[Federal Register Volume 89, Number 80 (Wednesday, April 24, 2024)]
[Rules and Regulations]
[Pages 31398-31485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08212]



[[Page 31397]]

Vol. 89

Wednesday,

No. 80

April 24, 2024

Part III





Department of Energy





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10 CFR Part 430





Energy Conservation Program: Energy Conservation Standards for 
Dishwashers; Final Rule

  Federal Register / Vol. 89 , No. 80 / Wednesday, April 24, 2024 / 
Rules and Regulations  

[[Page 31398]]


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DEPARTMENT OF ENERGY

10 CFR Part 430

[EERE-2019-BT-STD-0039]
RIN 1904-AF60


Energy Conservation Program: Energy Conservation Standards for 
Dishwashers

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

ACTION: Direct final rule.

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SUMMARY: The Energy Policy and Conservation Act, as amended (``EPCA''), 
prescribes energy conservation standards for various consumer products 
and certain commercial and industrial equipment, including dishwashers. 
In this direct final rule, the U.S. Department of Energy (``DOE'') is 
adopting amended energy conservation standards for dishwashers. 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 August 22, 2024. If adverse 
comment are received by August 12, 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. The incorporation by 
reference of certain material listed in this rule was approved by the 
Director as of February 17, 2023. If no such adverse comments are 
received, compliance with the amended standards established for 
dishwashers in this direct final rule is required on and after April 
23, 2027. 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 May 24, 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-2019-BT-STD-0039. 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) 306-7097. 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 and Water 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
    a. Desiccant Drying
    b. Reduced Inlet-Water Temperature
    c. Supercritical Carbon Dioxide Washing
    d. Ultrasonic Washing
    e. Thermoelectric Heat Pumps
    f. Water Re-Use System
    2. Remaining Technologies
    C. Engineering Analysis
    1. Efficiency Analysis
    a. Baseline Efficiency
    b. Higher Efficiency Levels
    2. Cost Analysis
    3. 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 Dioxide
    b. Social Cost of Methane and Nitrous Oxide
    c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
    2. Monetization of Other Emissions Impacts
    M. Utility Impact Analysis

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    N. Employment Impact Analysis
    O. Regulatory Impact Analysis
    P. Other Comments
    1. Non-Regulatory Approaches
    2. Test Procedure Usage Factors
    3. National Academy of Sciences Report
V. Analytical Results and Conclusions
    A. Trial Standard Levels
    B. Economic Justification and Energy Savings
    1. Economic Impacts on Individual Consumers
    a. Life-Cycle Cost and Payback Period
    b. Consumer Subgroup Analysis
    c. Rebuttable Presumption Payback
    2. Economic Impacts on Manufacturers
    a. Industry Cash Flow Analysis Results
    b. Direct Impacts on Employment
    c. Impacts on Manufacturing Capacity
    d. Impacts on Subgroups of Manufacturers
    e. Cumulative Regulatory Burden
    3. National Impact Analysis
    a. Significance of Energy and Water Savings
    b. Net Present Value of Consumer Costs and Benefits
    c. Indirect Impacts on Employment
    4. Impact on Utility or Performance of Products
    a. Cleaning Performance
    b. Drying Performance
    c. Cycle Length
    d. Water Dilution
    e. Equipment Lifetime and Energy Savings
    5. Impact of Any Lessening of Competition
    6. Need of the Nation To Conserve Energy
    7. Other Factors
    8. Summary of Economic Impacts
    C. Conclusion
    1. Benefits and Burdens of TSLs Considered for Dishwashers 
Standards
    2. Annualized Benefits and Costs of the 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. Materials Incorporated by Reference
    N. 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 dishwashers, the subject of 
this direct final rule. (42 U.S.C. 6292(a)(6))
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    \1\ All references to EPCA in this document refer to the statute 
as amended through the Energy Act of 2020, Public Law 116-260 (Dec. 
27, 2020), which reflect the last statutory amendments that impact 
Parts A and A-1 of EPCA.
    \2\ For editorial reasons, upon codification in the U.S. Code, 
Part B was redesignated Part A.
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    Pursuant to EPCA, any new or amended energy conservation standard 
must, 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 dishwashers.
    The adopted standards 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'' \3\), recommends specific energy conservation 
standards for dishwashers 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 \4\--and utilities--including San 
Diego Gas and Electric (``SDG&E'') and Southern California Edison 
(``SCE'') \5\--advocating for the adoption of the recommended 
standards.
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    \3\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055.
    \4\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0056.
    \5\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0057.
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    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) expressed in terms of maximum estimated annual 
energy use (``EAEU'') in kilowatt hours per year (``kWh/yr'') and 
maximum per cycle water consumption in gallons per cycle (``gal/
cycle'') as measured according to DOE's dishwasher test procedure 
codified at title 10 of the Code of Federal Regulations (``CFR'') part 
430, subpart B, appendix C2 (``appendix C2'').
    Table I.1 The amended standards recommended in the Joint Agreement 
are represented as trial standard level (``TSL'') 3 in this document 
(hereinafter the ``Recommended TSL'') and are described in section V.A 
of this document. The Joint Agreement's standards for dishwashers apply 
to all products listed in Table I.1 and manufactured in, or imported 
into, the United States starting 3 years after publication of a final 
rule in the Federal Register.

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A. Benefits and Costs to Consumers

    Table I.2 summarizes DOE's evaluation of the economic impacts of 
the adopted standards on consumers of dishwashers, as measured by the 
average life-cycle cost (``LCC'') savings and the simple payback period 
(``PBP'').\6\ The average LCC savings are positive for all product 
classes, and the PBP is less than the average lifetime of dishwashers, 
which is estimated to be 15.2 years (see section IV.F.6 of this 
document).
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    \6\ The average LCC savings refer to consumers that are affected 
by a standard and are measured relative to the efficiency 
distribution in the no-new-standards case, which depicts the market 
in the compliance year in the absence of new or amended standards 
(see section IV.F.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).
[GRAPHIC] [TIFF OMITTED] TR24AP24.001

    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 7
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    \7\ All monetary values in this document are expressed in 2022 
dollars and, where appropriate, are discounted to 2024 unless 
explicitly stated otherwise.
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    The industry net present value (``INPV'') is the sum of the 
discounted cash flows to the industry from the base year through the 
end of the analysis period (2024-2056). Using a real discount rate of 
8.5 percent, DOE estimates that the INPV for manufacturers of 
dishwashers in the case without amended standards is $735.8 million. 
Under the adopted standards, which align with the Recommended TSL for 
dishwashers, DOE estimates the change in INPV to range from -20.2 
percent to -13.1 percent, which represents a change in INPV of 
approximately -$148.8 million to -$96.7 million. In order to bring 
products into compliance with amended standards, it is estimated that 
industry will incur total conversion costs of $126.9 million.
    DOE's analysis of the impacts of the adopted standards on 
manufacturers is described in section IV.J and section V.B.2 of this 
document.

C. National Benefits and Costs

    DOE's analyses indicate that the adopted energy conservation 
standards for dishwashers would save a significant amount of energy. 
Relative to the case without amended standards, the lifetime energy 
savings for dishwashers purchased in the 30-year period that begins in 
the anticipated year of compliance with the amended standards (2027-
2056), amount to 0.31 quadrillion British thermal units (``Btu''), or 
quads.\8\ This represents a savings of 2.6 percent relative to the 
energy use of these products in the case without amended standards 
(referred to as the ``no-new-standards case'').
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    \8\ The quantity refers to full-fuel-cycle (``FFC'') energy 
savings. FFC energy savings includes the energy consumed in 
extracting, processing, and transporting primary fuels (i.e., coal, 
natural gas, petroleum fuels), and, thus, presents a more complete 
picture of the impacts of energy efficiency standards. For more 
information on the FFC metric, see section IV.H.1 of this document.
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    The cumulative net present value (``NPV'') of total consumer 
benefits of the standards for dishwashers ranges from $1.23 billion (at 
a 7-percent discount rate) to $2.90 billion (at a 3-percent discount 
rate). This NPV expresses the estimated total value of future 
operating-cost savings minus the estimated increased product costs for 
dishwashers purchased during the period 2027-2056.
    In addition, the adopted standards for dishwashers 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 9.48 million metric tons (``Mt'') \9\ 
of carbon dioxide (``CO2''), 1.41 thousand tons of sulfur 
dioxide (``SO2''), 22.37 thousand tons of nitrogen oxides 
(``NOX''), 98.97 thousand tons of methane 
(``CH4''), 0.06 thousand tons of nitrous oxide 
(``N2O''), and 0.01 tons of mercury (``Hg'').\10\
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    \9\ A metric ton is equivalent to 1.1 short tons. Results for 
emissions other than CO2 are presented in short tons.
    \10\ DOE calculated emissions reductions relative to the no-new-
standards-case, which reflects key assumptions in the Annual Energy 
Outlook 2023 (``AEO2023''). AEO2023 reflects, to the extent 
possible, laws and regulations adopted through mid-November 2022, 
including the Inflation Reduction Act. See section IV.K of this 
document for further discussion of AEO2023 assumptions that affect 
air pollutant emissions.
    \11\ Estimated climate-related benefits are provided in 
compliance with Executive Order 12866.
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    DOE estimates the value of climate benefits from a reduction in 
greenhouse gases (``GHG'') using four different estimates of the social 
cost of CO2 (``SC-CO2''), the social cost of 
methane (``SC-CH4''), and the social cost of nitrous oxide 
(``SC-N2O'').\11\ Together these represent the social cost 
of GHG (``SC-GHG''). DOE used interim SC-GHG

[[Page 31401]]

values (in terms of benefit per ton of GHG avoided) developed by an 
Interagency Working Group on the Social Cost of Greenhouse Gases 
(``IWG'').\12\ The derivation of these values is discussed in section 
IV.L of this document. For presentational purposes, the climate 
benefits associated with the average SC-GHG at a 3-percent discount 
rate are estimated to be $0.54 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. DOE notes, however, that the adopted standards would be 
economically justified even without inclusion of monetized benefits of 
reduced GHG emissions.
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    \12\ To monetize the benefits of reducing GHG emissions this 
analysis uses values that are based on the Technical Support 
Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim 
Estimates Under Executive Order 13990 published February 2021 by the 
IWG. (``February 2021 SC-GHG TSD''). www.whitehouse.gov/wp-content/uploads/2021/02/TechnicalSupportDocument_SocialCostofCarbonMethaneNitrousOxide.pdf.
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    DOE estimated the monetary health benefits of SO2 and 
NOX emissions reductions using benefit per ton estimates 
from the U.S. Environmental Protection Agency (``EPA''),\13\ as 
discussed in section IV.L of this document. DOE did not monetize the 
reduction in mercury emissions because the quantity is very small. DOE 
estimated the present value of the health benefits would be $0.37 
billion using a 7-percent discount rate, and $0.94 billion using a 3-
percent discount rate.\14\ 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 (NOX), but will continue to assess the 
ability to monetize other effects such as health benefits from 
reductions in direct PM2.5 emissions.
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    \13\ U.S. EPA. Estimating the Benefit per Ton of Reducing 
Directly Emitted PM2.5, PM2.5 Precursors and 
Ozone Precursors from 21 Sectors. Available at www.epa.gov/benmap/estimating-benefit-ton-reducing-pm25-precursors-21-sectors.
    \14\ DOE estimates the economic value of these emissions 
reductions resulting from the considered TSLs for the purpose of 
complying with the requirements of Executive Order 12866.
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    Table I.3 summarizes the monetized benefits and costs expected to 
result from the amended standards for dishwashers. There are other 
important unquantified effects, including certain unquantified climate 
benefits, unquantified public health benefits from the reduction of 
toxic air pollutants and other emissions, unquantified energy security 
benefits, and distributional effects, among others.
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[GRAPHIC] [TIFF OMITTED] TR24AP24.003

BILLING CODE 6450-01-C
    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.\15\
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    \15\ 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.
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    The national operating cost savings are domestic private U.S. 
consumer monetary savings that occur as a result of purchasing the 
covered products and are measured for the lifetime of dishwashers 
shipped in 2027-2056. The benefits associated with reduced emissions 
achieved as a result of the adopted standards are also calculated based 
on the lifetime of dishwashers shipped in 2027-2056. Total benefits for 
both the 3-percent and 7-percent cases are presented using the average 
GHG social costs with 3-percent discount rate.\16\ Estimates of total 
benefits are presented for all four SC-GHG discount rates in section 
V.B.8 of this document.
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    \16\ As discussed in section IV.L.1 of this document, DOE agrees 
with the IWG that using consumption-based discount rates (e.g., 3 
percent) is appropriate when discounting the value of climate 
impacts. Combining climate effects discounted at an appropriate 
consumption-based discount rate with other costs and benefits 
discounted at a capital-based rate (i.e., 7 percent) is reasonable 
because of the different nature of the types of benefits being 
measured.
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    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 $14.0 million per year in increased equipment costs, 
while the estimated annual benefits are $127.2 million in reduced 
equipment operating costs, $29.0 million in climate benefits, and $34.3 
million in health benefits. In this case, the net benefit would amount 
to $176.4 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the standards is $14.0 million per year in increased 
equipment costs, while the estimated annual benefits are $171.2 million 
in reduced operating costs, $29.0 million in climate benefits, and 
$50.8 million in health benefits. In this case, the net benefit would 
amount to $237.0 million per year.
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[GRAPHIC] [TIFF OMITTED] TR24AP24.005

BILLING CODE 6450-01-C
    DOE's analysis of the national impacts of the adopted standards is 
described in sections IV.J.3 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 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 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.
    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 dishwashers is $14.0 million per year in increased 
dishwasher costs, while the estimated annual benefits are $127.2 
million in reduced dishwasher operating costs, $29.0 million in climate 
benefits, and $34.3 million in health benefits. The net benefit amounts 
to $176.4 million per year. DOE notes that the net benefits are 
substantial even in the absence of the climate benefits \17\ and DOE 
would adopt the same standards in the absence of such benefits.
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    \17\ The information on climate benefits is provided in 
compliance with Executive Order 12866.
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    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.\18\ 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.
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    \18\ 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).
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    As previously mentioned, the standards are projected to result in 
estimated national energy savings of 0.31 quads FFC, the equivalent of 
the primary annual energy use of 2.1 million homes. In addition, they 
are projected to reduce cumulative CO2 emissions by 9.48 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.\19\
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    \19\ The TSD is available in the docket for this rulemaking at 
www.regulations.gov/docket/EERE-2019-BT-STD-0039/document.
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    In accordance with these and other statutory provisions discussed 
in this document, DOE analyzed the benefits and burdens of four TSLs 
for dishwashers. The TSLs and their associated benefits and burdens are 
discussed in detail in sections V.A through V.C of this document. As 
discussed in section V.C.1 of this document, DOE has tentatively

[[Page 31406]]

determined that TSL 3 (the Recommended TSL) represents the maximum 
improvement in energy efficiency that is technologically feasible and 
economically justified.

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 
dishwashers.

A. Authority

    EPCA authorizes DOE to regulate the energy efficiency of a number 
of consumer products and certain industrial equipment. Title III, Part 
B of EPCA established the Energy Conservation Program for Consumer 
Products Other Than Automobiles. These products include dishwashers, 
the subject of this document. (42 U.S.C. 6292(a)(6)) EPCA prescribed 
energy conservation design standards for these products (42 U.S.C. 
6295(g)(1) and (10)(A)), and directed DOE to conduct future rulemakings 
to determine whether to amend these standards. (42 U.S.C. 6295(g)(4) 
and (10)(B)) EPCA further provides that, not later than 6 years after 
the issuance of any final rule establishing or amending a standard, DOE 
must publish either a notice of determination that standards for the 
product do not need to be amended, or a NOPR including new proposed 
energy conservation standards (proceeding to a final rule, as 
appropriate). (42 U.S.C. 6295(m)(1))
    In establishing energy conservation standards with both energy and 
water use performance standards for dishwashers manufactured after 
2010, Congress also directed DOE to ``determin[e] whether to amend'' 
those standards. 42 U.S.C. 6295(g)(10)(B). Congress's directive, in 
section 6295(g)(10)(B), to consider whether ``to amend the standards 
for dishwashers'' refers to ``the standards'' established in the 
immediately preceding section, 6295(g)(10)(A). There, Congress 
established energy conservation standards with both energy and water 
use performance standards for dishwashers. Indeed, the energy and water 
use performance standards for dishwashers (both standard and compact) 
are each contained within a single subparagraph. See Id. Everything in 
section 6295(g)(10) suggests that Congress intended both of those twin 
standards to be evaluated when it came time, ``[n]ot later than January 
1, 2015,'' to consider amending them. (Id. 6295(g)(10)(B)(i)) 
Accordingly, DOE understands its authority, under section 
6295(g)(10)(B), to include consideration of amended energy and water 
use performance standards for dishwashers.
    DOE similarly understands its obligation 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 dishwashers. Neither 
section 6295(g)(10)(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)(10)(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 section 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 dishwashers, 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, Public Law 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, 
Public Law 102-486, 106 Stat 2776 (Oct. 24, 1992)). When it did so, 
Congress also made corresponding changes to the definition of 
``consumer 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 energy conservation 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 energy conservation

[[Page 31407]]

standards for residential clothes washers and dishwashers that included 
both energy and water use performance standards. (See Sec. 301, EISA 
2007, Public Law 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 residential 
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)(10), energy 
conservation standards for dishwashers that include both energy and 
water use performance standards, Congress intended that energy 
conservation standards for dishwashers 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)(10). 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, 530-531 (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 the EPCA specifically include 
definitions (42 U.S.C. 6291), test procedures (42 U.S.C. 6293), 
labeling provisions (42 U.S.C. 6294), energy conservation standards (42 
U.S.C. 6295), and the authority to require information and reports from 
manufacturers (42 U.S.C. 6296).
    Federal energy efficiency requirements for covered products 
established under EPCA generally supersede State laws and regulations 
concerning energy conservation testing, labeling, and standards. (42 
U.S.C. 6297(a)-(c)) DOE may, however, grant waivers of Federal 
preemption in limited instances for particular State laws or 
regulations, in accordance with the procedures and other provisions set 
forth under EPCA. (See 42 U.S.C. 6297(d))
    Subject to certain criteria and conditions, DOE is required to 
develop test procedures to measure the energy efficiency, energy use, 
or estimated annual operating cost of each covered product. (42 U.S.C. 
6295(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 dishwashers appear at title 10 of 
the CFR part 430, subpart B, appendix C1 (``appendix C1'') and appendix 
C2.
    DOE must follow specific statutory criteria for prescribing new or 
amended standards for covered products, including dishwashers. Any new 
or amended standards 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))
    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

[[Page 31408]]

economically justified, DOE must determine whether the benefits of the 
standard exceed its burdens. (42 U.S.C. 6295(o)(3)(B)) 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 must consider such factors as the utility to the consumer of such a 
feature and other factors DOE deems appropriate. (Id.) Any rule 
prescribing such a standard must include an explanation of the basis on 
which such higher or lower level was established. (42 U.S.C. 
6295(q)(2))
    Additionally, pursuant to the amendments contained in EISA 2007, 
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 and standards for 
dishwashers 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.
    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 this 
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, 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).

[[Page 31409]]

B. Background

1. Current Standards
    In a direct final rule published on May 30, 2012 (``May 2012 Direct 
Final Rule''), DOE adopted the current energy conservation standards 
for dishwashers manufactured on or after May 30, 2013, consistent with 
the levels proposed in a letter submitted to DOE by groups representing 
manufacturers, energy and environmental advocates, and consumer groups 
on July 30, 2010. 77 FR 31918, 31918-31919. This collective set of 
comments, titled ``Agreement on Minimum Federal Efficiency Standards, 
Smart Appliances, Federal Incentives and Related Matters for Specified 
Appliances'' (the ``July 2010 Joint Petition''),\20\ recommended 
specific energy conservation standards for dishwashers that, in the 
commenters' view, would satisfy the EPCA requirements in 42 U.S.C. 
6295(o). 77 FR 31918, 31919. The July 2010 Joint Petition proposed 
energy conservation standard levels for the standard-size and compact-
size dishwasher product classes based on the same capacity definitions 
that existed at that time. 77 FR 31918, 31926. In the May 2012 Direct 
Final Rule, DOE analyzed the benefits and burdens of multiple standard 
levels for dishwashers, including a standard level that corresponded to 
the recommended levels in the July 2010 Joint Petition, and determined 
that the levels recommended in the Joint Petition satisfied the EPCA 
requirements set forth under 42 U.S.C. 6295(o). 77 FR 31918, 31921.
---------------------------------------------------------------------------

    \20\ DOE Docket No. EERE-2011-BT-STD-0060-0001.
---------------------------------------------------------------------------

    In a final determination published on December 13, 2016 (``December 
2016 Final Determination''), DOE concluded that amended energy 
conservation standards would not be economically justified at any level 
above the standards established in the May 2012 Direct Final Rule, and 
therefore determined not to amend the standards. 81 FR 90072. The 
current energy and water conservation standards are set forth in DOE's 
regulations at 10 CFR part 430, Sec.  430.32(f), and are repeated in 
Table II.1. The currently applicable DOE test procedure for dishwashers 
appears at appendix C1.
[GRAPHIC] [TIFF OMITTED] TR24AP24.006

    The regulatory text at 10 CFR 430.32(f) references the Association 
of Home Appliance Manufacturers (``AHAM'') standard AHAM DW-1-2020 \21\ 
to define the items in the test load that comprise the serving pieces 
and each place setting. The number of serving pieces and place settings 
help determine the capacity of the dishwasher, which is used to 
determine the applicable product class.
---------------------------------------------------------------------------

    \21\ Uniform Test Method for Measuring the Energy Consumption of 
Dishwashers. AHAM DW-1-2020. Copyright 2020.
---------------------------------------------------------------------------

2. Current Test Procedure
    On December 22, 2021, DOE published a test procedure NOPR 
(``December 2021 TP NOPR'') proposing amendments to the dishwasher test 
procedure at appendix C1 and a new test procedure at appendix C2. 86 FR 
72738. On January 18, 2023, DOE published a final rule amending the 
test procedure at appendix C1 and establishing a new test procedure at 
appendix C2 (``January 2023 TP Final Rule''). 88 FR 3234. The new 
appendix C2 specifies updated annual cycles and low-power mode hours, 
both of which are used to calculate the EAEU metric, and introduces a 
minimum cleaning performance threshold to validate the selected test 
cycle. 88 FR 3234, 3236.
    Subsequently, on July 27, 2023, DOE published a final rule adding 
clarifying instructions to the dishwasher test procedure at appendix C1 
regarding the allowable dosing options for each type of detergent; 
clarifying the existing detergent reporting requirements; and adding an 
enforcement provision for dishwashers to specify the detergent and 
dosing method that DOE would use for any enforcement testing of 
dishwasher models certified in accordance with the applicable 
dishwasher test procedure prior to July 17, 2023 (i.e., the date by 
which the January 2023 TP Final Rule became mandatory for product 
testing). 88 FR 48351.
    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)) In general, a consumer-acceptable 
level of cleaning performance (i.e., a representative average use 
cycle) can be easier to achieve through the use of higher amounts of 
energy and water use during the dishwasher cycle. Conversely, 
maintaining acceptable cleaning performance can be more difficult as 
energy and water levels are reduced. Improving one aspect of dishwasher 
performance, such as reducing energy and/or water use as a result of 
energy conservation standards, may require a trade-off with one or more 
other aspects of performance, such as cleaning performance. 88 FR 3234, 
3250-3251. As discussed, the currently applicable energy conservation 
standards for dishwashers are based on appendix C1, which does not 
prescribe a method for testing dishwasher cleaning performance.
    The January 2023 TP Final Rule established a new test procedure at 
appendix C2, which includes provisions for a minimum cleaning index 
threshold of 70 to validate the selected test cycle. 88 FR 3234, 3261. 
The cleaning index is calculated based on the number and size of 
particles remaining on each item of the test load at the completion of 
a dishwasher cycle as specified in AHAM DW-2-2020.\22\ Items that do 
not have any soil particles are scored 0 (i.e., completely clean). No 
single item in the test load can exceed a score of 9. Individual scores 
for each item in the test load are combined as a weighted average to 
calculate the per cycle cleaning index. A cleaning index of 100 
indicates a completely clean test load. Id. at 88 FR 3255. In the 
January 2023 TP Final Rule, DOE specified that the

[[Page 31410]]

cleaning index is calculated by only scoring soil particles on all 
items in the test load and that spots, streaks, and rack contact marks 
on glassware are not included in the cleaning index calculation.\23\ 
Id. at 88 FR 3248. Manufacturers must use the results of testing under 
the new appendix C2 to determine compliance with the energy 
conservation standards adopted in this direct final rule. Accordingly, 
DOE used appendix C2 as finalized in the January 2023 TP Final Rule as 
the basis for the analysis in this direct final rule. Id. at 88 FR 
3234.
---------------------------------------------------------------------------

    \22\ Household Electric Dishwashers. AHAM DW-2-2020. Copyright 
2020.
    \23\ In the December 2021 TP NOPR, DOE proposed a cleaning index 
threshold of 65 calculated by scoring soil particles on all items as 
well as spots, streaks, and rack contact marks on glassware. 86 FR 
72738, 72756, 72758. In the January 2023 TP Final Rule, DOE noted 
that the specified cleaning index threshold of 70 is equivalent to 
the cleaning index threshold of 65 that was proposed in the December 
2021 TP NOPR. 88 FR 3234, 3261.
---------------------------------------------------------------------------

    DOE adopted a minimum cleaning performance threshold in appendix C2 
to determine if a dishwasher, when tested according to the DOE test 
procedure, ``completely washes a normally soiled load of dishes,'' so 
as to better represent consumer use of the product (i.e., to produce 
test results that are more representative of an average consumer use 
cycle). 88 FR 3234, 3253, 3255. Based on the data available, DOE 
determined that the cleaning performance threshold provides a 
reasonable proxy for when consumers are likely to be satisfied with 
performance on the normal cycle. 88 FR 3234, 3261. The cleaning index 
threshold established as part of the new appendix C2 ensures that 
energy and water savings are being realized for products that comply 
with the amended energy conservation standards for dishwashers 
established by this direct final rule. 88 FR 3234, 3253, 3254.
    The standards enacted by this direct final rule are expressed in 
terms of the EAEU and water consumption metrics as measured according 
to the newly established test procedure contained in appendix C2.
3. The Joint Agreement
    On September 25, 2023, DOE received a joint statement (i.e., the 
Joint Agreement) recommending standards for dishwashers, that was 
submitted by groups representing manufacturers, energy and 
environmental advocates, consumer groups, and a utility.\24\ In 
addition to the recommended standards for dishwashers, 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 the Joint Agreement is 
contingent upon DOE initiating rulemaking processes to adopt all 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.
---------------------------------------------------------------------------

    \24\ The signatories to the Joint Agreement include the AHAM, 
American Council for an Energy Efficient Economy, Alliance for Water 
Efficiency, ASAP, 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; 
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.
    \25\ The Joint Agreement contained recommendations for 6 covered 
products: refrigerators, refrigerator-freezers, and freezers; 
clothes washers; clothes dryers; dishwashers; 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 dishwashers with a cycle time for the 
normal cycle of 60 minutes or less, top-loading residential clothes 
washers and certain classes of consumer clothes dryers with a cycle 
time of less than 30 minutes, and front-loading residential clothes 
washers 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 residential clothes washers, 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 dishwashers.
---------------------------------------------------------------------------

    \26\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------

    The Joint Agreement recommends standard levels for dishwashers as 
presented in Table II.2. (Joint Agreement, No. 55 at p. 5) 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-2019-BT-STD-0039-0055.

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[[Page 31411]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.007

    DOE notes that it was conducting a rulemaking to consider amending 
the standards for dishwashers when the Joint Agreement was submitted. 
As part of that process, on January 24, 2022, DOE published a 
notification of a webinar and availability of preliminary technical 
support document (``January 2022 Preliminary Analysis''). 87 FR 3450. 
Subsequently, on May 19, 2023, DOE published a NOPR and announced a 
public meeting (``May 2023 NOPR'') seeking comment on its proposed 
amended standard to inform its decision consistent with its obligations 
under EPCA and the Administrative Procedure Act (``APA''). 88 FR 32514. 
DOE held a public meeting on June 8, 2023, to discuss and receive 
comments on the NOPR and NOPR TSD. The NOPR TSD is available at: 
www.regulations.gov/document/EERE-2019-BT-STD-0039-0032.
    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 own prior rulemaking will include a 
parenthetical reference that provides the location of the item in the 
public record.\28\
---------------------------------------------------------------------------

    \28\ The parenthetical reference provides a reference for 
information located in the docket of DOE's rulemaking to develop 
energy conservation standards for dishwashers. (Docket No. EERE-
2019-BT-STD-0039, which is maintained at www.regulations.gov). The 
references are arranged as follows: (commenter name, comment docket 
ID number, page of that document).
---------------------------------------------------------------------------

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 
parties 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 the final rule revoking two final rules that established the 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.'' \29\ That is because, as the letter explained, such product 
classes ``did not exist'' at the time of the Joint Agreement.
---------------------------------------------------------------------------

    \29\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------

    In a recently published request for information (``RFI''), 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. 89 FR 17338 (March 11, 2024). 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. . . .''
    The current standards applicable to any products within the scope 
of that proceeding remain unchanged by this rule. See 10 CFR 430.32(f). 
Consistent with the Joint Parties' letter, short-cycle products are not 
subject to the amended standards adopted by this direct final rule. 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 dishwashers: 
standard-size and compact-size. Although these product classes were not 
further divided by cycle time, DOE understands them to exclude 
standard-size dishwashers with an average cycle time of 60 minutes or 
less. As noted previously, any such ``short-cycle'' dishwashers will be 
considered in the Remand Proceeding; the current standards applicable 
to such ``short-cycle'' dishwashers 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.

[[Page 31412]]

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 and compact-size 
dishwashers that is not distinguished by cycle time and is 
representative of all dishwashers 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

    This direct final rule covers those consumer products that meet the 
definition of ``dishwasher'' as codified at 10 CFR 430.2.
    Dishwasher means a cabinet-like appliance which with the aid of 
water and detergent, washes, rinses, and dries (when a drying process 
is included) dishware, glassware, eating utensils, and most cooking 
utensils by chemical, mechanical and/or electrical means and discharges 
to the plumbing drainage system. 10 CFR 430.2.
    See section IV.A.1 of this document for discussion of the product 
classes analyzed in this direct final rule.

B. Fairly Representative of Relevant Points of View

    Under the direct final rule provision in EPCA, recommended energy 
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, AHAM, which represents 16 manufacturers 
of dishwashers.\30\ 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. 56). 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. 57). As a result, DOE has determined that the Joint Agreement was 
submitted by interested persons who are fairly representative of 
relevant points of view.
---------------------------------------------------------------------------

    \30\ These companies include: Asko Appliances AB; Beko US Inc.; 
BSH Home Appliances Corporation; Danby Products, Ltd.; Electrolux; 
Fotile America; GE Appliances, a Haier Company; LG Electronics; 
Midea America Corp.; Miele, Inc.; Samsung Electronics America, Inc.; 
Sharp Electronics Corporation; Smeg S.p.A; Sub-Zero Group, Inc.; The 
Middleby Corporation; 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 appendix 
A.
    After DOE has determined that particular technology options are 
technologically feasible, it further evaluates each technology option 
in light of the following additional screening criteria: (1) 
practicability to manufacture, install, and service; (2) adverse 
impacts on product utility or availability; (3) adverse impacts on 
health or safety and (4) unique-pathway proprietary technologies. 
Section 7(b)(2) through (5) of appendix A. Section IV.B of this 
document discusses the results of the screening analysis for 
dishwashers, particularly the designs DOE considered, those it screened 
out, and those that are the basis for the standards considered in this 
rulemaking. For further details on the screening analysis for this 
rulemaking, see chapter 4 of the 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 dishwashers, using the design parameters for the most 
efficient products available on the market or in working prototypes. 
The max-tech levels that DOE determined for this rulemaking are 
described in section IV.C.1.b 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 dishwashers purchased in the 30-year period that begins in the 
year of compliance with the amended standards (2027-2056).\31\ The 
savings are measured over the entire lifetime of dishwashers 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.
---------------------------------------------------------------------------

    \31\ DOE also presents a sensitivity analysis that considers 
impacts for products shipped in a 9-year period.
---------------------------------------------------------------------------

    DOE used its national impact analysis (``NIA'') spreadsheet models 
to estimate national energy savings (``NES'') from potential amended 
standards for dishwashers. The NIA spreadsheet model (described in 
section IV.H of this document) calculates energy savings in terms of 
site energy, which is the energy directly consumed by products at the 
locations where they are used. For electricity, DOE reports national 
energy savings in terms of primary energy savings, which is the savings 
in the energy that is used to generate and transmit the site 
electricity. For natural gas, the primary energy savings are considered 
to be equal to the site energy savings. DOE also calculates NES in 
terms of full-fuel-cycle (``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.\32\ DOE's approach is based on the calculation 
of an FFC multiplier for each of the energy types used by covered 
products or

[[Page 31413]]

equipment. For more information on FFC energy savings, see section 
IV.H.2 of this document.
---------------------------------------------------------------------------

    \32\ 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.\33\ For 
example, some covered products and equipment have most of their energy 
consumption occur during periods of peak energy demand. The impacts of 
these products on the energy infrastructure can be more pronounced than 
products with relatively constant demand. Accordingly, DOE evaluates 
the significance of energy savings on a case-by-case basis, taking into 
account the significance of cumulative FFC national energy savings, the 
cumulative FFC emissions reductions, and the need to confront the 
global climate crisis, among other factors.
---------------------------------------------------------------------------

    \33\ Procedures, Interpretations, and Policies for Consideration 
in New or Revised Energy Conservation Standards and Test Procedures 
for Consumer Products and Commercial/Industrial Equipment, 86 FR 
70892, 70901 (Dec. 13, 2021).
---------------------------------------------------------------------------

    As stated, the standard levels adopted in this direct final rule 
are projected to result in national energy savings of 0.31 quads FFC, 
the equivalent of the primary annual energy use of 2.1 million homes. 
Based on the amount of FFC savings, the corresponding reduction in 
emissions, and the need to confront the global climate crisis, DOE has 
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 a manufacturing impact analysis (``MIA''), 
as discussed in section IV.J of this document. DOE first uses an annual 
cash-flow approach to determine the quantitative impacts. This step 
includes both a short-term assessment--based on the cost and capital 
requirements during the period between when a regulation is issued and 
when entities must comply with the regulation--and a long-term 
assessment over a 30-year period. The industry-wide impacts analyzed 
include (1) INPV, which values the industry on the basis of expected 
future cash flows; (2) cash flows by year; (3) changes in revenue and 
income; and (4) other measures of impact, as appropriate. Second, DOE 
analyzes and reports the impacts on different types of manufacturers, 
including impacts on small manufacturers. Third, DOE considers the 
impact of standards on domestic manufacturer employment and 
manufacturing capacity, as well as the potential for standards to 
result in plant closures and loss of capital investment. Finally, DOE 
takes into account cumulative impacts of various DOE regulations and 
other regulatory requirements on manufacturers.
    For individual consumers, measures of economic impact include the 
changes in LCC and PBP associated with new or amended standards. These 
measures are discussed further in the following section. For consumers 
in the aggregate, DOE also calculates the national net present value of 
the consumer costs and benefits expected to result from particular 
standards. DOE also evaluates the impacts of potential standards on 
identifiable subgroups of consumers that may be affected 
disproportionately by a standard.
b. Savings in Operating Costs Compared To Increase in Price (LCC and 
PBP)
    EPCA requires DOE to consider the savings in operating costs 
throughout the estimated average life of the covered product in the 
type (or class) compared to any increase in the price of, or in the 
initial charges for, or maintenance expenses of, the covered product 
that are likely to result from a standard. (42 U.S.C. 
6295(o)(2)(B)(i)(II)) DOE conducts this comparison in its LCC and PBP 
analysis.
    The LCC is the sum of the purchase price of a product (including 
its installation) and the operating cost (including energy, 
maintenance, and repair expenditures) discounted over the lifetime of 
the product. The LCC analysis requires a variety of inputs, such as 
product prices, product energy consumption, energy prices, maintenance 
and repair costs, product lifetime, and discount rates appropriate for 
consumers. To account for uncertainty and variability in specific 
inputs, such as product lifetime and discount rate, DOE uses a 
distribution of values, with probabilities attached to each value.
    The PBP is the estimated amount of time (in years) it takes 
consumers to recover the increased purchase cost (including 
installation) of a more-efficient product through lower operating 
costs. DOE calculates the PBP by dividing the change in purchase cost 
due to a more-stringent standard by the change in annual operating cost 
for the year that standards are assumed to take effect.
    For its LCC and PBP analysis, DOE assumes that consumers will 
purchase the covered products in the first year of compliance with new 
or amended standards. The LCC savings for the considered efficiency 
levels are calculated relative to the case that reflects projected 
market trends in the absence of new or amended standards. DOE's LCC and 
PBP analysis is discussed in further detail in section IV.F of this 
document.
c. Energy Savings
    Although significant conservation of energy is a separate statutory 
requirement for adopting an energy conservation standard, EPCA requires 
DOE, in determining the economic justification of a standard, to 
consider the total projected energy savings that are expected to result 
directly from the standard. (42 U.S.C. 6295(o)(2)(B)(i)(III)) As 
discussed in section IV.H of this document, DOE uses the NIA 
spreadsheet models to project national energy savings.
d. Lessening of Utility or Performance of Products
    In establishing product classes, and in evaluating design options 
and the impact of potential standard levels, DOE evaluates potential 
standards that would not lessen the utility or performance of the 
considered products. (42 U.S.C. 6295(o)(2)(B)(i)(IV)) Based on data 
available to DOE, the standards adopted in this document would not 
reduce the utility or performance of the dishwashers 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

[[Page 31414]]

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 notice.
f. Need for National Energy and Water Conservation
    DOE also considers the need for national energy and water 
conservation in determining whether a new or amended standard is 
economically justified. (42 U.S.C. 6295(o)(2)(B)(i)(VI)) The energy 
savings from the 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 benefits in the form of reduced emissions of air 
pollutants and GHGs associated with energy production and use. DOE 
conducts an emissions analysis to estimate how potential standards may 
affect these emissions, as discussed in section IV.K of this document; 
the estimated emissions impacts are reported in section V.B.6 of this 
document. DOE also estimates the economic value of emissions reductions 
resulting from the considered TSLs, as discussed in section IV.L of 
this document.
g. Other Factors
    In determining whether an energy conservation standard is 
economically justified, DOE may consider any other factors that the 
Secretary deems to be relevant. (42 U.S.C. 6295(o)(2)(B)(i)(VII)) To 
the extent DOE identifies any relevant information regarding economic 
justification that does not fit into the other categories described 
previously, DOE could consider such information under ``other 
factors.''
2. Rebuttable Presumption
    As set forth in 42 U.S.C. 6295(o)(2)(B)(iii), EPCA creates a 
rebuttable presumption that an energy conservation standard is 
economically justified if the additional cost to the consumer of a 
product that meets the standard is less than three times the value of 
the first year's energy savings resulting from the standard, as 
calculated under the applicable DOE test procedure. DOE's LCC and PBP 
analyses generate values used to calculate the effect potential 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.9 of this document.

IV. Methodology and Discussion of Related Comments

    This section addresses the analyses DOE has performed for this 
rulemaking with regard to dishwashers. 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 dishwashers 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?D=EERE-019-BT-STD-0039. Additionally, DOE used output from the 
latest version of the EIA's Annual Energy Outlook (``AEO'') for the 
emissions and utility impact analyses.

A. Market and Technology Assessment

    DOE develops information in the market and technology assessment 
that provides an overall picture of the market for the products 
concerned, including the purpose of the products, the industry 
structure, manufacturers, market characteristics, and technologies used 
in the products. This activity includes both quantitative and 
qualitative assessments, based primarily on publicly available 
information. The subjects addressed in the market and technology 
assessment for this rulemaking include (1) a determination of the scope 
of the rulemaking and product classes, (2) manufacturers and industry 
structure, (3) existing efficiency programs, (4) shipments information, 
(5) market and industry trends, and (6) technologies or design options 
that could improve the energy efficiency of dishwashers. 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 two product classes for dishwashers. 
(Joint Agreement, No. 55 at p. 8) In this direct final rule, DOE is 
adopting the product classes from the Joint Agreement, as follows:
    (1) Standard-size dishwashers (>=8 place settings plus 6 serving 
pieces); and
    (2) Compact-size dishwashers (<8 place settings plus 6 serving 
pieces). Id.
    Where the place settings are as specified in AHAM DW-1-2020 and the 
test load is as specified in section 2.4 of appendix C2. Id.
    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

[[Page 31415]]

currently.\34\ DOE's findings in this regard are discussed in detail in 
section V.B.4 of this document.
---------------------------------------------------------------------------

    \34\ 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 20 technology options, 
consistent with the table of technology options presented in the May 
2023 NOPR. 88 FR 32514, 32527-32528. In general, technology options for 
dishwashers may reduce energy use alone, or reduce both energy and 
water use together. Most dishwashers in the United States use as their 
water source a hot water line that is typically tapped from the hot 
water line serving the adjacent kitchen faucet. Because the energy used 
to heat the water consumed by the dishwasher is included as part of the 
EAEU metric, technologies that decrease water use also inherently 
decrease energy use. Chapter 3 of the TSD for this direct final rule 
includes a detailed list and descriptions of all technology options 
identified for dishwashers, including a discussion of how each 
technology option reduces energy use only or both energy and water use 
together.
    Among the technology options identified for dishwashers, the 
following reduce energy use only (i.e., they reduce energy use without 
directly reducing water use): condensation drying, including use of a 
stainless steel tub; desiccant drying; fan/jet drying; improved motor 
efficiency; increased insulation; low-standby-loss electronic controls; 
reduced inlet-water temperature; thermoelectric heat pumps; ultrasonic 
washing; and variable-speed motors.
    The following technology options reduce both energy and water use 
together (i.e., they reduce water use, thereby also inherently reducing 
energy use): control strategies; flow-through heating; improved fill 
control; improved food filter; improved spray-arm geometry; 
microprocessor controls and fuzzy logic, including adaptive or soil-
sensing controls; modified sump geometry, with and without dual pumps; 
super-critical carbon dioxide washing; variable washing pressures and 
flow rates; and water re-use system.
    In developing the list of technology options for this direct final 
rule, DOE considered comments it had received in response to the May 
2023 NOPR. Samsung Electronics America, Inc. (``Samsung'') noted \35\ 
that variable-speed pump motors reduce energy consumption by allowing 
the dishwasher to operate at the most suitable flow rate for each 
specific phase of the cleaning process. (Samsung, No. 52 at p. 2) 
Samsung agreed with DOE that enhancements in dishwasher components also 
contribute to energy efficiency, especially advanced technologies such 
as electronic and soil-sensing controls. Samsung commented that the 
technology options identified by DOE are achievable and can be 
implemented by manufacturers to significantly improve energy 
efficiency, reduce resource consumption, and promote sustainability 
while maintaining cleaning performance that consumers expect. (Samsung, 
No. 52 at pp. 2-3) As noted, DOE has maintained the technology options 
discussed in the May 2023 NOPR.
---------------------------------------------------------------------------

    \35\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0052.
---------------------------------------------------------------------------

B. Screening Analysis

    DOE uses the following five screening criteria to determine which 
technology options are suitable for further consideration in an energy 
conservation standards rulemaking:
    (1) Technological feasibility. Technologies that are not 
incorporated in commercial products or in commercially viable, existing 
prototypes will not be considered further.
    (2) Practicability to manufacture, install, and service. If it is 
determined that mass production of a technology in commercial products 
and reliable installation and servicing of the technology could not be 
achieved on the scale necessary to serve the relevant market at the 
time of the projected compliance date of the standard, then that 
technology will not be considered further.
    (3) Impacts on product utility. If a technology is determined to 
have a significant adverse impact on the utility of the product to 
subgroups of consumers, or result in the unavailability of any covered 
product type with performance characteristics (including reliability), 
features, sizes, capacities, and volumes that are substantially the 
same as products generally available in the United States at the time, 
it will not be considered further.
    (4) Safety of technologies. If it is determined that a technology 
would have significant adverse impacts on health or safety, it will not 
be considered further.
    (5) Unique-pathway proprietary technologies. If a technology has 
proprietary protection and represents a unique pathway to achieving a 
given efficiency level, it will not be considered further, due to the 
potential for monopolistic concerns.
    10 CFR part 430, subpart C, appendix A, sections 6(b)(3) and 7(b).
    In summary, if DOE determines that a technology, or a combination 
of technologies, fails to meet one or more of the listed five criteria, 
it will be excluded from further consideration in the engineering 
analysis.
    The 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
    The following sections detail the technology options that were 
screened out for this direct final rule, and the reasons why they were 
eliminated.
a. Desiccant Drying
    Desiccant drying relies on a material such as zeolite \36\ to 
adsorb moisture to aid in the drying process and reduce drying energy 
consumption. DOE is aware of dishwashers from one manufacturer on the 
market in the United States that use desiccant drying.\37\
---------------------------------------------------------------------------

    \36\ Zeolite is a highly porous aluminosilicate mineral that 
adsorbs moisture and releases heat to aid in the drying process.
    \37\ See chapter 4, section 4.2.1.1 of the January 2022 
Preliminary TSD.
---------------------------------------------------------------------------

    DOE has screened out desiccant drying from further consideration 
because it is a unique-pathway proprietary technology. Desiccant drying 
is a patented technology, and although multiple manufacturers hold 
patents for dishwasher designs with desiccant drying features, DOE is 
concerned that this technology option is not available for all 
manufacturers.
b. Reduced Inlet-Water Temperature
    Reduced inlet-water temperature requires that dishwashers tap the 
cold water line for their water supply. Because most dishwashers in the 
United States tap the hot water line, this technology option would 
require significant alteration of existing dishwasher installations in 
order to

[[Page 31416]]

accommodate newly purchased units incorporating this technology option. 
Therefore, DOE has determined that it would not be practicable to 
install this technology on the scale necessary to serve the relevant 
market at the time of the effective date of an amended standard.
c. Supercritical Carbon Dioxide Washing
    Supercritical carbon dioxide washing, which uses supercritical 
carbon dioxide instead of conventional detergent and water to wash 
dishes, is currently being researched. Given that this technology is in 
the research stage, DOE has determined that it would not be practicable 
to manufacture, install and service this technology on the scale 
necessary to serve the relevant market at the time of the effective 
date of an amended standard. Furthermore, because this technology is in 
the research stage, it is not yet possible to assess whether it would 
have any adverse impacts on equipment utility to consumers or equipment 
availability, or any adverse impacts on consumers' health or safety.
d. Ultrasonic Washing
    A dishwasher using ultrasonic waves to generate a cleaning mist was 
produced for the Japanese market in 2002; however, this model is no 
longer available on the market. Available information indicates that 
the use of a mist with ion generation instead of water with detergent 
would decrease cleaning performance, impacting consumer utility.
    Ultrasonic dishwashing based upon soiled-dish immersion in a fluid 
that is then excited by ultrasonic waves has not been demonstrated. In 
an immersion-based ultrasonic dishwasher, standing ultrasonic waves 
within the washing cavity and the force of bubble cavitation implosion 
can damage fragile dishware. Because no manufacturers currently produce 
consumer ultrasonic dishwashers, it is impossible to assess whether 
this technology option would have any impacts on consumers' health or 
safety, or product availability.
    Based on this information, DOE has screened out both identified 
product types that incorporate the ultrasonic washing technology 
option.
e. Thermoelectric Heat Pumps
    The thermoelectric heat pump system aims to extract waste heat from 
drain water and recover heat normally lost during the drying process, 
and apply it to the washing, rinsing, and drying phases, effectively 
saving energy. The technology is not commercially available yet as the 
technology is still in the research phase. Therefore, DOE has 
determined that it would not be practicable to manufacture, install and 
service this technology on the scale necessary to serve the relevant 
market at the time of the effective date of the amended standards. 
Furthermore, because this technology is in the research stage, it is 
not yet possible to assess whether it would have any adverse impacts on 
equipment utility to consumers or equipment availability, or any 
adverse impacts on consumers' health or safety.
f. Water Re-Use System
    This system saves water from the final rinse of a given dishwasher 
cycle for use in a subsequent dishwasher cycle. A water re-use system 
dishwasher also performs ``drain out'' and ``clean out'' cycles if the 
dishwasher is not operated for a certain period of time. Both ``drain 
out'' and ``clean out'' events consume additional water and energy 
during the subsequent cycle, even though such a system saves water and 
energy consumption overall.
    DOE has screened out this technology option as it has determined 
that leaking and contamination from a water holding tank could 
potentially present negative health or safety impacts.
2. Remaining Technologies
    Through a review of each technology, DOE concludes that all of the 
other identified technologies listed in section IV.A.2 of this document 
met all five screening criteria to be examined further as design 
options in DOE's direct final rule analysis. In summary, DOE did not 
screen out the following technology options:
    Technology options that reduce energy use only: condensation 
drying, including use of a stainless steel tub; fan/jet drying; 
improved motor efficiency; increased insulation; low-standby-loss 
electronic controls; and variable-speed motors.
    Technology options that reduce both energy and water use together: 
control strategies; flow-through heating; improved fill control; 
improved food filter; improved spray-arm geometry; microprocessor 
controls and fuzzy logic, including adaptive or soil-sensing controls; 
modified sump geometry, with and without dual pumps; and variable 
washing pressures and flow rates.
    DOE 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 dishwashers. There are 
two elements to consider in the engineering analysis; the selection of 
efficiency levels to analyze (i.e., the ``efficiency analysis'') and 
the determination of product cost at each efficiency level (i.e., the 
``cost analysis''). In determining the performance of higher-efficiency 
products, DOE considers technologies and design option combinations not 
eliminated by the screening analysis. For each dishwasher class, DOE 
estimates the baseline cost, as well as the incremental cost for the 
dishwasher at efficiency levels above the baseline. The output of the 
engineering analysis is a set of cost-efficiency ``curves'' that are 
used in downstream analyses (i.e., the LCC and PBP analyses and the 
NIA).
1. Efficiency Analysis
    DOE typically uses one of two approaches to develop energy 
efficiency levels for the engineering analysis: (1) relying on observed 
efficiency levels in the market (i.e., the efficiency-level approach), 
or (2) determining the incremental efficiency improvements associated 
with incorporating specific design options to a baseline model (i.e., 
the design-option approach). Using the efficiency-level approach, the 
efficiency levels established for the analysis are determined based on 
the market distribution of existing products (in other words, based on 
the range of efficiencies and efficiency level ``clusters'' that 
already exist on the market). Using the design-option approach, the 
efficiency levels established for the analysis are determined through 
detailed engineering calculations and/or computer simulations of the 
efficiency improvements from implementing specific design options that 
have been identified in the technology assessment. DOE may also rely on 
a combination of these two approaches. For example, the efficiency-
level approach (based on actual products on the market) may be extended 
using the design-option approach to 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-

[[Page 31417]]

tech'' level exceeds the maximum efficiency level currently available 
on the market).
    For this analysis, DOE used a combination of the efficiency-level 
and design-option approach. This approach involved physically 
disassembling commercially available products, reviewing publicly 
available cost information, and modeling equipment cost. From this 
information, DOE estimated the manufacturer production costs (``MPCs'') 
for a range of products currently available on the market. DOE then 
considered the incremental steps manufacturers may take to reach higher 
efficiency levels. In its modeling, DOE started with the baseline MPC 
and added the expected design options at each higher efficiency level 
to estimate incremental MPCs. By doing this, the engineering analysis 
did not factor in the additional higher-cost features with no impact on 
efficiency that are included in some models. However, at efficiency 
levels where the product designs significantly deviated from the 
baseline product, DOE used the efficiency-level approach to determine 
an MPC estimate, while removing the costs associated with non-
efficiency-related components or features. DOE also provides further 
discussion on the design options and efficiency improvements in chapter 
5 of the direct final rule TSD.
a. Baseline Efficiency
    For each dishwasher 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 dishwasher class represents the 
characteristics of a dishwasher typical of that class (e.g., capacity, 
physical size). Generally, a baseline model is one that just meets 
current energy conservation standards, or, if no standards are in 
place, the baseline is typically the most common or least efficient 
unit on the market.
    For dishwashers, DOE identified products available on the market 
rated at the current energy conservation standards levels for both 
standard-size and compact-size dishwasher product classes. Accordingly, 
DOE analyzed these products as baseline units. DOE uses the baseline 
unit for comparison in several phases of the direct final rule 
analyses, including the engineering analysis, LCC analysis, PBP 
analysis, and NIA. To determine energy and water savings that will 
result from an amended energy conservation standard, DOE compares 
energy and water consumption at each of the higher energy efficiency 
levels to the energy and water consumption of the baseline unit. 
Similarly, to determine the changes in price to the consumer that will 
result from an amended energy conservation standard, DOE compares the 
price of a unit at each higher efficiency level to the price of a unit 
at the baseline. Additional details on the selection of baseline units 
may be found in chapter 5 of the direct final rule TSD. In the May 2023 
NOPR, DOE updated the baseline efficiency level for the compact-size 
dishwasher product class, when using appendix C2, from 178 kWh/year 
estimated in the January 2022 Preliminary Analysis to 191 kWh/year. 88 
FR 32514, 32530. In the January 2022 Preliminary Analysis, DOE 
translated the current compact-size product class standard level of 222 
kWh/year, which is based on appendix C1, to an EAEU based on appendix 
C2 using the baseline standby power use estimate of 2.3 watts from the 
December 2016 Final Determination (see chapter 7 of the December 2016 
Final Determination TSD).\38\ Id. at 32531. However, based on more 
recent testing of compact-size dishwashers, DOE determined in its 
analysis for the May 2023 NOPR that current baseline compact-size 
dishwashers consume 0.5 watts in standby mode. Using this updated 
standby power value to translate 222 kWh/year from appendix C1 to 
appendix C2, DOE calculated an updated baseline EAEU value of 191 kWh/
year for compact-size dishwashers. Id. Accordingly, in the May 2023 
NOPR, DOE proposed the baseline compact-size dishwasher efficiency 
level to be 191 kWh/year and 3.5 gal/cycle. Id. Table IV.1 presents the 
baseline levels identified for each dishwasher product class in the May 
2023 NOPR.
---------------------------------------------------------------------------

    \38\ To translate the current dishwasher EAEU standards from 
appendix C1 to appendix C2, DOE separated the EAEU into annual 
active mode energy use and annual standby mode energy use. DOE 
multiplied the annual active mode energy use by 184 cycles/year and 
divided by 215 cycles/year, then added back the annual standby 
energy use to determine updated EAEU values based on 184 annual 
cycles.
[GRAPHIC] [TIFF OMITTED] TR24AP24.008

    DOE sought comment on the baseline efficiency levels analyzed in 
the May 2023 NOPR for each product class. 88 FR 32514, 32531. DOE did 
not receive any comments related to the selected baseline efficiency 
levels, including the updated baseline efficiency level for compact-
size dishwashers in the May 2023 NOPR. DOE therefore used the baseline 
efficiency levels from the May 2023 NOPR in its analysis for this 
direct final rule.
b. Higher Efficiency Levels
    Using the efficiency-level approach, the higher efficiency levels 
established for the analysis are determined based on the market 
distribution of existing products (in other words, based on the range 
of efficiencies and efficiency level ``clusters'' that already exist on 
the market). Using this approach, DOE identified four efficiency levels 
beyond the baseline for standard-size dishwashers and two for the 
compact-size product class. At each higher efficiency level, both 
energy use and water use decrease through the implementation of 
combinations of design options that individually either reduce energy 
use alone, or reduce both energy and water use together, as

[[Page 31418]]

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, or reduce both energy and water use together.
    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 May 2023 NOPR.
    Table IV.2 and Table IV.3 show the efficiency levels DOE evaluated 
for standard-size and compact-size dishwashers in the May 2023 NOPR. 88 
FR 32514, 32534-32535.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR24AP24.010

    For standard-size dishwashers, EL 1 corresponded to the ENERGY STAR 
Version 6.0 \39\ (``ENERGY STAR V. 6.0'') level, EL 2 corresponded to a 
gap-fill efficiency level between ENERGY STAR V. 6.0 and ENERGY STAR V. 
7.0, and EL 3 corresponded to the ENERGY STAR V. 7.0 level (which was 
also the ENERGY STAR Most Efficient criteria in 2022 and 2023). For 
compact-size dishwashers, EL 1 corresponded to the ENERGY STAR V. 6.0 
level. For both standard-size and compact-size dishwashers, the max-
tech efficiency level corresponded to the highest efficiency unit 
available on the market at that time, excluding from consideration 
models that rely on technologies that were screened out previously. 88 
FR 32514, 32534-32535. In the May 2023 NOPR, DOE requested feedback on 
the efficiency levels analyzed for each product class in this proposal. 
88 FR 32514, 32335. DOE did not receive any comments related to the 
selected efficiency levels. DOE therefore used the baseline and 
incremental efficiency levels from the May 2023 NOPR in its analysis 
for this direct final rule.
---------------------------------------------------------------------------

    \39\ ENERGY STAR Version 6.0 Program Requirements available at: 
www.energystar.gov/sites/default/files/asset/document/ENERGY%20STAR%20Residential%20Dishwasher%20Version%206.0%20Final%20Program%20Requirements_0.pdf
---------------------------------------------------------------------------

    For the reasons discussed, DOE analyzed for this direct final rule 
the efficiency levels for standard-size and compact-size dishwashers 
that were proposed in the May 2023 NOPR, as reproduced in Table IV.4 
and Table IV.5, respectively.

[[Page 31419]]

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[GRAPHIC] [TIFF OMITTED] TR24AP24.012

BILLING CODE 6450-01-C
    DOE notes that the compact-size max-tech unit that was analyzed in 
the May 2023 NOPR was not included in DOE's Compliance Certification 
Database (``CCD'') as of September 2023. Models that are discontinued 
over the course of a DOE rulemaking timeline remain applicable in 
conducting the analysis in accordance with EPCA requirements because 
such models incorporate technologically feasible design options that 
manufacturers may use to achieve the corresponding efficiency levels in 
commercial products. The CCD included models that exceed the efficiency 
of the max-tech unit analyzed in the May 2023 NOPR; however, for these 
units, there is a discrepancy between the rated EAEU in DOE's CCD and 
the EAEU listed on the model's EnergyGuide label,\40\ therefore, DOE 
did not consider these units for its max-tech analysis. Accordingly, 
DOE has retained the same compact-size max-tech unit analyzed in this 
direct final rule as that identified in the May 2023 NOPR.
---------------------------------------------------------------------------

    \40\ The CCD lists models with an EAEU of 114 kWh/year and water 
consumption of 1.6 gallons/cycle. However, the EnergyGuide label for 
these units lists the EAEU as 154 kWh/year and water consumption of 
1.8 gallons/cycle. Accordingly, DOE did not consider this unit as 
the max-tech unit for this final rule analysis.
---------------------------------------------------------------------------

2. Cost Analysis
    The cost analysis portion of the engineering analysis is conducted 
using one or a combination of cost approaches. The selection of cost 
approach depends on a suite of factors, including the availability and 
reliability of public information, characteristics of the regulated 
product, the availability and timeliness of purchasing the dishwasher 
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 this direct final rule, DOE conducted the analysis using the 
physical teardown approach. For each product class, DOE tore down a 
representative sample of models spanning the entire range of efficiency 
levels, as well as multiple manufacturers within each product class. 
DOE aggregated the results so that the cost-efficiency relationship 
developed for each product class reflects DOE's assessment of a market-
representative ``path'' to achieve each higher efficiency level. The 
resulting bill of materials provides the basis for the MPC estimates.
    To 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 dishwashers. See section IV.J.2.d of 
this document and chapter 12 of the direct final rule TSD for 
additional detail on the manufacturer markup.
3. Cost-Efficiency Results
    To develop the incremental MPCs associated with improving product 
efficiency for each product class, DOE started with the baseline unit 
cost model and added the expected changes associated with improving 
efficiency at each higher efficiency level. By doing this, DOE excluded 
the costs of any non-efficiency related components from the more 
efficient units.
    Table IV.6 shows the baseline MPCs for standard-size and compact-
size dishwashers estimated for the May 2023 NOPR. 88 FR 32514, 32536. 
Table IV.7 and Table IV.8 show the incremental

[[Page 31420]]

MPCs from the baseline developed in the May 2023 NOPR for standard-size 
and compact-size dishwashers, respectively, in 2022 dollars. Id. at 88 
FR 32536-32537.
BILLING CODE 6450-01-P
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[GRAPHIC] [TIFF OMITTED] TR24AP24.014

[GRAPHIC] [TIFF OMITTED] TR24AP24.015

    For this direct final rule, DOE updated the underlying raw material 
and component prices used in its cost model to reflect raw material and 
component prices as of March 2023. Table IV.9 presents the baseline 
MPCs for each product class as determined for this final rule, in 2023 
dollars. Table IV.10 and Table IV.11 provide the incremental MPCs for 
each efficiency level for both product classes as determined for this 
final rule.
[GRAPHIC] [TIFF OMITTED] TR24AP24.016


[[Page 31421]]


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[GRAPHIC] [TIFF OMITTED] TR24AP24.018

BILLING CODE 6450-01-C
    The detailed description of DOE's determination of costs for 
baseline and higher efficiency levels is provided in chapter 5 of the 
direct final rule TSD.

D. Markups Analysis

    The markups analysis develops appropriate markups (e.g., retailer 
markups, distributor markups, contractor markups) in the distribution 
chain and sales taxes to convert the MSP estimates derived in the 
engineering analysis to consumer prices, which are then used in the LCC 
and PBP analysis. At each step in the distribution channel, companies 
mark up the price of the product to cover business costs and profit 
margin.
    DOE considered two distribution channels through which dishwashers 
move from manufacturers to consumers. The majority of dishwasher sales 
go through the direct retailer channel, in which manufacturers sell the 
products directly to retailers, who then sell to consumers. This direct 
retailer channel accounts for 85 percent of the dishwasher market. The 
rest of the market goes through a separate distribution channel, in 
which manufacturers sell the products to wholesalers, who in turn sell 
the products to general contractors, then to consumers. The main 
parties in the post-manufacturer distribution channels are retailers, 
wholesalers, and general contractors.
    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.\41\
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    \41\ Because the projected price of standards-compliant products 
is typically higher than the price of baseline products, using the 
same markup for the incremental cost and the baseline cost would 
result in higher per-unit operating profit. While such an outcome is 
possible, DOE maintains that in markets that are reasonably 
competitive it is unlikely that standards would lead to a 
sustainable increase in profitability in the long run.
---------------------------------------------------------------------------

    DOE relied on economic data from the U.S. Census Bureau to estimate 
average baseline and incremental markups. Specifically, DOE used the 
2017 Annual Retail Trade Survey for the ``electronics and appliance 
stores'' sector to develop retailer markups.\42\
---------------------------------------------------------------------------

    \42\ US Census Bureau, Annual Retail Trade Survey. 2017. 
www.census.gov/programs-surveys/arts.html
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding the markups analysis conducted for the May 2023 NOPR. The 
approach for determining markups in this direct final rule was the same 
approach DOE had used for the May 2023 NOPR analysis.
    In response to the March 2023 NOPR, AHAM commented \43\ that it, 
along with AHRI and other stakeholders, disputes DOE's distinction 
between markups from manufacturers to end customers for the base case, 
those for costs added to meet proposed standards, and the use of 
incremental versus average markups. (AHAM, No. 51 at p. 18) AHAM stated 
that in its comments on the 2015 NOPR contained quotes from actual 
retailers about their actual practices and they contradict the DOE 
process. (Id.)
---------------------------------------------------------------------------

    \43\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0051.
---------------------------------------------------------------------------

    DOE's incremental markup approach assumes that an increase in 
operating profits, which is implied by keeping a fixed average 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 reported by the 2017 Economic Census 
indicates that the household appliance stores sector (NAICS 443141) is 
a competitive marketplace.\44\ DOE recognizes that actors in the 
distribution chains are likely to seek to maintain the same markup on 
appliances in response to changes in MSPs after an amendment to energy 
conservation standards. However, DOE believes that retail

[[Page 31422]]

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.\45\ According to economic theory, firms in a perfectly 
competitive market are expected to achieve only normal profits in the 
long run, and any short-term economic profit would be eroded by entry 
and increased competition over time. While it is acknowledged that no 
real-world market perfectly fits the conditions of perfect competition, 
the theory provides insights into industries and sectors that share 
certain characteristics. As indicated by industry data,\46\ the 
appliance retail sector is a competitive marketplace; thus, DOE 
contends that an increase in profitability, which is implied by keeping 
a fixed average markup when the production cost goes up, is not likely 
viable in the long run.
---------------------------------------------------------------------------

    \44\ 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. The Herfindahl-
Hirschman Index value can be found by navigating to the 
``Concentration of largest firms for the U.S.'' table and then 
filtering the industry code to NAICS 443141.The Herfindahl-Hirschman 
Index reported for the largest 50 firms in household appliance 
stores sector, is 123.8. Generally, a market with an HHI value of 
under 1,000 is considered to be competitive.
    \45\ A recent retrospective study by LBNL compared ex-ante 
projections of the 2011 Direct Final Rule for Room ACs with ex-post 
data across various analytical inputs. While the observed product 
price data remain sparse, the available market data suggests that 
for some product classes, prices did not significantly increase 
after the standard change, and for others, the prices aligned with 
DOE's projections. Ganeshalingam, M., Ni, C., and Yang, H-C. 2021. A 
Retrospective Analysis of the 2011 Direct Final Rule for Room Air 
Conditioners. Lawrence Berkeley National Laboratory. LBNL-2001413.
    \46\ IBISWorld, US Industry Reports (NAICS): https://my.ibisworld.com/us/en/industry/home.
---------------------------------------------------------------------------

    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. DOE agrees that 
empirical data on markup practices would be desirable, but such 
information is closely held and difficult to obtain. Consequently, DOE 
relies to economic theory as the foundation for developing the markup 
analysis. Hence, DOE continues to maintain that its assumption that 
standards do not facilitate a sustainable increase in profitability is 
reasonable.
    The comments submitted by AHAM during the 2015 NOPR contain quotes 
from their interviews with retailers, but do not provide the details 
and the interview questions used by their consultant based on data 
confidentiality reasons. However, without knowing what questions were 
posed to the contractors and retailers, it is challenging for DOE to 
evaluate the applicability of those quotes. As noted, DOE's analysis 
necessarily considers a situation in which nothing changes except for 
those changes in appliance offerings that occur in response to amended 
standards, and this needs to be addressed clearly in the framing of the 
questions.
    Chapter 6 of the direct final rule TSD provides details on DOE's 
development of markups for dishwashers.

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 dishwashers at different 
efficiencies in representative U.S. single-family homes, and multi-
family residences, and to assess the energy and water savings potential 
of increased dishwasher efficiency. In order to determine 
representative life-cycle costs (as discussed in IV.F), both annual 
energy and water consumption are considered at each efficiency level 
because the technologies to improve energy efficiency may also reduce 
water usage (as discussed in IV.C.1.b). The energy and water use 
analysis estimates the range of energy and water use of dishwashers in 
the field (i.e., as they are actually used by consumers). The energy 
and water use analysis provides the basis for other analyses DOE 
performed, particularly assessments of the energy and water savings and 
the savings in consumer operating costs that could result from adoption 
of amended or new standards.
    For this direct final rule, DOE considered comments it had received 
regarding the energy and water use analysis conducted for the May 2023 
NOPR. The approach used to estimate the energy and water consumption 
for this direct final rule is largely the same as the approach DOE had 
used for the May 2023 NOPR analysis.
    In the May 2023 NOPR, DOE determined the average annual energy and 
water consumption of dishwashers by multiplying the per-cycle energy 
and water consumption by the number of cycles per year. 88 FR 32514, 
32537. DOE used the EIA's 2020 Residential Energy Consumption Survey 
(``RECS'') data to calculate an estimate of annual number of 
cycles.\47\ Id. Having determined number of cycles of dishwasher use 
per year for each RECS household, DOE determined the corresponding 
annual energy and water consumption. Id. In the May 2023 NOPR, DOE 
determined the average annual cycles of operation for dishwashers to be 
197 cycles per year based on RECS 2020. (Id. 88 FR 32538)
---------------------------------------------------------------------------

    \47\ U.S. Department of Energy-Energy Information 
Administration, Residential Energy Consumption Survey, 2015 Public 
Use Microdata Files, 2020. Washington, DC. Available at 
www.eia.doe.gov/emeu/recs/recspubuse20/pubuse20.html.
---------------------------------------------------------------------------

    In response to the May 2023 NOPR, Alliance for Water Efficiency 
(``AWE'') recommended \48\ that DOE consider using actual data for its 
assumptions about cycles per year. (AWE, No. 44 at p. 2) AWE commented 
that a significant difference exists between the 197 cycles per year 
that DOE is using and the 95 cycles per year the water industry 
typically uses. (Id.) AWE stated that the water industry frequently 
relies on residential end use data from Residential End Uses of Water, 
Version 2 Water Research Foundation Report #4309b (``REUW 2016''). 
(Id.) AWE also stated that its experience and academic research suggest 
there are often large gaps between consumer survey responses and actual 
behavior when it comes to fixture and appliance usage. (Id. at p. 3) 
AWE commented that DOE could explore acquiring data from companies 
using smart devices, sub-meters, or sensors installed on water meters 
and supply lines in thousands of homes across the United States that 
collect real-time end use data, which could then be disaggregated. 
(Id.)
---------------------------------------------------------------------------

    \48\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0044.
---------------------------------------------------------------------------

    DOE has reviewed the REUW 2016 report published by the Water 
Research Foundation, which analyzed dishwasher end-use data from 
detailed log data from 762 households. DOE acknowledges that RECS is 
based on household reported frequency of average dishwasher usage per 
week, rather than on contemporaneous logs taken by households or meters 
installed on household dishwashers, which could be more reliable on an 
individual basis. However, unlike the REUW 2016, which is based on 
households in the service areas of 21 U.S. utilities, the RECS 2020 
consists of a nationally representative sample of housing units 
including more than 10,000 households that report dishwasher usage. DOE 
also acknowledges AWE's concern that survey data can be different from 
field metered data. For a comparison between survey data and field 
metered data, DOE referred to a report from Sun et al. that showed that 
the average annual dishwasher cycle counts obtained from Pecan Street 
field metered data based on a limited household sample size and limited 
geographic locations were comparable with the average cycle counts 
reported by RECS 2020 with a difference of three percent.\49\ 
Therefore,

[[Page 31423]]

DOE considers RECS to be the most nationally representative dataset to 
approximate consumer dishwasher usage in the U.S. and uses it in the 
analysis for this direct final rule.
---------------------------------------------------------------------------

    \49\ Sun, Q., et al. 2022. Using Field-Metered Data to 
Characterize Consumer Usage Patterns of Residential Dishwashers. 
Lawrence Berkeley National Laboratory, Berkeley, CA.
---------------------------------------------------------------------------

    AHAM commented that DOE eliminated the numerical threshold for the 
significant conservation of energy savings determination that was in 
the prior Process Rule, reverting to its earlier approach of 
determining whether energy savings are significant on a case-by-case 
basis. AHAM noted that the amended standards for dishwasher would 
result in 0.31 quads, but DOE could achieve far greater savings through 
other means such as public education. AHAM stated that on a monthly 
basis, savings are so minuscule as to render them meaningless relative 
to the potential increase in up-front purchase costs, particularly for 
dishwashers on the lower end of the price scale. AHAM recommended that 
DOE use median savings as a way to partially overcome the bias in the 
RECS data where a few outlier high usage RECS data points distort the 
results. (AHAM, No. 51 at p. 6) AHAM stated using the median LCC 
savings, the savings are approximately $0.72 cents per year, which is 
an amount so small as not to even be noticed by consumers on their 
monthly balance sheets. (Id. at pp. 6-7) AHAM further stated that 
proposed standards that are not cost effective are not economically 
justified under EPCA because the savings do not justify the 
manufacturer and consumer burdens that result from the amended 
standards and DOE should issue a determination not to amend standards 
beyond EL 1 for dishwashers. (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 RECS 
2020, which provides household's dishwasher loads information ranging 
from 1 cycle to 21 cycles per week, once after every meal. The 
household survey-based annual energy and water use for each household 
then feed into the LCC analysis. Excluding minimum and maximum values 
from the RECS households samples would result in a less accurate 
representation of the actual national dishwasher usage patterns and 
consumption distribution exhibited by the household sample. However, as 
a standardized approach, DOE presents the distributions of LCC savings 
for each product class and efficiency level as histograms and boxplots 
in chapter 8 of the direct final rule TSD, which can also be generated 
via the published LCC spreadsheet tool. This approach allows 
stakeholders to observe the full range of LCC savings over the relevant 
time scale, which accounts for the total costs and savings to a 
consumer over the lifetime of a new unit purchased in the compliance 
year, enabling a more informed evaluation of the potential impacts of 
the proposed standards. In addition, DOE's decision on amended 
standards is not solely determined by the average LCC savings. While 
LCC savings play a role, they are considered alongside other critical 
factors, including the percentage of negatively impacted consumers, the 
simple payback period, and the overall impact on manufacturers. DOE 
further notes, that while AHAM submitted these comments in response to 
the May 2023 NOPR, since then AHAM became a party to the Joint 
Agreement and is supportive of the recommended standard adopted in this 
direct final rule
    The California Inventor-Owned Utilities (``CA IOUs'') \50\ 
recommended \51\ that DOE conduct a representative consumer survey to 
review the assumption that consumers turn off the power-dry feature 50 
percent of the time if such options exists, and in the absence of such 
information, amend the test procedure to test the default cycle with 
all manufacturer recommended settings for everyday use enabled. The CA 
IOUs expressed concern that DOE lacked solid supportive data and 
defaulted to the Department of Commerce Voluntary Labeling Program's 
position that for ``any feature requiring a consumer interaction and 
for which actual usage is unknown,'' a ``50 percent frequency'' was 
assumed. (CA IOUs, No. 50 at p. 6) The CA IOUs commented that in 
practice, it is unclear how often consumers actually choose to disable 
power-dry and that DOE is reducing the annual energy consumption of 15 
units by an average of 6 percent without proof of the expected consumer 
behavior. The CA IOUs cited to a 2007 Proctor & Gamble study that 
indicated 66 percent of households use the power-dry feature regularly. 
The CA IOUs suggested that DOE collect data to update this conclusion 
based on consumer use of power-dry, its relation to the ability to 
disable the feature, and its presence in default operation or 
recommendation for everyday use. (Id. at p. 7)
---------------------------------------------------------------------------

    \50\ The ``CA IOUs'' includes Pacific Gas and Electric Company, 
SDG&E, and SCE; collectively, the California Investor-Owned 
Utilities.
    \51\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0050.
---------------------------------------------------------------------------

    DOE updates its analyses with the most current, nationally 
representative data. As pointed out by the CA IOU, the 2007 Proctor & 
Gamble study did not specify if the dishwashers of the participants had 
the option to turn off heated dry, or if the heated dry option was by 
default on or off, and it was unclear how the consumer samples were 
selected. DOE is unaware of any nationally representative consumer data 
showing consumer selection of drying options. Conducting a survey as 
suggested is not viable within the context of this rulemaking, but DOE 
may consider doing so for a future rulemaking. The calculation of EAEU 
at 10 CFR 430.23 assumes dishwashers with the power dry feature use it 
50 percent of the time. In the absence of any other nationally 
representative data set, DOE is using the same assumption in this 
direct final rule analysis. DOE did not include drying option 
selections in this direct final rule analysis, but may consider other 
assumptions regarding use of drying features in future dishwasher test 
procedure rulemakings.
    AWE commented that DOE should more thoroughly consider and evaluate 
the energy embedded in the water that will be saved from the proposed 
standard, in addition to end-user energy use. (AWE, No. 44 at p. 4) AWE 
has developed a water conservation tracking tool for evaluating the 
water savings, costs, and benefits of urban water conservation programs 
and for projecting future water demands. (Id.) AWE further stated that 
DOE could also adjust this based on the assumptions it is currently 
using for private wells and DOE can calculate the emissions-related 
benefits in the same way it has calculated them for direct energy 
savings. (Id. at p. 5)
    DOE has previously determined that EPCA does not direct DOE to 
consider the energy used for utility water treatment and delivery. In a 
May 2012 Final Rule on Residential Clothes Washers, 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 Final Rule on Residential 
Clothes Washers, 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, primary energy savings and the full-fuel-
cycle measure are in a distribution chain that is directly linked to 
the energy used by appliances. (Id.)
    Chapter 7 of the direct final rule TSD provides details on DOE's 
energy and water use analysis for dishwashers.

[[Page 31424]]

F. Life-Cycle Cost and Payback Period Analysis

    DOE conducted LCC and PBP analyses to evaluate the economic impacts 
on individual consumers of potential energy conservation standards for 
dishwashers. Because the technologies to improve energy efficiency may 
also reduce water usage (as discussed in IV.C.1.b), the economic 
impacts in the LCC and PBP include both energy consumption and water 
consumption. 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 dishwashers in the absence of new 
or amended energy conservation standards. In contrast, the PBP for a 
given efficiency level is measured relative to the baseline product.
    For each considered efficiency level in each product class, DOE 
calculated the LCC and PBP for a nationally representative set of 
housing units. As stated previously, DOE developed household samples 
from the RECS 2020. For each sample household, DOE determined the 
energy and water consumption for the dishwashers 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 
dishwashers.
    Inputs to the calculation of total installed cost include the cost 
of the product--which includes MPCs, manufacturer markups, retailer and 
distributor markups, and sales taxes--and installation costs. Inputs to 
the calculation of operating expenses include annual energy 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 dishwasher user samples. For this 
rulemaking, the Monte Carlo approach is implemented in MS Excel 
together with the Crystal Ball\TM\ add-on.\52\ The model calculated the 
LCC for products at each efficiency level for 10,000 housing units per 
simulation run. The analytical results include a distribution of 10,000 
data points showing the range of LCC savings for a given efficiency 
level relative to the no-new-standards case efficiency distribution. In 
performing an iteration of the Monte Carlo simulation for a given 
consumer, product efficiency is chosen based on its probability. If the 
chosen product efficiency is greater than or equal to the efficiency of 
the standard level under consideration, the LCC calculation reveals 
that a consumer is not impacted by the standard level. By accounting 
for consumers who already purchase more-efficient products, DOE avoids 
overstating the potential benefits from increasing product efficiency.
---------------------------------------------------------------------------

    \52\ Crystal Ball\TM\ is a 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/middleware/technologies/crystalball.html 
(last accessed Oct. 19, 2023).
---------------------------------------------------------------------------

    DOE calculated the LCC and PBP for consumers of dishwashers as if 
each were to purchase a new product in the first year of required 
compliance with amended standards. Amended standards apply to 
dishwashers manufactured 3 years after the date on which any new or 
amended standard is published. (42 U.S.C. 6295(m)(4)(B)) Therefore, DOE 
used 2027 as the first year of compliance with any amended standards 
for dishwashers.
    Table IV.12 summarizes the approach and data DOE used to derive 
inputs to the LCC and PBP calculations. The subsections that follow 
provide further discussion. Details of the spreadsheet model, and of 
all the inputs to the LCC and PBP analyses, are contained in chapter 8 
of the direct final rule TSD and its appendices.
BILLING CODE 6450-01-P

[[Page 31425]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.019

BILLING CODE 6450-01-C
    For this direct final rule, DOE considered comments it had received 
regarding the LCC analysis conducted for the May 2023 NOPR. The LCC 
approach used for this direct final rule is largely the same as the 
approach DOE had used for the May 2023 NOPR analysis.
    In response to the May 2023 NOPR, AHAM commented that DOE should 
focus on conducting a purchase decision analysis instead of relying on 
outcomes and long-term cost analyses. (AHAM, No. 51 at p. 18) AHAM 
commented that the logical 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 
stated that systemic market failure relates to mispricing of inputs 
(such as underpricing of the environmental impacts in energy prices) or 
other similar conditions. AHAM commented that while there are many 
critiques of how accurate a rational choice model is for true consumer 
behavior, including the recent insights of behavioral economics, all of 
these discussions start from the premise of a purchase decision choice 
model. 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, which should be in the 
National Impact Analysis. (Id.) 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.)
    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 resulting 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. This is a methodological decision made 
by DOE after considering the existence of various systematic market 
failures (e.g., information asymmetries, bounded rationality, etc.) and 
their implication in rational versus actual purchase behavior. 
Considering that individual consumer decisions may be driven by 
multiple factors and may vary based on demographic features as well as 
available information to consumers at the time of purchase, the data 
required to develop a product specific complex consumer choice model 
were unavailable in the case of dishwashers. In the LCC analysis, DOE 
aims to simulate the range of individual outcomes resulting from a 
hypothetical setting of revised energy efficiency standards. Both the 
distribution and the national average values were considered. Moreover, 
the outcome of the LCC is not considered in isolation, but in the 
context of the broader set of analyses, including the NIA. DOE further 
notes, that AHAM is a party to the Joint Agreement and is supportive of 
the recommended standard adopted in this direct final rule.

[[Page 31426]]

    AHAM stated that there have been changes in DOE's analysis for 
standard-size dishwashers between the January 2022 Preliminary Analysis 
and the May 2023 NOPR including the percentage of consumers 
experiencing a net cost decreased from 43 percent to 3 percent and the 
payback period decreased from 7 to 2.4 years and it is unclear how DOE 
arrived at the new conclusions that have a significant impact on 
overall energy savings estimates and economic analysis. (AHAM, No. 51 
at p. 26) Whirlpool Corporation (``Whirlpool'') questioned \53\ why 
there is such a big departure in consumer cost-effectiveness for EL 2 
between the January 2022 Preliminary Analysis and the May 2023 NOPR. 
(Whirlpool, No. 45 at pp. 3-4) Whirlpool commented that compared to the 
43 percent of consumers who were estimated to experience a net cost 
from EL 2 in the January 2022 Preliminary Analysis, only 3 percent of 
consumers are now estimated to experience a net cost from this level in 
the May 2023 NOPR. (Id.) Whirlpool further commented that given this 
very large apparent change in the data and the impact that this has on 
DOE's overall selection of TSLs, DOE should provide stakeholders with 
supporting information/data that led to this drastic change in the 
analysis. (Id.)
---------------------------------------------------------------------------

    \53\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0045.
---------------------------------------------------------------------------

    DOE updates its analytical inputs with the most recent available 
data sources, in response to stakeholder comment, and based on 
information obtained through testing, teardowns, manufacturer 
interviews, and any additional research and analysis. Input updates 
include MPCs, energy and water prices and price trends, dollar year, 
price learning trends, product efficiency distributions, discount rate, 
sales tax, and shipments. For this final rule, the LCC inputs are 
summarized in Table IV.12. Because of those input changes, the LCC 
results were changed in the May 2023 NOPR analysis, and again in the 
direct final rule analysis compared to those from the January 2022 
Preliminary Analysis. In this case, the primary driver of the decrease 
in percent of consumers with a net cost is based on a change in MPC 
between the January 2022 Preliminary Analysis and the May 2023 NOPR, 
driven by DOE's updated engineering analysis. Specifically, based on 
manufacturer feedback, DOE revisited its teardown analysis and observed 
that the same technology options exist at both EL 1 and EL 2, with EL 2 
units having improved control started and design tolerances. For these 
reasons, the MPC at EL 2 is the same as that at EL 1, which decreases 
the percent of consumers with a net cost at EL 2. DOE notes that AHAM 
(of which Whirlpool is a member) supported the Recommended TSL, which 
includes the same EL as the standards proposed in the May 2023 NOPR for 
standard-size dishwashers.
1. Product Cost
    To calculate consumer product costs, DOE multiplied the MPCs 
developed in the engineering analysis by the markups described 
previously (along with sales taxes). DOE used different markups for 
baseline products and higher-efficiency products because DOE applies an 
incremental markup to the increase in MSP associated with higher-
efficiency products.
    Economic literature and historical data suggest that the real costs 
of many products may trend downward over time according to ``learning'' 
or ``experience'' curves. An experience curve analysis implicitly 
includes factors such as efficiencies in labor, capital investment, 
automation, materials prices, distribution, and economies of scale at 
an industry-wide level. To derive the learning rate parameter for 
dishwashers, DOE obtained historical Producer Price Index (``PPI'') 
data for appliances from the Bureau of Labor Statistics (``BLS''). A 
PPI for ``all-other-miscellaneous-household-appliances'' was available 
for the time period between 1988 and 2014.\54\ However, the all-other-
miscellaneous-household-appliances PPI was discontinued beyond 2014 due 
to insufficient sample size. To extend the price index beyond 2014, DOE 
assumed that the price index of primary products of major household 
appliance manufacturing would trend similarly to all other 
miscellaneous household appliances. This is because, based on 
communications with BLS researchers, discontinued series are often 
grouped into the primary products under the more aggregated PPI series. 
Examining the PPI of all other miscellaneous household appliances and 
primary products of major household appliances shows that the 
magnitudes of both price trends align with each other. Inflation-
adjusted price indices were calculated by dividing the PPI series by 
the gross domestic product index from Bureau of Economic Analysis for 
the same years. Using data from 1988-2021, the estimated learning rate 
(defined as the fractional reduction in price expected from each 
doubling of cumulative production) is 24.2 percent, which results in an 
average annual price decline of 0.96 percent. See chapter 8 of the 
direct final rule TSD for further details on this topic.
---------------------------------------------------------------------------

    \54\ U.S. Bureau of Labor Statistics, PPI Industry Data, Major 
household appliance manufacturers, Product series ID: PCU 
33522033522011. Data series available at www.bls.gov/ppi/.
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding the methodology for calculating consumer product costs that 
was presented in the May 2023 NOPR. The approach used for this direct 
final rule is largely the same as the approach DOE had used for the May 
2023 NOPR analysis.
    In response to the May 2023 NOPR, Northwest Energy Efficiency 
Alliance (``NEEA'') encouraged \55\ DOE to consider a specific learning 
curve for variable-speed drives when conducting future dishwasher 
standards analyses similar to its approach in the recent refrigerator 
standards rulemaking. (NEEA, No. 53 at p. 2)
---------------------------------------------------------------------------

    \55\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0053.
---------------------------------------------------------------------------

    DOE did not consider a specific price learning curve for variable-
speed drives due to the lack of data regarding the data regarding the 
relevant market share of products. DOE will consider all available 
technology options and their related learning curves when conducting 
future dishwasher standards analyses for standards rulemakings.
    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 for why 
an experience or learning curve should exist, what functional form it 
should take and whether it should be a continuous function. (AHAM, No. 
51 at p. 19) AHAM commented that the approach, based solely on 
empirical relationships, demands clear alignment with the actual 
products in question and the data used to develop the relationship. 
AHAM stated that when the data takes a new shape, DOE must adjust its 
equations to reflect that change as continuing to use old data and 
equations simply to create a longer time series is not acceptable. 
(Id.) 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 the very severe limitations 
of forward projection without a sound theoretical basis for assuming 
that the correlation will continue. (Id.) AHAM further stated that 
there is no particularly strong reason to expect that any future trends 
will be modeled with a continuous

[[Page 31427]]

function of the form DOE is proposing and that there is an apparent 
``flattening'' of the data in DOE's learning curve equation. 
Additionally, AHAM stated that all recent data is above the line drawn 
by the equation should give DOE significant pause to consider whether 
it is modeling a relationship that no longer holds, no matter what the 
regressions statistics from past data show. (Id. at pp. 19-20) 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. 20)
    DOE notes that there is considerable empirical evidence of 
consistent price declines for appliances in the past few decades. 
Several studies examined retail prices of various household appliances, 
including dishwashers, during different periods of time and showed that 
prices had been steadily falling while efficiency had been increasing, 
for example Dale, et al. (2009) and Taylor, et al. (2015). Given the 
limited data availability on historical manufacturing costs broken out 
by different components, DOE utilized the PPI published by the BLS as a 
proxy for manufacturing costs to represent the analyzed product as a 
whole. 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. When fitting the 
historical PPI and cumulative annual shipments to the experience curve, 
which takes the form of a power function, the resulting R-square value 
is 91 percent. Despite that the observed data could deviate above or 
below the fitted curve during certain periods, the high value of R-
square indicates a reasonable fit overall, although DOE recognizes the 
difficulty when projecting regression results out of sample. In 
addition, DOE also conducted sensitivity analyses that are based on a 
particular segment of the PPI data for ``all other miscellaneous 
household appliances and primary products of major household 
appliances'' to investigate the impact of alternative product price 
projections (low price learning and constant price) in the NIA of this 
rulemaking. In all scenarios that DOE considered, the impact of the 
price projection on the Net Present Value estimates is limited to 
negative three percent to one percent for the adopted TSL. Overall, the 
impact would not affect the policy decision. For details of the 
sensitivity results, see appendix 10C of the direct final rule TSD. DOE 
further notes, that AHAM is a party to the Joint Agreement and is 
supportive of the recommended standard adopted in this direct final 
rule.
2. Installation Cost
    Installation cost includes labor, overhead, and any miscellaneous 
materials and parts needed to install the product. Based on inputs 
provided by manufacturers, DOE concluded that installation costs would 
not be impacted by increased efficiency levels. DOE received no 
stakeholder comments on this issue.
3. Annual Energy and Water Consumption
    For each sampled household, DOE determined the energy and water 
consumption for dishwashers at different efficiency levels using the 
approach described previously in section IV.E of this document. Both 
energy and water consumption are considered in the LCC analysis because 
the technologies to improve energy efficiency may also reduce water 
usage (as discussed in section IV.C.1.b of this document).
4. Energy and Water Prices
a. Energy Prices
    Because marginal electricity price more accurately captures the 
incremental savings associated with a change in energy use from higher 
efficiency, it provides a better representation of incremental change 
in consumer costs than average electricity prices. Therefore, DOE 
applied average electricity prices for the energy use of the product 
purchased in the no-new-standards case, and marginal electricity prices 
for the incremental change in energy use associated with the other 
efficiency levels considered.
    DOE derived electricity prices in 2022 using data from EEI Typical 
Bills and Average Rates reports. Based upon comprehensive, industry-
wide surveys, this semi-annual report presents typical monthly electric 
bills and average kilowatt-hour costs to the customer as charged by 
investor-owned utilities. For the residential sector, DOE calculated 
electricity prices using the methodology described in Coughlin and 
Beraki (2018).\56\
---------------------------------------------------------------------------

    \56\ 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.
---------------------------------------------------------------------------

    To estimate energy prices in future years, DOE multiplied the 2020 
energy prices by the projection of annual average price changes for 
each of the nine Census Divisions from the Reference case in AEO2023, 
which has an end year of 2050.\57\ To estimate price trends after 2050, 
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

    \57\ EIA. Annual Energy Outlook 2023. Available at www.eia.gov/outlooks/aeo/ (last accessed Oct. 19, 2023).
---------------------------------------------------------------------------

    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.\58\ 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.
---------------------------------------------------------------------------

    \58\ 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.\59\ To estimate price trends after 2050, 
the 2046-2050 average was used for all years.
---------------------------------------------------------------------------

    \59\ 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

[[Page 31428]]

and Wastewater Rate Survey conducted by Raftelis Financial Consultants 
and the American Water Works Association.\60\ The survey covers 
approximately 445 water utilities and 334 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.
---------------------------------------------------------------------------

    \60\ 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 public sector 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. 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; consequently, 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 1970 to 2021 to develop a projection for 
2027, the effective year of potential new standards for 
dishwashers.\61\
---------------------------------------------------------------------------

    \61\ 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 to determine the percentage 
of households in rural areas served by private wells and septic tanks. 
Based on the estimated percentages, 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.
    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.\62\ 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.
---------------------------------------------------------------------------

    \62\ 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 the average well-water and septic 
tank prices, DOE used data on the historic trend in the overall 
national consumer price index from 1988 through 2022 provided by the 
Labor Department's BLS.\63\ 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. In addition, to estimate the future trend for the 
marginal well-water price, the electricity trend was used, as described 
previously in section IV.F.4.a of this document.
---------------------------------------------------------------------------

    \63\ 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 May 2023 NOPR, AHAM commented that it previously 
suggested DOE should consider the actual water costs for households on 
well systems. (AHAM, No. 51 at p. 12)
    AHAM commented that DOE's May 2023 NOPR approach to septic system 
costs is incorrect and stated that DOE should acknowledge that there 
are no incremental costs for consumers using septic systems and treat 
these both well water users and septic tank users as a separate 
subgroup instead of averaging them into composite water and sewer 
costs. (AHAM, No. 51 at pp. 12-14)
    As described in section IV.I.3 of this document, for this direct 
final rule, DOE updated its method for estimating well-water and septic 
costs. The updated average well-water and septic tank prices are 17.1 
percent of the combined cost of public water and sewer costs. In 
addition, DOE assigned either septic tank or public sewer prices to 
well-water households based on the probability distributions obtained 
from the AHS 2021 data.
    AHAM commented that the economic value of water is undefined and an 
inappropriate measure in the life cycle cost analysis. AHAM stated that 
if DOE is relying, even implicitly, on the AWWA/RFC study for its 
definition of economic value, as matter of administrative law, it must 
make the underlying reference available for public comment before it 
can use it as a source. According to AHAM, private well users pay the 
actual marginal cost of water, primarily the electricity for pumping, 
not an ``economic value.'' While there are embedded costs for drilling 
a well, these costs are sunk and the marginal cost is only the 
electricity. (AHAM, No. 51, at p. 13) 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. (Id.) AHAM further stated that 
even if there is an ``economic value'' of well water, it should be 
considered in the NIA, not the LCC. (Id. at 16.)
    DOE concurs 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 
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. 
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 references 
and 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 water and wastewater sources, along with corresponding 
specific prices, to RECS households randomly using different 
probability distributions for urban and rural households by Census 
Region based on AHS 2021 data. Similarly, both the public and private 
water and wastewater costs were accounted for in

[[Page 31429]]

the NIA. The term ``economic value'' of water refers to the National 
Groundwater Association's use of the term.\64\ The AWWA/Raftelis data 
used to develop the public water and wastewater costs are available 
from an online subscription.\65\
---------------------------------------------------------------------------

    \64\ Groundwater Use in the United States of America. National 
Ground Water Association, www.ngwa.org/docs/default-source/default-document-library/groundwater/usa-groundwater-use-fact-sheet.pdf?sfvrsn=5c7a0db8_4.
    \65\ The American Water Works Association & Raftelis Financial 
Consultants, Inc., 2022 RFC/AWWA Water and Wastewater Rate Survey. 
2023. Charlotte, NC. The latest report is available at https://engage.awwa.org/PersonifyEbusiness/Bookstore/Product-Details/productId/194150460.
---------------------------------------------------------------------------

    AWE commented that DOE should extrapolate from the annualized rate 
increases for 1998 to 2020 from the AWWA/Raftelis Water and Wastewater 
Rate Survey. (AWE, No. 44 at p. 1) AWE stated that instead of using 
AWWA/Raftelis for historic and current pricing and a CPI-based approach 
for future price trends, AWE supports the use of data from the AWWA/
Raftelis Survey as the basis for DOE's calculation for both the 
historic and current water and wastewater prices and for price trends. 
(Id. at p. 2) AWE commented that it is confident that the price trend 
data in the AWWA/Raftelis Survey are more accurate and representative 
because it is based on a review of the actual rates from a large sample 
set of utilities from nearly all U.S. states on a biennial basis and 
that it is better to use rate data when performing calculations based 
on specific volumes of water saved rather than data on average customer 
bills, which is what the water and sewerage maintenance item from CPI 
is based on. (Id.)
    AWWA/Raftelis conducts water and wastewater rates survey, which 
used to be every two years and now every six months, for U.S. water and 
wastewater utilities. For each of the AWWA/Raftelis 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, which is also known as sample 
bias. 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 AWWA/
Raftelis. Additionally, the Water and Sewer CPI was estimated based on 
consumer water bills that reflect household water consumption. 
Therefore, DOE concludes that the BLS' CPI water and sewer data better 
reflect the nationally representative price trends than the AWWA/
Raftelis data. DOE therefore used the CPI for water and sewer for its 
public utilities' water and wastewater price trend forecast for this 
final rule.
    DOE used a similar methodology to develop future water and 
wastewater prices in its clothes washer standard rulemaking as it used 
in the March 2024 final rule analysis. DOE used a constant value 
derived from the average values from 2046 through 2050 to estimate the 
price trend after 2050, whereas in the May 2023 NOPR, published May 19, 
2023 (88 FR 32514), DOE used the 2050 value for the price trend after 
2050.\66\
---------------------------------------------------------------------------

    \66\ Additional details regarding the dishwasher analysis are 
provided in the May 2023 NOPR TSD, available at www.regulations.gov/document/EERE-2019-BT-STD-0039-0032.
---------------------------------------------------------------------------

    AHAM stated DOE should recognize that not all households directly 
pay for water and sewer. (AHAM, No. 51 at p. 16) As such, AHAM asserted 
that DOE is overestimating the actual annual operating cost savings 
that these consumers would receive from reduced water use in 
dishwashers. (Id.) AHAM commented that in many circumstances the costs 
for water and sewer are either borne by landlords or are combined into 
generalized common charges. (Id.)
    AHAM identified two subgroups of consumers who might not see 
monetary savings from a reduction in water use 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. (AHAM, No. 51 at p. 16) As it 
applies to multi-family housing, AHAM stated that installing sub-
metering equipment may cost thousands of dollars per unit including 
plumbing charges and many landlords do not find it attractive or 
practical to sub-meter. (Id.) Additionally, for condominium properties, 
the owner owns the dishwasher, leading to a reverse split-incentive 
such that the household will not see the benefit directly and will have 
a negative LCC savings. Further, raising the price of a dishwasher will 
also encourage the household to continue repairing the dishwasher 
rather than purchasing a more expensive new one, reducing or 
eliminating the project national savings. As such, AHAM recommend that 
DOE recognize this sub-group and address the relevant financial 
situation. (Id. at pp. 16-17)
    DOE notes that while RECS does identify multi-family housing, it 
does not provide information on whether a household's water bill is 
included in the rent, included in the common charges, or paid directly 
to the utility. For the first group of multi-family unit owners (such 
as apartments, condominiums, and co-ops) identified in RECS and 
reporting that energy bills are not paid directly to the utilities, DOE 
posits that those households also do not directly pay their water 
bills, considering that some multi-family units may have a shared water 
meters, which is more common than shared electricity or gas meters. It 
is, therefore, likely that households that do not directly pay their 
energy bills to the utilities, also do not directly pay for their water 
bill. This group represents less than 1.2 percent of the national 
sample, indicating a relatively small group. For the second group of 
low-income renters in multi-family buildings, DOE adopted a 
conservative approach assuming that those households that reported as 
not paying their energy bill would also not pay their water bill and, 
therefore, do not accrue any operating cost savings from the considered 
standards. This issue is accounted for in the low-income subgroup 
analysis. Based on DOE's assessment, the low-income subgroup has 
comparable LCC savings and fraction of consumers experiencing a net 
cost as the national sample. See section IV.I.1 and section V.B.1.b of 
this document for the detailed methodology and the results of the low-
income subgroup analysis.
    With regards to the split-incentive issue, 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 landlord furnishes 
appliances, has been identified through a number of studies of 
residential appliance use broadly, and for dishwashers in low-income 
settings in specific. Building from early work including Jaffe and 
Stavins (1994),\67\ Murtishaw and Sathaye (2006) \68\ 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 solely 
focus on the low-income household,

[[Page 31430]]

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 dishwashers, based on RECS 2020, 88 percent of low-
income individuals who rented their homes and owned a dishwasher 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),\69\ Houde and Spurlock (2016),\70\ and citations 
therein (e.g., Davis 2012) \71\ also further elaborated on split-
incentives in rental housing and their association with generally lower 
efficiency among the appliances used by renters. As a result, DOE's 
analysis concludes that there is a substantial fraction of split-
incentive issue among low-income households. Therefore, DOE divide the 
low-income subgroup into renters and non-renters categories, for which 
different assumptions were applied. For low-income households who are 
home-owners and do pay for the product and energy costs, DOE considers 
that those households will experience an impact from any proposed 
standard and DOE then uses the same methodology applied to the national 
LCC analysis. For low-income households who are renters and do not pay 
for energy bills, DOE considers the amended standards will have no 
impact on those households. In the split-incentive case in which the 
low-income households who are renters and pay for energy bills, the 
landlord would bear the cost of the appliance, and the household would 
pay the operating costs and therefore accrue the operating cost savings 
from the considered standards. Although paid by different individuals, 
the difference between the incremental equipment cost and the life 
cycle operating cost savings would still be characterized as the LCC 
savings associated with the dishwasher in question in the national LCC 
analysis. Therefore, the split-incentives cases would not affect the 
methodology of the national LCC savings estimates. More details can be 
found in section IV.I.1 of this document as well as in chapter 11 of 
the direct final rule TSD.
---------------------------------------------------------------------------

    \67\ 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.
    \68\ 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.
    \69\ 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.
    \70\ 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.
    \71\ 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.
---------------------------------------------------------------------------

    As in the case when some consumers may delay or forgo their 
purchase due to the increased first cost caused by the standards, DOE 
assumed that those consumers would hand wash their dishes and accounted 
for the possible increase in energy and water use as an additional cost 
to the standards case in the National Impact Analysis. DOE considered 
this as a conservative approach since there are alternatives to 
handwashing dishes such as extended repair, or purchasing a second-hand 
unit.
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. However, products having significantly higher 
efficiencies compared to baseline products are more likely to incur 
higher repair and maintenance costs, because their increased complexity 
and higher part count typically increases the cumulative probability of 
failure.
    In this direct final rule analysis, DOE derived repair costs for 
dishwashers for each efficiency level based on manufacturers' inputs on 
the repair frequency and costs. DOE did not include routine maintenance 
costs as no evidence or data shows that the routine maintenance costs 
or frequency would vary with increased efficiency. See chapter 8 of the 
direct final rule TSD for further details.
6. Product Lifetime
    For dishwashers, DOE developed a distribution of lifetimes from 
which specific values are assigned to the appliances in the samples. 
DOE conducted an analysis of actual lifetime in the field using a 
combination of historical shipments data, the stock of the considered 
appliances in the American Housing Survey, and responses in RECS on the 
age of the appliances in the homes. The data allowed DOE to estimate a 
survival function, which provides an average appliance lifetime. This 
analysis yielded a lifetime probability distribution with an average 
lifetime for dishwashers of approximately 15.2 years. DOE has found no 
evidence or information related to variation in dishwasher lifetime by 
product class or efficiency level. 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 dishwashers 
based on the opportunity cost of consumer funds.
    DOE applies weighted average discount rates calculated from 
consumer debt and asset data, rather than marginal or implicit discount 
rates.\72\ 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.
---------------------------------------------------------------------------

    \72\ 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 
\73\ (``SCF'') starting in 1995 and ending in 2019 and multiple sources 
for asset interest rates from 1993-2022. Using the SCF and other 
sources, DOE

[[Page 31431]]

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 4.2 percent. See 
chapter 8 of the direct final rule TSD for further details on the 
development of consumer discount rates.
---------------------------------------------------------------------------

    \73\ U.S. Board of Governors of the Federal Reserve System. 
Survey of Consumer Finances. 1995, 1998, 2001, 2004, 2007, 2010, 
2013, 2016, and 2019. Available at www.federalreserve.gov/econresdata/scf/scfindex.htm (last accessed Oct. 19, 2023).
---------------------------------------------------------------------------

8. Energy Efficiency Distribution in the No-New-Standards Case
    To accurately estimate the share of consumers that would be 
affected by a potential energy conservation standard at a particular 
efficiency level, DOE's LCC analysis considered the projected 
distribution (market shares) of product efficiencies under the no-new-
standards case (i.e., the case without amended or new energy 
conservation standards).
    To estimate the energy efficiency distribution of dishwashers for 
2027, DOE used data from the engineering analysis, the manufacturer 
interviews, and DOE's Compliance Certification Database. DOE assumed no 
annual efficiency improvement for the no-new-standards case based on 
the current market evaluation and the observation that there was no 
shift in efficiency distributions compared to those used in the 
December 2016 Final Determination. DOE received no comments from 
stakeholders related to this assumption. The estimated market shares 
for the no-new-standards case for dishwashers are shown in Table IV.13. 
See chapter 8 of the direct final rule TSD for further information on 
the derivation of the efficiency distributions.
    In response to the May 2023 NOPR, Appliance Standards Awareness 
Project et al.\74\ (``ASAP et al.'') commented \75\ that DOE's 
assignment of efficiency levels in the no-new-standards case reasonably 
reflects actual consumer behavior. (ASAP et al., No. 46 at p. 3) For 
the final rule, DOE maintained the approach used in the May 2023 NOPR 
to derive efficiency distributions in the no-new-standards case.
---------------------------------------------------------------------------

    \74\ The ASAP et al. includes Appliance Standards Awareness 
Project, American Council for an Energy-Efficient Economy, Consumer 
Federation of America, Elevate, National Consumer Law Center, 
Natural Resources Defense Council, and Southwest Energy Efficiency 
Project.
    \75\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0046.
[GRAPHIC] [TIFF OMITTED] TR24AP24.020

    The LCC Monte Carlo simulations draw from the efficiency 
distributions and randomly assign an efficiency level to the dishwasher 
purchased by each sample household in the no-new-standards case. The 
resulting percentage shares within the sample match the market shares 
in the efficiency distributions.
    In response to the May 2023 NOPR, ASAP et al. stated that they 
agree with DOE's determination that assigning dishwasher efficiencies 
for the LCC analysis, which is in part random, is more representative 
of actual consumer behavior than assigning efficiencies based solely on 
cost-effectiveness. (ASAP et al., No. 46 at p. 3)
    ASAP et al. commented that consumer purchasing decisions for an 
infrequent purchase such as a dishwasher can be based on a variety of 
complex issues such as the timing of the purchase, competing demands 
for funds, and the information available to the consumer. (ASAP et al., 
No. 46 at p. 3)
    ASAP et al. additionally noted the split-incentive or principal-
agent problem in which there are misaligned incentives in rental 
properties because the landlord purchases and installs the dishwasher 
while the renter is responsible for paying the utility bill. (Id.)
    While DOE acknowledges that economic factors play a role when 
consumers decide on what type of dishwasher to install, assignment of 
dishwasher efficiency for a given installation, based solely on 
economic measures such as life-cycle cost or simple payback period, 
most likely would not 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 finds that the method of 
assignment, which is in part random, simulates behavior in the 
dishwasher market, where market failures result in purchasing decisions 
not being perfectly aligned with economic interests. DOE further 
emphasizes that its approach does not assume that all purchasers of 
dishwasher 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 does not assume certain market conditions that are unsupported 
given the available evidence.
    The following discussion provides more detail about the various 
market failures that affect dishwasher purchases. First, consumers are 
motivated by more than simple financial trade-offs. There are consumers 
who are willing to pay a premium for more

[[Page 31432]]

energy-efficient products because they are environmentally 
conscious.\76\ There are also several behavioral factors that can 
influence the purchasing decisions of complicated multi-attribute 
products, such as dishwashers. For example, consumers (or decision 
makers in an organization) are highly influenced by choice 
architecture, defined as the framing of the decision, the surrounding 
circumstances of the purchase, the alternatives available, and how they 
are presented for any given choice scenario.\77\ The same consumer or 
decision maker may make different choices depending on the 
characteristics of the decision context (e.g., the timing of the 
purchase, competing demands for funds), which have nothing to do with 
the characteristics of the alternatives themselves or their prices. 
Consumers or decision makers also face a variety of other behavioral 
phenomena including loss aversion, sensitivity to information salience, 
and other forms of bounded rationality.\78\ 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.\79\ These characteristics describe almost all 
purchasing situations of appliances and equipment, including 
dishwashers. The installation of a new or replacement dishwashers is 
done very infrequently, as evidenced by the mean lifetime of 15.2 
years. Further, if the purchaser of the dishwasher 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 
dishwashers. The principal-agent problem is a market failure that 
results when the consumer that purchases the equipment does not 
internalize all of the costs associated with operating the equipment. 
Instead, the user of the product, who has no control over the purchase 
decision, pays the operating costs. There is a high likelihood of 
split-incentive problems in the case of rental properties where the 
landlord makes the choice of what dishwasher to install, whereas the 
renter is responsible for paying energy bills.
---------------------------------------------------------------------------

    \76\ 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).
    \77\ Thaler, R.H., Sunstein, C.R., and Balz, J.P. (2014). 
``Choice Architecture'' in The Behavioral Foundations of Public 
Policy, Eldar Shafir (ed).
    \78\ 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).
    \79\ 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 dishwasher efficiency 
made by consumers. For example, unplanned replacements due to 
unexpected failure of equipment such as dishwashers are strongly biased 
toward like-for-like replacement (i.e., replacing the non-functioning 
equipment 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 \80\ 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.
---------------------------------------------------------------------------

    \80\ 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.\81\ show that consumers tend to underestimate the energy use of 
large energy-intensive appliances (such as air conditioners, 
dishwashers, and 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 
dishwashers, resulting in less cost-effective purchases.
---------------------------------------------------------------------------

    \81\ 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 \82\ 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.
---------------------------------------------------------------------------

    \82\ 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 dishwasher 
efficiency in the no-new-standards case solely according to energy and 
water 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 dishwasher market. Further, even if a 
specific household is not subject to the market failures above, the 
purchasing decision of dishwasher efficiency can be highly complex and 
influenced by a number of factors (e.g., aesthetics, brand, lifestyle, 
etc.) not captured by the building characteristics available in the 
RECS sample. These factors can lead to households or building owners 
choosing a dishwasher efficiency that deviates from the efficiency 
predicted using only energy use or economic considerations

[[Page 31433]]

such as life-cycle cost or payback period.
    There is a complex set of behavioral factors, with sometimes 
opposing effects, affecting the dishwasher 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 suspects 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 dishwashers to households in the 
no-new-standards case where savings from the rule would be greatest, 
nor does it preferentially assign lower-efficiency dishwashers to 
households in the no-new-standards case where savings from the rule 
would be smallest. Some consumers were assigned the dishwashers that 
they would have chosen if they had engaged in perfect economic 
considerations when purchasing the products. Others were assigned less-
efficient dishwashers 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 dishwashers 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.
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 and water savings by 
calculating the energy and water savings in accordance with the 
applicable DOE test procedure, and multiplying those savings by the 
average energy and water price projection for the year in which 
compliance with the amended standards would be required.

G. Shipments Analysis

    DOE uses projections of annual product shipments to calculate the 
national impacts of potential amended or new energy conservation 
standards on energy and water use, NPV, and future manufacturer cash 
flows.\83\ 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.
---------------------------------------------------------------------------

    \83\ DOE uses data on manufacturer shipments as a proxy for 
national sales, as aggregate data on sales are lacking. In general, 
one would expect a close correspondence between shipments and sales.
---------------------------------------------------------------------------

    Total shipments for dishwashers are developed by considering the 
demand from replacements for units in stock that fail and the demand 
from first-time owners (``FTOs''), which are the households without 
existing dishwashers. DOE calculated shipments due to replacements 
using the retirement function developed for the LCC analysis and 
historical data from AHAM. DOE estimated the ratio of households that 
would become FTOs each year based on the historical housing stock data, 
the estimated shipments of replacement units and the estimated shipment 
to FTOs. DOE calculated shipments of FTOs by multiplying the forecasted 
housing stock by the annualized ratio of existing households without a 
dishwasher that would purchase this product over the period 2027-2056, 
based on the housing stocks from AEO2023. 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 costs and savings that would be expected to result from new or 
amended standards at specific efficiency levels.\84\ (``Consumer'' in 
this context refers to consumers of the product being regulated.) 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 dishwashers sold from 2027 through 2056.
---------------------------------------------------------------------------

    \84\ The NIA accounts for impacts in the United 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 and water 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 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 and water 
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.14 summarizes the inputs and methods DOE used for the NIA 
analysis for the final rule. Discussion of these inputs and methods 
follows the

[[Page 31434]]

table. See chapter 10 of the direct final rule TSD for further details.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.021

BILLING CODE 6450-01-C
1. Product Efficiency Trends
    A key component of the NIA is the trend in 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 efficiency 
distribution for the no-new-standards case (which yields a shipment-
weighted average efficiency) for each of the considered product classes 
for the year of anticipated compliance with an amended or new standard. 
DOE assumed that the shipment-weighted efficiency would not increase 
annually for the dishwasher product classes.
    For the standards cases, DOE used a ``roll-up'' scenario to 
establish the shipment-weighted efficiency for the year that standards 
are assumed to become effective (2027). In this scenario, the market 
shares of products in the no-new-standards case that do not meet the 
standard under consideration would ``roll up'' to meet the new standard 
level, and the market share of products above the standard would remain 
unchanged. More details can be found in chapter 10 of the direct final 
rule TSD.
2. National Energy and Water Savings
    The national energy and water savings analysis involves a 
comparison of national energy consumption of the considered products 
between each potential standards case (``TSL'') and the case with no 
new or amended energy conservation standards. DOE calculated the 
national energy and water consumption by multiplying the number of 
units (stock) of each product (by vintage or age) by the unit energy 
and water consumption (also by vintage). DOE calculated annual NES and 
NWS based on the difference in national energy and water consumption 
for the no-new-standards case and for each higher efficiency standard 
case. DOE estimated energy consumption and savings based on site energy 
and converted the electricity consumption and savings to primary energy 
(i.e., the energy consumed by power plants to generate site 
electricity) using annual conversion factors derived from AEO2023. 
Cumulative energy and water savings are the sum of the NES and NWS for 
each year over the timeframe of the analysis.
    Use of higher-efficiency products is sometimes associated with a 
direct rebound effect, which refers to an increase in utilization of 
the product due to the increase in efficiency.
    As discussed in section V.B.4 of this document, DOE has concluded 
that the standards adopted in this direct final rule will not lessen 
the utility or performance of the dishwashers under consideration in 
this rulemaking. Specifically, the amended standards adopted in this 
direct final rule require the use of the test procedure at appendix C2, 
which includes a minimum cleaning performance threshold to determine if 
a dishwasher ``completely washes a normally soiled load of dishes,'' so 
as to better represent consumer use of the product. Dishwashers that 
comply with the amended standards will provide consumer-acceptable 
level of cleaning performance and the rated energy and water 
consumption will be representative of consumer-acceptable cleaning 
performance. In the NES and NWS analysis, therefore, DOE assumed that 
the adopted standards would not result in a direct rebound effect 
purportedly arising from consumers resorting to handwashing, increased 
pre-rinsing, or other consumer behaviors that increase the energy and 
water consumption of dishwashing as a

[[Page 31435]]

result of reduced dishwasher cleaning performance. Use of the new test 
appendix C2 test procedure may instead improve dishwasher cleaning 
performance because dishwashers will meet a minimum cleaning 
performance index, thereby reducing consumer handwashing, pre-rinsing, 
and other less efficient behaviors. DOE has nevertheless taken a 
conservative approach and assumed no reduction in handwashing or other 
inefficient behavior (e.g., running a ``heavy'' cycle) as a result of 
this rulemaking.
    However, in the NES and NWS analysis, DOE did account for the 
possible increase in energy and water use from handwashing dishes for 
households that would not purchase a new dishwasher purportedly due to 
the higher purchase costs under the amended standards. DOE adopted a 
conservative approach to these situations when households opt not to 
purchase a new dishwasher since there are alternatives to handwashing 
dishes: some households may keep their dishwasher longer than they 
might otherwise (i.e., extending the lifetime by repairing their unit); 
may use disposable plates and utensils; or may purchase a second-hand 
unit. Furthermore, for those households that still would forgo a new 
dishwasher, DOE did not account for the additional time or value of 
time required for handwashing.
    In 2011, in response to the recommendations of a committee on 
``Point-of-Use and Full-Fuel-Cycle Measurement Approaches to Energy 
Efficiency Standards'' appointed by the National Academy of Sciences, 
DOE announced its intention to use FFC measures of energy use and 
greenhouse gas and other emissions in the national impact analyses and 
emissions analyses included in future energy conservation standards 
rulemakings. 76 FR 51281 (Aug. 18, 2011). After evaluating the 
approaches discussed in the August 18, 2011 notice, DOE published a 
statement of amended policy in which DOE explained its determination 
that EIA's National Energy Modeling System (``NEMS'') is the most 
appropriate tool for its FFC analysis and its intention to use NEMS for 
that purpose. 77 FR 49701 (Aug. 17, 2012). NEMS is a public domain, 
multi-sector, partial equilibrium model of the U.S. energy sector \85\ 
that EIA uses to prepare its Annual Energy Outlook. The FFC factors 
incorporate losses in production and delivery in the case of natural 
gas (including fugitive emissions) and additional energy used to 
produce and deliver the various fuels used by power plants. The 
approach used for deriving FFC measures of energy use and emissions is 
described in appendix 10B of the direct final rule TSD.
---------------------------------------------------------------------------

    \85\ 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 Oct. 
19, 2023).
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
in response to the May 2023 NOPR regarding national energy and water 
savings, including potential rebound effects.
    The CA IOUs stated DOE is underestimating the water and energy 
savings from dishwasher use compared to hand washing, noting DOE 
estimates that hand washing consumes 140 percent more energy and 200 
percent more water than a dishwasher, based on two European studies 
from 2005-2006 and an article from the U.S. Geological Survey. The CA 
IOUs reviewed these data sources and identified limitations in their 
applicability or determined they were outdated in their estimates of 
energy and water used for handwashing dishes because the studies 
suggest cultural differences may dictate handwashing practices and the 
international studies may not accurately represent practices of 
American consumers. Additionally, the CA IOUs noted that the USGS 
article does not cite specific references and that the underlying data 
that the USGS uses significantly overestimates the dishwashers' water 
consumption. (CA IOUs, No. 50 at pp. 2-3) The CA IOUs recommend 
incorporating a more extensive data set with more countries to mitigate 
bias when applying international studies and that DOE should reduce a 
dishwasher's low-end water consumption to align with current 
regulations and market information. (Id. at pp. 3-4)
    Regarding hand washing water consumption, DOE used the weighted 
average dishwasher water consumption in the no-new-standards case and 
assumed that hand washing would consume 200 percent of the water used 
in machine washing for the same load based on literature review data. A 
2005 study conducted at Bonn University in Germany found that, on 
average, hand washing used 67 percent more energy and more than 450 
percent more water than machine washing.\86\ A United Kingdom (UK) 
study in 2006 quantified the energy and water consumption of washing by 
hand as a function of place settings.\87\ The study demonstrated that, 
on average, washing eight place settings by hand used approximately 210 
percent more energy and 250 percent more water than washing by machine. 
The U.S. Geological Service (USGS) provided estimates for water 
consumption from dishwashers as compared to water consumption from 
doing dishes by hand.\88\ The USGS reported that dishwashers typically 
use between 6 and 16 gallons per cycle, and that dishwashing by hand 
uses between 9 and 27 gallons per cycle. Using these sources, DOE 
estimated that hand washing consumed 200 percent of the water used in 
machine washing.
---------------------------------------------------------------------------

    \86\ Stamminger, R., R. Badura, G. Broil, S. Dorr, and A. 
Elschenbroich. A European Comparison of Cleaning Dishes by Hand. 
2003. Proceedings of EEDAL conference. University of Bonn: Germany. 
(Last accessed February, 8, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
    \87\ Market Transformation Programme-Briefing Note. BNW16: A 
comparison of washing up by hand with a domestic dishwasher. 
February 13, 2006. Market Transformation Programme, United Kingdom.
    \88\ U.S. Geological Service (USGS). How Much Water Do You Use 
at Home? (Last accessed January 18, 2024.) https://water.usgs.gov/edu/activity-percapita.php.
---------------------------------------------------------------------------

    Excluding minimum or maximum values, as the CA IOUs suggest, would 
result in a less accurate representation of the actual water 
consumption patterns exhibited by dishwashers as well as by households' 
hand washing. Further, DOE notes that the majority of studies cited by 
the CA IOUs occur in laboratory settings or span brief time periods 
(from a couple of hours to two weeks), so may not be representative of 
typical householder behaviors. Additionally, the sole field-metered 
study (Richter, 2011) found that relative to machine washing, 
handwashing used 200 percent more water,\89\ which is consistent with 
the current DOE estimates for energy and water use with hand washing.
---------------------------------------------------------------------------

    \89\ Richter, Christian Paul, 2011. Use of dishwashers: 
observation of consumer habits in the domestic environment. (Last 
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
---------------------------------------------------------------------------

    AHAM and Whirlpool commented that energy conservation standards 
beyond EL 1 will cause rebound consumer behavior, such as running the 
dishwasher more than once to reach the desired cleanliness, re-rinsing 
dishes before placing them in the dishwasher, or handwashing, all of 
which undercut projected energy and water savings. (AHAM, No. 51 at pp. 
5-6; Whirlpool, No. 45 at p. 5) AHAM stated that consumers are already 
hesitant to use their dishwashers for reasons not yet known and DOE 
should not adopt energy conservation standards--which because of the 
anti-backsliding rule cannot be undone if the results are as AHAM 
predicts--that could make it less likely consumers will purchase or use 
their efficient dishwashers. (AHAM, No.

[[Page 31436]]

51 at pp. 5-6) Whirlpool commented that negative rebound effects, such 
as consumer compensatory behavior, would reduce much of the expected 
gains from amended standards. (Whirlpool, No. 45 at pp. 3, 5) Whirlpool 
further stated that DOE needs to perform a detailed analysis of these 
possible rebound effects, and include this analysis in this rulemaking 
docket, make the analysis available to stakeholders for review, and DOE 
should account for this in their determination in selecting an 
appropriate EL. (Whirlpool, No. 45 at p. 5) Competitive Enterprise 
Institute (``CEI et al.'') \90\ asserted \91\ that the proposed 
rulemaking violates EPCA's mandate that DOE cannot set an efficiency 
standard that compromises appliance quality or fails to save consumers 
a significant amount of energy and/or water. (CEI et al., No. 48 at pp. 
1-2) CEI et al. also asserted that the proposed rule saves so little 
energy and water that it fails any interpretation of this provision. 
CEI et al. commented that the proposed rule would save consumers $17 
over the life of a standard-size dishwasher, which works out to $1.12 
per year, but the savings are undercut if the proposed rule increases 
the need to hand wash dishes instead of running them in the dishwasher 
or to run the load twice. (CEI et al., No. 48 at p. 5) CEI et al. 
stated that the insignificant direct energy savings for consumers 
cannot be salvaged by adding in the agency's claims of environmental 
and public health benefits, including climate benefits. CEI et al. 
further asserted that the inclusion of ``the need to confront the 
global climate crisis'' as a factor in determining the significance of 
the energy savings is not appropriate and cannot rescue the proposed 
rule from significance. (Id.)
---------------------------------------------------------------------------

    \90\ The CEI et al. includes comments of the Competitive 
Enterprise Institute, AMAC Action, America First Policy Institute, 
American Consumer Institute, Americans for Prosperity, Caesar Rodney 
Institute, Center of the American Experiment, Consumers' Research, 
Energy & Environment Legal Institute, Foundation Supporting Climate 
Science, Free Enterprise Project, Heartland Institute, Heritage 
Foundation, Independent Women's Forum, Independent Women's Voice, 
Institute for Energy Research, John Locke Foundation, Project 21, 
Rio Grande Foundation, and Roughrider Policy Center.
    \91\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0048.
---------------------------------------------------------------------------

    AWE encouraged DOE to carefully consider product performance in 
setting standards. (AWE, No. 44 at p. 6) AWE stated that there are many 
examples of high-performing products that are also water-efficient and 
noted that products must meet standards for both parameters to earn 
EPA's WaterSense label. (Id.) AWE commented that poor product 
performance can potentially undercut water and energy savings if it 
leads to a backlash of public opinion or contributes to the ``hacking'' 
of products. (Id.) Accordingly, AWE recommended DOE consider comments 
about product performance from manufacturers and other stakeholders. 
(Id.)
    Sub-Zero Group, Inc. (``Sub-Zero'') asserted \92\ that these design 
changes will cause consumers to compensate for performance degradation 
by pre-rinsing dishes or using wash cycle options that consume more 
energy. (Sub-Zero, No. 47 at pp. 1-2)
---------------------------------------------------------------------------

    \92\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0047.
---------------------------------------------------------------------------

    DOE has considered the evidence and arguments put forward by these 
commenters, reviewed available literature, and has concluded that the 
adopted standards are not likely to cause the types of consumer 
behavior suggested by commenters, such as increased handwashing, 
prewashing, and changes in dishwasher use. In a 2020 rulemaking, DOE 
considered similar comments and determined that a ``short-cycle'' 
product class for dishwashers was warranted. In part, DOE based that 
determination on its view that existing standards failed to account for 
pre-washing or consumers washing the same load multiple times. DOE 
determined that a short-cycle ``could'' prevent handwashing or re-
washing. 85 FR 68723. DOE recognizes that the conclusion reached here 
is a departure from that in the 2020 rule. For the reasons that follow, 
DOE no longer agrees with the 2020 Rule's assumption that diminished 
performance resulting from standards will result, in handwashing and 
rewashing. Whatever effect prior standards may have had on handwashing, 
pre-washing, and re-washing, DOE concludes that the standards adopted 
here are unlikely to have such an effect. 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 
in which the signatories corroborate this conclusion stating that 
dishwashers can provide cleaning performance at levels consistent with 
those on the market today when they meet the recommended standard 
levels.\93\
---------------------------------------------------------------------------

    \93\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
---------------------------------------------------------------------------

    DOE disagrees with the comments asserting that the standards 
adopted here will decrease dishwasher performance, thereby inducing 
consumers to increase pre-washing, handwashing, or changes to 
dishwasher use. As an initial matter, the academic literature does not 
support the assertion that dishwasher efficiency is correlated with 
consumer dishwashing behavior.94 95 96 More importantly, as 
discussed in section IV.B of this document, DOE has determined that the 
technology options likely to be used to meet the standards would not 
have a significant adverse impact on the utility of the product to 
subgroups of consumers. Furthermore, as discussed in section V.B.4 of 
this document, DOE has determined that the adopted standards cannot 
compromise the utility that consumers expect from dishwashers because 
the test procedure at appendix C2 requires that a test cycle achieve a 
minimum cleaning performance threshold to determine if a dishwasher, 
when tested according to the DOE test procedure, completely washes a 
normally soiled load of dishes. Accordingly, the test procedure ensures 
that any dishwasher tested for certification will only have a valid 
energy and water representation if such dishwashers also meet or exceed 
a minimum level of cleaning performance. Thus, even if a diminishment 
in performance could lead to increased pre-washing or handwashing, 
there is no evidence to believe that the standards adopted here will 
result in any diminishment in performance. Therefore, DOE does not 
expect any rebound effect due to a theoretical compromised cleaning 
performance in the standards case. Additionally, DOE assumes that the 
consumer's pre-clean behavior would not change in the standards case 
compared to the no-new standards case due to the cleaning performance 
issue, and therefore, has no impact on the savings estimates.
---------------------------------------------------------------------------

    \94\ Richter, Christian Paul, 2011. Use of dishwashers: 
observation of consumer habits in the domestic environment. (Last 
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
    \95\ Stamminger, et al., 2017. A European Comparison of Cleaning 
Dishes by Hand. (Last accessed January 23, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
    \96\ Lotta Theresa Florianne Schencking and Rainer Stamminger, 
2022. What science knows about our daily dishwashing routine. (last 
accessed January 23, 2024.) www.degruyter.com/document/doi/10.1515/tsd-2022-2423/html?lang=en.
---------------------------------------------------------------------------

    By contrast, DOE does recognize that a small portion of consumers 
possibly might forgo the purchase of a new dishwasher due to the 
increased purchase price, may use disposable plates and utensils, keep 
their current dishwasher longer than they otherwise would and handwash 
their dishes.

[[Page 31437]]

Accordingly, DOE's national impact analysis accounts for consumer 
behaviors, such as handwashing, due to the price elasticity considered 
in the standards case.
    Regarding EPA's WaterSense label, DOE notes that dishwashers are 
not products eligible for EPA's WaterSense label; additionally, 
WaterSense is a voluntary program, similar to EPA's ENERGY STAR 
Program, which includes voluntary energy and water use standards for 
dishwashers.
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 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 
dishwashers price trends based on historical PPI data. DOE applied the 
same trends to project prices for each product class at each considered 
efficiency level. By 2056, which is the end date of the projection 
period, the average dishwasher price is projected to drop 29.2 percent 
relative to 2020. 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 
dishwashers. In addition to the default price trend, DOE considered two 
product price sensitivity cases: (1) a constant price scenario; and (2) 
a high price decline scenario based on the combined PPI series of ``all 
other miscellaneous household appliances'' and ``primary products of 
major household appliance manufacturing'' between the years of 1988-
2008, which shows a faster price decline than the full time series 
between the years of 1988-2022. 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 cost savings are calculated using the estimated energy 
savings in each year and the projected price of the appropriate form of 
energy. To estimate energy prices in future years, DOE multiplied the 
average regional energy prices by the projection of annual national-
average residential energy price changes in the Reference case from 
AEO2023, which has an end year of 2050. To estimate price trends after 
2050, the 2046-2050 average was used for all years. As part of the NIA, 
DOE also analyzed scenarios that used inputs from variants of the 
AEO2023 Reference case that have lower and higher economic growth. 
Those cases have lower and higher energy price trends compared to the 
Reference case. NIA results based on these cases are presented in 
appendix 10C of the direct final rule TSD.
    The water cost savings are calculated using the estimated water 
savings in each year and the projected water and wastewater prices. To 
estimate water and wastewater prices in future years, DOE multiplied 
the weighted average marginal national water and wastewater prices by 
the weighted average of water price projections of both public and 
private water and wastewater sources. For the public water and 
wastewater sources, the water price projection was developed as a 
linear regression based on historical 1986-2022 water and sewerage 
maintenance CPI data to forecast prices through 2050. For years after 
2050, DOE adopted a flat price trend based on average price from 2046 
through 2050. For the private well marginal water cost, the cost is 
only related to the additional pumping energy use; therefore, DOE used 
the projection of annual national average residential electricity price 
changes in the Reference case from AEO2023. The Reference case has an 
end year of 2050. The 2046-2050 average was used for all years after 
2050. For septic tank users, the marginal wastewater costs were 
considered as zero and no price trends were required.
    DOE forecasted an initial drop in dishwasher shipments in response 
to an increase in purchase price attributable to potential standards-
related efficiency increases. For the selected TSL (TSL3) and the max-
tech TSL (TSL5), a 0.03 percent and a 2.29 percent of the shipments 
drop were projected during the 30-year analysis period compared to the 
No-New-Standards case, respectively. DOE assumed that those consumers 
who forgo buying a dishwasher because of the higher purchase price 
would then wash their dishes by hand, and DOE estimated the energy and 
water use of washing dishes by hand (see chapter 10 of the direct final 
rule TSD for details). As discussed in section V.B.4 of this document, 
DOE has determined that the adopted standards are achievable without 
impacting consumer utility. Therefore, DOE does not expect consumers to 
behave differently in handwashing and pre-rinsing dishes among the 
considered efficiency levels.
    In calculating the NPV, DOE multiplies the net savings in future 
years by a discount factor to determine their present value. For this 
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.\97\ 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.
---------------------------------------------------------------------------

    \97\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024). 
DOE used the prior version of Circular A-4 (September 17, 2003) in 
accordance with the effective date of the November 9, 2023 version. 
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March 
11, 2024).
---------------------------------------------------------------------------

    ASAP et al. commented that DOE's analysis shows that the consumer 
benefits, even at the more conservative discount rate, outweigh the 
maximum costs to manufacturers by over seven times. (ASAP, No. 46 at p. 
1)

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 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-using households. The analysis used subsets of the RECS 
2020 sample composed of

[[Page 31438]]

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 of the 
direct final rule TSD describes the consumer subgroup analysis.
1. Low-Income Households
    The identification of low-income households depends on family size 
and income level. 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 used RECS data to divide 
low-income households into three sub-subgroups: (1) renters who pay the 
energy bill, (2) renters who do not pay the energy bill, and (3) 
homeowners.\98\ For large appliance such as dishwashers, renters are 
unlikely to be purchasers. Instead, the landlord would bear the cost, 
and some or none of the cost could get passed on to the renter. Renters 
who pay the energy bill would receive the energy cost savings from 
higher-efficiency appliances. This disaggregation allows DOE to 
determine whether low-income households are disproportionately affected 
by an amended energy conservation standard in a more accurate manner.
---------------------------------------------------------------------------

    \98\ The energy bill includes fuel types of electricity, natural 
gas, or propane consumed by a household.
---------------------------------------------------------------------------

    Table IV.15 shows the distribution of low-income household 
dishwasher users with respect to whether they rent or own and whether 
they pay the energy bill.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.022

BILLING CODE 6450-01-C
    In response to the May 2023 NOPR, Samsung stated its appreciation 
for DOE's analysis of the proposed standards levels on low-income 
households. Samsung commented that DOE's analysis shows that it is 
unlikely that renters purchase large appliances like dishwashers. 
Samsung noted that landlords typically bear the cost while renters 
directly benefit from higher-efficiency appliances through reduced 
energy costs. Samsung commented that considering the small percentage 
of low-income consumers in DOE's analysis experiencing a net LCC cost 
at TSL 3 (2 percent for standard-size dishwashers and 0 percent for 
compact-size dishwashers) and the positive average LCC impact, TSL 3 
offers equitable outcomes for different consumer groups. Samsung added 
that the simple payback periods indicate that the initial investment in 
more efficient dishwashers can be recouped within a short timeframe. 
(Samsung, No. 52 at p. 3)
    DOE agrees that TSL 3 provides equitable outcomes for different 
consumer groups.
    AHAM commented that it commissioned Bellomy Research to conduct a 
study focusing on low-income households. (AHAM, No. 51 at p. 4)

[[Page 31439]]

AHAM commented that this research does not constitute a full 
marketplace analysis, but does provide additional information on the 
effects of higher appliance prices on low-income households and is 
helpful in understanding the real-world impact DOE's proposed standards 
may have. (Id.) AHAM stated 75 percent of U.S. households own a 
dishwasher and that fewer than 40 percent of households with gross 
incomes of under $40,000 own a dishwasher and that costs are the 
primary consideration when considering a dishwasher purchase. AHAM 
noted that dishwashers may be seen as discretionary because handwashing 
is an option, and that this means that a significant portion of lower 
income populations are spending more than other consumers on their 
water and electricity bills due to handwashing. (Id. at p. 3) AHAM 
asserted that amended standards beyond EL 1 are unnecessary given these 
successes and unjustified under EPCA given the limited opportunity for 
energy savings and the disproportionate impacts amended standards will 
have on low-income consumers, noting that most standard-size 
dishwashers are certified to ENERGY STAR V. 6.0 (i.e., EL 1). (Id. at 
pp. 1-2) AHAM commented that standards beyond EL 1 are likely to 
disproportionately, negatively impact low-income consumers and drive 
negative, unintended consumer behaviors that negate predicted savings. 
(AHAM, No. 51 at pp. 2-3) AHAM urged DOE to exercise restraint and 
consider energy conservation standards for dishwashers that do not 
exceed EL 1, as outlined in the January 2022 Preliminary TSD, and 
investigate other approaches to achieve additional energy and water 
savings without creating this undue burden on low-income and 
underserved communities. (Id. at p. 5)
    DOE welcomes the opportunity to review the Bellomy report, but has 
not received a copy of the Bellomy research; nor is the report 
available online. 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 
dishwasher and are not specifically relevant to the potential increased 
incremental cost of purchasing a new dishwasher in a standards case 
(which is substantially less than the full cost of a dishwasher). 
Additionally, based on DOE's estimates, the installed price of EL1 is 
the same as EL2 which is the selected level for the standard size 
dishwashers. Therefore, all consumers, including low-income consumers, 
would not experience additional incremental cost at EL2 compared to 
EL1. Moreover, DOE's low-income LCC subgroup analysis uses inputs 
specific to low-income consumers to estimate the impact of adopted 
standards. The results indicate that only two percent of the low-income 
consumers would experience a net cost. DOE further notes, that AHAM is 
a party to the Joint Agreement and is supportive of the recommended 
standard adopted in this direct final rule.
2. Senior-Only Households
    DOE defined a senior-only household as having all occupants with 
ages of 65 years or greater. Using RECS 2020 data, senior-only 
households represent 23 percent of households that have and use 
dishwashers.
3. Well-Water Households
    AHAM recommended that DOE consider well-water users as a distinct 
sub-group given the differences in costs between publicly supplied and 
household-supplied water and the resulting impacts on operating cost 
savings. (AHAM at No. 51 at p. 16) AHAM further commented that at EL2 
for standard dishwashers, using the appropriate cash costs for water 
and sewer, the mean LCC savings decline by nearly 50 percent. AHAM 
asserted that this makes it glaringly obvious that this group is worth 
direct consideration and DOE must acknowledge that its proposed 
standards create significant burden for them and adjust its proposal 
accordingly. (Id.)
    DOE defined a well-water household as (1) having a dedicated water 
well for that particular household; (2) distributing water to no other 
households from its water well; and (3) having no connection to a 
public water utility water line. RECS 2020 data do not indicate whether 
a household uses a water well, so DOE used AHS data to estimate the 
percentage of households with dedicated water wells. Additionally, DOE 
used AHS data from 1970 to 2021 to develop a projection by U.S. Census 
Region. Use of septic tanks for wastewater effluent was also noted.
    Given that the majority of wells and septic tanks are located in 
rural areas, the probability of a household owning a well and/or a 
septic tank is significantly higher in rural areas than in urban areas. 
Therefore, DOE distinguishes rural and urban households when assigning 
the water and wastewater sources to the RECS household samples, and 
using different probability distributions of owning a well and a septic 
tank by Census Region based on AHS 2021 data.
    Chapter 11 of 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 dishwashers 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.
    The quantitative part of the MIA primarily relies on the GRIM, an 
industry cash flow model with inputs specific to this rulemaking. The 
key GRIM inputs include data on the industry cost structure, 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

[[Page 31440]]

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 dishwasher manufacturing 
industry based on the market and technology assessment, and publicly 
available information. This included a top-down analysis of dishwasher 
manufacturers that DOE used to derive preliminary financial inputs for 
the GRIM (e.g., revenues; materials, labor, overhead, and depreciation 
expenses; selling, general, and administrative expenses (``SG&A''); and 
R&D expenses). DOE also used public sources of information to further 
calibrate its initial characterization of the dishwasher manufacturing 
industry, including company filings of form 10-K from the SEC,\99\ 
corporate annual reports, the U.S. Census Bureau's Annual Survey of 
Manufactures (``ASM''),\100\ and reports from Dun & Bradstreet.\101\
---------------------------------------------------------------------------

    \99\ U.S. Securities and Exchange Commission, Electronic Data 
Gathering, Analysis, and Retrieval (``EDGAR'') system. Available at 
www.sec.gov/edgar/search/ (last accessed Nov. 18, 2023).
    \100\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Statistics for Industry Groups and Industries in the U.S (2021).'' 
Available at www.census.gov/programs-surveys/asm/data/tables.html 
(last accessed Nov. 14, 2023).
    \101\ The Dun & Bradstreet Hoovers login is available at 
app.dnbhoovers.com (last accessed Nov. 14, 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 dishwashers in order to develop other 
key GRIM inputs, including product and capital conversion costs, and to 
gather additional information on the anticipated effects of energy 
conservation standards on revenues, direct employment, capital assets, 
industry competitiveness, and subgroup impacts.
    In Phase 3 of the MIA, DOE conducted structured, detailed 
interviews with representative manufacturers. During these interviews, 
DOE discussed engineering, manufacturing, procurement, and financial 
topics to validate assumptions used in the GRIM and to identify key 
issues or concerns. 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, 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 to 
2056. DOE calculated INPVs by summing the stream of annual discounted 
cash flows during this period. For manufacturers of dishwashers, DOE 
used a real discount rate of 8.5 percent, which was derived from 
industry financials and then modified according to feedback received 
during manufacturer interviews.
    The GRIM calculates cash flows using standard accounting principles 
and compares changes in INPV between the no-new-standards case and each 
standards case. The difference in INPV between the no-new-standards 
case and a standards case represents the financial impact of the 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 
and shipments analysis, and information gathered from industry 
stakeholders during the course of manufacturer interviews conducted in 
support of the May 2023 NOPR. 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.
    For this analysis, DOE used a combination of design and efficiency 
engineering approaches. This approach involved physically disassembling 
commercially available products, reviewing publicly available cost 
information, and modeling equipment cost. From this information, DOE 
estimated the MPCs for a range of products currently available on the 
market. DOE then considered the incremental steps manufacturers may 
take to reach higher efficiency levels. In its modeling, DOE started 
with the baseline MPC and added the expected design options at each 
higher efficiency level to estimate incremental MPCs. 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 2024 (the base year) to 2056 (the end year of 
the analysis period). See section IV.G of this document and chapter 9 
of the direct final rule TSD for additional details.
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 dishwasher designs into compliance. DOE evaluated the 
level of conversion-related expenditures that would be needed to comply 
with each considered efficiency

[[Page 31441]]

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 efficiency levels. During interviews, DOE asked 
manufacturers to estimate the capital conversion costs to meet the 
various efficiency levels. This feedback was compared to findings from 
the engineering analysis to determine the validity of investment 
levels. DOE also asked manufacturers to estimate the redesign effort, 
engineering resources, and marketing expenses required at various 
efficiency levels to quantify the product conversion costs. Based on 
manufacturer feedback, DOE also estimated ``re-flooring'' costs 
associated with replacing obsolete display models in big-box stores 
(e.g., Lowe's, Home Depot, Best Buy) due to more stringent 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 the new appendix C2, as finalized in the January 2023 TP Final 
Rule. Among other updates, appendix C2 contains provisions for a 
minimum cleaning index threshold to validate the regulated test cycle. 
See 88 FR 3234, 3271-3272, 3281. At each efficiency level, DOE included 
the costs associated with re-rating compliant basic models in 
accordance with appendix C2. 88 FR 3234, 3271-3272. Based on 
manufacturer feedback, DOE expects some manufacturers may incur one-
time costs if their current testing laboratories are at capacity and 
additional laboratory space or test stations are required. DOE includes 
these one-time costs in its capital conversion cost estimates. DOE 
interviewed manufacturers representing approximately 90 percent of 
industry shipments. In interviews, multiple manufacturers provided 
estimates for the expected upfront capital costs associated with 
implementing the cleaning performance test (e.g., additional test 
stations, equipment upgrades for existing stations, building 
modifications, etc.). DOE considered these costs in its conversion cost 
estimates, as appendix C2 would go into effect at the time when 
compliance is required for any amended energy conservation standards.
    Manufacturer feedback on conversion costs was aggregated to protect 
confidential information. DOE then scaled up the aggregate capital and 
product conversion cost feedback from interviews to estimate total 
industry conversion costs. DOE adjusted the conversion cost estimates 
developed in support of the May 2023 NOPR to 2022$ for this direct 
final rule.
    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 or amended standard. 
The conversion cost figures at each analyzed TSL can be found in 
section V.B.2.a 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 and all non-
production costs (i.e., SG&A, R&D, and interest), along with profit. To 
calculate the MSPs in the GRIM, DOE applied manufacturer markups to the 
MPCs estimated in the engineering analysis for each product class and 
efficiency level. Modifying these manufacturer markups in the standards 
case yields different sets of impacts on manufacturers. For the MIA, 
DOE modeled two standards-case manufacturer markup scenarios to 
represent uncertainty regarding the potential impacts on prices and 
profitability for manufacturers following the implementation of amended 
energy conservation standards: (1) a preservation of gross margin 
percentage scenario; and (2) a tiered 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 production costs increase 
with efficiency, this scenario implies that the per-unit dollar profit 
will increase. Based on publicly available financial information, as 
well as comments from manufacturer interviews, DOE assumed average 
gross margin percentages of 19.4 percent for both standard-size and 
compact-size product classes.\102\ Manufacturers noted that this 
scenario represents the upper bound of the dishwasher industry's 
profitability in the standards case because manufacturers can fully 
pass on additional product costs due to standards to consumers.
---------------------------------------------------------------------------

    \102\ The gross margin percentage of 19.4 percent is based on a 
manufacturer markup of 1.24.
---------------------------------------------------------------------------

    The tiered scenario starts with the three tiers of manufacturer 
markups wherein higher efficiency products have a higher markup than 
low efficiency products. In the no-new-standards case, the three tiers 
are baseline efficiency, ENERGY STAR V. 6.0, and ENERGY STAR V. 7.0 
(which corresponds to the ENERGY STAR Most Efficient qualification 
criteria in 2022). In the standards case, DOE models the breadth of 
manufacturers' portfolio of products shrinking and amended standards, 
resulting in higher-tier products moving to lower tiers. As a result, 
higher efficiency products that previously commanded the ENERGY STAR V. 
6.0 and 2022 ENERGY STAR Most Efficient manufacturer markups are 
assigned the baseline and ENERGY STAR V. 6.0 manufacturer markups, 
respectively. This scenario reflects a concern about product 
commoditization at higher efficiency levels as efficiency 
differentiators are eliminated.
    A comparison of industry financial impacts under the two 
manufacturer markup 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 
regarding its MIA presented in the May 2023 NOPR. The approach used for 
this direct final rule is largely the same approach DOE had used for 
the May 2023 NOPR analysis.
    In response to the May 2023 NOPR, AHAM stated that it cannot 
comment on the accuracy of DOE's approach for including how 
manufacturers might or might not recover potential investments (i.e., 
the accuracy of DOE's manufacturer markup scenarios), but that AHAM 
supports DOE's intent in the

[[Page 31442]]

microwave ovens SNOPR (``August 2022 SNOPR'') energy conservation 
standards rulemaking to include those costs and investments in the 
actual costs of products and retail prices. AHAM urged DOE to apply the 
same conceptual approach used in the August 2022 SNOPR in this 
dishwashers rulemaking and all future rulemakings. (AHAM, No. 51 at p. 
21)
    DOE models different standards-case manufacturer markup scenarios 
to represent the uncertainty surrounding the potential impacts on 
prices and profitability for manufacturers following the implementation 
of amended energy conservation standards (see section IV.J.2.d of this 
document). 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. For the May 2023 NOPR, DOE applied the preservation of gross 
margin percentage scenario to reflect an upper bound of industry 
profitability and a tiered scenario to reflect a lower bound of 
industry profitability under amended standards. 88 FR 32514, 32549. DOE 
used these scenarios to reflect the range of realistic profitability 
impacts under more stringent standards. Under the preservation of gross 
margin scenario for dishwashers, the incremental increase in MPCs--at 
most analyzed efficiency levels--result in an increase in per-unit 
dollar profit per unit sold. In interviews, multiple manufacturers 
emphasized the competitive nature of the dishwasher industry and the 
importance of offering dishwashers at competitive price points. Some 
manufacturers expressed concern that they would not be able to maintain 
their current manufacturer markups under more stringent standards. 
Thus, while manufacturers will likely continue to differentiate 
products and garner higher manufacturer markups based on consumer 
features (e.g., Wi-Fi enablement), brand recognition, energy 
efficiency, etc., DOE believes that maintaining the industry average 
manufacturer markup, reflected by the preservation of gross margin 
percentage scenario, represents an appropriate upper bound to industry 
pricing and profitability. Applying the approach used in the microwave 
ovens rulemaking (i.e., a conversion-cost-recovery scenario) would 
reflect a scenario where dishwasher manufacturers would increase 
manufacturer markups under more stringent standards. Based on 
information gathered during confidential interviews in support of the 
May 2023 NOPR and a review of financial statements of six companies 
engaged in manufacturing dishwashers, DOE does not expect that the 
dishwasher industry would increase manufacturer markups under an 
amended standard. Furthermore, in response to the May 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 maintained the two manufacturer 
markup scenarios from the May 2023 NOPR for this direct final rule 
analysis. DOE further notes, that AHAM is a party to the Joint 
Agreement and is supportive of the recommended standard adopted in this 
direct final rule.
    AHAM urged DOE to consider cumulative regulatory burden in its 
analysis and decision-making process. 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. AHAM commented the cumulative regulatory burden is 
significant for home appliance manufacturers when redesigning products 
and product lines for consumer clothes dryers, residential clothes 
washers, conventional cooking products, dishwashers, refrigerators, 
refrigerator-freezers, and freezers, miscellaneous refrigeration 
products, room air conditioners, and microwave ovens. AHAM noted that 
many of these rulemakings are expected to have compliance dates in 
2027. (AHAM, No. 51 at p. 22) AHAM asserted that engineers would need 
to spend all their time redesigning products to meet more stringent 
energy efficiency standards, pulling resources from other development 
efforts and business priorities. AHAM asserted that DOE's analysis does 
not adequately account for cumulative regulatory burden. AHAM 
encouraged DOE to acknowledge the cumulative regulatory burden its 
proposals place on industry and suggested that DOE could reduce 
cumulative regulatory burden by prioritizing rulemakings, 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. at p. 23) 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. AHAM stated that the appropriate approach is to include 
costs of manufacturers needing to comply with multiple regulations 
across product categories as well as the same product, noting that the 
manufacturer impact analysis does not adequately analyze this issue. 
(Id. at p. 24)
    Whirlpool commented that manufacturers are facing unprecedented 
cumulative regulatory burden due to DOE energy conservation standards, 
citing more stringent proposed standards and tight compliance deadlines 
for over 10 DOE-covered product categories manufactured and sold by 
Whirlpool. Whirlpool commented that many of these proposed rules, if 
finalized, would have compliance dates in 2026 or 2027. Whirlpool, a 
member of AHAM and party to the Joint Agreement, asserted that 
manufacturers may be forced to make difficult tradeoffs and potentially 
stop many projects over a multi-year period focused on cost reduction, 
quality improvement, or innovation; and instead focus their resources 
mainly on compliance to these amended standards. (Whirlpool, No. 45, at 
p. 4)
    DOE analyzes cumulative regulatory burden in accordance with 
section 13(g) of appendix A. As such, DOE details the rulemakings and 
expected conversion expenses of Federal energy conservation standards 
that could impact dishwasher original equipment manufacturers 
(``OEMs'') that take effect approximately 3 years before or after the 
2027 compliance date in section V.B.2.e of this document. As shown in 
Table V.11, DOE considers the rulemakings referenced by AHAM and 
Whirlpool as potentially contributing to cumulative regulatory burden 
in this direct final rule analysis. DOE notes that regulations that are 
not finalized are not considered in its cumulative regulatory burden 
analysis, as the timing, cost, and impacts of unfinalized rules are 
speculative. However, to aid stakeholders in identifying potential 
cumulative regulatory burden, DOE does list rulemakings in Table V.11 
that have proposed rules, which have tentative compliance dates, 
compliance levels, and compliance cost estimates. Regarding AHAM's 
suggestion about spacing out the timing of final rules for home 
appliance rulemakings, DOE has statutory requirements under EPCA on the 
timing of rulemakings. For dishwashers, refrigerators, refrigerator-
freezers, and freezers, consumer cooking products, residential clothes 
washers, consumer clothes dryers, and room air conditioners, amended 
standards apply

[[Page 31443]]

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, DOE notes that the multi-product Joint 
Agreement recommends alternative compliance dates for refrigerators, 
refrigerator-freezers, and freezers; consumer conventional cooking 
products; residential clothes washers; consumer clothes dryers; and 
miscellaneous refrigeration products.\103\ As a result, the expected 
compliance dates for many of the home appliance rulemakings AHAM listed 
will be spread out compared to the estimated compliance dates resulting 
from EPCA-specified lead times. See section V.B.2.e of this document 
for additional details. Regarding AHAM's recommendation of combining 
the product conversion costs from multiple regulations 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. 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. Conversion costs would be spread over a larger 
revenue base and potentially result in less severe INPV impacts when 
evaluated on a percent change basis.
---------------------------------------------------------------------------

    \103\ The Joint Agreement is available in the docket at 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0055.
---------------------------------------------------------------------------

    In response to the May 2023 NOPR, Gazoobie commented \104\ that 
taking 91 percent of dishwashers off the market will lead to severe 
supply chain issues and product shortages for minimal savings. Gazoobie 
asserted that supply chain issues could lead to higher prices than 
estimated, and facing shortages, more consumers will repair their older 
and less efficient dishwashers. Further, Gazoobie stated that DOE 
should not adopt a rule that takes so many units out of existence and 
recommended DOE adopt a lower TSL that removes less than 33 percent of 
the units or finalize a no new standards rule to see if supply chain 
issues becomes resolved over the next few years. (Gazoobie, No. 38 at 
p. 1)
---------------------------------------------------------------------------

    \104\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0038.
---------------------------------------------------------------------------

    DOE does not expect that the levels adopted in this direct final 
rule, which align with the levels proposed in the May 2023 NOPR, would 
lead to product shortages. Manufacturers would have until 2027 (3 years 
after the direct final rule is published in the Federal Register) to 
redesign models to meet the amended standards and/or increase 
production capacity of compliant models. DOE notes that most OEMs 
already offer models that meet the adopted TSL. Of the 19 OEMs offering 
standard-size products, 16 OEMs offer products that meet the efficiency 
level required. All the compact-size dishwasher OEMs currently offer 
products that meet the adopted TSL. Furthermore, as discussed in 
section V.B.2.c of this document, manufacturers did not express any 
concerns about production capacity at the levels adopted in this direct 
final rule. Additionally, DOE notes that TSL 3 corresponds to the 
levels recommended in the Joint Agreement, which includes signatories 
representing dishwasher manufacturers.

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 of the direct final rule TSD. The analysis 
presented in this notice 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 EPA.\105\
---------------------------------------------------------------------------

    \105\ Available at www.epa.gov/sites/production/files/2021-04/documents/emission-factors_apr2021.pdf (last accessed Oct. 24, 
2023).
---------------------------------------------------------------------------

    The on-site operation of dishwashers 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.\106\
---------------------------------------------------------------------------

    \106\ 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 Oct. 24, 2023).
---------------------------------------------------------------------------

    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 MWh or 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 the emissions control programs discussed in the following 
paragraphs, and the Inflation Reduction Act.\107\
---------------------------------------------------------------------------

    \107\ 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 Oct. 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

[[Page 31444]]

January 1, 2015.\108\ 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.
---------------------------------------------------------------------------

    \108\ 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.\109\ 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 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.
---------------------------------------------------------------------------

    \109\ 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 cases, 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 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 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 recommended by applicable Executive orders, and DOE would 
reach the same conclusion presented in this rulemaking in the absence 
of the social cost of greenhouse gases. That is, the social costs of 
greenhouse gases, whether measured using the February 2021 interim 
estimates presented by the IWG on the Social Cost of Greenhouse Gases 
or by another means, did not affect the rule ultimately adopted by DOE.
    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 agreed that the interim SC-GHG estimates represent 
the most appropriate estimate of the SC-GHG until revised estimates are 
developed reflecting the latest, peer-reviewed science. See 87 FR 
78382, 78406-78408 for discussion of the development and details of the 
IWG SC-GHG estimates.
    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

[[Page 31445]]

intergenerational analysis in the context of climate change are likely 
to be less than 3 percent, near 2 percent or lower.\110\ 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.
---------------------------------------------------------------------------

    \110\ 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/.
---------------------------------------------------------------------------

    For this direct final rule, DOE considered comments it had received 
regarding its approach for monetizing greenhouse gas emissions in the 
May 2023 NOPR. The approach used for this direct final rule is largely 
the same approach DOE had used for the May 2023 NOPR analysis.
    In response to the May 2023 NOPR, 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, which AHAM noted are constantly 
subject to change. (AHAM, No. 51 at p. 25) AHAM commented that DOE's 
decision making should not rely on the monetization of reductions 
benefits and that it is unclear to what extent DOE's deliberation to 
propose a TSL rely on the monetization of emissions reduction. (AHAM, 
No. 51 at pp. 24-25) AHAM stated that based on the extent to which DOE 
calculates climate and health benefits, it appears that DOE is prepared 
to rely upon the estimated monetary value of emissions reductions 
should the consumer NPV and energy savings not appear to justify a more 
stringent level. (Id. at p. 15) 'AHAM commented that DOE has responded 
to these objections by indicating that environmental and public health 
benefits associated with the more efficient use of energy, including 
those connected to global climate change, are important to take into 
account when considering the need for national energy conservation, 
which is one of the factors EPCA requires DOE to evaluate in 
determining whether a potential energy conservation standard is 
economically justified, and AHAM does not object to DOE considering the 
benefits. AHAM stated that it objects to DOE relying upon those 
benefits to justify a rule given the uncertain and ever-evolving nature 
of the estimates. AHAM commented that DOE can consider ``other 
factors'' under EPCA, but that does not override the key criteria EPCA 
requires DOE to balance and DOE must consider EPCA's factors together 
and achieve a balance of impacts and benefits--a balance DOE has failed 
to strike in this rule. (Id. at p. 25) AHAM stated that while it may be 
acceptable for DOE to continue its current practice of examining the 
social cost of carbon and monetization of other emissions reductions 
benefits as informational so long as the underlying interagency 
analysis is transparent and vigorous, the monetization analysis should 
not impact the TSLs DOE selects as a new or amended standard. (Id.)
    Zycher commented that the IWG analysis is deeply flawed because it 
asserts the benefits of GHG reductions on a global scale. (Zycher, No. 
49 at pp. 22-23) Zycher stated that the IWG analysis incorporates 
explicitly in its benefit/cost calculation the purported global climate 
benefits from reductions in U.S. GHG emissions, presumably on the 
grounds that the assumed GHG externality is global in nature. Zycher 
asserted that this argument is fundamentally flawed, in substantial 
part because the global climate effect of all U.S. GHG emissions is 
very close to zero. (Zycher, No. 49 at p. 25)
    In response to the AHAM and Zycher's comments regarding global 
impacts, DOE reiterates its view that the environmental and public 
health benefits associated with more efficient use of energy, including 
those connected to global climate change, 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)) Additionally, 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.
    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 considers 
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, 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. As described in detail in section 
V.C.1 of this document, at the adopted TSL for dishwashers, the average 
LCC savings for both product classes are positive, a shipment-weighted 
3 percent of consumers would experience a net cost, and the NPV of 
consumer benefits is positive using both a 3-percent and 7-percent 
discount rate.
    Zycher commented \111\ that the interim IWG estimates are deeply 
flawed for a number of reasons, they: (1) distort the actual economic 
growth predictions produced by the integrated assessment models, (2) 
base predictions of future climate phenomena on climate models that 
cannot predict the past or the present, (3) incorporate co-benefits in 
the form of a reduction in the emissions of other criteria and 
hazardous air pollutants already regulated under different provisions 
of the Clean Air Act, (4) incorporate the

[[Page 31446]]

asserted benefits of GHG reductions on a global basis, and (5) employ 
discount rates that are inconsistent and inappropriate. (Zycher, No. 49 
at pp. 22-23)
---------------------------------------------------------------------------

    \111\ Available at: www.regulations.gov/comment/EERE-2019-BT-STD-0039-0049.
---------------------------------------------------------------------------

    Zycher commented that the artificially low discount rate applied to 
the asserted climate benefits is incorrect analytically and that the 
opportunity cost of capital is the appropriate discount rate to be 
applied to the evaluation of the asserted climate benefits of the 
proposed rule because the allocation of resources to such endeavors 
imposes an opportunity cost in the form of forgone investments. 
(Zycher, No. 49 at p. 26) Zycher commented that the IWG estimates are 
flawed for a number of reasons, including the use of inconsistent and 
inappropriate discount rates: (1) ``consumption rate of interest'' is 
an incorrect conceptual discount rate for a proposed rule analysis 
because the use of resources for purposes of reductions in GHG 
emissions is obviously an investment, the opportunity cost of which is 
the marginal social return to investment and (2) incorrect 
identification of future generations' preferences. (Zycher, No. 49 at 
pp. 27-28) In regards to the consumption rate of interest, Zycher 
stated that the use of a low consumption rate of interest for the 
evaluation of climate benefits only would introduce an important bias 
in the allocation of resources among government policies and between 
government and private-sector resource use. Zycher commented that the 
private sector would not choose to use an artificially-low discount 
rate for the evaluation of alternative resource uses. (Id. at p. 27) In 
regards to intergenerational preferences, Zycher asserted that future 
generations prefer to receive a bequest of a bequest of an aggregate 
capital stock. (Id.)
    The reasons for using a consumption discount rate rather than a 
rate based on the social rate of return on capital (estimated to be 7 
percent under OMB's 2003 Circular A-4 guidance) is because 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 reiterates 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.''
    CEI et al. commented that there are numerous flaws with IWG 2021 
that 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 et al. also 
stated that the inclusion of claimed climate benefits out nearly 300 
years into the future and the use of global rather than national 
benefits, are also skewed toward inflating the end result. (CEI et al., 
No. 48 at p. 6) 'CEI et al. commented that missing from the agency's 
analysis is any estimate of the temperature increase it believes will 
be averted as a result of the proposed rule, which CEI et al. estimated 
to be 0.0003 [deg]C by 2050. (CEI et al., No. 48 at p. 7)
    DOE notes that 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 comments were 
addressed by the IWG in its February 2021 SC-GHG TSD. DOE agrees that 
the interim SC-GHG values applied for this direct final rule are 
conservative estimates. 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.
    DOE is aware that in December 2023, EPA issued a new set of SC-GHG 
estimates in connection with a final rulemaking under the Clean Air 
Act.\112\ As DOE had used the IWG interim values in proposing this rule 
and is currently reviewing the updated 2023 SC-GHG values, for this 
direct final rule, 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 dishwashers (see section 
IV.L.1.c of this document). DOE notes that because EPA's estimates are 
considerably higher than the IWG's interim SC-GHG values applied for 
this direct final rule, an analysis that uses the EPA's estimates 
results in significantly greater climate-related benefits. However, 
such results would not affect DOE's decision in this direct final rule. 
As stated elsewhere in this document, DOE would reach the same 
conclusion regarding the economic justification of the standards 
presented in this direct final rule without considering the IWG's 
interim SC-GHG values. For the same reason, if DOE were to use EPA's 
higher SC-GHG estimates, they would not change DOE's conclusion that 
the standards are economically justified.
---------------------------------------------------------------------------

    \112\ See www.epa.gov/environmental-economics/scghg.
---------------------------------------------------------------------------

    In response to Zycher's comment regarding the use of consumption 
discount rate instead of a rate based on the social rate of return on 
capital, DOE notes that DOE's analysis is only using the medium 
discount rate presented in the IWG TSD as a central estimate of climate 
benefits. The IWG TSD has provided significant details to justify the 
choice of discount rate and DOE agrees with the assessment. However, 
there is no suggested justification to use a 7 percent discount rate in 
the IWG TSD. DOE also wants to note that while DOE could have used 
other discount rate values (5 percent or 2.5 percent), as presented by 
the IWG, it would have only resulted in lower or higher climate 
benefit, but would not have changed DOE's conclusion of economic 
justification. As stated in section V.C.1 of this document, DOE 
concludes that the rule is economically justified even without 
factoring in the climate benefit.
    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 Dioxide
    The SC-CO2 values used for this direct final rule were 
based on the values developed for the IWG's February 2021 TSD, which 
are shown in Table IV.16 in five-year increments from 2020 to 2050. The 
set of annual values

[[Page 31447]]

that DOE used, which was adapted from estimates published by EPA,\113\ 
is 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.
---------------------------------------------------------------------------

    \113\ 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 Feb. 21, 2023).
[GRAPHIC] [TIFF OMITTED] TR24AP24.023

    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.
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.17 shows the updated sets of SC-
CH4 and SC-N2O estimates from the latest 
interagency update in 5-year increments from 2020 to 2050. The full set 
of annual values used is presented in appendix 14A of the 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.024

    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 
gross domestic product (``GDP'') from the Bureau of Economic Analysis. 
To calculate a present value of the stream of monetary values, DOE 
discounted the values in each of the cases using the specific discount 
rate that had been used to obtain the SC-CH4 and SC-
N2O estimates in each case.
c. Sensitivity Analysis Using EPA's New SC-GHG Estimates
    In December 2023, EPA issued an updated set of SC-GHG estimates 
(2023 SC-GHG) in connection with a final rulemaking under the Clean Air 
Act. These estimates incorporate recent research and address 
recommendations of the National Academies (2017) and comments from a 
2023 external peer review of the accompanying technical report.
    For this rulemaking, DOE used these updated 2023 SC-GHG values to

[[Page 31448]]

conduct a sensitivity analysis of the value of GHG emissions reductions 
associated with alternative standards for dishwashers. This sensitivity 
analysis provides an expanded range of potential climate benefits 
associated with amended standards. The final year of EPA's new 2023 SC-
GHG estimates is 2080; therefore, DOE did not monetize the climate 
benefits of GHG emissions reductions occurring after 2080.
    The overall climate benefits are greater when using the higher, 
updated 2023 SC-GHG estimates, compared to the climate benefits using 
the older IWG SC-GHG estimates. The results of the sensitivity analysis 
are presented in appendix 14C of the direct final rule TSD.
2. Monetization of Other Emissions Impacts
    For the 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.\114\ 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).
---------------------------------------------------------------------------

    \114\ U.S. Environmental Protection Agency. Estimating the 
Benefit per Ton of Reducing Directly Emitted PM2.5, 
PM2.5 Precursors, and Ozone Precursors from 21 Sectors. 
www.epa.gov/benmap/estimating-benefit-ton-reducing-directly-emitted-pm25-pm25-precursors-and-ozone-precursors.
---------------------------------------------------------------------------

    DOE also estimated the monetized value of NOX and 
SO2 emissions reductions from site use of natural gas in 
dishwashers 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.\115\ The EPA document provides 
high and low estimates for 2025 and 2030 at 3- and 7-percent discount 
rates.\116\ DOE used the same linear interpolation and extrapolation as 
it did with the values for electricity generation.
---------------------------------------------------------------------------

    \115\ ``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.
    \116\ ``Area sources'' are a category in the 2018 document from 
EPA, but are not used in the 2021 document cited above. See 
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. The MIA addresses 
those impacts. Indirect employment impacts are changes in national 
employment that occur due to the shift in expenditures and capital 
investment caused by the purchase and operation of more-efficient 
appliances. Indirect employment impacts from standards consist of the 
net jobs created or eliminated in the national economy, other than in 
the manufacturing sector being regulated, caused by (1) reduced 
spending by consumers on energy, (2) reduced spending on new energy 
supply by the utility industry, (3) increased consumer spending on the 
products to which the new standards apply and other goods and services, 
and (4) the effects of those three factors throughout the economy.
    One method for assessing the possible effects on the demand for 
labor of such shifts in economic activity is to compare sector 
employment statistics developed by the Labor Department's Bureau of 
Labor Statistics (``BLS''). BLS regularly publishes its estimates of 
the number of jobs per million dollars of economic activity in 
different sectors of the economy, as well as the jobs created elsewhere 
in the economy by this same economic activity. Data from BLS indicate 
that expenditures in the utility sector generally create fewer jobs 
(both directly and indirectly) than expenditures in other sectors of 
the economy.\117\ There are many reasons for these differences, 
including wage differences and the fact that the utility sector is more 
capital-intensive and less labor-intensive than other sectors. Energy 
conservation standards have the effect of reducing consumer utility 
bills. Because reduced consumer expenditures for energy likely lead to 
increased expenditures in other sectors of the economy, the general 
effect of efficiency standards is to shift economic activity from a 
less labor-intensive sector (i.e., the utility sector) to more labor-
intensive sectors (e.g., the retail and service sectors). Thus, the BLS 
data suggest that net national employment may increase due to shifts in 
economic activity resulting from energy conservation standards.
---------------------------------------------------------------------------

    \117\ 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 apps.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf (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'').\118\ ImSET is a special-purpose version of

[[Page 31449]]

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

    \118\ 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 overestimate 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. 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.

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. Non-Regulatory Approaches
    AHAM commented that it incorporated by reference its comments on 
the January 2022 Preliminary TSD regarding AHAM's position that there 
is more to be gained from increasing proper dishwasher use and 
ownership than from increasing energy conservation standards beyond 
efficiency level (``EL'') 1. (AHAM, No. 51 at p. 7) AHAM stated that 
the environmental goal for dishwasher cleaning should be to focus on 
dish cleaning as a process, as continued efficiency improvements for 
dishwashers themselves have diminishing returns with available 
technology. AHAM commented that the dishwasher is an important part of 
that process and increasing ownership and proper use of dishwashers has 
the potential to drive enormous water and significant energy savings 
that would dwarf the savings attributable to further amended standards. 
AHAM commented that in the future, conserving water--rather than 
energy--will continue to be the defining environmental issue for 
dishwasher cleaning performance. (Id.) AHAM commented that there is a 
wide range of dish cleaning behavior and from an environmental 
perspective, the preferred ordering of consumer behaviors is to run a 
full or partial dishwasher load without pre-rinsing and abstaining from 
hand-washing dishes altogether, as the latter tends to use far more 
water than running a dishwasher. (Id. at pp. 7-8) AHAM cited the Energy 
Information Administration's (``EIA's'') 2020 Residential Energy 
Consumption Survey (``RECS''), stating that 14 percent of households 
have and do not use their dishwasher. Additionally, according to RECS, 
dishwasher presence is lower in renter-occupied homes. AHAM recommended 
that DOE make an effort to increase educational and awareness 
initiatives on effective dishwasher use. (Id. at p. 8) AHAM cited data 
from EPA and a study from the University of Michigan by Gabriela Porras 
et al. to reiterate that properly using a dishwasher without pre-
rinsing is the most economical approach for energy, water, and time 
usage, and that handwashing using between 6.9 to 22.8 gallons for eight 
place settings, respectively. (Id. at p. 9) AHAM asserted that by 
increasing dishwasher usage through educational initiatives promoting 
dishwasher ownership and proper use, DOE can achieve far greater 
savings that would show on consumers' utility bills than it can by 
amending standards. (Id. at p. 10)
    DOE acknowledges that a percentage of households do not own or own 
but do not use their dishwashers. DOE also acknowledges that non-
regulatory options may exist to promote dishwasher ownership and 
property use to further push the potential for energy and water 
savings. However, 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 that the Secretary determines 
is technologically feasible and economically justified. (42 U.S.C. 
6295(g), (m), and (o)(2)(A)) DOE has determined that the energy 
conservation standards for dishwashers adopted in this direct final 
rule achieve the maximum improvement in energy efficiency which is 
technologically feasible and economically justified.
2. Test Procedure Usage Factors
    The CA IOUs recommended DOE adjust the current load usage factors 
to reflect changes in consumer pre-treating habits since 2001, the date 
of the studies DOE relies on in this rulemaking. (CA IOUs, No. 50 at 
pp. 5-6) The CA IOUs commented that a nationally representative study 
by Lawrence Berkeley National Laboratory (``LBNL'') in 2021 (``2021 
LBNL Study'') \119\ shows

[[Page 31450]]

consumers pre-treat their dishes less often (when compared to 2001) 
before placing them in a dishwasher, and the CA IOUs recommended DOE 
capture this change by updating the light, medium, and heavy soil level 
distribution to 48 percent, 38 percent, and 14 percent, respectively. 
(Id.)
---------------------------------------------------------------------------

    \119\ Stratton, H. et al., ``Dishwashers in the Residential 
Sector: A Survey of Product Characteristics, Usage, and Consumer 
Preferences,'' Energy Technologies Area Publications, May 2021 
https://eta-publications.lbl.gov/sites/default/files/osg_lbnl_report_dishwashers_final_4.pdf.
---------------------------------------------------------------------------

    DOE notes that it established the load usage factors in the 
dishwasher test procedure in August 2003 to account for the varying 
energy and water performance of units that include soil sensors. 68 FR 
51887, 51890. In that rulemaking, DOE relied on survey data gathered 
and analyzed by Arthur D. Little (``ADL'') \120\ to characterize the 
quantity of soils that consumers load into a dishwasher. 68 FR 51887, 
51890. Using the soil loads from an earlier version of AHAM DW-1 \121\ 
as a reference point, the ADL report defined a light soil load as half 
the quantity of a single soiled place setting as defined in AHAM DW-1. 
A medium soil load was equivalent to two soiled AHAM DW-1 place 
settings and a heavy soil load was approximately equal to four soiled 
AHAM DW-1 place settings. With these load size definitions, ADL found 
that consumers reported that they most frequently washed lightly soiled 
loads (62 percent of loads), with medium (33 percent) and heavy (5 
percent) soil loads making up the remainder. Therefore, DOE used this 
as the distribution of soil loads for the heavy, medium, and light soil 
load cycles in the DOE test procedure. 68 FR 51887, 51890. While the 
ADL report also presented data on the frequency of different types of 
pre-treatment, it did not correlate pre-treatment itself to different 
resulting soil loads and thus load usage factors.
---------------------------------------------------------------------------

    \120\ ADL survey data are available at www.regulations.gov/document?D=EERE-2006-TP-0096-0055.
    \121\ ``Household Electric Dishwashers.'' AHAM DW-1 was 
renumbered to AHAM DW-2 when it was updated in 2020. Although not 
identical to the soil loads in AHAM DW-2-2020, they are 
substantially similar. This standard provides a uniform method to 
test and measure cleaning performance of dishwashers, including the 
soil preparation, soil application, and scoring of test load to 
calculate cleaning index.
---------------------------------------------------------------------------

    More recently, in the January 2023 TP Final Rule, DOE addressed 
comments from the CA IOUs and Samsung pertaining to whether consumers' 
pre-rinsing habits, including those surveyed in the 2021 LBNL Study, 
warranted amendments to the soil loads and corresponding usage factors 
in the dishwasher test procedure. DOE determined in the January 2023 TP 
Final Rule that it did not have, nor did commenters submit, any 
specific information about the types of soils that would be used to 
reflect pre-rinsing, or lack thereof, or the consumer relevance of such 
soils. 88 FR 3234, 3246. Accordingly, DOE did not amend the soil load 
usage factors in the January 2023 TP Final Rule.
    DOE also notes that the 2021 LBNL Study focused on consumer 
priorities with respect to their dishwashers. The requirement for pre-
treatment of dishes was identified as the second to last priority of 18 
possibilities for the 1201 survey respondents (less important than 
cutlery tray location). Pre-treatment of dishes reflect consumer habit, 
rather than dishwasher performance.122 123 The 2021 LBNL 
Study did not address a correlation of pre-treatment of dishes with 
resulting soil loads on the dishes, which may have changed since the 
time of the ADL report, so did not provide information with which to 
evaluate any different load usage factors. Additionally, the LCC 
employs no load usage factor but relies on the reported number of 
weekly loads for each household in the RECS 2020 dataset.
---------------------------------------------------------------------------

    \122\ Richter, Christian Paul, 2011. Use of dishwashers: 
observation of consumer habits in the domestic environment. (Last 
accessed January 23, 2024.) https://pubag.nal.usda.gov/catalog/547534.
    \123\ Stamminger, et al., 2017. A European Comparison of 
Cleaning Dishes by Hand. (Last accessed January 23, 2024.) https://silo.tips/download/a-european-comparison-of-cleaning-dishes-by-hand.
---------------------------------------------------------------------------

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 \124\ in 2021 detailing its findings and 
recommendations on how DOE can improve its analyses and align them with 
best practices for cost-benefit analysis.
---------------------------------------------------------------------------

    \124\ National Academies of Sciences, Engineering, and Medicine. 
2021. Review of Methods for Setting Building and Equipment 
Performance Standards. Available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards (last accessed Nov. 20, 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. 51 at 
p. 17) AHAM asserted that DOE seems to be ignoring the recommendations 
in the NAS Peer Review Report and even conducting analyses that are the 
opposite of these recommendations. AHAM stated 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 is specified at 
appendix A. DOE periodically examines and revises these provisions in 
separate rulemaking proceedings. The recommendations provided in the 
2021 NAS report, which pertain to the processes by which DOE analyzes 
energy conservation standards, will be considered by DOE in a 
forthcoming 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 
dishwashers. It addresses the TSLs examined by DOE, the projected 
impacts of each of these levels if adopted as energy conservation 
standards for dishwashers, and the standards levels that DOE is 
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 dishwasher 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 five TSLs for dishwashers. DOE developed 
TSLs that combine efficiency levels for each analyzed dishwasher class. 
DOE presents the results for the TSLs in this document, while the 
results for all efficiency levels that DOE analyzed are in the direct 
final rule TSD.
    Table V.1 presents the TSLs and the corresponding efficiency levels 
that DOE has identified for potential amended energy conservation 
standards for dishwashers. TSL 5 represents the max-tech energy 
efficiency for both product classes and corresponds to EL 4 for 
standard-size dishwashers and EL

[[Page 31451]]

2 for compact-size dishwashers. TSL 4 is the TSL that maximizes net 
benefits at a 3-percent discount rate; this TSL represents the highest 
efficiency levels providing positive LCC savings, which comprises the 
gap-fill efficiency level between ENERGY STAR V. 6.0 and ENERGY STAR V. 
7.0 (EL 2) for standard-size dishwashers and max-tech efficiency level 
(EL 2) for compact-size dishwashers. TSL 3 is the Recommended TSL 
detailed in the Joint Agreement. TSL 3 maximizes net benefits at a 7-
percent discount rate; this TSL comprises the gap-fill efficiency level 
between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level (EL 
2) for standard-size dishwashers and the ENERGY STAR V. 6.0 level (EL 
1) for compact-size dishwashers. TSL 2 comprises the ENERGY STAR V. 6.0 
level (EL 1) for standard-size dishwashers and the max-tech efficiency 
level (EL 2) for compact-size dishwashers. TSL 1 represents EL 1 across 
both product classes and the ENERGY STAR V. 6.0 level. While 
representative ELs were included in the TSLs, DOE considered all 
efficiency levels as part of its analysis and included the efficiency 
levels with positive LCC savings in the TSLs.\125\
---------------------------------------------------------------------------

    \125\ Efficiency levels that were analyzed for this final rule 
are discussed in section IV.C.4 of this document. Results by 
efficiency level are presented in TSD chapters 8, 10, and 12.
[GRAPHIC] [TIFF OMITTED] TR24AP24.025

B. Economic Justification and Energy Savings

1. Economic Impacts on Individual Consumers
    DOE analyzed the economic impacts on dishwasher 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. Because the technologies to improve energy efficiency may 
also reduce water usage (as discussed in IV.C.1.b), annual operating 
costs include both energy and water consumption. 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 and water use, energy prices, energy and water 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.
    Table V.2 through Table V.5 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.
BILLING CODE 6450-01-P

[[Page 31452]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.026

[GRAPHIC] [TIFF OMITTED] TR24AP24.027

[GRAPHIC] [TIFF OMITTED] TR24AP24.028

[GRAPHIC] [TIFF OMITTED] TR24AP24.029

b. Consumer Subgroup Analysis
    In the consumer subgroup analysis, DOE estimated the impact of the 
considered TSLs on low-income households, senior-only households, and 
well-water households. Table V.6 and Table V.7 compare the average LCC 
savings and PBP at each efficiency level for the consumer subgroups 
with similar metrics for the entire consumer sample for standard-size 
dishwashers. In most cases, the average LCC savings and PBP for low-
income households, senior-only households, and well-water households at 
the considered efficiency levels are not substantially different from 
the average for all households. The well-users have reduced water 
operating costs and therefore receive less operating cost savings (and 
lower LCC savings). The senior subgroup has

[[Page 31453]]

slightly lower dishwasher usage frequency compared to the national 
sample and therefore also experience lower operating cost savings (and 
lower LCC savings).
    Chapter 11 of the direct final rule TSD presents the complete LCC 
and PBP results for the subgroups.
[GRAPHIC] [TIFF OMITTED] TR24AP24.030

[GRAPHIC] [TIFF OMITTED] TR24AP24.031


[[Page 31454]]


BILLING CODE 6450-01-C
c. Rebuttable Presumption Payback
    As discussed in section III.D.2 of this document, EPCA establishes 
a rebuttable presumption that an energy conservation standard is 
economically justified if the increased purchase cost for a product 
that meets the standard is less than three times the value of the 
first-year energy savings resulting from the standard. (42 U.S.C. 
6295(o)(2)(B)(iii)) In calculating a rebuttable presumption payback 
period for each of the considered TSLs, DOE used discrete values, and, 
as required by EPCA, based the energy use calculation on the DOE test 
procedures for dishwashers. In contrast, the PBPs presented in section 
V.B.1.a of this document were calculated using distributions that 
reflect the range of energy use in the field.
    Table V.8 presents the rebuttable-presumption payback periods for 
the considered TSLs for dishwashers. While DOE examined the rebuttable-
presumption criterion, it considered whether the standard levels 
considered for this rule are economically justified through a more 
detailed analysis of the economic impacts of those levels, pursuant to 
42 U.S.C. 6295(o)(2)(B)(i), that considers the full range of impacts to 
the consumer, manufacturer, Nation, and environment. The results of 
that analysis serve as the basis for DOE to definitively evaluate the 
economic justification for a potential standard level, thereby 
supporting or rebutting the results of any preliminary determination of 
economic justification.
[GRAPHIC] [TIFF OMITTED] TR24AP24.032

2. Economic Impacts on Manufacturers
    DOE performed an MIA to estimate the impact of amended energy 
conservation standards on manufacturers of dishwashers. The following 
section describes the expected impacts on manufacturers at each 
considered TSL. Chapter 12 of the 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 illustrate the estimated financial impacts 
(represented by changes in INPV) of potential amended energy 
conservation standards on manufacturers of dishwashers, as well as the 
conversion costs that DOE estimates manufacturers of dishwashers would 
incur at each TSL.
    To evaluate the range of cash-flow impacts on the dishwasher 
industry, DOE modeled two scenarios using different assumptions that 
correspond to the range of anticipated market responses to amended 
energy conservation standards: (1) a preservation of gross margin 
percentage scenario; (2) a tiered scenario, as discussed in section 
IV.J.2.d of this document. The preservation of gross margin percentage 
applies a ``gross margin percentage'' of 19.4 percent for both 
standard-size and compact-size product classes.\126\ 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.
---------------------------------------------------------------------------

    \126\ The gross margin percentage of 19.4 percent is based on a 
manufacturer markup of 1.24.
---------------------------------------------------------------------------

    The tiered scenario starts with the three different product 
manufacturer markups in the no-new-standards case (baseline, ENERGY 
STAR V. 6.0, and ENERGY STAR V. 7.0 \127\). This scenario reflects a 
concern about product commoditization at higher efficiency levels as 
efficiency differentiators are eliminated and manufacturer markups are 
reduced. The tiered scenario results in the lower (or larger in 
magnitude) bound to impacts of potential amended standards on industry.
---------------------------------------------------------------------------

    \127\ ENERGY STAR V. 7.0 corresponds to the 2022 ENERGY STAR 
Most Efficient qualification criteria.
---------------------------------------------------------------------------

    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 direct final rule publication year 
through the end of the analysis period (2024-2056). The ``change in 
INPV'' results refer to the difference in industry value between the 
no-new-standards case and standards case at each TSL. To provide 
perspective on the short-run cash flow impact, DOE includes a 
comparison of free cash flow between the no-new-standards case and the 
standards case at each TSL in the year before amended standards would 
take effect. This figure provides an understanding of the magnitude of 
the required conversion costs relative to the cash flow generated by 
the industry in the no-new-standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and product designs into 
compliance with potential amended standards. As described in section 
IV.J.2.c of this document, conversion cost investments occur between 
the year of publication of the direct final rule and the year by which 
manufacturers must comply with the new standard. The conversion costs 
can have a significant impact on the short-term cash flow of the 
industry 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.
BILLING CODE 6450-01-P

[[Page 31455]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.033

BILLING CODE 6450-01-C
    At TSL 1, the standard represents EL 1 across both standard-size 
and compact-size dishwashers and the ENERGY STAR V. 6.0 level. The 
change in INPV is expected to range from -7.5 percent to -0.8 percent. 
At this level, free cash flow is estimated to decrease by 8.5 percent 
compared to the no-new-standards case value of $52.3 million in the 
year 2026, the year before the standards year. Currently, approximately 
93 percent of domestic dishwasher shipments meet the efficiencies 
required at TSL 1. For standard-size dishwashers, which account for 
approximately 98 percent of annual shipments, 93 percent of shipments 
meet the efficiencies required. For compact-size dishwashers, which 
account for the remaining 2 percent of annual shipments, 87 percent of 
shipments meet the efficiencies required.
    The design options DOE analyzed for standard-size dishwashers 
include implementing electronic controls, soil sensing, multiple spray 
arms, improved water filters, a separate drain pump, and tub 
insulation. The design options DOE analyzed for compact-size 
dishwashers include implementing improved controls. At this level, 
capital conversion costs are minimal since the majority of products 
already meet the efficiency levels required. As with all the analyzed 
TSLs, conversion costs incorporate industry testing costs as 
manufacturers implement the cleaning performance test and re-rate all 
their existing, compliant models in accordance with the new appendix 
C2. 10 CFR appendix C2 to subpart of part 430. DOE expects industry to 
incur some re-flooring costs associated with standard-size dishwashers 
as manufacturers redesign baseline products to meet the efficiency 
levels required by TSL 1. In interviews, manufacturers stated that 
there are not re-flooring costs associated with compact-size 
dishwashers as those are typically not on display at big-box stores. 
DOE estimates capital conversion costs of $1.0 million and product 
conversion costs of $11.8 million. Conversion costs total $12.7 
million.
    Under the tiered manufacturer markup scenario, which is discussed 
in IV.J.2.d of this document, the key driver of impacts to INPV at TSL 
1 is the result of margin compression for both standard-size and 
compact-size dishwashers as manufacturers forfeit premiums and cut into 
margins as they try to maintain a competitively priced baseline 
product. Although only a small fraction of products (approximately 7 
percent of shipments) would need to be redesigned at this level, the 
margin compression under the tiered scenario has a disproportionately 
large impact on INPV, since most of the market (approximately 84 
percent of standard-size and compact-size dishwasher shipments) is at 
EL 1 (i.e., the ENERGY STAR V. 6.0 level) in the no-new-standards case.
    At TSL 2, the standard represents the ENERGY STAR V. 6.0 level (EL 
1) for standard-size dishwashers and the max-tech efficiency level (EL 
2) for compact-size dishwashers. The change in INPV is expected to 
range from -8.4 percent to -1.7 percent. At this level, free cash flow 
is estimated to decrease by 16.3 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before 
the standards year. Currently, approximately 92 percent of domestic 
dishwasher shipments meet the efficiencies required at TSL 2. As with 
TSL 1, 93 percent of standard-size dishwasher shipments meet the 
efficiencies required. For compact-size dishwashers, 21 percent of 
shipments currently meet the efficiencies required.
    The design options DOE analyzed for standard-size dishwashers are 
the same as at TSL 1. The design options analyzed for compact-size 
dishwashers include implementing the design options at TSL 1 as well as 
permanent magnet motors, improved filters, hydraulic system 
optimization, heater incorporated into base of tub, and reduced sump 
volume. The increase in

[[Page 31456]]

conversion costs from the prior TSL is entirely due to the higher 
efficiency level required for compact-size dishwashers. At TSL 2, all 
manufacturers of compact-size countertop dishwashers with four or more 
place settings and in-sink dishwashers with less than four place 
settings would need to redesign their products to meet the efficiencies 
required, as DOE is not aware of any currently available products in 
these two configurations that meet TSL 2. Manufacturer feedback and the 
engineering analysis indicate that redesigning these compact-size 
configurations to meet max-tech would require significant investment, 
both in terms of engineering resources and new tooling, relative to the 
size of the domestic compact-size dishwasher market. While it is 
technologically feasible for compact-size countertop dishwashers with 
four or more place settings and in-sink dishwashers with less than four 
place settings to meet TSL 2 (max-tech for compact-size dishwashers), 
manufacturers would need to determine whether the shipments volumes 
justify the level of investment required. DOE expects industry to incur 
the same re-flooring costs as at TSL 1. DOE estimates capital 
conversion costs of $6.0 million and product conversion costs of $17.0 
million. Conversion costs total $23.0 million.
    Under the tiered manufacturer markup scenario, the key driver of 
impacts to INPV at TSL 2 is the result of margin compression for both 
standard-size and compact-size dishwashers as manufacturers forfeit 
premiums and cut into margins in an attempt to maintain a competitively 
priced baseline product. In particular, because TSL 2 sets standards 
for compact-size dishwashers at max-tech, manufacturers lose their 
premium markup for high-efficiency compact-size products, contributing 
to a reduction in future revenues and INPV.
    At TSL 3, the standard represents the gap-fill efficiency level 
between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level (EL 
2) for standard-size dishwashers and the ENERGY STAR V. 6.0 level (EL 
1) for compact-size dishwashers. The change in INPV is expected to 
range from -20.2 percent to -13.1 percent. At this level, free cash 
flow is estimated to decrease by 97.1 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before 
the standards year. Currently, approximately 11 percent of domestic 
dishwasher shipments meet the efficiencies required at TSL 3. For 
standard-size dishwashers, 9 percent of current shipments meet the 
efficiencies required. As with TSL 1, 87 percent of compact-size 
dishwasher shipments meet the efficiencies required.
    The design options DOE analyzed for standard-size dishwashers 
include implementing the design options at TSL 1 and TSL 2 as well as 
improved control strategies, which could necessitate product redesign 
to more closely control water temperature, water fill volumes, etc. The 
design options analyzed for compact-size dishwashers are the same as 
for TSL 1. The increase in conversion costs from the prior TSL is 
entirely due to the increased efficiency level required for standard-
size dishwashers. In interviews, some manufacturers stated that meeting 
TSL 3 would involve physical improvements to system elements to enable 
tighter controls and better design tolerances, while maintaining 
certain product attributes valued by their consumers. Although 
manufacturers tended to agree that the key product attributes (in 
addition to energy use, water use, and cleaning performance) included 
drying performance, cycle duration, and noise levels, manufacturers 
identified different priorities and internal targets for those metrics. 
One manufacturer noted that maintaining the same normal cycle time 
across its dishwasher portfolio was a key design parameter, as this 
feature was part of its value proposition and marketing material. A 
different manufacturer emphasized that maintaining drying performance, 
particularly of plastic dishware, was a key concern for its consumer 
base. These manufacturers stated that they may need new tooling and 
some modifications to the assembly line to improve the system elements 
to meet TSL 3 efficiencies while maintaining these product attributes. 
DOE notes that since the May 2023 NOPR published, more manufacturers 
now offer standard-size dishwasher models that meet the TSL 3 
efficiencies. DOE believes that the recent introduction of more high-
efficiency standard-size dishwashers is largely in response to ENERGY 
STAR V. 7.0, which went into effect in July 2023. Of the 19 OEMs 
offering standard-size products, 16 OEMs offer products that meet the 
efficiency level required. DOE expects industry to incur more re-
flooring costs compared to TSL 2. DOE estimates capital conversion 
costs of $68.7 million and product conversion costs of $58.3 million. 
Conversion costs total $126.9 million.
    TSL 3 brings standards for standard-size dishwashers above ENERGY 
STAR V. 6.0 levels. Under the tiered scenario, the fraction of products 
that are eligible for any additional premium markups above baseline is 
further reduced as manufacturers sacrifice margins while seeking to 
maintain a low-price-point baseline model.
    At TSL 4, the standard represents the highest efficiency levels 
providing positive LCC savings, which comprise the gap-fill efficiency 
level between the ENERGY STAR V. 6.0 level and ENERGY STAR V. 7.0 level 
(EL 2) for standard-size dishwashers and max-tech efficiency level (EL 
2) for compact-size dishwashers. The change in INPV is expected to 
range from -21.2 percent to -14.0 percent. At this level, free cash 
flow is estimated to decrease by 104.8 percent compared to the no-new-
standards case value of $52.3 million in the year 2026, the year before 
the standards year. Currently, approximately 10 percent of domestic 
dishwasher shipments meet the efficiencies required at TSL 4. As with 
TSL 3, 9 percent of standard-size dishwasher shipments meet the 
efficiencies required. As with TSL 2, 21 percent of compact-size 
dishwasher shipments meet the efficiencies required.
    The design options DOE analyzed for standard-size dishwashers are 
the same as at TSL 3. The design options analyzed for compact-size 
dishwashers are the same as at TSL 2 and include implementing permanent 
magnet motors, improved filters, hydraulic system optimization, heater 
incorporated into base of tub, and reduced sump volume. The increase in 
conversion costs from the prior TSL is entirely due to the increased 
efficiency level required for compact-size dishwashers. As discussed 
previously, all manufacturers of compact-size countertop dishwashers 
with four or more place settings and in-sink dishwashers with less than 
four place settings would need to redesign their products to meet the 
efficiencies required, as DOE is not aware of any currently available 
products in these two configurations that meet TSL 4 (max-tech for 
compact-size dishwashers). Manufacturer feedback and the engineering 
analysis indicate that redesigning these compact-size dishwasher 
configurations to meet TSL 4 would require significant investment, both 
in terms of engineering resources and new tooling, relative to the size 
of the domestic compact-size dishwasher market. DOE expects industry to 
incur similar re-flooring costs compared to TSL 3. DOE estimates 
capital conversion costs of $73.7 million and product conversion costs 
of $63.5 million. Conversion costs total $137.2 million.

[[Page 31457]]

    At TSL 4, the large conversion costs result in 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.
    Under the tiered manufacturer markup scenario, one of the key 
drivers of impacts to INPV at TSL 4 is the result of margin compression 
for both standard-size and compact-size dishwashers as manufacturers 
forfeit premiums and cut into margins in an attempt to maintain a 
competitively priced baseline product. In particular, because TSL 4 
sets standards for compact-size dishwashers at max-tech, manufacturers 
lose their premium markups for high-efficiency compact-size products, 
contributing to a reduction in future revenues and INPV.
    At TSL 5, the standard represents the max-tech energy efficiency 
for both product classes and corresponds to EL 4 for standard-size 
dishwashers and EL 2 for compact-size dishwashers. The change in INPV 
is expected to range from -54.5 percent to -43.7 percent. At this 
level, free cash flow is estimated to decrease by 552.0 percent 
compared to the no-new-standards case value of $52.3 million in the 
year 2026, the year before the standards year. Currently, less than 1 
percent of domestic dishwasher shipments meet the efficiencies required 
at TSL 5. For standard-size dishwashers, DOE estimates that no 
shipments currently meet the efficiencies required. As with TSL 4, 21 
percent of compact-size dishwasher shipments meet the efficiencies 
required.
    The design options DOE analyzed for standard-size dishwashers 
include design options considered at the lower efficiency levels (i.e., 
electronic controls, soil sensors, multiple spray arms, improved water 
filters and control strategies, separate drain pump, tub insulation, 
hydraulic system optimization, water diverter assembly, temperature 
sensor, 3-phase variable-speed motor, and flow meter) and include 
additional design options such as condensation drying, including use of 
a stainless steel tub; flow-through heating implemented as an in-sump 
integrated heater; and control strategies. The design options analyzed 
for compact-size dishwashers are the same as at TSL 4. The increase in 
conversion costs from the prior TSL is entirely due to the increased 
efficiencies required for standard-size dishwashers.
    All manufacturers interviewed stated that meeting max-tech would 
necessitate significant platform redesign in order to meet the required 
efficiencies and maintain the product attributes that consumers desire. 
Manufacturers noted that investments in new tooling, equipment, and 
production line modifications may be necessary to implement a range of 
design options. Specifically, manufacturers discussed tooling for 
additional spray arms, new sump tooling, new stamping equipment, door 
opening systems, improved filtration systems, and new dish racks. 
Manufacturers would likely need to convert all existing plastic tub 
designs to stainless steel tubs, which would necessitate expanding 
existing stainless steel tub production capacity and retiring plastic 
injection equipment used for plastic tubs. None of the manufacturers 
interviewed, which together account for approximately 90 percent of 
dishwasher shipments, currently offer standard-size dishwashers that 
meet max-tech. Therefore, most manufacturers expressed technical 
uncertainty about the extent of the design changes and production line 
updates that would be needed to meet max-tech and satisfy their 
consumer base. Some manufacturers suggested they would explore new 
water purification technology systems for water reuse. Other 
manufacturers noted that meeting max-tech may necessitate new tub 
architectures, which would require significant capital investment. 
These manufacturers noted that if new technology was necessary (e.g., 
water purification systems) or if new tub architectures were required, 
the 3-year compliance period may be insufficient to complete the 
necessary product redesign and production facility updates. DOE 
estimates capital conversion costs of $432.0 million and product 
conversion costs of $249.0 million. Conversion costs total $681.0 
million.
    At TSL 5, the large conversion costs result in free cash flow 
dropping below zero in the years before the standards year. The 
negative free cash flow calculation indicates manufacturers may need to 
access cash reserves or outside capital to finance conversion efforts.
    TSL 5 sets the standard for all products as high as technologically 
feasible, leaving manufacturers no ability to differentiate products by 
efficiency under the tiered manufacturer markup scenario. Thus, all 
margins collapse to the baseline levels.
b. Direct Impacts on Employment
    To quantitatively assess the potential impacts of amended energy 
conservation standards on direct employment in the dishwasher industry, 
DOE used the GRIM to estimate the domestic labor expenditures and 
number of direct employees in the no-new-standards case and in each of 
the standards cases during the analysis period. For this direct final 
rule, DOE used the most up-to-date information available. DOE 
calculated these values using statistical data from the U.S. Census 
Bureau's 2021 ASM,\128\ BLS employee compensation data,\129\ results of 
the engineering analysis, and manufacturer interviews.
---------------------------------------------------------------------------

    \128\ U.S. Census Bureau, Annual Survey of Manufactures. 
``Summary Statistics for Industry Groups and Industries in the U.S. 
(2021).'' Available at www.census.gov/data/tables/time-series/econ/asm/2018-2021-asm.html (last accessed Nov. 22, 2023).
    \129\ U.S. Bureau of Labor Statistics. Employer Costs for 
Employee Compensation. September 12, 2023. Available at www.bls.gov/news.release/archives/ecec_12152023.pdf (last accessed Nov. 22, 
2023).
---------------------------------------------------------------------------

    Labor expenditures related to product manufacturing depend on the 
labor intensity of the product, the sales volume, and an assumption 
that wages remain fixed in real terms over time. The total labor 
expenditures in each year are calculated by multiplying the total MPCs 
by the labor percentage of MPCs. The total labor expenditures in the 
GRIM were then converted to total production employment levels by 
dividing production labor expenditures by the average fully burdened 
wage multiplied by the average number of hours worked per year per 
production worker. To do this, DOE relied on the ASM inputs: Production 
Workers Annual Wages, Production Workers Annual Hours, Production 
Workers for Pay Period, and Number of Employees. DOE also relied on the 
BLS employee compensation data to determine the fully burdened wage 
ratio. The fully burdened wage ratio factors in paid leave, 
supplemental pay, insurance, retirement and savings, and legally 
required benefits.
    The total 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 approximately 78 percent of standard-
size dishwashers are produced domestically. DOE estimates that no 
compact-size dishwashers are produced domestically. Therefore, overall, 
DOE estimates that approximately 76 percent of all covered dishwashers 
sold in the

[[Page 31458]]

United States are produced domestically.
    The domestic production employees estimate covers production line 
workers, including line supervisors, who are directly involved in 
fabricating and assembling products within the OEM facility. Workers 
performing services that are closely associated with production 
operations, such as materials handling tasks using forklifts, are also 
included as production labor. DOE's estimates only account for 
production workers who manufacture the specific products covered by 
this direct final rule.
    Non-production workers account for the remainder of the direct 
employment figure. The number of non-production employees covers 
domestic workers who are not directly involved in the production 
process, such as sales, engineering, human resources, management, etc. 
Using the number of domestic production workers calculated above, non-
production domestic employees are extrapolated by multiplying the ratio 
of non-production workers in the industry compared to production 
employees. DOE assumes that this employee distribution ratio remains 
constant between the no-new-standards case and standards cases.
    Using the GRIM, DOE estimates in the absence of new energy 
conservation standards there would be 3,950 domestic production and 
non-production workers for standard-size dishwashers in 2027 (the 
analyzed compliance year). To evaluate the range of cash-flow impacts 
on the dishwasher industry, DOE modeled two scenarios using different 
assumptions that correspond to the range of anticipated market 
responses to amended energy conservation standards: (1) a preservation 
of gross margin percentage scenario; (2) a tiered scenario, as 
discussed in section IV.J.2.d of this document. The preservation of 
gross margin percentage applies a ``gross margin percentage'' of 19.4 
percent for both standard-size and compact-size product classes. 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.
    The tiered scenario starts with the three different product 
manufacturer markups in the no-new-standards case (baseline, ENERGY 
STAR V. 6.0, and ENERGY STAR V. 7.0). This scenario reflects a concern 
about product commoditization at higher efficiency levels as efficiency 
differentiators are eliminated and manufacturer markups are reduced. 
The tiered scenario results in the lower (or larger in magnitude) bound 
to impacts of potential amended standards on industry.
    Each of the modeled scenarios results in a unique set of cash flows 
and corresponding INPV for each TSL. INPV is the sum of the discounted 
cash flows to the industry from the direct final rule publication year 
through the end of the analysis period (2024-2056). The ``change in 
INPV'' results refer to the difference in industry value between the 
no-new-standards case and standards case at each TSL. To provide 
perspective on the short-run cash flow impact, DOE includes a 
comparison of free cash flow between the no-new-standards case and the 
standards case at each TSL in the year before amended standards would 
take effect. This figure provides an understanding of the magnitude of 
the required conversion costs relative to the cash flow generated by 
the industry in the no-new-standards case.
    Conversion costs are one-time investments for manufacturers to 
bring their manufacturing facilities and product designs into 
compliance with potential amended standards. As described in section 
IV.J.2.c of this document, conversion cost investments occur between 
the year of publication of the direct final rule and the year by which 
manufacturers must comply with the new standard. The conversion costs 
can have a significant impact on the short-term cash flow of the 
industry 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.9 Table V.10 shows the range of the impacts of energy 
conservation standards on U.S. manufacturing employment in the 
standard-size dishwasher industry. As previously noted, DOE did not 
identify any U.S. manufacturing facilities producing compact-size 
dishwashers for the domestic market, and therefore does not present a 
range of direct employment impacts. The following discussion provides a 
qualitative evaluation of the range of potential impacts presented in 
Table V.10.
[GRAPHIC] [TIFF OMITTED] TR24AP24.034

    The direct employment impacts shown in Table V.10 represent the 
potential domestic employment changes that could result following the 
compliance date for the standard-size dishwashers in this direct final 
rule. The upper bound estimate corresponds to an increase in the number 
of domestic workers that would result from amended energy conservation 
standards if manufacturers continue to produce the same scope of 
covered products within the United States after compliance takes 
effect.

[[Page 31459]]

    To establish a conservative lower bound, DOE assumes all 
manufacturers would shift production to foreign countries or would 
shift to importing finished goods (versus manufacturing in-house). As 
previously discussed, the majority of standard-size dishwashers sold in 
the United States are manufactured in domestic production facilities. 
However, many major dishwasher OEMs with U.S. production facilities 
also have dishwasher manufacturing facilities located outside the 
United States. At lower TSLs (i.e., TSL 1 through TSL 4), DOE believes 
the likelihood of changes in production location due to amended 
standards are low due to the relatively minor production line updates 
required. However, at max-tech, both the complexity and cost of 
production facility updates increases, manufacturers are more likely to 
revisit their production location decisions. At max-tech, one 
manufacturer representing a large portion of the U.S. dishwasher market 
noted concerns about the level of investment and indicated the 
potential need to relocate production lines in order to remain 
competitive. In this direct final rule, DOE is adopting the Recommended 
TSL, which corresponds to the standard levels recommended in the Joint 
Agreement. As discussed in section III.B of this document, the Joint 
Agreement included a trade association, AHAM, which represents 16 
manufacturers of dishwashers. Additionally, DOE notes that the 
Recommended TSL for standard-size dishwashers corresponds to EL 2 and 
not max-tech (EL 4). Furthermore, most OEMs already make standard-size 
dishwashers that meet the Recommended TSL. Of the 19 OEMs offering 
standard-size products, 16 OEMs already offer standard-size dishwashers 
that meet the efficiency level required. Since most manufacturers with 
U.S. production facilities already manufacture standard-size 
dishwashers that meet the adopted levels, DOE expects that the 
likelihood of shifts in domestic production locations as a direct 
result of amended standards for standard-size dishwashers are 
relatively low.
    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, implementing the 
different design options analyzed for this direct final rule would 
require varying levels of resources and investment. At higher 
efficiency levels, manufacturers noted that balancing more stringent 
energy and water use requirements while maintaining the product 
attributes their consumers value becomes increasingly challenging. All 
manufacturers interviewed, which together account for approximately 90 
percent of industry shipments, noted that meeting the standard-size 
dishwasher max-tech efficiencies and cleaning performance requirement 
while maintaining internal targets for other product attributes such as 
drying performance, cycle duration, and noise levels, would require 
significant investment. None of the manufacturers interviewed currently 
offer a max-tech product, and they expressed technical uncertainty 
about the exact technologies and production line changes that would be 
needed to meet both the required efficiencies and the manufacturers' 
internal design standards. In interviews, several manufacturers 
expressed concerns that the 3-year time period between the announcement 
of the direct final rule and the compliance date of the amended energy 
conservation standard might be insufficient to design, test, and 
manufacture the necessary number of products to meet consumer demand. 
These manufacturers noted that the 3-year time period would be 
particularly problematic if the standard necessitated completely new 
tub architectures. However, because TSL 3 (i.e., the Recommended TSL, 
which corresponds to the levels recommended in the Joint Agreement) 
would not require max-tech efficiencies, DOE does not expect 
manufacturers to 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.'' \130\ Based 
on this classification, DOE did not identify any 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.
---------------------------------------------------------------------------

    \130\ 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 
Nov. 18, 2023).
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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 dishwasher 
manufacturers that take effect approximately 3 years before or after 
the 2027 compliance date (2024 to 2030). This information is presented 
in Table V.11.
BILLING CODE 6450-01-P

[[Page 31460]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.035


[[Page 31461]]


[GRAPHIC] [TIFF OMITTED] TR24AP24.036

    As shown in Table V.11, the rulemakings with the largest overlap of 
dishwasher OEMs include refrigerators, refrigerator-freezers, and 
freezers, consumer conventional cooking products, residential clothes 
washers, consumer clothes dryers, and miscellaneous refrigeration 
products, which are all part of the multi-product Joint Agreement 
submitted by interested parties.\131\ As detailed in the multi-product 
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. 55 at p. 3)
---------------------------------------------------------------------------

    \131\ 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. 55 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. See section IV.J.3 of this 
document for stakeholder comments about cumulative regulatory burden. 
See Table V.12 for a comparison of the estimated compliance dates based 
on EPCA-specified timelines and the compliance dates detailed in the 
Joint Agreement.

[[Page 31462]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.037

BILLING CODE 6450-01-C
3. National Impact Analysis
    This section presents DOE's estimates of the national energy 
savings, NWS, and the NPV of consumer benefits that would result from 
each of the TSLs considered as potential amended standards.
a. Significance of Energy and Water Savings
    To estimate the energy and water savings attributable to potential 
amended standards for dishwashers, DOE compared their energy and water 
consumption under the no-new-standards case to their anticipated energy 
and water consumption under each TSL. The savings are measured over the 
entire lifetime of products purchased in the 30-year period that begins 
in the year of anticipated compliance with amended standards (2027-
2056). Table V.13 and Table V.14 present DOE's projections of the 
national energy and water savings for each TSL considered for 
dishwashers. The savings were calculated using the approach described 
in section IV.H.2 of this document.
[GRAPHIC] [TIFF OMITTED] TR24AP24.038

[GRAPHIC] [TIFF OMITTED] TR24AP24.039

    OMB Circular A-4 \132\ 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

[[Page 31463]]

revised standards.\133\ The review timeframe established in EPCA is 
generally not synchronized with the product lifetime, product 
manufacturing cycles, or other factors specific to dishwashers. Thus, 
such results are presented for informational purposes only and are not 
indicative of any change in DOE's analytical methodology. The NES and 
NWS sensitivity analysis results based on a 9-year analytical period 
are presented in Table V.15 and Table V.16. The impacts are counted 
over the lifetime of dishwashers purchased during the period 2027-2035.
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    \132\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024). 
DOE used the prior version of Circular A-4 (September 17, 2003) in 
accordance with the effective date of the November 9, 2023 version. 
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March 
11, 2024).
    \133\ 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.
[GRAPHIC] [TIFF OMITTED] TR24AP24.040

[GRAPHIC] [TIFF OMITTED] TR24AP24.041

b. Net Present Value of Consumer Costs and Benefits
    DOE estimated the cumulative NPV of the total costs and savings for 
consumers that would result from the TSLs considered for dishwashers. 
In accordance with OMB's guidelines on regulatory analysis,\134\ DOE 
calculated NPV using both a 7-percent and a 3-percent real discount 
rate. Table V.17 shows the consumer NPV results with impacts counted 
over the lifetime of products purchased during the period 2027-2056.
---------------------------------------------------------------------------

    \134\ U.S. Office of Management and Budget. Circular A-4: 
Regulatory Analysis. Available at www.whitehouse.gov/omb/information-for-agencies/circulars (last accessed April 10, 2024). 
DOE used the prior version of Circular A-4 (September 17, 2003) in 
accordance with the effective date of the November 9, 2023 version. 
Available at www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/circulars/A4/a-4.pdf (last accessed March 
11, 2024).
[GRAPHIC] [TIFF OMITTED] TR24AP24.042

    The NPV results based on the aforementioned 9-year analytical 
period are presented in Table V.18. The impacts are counted over the 
lifetime of products purchased during the period 2027-2035. As 
mentioned previously, such results are presented for informational 
purposes only and are not indicative of any change in DOE's analytical 
methodology or decision criteria.
[GRAPHIC] [TIFF OMITTED] TR24AP24.043


[[Page 31464]]


BILLING CODE 6450-01-C
    The previous results reflect the use of a default trend to estimate 
the change in price for dishwashers over the analysis period (see 
section IV.F.1 of this document). DOE also conducted a sensitivity 
analysis that considered one scenario with a lower rate of price 
decline than the reference case and one scenario with a higher rate of 
price decline than the reference case. The results of these alternative 
cases are presented in appendix 10C of the direct final rule TSD. In 
the high-price-decline case, the NPV of consumer benefits is higher 
than in the default case. In the low-price-decline case, the NPV of 
consumer benefits is lower than in the default case.
c. Indirect Impacts on Employment
    DOE estimates that amended energy conservation standards for 
dishwashers will reduce energy expenditures for consumers of those 
products, with the resulting net savings being redirected to other 
forms of economic activity. These expected shifts in spending and 
economic activity could affect the demand for labor. As described in 
section IV.N of this document, DOE used an input/output model of the 
U.S. economy to estimate indirect employment impacts of the TSLs that 
DOE considered. There are uncertainties involved in projecting 
employment impacts, especially changes in the later years of the 
analysis. Therefore, DOE generated results for near-term timeframes 
(2027-2056), where these uncertainties are reduced.
    The results suggest that the adopted standards are likely to have a 
negligible impact on the net demand for labor in the economy. The net 
change in jobs is so small that it would be imperceptible in national 
labor statistics and might be offset by other, unanticipated effects on 
employment. Chapter 16 of the direct final rule TSD presents detailed 
results regarding anticipated indirect employment impacts.
4. Impact on Utility or Performance of Products
    As 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 this section, DOE has concluded that the standards 
adopted in this direct final rule will not lessen the utility or 
performance of the dishwashers under consideration in this rulemaking. 
Manufacturers of these products currently offer units that meet or 
exceed the adopted standards.
    In making this determination for this direct final rule, DOE 
considered comments it had received in response to the May 2023 NOPR.
a. Cleaning Performance
    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 
dishwasher reflects, in part, a consumer using the dishwasher to 
achieve an acceptable level of cleaning performance. As discussed, the 
amended standards adopted in this direct final rule require the use of 
the test procedure at appendix C2, which includes a minimum cleaning 
performance threshold as a condition for a valid test cycle to 
determine if a dishwasher, when tested according to the DOE test 
procedure, ``completely washes a normally soiled load of dishes,'' so 
as to better represent consumer use of the product. See section 1 of 
appendix C2 for definition of ``normal cycle'' and section 4 of 
appendix C2 for the cleaning index threshold.
    In response to the May 2023 NOPR, ASAP et al. asserted that 
analyses from DOE and EPA demonstrate that dishwashers meeting the 
proposed standards meet consumer expectations in various performance 
areas. (ASAP et al. No. 46 at pp. 2-3) ASAP et al. commented that as 
part of the development of ENERGY STAR V. 7.0, EPA used web-scraped and 
Consumer Reports data to understand how dishwashers meeting the 
proposed requirements perform across a range of metrics that impact 
consumer satisfaction and found standard-size dishwashers on the market 
that could meet the ENERGY STAR Most Efficient 2022 criteria \135\ 
while achieving the cleaning performance threshold. (Id.) ASAP et al. 
additionally commented that EPA's analysis indicated that standard-size 
dishwashers are able to meet EL 3, while providing high consumer 
satisfaction across various areas of performance such as drying time, 
cycle time, and noise performance. (Id.)
---------------------------------------------------------------------------

    \135\ 2022 ENERGY STAR Most Efficient Requirement for 
Dishwashers: www.energystar.gov/sites/default/files/ENERGY%20STAR%20Most%20Efficient%202022%20Dishwasher%20Final%20Criteria%20Memo_0.pdf.
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    Samsung supported DOE's revised cleaning index threshold value of 
70 and commented that the minimum cleaning index would help incentivize 
dishwasher designs that do not require multiple runs to perform basic 
functionality, thereby avoiding increased energy use from running 
multiple cycles. (Samsung, No. 52 at p. 3) NEEA also commented in 
support of DOE's requirement of a certain cleaning performance level 
for the normal cycle to ensure dishwasher cleaning performance is 
maintained. NEEA noted that NEEA's dishwasher market research, 
previously shared confidentially with DOE, shows no correlation between 
cleaning performance and efficiency for current models. (NEEA, No. 53 
at p. 2)
    AHAM commented that DOE must further evaluate the impact of amended 
standards on performance despite the newly finalized cleaning 
performance metric in the test procedure. AHAM stated that the test 
procedure requirement alone is not sufficient to satisfy EPCA's 
requirement that standards not result in the unavailability of products 
with performance characteristics substantially the same as those 
currently available. AHAM commented that DOE has not presented any 
consumer data to demonstrate that its test and/or threshold are 
relevant to consumers nor has it produced sufficient data to 
demonstrate that its proposed standards will not result in a 
degradation of performance. (AHAM, No. 51 at p. 10).
    Sub-Zero asserted that the degradation in dishwasher performance 
that will result from the proposed standards will affect consumer 
opinions of Sub-Zero's products and disproportionately harm the segment 
of the market in which Sub-Zero operates. (Sub-Zero, No. 47 at pp. 1-2)
    CEI et al. stated that adverse impacts of the agency's past 
dishwasher rules have necessitated compensating behaviors that are not 
only costly and inconvenient, but also undercut any climate benefits. 
(CEI et al., No. 48 at p. 7) CEI et al. commented that the reduced 
useful life of compliance models is also environmentally detrimental, 
as it results in greater energy and other resources going into the 
manufacturing and disposal of dishwashers. (CEI et al., No. 48 at p. 7)
    Zycher commented that DOE claims the proposed standard would not 
reduce the utility or performance of the products under consideration 
in this rulemaking, but Zycher asserted that the

[[Page 31465]]

only analytical support for this statement provided by DOE is that 
manufacturers of these products currently offer units that meet or 
exceed the proposed standards. (Zycher, No. 49 at pp. 2, 4, 28) Zycher 
stated that this argument does not provide any information about the 
relative ``utility or performance'' of such options. (Id.)
    In response to comments from stakeholders over concerns about 
product cleaning performance for standard-size dishwashers at EL 2, DOE 
reiterates that the amended standards adopted in this direct final rule 
require the use of the test procedure at appendix C2, which includes a 
minimum cleaning performance threshold to determine if a dishwasher, 
when tested according to the DOE test procedure, ``completely washes a 
normally soiled load of dishes,'' so as to better represent consumer 
use of the product. That is, the new test procedure at appendix C2 
ensures that the rated energy and water consumption of dishwashers are 
representative of a consumer-acceptable level of cleaning performance.
    DOE further references its investigatory testing data that was 
presented in the January 2022 Preliminary Analysis, which demonstrated 
that standard-size dishwashers within the test sample could achieve the 
threshold cleaning performance finalized in the January 2023 TP Final 
Rule at all soil levels for efficiency levels up to EL 3. DOE also 
notes that feedback from some manufacturers during confidential 
interviews indicates that the adopted standards are achievable without 
impacting consumer utility. Additionally, DOE identified dishwasher 
models that are certified as 2024 ENERGY STAR Most Efficient,\136\ 
which specifies equivalent cleaning performance requirements as 
appendix C2 but has more stringent water and energy use criteria than 
the standards adopted in this document. Some of these models met or 
exceeded EL 4, indicating that max-tech efficiency dishwashers that can 
achieve the threshold cleaning performance on the normal cycle 
currently exist on the market. In fact, DOE's investigatory testing 
data shows that the best performing unit at all soil levels is a unit 
that meets the adopted standard level. DOE also did not observe any 
correlation between cleaning indices and efficiency level in its test 
sample and units that would meet the amended standard have the same 
average cleaning index across all soil levels as units that would not 
meet the amended standard.
---------------------------------------------------------------------------

    \136\ ENERGY STAR Most Efficient 2024. ``Recognition Criteria 
Residential Dishwashers.'' 2024. Available online at 
www.energystar.gov/sites/default/files/asset/document/Dishwasher%20ENERGY%20STAR%20Most%20Efficient%202024%20Final%20Criteria.pdf.
---------------------------------------------------------------------------

    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 in which the signatories reaffirmed 
the standards recommended in the Joint Agreement.\137\ In particular, 
the letter states that there are more than 400 dishwasher models that 
are certified to the current ENERGY STAR V. 7.0 level, which is more 
stringent that the standards recommended in the Joint Agreement, that 
are also required to meet a minimum cleaning index threshold of 65. The 
signatories stated that the prevalence of these ENERGY STAR certified 
dishwashers indicated that dishwashers meeting the recommended standard 
levels can provide cleaning performance at levels consistent with those 
on the market today.
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    \137\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
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    Accordingly, DOE has concluded, based not only on its newly adopted 
test procedure, but also on confirmatory testing data, confidential 
interviews, and ENERGY STAR's performance requirements, that the 
standards adopted here will not negatively impact dishwasher 
performance.
    CEI et al. commented that the previous rulemakings affecting 
existing energy and water efficiency measures for dishwashers have 
already led to widespread and well-documented consumer dissatisfaction 
and that the proposed rulemaking would exacerbate the issues. (CEI et 
al., No. 48 at p. 2)
    Whirlpool commented that it was concerned with any amended 
dishwashers energy conservation standards beyond EL 1. Whirlpool 
commented that the proposed rule would lessen the utility and 
performance of dishwashers, especially as compared to consumer 
expectations of dishwashers today, and the experiences from past 
dishwashers that consumers may have owned. (Whirlpool, No. 45 at pp. 3, 
4) Whirlpool also commented that DOE should not take any action that 
would potentially degrade the performance or lower the utility of 
dishwashers, especially because dishwashers have among the lowest 
household penetration rates of any major appliance in U.S. households. 
(Id. at p. 4) Whirlpool also asserted that the new cleaning index 
requirement does not adequately correlate to real-world consumer 
satisfaction and that consumers will perform compensatory behaviors to 
make up for the loss in cleaning performance. (Id. at p. 5) Whirlpool 
stated that lowering the energy and water consumption of a dishwasher 
further will degrade cleaning and drying performance for consumers, and 
create negative rebound effects, thus making it less attractive for 
many consumers to own and use their dishwashers. (Whirlpool, No. 45 at 
p. 6) Whirlpool commented that DOE should work collaboratively to 
increase overall penetration of the already energy and water efficient 
appliances but the proposed rule may disincentivize increased 
penetration and utilization as dishwashers offer consumers lower 
utility and performance benefits. (Id. at p. 3)
    AHAM asserted that further cost-effective efficiency gains may 
threaten performance and product functionality as opportunities for 
additional energy and water savings beyond those already achieved are 
severely diminished as products are near maximum efficiency under 
available technology. (AHAM, No. 51 at pp. 1-2) AHAM noted that while 
DOE does account for the cleaning performance outcome, DOE does not 
account for the relationship of cleaning performance to other 
performance elements in the dishwasher system including washing 
temperatures, length of washing cycles, types and amounts of detergent 
applied, and mechanics (power). (Id. at pp. 10-11) AHAM commented that 
reducing one aspect of wash performance, such as energy or water, can 
lead to an impact on these other performance elements. (Id. at p. 11) 
AHAM commented that the test procedure's cleaning performance metric 
ignores all performance aspects other than cleaning performance. AHAM 
stated that AHAM DW-2-2020, which DOE proposed to use in appendix C2 
for the determination of cleaning performance was primarily designed to 
address performance in terms of redeposition of soils and the soils 
were selected with that in mind. AHAM stated that AHAM DW-2-2020 does 
not assess greasy or detergent buildup over time, which it stated is an 
issue for the majority of dishwasher users who pre-rinse their dishes. 
AHAM also commented that the test procedure does not address other 
elements of performance such as drying performance, cycle length, and 
noise. (Id.) AHAM stated that some of these performance factors, such 
as wash temperature, cannot be lowered

[[Page 31466]]

indefinitely because the wash temperature must be warm enough to 
activate the detergent and remove fatty soils, otherwise the dishwasher 
would lose its utility. AHAM stated that water heating is the biggest 
contributor to energy use and once water heating energy is reduced as 
much as possible, it leaves fewer options for manufacturers to consider 
other than lengthening cycles, reducing drying performance or 
eliminating drying altogether, or increasing the noise level of the 
dishwasher to allow for greater power, in order to maintain cleaning 
performance while also meeting more stringent standards. (Id.) AHAM 
asserted that by requiring energy and water levels and a cleaning 
performance level, DOE could force manufacturers to design dishwashers 
that satisfy DOE's test procedure requirements but do not satisfy 
consumers on all factors, including cleaning performance. Therefore, 
AHAM stated that DOE must assess the impact of its proposed standards 
from a more holistic perspective. (Id.) AHAM recommended that DOE issue 
a NODA or other notice that would provide data on the impact of these 
standards on performance and provide interested parties with an 
opportunity to comment. (Id.)
    Sub-Zero asserted that any standard beyond ENERGY STAR V. 6.0 
(i.e., EL 1) will force manufacturers to make significant design 
changes that lower a dishwasher's cleaning performance scores. Sub-Zero 
also asserted that the levers of performance and energy consumption 
have already been working against each other for years via serial 
rulemakings on dishwashers, but with the proposed standards, its 
consumers would be the most disappointed based on the consumer purchase 
price versus consumer expectations correlation. (Sub-Zero, No. 47 at p. 
1)
    CEI et al. stated that DOE has violated the ``features provision'' 
of EPCA, which prohibits setting an efficiency standard so stringent 
that it would sacrifice any desired product characteristics. CEI et al. 
asserted that by DOE's own admission, DOE has imposed standards on 
dishwashers that increase cycle times. (CEI et al., No. 48 at p. 3) CEI 
et al. also asserted that previous efficiency standards have led to 
other drawbacks by negatively affecting dishwasher reliability and 
durability, adversely impact cleaning performance, and undermining 
drying performance. (Id. at p. 4) CEI et al. additionally asserted that 
DOE's proposed rulemaking would exacerbate these issues and therefore 
would violate EPCA's features provision. (Id. at p. 5)
    DOE does not anticipate that significant design changes will be 
necessary for standard-size dishwashers to reach EL 2 because DOE's 
teardown analysis, described in chapter 5 of the direct final rule TSD, 
showed that existing products at EL 2 utilize the same design options 
as those at EL 1 with improved control strategies. Improved control 
strategies would allow manufacturers to more closely control water 
temperature and water fill volumes, thereby optimizing the wash cycle 
and minimizing losses. For these reasons, DOE does not expect any 
impact to utility or performance at the standards adopted in this 
direct final rule. As such, DOE's analysis indicates that it is 
possible to meet the adopted standards in this direct final rule 
without making significant design changes and without impacting a 
dishwasher's cleaning performance or other performance attributes, as 
discussed further in this section (regarding cleaning performance) and 
sections IV.H.2 (regarding impact on non-dishwasher cleaning patterns), 
V.B.4.b (regarding drying performance), and V.B.4.c (regarding cycle 
length) of this document.
    Furthermore, in this direct final rule, DOE is adopting standards 
for dishwashers that are consistent with the standards recommended in 
the Joint Agreement. Additionally, as previously discussed, on February 
14, 2024, DOE received a second joint statement from the same group of 
stakeholders that submitted the Joint Agreement in which the 
signatories reaffirmed the standards recommended in the Joint 
Agreement, and stated that they would not negatively affect features or 
performance, including cycle times.\138\
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    \138\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
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b. Drying Performance
    Whirlpool asserted that DOE's proposed standards for dishwashers 
will be difficult for manufacturers to meet while meeting consumer 
demand for dishwashers capable of drying dishes thoroughly. (Whirlpool, 
No. 45 at p. 5) Whirlpool stated that the low final rinse temperatures 
and shorter heated drying durations that would be required to meet 
stringent energy conservation standards beyond EL 1 would make it 
increasingly difficult to completely dry all items in the dishwasher. 
Whirlpool stated that DOE must not set standards beyond EL 1, which 
would further reduce the total allowable energy usage that 
manufacturers can dedicate to effective drying performance and further 
reduce consumer satisfaction with drying performance. (Id.)
    In response to concerns over drying performance, DOE expects 
existing drying options would continue to be available on dishwashers 
regardless of amended standards up to at least EL 3 because there are 
no unique drying technologies at EL2 and EL3. In the May 2023 NOPR TSD 
as well as in this final rule, DOE noted that dishwasher models could 
reach EL 2 or EL 3 with the same drying technology options on the 
regulated cycle as at EL 1 (see chapter 5 of this final rule TSD). DOE 
expects that any amended standards up to at least EL 3 would not stifle 
innovation around drying options and other features that could be 
implemented on dishwashers outside the regulated cycle.
    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.\139\ In particular, the letter 
states that the stakeholders do not anticipate the recommended 
standards will negatively affect features, which DOE assumes would also 
include drying performance.
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    \139\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
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c. Cycle Length
    CEI et al. stated that given the long cycle times and other issues 
with dishwashers traceable to current standards, this is the proper 
regulatory avenue that DOE should be pursuing. CEI et al. commented 
that DOE should be fixing the problems with existing dishwasher 
standards rather than making them worse with the proposed rule. CEI et 
al. stated DOE has previously taken steps to address longer cycle 
times, but the efforts were reversed. CEI et al. commented that 
corrective rulemakings should be revived and expanded to include all 
performance-related features that have been impacted by past 
dishwashers regulations. (CEI et al., No. 48 at pp. 7-8) CEI et al. 
commented that compliance with EPCA is best served by DOE regulations 
that address the consumer problems with dishwashers, not ones that 
exacerbate these problems. (Id.)
    In this rulemaking, DOE considered dishwasher performance, 
including comments raised about cycle times. In the January 2022 
Preliminary TSD, DOE provided data from its investigatory testing 
sample that determined cycle

[[Page 31467]]

time is not substantively correlated with energy and water consumption 
of the normal cycle. (See section 5.9 of the January 2022 Preliminary 
TSD). Additionally, the adopted standards are applicable to the 
regulated cycle type (i.e., normal cycle); manufacturers can continue 
to provide additional, non-regulated cycle types (e.g., quick cycles, 
pots and pans, heavy, delicates, etc.) for consumers that choose to 
utilize them. Specifically, DOE expects quick cycles, many of which 
clean a load within 1 hour or less would still be available on 
dishwasher models that currently offer such cycle types. DOE has 
determined that the adopted standards in this direct final rule are 
compliant with the applicable provisions of EPCA. Additionally, in this 
direct final rule, DOE is adopting standards for dishwashers that are 
consistent with the standards recommended in the Joint Agreement, which 
do not apply to any short-cycle product classes. Further, as previously 
discussed, on February 14, 2024, DOE received a second joint statement 
from the same group of stakeholders that submitted the Joint Agreement 
in which the signatories reaffirmed the standards recommended in the 
Joint Agreement.\140\ In particular, the signatories acknowledge that 
DOE's investigative testing shows that cycle times at the recommended 
levels for dishwashers are the same as dishwashers on the market today.
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    \140\ This document is available in the docket at: 
www.regulations.gov/comment/EERE-2019-BT-STD-0039-0059.
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    Finally, as noted previously, the Fifth Circuit Court of Appeals 
recently remanded to DOE the January 2022 Rule for further 
consideration. As noted elsewhere in this document, DOE has published 
an RFI regarding short-cycle products. 89 FR 17338.
d. Water Dilution
    Whirlpool commented that water dilution and soil and detergent 
redeposition remain an issue under amended standards beyond EL 1, and 
that DOE does not cite new technology in its supporting analysis to 
indicate that this problem will be resolved. (Whirlpool, No. 45 at p. 
5) As a result, Whirlpool asserted that according to its own test data, 
dishwasher cleaning performance will degrade under the proposed 
standards. (Id.)
    As noted in the May 2023 NOPR, while DOE recognizes that poor water 
dilution can impact cleaning performance, as mentioned elsewhere in 
this document (as well as the May 2023 NOPR and January 2022 
Preliminary TSD), DOE's testing and analysis indicates that 
satisfactory cleaning performance is achievable at all efficiencies. 
(See 88 FR 32514, 32533-32534 and chapter 5 of the May 2023 NOPR TSD 
and January 2022 Preliminary TSD). Additionally, the minimum cleaning 
index threshold requirement specified in the new appendix C2 ensures 
that cleaning performance will be maintained after the compliance date 
of any new standards.
e. Equipment Lifetime and Energy Savings
    CEI et al. commented that the reduced useful life of compliance 
models is also environmentally detrimental, as it results in greater 
energy and other resources going into the manufacturing and disposal of 
dishwashers. (CEI et al., No. 48 at p. 7)
    DOE determines the lifetime of dishwashers from an analysis of 
historical shipments, AHS and RECS data. See section IV.F.6 of this 
document for more information. No publicly available data show that the 
lifetime of a dishwasher is correlated with its efficiency level.
    Zycher asserted that energy savings per se are not relevant 
analytically because the economic benefits of energy savings are 
captured fully by purchasers of such appliances. Further, Zycher 
commented that there is no externality attendant upon energy 
consumption per se, and if energy savings are to be considered relevant 
for purpose of benefit/cost analysis, then the adverse effects or costs 
of reduction in energy consumption in terms of the quality of 
dishwasher performance in the context of this proposed rule must be 
included in the analysis. (Zycher, No. 49 at p. 3) Zycher also asserted 
that DOE's estimates of the annual cost savings are subject to 
uncertainty and the asserted benefits are so small that that from an 
analytical standpoint they cannot be regarded as benefits at all. 
Zycher further asserted that the proposed rule would force consumers to 
change their purchase choices in ways that have not and would not be 
observed in the absence of the proposed rule. Zycher commented that 
this demonstrates that the energy cost savings, even if the underlying 
calculations are accepted, must be accompanied by some explicit or 
implicit costs in terms of forgone quality dimensions of dishwasher 
performance, the value of which must be greater than the value of the 
purported energy cost savings. (Id. at p. 4)
    In regard to the purported adverse effects of reduction in energy 
consumption in terms of the quality of dishwasher performance, DOE does 
not expect any rebound effect due to reduced energy and water 
consumption in the standards case. More detailed discussion can be 
found in section IV.H.2 of this document regarding the rebound effect 
and in section V.B.4.a of this document regarding the standards' impact 
on the cleaning performance.
    In response to comments regarding the significance of annualized 
LCC savings, as described in section IV.E of this document, DOE's LCC 
analysis captures the variability of consumer's life cycle costs. For 
example, DOE's energy and water use analysis relied on RECS 2020, which 
provides sample household's dishwasher usage frequency information 
ranging from one to 21 cycles per week. DOE also considered the 
variability of energy and water costs based on the sample household's 
geographic location, as well as the range of product lifetime. Taking 
into account the variability of those inputs allows DOE to observe the 
full range of LCC savings and to understand the distribution of 
results, enabling a more informed evaluation of the potential impact of 
the adopted standards. DOE presents all statistic results of LCC 
savings in chapter 8 of the direct final rule TSD. Based on the LCC 
savings estimates of 10,000 household samples, 97 percent of the sample 
households would either not be affected (11 percent) or experience a 
positive savings (86 percent). The weighted average LCC savings are $17 
for the selected TSL which is significantly different from zero. In 
addition, DOE's decision on amended standards is not solely determined 
by LCC savings. While they play an important 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 the manufacturers.
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.d 
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

[[Page 31468]]

determination, DOE is providing DOJ with copies of the 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 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 of 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 dishwashers is expected to yield environmental benefits 
in the form of reduced emissions of certain air pollutants and 
greenhouse gases. Table V.19 provides DOE's estimate of cumulative 
emissions reductions expected to result from the TSLs considered in 
this rulemaking. The emissions were calculated using the multipliers 
discussed in section III.C of this document. DOE reports annual 
emissions reductions for each TSL in chapter 13 of the direct final 
rule TSD.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TR24AP24.044

    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 dishwashers. 
Section IV.L of this document discusses the estimated SC-CO2 
values that DOE used. Table V19 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 
Recommended TSL in chapter 14 of the direct final rule TSD.

[[Page 31469]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.045

    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 dishwashers. Table V.21 presents the value of the CH4 
emissions reduction at each TSL, and Table V.22 presents the value of 
the N2O emissions reduction at each TSL. The time-series of 
annual values is presented for the Recommended TSL in chapter 14 of the 
direct final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR24AP24.046

[GRAPHIC] [TIFF OMITTED] TR24AP24.047

    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 dishwashers. The 
dollar-per-ton values that DOE used are discussed in section IV.L of 
this document. Table V.23 presents the

[[Page 31470]]

present value for NOX emissions reduction for each TSL 
calculated using 7-percent and 3-percent discount rates, and Table V.24 
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 Recommended TSL in chapter 14 of the direct 
final rule TSD.
[GRAPHIC] [TIFF OMITTED] TR24AP24.048

[GRAPHIC] [TIFF OMITTED] TR24AP24.049

    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.25 presents the NPV values that result from adding the 
estimates of the economic benefits resulting from reduced GHG and 
NOX and SO2 emissions to the NPV of consumer 
benefits calculated for each TSL considered in this rulemaking. The 
consumer benefits are domestic U.S. monetary savings that occur as a 
result of purchasing the covered dishwashers, and are measured for the 
lifetime of products shipped during the period 2027-2056. The climate 
benefits associated with reduced GHG emissions resulting from the 
adopted standards are global benefits, and are also calculated based on 
the lifetime of dishwashers shipped during the period 2027-2056.

[[Page 31471]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.050

BILLING CODE 6450-01-C

C. Conclusion

    When considering new or amended energy conservation standards, the 
standards that DOE adopts for any type (or class) of covered dishwasher 
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 dishwashers at each TSL, beginning with the maximum 
technologically feasible level, to determine whether that level was 
economically justified. Where the max-tech level was not justified, DOE 
then considered the next most efficient level and undertook the same 
evaluation until it reached the highest efficiency level that is both 
technologically feasible and economically justified and saves a 
significant amount of energy.
    To aid the reader as DOE discusses the benefits and/or burdens of 
each TSL, tables in this section present a summary of the results of 
DOE's quantitative analysis for each TSL. In addition to the 
quantitative results presented in the tables, DOE also considers other 
burdens and benefits that affect economic justification. These include 
the impacts on identifiable subgroups of consumers who may be 
disproportionately affected by a national standard and impacts on 
employment.
    DOE also notes that the economics literature provides a wide-
ranging discussion of how consumers trade off upfront costs and energy 
savings in the absence of government intervention. Much of this 
literature attempts to explain why consumers appear to undervalue 
energy efficiency improvements. There is evidence that consumers 
undervalue future energy savings as a result of (1) a lack of 
information; (2) a lack of sufficient salience of the long-term or 
aggregate benefits; (3) a lack of sufficient savings to warrant 
delaying or altering purchases; (4) excessive focus on the short term, 
in the form of inconsistent weighting of future energy cost savings 
relative to available returns on other investments; (5) computational 
or other difficulties associated with the evaluation of relevant 
tradeoffs; and (6) a divergence in incentives (for example, between 
renters and owners, or builders and purchasers). Having less than 
perfect foresight and a high degree of uncertainty about the future, 
consumers may trade off these types of investments at a higher than 
expected rate between current consumption and uncertain future energy 
cost savings.
    In DOE's current regulatory analysis, potential changes in the 
benefits and costs of a regulation due to changes in consumer purchase 
decisions are included in two ways. First, if consumers 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 
and water 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 
and water 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

[[Page 31472]]

sensitivity variation according to household income.\141\
---------------------------------------------------------------------------

    \141\ P.C. Reiss and M.W. White. Household Electricity Demand, 
Revisited. Review of Economic Studies. 2005. 72(3): pp. 853-883. 
doi: 10.1111/0034-6527.00354.
---------------------------------------------------------------------------

    While DOE is not prepared at present to provide a fuller 
quantifiable framework for estimating the benefits and costs of changes 
in consumer purchase decisions due to an energy conservation standard, 
DOE is committed to developing a framework that can support empirical 
quantitative tools for improved assessment of the consumer welfare 
impacts of appliance standards. DOE has posted a paper that discusses 
the issue of consumer welfare impacts of appliance energy conservation 
standards, and potential enhancements to the methodology by which these 
impacts are defined and estimated in the regulatory process.\142\ DOE 
welcomes comments on how to more fully assess the potential impact of 
energy conservation standards on consumer choice and how to quantify 
this impact in its regulatory analysis in future rulemakings. 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.
---------------------------------------------------------------------------

    \142\ Sanstad, A. H. Notes on the Economics of Household Energy 
Consumption and Technology Choice. 2010. Lawrence Berkeley National 
Laboratory. Available at www1.eere.energy.gov/buildings/appliance_standards/pdfs/consumer_ee_theory.pdf (last accessed July 
1, 2021).
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1. Benefits and Burdens of TSLs Considered for Dishwashers Standards
    Table V.26 and Table V.27 summarize the quantitative impacts 
estimated for each TSL for dishwashers. The national impacts are 
measured over the lifetime of dishwashers purchased in the 30-year 
period that begins in the anticipated year of compliance with amended 
standards (2027-2056). The energy savings, emissions reductions, and 
value of emissions reductions refer to full-fuel-cycle results. The 
consumer operating savings are inclusive of energy and water. 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 notice in the absence of the social cost 
of greenhouse gases, including the Interim Estimates presented by the 
IWG. The efficiency levels contained in each TSL are described in 
section V.A of this document.
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[[Page 31474]]


[GRAPHIC] [TIFF OMITTED] TR24AP24.052

BILLING CODE 6450-01-C
    DOE first considered TSL 5, which represents the max-tech 
efficiency levels for both product classes. Specifically, for a 
standard-size dishwasher, this efficiency level includes design options 
considered at the lower efficiency levels (i.e., electronic controls, 
soil sensors, multiple spray arms, improved water filters and control 
strategies, separate drain pump, tub insulation, hydraulic system 
optimization, water diverter assembly, temperature sensor, 3-phase 
variable-speed motor, and flow meter) and condensation drying, 
including use of a stainless steel tub; flow-through heating 
implemented as an in-sump integrated heater; and control strategies. 
The majority of these design options reduce both energy and water use 
together.\143\ For a compact-size dishwasher, this efficiency level 
includes the design options considered at the lower efficiency levels 
(i.e., improved control strategies) and additionally includes the use 
of permanent magnet motor, improved filters, hydraulic system 
optimization, heater incorporated into base of tub, and reduced sump 
volume. Similar to standard-size dishwashers, the majority of these 
design options reduce both energy and water use together. TSL 5 would 
save an estimated 1.28 quads of energy and 0.92 trillion gallons of 
water, an amount DOE considers significant. Under TSL 5, the NPV of 
consumer benefit (inclusive of both energy and water) would be -$12.18 
billion using a discount rate of 7 percent, and -$20.12 billion using a 
discount rate of 3 percent.
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    \143\ As discussed previously in section IV.A.2 of this 
document, because the energy used to heat the water consumed by the 
dishwasher is included as part of the EAEU energy use metric, 
technologies that decrease water use also inherently decrease energy 
use.
---------------------------------------------------------------------------

    The cumulative emissions reductions at TSL 5 are 38.89 Mt of 
CO2, 5.73 thousand tons of SO2, 91.86 thousand 
tons of NOX, 0.03 tons of Hg, 406.30 thousand tons of 
CH4, and 0.23 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 5 is $2.20 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 5 is $1.52 billion using a 7-percent discount rate and $3.85 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 5 is -$8.46 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total

[[Page 31475]]

NPV at TSL 5 is -$14.08 billion. The estimated total NPV is provided 
for additional information; however, DOE primarily relies upon the NPV 
of consumer benefits when determining whether an amended standard level 
is economically justified.
    At TSL 5, the average LCC impact is a loss of $145 for standard-
size dishwashers and a $4 savings for compact-size dishwashers. The 
simple payback period is 15.9 years for standard-size dishwashers and 
5.5 years for compact-size dishwashers. The fraction of consumers 
experiencing a net LCC cost is 97 percent for standard-size dishwashers 
and 54 percent for compact-size dishwashers. Notably, for the standard-
size product class, which as discussed represents 98 percent of the 
market, TSL 5 (which includes EL 4 for this product class) would 
increase the first cost by $178. This associated increase in first cost 
at TSL 5 for standard-size dishwashers could impact the number of new 
shipments by approximately less than 2 percent annually due to 
consumers shifting to extending the lives of their existing dishwashers 
beyond their useful life, repairing instead of replacing, or 
handwashing their dishes. In the national impact analysis, DOE modeled 
a scenario where part of this 2-percent of consumers forgoing the 
purchase of a new dishwasher due to price increases will substitute to 
handwashing. This results in a small increase in energy and water use, 
which is then subtracted from the energy and water savings projected to 
result from the amended standards at TSL5.
    For the low-income consumer group, the average LCC impact is a loss 
of $29 for standard-size dishwashers and a savings of $62 for compact-
size dishwashers. The simple payback period is 6.6 years for standard-
size dishwashers and 2.3 years for compact-size dishwashers. The 
fraction of low-income consumers experiencing a net LCC cost is 46 
percent for standard-size dishwashers and 26 percent for compact-size 
dishwashers. For the senior-only households consumer group, the average 
LCC impact is a loss of $159 for standard-size dishwashers and a loss 
of $14 for compact-size dishwashers. The simple payback period is 19.8 
years for standard-size dishwashers and 6.8 years for compact-size 
dishwashers. The fraction of senior-only consumers experiencing a net 
LCC cost is 98 percent for standard-size dishwashers and 62 percent for 
compact-size dishwashers. For the consumer sub-group of well-water 
households, the average LCC impact is a loss of $162 for standard-size 
dishwashers and a loss of $19 for compact-size dishwashers. The simple 
payback period is 21.4 years for standard-size dishwashers and 6.9 
years for compact-size dishwashers. The fraction of well-water 
consumers experiencing a net LCC cost is 98 percent for standard-size 
dishwashers and 63 percent for compact-size dishwashers.
    At TSL 5, the projected change in INPV ranges from a decrease of 
$334.4 million to a decrease of $414.6 million, which corresponds to 
decreases of 54.5 percent and 43.7 percent, respectively. Industry 
conversion costs could reach $681.0 million at this TSL, as 
manufacturers work to redesign their portfolios of model offerings, 
transition their standard-size dishwasher platforms entirely to 
stainless steel tubs, and renovate manufacturing facilities to 
accommodate changes to the production line and manufacturing processes.
    DOE estimates that less than 1 percent of dishwasher shipments 
currently meet the max-tech levels. Standard-size dishwashers account 
for approximately 98 percent of annual shipments. Of the 19 standard-
size dishwasher OEMs, only one OEM, which accounts for approximately 2 
percent of basic models in the CCD, currently offers products that meet 
the max-tech efficiencies required. All manufacturers interviewed, 
which together account for approximately 90 percent of the industry 
shipments, expressed uncertainty as to whether they could reliably meet 
the standard-size dishwasher max-tech efficiencies and the cleaning 
performance threshold and noted meeting max-tech would require a 
platform redesign and significant investment in tooling, equipment, and 
production line modifications. Many manufacturers would need to 
increase production capacity of stainless steel tub designs. Some 
manufacturers noted that a max-tech standard could necessitate new tub 
architectures.
    For compact-size dishwashers, which account for the remaining 2 
percent of annual shipments, DOE estimates that 14 percent of shipments 
currently meet the required max-tech efficiencies. Of the five compact-
size dishwasher OEMs, two OEMs currently offer compact-size products 
that meet max-tech. At TSL 5, compact-size countertop dishwashers with 
four or more place settings and in-sink dishwashers with less than four 
place settings are not currently available in the market. Meeting TSL 5 
is technologically feasible for those products; however, DOE expects 
that it would take significant investment relative to the size of the 
compact-size dishwasher market to redesign products to meet the max-
tech efficiencies.
    Based on the above considerations, the Secretary concludes that at 
TSL 5 for dishwashers, the benefits of energy and water savings, 
emissions reductions, and the estimated monetary value of the health 
benefits and climate benefits from emissions reductions would be 
outweighed by the negative NPV of consumer benefits and the impacts on 
manufacturers, including the large potential reduction in INPV. At TSL 
5, a majority of standard-size dishwasher consumers (97 percent) would 
experience a net cost and the average LCC loss is $145 for this product 
class. Additionally, at TSL 5, manufacturers would need to make 
significant upfront investments to redesign product platforms and 
update manufacturing facilities. Some manufacturers expressed concern 
that they would not be able to complete product and production line 
updates within the 3-year conversion period. Consequently, the 
Secretary has concluded that TSL 5 is not economically justified.
    DOE next considered TSL 4, which represents the highest efficiency 
levels providing positive LCC savings. TSL 4 comprises the gap-fill 
efficiency level between the ENERGY STAR V. 7.0 level and the ENERGY 
STAR V. 6.0 level (EL 2) for standard-size dishwashers and the max-tech 
efficiency level for compact-size dishwashers. Specifically, for a 
standard-size dishwasher, this efficiency level includes design options 
considered at the lower efficiency levels (i.e., electronic controls, 
soil sensors, multiple spray arms, improved water filters, separate 
drain pump, and tub insulation) and additionally includes the use of 
improved control strategies. For a compact-size dishwasher, this 
efficiency level includes the design options considered at the lower 
efficiency levels (i.e., improved control strategies) and additionally 
includes the use of a permanent magnet motor, improved filters, 
hydraulic system optimization, heater incorporated into base of tub, 
and reduced sump volume. The majority of these design options for both 
standard-size and compact-size dishwashers reduce both energy and water 
use together. TSL 4 would save an estimated 0.34 quads of energy and 
0.26 trillion gallons of water, an amount DOE considers significant. 
Under TSL 4, the NPV of consumer benefit (inclusive of energy and 
water) would be $1.23 billion using a discount rate of 7 percent, and 
$2.95 billion using a discount rate of 3 percent.
    The cumulative emissions reductions at TSL 4 are 10.33 Mt of 
CO2, 1.53 thousand tons of SO2, 24.37 thousand

[[Page 31476]]

tons of NOX, 0.01 tons of Hg, 107.80 thousand tons of 
CH4, and 0.06 thousand tons of N2O. The estimated 
monetary value of the climate benefits from reduced GHG emissions 
(associated with the average SC-GHG at a 3-percent discount rate) at 
TSL 4 is $0.58 billion. The estimated monetary value of the health 
benefits from reduced SO2 and NOX emissions at 
TSL 4 is $0.40 billion using a 7-percent discount rate and $1.02 
billion using a 3-percent discount rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at TSL 4 is $2.21 
billion. Using a 3-percent discount rate for all benefits and costs, 
the estimated total NPV at TSL 4 is $4.56 billion. The estimated total 
NPV is provided for additional information; however, DOE primarily 
relies upon the NPV of consumer benefits when determining whether a 
proposed standard level is economically justified.
    At TSL 4, the average LCC impact is a savings of $17 for standard-
size dishwashers and $4 for compact-size dishwashers. The simple 
payback period is 3.9 years for standard-size dishwashers and 5.5 years 
for compact-size dishwashers. The fraction of consumers experiencing a 
net LCC cost is 3 percent for standard-size dishwashers and 54 percent 
for compact-size dishwashers.
    For the low-income consumer group, the average LCC impact is a 
savings of $21 for standard-size dishwashers and $62 for compact-size 
dishwashers. The simple payback period is 1.6 years for standard-size 
dishwashers and 2.3 years for compact-size dishwashers. The fraction of 
low-income consumers experiencing a net LCC cost is 2 percent for 
standard-size dishwashers and 26 percent for compact-size dishwashers. 
For the senior-only households consumer group, the average LCC impact 
is a savings of $13 for standard-size dishwashers and a loss of $14 for 
compact-size dishwashers. The simple payback period is 4.9 years for 
standard-size dishwashers and 6.8 years for compact-size dishwashers. 
The fraction of senior-only consumers experiencing a net LCC cost is 4 
percent for standard-size dishwashers and 62 percent for compact-size 
dishwashers. For the consumer sub-group of well-water households, the 
average LCC impact is a savings of $12 for standard-size dishwashers 
and a loss of $19 for compact-size dishwashers. The simple payback 
period is 5.5 years for standard-size dishwashers and 6.9 years for 
compact-size dishwashers. The fraction of well-water consumers 
experiencing a net LCC cost is 4 percent for standard-size dishwashers 
and 63 percent for compact-size dishwashers.
    At TSL 4, the projected change in INPV ranges from a decrease of 
$155.9 million to a decrease of $103.1 million, which corresponds to 
decreases of 21.2 percent and 14.0 percent, respectively. Industry 
conversion costs could reach $137.2 million at this TSL as some 
manufacturers of standard-size dishwashers redesign products to enable 
improved controls and better design tolerances and manufacturers of 
certain compact-size dishwashers redesign products to meet max-tech.
    DOE estimates that approximately 10 percent of dishwasher shipments 
currently meet the TSL 4 efficiencies, of which approximately 9 percent 
of standard-size dishwasher shipments and 14 percent of compact-size 
dishwasher shipments meet the required efficiencies. Compared to max-
tech, more manufacturers offer standard-size dishwashers that meet the 
required efficiencies. Furthermore, since the May 2023 NOPR, more 
manufacturers now offer standard-size dishwasher models that meet the 
TSL 4 efficiencies. DOE believes that the recent introduction of more 
high-efficiency standard-size dishwashers is largely in response to 
ENERGY STAR V. 7.0, which went into effect in July 2023. Of the 19 OEMs 
offering standard-size products, 16 OEMs offer products that meet the 
efficiency level required. For compact-size dishwashers, TSL 4 
represents the same efficiency level as for TSL 5. Just as with TSL 5, 
compact-size countertop dishwashers with four or more place settings 
and in-sink dishwashers with less than four place settings are not 
currently available in the market at TSL 4 levels. Meeting TSL 4 is 
technologically feasible for those products; however, DOE expects that 
it would take significant investment (nearly $11 million) relative to 
the size of the compact-size dishwasher market (no-new-standards case 
INPV of $15.4 million) for them to meet the max-tech efficiencies.
    Based upon the above considerations, the Secretary concludes that 
at TSL 4 for dishwashers, the benefits of energy and water savings, 
positive NPV of consumer benefits, emission reductions, and the 
estimated monetary value of the health benefits and climate benefits 
from emissions reductions would be outweighed by negative LCC savings 
for the senior-only households for the compact-size dishwasher product 
class and the high percentage of consumers with net costs for the 
compact-size dishwasher product class. Consequently, the Secretary has 
concluded that TSL 4 is not economically justified.
    DOE then considered the Recommended TSL (i.e., TSL 3), which 
comprises the gap-fill efficiency level between the ENERGY STAR V. 7.0 
level and the ENERGY STAR V. 6.0 level (EL 2) for standard-size 
dishwashers and the ENERGY STAR V. 6.0 level (EL 1) for compact-size 
dishwashers. Specifically, for a standard-size dishwasher, this 
efficiency level includes design options considered at the lower 
efficiency levels (i.e., electronic controls, soil sensors, multiple 
spray arms, improved water filters, separate drain pump, and tub 
insulation) and additionally includes the use of improved control 
strategies. For a compact-size dishwasher, this efficiency level 
represents the use of improved controls. The majority of these design 
options for both standard-size and compact-size dishwashers reduce both 
energy and water use together. The Recommended TSL would save an 
estimated 0.31 quads of energy and 0.24 trillion gallons of water, an 
amount DOE considers significant. Under the Recommended TSL, the NPV of 
consumer benefit (inclusive of energy and water) would be $1.23 billion 
using a discount rate of 7 percent, and $2.90 billion using a discount 
rate of 3 percent.
    The cumulative emissions reductions at the Recommended TSL are 9.48 
Mt of CO2, 1.41 thousand tons of SO2, 22.37 
thousand tons of NOX, 0.01 tons of Hg, 98.97 thousand tons 
of CH4, and 0.06 thousand tons of N2O. The 
estimated monetary value of the climate benefits from reduced GHG 
emissions (associated with the average SC-GHG at a 3-percent discount 
rate) at the Recommended TSL is $0.54 billion. The estimated monetary 
value of the health benefits from reduced SO2 and 
NOX emissions at the Recommended TSL is $0.37 billion using 
a 7-percent discount rate and $0.94 billion using a 3-percent discount 
rate.
    Using a 7-percent discount rate for consumer benefits and costs, 
health benefits from reduced SO2 and NOX 
emissions, and the 3-percent discount rate case for climate benefits 
from reduced GHG emissions, the estimated total NPV at the Recommended 
TSL is $2.13 billion. Using a 3-percent discount rate for all benefits 
and costs, the estimated total NPV at the Recommended TSL is $4.38 
billion. The estimated total NPV is provided for additional 
information; however, DOE primarily relies upon the NPV of consumer 
benefits when determining

[[Page 31477]]

whether a proposed standard level is economically justified.
    At the Recommended TSL, the average LCC impact is a savings of $17 
for standard-size dishwashers and $32 for compact-size dishwashers. The 
simple payback period is 3.9 years for standard-size dishwashers and 
0.0 years for compact-size dishwashers. The fraction of consumers 
experiencing a net LCC cost is 3 percent for standard-size dishwashers 
and 0 percent for compact-size dishwashers.
    For the low-income consumer group, the average LCC impact is a 
savings of $21 for standard-size dishwashers and $39 for compact-size 
dishwashers. The simple payback period is 1.6 years for standard-size 
dishwashers and 0.0 years for compact-size dishwashers. The fraction of 
low-income consumers experiencing a net LCC cost is 2 percent for 
standard-size dishwashers and 0 percent for compact-size dishwashers. 
For the senior-only households consumer group, the average LCC impact 
is a savings of $13 for standard-size dishwashers and $26 for compact-
size dishwashers. The simple payback period is 4.9 years for standard-
size dishwashers and 0.0 years for compact-size dishwashers. The 
fraction of senior-only consumers experiencing a net LCC cost is 4 
percent for standard-size dishwashers and 0 percent for compact-size 
dishwashers. For the consumer sub-group of well water households, the 
average LCC impact is a savings of $12 for standard-size dishwashers 
and $23 for compact-size dishwashers. The simple payback period is 5.5 
years for standard-size dishwashers and 0.0 years for compact-size 
dishwashers. The fraction of well water consumers experiencing a net 
LCC cost is 4 percent for standard-size dishwashers and 0 percent for 
compact-size dishwashers.
    At the Recommended TSL, the projected change in INPV ranges from a 
decrease of $148.8 million to a decrease of $96.7 million, which 
corresponds to decreases of 20.2 percent and 13.1 percent, 
respectively. Industry conversion costs could reach $126.9 million at 
this TSL as some manufacturers redesign standard-size products to 
enable improved controls and better design tolerances.
    DOE estimates that approximately 11 percent of dishwasher shipments 
currently meet the Recommended TSL efficiencies, of which approximately 
9 percent of standard-size dishwasher shipments and 87 percent of 
compact-size dishwasher shipments meet the required efficiencies. At 
this level, the decrease in conversion costs compared to TSL 4 is 
entirely due to the lower efficiency level required for compact-size 
dishwashers, as the efficiency level required for standard-size 
dishwashers is the same as for TSL 4 (EL 2). All the compact-size 
dishwasher OEMs currently offer products that meet the Recommended TSL. 
At this level, DOE expects manufacturers of compact-size dishwashers 
would implement improved controls, which would likely require minimal 
upfront investment.
    After considering the analysis and weighing the benefits and 
burdens, the Secretary has concluded that a standard set at the 
Recommended TSL for dishwashers would be economically justified. At 
this TSL, the shipments weighted-average LCC savings for both product 
classes is $17. The shipments weighted-average share of consumers with 
a net LCC cost for both product classes is 3 percent. For all consumer 
sub-groups, the LCC savings are positive and the net share of consumers 
with a net LCC cost is below 5 percent for both product classes. The 
FFC national energy and water savings are significant and the NPV of 
consumer benefits is $2.90 billion and $1.23 billion using both a 3-
percent and 7-percent discount rate respectively. 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 eight times 
higher than the maximum estimated manufacturers' loss in INPV. The 
standard levels at the Recommended TSL are economically justified even 
without weighing the estimated monetary value of emissions reductions. 
When those emissions reductions are included--representing $0.54 
billion in climate benefits (associated with the average SC-GHG at a 3-
percent discount rate), and $0.94 billion (using a 3-percent discount 
rate) or $0.37 billion (using a 7-percent discount rate) in health 
benefits--the rationale becomes stronger still.
    The adopted standards are applicable to the regulated cycle type 
(i.e., normal cycle) as specified by the DOE test procedures; 
manufacturers can continue to provide additional, non-regulated cycle 
types (e.g., quick cycles, pots and pans, heavy, delicates, etc.). 
Specifically, DOE expects quick cycles, many of which clean a load 
within 1 hour or less, and existing drying options would still be 
available on dishwasher models that currently offer such cycle types. 
DOE has no information suggesting that any aspect of this direct final 
rule would limit the other cycle options, especially quick cycles. 
Additionally, in the January 2022 Preliminary TSD, DOE provided data 
from its investigatory testing sample that determined cycle time is not 
substantively correlated with energy and water consumption of the 
normal cycle.\144\ Based on these results, DOE has determined that this 
direct final rule would not have any substantive impact to normal cycle 
durations.
---------------------------------------------------------------------------

    \144\ See section 5.5.1 of the January 2022 Preliminary TSD. 
Available at www.energy.gov/sites/default/files/2022-01/dw-tsd.pdf.
---------------------------------------------------------------------------

    The test procedure in appendix C2, which includes provisions for a 
minimum cleaning index threshold of 70 to validate the selected test 
cycle, will go into effect at such time as compliance is required with 
any amended energy conservation standards. At the Recommended TSL, both 
standard-size and compact-size dishwasher models achieving the 
efficiencies, as measured by appendix C2, including the cleaning 
performance threshold, are readily available on the market.
    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 considers amended standard 
levels for dishwashers by grouping the efficiency levels for each 
product class into TSLs and evaluates all analyzed efficiency levels in 
its LCC analysis and all efficiency levels with positive LCC savings 
for the NIA and MIA. For both standard-size and compact-size 
dishwashers, the adopted standard level represents the maximum energy 
savings that do not result in a large percentage of consumers 
experiencing a net LCC cost. The efficiency levels at the adopted 
standard level result in positive LCC savings for both product classes, 
significantly reduce the number of consumers experiencing a net cost, 
and reduce the decrease in INPV and conversion costs to the point where 
DOE has concluded they are economically justified, as discussed for the 
Recommended TSL in the preceding paragraphs.
    At the Recommended standard level for the standard-size product 
class, the average LCC savings are $17, the percentage of consumers 
experiencing a net cost is 3 percent (see Table V.3), and

[[Page 31478]]

the FFC energy savings are 0.3 quads. At the Recommended standard level 
for compact-size product class, the average LCC savings are $32 and 
there are no consumers that would experience a net cost. DOE concludes 
that there is economic justification to adopt the standards for 
standard-size and compact size dishwashers independent of each other.
    Therefore, based on the previous considerations, DOE adopts the 
energy conservation standards for dishwashers at the Recommended TSL.
    While DOE considered each potential TSL under the criteria laid out 
in 42 U.S.C. 6295(o) as discussed in the preceding paragraphs, DOE 
notes that the Recommended TSL for dishwashers adopted in this direct 
final rule is part of a multi-product Joint Agreement covering six 
rulemakings (refrigerators, refrigerator-freezers, and freezers; 
miscellaneous refrigeration products; consumer conventional cooking 
products; residential clothes washers; consumer clothes dryers; and 
dishwashers). 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. As discussed in 
section V.B.2.e of this document, many dishwasher OEMs also manufacture 
refrigerators, refrigerator-freezers, and freezers, miscellaneous 
refrigeration products, consumer conventional cooking products, 
residential clothes washers, and consumer clothes dryers. Rather than 
requiring compliance with five amended standards in a single year 
(2027),\145\ 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 May 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 required 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. 51 at pp. 
21-24) AHAM has submitted similar comments to other ongoing consumer 
product rulemakings.\146\ 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, about the need to align 
compliance dates for products that are typically designed or sold as 
matched pairs, and about the ability of their suppliers to ramp up 
production of key components. The Joint Agreement also provides 
additional years of regulatory certainty for manufacturers and their 
suppliers while still achieving the maximum improvement in energy 
efficiency that is technologically feasible and economically justified.
---------------------------------------------------------------------------

    \145\ The refrigerators, refrigerator-freezers, and freezers (88 
FR 12452); consumer conventional cooking products (88 FR 6818); 
residential clothes washers (88 FR 13520); consumer clothes dryers 
(87 FR 51734); and dishwashers (88 FR 32514) 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.
    \146\ 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-2017-BT-STD-0003-0069 (pp. 20-21) for refrigerators, 
refrigerator-freezers, and freezers; www.regulations.gov/comment/EERE-2020-BT-STD-0039-0031 (pp. 12-15) for miscellaneous 
refrigeration products; www.regulations.gov/comment/EERE-2014-BT-STD-0005-2285 (pp. 44-47) for consumer conventional cooking 
products; www.regulations.gov/comment/EERE-2017-BT-STD-0014-0464 
(pp. 40-44) for residential clothes washers; and 
www.regulations.gov/comment/EERE-2014-BT-STD-0058-0046 (pp. 12-13) 
for consumer clothes dryers.
---------------------------------------------------------------------------

    The amended energy conservation standards for dishwashers, which 
are expressed in EAEU and per-cycle water consumption, shall not exceed 
the values shown in Table V.28.
[GRAPHIC] [TIFF OMITTED] TR24AP24.053

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$) of the 
benefits from operating products that meet the adopted standards 
(consisting primarily of operating cost savings from using less energy 
and water), minus increases in product purchase costs, and 2) the 
annualized monetary value of the climate and health benefits.
    Table V.29 shows the annualized values for dishwashers under the 
Recommended TSL, expressed in 2022$. The results under the primary 
estimate are as follows.
    Using a 7-percent discount rate for consumer benefits and costs and 
NOX and SO2 reductions, and the 3-percent 
discount rate case for GHG social costs, the estimated cost of the 
adopted standards for dishwashers is $14.0 million per year in 
increased equipment installed costs, while the estimated annual 
benefits are $127.2 million from reduced equipment operating costs, 
$29.0 million in GHG reductions, and $34.3 million from reduced 
NOX and SO2 emissions. In this case, the net 
benefit amounts to $176.4 million per year.
    Using a 3-percent discount rate for all benefits and costs, the 
estimated cost of the adopted standards for dishwashers is $14.0 
million per year in increased equipment costs, while the estimated

[[Page 31479]]

annual benefits are $171.2 million in reduced operating costs, $29.0 
million from GHG reductions, and $50.8 million from reduced 
NOX and SO2 emissions. In this case, the net 
benefit amounts to $237.0 million per year.
BILLING CODE 6450-01-P

[[Page 31480]]

[GRAPHIC] [TIFF OMITTED] TR24AP24.054


[[Page 31481]]


[GRAPHIC] [TIFF OMITTED] TR24AP24.055

BILLING CODE 6450-01-C

VI. Severability

    DOE added a new paragraph (3) into section 10 CFR 430.32(f) to 
provide that each energy and water conservation for each dishwasher 
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 or 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 
(Apr. 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, OIRA in the 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 this preamble, this final 
regulatory action is consistent with these principles.
    Section 6(a) of E.O. 12866 also requires agencies to submit 
``significant regulatory actions'' to OIRA for review. OIRA has 
determined that this final regulatory action constitutes a 
``significant regulatory action'' within the scope of section 3(f) 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 and a final 
regulatory flexibility analysis 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 dishwashers under the procedures in 42 
U.S.C. 6295(p)(4). DOE notes that the NOPR for energy conservation 
standards for dishwashers published elsewhere in this issue of the 
Federal Register contains a regulatory flexibility analysis.

C. Review Under the Paperwork Reduction Act

    Manufacturers of dishwashers must certify to DOE that their 
products comply with any applicable energy conservation standards. In 
certifying compliance, manufacturers must test their products according 
to the DOE test procedures for dishwashers, including any amendments 
adopted for those test

[[Page 31482]]

procedures. DOE has established regulations for the certification and 
recordkeeping requirements for all covered consumer products and 
commercial equipment, including dishwashers. (See generally 10 CFR part 
429). The collection-of-information requirement for the certification 
and recordkeeping is subject to review and approval by OMB under the 
Paperwork Reduction Act (``PRA''). This requirement has been approved 
by OMB under OMB control number 1910-1400. Public reporting burden for 
the certification is estimated to average 35 hours per response, 
including the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing the collection of information.
    Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB Control Number.

D. Review Under the National Environmental Policy Act of 1969

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

E. Review Under Executive Order 13132

    E.O. 13132, ``Federalism,'' 64 FR 43255 (Aug. 10, 1999), imposes 
certain requirements on Federal agencies formulating and implementing 
policies or regulations that preempt State law or that have federalism 
implications. The Executive order requires agencies to examine the 
constitutional and statutory authority supporting any action that would 
limit the policymaking discretion of the States and to carefully assess 
the necessity for such actions. The Executive order also requires 
agencies to have an accountable process to ensure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that have federalism implications. On March 14, 2000, DOE 
published a statement of policy describing the intergovernmental 
consultation process it will follow in the development of such 
regulations. 65 FR 13735. DOE has examined this rule and has determined 
that it would not have a substantial direct effect on the States, on 
the relationship between the national government and the States, or on 
the distribution of power and responsibilities among the various levels 
of government. EPCA governs and prescribes Federal preemption of State 
regulations as to energy conservation for the products that are the 
subject of this 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 13132.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil 
Justice Reform,'' imposes on Federal agencies the general duty to 
adhere to the following requirements: (1) eliminate drafting errors and 
ambiguity, (2) write regulations to minimize litigation, (3) provide a 
clear legal standard for affected conduct rather than a general 
standard, and (4) promote simplification and burden reduction. 61 FR 
4729 (Feb. 7, 1996). Regarding the review required by section 3(a), 
section 3(b) of E.O. 12988 specifically requires that Executive 
agencies make every reasonable effort to ensure that the regulation (1) 
clearly specifies the preemptive effect, if any, (2) clearly specifies 
any effect on existing Federal law or regulation, (3) provides a clear 
legal standard for affected conduct while promoting simplification and 
burden reduction, (4) specifies the retroactive effect, if any, (5) 
adequately defines key terms, and (6) addresses other important issues 
affecting clarity and general draftsmanship under any guidelines issued 
by the Attorney General. Section 3(c) of 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 dishwashers 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 dishwashers, starting at the compliance 
date for the applicable standard.
    Section 202 of UMRA authorizes a Federal agency to respond to the 
content requirements of UMRA in any other statement or analysis that 
accompanies the 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

[[Page 31483]]

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 dishwashers that are designed to achieve the maximum 
improvement in energy efficiency that DOE has determined to be both 
technologically feasible and economically justified, as required by 
6295(o)(2)(A) and 6295(o)(3)(B). A full discussion of the alternatives 
considered by DOE is presented in chapter 17 of the TSD for this direct 
final rule.

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

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any rule that may affect family well-being. 
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 rule). As part of its rulemaking process, DOE 
must determine whether the energy conservation standards contained in 
this 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 rule. Moreover, as discussed further in section V.B.1 of 
this document, DOE has determined that for the 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.

[[Page 31484]]

    DOE has concluded that this regulatory action, which sets forth 
amended energy conservation standards for dishwashers, 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.\147\ 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.\148\
---------------------------------------------------------------------------

    \147\ The 2007 ``Energy Conservation Standards Rulemaking Peer 
Review Report'' is available at the following website: energy.gov/eere/buildings/downloads/energy-conservation-standards-rulemaking-peer-review-report-0 (last accessed Nov. 15, 2023).
    \148\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards.
---------------------------------------------------------------------------

M. Materials Incorporated by Reference

    The following standard appears in the amendatory text of this 
document and was previously approved for the locations in which it 
appears: AHAM DW-1-2020.

N. Congressional Notification

    As required by 5 U.S.C. 801, DOE will report to Congress on the 
promulgation of this rule prior to its effective date. The report will 
state that 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, 
Incorporation by reference, Intergovernmental relations, Reporting and 
recordkeeping requirements, Small businesses.

Signing Authority

    This document of the Department of Energy was signed on April 12, 
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 April 12, 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 (f) to read as follows:


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

* * * * *
    (f) Dishwashers. (1) All dishwashers manufactured on or after May 
30, 2013, shall meet the following standard--
    (i) Standard size dishwashers shall not exceed 307 kwh/year and 5.0 
gallons per cycle. Standard size dishwashers have a capacity equal to 
or greater than eight place settings plus six serving pieces as 
specified in AHAM DW-1-2020 (incorporated by reference, see Sec.  
430.3) using the test load specified in section 2.3 of appendix C1 or 
section 2.4 of appendix C2 to subpart B of this part, as applicable.
    (ii) Compact size dishwashers shall not exceed 222 kwh/year and 3.5 
gallons per cycle. Compact size dishwashers have a capacity less than 
eight place settings plus six serving pieces as specified in AHAM DW-1-
2020 (incorporated by reference, see Sec.  430.3) using the test load 
specified in section 2.3 of appendix C1 or section 2.4 of appendix C2 
to subpart B of this part, as applicable.
    (2) All dishwashers manufactured on or after April 23, 2027, shall 
not exceed the following standard--

[[Page 31485]]



------------------------------------------------------------------------
                                     Estimated annual  Maximum per-cycle
           Product class            energy use  (kWh/  water consumption
                                          year)            (gal/cycle)
------------------------------------------------------------------------
(i) Standard-size \1\ (>=8 place                  223                3.3
 settings plus 6 serving pieces)
 \2\..............................
(ii) Compact-size (<8 place                       174                3.1
 settings plus 6 serving pieces)
 \2\..............................
------------------------------------------------------------------------
\1\ The energy conservation standards in this table do not apply to
  standard-size dishwashers with a cycle time for the normal cycle of 60
  minutes or less.
\2\ Place settings are as specified in AHAM DW-1-2020 (incorporated by
  reference, see Sec.   430.3) and the test load is as specified in
  section 2.4 of appendix C2 to subpart B of this part.

    (3) The provisions of paragraph (f)(2) of this section 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 provision of this 
section.
* * * * *
[FR Doc. 2024-08212 Filed 4-23-24; 8:45 am]
BILLING CODE 6450-01-P