
                      Present Value of Benefits and Costs (7% discount rate, billion 2022$)
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................            6.61            8.65           12.90           16.61
Climate Benefits *..............................            0.79            0.84            1.89            3.38
Health Benefits **..............................            0.70            0.73            1.58            2.65
                                                 ---------------------------------------------------------------
    Total Benefits [dagger].....................            8.11           10.22           16.37           22.64
Consumer Incremental Product Costs [Dagger].....            2.83            5.37            6.94            7.86
                                                 ---------------------------------------------------------------
    Consumer Net Benefits.......................            3.78            3.28            5.96            8.76
        Total Net Benefits......................            5.28            4.85            9.43           14.79
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs shipped during the period 2027-2056 for
  all TSLs except for TSL 2 (the Recommended TSL). These results include benefits to consumers which accrue
  after 2056 from the products shipped during the period 2027-2056. For TSL 2, this table presents the costs and
  benefits associated with RCWs shipped during the period 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; however, DOE 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 IWG.
** Health benefits are calculated using benefit-per-ton values for NOX and SO2. DOE is currently only monetizing
  (for NOX and SO2) PM2.5 precursor health benefits and (for NOX) ozone precursor health benefits, but will
  continue to assess the ability to monetize other effects such as health benefits from reductions in direct
  PM2.5 emissions. The health benefits are presented at real discount rates of 3 and 7 percent. See section IV.L
  of this document for more details.
[dagger] Total and net benefits include consumer, climate, and health benefits. For presentation purposes, total
  and net benefits for both the 3-percent and 7-percent cases are presented using the average SC-GHG with 3-
  percent discount rate.
[Dagger] Costs include incremental equipment costs as well as installation costs.


                    Table V.36--Summary of Analytical Results for Residential Clothes Washer TSLs: Manufacturer and Consumer Impacts
--------------------------------------------------------------------------------------------------------------------------------------------------------
             Category                           TSL 1                       TSL 2 **                       TSL 3                        TSL 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry NPV (million 2022$) (No-   1,639.0 to 1,710.7..........  1,429.6 to 1,560.9..........  1,053.8 to 1,234.5.........  535.8 to 738.2.
 new-standards case INPV =
 1,707.9).
Industry NPV (% change)...........  (4.0) to 0.2................  (16.3) to (8.6).............  (38.3) to (27.7)...........  (68.6) to (56.8).
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Consumer Average LCC Savings (2022$)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact.........  n.a.........................  n.a.........................  n.a........................  n.a.
Top-Loading Standard-Size.........  $122........................  $111........................  $116.......................  $133.
Front-Loading Compact.............  0...........................  9...........................  8..........................  38.
Front-Loading Standard-Size.......  26..........................  46..........................  15.........................  49.
Semi-Automatic....................  280.........................  284.........................  280........................  188.
Shipment-Weighted Average *.......  98..........................  96..........................  91.........................  111.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               Consumer Simple PBP (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact.........  n.a.........................  n.a.........................  n.a........................  n.a.
Top-Loading Standard-Size.........  4.4.........................  6.2.........................  5.7........................  5.4.
Front-Loading Compact.............  9.6.........................  9.3.........................  9.5........................  8.0.
Front-Loading Standard-Size.......  0.9.........................  1.4.........................  1.6........................  1.7.
Semi-Automatic....................  0.5.........................  0.5.........................  0.5........................  0.6.
Shipment-Weighted Average *.......  3.6.........................  4.9.........................  4.6........................  4.4.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Percent of Consumers that Experience a Net Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Top-Loading Ultra-Compact.........  n.a.........................  n.a.........................  n.a........................  n.a.
Top-Loading Standard-Size.........  16..........................  27..........................  28.........................  26.
Front-Loading Compact.............  0...........................  21..........................  22.........................  35.
Front-Loading Standard-Size.......  1...........................  2...........................  20.........................  16.

[[Page 19116]]

 
Semi-Automatic....................  0...........................  0...........................  0..........................  0.
Shipment-Weighted Average *.......  12..........................  20..........................  25.........................  23.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Parentheses indicate negative (-) values. The entry ``n.a.'' means not applicable because there is no change in the standard at certain TSLs.
* Weighted by shares of each product class in total projected shipments in 2027 except for TSL 2 (the Recommended TSL).
** For TSL 2 (the Recommended TSL), shipment-weighted averages are weighted by shares of each product class in total projected shipments in 2028.

    DOE first considered TSL 4, which represents the max-tech 
efficiency levels for all product classes. Specifically for top-loading 
standard-size RCWs, DOE's expected design path for TSL 4 (which 
represents EL 4 for this product class) incorporates the use of a 
direct drive motor, stainless steel basket and more robust suspension 
and balancing systems (as methods for enabling faster spin speeds), a 
wash plate (as a means for enabling reduced water levels), reduced hot 
and warm wash water temperatures compared to temperatures available on 
baseline units, spray rinse, the fastest achievable spin speeds, and an 
increase in tub size compared to the baseline (as a means for reducing 
energy and water use on a per-pound of clothing basis).\202\ Among 
these design options, use of a direct drive motor, stainless steel 
basket and more robust suspension and balancing systems, reduced wash 
water temperatures, and fastest achievable spin speeds reduce energy 
use only; spray rinse reduces water use only; and the wash plate and 
increase in tub size reduce both energy and water use together.\203\
---------------------------------------------------------------------------

    \202\ As discussed previously, DOE's direct final rule analysis 
indicates that an increase in tub capacity is not required to 
achieve EL 5; however, manufacturers are currently implementing this 
design option in EL 5 models currently available on the market.
    \203\ As discussed previously in section IV.A.2 of this 
document, because the energy used to heat the water consumed by the 
RCW is included as part of the EER energy use metric, technologies 
that decrease hot water use also inherently decrease energy use.
---------------------------------------------------------------------------

    For front-loading standard-size RCWs, DOE's expected design path 
for TSL 4 (which represents EL 4 for this product class) incorporates 
the use of the most efficient available direct drive motor, the 
implementation of advanced sensors, the fastest achievable spin speeds, 
and lower cold water volume (but with no change to total hot water 
use). Among these design options, the direct drive motor, more advanced 
sensors, and faster spin speeds reduce energy use only; whereas the 
lower cold water volume reduces water use only.
    TSL 4 would save an estimated 2.12 quads of energy and 2.73 
trillion gallons of water, an amount DOE considers significant. Under 
TSL 4, the NPV of consumer benefit would be $8.76 billion using a 
discount rate of 7 percent, and $21.12 billion using a discount rate of 
3 percent.
    The cumulative emissions reductions at TSL 4 are 55.77 Mt of 
CO2, 10.33 thousand tons of SO2, 123.66 thousand 
tons of NOX, 0.07 tons of Hg, 554.46 thousand tons of 
CH4, and 0.38 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 $3.38 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $2.65 billion using a 7-percent discount rate and $6.10 
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 $14.79 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $30.59 billion. The estimated total 
NPV is provided for additional information; however, DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 4, the average LCC impact is a savings of $133 for top-
loading standard-size, $38 for front-loading compact, $49 for front-
loading standard-size, and $188 for semi-automatic clothes washers. The 
simple payback period is 5.4 years for top-loading standard-size, 8.0 
years for front-loading compact, 1.7 years for front-loading standard-
size, and 0.6 years for semi-automatic clothes washers. The fraction of 
consumers experiencing a net LCC cost is 26 percent for top-loading 
standard-size, 35 percent for front-loading compact, 16 percent for 
front-loading standard-size, and zero percent for semi-automatic 
clothes washers. For the top-loading standard-size product class, which 
represents 71 percent of the market, TSL 4 would increase the first 
cost by $166, in comparison to an installed cost of $690 for baseline 
units. For the front-loading standard-size product class, which 
represents 25 percent of the market, TSL 4 would increase the first 
cost by $93, compared to an installed cost of $1,027 for baseline 
units. At TSL 4, the standard for top-loading ultra-compact RCWs is at 
the baseline, resulting in no LCC impact, no simple PBP, and no 
consumers experiencing a net LCC cost. Additionally, as a result of 
lower costs associated with well water and septic tanks in rural areas, 
about 40 percent of well-water households would experience a net LCC 
cost at TSL 4.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$1,172.0 million to a decrease of $969.6 million, which correspond to a 
decrease of 68.6 percent and 56.8 percent, respectively. The loss in 
INPV is largely driven by industry conversion costs as manufacturers 
work to redesign their portfolios of model offerings and re-tool entire 
factories to comply with amended standards at this level. Industry 
conversion costs could reach $1,321.2 million at this TSL.
    Conversion costs at max-tech are significant, as nearly all 
existing RCW models would need to be redesigned to meet the required 
efficiencies. Currently, approximately 4 percent of RCW annual 
shipments meet the max-tech levels. For top-loading standard-size RCWs, 
which DOE projects will account for 71 percent of annual shipments in 
2027, less than 1 percent of current shipments meet this level. Of the 
nine OEMs offering top-loading standard-size products, one OEM offers 
five basic models (representing approximately 1 percent of all top-
loading standard-size basic models) that meet the efficiencies required 
by TSL 4. The remaining eight OEMs would need to overhaul their 
existing platforms and make significant updates to their production 
facilities. Those manufacturers may need to incorporate increased tub 
capacities, wash plate designs, direct drive motors, reinforced wash 
baskets, robust suspension and balancing systems, and advanced sensors. 
These product changes require significant investment. In interviews, 
several manufacturers expressed concerns about their ability to meet

[[Page 19117]]

existing market demand given the required scale of investment, redesign 
effort, and 3-year compliance timeline.
    At TSL 3 and higher, manufacturers expressed concerns and presented 
data regarding potential impacts to product performance, including wash 
temperatures, cleaning and rinsing performance, and fabric care. At TSL 
4, such concerns and uncertainties would be further exacerbated. 
Consumers that experience any such negative impacts on product 
performance could potentially alter their usage patterns, for example 
by using more energy-intensive settings more frequently (e.g., Extra-
Hot temperature setting); using more water-intensive cycle options 
(e.g., Deep Fill option; extra rinse cycles); using non-regulated 
cycles (e.g., Heavy Duty cycle); or re-washing clothing that has not 
been cleaned sufficiently. Such changes to consumer usage patterns may 
counteract the energy and water savings that DOE has estimated would be 
achieved at TSL 4. For these reasons, DOE cannot be certain that the 
designs associated with TSL 4 efficiencies would not negatively impact 
certain aspects of standard-size RCW performance and consequently may 
jeopardize the energy and water savings that would be achieved at these 
efficiency levels. DOE emphasizes that its findings in this regard are 
based on the data available at this time and are predicated on the 
current state of clothes washer technology. Additional data that could 
become available, as well as future advances in washing technologies 
and design strategies, could alleviate any such concerns or 
uncertainties regarding product performance and could lead DOE to reach 
a different conclusion in a future rulemaking.
    Based upon the above considerations, the Secretary concludes that 
at TSL 4 for RCWs, the benefits of energy and water savings, positive 
NPV of consumer benefits, and emission reductions would be outweighed 
by the potential for negative consumer utility impacts, which may 
jeopardize the energy and water savings that would be achieved at TSL 
4, and the impacts on manufacturers, including the large potential 
reduction in INPV. DOE estimated the potential loss in INPV to be as 
high as 68 percent. The potential losses in INPV are primarily driven 
by large conversion costs that must be made ahead of the compliance 
date. At max-tech, manufacturers would need to make significant upfront 
investments to update nearly all product lines and manufacturing 
facilities. Manufacturers expressed concern that they would not be able 
to complete product and production line updates within the 3-year 
conversion period. Consequently, the Secretary has concluded that TSL 4 
is not economically justified.
    DOE then considered TSL 3, which represents the ENERGY STAR Most 
Efficient level for the front-loading product classes, the CEE Tier 1 
level for the top-loading standard-size product class, and a gap fill 
level for the semi-automatic product classes.\204\ Specifically, for 
top-loading standard-size RCWs, DOE's expected design path for TSL 3 
(which represents EL 3 for this product class) incorporates many of the 
same technologies and design strategies as described for TSL 4. At TSL 
3, top-loading standard-size units would incorporate a direct drive 
motor, stainless steel basket and more robust suspension and balancing 
systems (as methods for enabling faster spin speeds), a wash plate (as 
a means for enabling reduced water levels), and spray rinse, consistent 
with TSL 4. Models at TSL 3 would also incorporate slightly reduced hot 
wash water temperatures compared to temperatures available on baseline 
units, faster spin speeds compared to the baseline (although not as 
fast as TSL 4), and an increase in tub size compared to the baseline 
(as a means for reducing energy and water use on a per-pound of 
clothing basis).\205\ Among these design options, use of a direct drive 
motor, stainless steel basket and more robust suspension and balancing 
systems, reduced wash water temperatures, and faster spin speeds reduce 
energy use only; spray rinse reduces water use only; and the wash plate 
and increase in tub size reduce both energy and water use together.
---------------------------------------------------------------------------

    \204\ Tables IV.6 and IV.8 of this document provide the and 
ENERGY STAR Most Efficient and CEE Tier 1 equivalencies between the 
current metrics (IMEF and IWF) and the new metrics (EER and WER) for 
the top-loading and front-loading standard-size product classes, 
respectively.
    \205\ As discussed previously, DOE's direct final rule analysis 
indicates that an increase in tub capacity is not required to 
achieve EL 3; however, manufacturers are currently implementing this 
design option in EL 3 models currently available on the market.
---------------------------------------------------------------------------

    For front-loading standard-size RCWs, DOE's expected design path 
for TSL 3 (which represents EL 3 for this product class) incorporates 
the use of the most efficient direct drive motor available, spin speeds 
that are faster than the baseline level but not as fast as at TSL 4, 
and lower water volume (but with no change to total hot water heating). 
Among these design options, the direct drive motor and faster spin 
speeds reduce energy use only; whereas the lower water volume reduces 
water use only.
    TSL 3 would save an estimated 1.34 quads of energy and 2.33 
trillion gallons of water, an amount DOE considers significant. Under 
TSL 3, the NPV of consumer benefit would be $5.96 billion using a 
discount rate of 7 percent, and $14.68 billion using a discount rate of 
3 percent.
    The cumulative emissions reductions at TSL 3 are 31.22 Mt of 
CO2, 6.97 thousand tons of SO2, 65.47 thousand 
tons of NOX, 0.05 tons of Hg, 294.14 thousand tons of 
CH4, and 0.24 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 $1.89 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 3 is $1.58 billion using a 7-percent discount rate and $3.53 
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 $9.43 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 3 is $20.10 billion. The estimated total 
NPV is provided for additional information; however, DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
standard level is economically justified.
    At TSL 3, the average LCC impact is a savings of $116 for top-
loading standard-size, $8 for front-loading compact, $15 for front-
loading standard-size, and $280 for semi-automatic clothes washers. The 
simple payback period is 5.7 years for top-loading standard-size, 9.5 
years for front-loading compact, 1.6 years for front-loading standard-
size, and 0.5 years for semi-automatic clothes washers. The fraction of 
consumers experiencing a net LCC cost is 28 percent for top-loading 
standard-size, 22 percent for front-loading compact, 20 percent for 
front-loading standard-size, and zero percent for semi-automatic 
clothes washers. For the top-loading standard-size product class, TSL 3 
would increase the first cost by $160, in comparison to an installed 
cost of $690 for baseline units. For the front-loading standard-size 
product class, TSL 3 would increase the first cost by $78, compared to 
an installed cost of $1,027 for baseline units. At TSL 3, the standard 
for top-loading ultra-compact RCWs is at the baseline, resulting in no 
LCC impact, no simple PBP, and no consumers

[[Page 19118]]

experiencing a net LCC cost. Overall, across all product classes, 
around 25 percent of consumers would experience a net LCC cost at TSL 
3. DOE estimates that about 16 percent of low-income households would 
experience a net LCC cost at TSL 3, and as a result of having generally 
smaller households and lower annual usage, about 33 percent of senior-
only households would experience a net LCC cost at TSL 3. Additionally, 
as a result of lower costs associated with well water and septic tanks 
in rural areas, about 41 percent of well-water households would 
experience a net LCC cost at TSL 3.
    At TSL 3, the projected change in INPV ranges from a decrease of 
$654.1 million to a decrease of $473.3 million, which correspond to a 
decrease of 38.3 percent and 27.7 percent, respectively. The loss in 
INPV is largely driven by industry conversion costs as manufacturers 
work to redesign their portfolios of model offerings and update 
production facilities to comply with amended standards at this level. 
Industry conversion costs could reach $724.6 million at this TSL.
    For top-loading standard-size products, approximately 3 percent of 
shipments meet TSL 3. Of the nine OEMs offering top-loading standard-
size products, two OEMs offer 20 basic models (representing 
approximately 4 percent of all top-loading standard-size basic models) 
that meet the efficiencies required by TSL 3. At this level, the 
remaining seven manufacturers would likely implement largely similar 
design options as at TSL 4, but to a lesser extent for the increase in 
tub size and hardware changes associated with faster spin speeds (e.g., 
reinforced wash baskets, robust suspension and balancing systems, and 
advanced sensors)--which are faster than the baseline level but not as 
fast as TSL 4. Although top-loading standard-size RCW manufacturers 
indicated that meeting TSL 3 efficiencies would require a less-
extensive redesign than meeting TSL 4 efficiencies, these product 
changes would still require significant investment.
    As discussed above, manufacturers expressed concerns and presented 
data regarding potential impacts to product performance, including wash 
temperatures, cleaning and rinsing performance, and fabric care. DOE's 
analysis of third-party clothes washer performance ratings as well as 
DOE's own performance testing on a representative sample of top-loading 
standard-size and front-loading standard-size RCWs suggested that TSL 3 
can be achieved with key performance attributes (e.g., wash 
temperatures, stain removal, mechanical action, and cycle duration) 
that are largely comparable to the performance of lower-efficiency 
units available on the market today. However, manufacturers presented 
additional data suggesting that other attributes of clothes washer 
performance not specifically evaluated by DOE may be negatively 
impacted at TSL 3 for particularly heavily soiled clothing loads, given 
current design technologies and approaches. For these reasons, DOE 
cannot be certain that the designs associated with TSL 3 efficiencies 
would not negatively impact certain aspects of standard-size RCW 
performance and consequently may jeopardize the energy and water 
savings that would be achieved at these efficiency levels. As with TSL 
4, DOE emphasizes that its findings in this regard are based on the 
data available at this time and are predicated on the current state of 
clothes washer technology. Additional data that could become available, 
as well as future advances in washing technologies and design 
strategies, could alleviate any such concerns or uncertainties 
regarding product performance and could lead DOE to reach a different 
conclusion in a future rulemaking.
    Based upon the above considerations, the Secretary concludes that 
at TSL 3 for RCWs, the benefits of energy and water savings, positive 
NPV of consumer benefits, and emission reductions would be outweighed 
by the potential for negative consumer utility impacts, which may 
jeopardize the energy and water savings that could be achieved at TSL 
3, and the impacts on manufacturers, including the large potential 
reduction in INPV. DOE estimates the potential loss in INPV to be as 
high as 38 percent. The potential losses in INPV are primarily driven 
by large conversion costs associated with redesigning top-loading 
standard-size RCWs that must be made ahead of the compliance date. 
Consequently, the Secretary has concluded that TSL 3 is not 
economically justified.
    DOE then considered the Recommended TSL, which represents the 
ENERGY STAR v.8.1 level for the top-loading and front-loading standard-
size product classes, the ENERGY STAR Most Efficient level for the 
front-loading compact, and a gap fill level for the semi-automatic 
product classes.\206\ DOE's expected design path for top-loading 
standard-size RCWs at the Recommended TSL (which represents EL 2 for 
this product class) incorporates a direct drive motor, stainless steel 
basket and more robust suspension and balancing systems (as methods for 
enabling faster spin speeds), and spray rinse. Models at the 
Recommended TSL would also require faster spin speeds compared to the 
baseline (although not as fast as at TSL 3), lower water volume (but 
with no change to total hot water heating energy), and may include an 
increase in tub size compared to the baseline (as a potential means for 
reducing energy and water use on a per-pound of clothing basis).\207\ 
Among these design options, use of a direct drive motor, stainless 
steel basket and more robust suspension and balancing systems, and 
faster spin speeds reduce energy use only; spray rinse reduces water 
use only; and the lower water volume reduces water use only. Any 
potential increase in tub size would reduce both energy and water use 
together.
---------------------------------------------------------------------------

    \206\ Tables IV.6 and IV.8 of this document provide the ENERGY 
STAR v.8.1 and ENERGY STAR Most Efficient equivalencies between the 
current metrics (IMEF and IWF) and the new metrics (EER and WER) for 
the top-loading and front-loading standard-size product classes, 
respectively.
    \207\ As discussed previously, DOE's direct final rule analysis 
indicates that an increase in tub capacity is not required to 
achieve EL 2; however, manufacturers are currently implementing this 
design option in EL 2 models currently available on the market.
---------------------------------------------------------------------------

    For front-loading standard-size RCWs, DOE's expected design path 
for the Recommended TSL (which represents EL 2 for this product class) 
incorporates the use of a direct drive motor, spin speeds that are 
faster than the baseline level but not as fast as at TSL 3, and lower 
water volume (but with no change to total hot water heating energy). 
Among these design options, the direct drive motor and faster spin 
speeds reduce energy use only; whereas the lower water volume reduces 
water use only.
    The Recommended TSL would save an estimated 0.67 quads of energy 
and 1.89 trillion gallons of water, an amount DOE considers 
significant. Under the Recommended TSL, the NPV of consumer benefit 
would be $3.28 billion using a discount rate of 7 percent, and $8.71 
billion using a discount rate of 3 percent.
    The cumulative emissions reductions at the Recommended TSL are 
13.96 Mt of CO2, 3.65 thousand tons of SO2, 27.74 
thousand tons of NOX, 0.02 tons of Hg, 124.57 thousand tons 
of CH4, and 0.12 thousand tons of N2O. The 
estimated monetary value of the climate benefits from reduced GHG 
emissions (associated with the average SC-GHG at a 3-percent discount 
rate) at the Recommended TSL is $0.84 billion. The estimated monetary 
value of the health benefits from reduced SO2 and 
NOX emissions at the Recommended TSL is

[[Page 19119]]

$0.73 billion using a 7-percent discount rate and $1.62 billion using a 
3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at the Recommended 
TSL is $4.85 billion. Using a 3-percent discount rate for all benefits 
and costs, the estimated total NPV at the Recommended TSL is $11.18 
billion. The estimated total NPV is provided for additional 
information; however, DOE primarily relies upon the NPV of consumer 
benefits when determining whether a standard level is economically 
justified.
    At the Recommended TSL, the average LCC impact is a savings of $111 
for top-loading standard-size, $9 for front-loading compact, $46 for 
front-loading standard-size, and $284 for semi-automatic clothes 
washers. The simple payback period is 6.2 years for top-loading 
standard-size, 9.3 years for front-loading compact, 1.4 years for 
front-loading standard-size, and 0.5 years for semi-automatic clothes 
washers. The fraction of consumers experiencing a net LCC cost is 27 
percent for top-loading standard-size, 21 percent for front-loading 
compact, 2 percent for front-loading standard-size, and zero percent 
for semi-automatic clothes washers. For the top-loading standard-size 
product class, The Recommended TSL would increase the first cost by 
$146, in comparison to an installed cost of $687 for baseline units in 
2028. For the front-loading standard-size product class, the 
Recommended TSL would increase the first cost by $67, compared to an 
installed cost of $1,021 for baseline units in 2028. At the Recommended 
TSL, the standard for top-loading ultra-compact RCWs is at the 
baseline, resulting in no LCC impact, no simple PBP, and no consumers 
experiencing a net LCC cost. Overall, across all product classes, 
around 20 percent of consumers would experience a net LCC cost at the 
Recommended TSL. DOE estimates that about 12 percent of low-income 
households would experience a net LCC cost at the Recommended TSL, and 
as a result of smaller households and lower annual usage, about 26 
percent of senior-only households would experience a net LCC cost at 
the Recommended TSL. Additionally, as a result of lower costs 
associated with well water and septic tanks in rural areas, about 37 
percent of well-water households would experience a net LCC cost at the 
Recommended TSL.
    At the Recommended TSL, the projected change in INPV ranges from a 
decrease of $278.3 million to a decrease of $146.9 million, which 
corresponds to decreases of 16.3 percent and 8.6 percent, respectively. 
Industry conversion costs could reach $320.0 million at this TSL.
    At this level, many existing top-loading standard-size products 
would need to be redesigned to meet the Recommended TSL efficiencies; 
however, there are a wide range of top-loading standard-size models 
currently available on the market due to manufacturers' participation 
in the ENERGY STAR program. Currently, approximately 49 percent of RCW 
shipments meet the Recommended TSL efficiencies, including 
approximately 31 percent of all top-loading standard-size shipments. Of 
the nine OEMs with top-loading standard-size products, six OEMs offer 
166 basic models (representing approximately 30 percent of all top-
loading standard-size basic models) that meet the Recommended TSL 
efficiencies. These six OEMs that currently offer top-loading standard-
size RCW models that meet the Recommended TSL efficiencies collectively 
account for over 95 percent of overall top-loading standard-size RCW 
shipments. At this level, a substantial number of front-loading 
standard-size products are available on the market due to 
manufacturers' participation in the ENERGY STAR program. Currently, 
approximately 92 percent of front-loading standard-size shipments meet 
the Recommended TSL. Of the seven OEMs with front-loading standard-size 
products, six OEMs offer 169 basic models (representing approximately 
89 percent of all front-loading standard-size basic models) that meet 
the Recommended TSL efficiencies.
    For all TSLs considered in this direct final rule--except for the 
Recommended TSL--DOE is bound by the 3-year lead time requirements in 
EPCA when determining compliance dates (i.e., compliance with amended 
standards required in 2027). For the Recommended TSL, DOE's analysis 
utilized the March 1, 2028, compliance date specified in the Joint 
Agreement as it was an integral part of the multi-product joint 
recommendation. A 2028 compliance year provides manufacturers 
additional flexibility to spread capital requirements, engineering 
resources, and conversion activities over a longer period of time 
depending on the individual needs of each manufacturer. Furthermore, 
these delayed compliance dates provide additional lead time and 
certainty for suppliers of components that improve efficiency.
    At the Recommended TSL, DOE's data demonstrates no negative impact 
on consumer utility for both top-loading and front-loading RCWs. 
Manufacturers did not provide any specific data nor express any 
specific concerns regarding clothes washer performance at the 
Recommended TSL. In addition, in the second joint statement from the 
same group of stakeholders that submitted the Joint Agreement states 
that DOE's test data and industry experience agrees that the 
recommended standard level for RCWs can maintain good cleaning 
performance and do not preclude the ability to provide high wash 
temperatures.\208\ Based on the information available, DOE concludes 
that no lessening of product utility or performance would occur at the 
Recommended TSL.
---------------------------------------------------------------------------

    \208\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2017-BT-STD-0014-0509.
---------------------------------------------------------------------------

    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that at a standard set at the 
Recommended TSL for RCWs would be economically justified. At the 
Recommended TSL, the average LCC savings for all product classes is 
positive. An estimated 27 percent of top-loading standard-size users, 
21 percent of front-loading compact, 2 percent of front-loading 
standard-size, and zero percent of semi-automatic clothes washer 
consumers experience a net cost. At the Recommended TSL, the positive 
average LCC savings across all product classes and cost savings for 
approximately two-thirds of RCWs consumers, outweigh the negative 
average LLC savings of $20 for well-water households and the 37 percent 
of these households that might experience a net cost. DOE notes that 
its analysis ensures that the financial implications for households 
with wells and/or septic systems are comprehensively incorporated into 
the national LCC analysis. In addition, 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 the Recommended 
TSL, the NPV of consumer benefits, even measured at the more 
conservative discount rate of 7 percent is over 11 times higher than 
the maximum estimated manufacturers' loss in INPV. The standard levels 
at the Recommended TSL are economically justified even without weighing 
the

[[Page 19120]]

estimated monetary value of emissions reductions. When those emissions 
reductions are included--representing $ 0.84 billion in climate 
benefits (associated with the average SC-GHG at a 3-percent discount 
rate), and $ 1.62 billion (using a 3-percent discount rate) or $ 0.73 
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 
amended energy conservation standards, DOE notes that as compared to 
TSL 4 and TSL 3, the Recommended TSL has a lower maximum decrease in 
INPV and lower manufacturer conversion costs.
    Accordingly, the Secretary has concluded that the Recommended TSL 
would offer the maximum improvement in efficiency that is 
technologically feasible and economically justified and would result in 
the significant conservation of energy.
    Therefore, based on the previous considerations, DOE adopts the 
energy conservation standards for RCWs at the Recommended TSL.
    While DOE considered each potential TSL under the criteria laid out 
in 42 U.S.C. 6295(o) as discussed above, DOE notes that the Recommended 
TSL for RCWs adopted in this direct final rule is part of a multi-
product Joint Agreement covering six rulemakings (RCWs; consumer 
clothes dryers; consumer conventional cooking products; dishwashers; 
refrigerators, refrigerator-freezers, and freezers; and miscellaneous 
refrigeration products). The signatories indicate that the Joint 
Agreement for the six rulemakings should be considered as a joint 
statement of recommended standards, to be adopted in its entirety. 
(Joint Agreement, No. 505 at p. 3) As discussed in section V.B.2.e of 
this document, many RCW OEMs also manufacture consumer clothes dryers; 
consumer conventional cooking products; dishwashers; refrigerators, 
refrigerator-freezers, and freezers; and miscellaneous refrigeration 
products. Therefore, there are potential integrated benefits to the 
Joint Agreement. Rather than requiring compliance with five amended 
standards in a single year (2027),\209\ the negotiated multi-product 
Joint Agreement staggers the compliance dates for the five amended 
standards over a 4-year period (2027-2030). In response to the March 
2023 NOPR, AHAM expressed concerns about the timing of ongoing home 
appliance rulemakings. Specifically, AHAM commented that the 
combination of the stringency of DOE's proposals, the short lead-in 
time under EPCA to comply with standards, and the overlapping timeframe 
of multiple standards affecting the same manufacturers represents 
significant cumulative regulatory burden for the home appliance 
industry. (AHAM, No. 464 at pp. 41-42) AHAM has submitted similar 
comments to other ongoing home appliance rulemakings.\210\
---------------------------------------------------------------------------

    \209\ The analyses for residential clothes washers (88 FR 
13520); consumer clothes dryers (87 FR 51734); consumer conventional 
cooking products (88 FR 6818); dishwashers (88 FR 32514); and 
refrigerators, refrigerator-freezers, and freezers (88 FR 12452) 
utilized a 2027 compliance year for analysis at the proposed rule 
stage. Miscellaneous refrigeration products (88 FR 12452) utilized a 
2029 compliance year for the NOPR analysis.
    \210\ AHAM has submitted written comments regarding cumulative 
regulatory burden for the other five rulemakings included in the 
multi-product Joint Agreement. AHAM's written comments on cumulative 
regulatory burden are available at: www.regulations.gov/comment/EERE-2014-BT-STD-0058-0046 (pp. 12-13) for consumer clothes dryers; 
www.regulations.gov/comment/EERE-2014-BT-STD-0005-2285 (pp. 44-47) 
for consumer conventional cooking products; www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051 (pp. 21-24) for dishwashers; 
www.regulations.gov/comment/EERE-2017-BT-STD-0003-0069 (pp. 20-22) 
for refrigerators, refrigerator-freezers, and freezers; and 
www.regulations.gov/comment/EERE-2020-BT-STD-0039-0031 (pp. 12-15) 
for miscellaneous refrigeration products.
---------------------------------------------------------------------------

    As AHAM is a key signatory of the Joint Agreement, DOE understands 
that the compliance dates recommended in the Joint Agreement would help 
reduce cumulative regulatory burden. These compliance dates help 
relieve concern on the part of some manufacturers about their ability 
to allocate sufficient resources to comply with multiple concurrent 
amended standards and about the need to align compliance dates for 
products that are typically designed or sold as matched pairs. The 
Joint Agreement also provides additional years of regulatory certainty 
for manufacturers and their suppliers.
    For RCWs and consumer clothes dryers specifically, aligned 
compliance dates would help reduce cumulative regulatory burden for the 
13 OEMs that manufacture both RCWs and consumer clothes dryers. In 
response to the March 2023 NOPR, AHAM commented that laundry products 
(RCWs and consumer clothes dryers) are designed and used in pairs. 
(AHAM, No. 464 at p. 44) AHAM stated that an additional design cycle 
for clothes washers and/or clothes dryers may be necessary if the 
effective compliance dates for the two products were out of sync and 
this would undermine the investment and associated recovery assumptions 
underlying the MIA from the consumer clothes dryer rulemaking. (Id.)
    The amended energy conservation standards for RCWs, which are 
expressed in EER and WER, are shown in Table V.37.

    Table V.37--Amended Energy Conservation Standards for Residential
                             Clothes Washers
------------------------------------------------------------------------
                                      Minimum energy     Minimum water
           Product class             efficiency ratio   efficiency ratio
                                      (lb/kWh/cycle)     (lb/gal/cycle)
------------------------------------------------------------------------
Automatic Clothes Washers:
Top-Loading Ultra-Compact (less                  3.79               0.29
 than 1.6 ft\3\ capacity).........
    Top-Loading Standard-Size (1.6               4.27               0.57
     ft\3\ or greater capacity)...
    Front-Loading Compact (less                  5.02               0.71
     than 3.0 ft\3\ capacity).....
    Front-Loading Standard-Size                  5.52               0.77
     (3.0 ft\3\ or greater
     capacity)....................
    Semi-Automatic Clothes Washers               2.12               0.27
------------------------------------------------------------------------


[[Page 19121]]

2. Annualized Benefits and Costs of the Adopted Standards
    The benefits and costs of the adopted standards can also be 
expressed in terms of annualized values. The annualized net benefit is 
(1) the annualized national economic value (expressed in 2022$) of the 
benefits from operating products that meet the adopted standards 
(consisting primarily of operating cost savings from using less 
energy), minus increases in product purchase costs, and (2) the 
annualized monetary value of the climate and health benefits.
    Table V.38 shows the annualized values for RCWs under the 
Recommended TSL, expressed in 2022$. The results under the primary 
estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
health benefits from reduced NOX and SO2 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated cost of the standards adopted 
in this rule is $530.1 million per year in increased equipment costs, 
while the estimated annual benefits are $853.9 million in reduced 
equipment operating costs, $46.9 million in climate benefits, and $71.9 
million in health benefits. In this case, the net benefit would amount 
to $442.5 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $513.1 million per year in increased 
equipment costs, while the estimated annual benefits are $998.9 million 
in reduced operating costs, $46.9 million in climate benefits, and 
$90.3 million in health benefits. In this case, the net benefit would 
amount to $623.0 million per year.

Table V.38--Annualized Benefits and Costs of Adopted Standards (Recommended TSL) for Residential Clothes Washers
                                                   [2028-2057]
----------------------------------------------------------------------------------------------------------------
                                                                                Million 2022$/year
                                                                 -----------------------------------------------
                                                                                     Low-net-        High-net-
                                                                      Primary        benefits        benefits
                                                                     estimate        estimate        estimate
----------------------------------------------------------------------------------------------------------------
                                                3% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           998.9           957.2         1,020.9
Climate Benefits *..............................................            46.9            45.2            47.5
Health Benefits **..............................................            90.3            87.1            91.6
----------------------------------------------------------------------------------------------------------------
    Total Benefits [dagger].....................................         1,136.1         1,089.5         1,160.0
Consumer Incremental Product Costs [Dagger].....................           513.1           551.8           468.6
----------------------------------------------------------------------------------------------------------------
    Net Benefits................................................           623.0           537.7           691.4
Change in Producer Cash Flow (INPV [Dagger][Dagger])............       (27)-(14)       (27)-(14)       (27)-(14)
----------------------------------------------------------------------------------------------------------------
                                                7% discount rate
----------------------------------------------------------------------------------------------------------------
Consumer Operating Cost Savings.................................           853.9           821.2           871.7
Climate Benefits * (3% discount rate)...........................            46.9            45.2            47.5
Health Benefits **..............................................            71.9            69.6            72.8
----------------------------------------------------------------------------------------------------------------
    Total Benefits [dagger].....................................           972.6           935.9           992.0
Consumer Incremental Product Costs [Dagger].....................           530.1           564.6           489.5
----------------------------------------------------------------------------------------------------------------
    Net Benefits................................................           442.5           371.3           502.5
Change in Producer Cash Flow (INPV [Dagger][Dagger])............       (27)-(14)       (27)-(14)       (27)-(14)
----------------------------------------------------------------------------------------------------------------
Note: This table presents the costs and benefits associated with RCWs 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
  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 it
  emphasizes the importance and value of considering the benefits calculated using all four sets of SC-GHG
  estimates. To monetize the benefits of reducing GHG emissions, this analysis uses the interim estimates
  presented in the Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim
  Estimates Under Executive Order 13990 published in February 2021 by the 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.

[[Page 19122]]

 
[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
  impact 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
  (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 9.3 percent that is estimated in the MIA (see chapter 12 of the direct final rule TSD for a
  complete description of the industry weighted average cost of capital). For RCWs, the annualized change in
  INPV ranges from -$27 million to -$14 million. DOE accounts for that range of likely impacts in analyzing
  whether a TSL is economically justified. See section V.C of this document. DOE is presenting the range of
  impacts to the INPV under two manufacturer 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 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 direct
  final rule 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 annualized change in INPV into the annualized
  net benefit calculation for this direct final rule, the annualized net benefits, using the primary estimate,
  would range from $596 million to $609 million at 3-percent discount rate and would range from $415 million to
  $428 million at 7-percent discount rate. Parentheses () indicate negative values.

VI. Severability

    DOE added a new paragraph (g)(2)(ii) into 10 CFR 430.32 to provide 
that each energy and water conservation for each RCW category is 
separate and severable from one another, and that if any energy or 
water conservation standard is stayed or determined to be invalid by a 
court of competent jurisdiction, the remaining standards shall continue 
in effect. This severability clause is intended to clearly express the 
Department's intent that should an energy or water conservation 
standard for any product class be stayed or invalidated, the other 
conservation standards shall continue in effect. In the event a court 
were to stay or invalidate one or more energy or water conservation 
standards for any product class as finalized, the Department would want 
the remaining energy conservation standards as finalized to remain in 
full force and legal effect.

VII. Procedural Issues and Regulatory Review

A. Review Under Executive Orders 12866, 13563, and 14094

    Executive Order (``E.O.'') 12866, ``Regulatory Planning and 
Review,'' as supplemented and reaffirmed by E.O. 13563, ``Improving 
Regulation and Regulatory Review,'' 76 FR 3821 (Jan. 21, 2011), 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 final regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f) of 
E.O. 12866. DOE has provided to OIRA an assessment, including the 
underlying analysis, of benefits and costs anticipated from the final 
regulatory action, together with, to the extent feasible, a 
quantification of those costs; and an assessment, including the 
underlying analysis, of costs and benefits of potentially effective and 
reasonably feasible alternatives to the planned regulation, and an 
explanation why the planned regulatory action is preferable to the 
identified potential alternatives. These assessments are summarized in 
this preamble and further detail can be found in the technical support 
document for this rulemaking.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
preparation of an initial regulatory flexibility analysis (``IRFA'') 
and a final regulatory flexibility analysis (``FRFA'') for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. As required 
by E.O. 13272, ``Proper Consideration of Small Entities in Agency 
Rulemaking,'' 67 FR 53461 (Aug. 16, 2002), DOE published procedures and 
policies on February 19, 2003, to ensure that the potential impacts of 
its rules on small entities are properly considered during the 
rulemaking process. 68 FR 7990. DOE has made its procedures and 
policies available on the Office of the General Counsel's website 
(www.energy.gov/gc/office-general-counsel).
    DOE is not obligated to prepare a regulatory flexibility analysis 
for this rulemaking because there is not a requirement to publish a 
general notice of proposed rulemaking under the Administrative 
Procedure Act. See 5 U.S.C. 601(2), 603(a). As discussed previously, 
DOE has determined that the Joint Agreement meets the necessary 
requirements under EPCA to issue this direct final rule for energy 
conservation standards for RCWs under the procedures in 42 U.S.C. 
6295(p)(4). DOE notes that the NOPR for energy conservation standards 
for RCWs published elsewhere in this issue of the Federal Register 
contains an IRFA.

[[Page 19123]]

C. Review Under the Paperwork Reduction Act

    Under the procedures established by the Paperwork Reduction Act of 
1995 (``PRA''), a person is not required to respond to a collection of 
information by a Federal agency unless that collection of information 
displays a currently valid OMB Control Number.
    OMB Control Number 1910-1400, Compliance Statement Energy/Water 
Conservation Standards for Appliances, is currently valid and assigned 
to the certification reporting requirements applicable to covered 
products, including RCWs.
    DOE's certification and compliance activities ensure accurate and 
comprehensive information about the energy and water use 
characteristics of covered products and covered equipment sold in the 
United States. Manufacturers of all covered products and covered 
equipment must submit a certification report before a basic model is 
distributed in commerce, annually thereafter, and if the basic model is 
redesigned in such a manner to increase the consumption or decrease the 
efficiency of the basic model such that the certified rating is no 
longer supported by the test data. Additionally, manufacturers must 
report when production of a basic model has ceased and is no longer 
offered for sale as part of the next annual certification report 
following such cessation. DOE requires the manufacturer of any covered 
product or covered equipment to establish, maintain, and retain the 
records of certification reports, of the underlying test data for all 
certification testing, and of any other testing conducted to satisfy 
the requirements of part 429, part 430, and/or part 431. Certification 
reports provide DOE and consumers with comprehensive, up-to-date 
efficiency information and support effective enforcement.
    Revised certification data will be required for RCWs to demonstrate 
compliance with the amended standards enacted in this direct final 
rule, which are based on different metrics than the current standards. 
However, DOE is not amending certification or reporting requirements 
for RCWs in this direct final rule. Instead, DOE may consider proposals 
to amend the certification requirements and reporting for RCWs under a 
separate rulemaking regarding appliance and equipment certification. 
DOE will address changes to OMB Control Number 1910-1400 at that time, 
as necessary.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

    Pursuant to the National Environmental Policy Act of 1969 
(``NEPA''), DOE has analyzed this rule in accordance with NEPA and 
DOE's NEPA implementing regulations (10 CFR part 1021). DOE has 
determined that this rule qualifies for categorical exclusion under 10 
CFR part 1021, subpart D, appendix B, 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 B5.1(b) apply, no extraordinary circumstances 
exist that require further environmental analysis, and it meets the 
requirements for application of a categorical exclusion. See 10 CFR 
1021.410. Therefore, DOE has determined that promulgation of this rule 
is not a major Federal action significantly affecting the quality of 
the human environment within the meaning of NEPA, and does not require 
an environmental assessment or an environmental impact statement.

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735.
    In the March 2023 NOPR, DOE tentatively determined that the 
proposed rule 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. 88 FR 13520, 13616. Furthermore, DOE stated that 
EPCA governs and prescribes Federal preemption of State regulations as 
to energy conservation for the products that are the subject of the 
proposed rule and that States can petition DOE for exemption from such 
preemption to the extent, and based on criteria, set forth in EPCA. Id. 
(citing 42 U.S.C. 6297). Accordingly, DOE concluded that no further 
action was required by E. O. 13132.
    The AGs of TN et al. commented that DOE's conclusion regarding E.O. 
13132 in the March 2023 NOPR is incorrect because the proposed 
standards have significant federalism implications within the meaning 
of E.O. 13132. (AGs of TN et al., No. 438 at p. 3) The AGs of TN et al. 
commented that if the proposed standards are promulgated, ``[a]ny State 
regulation which sets forth procurement standards'' relating to clothes 
washers is ``superseded'' unless those ``standards are more stringent 
than the corresponding Federal energy conservation standards'' and 
preempting, even in part, State procurement rules directly affects the 
States and alters the Federal-State relationship by directly regulating 
the States. (Id.) The AGs of TN et al. commented that States own 
appliances like clothes washers, which indicates the proposed standards 
implicate reliance interests DOE must take into consideration. (Id. 
citing Dep't of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. 
Ct. 1891, 1913 (2020)) The AGs of TN et al. added that the standards 
will have an effect on the States that could give rise to ``substantial 
direct compliance costs,'' and since the proposed efficiency standards 
are ``not required by statute,'' section 6(b) of E.O. 13132 applies. 
(Id.)
    DOE reiterates that this direct final rule does not have 
significant federalism implications. DOE has examined this rule and has 
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 expressly prescribes 
Federal preemption of State regulations as to energy conservation for 
the products that are the subject of this direct final 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 13135.
    Even if DOE were to find otherwise, with regards to the AGs of TN 
et al.'s arguments regarding section 6(c) of E.O.

[[Page 19124]]

13132, DOE notes that the AGs of TN et al. do not provide any examples 
of a state procurement rule that conflicts with the standards adopted 
in this rulemaking and DOE is not aware of any such conflicts. While it 
is possible that a State may have to revise its procurement standards 
to reflect the new standards, States can petition DOE for exemption 
from such preemption to the extent, and based on criteria, set forth in 
EPCA. Absent such information, DOE concludes that no further action 
would be required by E.O. 13132 even if the Executive order were 
applicable here. Moreover, assuming the hypothetical preemption alleged 
by the AGs of TN et al. were to present itself, DOE notes, that like 
all interested parties, states were presented with an opportunity to 
engage in the rulemaking process early in the development of the 
proposed rule. Prior to publishing the proposed rulemaking, on August 
2, 2019, DOE published an RFI to collect data and information to help 
DOE determine whether any new or amended standards for RCWs would 
result in a significant amount of additional energy savings and whether 
those standards would be technologically feasible and justified. 84 FR 
37794. DOE then published a notification of availability of a 
preliminary technical support document on September 29, 2021, and 
sought public comment again. 86 FR 53886. DOE extended the comment 
period on that document by 45 days. 86 FR 59889. Finally, DOE published 
a notification of data availability to present the results of 
additional testing conducted to develop the translations between the 
current and then proposed test procedure. 87 FR 21816. As such, states 
were provided the opportunity to meaningful and substantial input as 
envisioned by the Executive order.
    With regards to the AGs of TN et al.'s arguments regarding section 
6(b) of E.O. 13132, the potential effect alleged by the AGs of TN et 
al. is the same effect experienced by all RCW consumers--models 
manufactured after a specific date must meet the revised efficiency 
standards. This impact does not constitute a ``substantial'' impact as 
required by the Executive order. Further, contrary to the assertions of 
the AGs of TN et al., the direct final rule is required by law. As 
noted previously, where DOE determines that a proposed amended standard 
is designed to achieve the maximum improvement in energy efficiency and 
is both technologically feasible and economically justified, it must 
adopt it. Therefore, section 6(b) is inapplicable. Executive Order 
13132, section 6(b) (applicable to regulation ``that is not required by 
statute'').

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 E.O. 12988 requires Executive 
agencies to review regulations in light of applicable standards in 
section 3(a) and section 3(b) to determine whether they are met or it 
is unreasonable to meet one or more of them. DOE has completed the 
required review and determined that, to the extent permitted by law, 
this direct final rule meets the relevant standards of E.O. 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'') 
requires each Federal agency to assess the effects of Federal 
regulatory actions on State, local, and Tribal governments and the 
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). 
For a regulatory action likely to result in a rule that may cause the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector of $100 million or more in any one year 
(adjusted annually for inflation), section 202 of UMRA requires a 
Federal agency to publish a written statement that estimates the 
resulting costs, benefits, and other effects on the national economy. 
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to 
develop an effective process to permit timely input by elected officers 
of State, local, and Tribal governments on a ``significant 
intergovernmental mandate,'' and requires an agency plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirements that might 
significantly or uniquely affect them. On March 18, 1997, DOE published 
a statement of policy on its process for intergovernmental consultation 
under UMRA. 62 FR 12820. DOE's policy statement is also available at 
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
    DOE has concluded that this direct final rule may require 
expenditures of $100 million or more in any one year by the private 
sector. Such expenditures may include (1) investment in research and 
development and in capital expenditures by RCW manufacturers in the 
years between the direct final rule and the compliance date for the new 
standards and (2) incremental additional expenditures by consumers to 
purchase higher-efficiency RCWs, starting at the compliance date for 
the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the direct final rule. (2 U.S.C. 1532(c)) The content 
requirements of section 202(b) of UMRA relevant to a private sector 
mandate substantially overlap the economic analysis requirements that 
apply under section 325(o) of EPCA and Executive Order 12866. The 
SUPPLEMENTARY INFORMATION section of this document and the TSD for this 
direct final rule respond to those requirements.
    Under section 205 of UMRA, DOE is obligated to identify and 
consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a written statement under section 202 is 
required. (2 U.S.C. 1535(a)) DOE is required to select from those 
alternatives the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule unless DOE publishes an 
explanation for doing otherwise, or the selection of such an 
alternative is inconsistent with law. As required by 42 U.S.C. 6295(m), 
this direct final rule establishes amended energy conservation 
standards for RCWs that are designed to achieve the maximum improvement 
in energy efficiency that DOE has determined to be both technologically 
feasible and economically justified, as required by 6295(o)(2)(A) and 
6295(o)(3)(B). A full discussion of the alternatives considered by DOE 
is presented in chapter 17 of the TSD for this direct final rule.

[[Page 19125]]

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

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
Although this direct final rule would not have any impact on the 
autonomy or integrity of the family as an institution as defined, this 
rule could impact a family's well-being. When developing a Family 
Policymaking Assessment, agencies must assess whether: (1) the action 
strengthens or erodes the stability or safety of the family and, 
particularly, the marital commitment; (2) the action strengthens or 
erodes the authority and rights of parents in the education, nurture, 
and supervision of their children; (3) the action helps the family 
perform its functions, or substitutes governmental activity for the 
function; (4) the action increases or decreases disposable income or 
poverty of families and children; (5) the proposed benefits of the 
action justify the financial impact on the family; (6) the action may 
be carried out by State or local government or by the family; and 
whether (7) the action establishes an implicit or explicit policy 
concerning the relationship between the behavior and personal 
responsibility of youth, and the norms of society.
    DOE has considered how the proposed benefits of this rule compare 
to the possible financial impact on a family (the only factor listed 
that is relevant to this final rule). As part of its rulemaking 
process, DOE must determine whether the energy conservation standards 
contained in this direct final rule are economically justified. As 
discussed in section V.C.1 of this document, DOE has determined that 
the standards are economically justified because the benefits to 
consumers far outweigh the costs to manufacturers. Families will also 
see LCC savings as a result of this final rule. Moreover, as discussed 
further in section V.B.1 of this document, DOE has determined that for 
low-income households, average LCC savings and PBP at the considered 
efficiency levels are improved (i.e., higher LCC savings and lower 
payback period) as compared to the average for all households. Further, 
the standards will also result in climate and health benefits for 
families.

I. Review Under Executive Order 12630

    Pursuant to E.O. 12630, ``Governmental Actions and Interference 
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March 
18, 1988), DOE has determined that this rule would not result in any 
takings that might require compensation under the Fifth Amendment to 
the U.S. Constitution.

J. Review Under the Treasury and General Government Appropriations Act, 
2001

    Section 515 of the Treasury and General Government Appropriations 
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to 
review most disseminations of information to the public under 
information quality guidelines established by each agency pursuant to 
general guidelines issued by OMB. OMB's guidelines were published at 67 
FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 
62446 (Oct. 7, 2002). Pursuant to OMB Memorandum M-19-15, Improving 
Implementation of the Information Quality Act (April 24, 2019), DOE 
published updated guidelines which are available at www.energy.gov/sites/prod/files/2019/12/f70/DOE%20Final%20Updated%20IQA%20Guidelines%20Dec%202019.pdf. DOE has 
reviewed this direct final rule under the OMB and DOE guidelines and 
has concluded that it is consistent with applicable policies in those 
guidelines.

K. Review Under Executive Order 13211

    E.O. 13211, ``Actions Concerning Regulations That Significantly 
Affect Energy Supply, Distribution, or Use,'' 66 FR 28355 (May 22, 
2001), requires Federal agencies to prepare and submit to OIRA at OMB, 
a Statement of Energy Effects for any significant energy action. A 
``significant energy action'' is defined as any action by an agency 
that promulgates or is expected to lead to promulgation of a final 
rule, and that (1) is a significant regulatory action under Executive 
Order 12866, or any successor order; and (2) is likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, or (3) is designated by the Administrator of OIRA as a 
significant energy action. For any significant energy action, the 
agency must give a detailed statement of any adverse effects on energy 
supply, distribution, or use should the proposal be implemented, and of 
reasonable alternatives to the action and their expected benefits on 
energy supply, distribution, and use.
    DOE has concluded that this regulatory action, which sets forth 
amended energy conservation standards for RCWs, is not a significant 
energy action because the standards are not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy, nor has it been designated as such by the Administrator at 
OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects 
on this direct final rule.

L. Information Quality

    On December 16, 2004, OMB, in consultation with the Office of 
Science and Technology Policy (``OSTP''), issued its Final Information 
Quality Bulletin for Peer Review (``the Bulletin'') 70 FR 2664 (Jan. 
14, 2005). The Bulletin establishes that certain scientific information 
shall be peer reviewed by qualified specialists before it is 
disseminated by the Federal Government, including influential 
scientific information related to agency regulatory actions. The 
purpose of the Bulletin is to enhance the quality and credibility of 
the Government's scientific information. Under the Bulletin, the energy 
conservation standards rulemaking analyses are ``influential scientific 
information,'' which the Bulletin defines as ``scientific information 
the agency reasonably can determine will have, or does have, a clear 
and substantial impact on important public policies or private sector 
decisions'' 70 FR 2664, 2667.
    In response to OMB's Bulletin, DOE conducted formal peer reviews of 
the energy conservation standards development process and the analyses 
that are typically used and prepared a report describing that peer 
review.\211\ 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.\212\
---------------------------------------------------------------------------

    \211\ 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 July 10, 2023).
    \212\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

M. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation

[[Page 19126]]

of this rule prior to its effective date. The report will state that 
the Office of Information and Regulatory Affairs has determined that 
this rule meets the criteria set forth in 5 U.S.C. 804(2).

VIII. Approval of the Office of the Secretary

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

List of Subjects in 10 CFR Part 430

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

Signing Authority

    This document of the Department of Energy was signed on February 
29, 2024, 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 March 1, 2024.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.

    For the reasons set forth in the preamble, DOE amends part 430 of 
chapter II, subchapter D, of title 10 of the Code of Federal 
Regulations, as set forth below:

PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS

0
1. The authority citation for part 430 continues to read as follows:

    Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.

0
2. Amend Sec.  430.32 by revising paragraph (g) to read as follows:


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

* * * * *
    (g) Clothes washers. (1) Clothes washers manufactured on or after 
January 1, 2018, shall have an Integrated Modified Energy Factor no 
less than, and an Integrated Water Factor no greater than:

------------------------------------------------------------------------
                                        Integrated
                                     modified  energy  Integrated  water
           Product class             factor  (cu.ft./    factor  (gal/
                                        kWh/cycle)       cycle/cu.ft.)
------------------------------------------------------------------------
(i) Top-loading, Compact (less                   1.15               12.0
 than 1.6 ft\3\ capacity).........
(ii) Top-loading, Standard (1.6                  1.57                6.5
 ft\3\ or greater capacity).......
(iii) Front-loading, Compact (less               1.13                8.3
 than 1.6 ft\3\ capacity).........
(iv) Front-loading, Standard (1.6                1.84                4.7
 ft\3\ or greater capacity).......
------------------------------------------------------------------------

    (2) Clothes washers manufactured on or after March 1, 2028:
    (i) Shall have an Energy Efficiency Ratio and a Water Efficiency 
Ratio no less than:

------------------------------------------------------------------------
                                    Energy efficiency   Water efficiency
           Product class             ratio  (lb/kWh/    ratio  (lb/gal/
                                          cycle)             cycle)
------------------------------------------------------------------------
(A) Automatic Clothes Washers:....
    (1) Top-Loading Ultra-Compact                3.79               0.29
     (less than 1.6 ft\3\
     capacity)....................
    (2) Top-Loading Standard-Size                4.27               0.57
     (1.6 ft\3\ or greater
     capacity) \1\................
    (3) Front-Loading Compact                    5.02               0.71
     (less than 3.0 ft\3\
     capacity) \2\................
    (4) Front-Loading Standard-                  5.52               0.77
     Size (3.0 ft\3\ or greater
     capacity) \3\................
(B) Semi-Automatic Clothes Washers               2.12               0.27
------------------------------------------------------------------------
\1\ The energy conservation standards in this table do not apply to top-
  loading standard-size clothes washers with an average cycle time less
  than 30 minutes.
\2\ The energy conservation standards in this table do not apply to
  front-loading clothes washers with a capacity greater than or equal to
  1.6 ft\3\ and less than 3.0 ft\3\ with an average cycle time of less
  than 45 minutes.
\3\ The energy conservation standards in this table do not apply to
  front-loading standard-size clothes washers with an average cycle time
  less than 45 minutes.

    (ii) The provisions of this paragraph (g)(2) are separate and 
severable from one another. Should a court of competent jurisdiction 
hold any provision(s) of this section to be stayed or invalid, such 
action shall not affect any other provisions of this section.
* * * * *
[FR Doc. 2024-04736 Filed 3-14-24; 8:45 am]
BILLING CODE 6450-01-P