[Federal Register Volume 91, Number 128 (Tuesday, July 7, 2026)]
[Proposed Rules]
[Pages 42034-42083]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-13674]
[[Page 42033]]
Vol. 91
Tuesday,
No. 128
July 7, 2026
Part III
Department of Energy
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10 CFR Part 430
Energy Conservation Program: Procedures, Interpretations, and Policies
for Consideration of New or Revised Energy Conservation Standards and
Test Procedures for Consumer Products and Certain Commercial/Industrial
Equipment; Proposed Rule
Federal Register / Vol. 91 , No. 128 / Tuesday, July 7, 2026 /
Proposed Rules
[[Page 42034]]
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DEPARTMENT OF ENERGY
10 CFR Part 430
[EERE-2025-BT-STD-0001]
RIN 1904-AF72
Energy Conservation Program: Procedures, Interpretations, and
Policies for Consideration of New or Revised Energy Conservation
Standards and Test Procedures for Consumer Products and Certain
Commercial/Industrial Equipment
AGENCY: Office of Critical Minerals and Energy Innovation, Department
of Energy.
ACTION: Notice of proposed rulemaking and announcement of webinar.
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SUMMARY: The U.S. Department of Energy (``DOE'' or ``the Department'')
proposes to update the Department's current rulemaking methodology
titled, ``Procedures, Interpretations, and Policies for Consideration
of New or Revised Energy Conservation Standards and Test Procedures for
Consumer Products and Certain Commercial/Industrial Equipment''
(``Process Rule''). Specifically, DOE proposes to: make Appendix A
binding on DOE for certain actions; amend objectives and considerations
consistent with recent Executive orders and Department policies; add a
definition of ``significant energy savings''; re-instate the
comparative analysis requirement, described as a ``walk up'' approach;
include certain economic thresholds; re-instate the description of
clear and convincing evidence; and revert to language from the 2020
Process Rule text, with minor edits, in several sections. In addition
to requesting written comments on its proposal, DOE will also hold a
public meeting to discuss this proposal and obtain additional input.
DATES:
Comments: DOE will accept comments, data, and information regarding
all aspects of this notice of proposed rulemaking (``NOPR'') no later
than August 6, 2026.
Meeting: DOE will hold a public meeting via webinar on Wednesday,
July 15, 2026, from 1 to 4 p.m. ET. See section VI of this document,
``Public Participation,'' for webinar registration information,
participant instructions, and information about the capabilities
available to webinar participants.
ADDRESSES: Interested persons are encouraged to submit comments using
the Federal eRulemaking Portal at www.regulations.gov under docket
number EERE-2025-BT-STD-0001. Follow the instructions for submitting
comments. Alternatively, interested persons may submit comments,
identified by docket number EERE-2025-BT-STD-0001 and/or regulatory
information number (``RIN'') 1904-AF72, by any of the following
methods:
(1) Email: [email protected]. Include the docket
number EERE-2025-BT-STD-0001 and/or RIN 1904-AF72 in the subject line
of the message. Submit electronic comments in WordPerfect, Microsoft
Word, PDF, or ASCII file format, and avoid the use of special
characters or any form of encryption.
(2) Postal Mail: Appliance and Equipment Standards Program, U.S.
Department of Energy, Building Technologies Office, Mailstop CM-5B,
1000 Independence Avenue SW, Washington, DC, 20585-0121. If possible,
please submit all items on a compact disc (``CD''), in which case it is
not necessary to include printed copies.
(3) Hand Delivery/Courier: Appliance and Equipment Standards
Program, U.S. Department of Energy, Building Technologies Office, 1000
Independence Avenue SW, Washington, DC, 20585-0121. Telephone: (202)
287-1445. If possible, please submit all items on a CD, in which case
it is not necessary to include printed copies. No telefacsimiles
(``faxes'') will be accepted. For detailed instructions on submitting
comments and additional information on this process, see section VI
(Public Participation) of this document.
Docket: The docket for this activity, which includes Federal
Register notices, comments, and other supporting documents/materials,
is available for review at www.regulations.gov. All documents in the
docket are listed in the www.regulations.gov index. However, not all
documents listed in the index may be publicly available, such as
information that is exempt from public disclosure.
The docket web page can be found at www.regulations.gov/docket/EERE-2025-BT-STD-0001. The docket web page contains instructions on how
to access all documents, including public comments, in the docket. See
section VI of this document for information on how to submit comments
through www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Appliance Standards Program, U.S. Department of Energy, Office of
Critical Minerals and Energy Innovation, Building Technologies Office,
CM-5B, 1000 Independence Avenue SW, Washington, DC, 20585-0121. Email:
[email protected].
Mr. Pete Cochran, U.S. Department of Energy, Office of the General
Counsel, GC-33, 1000 Independence Avenue SW, Washington, DC, 20585-
0121. Telephone: (202) 586-4798. Email: [email protected].
For further information on how to submit a comment, review other
public comments and the docket, or participate in the public meeting,
contact the Appliance and Equipment Standards Program staff at (202)
287-1445 or by email: [email protected]. A plain
language summary of the rule is also available on the Federal e-
Rulemaking Portal at www.regulations.gov.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Summary of the Proposal
II. Authority and Background
A. Authority
B. Background
III. Discussion of General Comments
A. General Support for or Opposition to Standards
B. General Support for or Opposition to Changes to the Process
Rule
IV. Discussion of Comments and Proposed Revisions to Individual
Sections of the Process Rule
A. Objectives (Section 1)
B. Scope (Section 2)
C. Application (Section 3)
D. Setting Priorities for Rulemaking Activity (Section 4)
E. Coverage Determination Rulemakings (Section 5)
F. Significant Energy Savings
1. Background
2. Proposed Threshold for Significant Energy Savings
G. Process For Developing Energy Conservation Standards (Section
6)
1. Early Assessment and Pre-NOPR Stages
2. Comment Periods
3. Factors To Be Considered in Selecting a Proposed Standard
a. Private Impacts on Consumers
b. Impacts on the Environment
H. Policies on Selection of Standards (Section 7)
1. Market Competition and Innovational
2. Analytic Approaches To Address Balancing Factors in EPCA
3. Selection of Standard Level
I. Test Procedures (Section 8)
1. Early Assessment and Pre-NOPR Stage
2. Comment Periods
3. 180-Day Period
4. Industry Standards
5. General
J. ASHRAE Equipment (Section 9)
1. Limited Circumstances and Clear and Convincing Evidence
2. Timelines and Triggers
K. Direct Final Rules (Section 10) and Negotiated Rulemaking
L. Principles for Distinguishing Between Effective and
Compliance Dates (Section 11)
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M. Other Comments
N. Topics Considered in Other Processes
1. Analytical Methodology
2. Product-Specific Comments
O. Severability
V. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
B. Review Under Additional Executive Orders and Presidential
Memoranda
C. Review Under the Regulatory Flexibility Act
D. Review Under the Paperwork Reduction Act of 1995
E. Review Under the National Environmental Policy Act of 1969
F. Review Under Executive Order 13132
G. Review Under Executive Order 12988
H. Review Under the Unfunded Mandates Reform Act of 1995
I. Review Under the Treasury and General Government
Appropriations Act, 1999
J. Review Under Executive Order 12630
K. Review Under the Treasury and General Government
Appropriations Act, 2001
L. Review Under Executive Order 13211
M. Review Under the Information Quality Bulletin for Peer Review
VI. Public Participation
A. Participation in the Webinar
B. Procedure for Submitting Prepared General Statements for
Distribution
C. Conduct of the Webinar
D. Submission of Comments
VII. Approval of the Office of the Secretary
I. Summary of the Proposal
In this NOPR, DOE is proposing revisions to the Procedures,
Interpretations, and Policies for Consideration of New or Revised
Energy Conservation Standards and Test Procedures for Consumer Products
and Certain Commercial/Industrial Equipment, codified in the Code of
Federal Regulations (``CFR'') at 10 CFR part 430, subpart C, appendix
A, (``Appendix A'' or the Process Rule), which DOE generally uses to
prescribe energy conservation standards and test procedures for both
consumer products and commercial equipment pursuant to the Energy
Policy and Conservation Act of 1975 (EPCA), as amended (42 U.S.C. 6291,
et seq.; 42 U.S.C. 6311, et seq.). These proposed changes are intended
to provide increased certainty in DOE's rulemaking processes for
impacted stakeholders, and to better inform the Secretary in making his
or her determination under EPCA regarding both whether to regulate and,
when choosing to regulate, what standard level to select. In addition,
as discussed further below, the proposed process changes reflect the
best reading of the statute, consistent with Loper Bright Enters v.
Raimondo, 603 U.S. 369 (2024), and Michigan v. EPA, 576 U.S. 743
(2015).
In this document, DOE proposes to make appendix A binding on DOE
for certain actions; amend objectives and considerations consistent
with statute and recent Executive Orders and Department policies; add a
definition of ``significant energy savings''; re-instate the
comparative analysis requirement, described as a ``walk up'' approach;
include certain economic thresholds; re-instate the description of
clear and convincing evidence; and revert to language from the 2020
Process Rule text, with minor edits, in several sections. These
proposed revisions are summarized in Table I.1.
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[GRAPHIC] [TIFF OMITTED] TP07JY26.148
In addition, on January 20, 2025, the President issued Executive
Order 14154, ``Unleashing American Energy'' (E.O. 14154). 90 FR 8353
(Jan. 29, 2025). That order stated the policy of the United States with
regard to energy production and management. Among the stated elements
of this policy, sections 1(f) through (h) of E.O. 14154 cite the intent
to safeguard the American people's freedom to choose from a variety of
goods and appliances, including but not limited to lightbulbs,
dishwashers, washing machines, gas stoves, water heaters, toilets, and
shower heads, and
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to promote market competition and innovation within the manufacturing
and appliance industries; to ensure that the global effects of a rule,
regulation, or action shall, whenever evaluated, be reported separately
from its domestic costs and benefits, in order to promote sound
regulatory decision making and prioritize the interests of the American
people; and to guarantee that all Executive departments and agencies
(agencies) provide opportunity for public comment and rigorous, peer-
reviewed scientific analysis. Section 6 of the Executive order also
specifies policies for prioritizing accuracy in environmental analyses,
specifically instructing that for Federal regulatory processes, ``all
agencies shall adhere to only the relevant legislated requirements for
environmental considerations and any considerations beyond those
requirements are eliminated.'' Section 6 of the Executive order also
provides instructions regarding consideration of greenhouse gas
emissions and the ``social cost of carbon.''
Consistent with E.O. 14154, the Department, among other actions, is
evaluating existing policy regarding its approach for consideration of
new or amended energy conservation standards and test procedures for
consumer products and certain commercial and industrial equipment. The
Department has tentatively determined that the changes proposed herein
will provide certainty in DOE's rulemaking processes for impacted
stakeholders and will allow the Secretary to make the best-informed
determinations under EPCA regarding the regulation of covered products
and equipment.
In addition to the specific issues discussed in this NOPR, DOE
welcomes comment on all other aspects of the Process Rule that
interested parties believe could be improved or should be maintained.
II. Authority and Background
A. Authority
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, as codified). Title III, Part B \2\ of EPCA
established the Energy Conservation Program for Consumer Products Other
Than Automobiles. (42 U.S.C. 6291-6309, as codified). Title III, Part C
\3\ of EPCA, added by Public Law 95-619, Title IV, section 441(a),
established the Energy Conservation Program for Certain Industrial
Equipment, which sets forth a variety of provisions designed to improve
energy efficiency. (42 U.S.C. 6311-6317, as codified). Under EPCA,
DOE's energy conservation program consists essentially of four parts:
(1) testing, (2) labeling, (3) the establishment of Federal energy
conservation standards, and (4) certification and enforcement
procedures. Relevant provisions of EPCA specifically include
definitions (42 U.S.C. 6291; 42 U.S.C. 6311), test procedures (42
U.S.C. 6293; 42 U.S.C. 6314), labeling provisions (42 U.S.C. 6294; 42
U.S.C. 6315), energy conservation standards (42 U.S.C. 6295; 42 U.S.C.
6313), and the authority to require information and reports from
manufacturers (42 U.S.C. 6296; 42 U.S.C. 6316).
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\1\ All references to EPCA in this document refer to the statute
as amended through Energy Act of 2020, Public Law 116-260 (Dec. 27,
2020), which reflects 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 as Part A.
\3\ For editorial reasons, upon codification in the U.S. Code,
Part C was redesignated as Part A-1.
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Subject to certain criteria and conditions, DOE is required to
develop test procedures to measure the energy efficiency, energy use,
water use (as applicable), or estimated annual operating cost of each
covered product and covered equipment during a representative average
use cycle or period of use, and the statute further requires that the
test procedure not be unduly burdensome to conduct. (42 U.S.C. 6293; 42
U.S.C. 6314). Manufacturers of covered products must use the prescribed
DOE test procedure as the basis for certifying to DOE that their
product complies with the applicable energy conservation standards and
as the basis for any representations regarding the energy use or energy
efficiency of the product. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s); 42
U.S.C. 6314(d); and 42 U.S.C. 6316(a)). Similarly, DOE must use these
test procedures to determine whether the products or equipment comply
with the applicable energy conservation standards adopted pursuant to
EPCA. (42 U.S.C. 6295(s); 42 U.S.C. 6316(a)).
DOE must follow specific statutory criteria for prescribing new or
amended standards for covered products. EPCA requires that any new or
amended energy conservation standard for covered products (and at least
certain types of equipment) must be designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. (42 U.S.C. 6295(o)(2)(A); 42 U.S.C.
6313(a)(6)(A)-(C); 42 U.S.C. 6316(a)). Furthermore, for covered
consumer products and certain covered equipment, the new or amended
standard must result in a significant conservation of energy. (42
U.S.C. 6295(o)(3)(B); 42 U.S.C. 6316(a)). For other covered equipment
subject to ASHRAE Standard 90.1, the statute states that if DOE
determines that a standard higher than the ASHRAE level is appropriate,
the Department must determine that such standard would result in
significant additional conservation of energy and be supported by clear
and convincing evidence. (42 U.S.C. 6313(a)(6)(A)-(C)).
Moreover, DOE may not prescribe a standard: (1) for certain
products, if no test procedure has been established for the product, or
(2) if DOE determines by rule that the standard is not technologically
feasible or economically justified. (42 U.S.C. 6295(o)(3)(A)-(B); 42
U.S.C. 6313(a)(6)(A)-(C); 42 U.S.C. 6316(a)). In determining whether a
proposed standard is economically justified, DOE must determine whether
the benefits of the standard exceed its burdens. (42 U.S.C.
6295(o)(2)(B)(i); 42 U.S.C. 6313(a)(6)(B)(ii); 42 U.S.C. 6316(a)). 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 the manufacturers and
consumers;
(2) The savings in operating costs, throughout the estimated
average life of the products (i.e., life-cycle costs), compared with
any increase in the price of, or in the initial charges for, or
operating and maintaining expenses of, the products which are likely to
result from the imposition of 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 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 DOE considers relevant. (42 U.S.C.
6295(o)(2)(B)(i)(I)-(VII)) Furthermore, the new or amended standard
must result in a significant conservation of energy (42 U.S.C.
6295(o)(3)(B); 42 U.S.C. 6313(a)(6)(A)-(C); and 42 U.S.C. 6316(a)) and
comply
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with any other applicable statutory provisions.
Further, EPCA establishes a rebuttable presumption that a standard
is economically justified if the Secretary finds that the additional
cost to the consumer of purchasing a product complying with an energy
conservation standard level will be less than three times the value of
the energy savings during the first year that the consumer will receive
as a result of the standard, as calculated under the applicable test
procedure. (42 U.S.C. 6295(o)(2)(B)(iii); 42 U.S.C. 6316(a)).
Additionally, EPCA provides that a rule prescribing an energy
conservation standard for a type (or class) of covered products shall
specify a level of energy use or efficiency higher or lower than that
which applies (or would apply) for such type (or class) for any group
of covered products which have the same function or intended use, if
the Secretary determines that covered 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 from that which applies (or will apply) to other products
within such type (or class). (42 U.S.C.6295(q)(1)) In making a
determination under this paragraph concerning whether a performance-
related feature justifies the establishment of a higher or lower
standard, the Secretary shall consider such factors as the utility to
the consumer of such a feature, and such other factors as the Secretary
deems appropriate. (Id.)
In 2020, DOE previously exercised permissible discretion in
amending and making binding the Department's Process Rule. Since then,
recent Supreme Court decisions--notably Loper Bright Enterprises v.
Raimondo (603 U.S. 369 (2024))--provide further guidance on how
agencies should interpret and apply applicable statutes. The decision
in Loper not only bolsters the discretion exercised by the 2020 final
rule but also supports this proposal as consistent with the ``best
read'' of EPCA. In addition, other decisions, such as Michigan v. EPA,
576 U.S. 743 (2015), further support DOE's proposed application of the
balancing factors under at 42 U.S.C. 6295(o)(2)(B)(i). EPCA expressly
requires that DOE ``shall . . . determine whether the benefits of the
standard exceed its burdens'' and lists a broad array of seven
balancing factors the Secretary must consider. Id. The procedures
proposed here, and the proposal to make them binding on actions that
may result in more stringent standards, will enhance the Department's
ability to gather and weigh the relevant evidence needed to support a
reasoned decision under EPCA's broad and inherently consumer-protective
balancing factors. See id. (directing Secretary expressly to consider,
inter alia, the economic impact on manufacturers and consumers, the
comparative life-time operating cost savings versus increases in
product purchase and maintenance costs, and any lessening in utility as
a result of new standards); see also id. 42 U.S.C. 6295(o)(3)(B)
(forbidding the establishment of new standard if it will not result in
``significant conservation'' of energy or water); cf. Michigan, 576
U.S. at 752 (noting irrationality of ignoring costs under even the
vague ``appropriate and necessary'' standard).
B. Background
In July of 1996, DOE published a final rule in the Federal Register
that codified DOE'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. 61 FR
36974 (July 15, 1996) (``July 1996 Final Rule''). The goal of the
Process Rule was to increase transparency by elaborating on the
procedures, interpretations, and policies that would guide the
Department in establishing new or revised energy conservation standards
for consumer products.
On February 14, 2020, DOE published a final rule in the Federal
Register (``February 2020 Final Rule'') that significantly revised the
Process Rule. 85 FR 8626. This rule made the specified rulemaking
procedures binding on DOE and revised certain provisions to ensure
consistency with existing statutory requirements. Other changes
included expanding early opportunities for public input on the
Appliance Program's priority setting and rulemaking activities, setting
a significant energy savings threshold for updating standards,
establishing a 180-day window between test procedure final rules and
standards proposals, specifying DOE's approach to adoption of industry
test standards in its test procedures, and delineating procedures for
rulemaking under the separate direct final rule and negotiated
rulemaking authorities. DOE also published a companion final rule in
the Federal Register on August 19, 2020 (``August 2020 Final Rule''),
that clarified how DOE would conduct a comparative analysis across all
trial standard levels when determining whether a particular trial
standard level was economically justified. 85 FR 50937.
Subsequently, DOE published further amendments to the Process Rule,
some of which reversed or modified amendments made in the February 2020
and August 2020 Final Rules. DOE published the first of these final
rules in the Federal Register on December 13, 2021 (``December 2021
Final Rule''). 86 FR 70892. DOE published a second final rule with
additional amendments to certain sections of the Process Rule in the
Federal Register on April 8, 2024 (``April 2024 Final Rule''). 89 FR
24340. These amendments, among other things, reverted the Process Rule
back to the non-binding status of the July 1996 Final Rule to allow DOE
to tailor its rulemaking process to best fit the unique circumstances
of a particular rulemaking and provide DOE with flexibility to be able
to better meet statutory review requirements, and removed the
significant energy savings threshold. 86 FR 70896-70906.
The following paragraphs summarize the origins and historical
amendments to the individual sections of the Process Rule.\4\
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\4\ The full text of the current Process Rule is available at
www.ecfr.gov/current/title-10/chapter-II/subchapter-D/part-430/subpart-C/appendix-Appendix%20A%20to%20Subpart%20C%20of%20Part%20430.
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(1) Objectives--This section was established in the July 1996 Final
Rule and lays out the overall purpose of the Process Rule and its
specific provisions. The February 2020 Final Rule made various
editorial changes to this section.
(2) Scope--This section was established in the July 1996 Final Rule
and identifies the types of rulemakings to which the Process Rule
applies. This section was amended in the February 2020 Final Rule to
clarify that the Process Rule applies to energy conservation standards
and test procedures for both covered consumer products and commercial
and industrial equipment.
(3) Application--This section was added in the February 2020 Final
Rule and specified that the Process Rule would be binding on DOE. This
section was subsequently amended in the December 2021 Final Rule to
state that DOE has discretion to depart from the general guidance in
Appendix A when it deems necessary or appropriate, with the stipulation
that DOE will provide interested parties with notice of the deviation
and an explanation.
(4) Setting Priorities for Rulemaking Activity--This section was
established in the July 1996 Final Rule and
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identifies the factors that DOE applies when determining its regulatory
plans and formulation of inputs for the Regulatory Agenda. This section
was amended in the February 2020 Final Rule to specify that DOE would
offer an opportunity to provide input on prioritization of rulemakings
through a request for comment as DOE begins preparation of its
Regulatory Agenda each spring.
(5) Coverage Determination Rulemakings--This section was
established in the February 2020 Final Rule and describes the process
DOE would follow to establish coverage for consumer products and
industrial equipment. Subsequent amendments in the December 2021 Final
Rule and April 2024 Final Rule allow DOE to seek early stakeholder
input through preliminary rulemaking documents prior to a proposed
coverage determination, removed a previous requirement that final
coverage determinations be published prior to the initiation of any
test procedure or energy conservation standard rulemaking and at least
180 days prior to publication of a test procedure NOPR, and removed the
previously required 180-day period between finalization of DOE test
procedures and issuance of a NOPR proposing new or amended energy
conservation standards.
(6) Process for Developing Energy Conservation Standards--This
section was established in the July 1996 Final Rule and describes the
process to be used in developing energy conservation standards for
covered products and equipment other than those covered equipment
subject to ASHRAE/IES Standard 90.1. The February 2020 Final Rule
created an ``early assessment'' process for seeking stakeholder input
prior to commencing a rule and committed to an initial rulemaking stage
prior to a proposed rule (e.g., a framework document or preliminary
analysis). This rule also established a threshold of ``significant
energy savings'' of 0.3 quads or 10-percent site savings over 30 years.
Subsequent amendments in the December 2021 and April 2024 Final Rules
removed the energy savings threshold requirement and the requirement
for a separate early assessment request for information (``RFI'') but
clarified that DOE will issue one or more documents during the pre-NOPR
stage of a rulemaking.
(7) Policies on Selection of Standards--This section was
established in the July 1996 Final Rule and describes Department
policies concerning the selection of new or revised standards. The July
1996 Final Rule provided that DOE would implement the statutory mandate
that any new or amended standard is designed to achieve the maximum
improvement in energy efficiency that is technologically feasible and
economically justified. The February 2020 Final Rule made minor
amendments to align with revisions elsewhere in in the Process Rule,
while the August 2020 Final Rule added a clarification that DOE would
conduct a comparative analysis across all trial standard levels when
determining whether a level was economically justified. The December
2021 Final Rule amended this section to remove the requirement for a
comparative analysis.
(8) Test Procedures--This section was established in the original
July 1996 Final Rule and describes the process by which DOE would
establish test procedures for covered products and equipment. The
February 2020 Final Rule added an early assessment process for test
procedures and generally committed that DOE would adopt consensus
industry test procedures unless not consistent with EPCA. Consistent
with other amendments in that rule, this section was also amended to
require that DOE finalize a test procedure 180 days in advance of a
standards proposal. The December 2021 Final Rule clarified that DOE may
revise consensus industry test procedure standards for compliance,
certification, and enforcement purposes, and revised application of the
180-day period to apply to the period between finalization of a test
procedure and close of the comment period of a standards proposal
(rather than publication of the proposal).
(9) ASHRAE Equipment--This section was created by the February 2020
Final Rule and describes the process DOE will follow for conducting
rulemakings for equipment subject to the ``ASHRAE trigger'' provisions
in EPCA that apply when ASHRAE Standard 90.1 is amended with respect to
standards, test procedures, or design requirements applicable to such
equipment. The April 2024 Final Rule added provisions to clarify
application of the 6- and 7-year-lookback provisions for periodic
review of standards and test procedures for ASHRAE equipment.
(10) Direct Final Rules--This section was established in the
February 2020 Final Rule and describes how DOE would comply with EPCA
requirements specific to publication of direct final rules, including
the Department's interpretation of the term ``fairly representative of
relevant points of view'' as it applies to interested stakeholders. It
also stated that a negotiated rulemaking may not result in a direct
final rule. The December 2021 Final Rule amended this section to
clarify that DOE will implement its direct final rule authority under
EPCA on a case-by-case basis including its evaluation of the meaning of
``fairly representative'', subject to the circumstances of a particular
rulemaking. It also removed the prohibition on a negotiated rulemaking
culminating in a direct final rule.
(11) Principles for Distinguishing Between Effective and Compliance
Dates--This section was established in the February 2020 Final Rule and
provides clarification as to the distinction between the effective and
compliance dates of a final rule. This section has not been amended
since its original establishment.
(12) Principles for the Conduct of the Engineering Analysis--This
section was established in the July 1996 Final Rule, and other than
minor editorial changes, was not substantively amended in subsequent
rulemakings.
(13) Principles for the Analysis of Impacts on Manufacturers--This
section was established in the July 1996 Final Rule, and other than
minor editorial changes, was not substantively amended in subsequent
rulemakings.
(14) Principles for the Analysis of Impacts on Consumers--This
section was established in the July 1996 Final Rule, and other than
minor editorial changes, was not substantively amended in subsequent
rulemakings.
(15) Consideration of Non-Regulatory Approaches--This section was
established in the July 1996 Final Rule and identifies how DOE will
consider the effects of non-regulatory efforts by manufacturers,
utilities, and other interested parties to produce substantial
efficiency improvements. Revisions in the February 2020 Final Rule
removed a section discussing the Department's pursuit of voluntary
programs where it appears that highly efficient products can obtain a
significant market share but that less efficient products cannot be
eliminated altogether because, for instance, of unacceptable adverse
impacts on a significant subgroup of consumers.
(16) Cross-Cutting Analytical Assumptions--This section was
established in the July 1996 Final Rule and sets outs the sources and
general principles that DOE expects to continue relying upon in
selecting values for certain cross-cutting analytical assumptions. This
section was amended in the February 2020 Final Rule to specify that DOE
would use two time lengths--30 years and another time length that is
specific to the standard being considered, such as the useful
[[Page 42040]]
lifetime of the product under consideration, as well as a 9-year
regulatory timeline as a sensitivity case. That rule also specified
that DOE will endeavor to use robust price forecasting techniques in
projecting future prices of products.
On April 17, 2025, DOE published in the Federal Register an RFI
seeking comments and information from interested parties to assist DOE
in identifying potential modifications to its Process Rule (``April
2025 RFI''). 90 FR 16093. DOE received comments in response to the
April 2025 RFI from the interested parties listed in Table II.1.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP07JY26.149
[[Page 42041]]
[GRAPHIC] [TIFF OMITTED] TP07JY26.150
BILLING CODE 6450-01-C
A parenthetical reference at the end of a comment quotation or
paraphrase provides the location of the item in the public record.\6\
---------------------------------------------------------------------------
\5\ The Air-Conditioning, Heating, and Refrigeration Institute
(AHRI); Air Movement and Control Association (AMCA) International;
Association of Home Appliance Manufacturers (AHAM); Consumer
Technology Association (CTA); Hearth, Patio & Barbecue Association
(HPBA); Heating, Air-Conditioning, Refrigeration Distributors
International (HARDI); National Association of Manufacturers (NAM);
National Automatic Merchandising Association (NAMA); North American
Association of Food Equipment Manufacturers (NAFEM); National
Electrical Manufacturers Association (NEMA); Plumbing-Heating-
Cooling Contractors Association (PHCC); Plumbing Manufacturers
International (PMI); and Power Tool Institute (PTI).
\6\ The parenthetical reference provides a reference for
information located in this rulemaking docket, Docket No. EERE-2025-
BT-STD-0001, which is maintained at: www.regulations.gov. The
references are arranged as follows: (commenter name, comment docket
ID number at page of that document).
---------------------------------------------------------------------------
DOE received one comment pertaining to issues outside of the scope
of this rulemaking and which, therefore, are not addressed in this
document.\7\
---------------------------------------------------------------------------
\7\ (TRG, No. 2 at pp. 1-4).
---------------------------------------------------------------------------
III. Discussion of General Comments
A. General Support for or Opposition to Standards
A number of commenters indicated general support for existing
energy conservation standards. (Anonymous, No. 4 at p. 1; Anonymous,
No. 6 at p.1; Ceres, No. 22 at p. 6; Lennox, No. 26 at p. 1; Rinnai,
No. 11 at p. 2)
An individual commented that existing energy conservation standards
still allow for a significant number of choices for consumers.
(Anonymous, No. 6 at p. 1) Another individual commented that energy
conservation standards drive engineering innovation, including for
lighting and water-using products. (Anonymous, No. 3 at p. 1)
Several individuals commented on operating cost savings associated
with energy conversation standards. An individual commented that energy
efficient appliances reduce operating costs for consumers and asked DOE
to continue enforcing standards. (Anonymous, No. 3 at p. 1) The
individual also suggested DOE review studies documenting the value of
energy conservation standards. (Anonymous, No. 3 at p. 1) Another
individual commented that less-efficient appliances will cost consumers
more to operate regardless of energy source or price and that DOE
should continue to establish energy conservation standards to save
consumers money. (Anonymous, No. 9 at p. 1) A third individual
commented that E.O. 14154 is focused on reducing energy costs and
burdens on consumers and that increasing energy efficiency is one of
the best ways to reduce energy costs for consumers. The individual also
commented that regulations should be backed by strong data and analysis
and that research demonstrates that the energy savings associated with
standards can be worth it, even if there is a higher up-front cost.
(Anonymous, No. 10 at pp. 1-2).
Lennox commented to support the goals of DOE's appliance efficiency
program to maximize improvements in energy savings for consumers that
are technologically feasible and economically justified for finished
products at the system level. (Lennox, No. 26 at p. 1).
Rinnai commented to support national energy efficiency standards
and the principle of Federal preemption, which prevents State-level
mandates that would destabilize markets and erode consumer choice.
(Rinnai, No. 11 at p. 2).
An individual expressed opposition to energy conservation
standards, commenting that efficiency standards have had a negative
impact on reliability and that it would be preferable to have greater
choice for lighting and appliances. (Anonymous, No. 5 at p. 1).
In response, DOE is not making any proposals with respect to the
Appliance Standards Program itself, but instead, the Department is
proposing certain revisions to the process by which it carries out its
obligations under EPCA to adopt new or revised energy conservation
standards and test procedures, as discussed in section IV of this
document.
B. General Support for or Opposition to Changes to the Process Rule
This section discusses the comments in general support for or
opposition to revising the current Process Rule. Specific comments
related to specific Process Rule revisions are discussed in section IV
of this document.
Several commenters expressed general support for revising the
current Process Rule, as discussed in the following paragraphs.
BHI commented that DOE's existing rulemaking process is opaque,
overly complex, and subject to agenda-driven manipulation. The
commenter added that the resulting rules are often delayed, based on
flawed analysis, and poorly documented, and that they impose undue
regulatory burden and uncertainty on the industry, while leaving DOE
open to litigation. (BHI, No. 16 at p. 2) BHI attached comments
submitted to previous rulemakings \8\ to illustrate the need for
revisions. (BHI, No. 16 at pp. 1-2) BHI acknowledged that implementing
the Process Rule changes as changes recommended in their comments for
periodic reviews of standards as required under EPCA would likely
result in an increased frequency with which new standards cannot be
justified for a particular product. According to the commenter,
[[Page 42042]]
increasing standards for a particular product over time results in an
appliance's efficiency approaching its theoretical limit, thereby
suggesting that previous standards have done what EPCA intended; any
process for standard setting should account for the reality that
trivial energy gains will result in cost increases to consumers that
yield little to no real-world payback by way of decreases in utility
bills. (BHI, No. 16 at p. 6)
---------------------------------------------------------------------------
\8\ BHI attached previously submitted comments that were
summarized as part of the rulemakings corresponding to the following
dockets: Docket EERE 2019-BT-STD-0036, EERE-2021-BT-STD-003, EERE-
2018-BT-STD-0018 related to Boilers, the Process Rule, and Non-
Condensing Technology, respectively.
---------------------------------------------------------------------------
The Joint Commenters stated that the Process Rule should be clear,
transparent, and reflect stakeholder consensus so that it will not be
subject to policy swings by changing Administrations. (Joint
Commenters, No. 24 at p. 3).
The Joint Gas Associations commented that the Process Rule should
be revised to ensure protection of consumer choice, promote market
competition and innovation, maintain fuel neutrality, and reduce
regulatory burdens. (Joint Gas Associations, No. 25 at p. 7).
NRECA commented in support of DOE's efforts to revise the Process
Rule in ways that would lead to more common sense outcomes when
updating energy conservation standards. NRECA added that the Process
Rule should be revised to enhance consumer choice and affordability.
(NRECA, No. 17 at p. 2).
Rinnai commented that the Process Rule should be revised to ensure
discipline, transparency, and public accountability. (Rinnai, No. 11 at
p. 3).
DOE also received comments generally supporting revisions to
return, fully or partially, to the Process Rule as amended at the
beginning of 2020 (i.e., the ``2020 Process Rule''), as further
discussed in the following paragraphs.
BHI, MHI, WM Technologies and Zero Zone commented that DOE should
return to the 2020 Process Rule. (BHI, No. 16 at p. 2; MHI, No. 21 at
p. 2; WM Technologies, No. 14 at pp. 1, 3; Zero Zone, No. 15 at p. 1).
MHI noted that standards for water heaters, gas furnaces, showerheads,
electric spas, and freezers would have been avoided with the 2020
Process Rule. (MHI, No. 21 at p. 2).
AHRI, BWC, the Joint Commenters, and Lennox commented in support of
revising the Process Rule and of any changes largely consistent with
the 2020 Process Rule. (AHRI, No. 28 at p. 1; BWC, No. 34 at p. 1;
Joint Commenters, No. 24 at p. 2; Lennox, No. 26 at p. 2) Specifically,
Lennox stated that they support re-instituting the five key Process
Rule measures from the 2020 Process Rule: (1) DOE's compliance with the
Process Rule must be mandatory and binding on DOE; (2) test procedures
should be finalized by DOE 180 days before proposing new energy
conservation standards; (3) reasonable and mandatory minimum public
comment periods should be provided; (4) minimum threshold values for
significant energy savings should be reinstated; and (5) comparative
analysis across trial standard levels should be reinstated. (Lennox,
No. 26 at p. 2). BWC added that the 2020 Process Rule was not a ``one-
size-fits-all'' approach and provided DOE with extensive regulatory
flexibility. (BWC, No. 34 at p. 3).
Several commenters opposed changes to the current Process Rule and
generally stated that the current Process Rule is adequate. (Joint
Advocates, No. 31 at p. 1; State Agencies, No. 33 at pp. 1-2; Ceres,
No. 22 at p. 6; Anonymous, No. 4 at p. 1).
The Joint Advocates added that the current Process Rule already
provides detailed rulemaking guidance that addresses the topics
discussed in the April 2025 RFI. For example, the Joint Advocates
argued that the current Process Rule already includes consumer choice
and market competition and innovation protections; it also considers
manufacturer impacts, including regulatory burden, and it provides
detailed guidance on cost and benefit analysis and the public comment
and review process. (Joint Advocates, No. 31 at p. 1).
The State Agencies added that the current Process Rule
appropriately provides guidance and should not be modified. The State
Agencies argued that repeated changes to the Process Rule have led to
market uncertainty. In addition, the State Agencies further argued that
any changes to the Process Rule would increase regulatory burden and
recommended that DOE should not pursue any further rulemakings related
to Process Rule, including a separate analytical methodology RFI.
(State Agencies, No. 33 at pp. 1-2).
An individual commented that there was a lack of evidence to
suggest that there are substantial flaws in existing rules or the
current process to establish them. (Anonymous, No. 4 at p. 1).
AUX stated that the current Process Rule is essential to fostering
innovation, ensuring affordable and environmentally-friendly products,
and balancing regulatory certainty and flexibility for manufacturers
without overburdening manufacturers. AUX added that the existing
Process Rule has driven innovation in residential HVAC, leading to
more-efficient products that often exceed standards and providing
significant cost savings to consumers. (AUX, No. 7 at pp. 1-2).
The CA IOUs stated that they support the objectives of the Process
Rule and recommended that any changes should enhance these goals while
aligning with EPCA's purpose of achieving cost-effective energy
savings. The CA IOUs emphasized the importance of maintaining
flexibility to address appliance-specific issues, complying with EPCA
and the Administrative Procedure Act, and ensuring equitable
implementation. The commenters suggested that DOE should evaluate
issues on a case-by-case basis within the context of each individual
rulemaking rather than being pre-determined by a set of generalized
assumptions. The CA IOUs further cautioned against frequent changes to
the Process Rule, which create uncertainty, instead urging DOE to
prioritize consistency and to focus on improvements grounded either in
established practices or ones widely supported by stakeholders. (CA
IOUs, No. 32 at pp. 1-2).
NEEA commented that DOE should maintain a consistent Process Rule
to provide a predictable and accessible regulatory process and prevent
additional regulatory burden. (NEEA, No. 36 at p. 1).
In response, DOE has reviewed the current Process Rule, the 2020
Process Rule, and the general comments received in response to the
April 2025 RFI. Based on this review and an evaluation of comments
received on specific Process Rule topics, DOE is proposing revisions to
the current Process Rule to return largely to the 2020 Process Rule
with some modifications, as discussed in further detail in section IV
of this document.
IV. Discussion of Comments and Proposed Revisions to Individual
Sections of the Process Rule
The following sections discuss comments received relating to
individual sections of the Process Rule, DOE's responses, and the
proposed revisions to the Process Rule. DOE requests comments, data,
and information regarding these proposals and all aspects of this
notice of proposed rulemaking.
A. Objectives (Section 1)
This section was established in the July 1996 Final Rule and lays
out the overall purpose of the Process Rule and its specific
provisions. The February 2020 Final Rule made various editorial changes
to this section. The December 2021 Final Rule added support for
proposals developed in accordance with the Negotiated Rulemaking Act (5
U.S.C. 561 et seq.).
[[Page 42043]]
DOE did not receive any comments specific to the Objectives section
of the Process Rule, other than general comments related to
negotiations, as discussed in section IV.K of this document.
As discussed in the April 2025 RFI, DOE requested information to
ensure consistency with recently issued Executive orders while
continuing to satisfy the Department's statutory obligations. 90 FR
16093 (April 17, 2025). Consistent with this goal, DOE is proposing to
include a new section in the Objectives section of the Process Rule to
clearly specify the Department's goals of preserving availability of
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 as prescribed by EPCA.
Such goals also safeguard the American people's freedom to choose from
a variety of goods and appliances (including but not limited to
lightbulbs, dishwashers, washing machines, gas stoves, water heaters,
toilets, and shower heads); promote market competition and innovation
within the manufacturing and appliance industries; ensure that the
global effects of a rule, regulation, or action shall, whenever
evaluated, be reported separately from its domestic costs and benefits
(energy savings and efficiency), in order to promote sound regulatory
decision making and prioritize the interests of the American people;
and guarantee opportunities for public comment and rigorous, peer-
reviewed scientific analysis. (42 U.S.C. 6295(o)-(p)). These objectives
also support the policies specified in Executive Order 14154.
Consistent with the statutory requirements of EPCA, DOE
additionally has the goal of eliminating counterproductive requirements
that raise the costs of home appliances.\9\ DOE is proposing to include
this goal within the objectives section of the Process Rule.
---------------------------------------------------------------------------
\9\ See ``Delivering Emergency Price Relief for American
Families and Defeating the Cost-of-Living Crisis'' (Available at:
https://www.whitehouse.gov/presidential-actions/2025/01/delivering-emergency-price-relief-for-american-families-and-defeating-the-cost-of-living-crisis/).
---------------------------------------------------------------------------
B. Scope (Section 2)
This section was established in the July 1996 Final Rule and
identifies the types of rulemakings to which the Process Rule applies.
This section was amended in the February 2020 Final Rule to clarify
that the Process Rule applies to both covered consumer products and
commercial and industrial equipment, except covered ASHRAE equipment,
which is governed separately under section 9 of the appendix.
The Joint Gas Associations stated that a revised process Rule
should apply to both consumer products and industrial and commercial
equipment, except for ASHRAE equipment. (Joint Gas Associations, No. 25
at p. 30).
In response, DOE notes that the current Process Rule has this same
scope as recommended by Joint Gas Associations, with ASHRAE covered
separately in its own section. DOE is not proposing any revisions to
the Scope section of the Process Rule.
C. Application (Section 3)
This section was added to the Process Rule by the February 2020
Final Rule and specified that the Process Rule would be binding on DOE.
This section was subsequently amended in the December 2021 Final Rule
to provide DOE with discretion to depart from the general guidance in
Appendix A when it deems it necessary or appropriate to do so, with the
stipulation that DOE will provide interested parties with notice of the
deviation and an explanation.
In the April 2025 RFI, DOE requested comments on whether
reintroducing a provision making the Process Rule mandatory would
better enable the Department to comply with its obligations under the
statute and applicable Executive orders. 90 FR 16093, 16100 (April 17,
2025).
In response to the April 2025 RFI, many commenters supported
mandatory application of the Process Rule, generally to provide
certainty to stakeholders. (Joint commenters, No. 24 at p. 3; AHRI, No.
28 at p. 13; Joint Gas Associations, No. 25 at pp. 7, 10-11; ASHRAE,
No. 12 at p. 2; BWC, No. 34 at p. 1; MHI, No. 21 at p. 3; NAHB, No. 19
at p. 5; NEMA, No. 23 at pp. 2-3; NAFEM, No. 13 at p. 7; ONE Gas, No.
37 at p. 2; Rinnai, No. 11 at pp. 3, 11-12; WM Technologies, No. 14 at
p. 3; Zero Zone, No. 15 at p. 3; BHI, No. 16 at p. 2) AHRI and BHI
noted that mandatory application should reduce litigation risk. (AHRI,
No. 28 at p. 13; BHI, No. 16 at p. 2).
Several of the commenters supporting mandatory application also
acknowledged that some changes or flexibility may need to be included.
PHTA stated that some areas should have well thought out deviations.
(PHTA, No. 27 at p. 1) The Joint Commenters stated that any flexibility
needed should be built into the rule. (Joint Commenters, No. 24 at p.
3) NAFEM stated that its recommended revisions should be included if
the rule becomes mandatory. (NAFEM, No. 13 at p. 7) Lennox stated that
if made binding, the Process Rule should require DOE to actively
explore negotiated rulemakings for all major new standards. (Lennox,
No. 26 at pp. 11-12).
In addition, Zero Zone emphasized the value of public comment in
making any changes to the Process Rule. (Zero Zone, No. 15 at p. 3) BHI
suggested that Congress should cement this rule as law to avoid the
pendulum swinging between Administrations. (BHI, No. 16 at p. 2).
Two commenters opposed mandatory application of the Process Rule.
The Joint Advocates stated that an overly rigid approach could result
in missed energy and water savings opportunities, delay rulemakings,
and increase potential for procedural litigation. (Joint Advocates, No.
31 at p. 4) The State Agencies stated that flexibility is needed, and
that making the Process Rule mandatory would increase regulatory
burden. They noted that if the Process Rule is to be made mandatory,
additional opportunities for public comment should be provided to make
sure all potential provisions are carefully considered. (State
Agencies, No. 33 at p. 2).
Upon review, DOE has tentatively determined that there is a
reasonable basis for making the Process Rule binding for certain
actions, while retaining greater flexibility for other actions. Any
ECS-related action undertaken by DOE must adhere to the requirements
outlined by EPCA. See 42 U.S.C. 6295; 42 U.S.C. 6311-6313. When the
Secretary must make a statutory determination (e.g., regarding whether
to regulate; or whether a proposed standard is technologically feasible
and economically justified; or whether the benefits of a proposed
standard exceed its burdens), DOE may offer the public additional
transparency regarding circumstances when the Department will follow
the requirements under EPCA more narrowly or will follow additional
procedures. The Secretary has discretion under EPCA to implement
additional procedures in support of careful consideration of statutory
factors that weigh heavily in his determinations.
In the Process Rule, DOE is proposing that all procedures for
regulatory actions (actions that may increase ECS stringency relative
to existing requirements) will be binding requirements for the
Department, which will provide much-needed certainty to stakeholders
and will reflect the Secretary's careful consideration and
[[Page 42044]]
weighing of the balancing factors for economic justification and other
requirements under EPCA. (See 42 U.S.C. 6295(o)). This approach
recognizes, per EPCA, that regulatory changes often increase
manufacturer costs and usually result in the need for design
modifications that necessitate substantial investments of engineering
resources, production line conversions, and other related manufacturing
alterations or revisions to testing regimes. (See 42 U.S.C.
6295(o)(2)(B)(i), (m)). EPCA acknowledges the time, detailed analysis,
and notice required in prescribing new or amended standards by
establishing a minimum allowable period between further regulatory
rulemakings; clearly articulated factors for a determination of
economic justification; and required procedures for notice, comment,
and transparency of record. (See 42 U.S.C. 6295(l), (m), (o), (p)). It
behooves DOE to proceed with caution when enacting efficiency standards
that may adversely affect consumers by pricing them out of the market
for new or replacement appliances or eliminating useful characteristics
of covered products. (See 42 U.S.C. 6295(o)(2)(B)(i)). New standards
are also likely to present more challenges when evaluating economic
effects, including lack of pertinent data on consumer response and
reliance on assumptions. When reweighing evidence in other actions,
such as for certain deregulatory actions, however, hindsight may
provide a wealth of information. Moreover, DOE must meet strict
evidentiary standards when issuing rules, including more stringent
energy conservation standards, under 42 U.S.C. 6293, 6294, or 6295.
Under 42 U.S.C. 6306(b)(2), when petitioned by an aggrieved party, a
court may not affirm a ule unless DOE's rule is supported by
``substantial evidence.'' Likewise, 42 U.S.C. 6313(b)(6)(A)(ii)(II)
requires ``clear and convincing evidence'' to support a heightened
standard for certain commercial equipment. This is true even when the
Department has limited information to evaluate such complex factors as
``the economic impact of the standard on the manufacturers and on the
consumers of the products'' and a comparison of the ``operating costs
throughout the estimated average life of the covered product'' against
``any increase in the price . . . or maintenance expenses of[] the
covered products'' with respect to products that may not be brought to
market until some years after the regulatory action is finalized. (42
U.S.C. 6295(o)(2)(B)(i); see, e.g., id. 42 U.S.C. 6295(l)(2), (m)(4),
(n)(5) (requiring delays of up to five years before new standards may
be enforced on manufacturers))
As noted previously and as EPCA acknowledges, regulatory actions
typically justify the need for early stakeholder involvement and ample
opportunities for public input. That is why it is crucial that DOE
regulatory actions provide sufficient opportunity for public input so
that stakeholders have adequate time to analyze and provide thoughtful
comments, data, and information to the agency before it finalizes a
proposed regulatory action. Not only does a properly structured process
provide regulatory certainty and prevent the imposition of unnecessary
or unjustified costs on manufacturers, but it also ensures that
consumers do not face excessive costs or the loss of important
performance-related features. This holds true for both energy
conservation standards and test procedure rulemakings, because if a
test procedure does not properly measure a covered product's energy
efficiency or energy use, energy conservation standards may be set at
an inappropriate level. And it is important to remember that EPCA
establishes the minimum requirements to issue new rules. For example,
EPCA requires a comment period of not less than 60 days for proposed
standards and test procedures. (42 U.S.C. 6295(p)(2), 6293(b)(2)). But
there is no maximum comment period limit for a proposed standards rule
and the limit for a proposed test procedure rule is 270 days. Id.
Similarly, EPCA only requires that DOE publish a notice of proposed
rulemaking before issuing a final rule or final determination not to
amend standards. (42 U.S.C. 6295(p)(1)). But again, that is the minimum
requirement. And while these procedural requirements may be sufficient
for revisiting a determination not to amend standards that was made
less than 3 years ago in a market where there has been no technological
advances in efficiency, for all the reasons discussed previously, a
more comprehensive, structured process is warranted before implementing
rules that impose new obligations and costs on regulated parties and
consumers. Consequently, the proposed Process Rule sets forth
procedural elements (including early assessment opportunities and
preliminary documents), temporal spacing between key elements, and
minimum comment periods to facilitate rulemakings that are robust and
best meet all applicable statutory requirements. Making these
procedures binding on DOE would further safeguard the achievement of
these important objectives. While DOE acknowledges the concerns raised
by some commenters about an overly rigid approach, the Department has
tentatively determined that the Process Rule, as proposed to be amended
in this NOPR, contains sufficient flexibility to address those
stakeholder concerns.
Certain actions, in contrast, may present a very different set of
situations that may warrant a different approach and may not
necessitate the same level of advance outreach, lengthened comment
periods, or lead time, as compared to regulatory actions. In some
circumstances, where DOE determines that deregulation is appropriate,
it may be that DOE has recognized, with the benefit of hindsight and
additional real-world information gathered as a new standard or test
procedure is implemented, or a test procedure later determined to be
unduly burdensome to conduct (in violation of 42 U.S.C. 6293(b)(3) or
42 U.S.C. 6314(a)(2)). In such instances, consumers may experience a
reduction in product choice, a loss of valuable features, and/or an
unjustified increase in first costs. Alternatively, an unanticipated
change in market conditions or error in analysis may result in
hardships or barriers to compliance for manufactures. Deregulatory
actions are intended to remedy these suboptimal outcomes, and in some
cases, DOE does not believe that there is the same need for procedural
protections for deregulatory actions as there is for regulatory
actions, for the reasons that follow. Over time, DOE has exercised
discretion in expediting certain deregulatory actions. For example, DOE
has conducted test procedure rulemakings on an expedited timeline to
address limited-scope issues (e.g., the rulemaking to amend test cloth
specifications for clothes dryer and clothes washer testing was
initiated with a NOPR \10\ and did not have a pre-proposal document).
---------------------------------------------------------------------------
\10\ See, FR 87903 (Nov. 5,2024), which led to a final rule
publication at 90 FR 5519 (Jan. 17, 2025)
---------------------------------------------------------------------------
First, deregulatory actions are not likely to require costly
changes to manufacturing lines or production facilities, as would be
expected to accompany more stringent standards. In contrast to
regulatory actions, deregulation may reduce costs, and potential
savings may trickle down to consumer, especially in highly competitive
markets. A newly deregulated area frees industry from associated
compliance mandates and presents more business options, which will of
course entail the independent weighing of potential costs and benefits
by industry before taking action.
[[Page 42045]]
Second, because deregulatory actions open up new, less burdensome
options to manufacturers (and indirectly to consumers), those same
procedural safeguards (e.g., preliminary documents, required spacing of
rulemaking steps, and extended comment periods) may not be necessary.
With the increased flexibility that comes from deregulation, industry
and consumers may choose to maintain course or adjust, but are not
compelled to take any action, unlike with regulatory actions, which by
their nature limit choice and force action. Furthermore, DOE believes
that there is also a temporal element to deregulatory actions, in that
there is value in providing substantive relief to consumers and
manufacturers as soon as possible. Accordingly, following all of the
procedural steps proposed in the Process Rule would in certain
circumstances run counter to providing deregulatory relief as soon as
possible. Finally, DOE may choose to add to the standards determination
process thresholds rooted in EPCA's required considerations for
economic justification. When those thresholds, which reflect the
Secretary's discretion in weighing EPCA's balancing factors, indicate a
determination not to further regulate, DOE may consider that analysis
sufficient under the requirements of EPCA and may choose to forego more
detailed analyses. (42 U.S.C. 6295(o)). Though such an action is not
deregulatory, it offers the kind of certainty and timely notice
contemplated by EPCA, and these considerations may outweigh the
additional procedural steps merited for increases in stringency.
Consequently, DOE proposes not to make all Process Rule provisions
binding on the Department for actions that are not likely to increase
stringency for affected entities (e.g., certain deregulatory actions or
determinations not to further regulate). In such instances, the
Department may choose to apply those provisions as may be appropriate
in any particular action so as to maintain flexibility and to provide
relief without undue delay in appropriate cases.
Moreover, in contrast to a regulatory action imposing new standards
that will result in estimated, but uncertain, impacts on the market, it
will often be the case that DOE has a wealth of information to rely on
in making a deregulatory decision with respect to a test procedure or
standard under consideration. Both the Department and stakeholders will
have data and experience gathered during the implementation of an
existing standard that will provide greater certainty without the need
for an extended period of evidence building and development of
estimates and projections.
DOE has not identified any statutory or other legal impediments to
a bifurcated approach to the binding nature of the Process Rule that
distinguishes between regulatory and other actions. DOE has discretion
to set its own procedures for conducting rulemaking proceedings, as
long as such procedures also incorporate any relevant statutory
requirements set forth in EPCA (e.g., a minimum 60-day comment period
for NOPRs). In crafting those procedures, DOE is at liberty to tailor
those procedures to address identified concerns (as discussed
previously) or to provide a more flexible and expedited process where
the same concerns are not found to exist.
It is DOE's view that this approach would allow DOE to best meet
the statutory requirements of EPCA, including preventing the
unavailability of performance-related features. (42 U.S.C. 6295(o)(4)).
DOE also believe that this approach is consistent with numerous
comments on the April 2025 RFI which generally supported mandatory
application of the Process Rule but acknowledged the potential need for
flexibility in certain situations. Furthermore, this approach is
consistent with the objectives set forth in various Executive orders
and Presidential memoranda. For example, section 2(f) of Executive
Order (E.O.) 14154, ``Unleashing American Energy,'' 90 FR 8353 (Jan.
29, 2025), states that it is the policy of the United States to
safeguard the American people's freedom to choose from a variety of
goods and appliances, including but not limited to lightbulbs,
dishwashers, washing machines, gas stoves, water heaters, toilets, and
shower heads, and to promote market competition and innovation within
the manufacturing and appliance industries. In addition, the
Presidential memorandum titled ``Delivering Emergency Price Relief for
American Families and Defeating the Cost-of-Living Crisis,'' 90 FR 8245
(Jan. 28, 2025), directs agencies to take appropriate actions to, among
other things, ``eliminate counterproductive requirements that raise the
cost of home appliances.''
In summary, DOE has tentatively concluded that a bifurcated
approach to the binding nature of the Process Rule which distinguishes
between regulatory and other actions would be appropriate for several
reasons. DOE believes that it best suits the Department's model outcome
for deregulatory situations, in that it would allow DOE to provide
expedited relief to stakeholders in terms of cost savings, reduced
regulatory burdens, and protection of performance-related features.
Along these lines, it would also be consistent with the views of many
commenters and would allow DOE to implement what it believes is the
best reading of the statutory provisions of EPCA, including applicable
evidentiary standards, as well as practical differences between
regulatory and deregulatory actions such as informational asymmetries.
It would also support the Administration's priorities in terms of
advancing appliance affordability and preserving consumer choice.
As such, DOE proposes to revise section 3 of the Process Rule to
specify its mandatory application as described in this section. DOE
requests comment on this proposal and on any alternate approaches to
mandatory application that best achieve transparency and opportunities
for public comment while allowing for flexibility for certain
deregulatory actions.
D. Setting Priorities for Rulemaking Activity (Section 4)
This section was established in the July 1996 Final Rule and
identifies the factors that DOE applies when determining its regulatory
plans and formulation of inputs for the Regulatory Agenda. This section
was amended in the February 2020 Final Rule to specify that DOE would
offer the opportunity to provide input on prioritization of rulemakings
through a request for comment as DOE begins preparation of its
Regulatory Agenda each spring.
In the April 2025 RFI, DOE generally requested comments and
information on whether and how the Process Rule should be amended to
specify rulemaking prioritization and timelines, consistent with EPCA's
requirements. 90 FR 16093, 16100 (April 17, 2025).
The Joint Advocates stated that the current Process Rule already
describes the prioritization process for rulemaking activity, so no
amendment is needed. (Joint Advocates, No. 31 at p. 4).
The State Agencies stated that EPCA already establishes timelines
for standards to be revised. The State Agencies added that the current
Process Rule allows for reasonable timelines, and that the Process Rule
should not be amended to provide specific rulemaking prioritization and
timelines. They further stated that any potential changes must be
justified by DOE after thorough consideration of impacts and burdens.
(State Agencies, No. 33 at p. 2).
The Joint Gas Associations stated that DOE should focus on the
potential energy savings and the potential economic benefits as an
initial screen
[[Page 42046]]
for determining its priorities. The Joint Gas Associations argued that
such focus is important, because if DOE determines the proposed
regulatory activity does not provide sufficient energy savings or is
not cost-effective, there is no need to review the other factors. The
Joint Gas Associations also supported stakeholder input in the
rulemaking process and with regard to setting priorities, and they
stated that commenting on the Regulatory Agenda would provide
stakeholders with a chance to weigh in on these priorities. (Joint Gas
Associations, No. 25 at pp. 35-36).
Upon review, DOE has tentatively determined that DOE's statutory
review requirements and the current Process Rule adequately describe
the prioritization setting framework as recommended by commenters.
Specifically, DOE is statutorily required to review energy conservation
standards and test procedures at intervals specified by EPCA.
Additionally, DOE acknowledges the benefits of considering energy
savings and potential economic benefits in prioritizing rulemakings, as
recommended by the Joint Gas Associations, which are already specified
in section 4 of the Process Rule.
As discussed in section IV.A of this document, DOE is proposing to
specify that the Department's objectives include protecting consumer
choice in covered products and equipment and eliminating
counterproductive requirements that increase the costs of appliances.
DOE is proposing to include these objectives in the list of factors DOE
will consider when establishing rulemaking priorities, and requests
comment on their inclusion.
Section 6 of Executive Order 14154 specifies policies for
prioritizing accuracy in environmental analyses, specifically
instructing that for Federal regulatory processes, ``all agencies shall
adhere to only the relevant legislated requirements for environmental
considerations and any considerations beyond those requirements are
eliminated.'' Consistent with this direction, DOE is proposing to
remove the consideration of environmental factors as specified in
section 4(a)(2) of the Process Rule and to instead refer to potential
social and private costs and benefits.
DOE has also considered the requirement to request comment as DOE
begins preparation of its Regulatory Agenda each spring. DOE's
rulemaking reviews are largely driven by statutory timelines, with
consideration of the factors outlined in section 4 of the Process Rule.
DOE's goal is to limit regulatory burden for stakeholders, and the
Department has tentatively determined that there is little additional
benefit provided by the current request for comment specified in
section 4 of the Process Rule. Therefore, DOE is proposing to clarify
in the Process Rule that DOE will request comment on rulemaking
prioritization only when circumstances weigh towards doing so. Such
circumstances may include Executive Orders or other Administration
initiatives or meaningful shifts in policy on which the Department
would benefit from broad and early public comment. Consequently, this
would move from being a prescriptive annual publication from DOE for
stakeholder review to a discretionary action considered on a case-by-
case basis, thereby limiting the burden associated with reviewing DOE's
rulemaking documents while providing the benefit of public comment when
needed. DOE notes that stakeholders may contact DOE regarding
rulemaking priorities, independent of a published request for comment.
E. Coverage Determination Rulemakings (Section 5)
This section was established in the February 2020 Final Rule and
describes the process DOE would follow to establish coverage for new
consumer products and industrial equipment under the applicable
statutory criteria of EPCA. Subsequent amendments in the December 2021
Final Rule and April 2024 Final Rule allowed DOE to seek early
stakeholder input through preliminary rulemaking documents prior to a
proposed coverage determination, removed a previous requirement that
final coverage determinations be published prior to the initiation of
any test procedure or energy conservation standard rulemaking and at
least 180 days prior to publication of a test procedure NOPR, and
removed the previously required 180-day period between finalization of
DOE test procedures and issuance of a NOPR proposing new or amended
energy conservation standards.
In the April 2025 RFI, DOE generally requested comments and
information on whether and how the Process Rule should be amended to
specify rulemaking prioritization and timelines, consistent with EPCA's
requirements. 90 FR 16093, 16100 (April 17, 2025). Timing of coverage
determinations falls within the scope of this request.
Lennox commented that DOE should require that coverage
determinations be finalized at least 180 days prior to the publication
of a TP NOPR for newly-covered products/equipment. The commenter argued
that it is a misuse of DOE, manufacturer, and other stakeholder
resources to attempt to address substantive regulatory issues until the
products have been clearly and specifically defined. (Lennox, No. 26 at
p. 11).
Lennox also commented that coverage determination comment periods
should be at least 60 days. (Lennox, No. 26 at p. 8-9).
In response, as discussed previously, DOE is largely proposing to
revert to the language in the 2020 Process Rule, including for the
section on coverage determinations. As mentioned, the 2020 Process Rule
required that final coverage determinations be published prior to the
initiation of any test procedure or energy conservation standard
rulemaking and at least 180 days prior to publication of a test
procedure NOPR. DOE understands that the 180 day-period provides
regulated entities with both regulatory certainty and time to
reallocate capital in preparation for compliance requirements. With
regard to the comment period, both the current and 2020 Process Rule
include a comment period of at least 60 days, so DOE is not proposing
any changes specific to this requirement.
Several commenters discussed the process that they believe DOE
should follow to establish coverage for consumer products and
industrial equipment, as described in this section. On this topic,
Strauch commented that DOE should focus on covered products required by
statute under EPCA and not expand coverage to other consumer products
and industrial equipment. (Strauch, No. 18 at p. 1).
The Joint Gas Associations supported a Process Rule that limits any
expansion of coverage to those narrow circumstances that satisfy the
statutory requirements and purpose of EPCA. (The Joint Gas
Associations, No. 25 at p. 33).
Lennox and WM Technologies stated that standards should apply to
only the finished product/system level, and not to sub-systems or
components. Lennox and WM Technologies further stated that component-
level regulation increases burden (e.g., regulatory complexity,
consumer costs) and/or limits innovation. WM Technologies added that
component-level and finished-product-level tests are different from
each other and could produce test results that are not compatible.
(Lennox, No. 26 at pp. 1, 4-5; WM Technologies, No. 14 at pp. 2-3)
In response, both the current and the 2020 Process Rule state that
DOE has discretion to conduct proceedings to
[[Page 42047]]
determine whether additional products or equipment should be covered or
whether to reduce the scope of coverage under EPCA if certain statutory
requirements are met, including if such coverage is necessary or
appropriate to carry out the purpose of EPCA. Section 5 of appendix A.
Furthermore, the statute includes definitions for the terms ``consumer
product'' and ``industrial equipment'' that determine the product level
subject to regulation. Finally, DOE plans to consider issues related to
component-level regulation on a case-by-case basis. At this time, DOE
does not believe it is necessary to provide additional context with
respect to the statutory requirements and is not proposing any
additional changes to the Coverage Determination Rulemakings section of
the Process Rule.
F. Significant Energy Savings
1. Background
Under EPCA, any new or amended energy conservation standard must
result in significant conservation of energy or, in the case of ASHRAE
equipment, significant additional conservation of energy.\11\ (42
U.S.C. 6295(o)(3)(B); 42 U.S.C. 6313(a)(6)(A)(ii)(II); 42 U.S.C.
6316(a)). However, EPCA does not define ``significant'' as it relates
to the amount of energy savings projected to result from an energy
conservation standard. While DOE has generally addressed the
significance of energy savings on a case-by-case basis in the context
of individual energy conservation standards rulemakings, DOE has twice
established sets of numerical thresholds to determine whether energy
savings are significant.
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\11\ For ASHRAE equipment, the baseline for comparison is the
potential energy savings from the industry standard (i.e., ASHRAE
Standard 90.1). Thus, DOE can only issue a more-stringent standard
if the additional energy savings are significant. (See 42 U.S.C.
6313(a)(6)(A)(ii)(II)).
---------------------------------------------------------------------------
In a final rule published in the Federal Register on December 22,
1982, DOE adopted three tests for determining whether an energy
conservations standard would result in significant energy savings. 47
FR 57198 (December 1982 Final Rule). The first test deemed energy
savings significant if the standard would result in the saving of
10,000 barrels per day (bpd) of oil or the saving of natural gas
equivalent to 10,000 bpd of oil over the period of the average life of
the product. The second test deemed energy savings significant if the
standard would result in the saving of one percent of national
electricity use over the period of the average life of the product. The
third test deemed energy savings significant if the standard would
reduce product energy consumption by 16.67 percent. Id. at 47 FR 57209.
In Natural Resources Defense Council v. Herrington, 768 F.2d 1355 (D.C.
Cir. 1985), the court held that, while Congress gave DOE considerable
discretion to define significant energy savings, DOE's three tests were
inconsistent with the purposes of EPCA. Id. at 1383.
In 2017, DOE once again initiated inquiry on the topic of a
significant energy savings threshold in a request for information (RFI)
published in the Federal Register on December 18, 2017. 82 FR 59992,
59997. Subsequently, in the February 2019 Process Rule NOPR, DOE
proposed a threshold-based analysis for determining whether energy
savings are significant. 84 FR 3910, 3923 (Feb. 13, 2019). Subsequent
to the February 2019 NOPR, DOE published in the Federal Register a
notice of data availability (NODA) on July 26, 2019, which presented
its energy savings data in terms of site energy usage. 84 FR 36037
(July 2019 NODA).
DOE's proposal generated significant comments both in support and
in opposition, with the most salient points presented in the paragraphs
that follow. (These comments are summarized in the February 2020 final
rule, followed by DOE's responses. See 85 FR 8626, 8656-8676 (Feb. 14,
2020).)
Commenters supporting the significant energy savings threshold
argued that it would support consistency across energy conservation
standards rulemakings, alleviate unnecessary regulatory burdens and
uncertainty on industry, assist the Department and industry with
resource allocation, and help mitigate consumer cost impacts. Id. at 85
FR 8656-8658.
Commenters opposing the significant energy savings threshold argued
that it was inconsistent with the Herrington decision, that it would
sacrifice energy and cost savings, and that any such level would be
arbitrary. Id. at 85 FR 8658-8662. It was also argued that a simple
threshold does not account for the importance of saving energy at
different times of day, such as at times of peak grid demand. Id. at 85
FR 8660.
After considering comments received and applying a uniform approach
with respect to the energy usage examined, DOE decided to adopt a
significant energy savings threshold in the February 2020 Process Rule
final rule, but it adjusted the numerical value of the threshold to
account for concerns raised by commenters. In that rule, DOE adopted
two tests for determining whether an energy conservation standard would
result in significant energy savings. The primary test deemed energy
savings significant if the standard would result in a 10-percent
reduction in site energy use over a 30-year period. Id. at 85 FR 8675.
The second test deemed energy savings significant if the standard would
save 0.3 quads of site energy use over a 30-year period. DOE found that
these thresholds would have significantly reduced rulemaking burden
over the history of the energy conservation standards program while
retaining over 95 percent of the energy savings. Id. DOE explained its
conclusion that the adopted approach was consistent with the court's
holding in Herrington. See id. at 85 FR 8669. The final rule pointed to
that portion of the court's decision in Herrington noting that DOE
could establish a threshold for significant energy savings as long as
the selected level reasonably accommodates the policies of EPCA. Id. at
85 FR 8675. This language in the Herrington opinion is particularly
noteworthy because it provides a judicial interpretation as to the best
reading of EPCA vis-[agrave]-vis the ``significant conservation of
energy'' provision. Under Loper Bright Enterprises v. Raimondo, 603
U.S. 369 (2024), it is the province of Article III courts to determine
the best reading of ambiguous statutory provisions. Consequently, the
Herrington court's pronouncement as to the permissibility of a
threshold for significant energy savings suggests that DOE is on firm
ground in proposing such a threshold as part of the Process Rule.
However, before these significant energy savings tests were ever
utilized in a DOE rulemaking, the Department changed course and
eliminated these tests from its regulations in the December 2021 Final
Rule, thereby reverting once again to assessing on a case-by-case basis
whether a new or amended energy conservation standard would result in
significant conservation of energy. 86 FR 70892, 70893 (Dec. 13, 2021).
As discussed in the April 2021 Process Rule NOPR, DOE proposed to
remove the current numerical threshold for determining whether energy
savings are significant for a number of reasons; however, DOE did not
claim that establishing a threshold was outside its authority under
EPCA. 86 FR 18901, 18905 (April 12, 2021).
In light of E.O. 14154, ``Unleashing American Energy,'' 90 FR 8353
(Jan. 29, 2025), and the Presidential Memorandum of January 20, 2025,
``Delivering Emergency Price Relief for American Families and Defeating
the Cost-of-Living Crisis,'' 90 FR 8245 (Jan. 28, 2025), DOE has
decided to once again examine the potential for using
[[Page 42048]]
tests or numerical thresholds in determining whether energy savings
from a standard would be significant. Specifically, section 2(f) of
E.O. 14154 provides that it is the policy of the United States ``to
safeguard the American people's freedom to choose from a variety of
goods and appliances, including but not limited to lightbulbs,
dishwashers, washing machines, gas stoves, water heaters, toilets, and
shower heads, and to promote market competition and innovation within
the manufacturing and appliance industries.'' 90 FR 8353, 8353 (Jan.
29, 2025). Furthermore, the Presidential Memorandum of January 20,
2025, in relevant part, orders the heads of all Executive departments
and agencies to ``eliminate counterproductive requirements that raise
the cost of home appliances.'' 90 FR 8245, 8245 (Jan. 28, 2025).
For these reasons, in the April 2025 RFI, DOE requested comments on
ways to reduce regulatory burden, mentioning the threshold value for
energy savings as an example of such an opportunity. 90 FR 16093, 16097
(April 17, 2025). DOE received several comments in response to the
April 2025 RFI related to whether DOE should establish criteria or
thresholds to define the term ``significant energy savings.'' Two
commenters opposed adding a significant energy savings threshold.
(ASHRAE, No. 12 at pp. 2-3; NEEA, No. 36 at pp. 1-2). ASHRAE stated
that there is no widely agreed to definition and that DOE should focus
on achieving efficiency improvements on an individual basis, and NEEA
stated that smaller incremental jumps are less burdensome and suggested
assessing burden on an individual product basis. (Id.) Several
commenters were supportive of a threshold. (AHRI, No. 28 at p. 11; BWC,
No. 34 at pp. 4-5; BHI, No. 16 at pp. 2-3; Joint Gas Associations, No.
25 at p. 27; Lennox, No. 26 at pp. 2-4; MHI, No. 21 at p. 3; Strauch,
No. 18 at p. 1; NAHB, No. 19 at p. 4; NEMA, No. 23 at pp. 4-5; NRECA,
No. 17 at p. 2; ONE Gas, No. 37 at p. 5; Rinnai, No. 11 at p. 9;
Strauch, No. 18 at p. 1; Zero Zone, No. 15 at p. 3) BWC, MHI, NAHB, and
NEMA supported the thresholds from the February 2020 Process Rule.
(BWC, No. 34 at pp. 4-5; MHI, No. 21 at p. 3; NAHB, No. 19 at p. 4;
NEMA, No. 23 at pp. 4-5) Lennox supported a threshold of 0.3 quads or a
5-percent improvement in site energy savings. (Lennox, No. 26 at pp. 2-
4) The Joint Gas Associations recommended that DOE utilize source
energy when evaluating critical energy policy decisions and include the
anticipated reduction of source energy consumption and impact of
overall source energy consumption in the market sector, noting that gas
products are at a disadvantage when using site savings due to differing
site-to-source factors. (Joint Gas Associations, No. 25 at p. 19-21,
27) In addition, the Joint Gas Associations stated that any energy
savings associated with fuel switching should not be permitted to be
used to justify a standard. (Joint Gas Associations, No. 25 at p. 21).
Energy conservation standards that reduce consumer choice and raise
costs while delivering minimal energy savings to the consumer and the
Nation are counterproductive as contrary to the statutory
considerations outlined in EPCA. Establishing a reasonable, consistent
methodology for determining significant energy savings ensures
compliance with both the requirements of EPCA, as well as the policies
and objectives set forth in these additional Executive Actions, and is
responsive to the majority of stakeholder comments.
2. Proposed Threshold for Significant Energy Savings
One of the complicating factors in establishing tests or thresholds
for determining significant energy savings has always been the vast
difference in energy use amongst covered products and equipment. For
example, the regulated site energy use of covered products and
equipment ranges from less than 1 quad over a 30-year period to over
500 quads.\12\ In Herrington, the court acknowledged that DOE may
reasonably regard energy savings as not significant for a high-
consumption appliance, even if the same amount would be significant for
a low-consumption appliance. Natural Resources Defense Council v.
Herrington, 768 F.2d 1355, 1376 (D.C. Cir. 1985). As a result, the
court held that EPCA does not forbid DOE from setting a significant
energy savings threshold as a percentage of the energy consumed by a
covered product or equipment, provided that the selected level
reasonably accommodates the policies of EPCA. Id. Keeping in mind these
important considerations, DOE has tentatively concluded that a
percentage-based threshold is the best way to reduce regulatory burdens
while meeting the policy objectives of EPCA.
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\12\ The range is based on the standby energy use for microwave
ovens compared to the energy use of electric motors.
---------------------------------------------------------------------------
As for the specific percentage, DOE agrees with the court in
Herrington that a significant energy savings threshold must show some
awareness of the range of energy savings Congress thought worth
pursuing. Id. at 1377. Since the inception of the program, DOE has
issued 86 rules establishing energy conservation standards for covered
products and equipment with a total site energy savings of 83.5
quads.\13\ Without a significant energy savings threshold in place, DOE
has generally adopted standards unless the energy savings would be
genuinely trivial.\14\ For example, DOE has adopted standards that
would result in 0.016 (Ceiling Fan light Kits), 0.02 (Microwave Ovens),
and 0.044 (Beverage Vending Machines) quads of site energy savings over
a 30-year period.\15\ Because the criterion for significant energy
savings has, therefore, been almost without meaning (other than that
trivial energy savings are not significant), DOE has essentially
established standards based solely on what is economically justified
and technologically feasible under EPCA. As a result, the energy
savings from these standards are already close to the upper range of
energy savings that is even achievable under EPCA, let alone the amount
of energy savings that Congress thought was worth pursuing as
``significant.''
---------------------------------------------------------------------------
\13\ See supporting table available in www.regulations.gov/docket/EERE-2025-BT-STD-0001. This includes final rules published
from 1989 to 2025.
\14\ See, e.g., Energy Conservation Program: Energy Conservation
Standards for Dehumidifiers, 81 FR 38338, 38346 (June 13,
2016)(finding energy savings to be nontrivial and, therefore,
``significant'' within the meaning of section 325 of EPCA).
\15\ See supporting table available in www.regulations.gov/docket/EERE-2025-BT-STD-0001.
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Knowing that a reasonable threshold for significant energy savings
can help achieve the energy conservation objective of EPCA while
reducing regulatory burden, DOE evaluated potential energy savings
percentage thresholds based on what percentage of energy savings from
past standards rulemakings would have been retained under a new,
proposed threshold. In conducting this evaluation, however, it rapidly
became apparent that it would be difficult to accommodate the policies
of EPCA solely using a percentage threshold. For example, on January
17, 2001, DOE published standards for consumer water heaters that were
projected to result in 4.6 quads of source energy savings. 66 FR 4474,
4475. However, those energy savings only represented a 4-percent
reduction in energy use of consumer water heaters over the analysis
period. As a result, similar to the February 2020 Final Rule, DOE is
proposing a second threshold that would be based on the cumulative
amount of energy saved over the 30-year
[[Page 42049]]
analysis period. The second threshold would account for situations
where standards result in significant energy savings in absolute terms
that may be achieved through small percentage reductions in energy use
for covered products and equipment that use more energy (e.g., water
heaters and central air conditioners and heat pumps).
In proposing these thresholds, DOE notes that the choice of site
energy vs. source (or primary) energy is important. Site energy
consumption refers to energy use at the site of the relevant equipment.
For electricity from the grid, source (or primary) energy consumption
is equal to the heat content of the fuels used to generate that
electricity (which accounts for losses associated with the generation,
transmission, and distribution of electricity).
For natural gas, oil, and propane, source energy is equivalent to
site energy. Full-fuel-cycle (FFC) energy includes source energy and
all energy consumed in extracting, processing, and transporting or
distributing primary fuels, which are referred to as upstream
activities. For natural gas, FFC energy includes leakage in upstream
activities. This distinction is important, as some covered products and
equipment may only use a single type of fuel (e.g., central air
conditioners and heat pumps (electricity)), while others may use
multiple types of fuel (e.g., water heaters (gas, oil, and
electricity)). As the National Academies report \16\ noted, for
products that use multiple fuel types or when more than one fuel can be
used for the same application, comparison of just the site energy will
lead to incorrect inferences about the potential for energy
conservation. The report stated that for these products, measuring
full-fuel-cycle energy consumption would provide a more complete
picture of energy used, allowing comparison across many different
products. Based on ensuring an equitable treatment of different energy
sources, DOE has tentatively determined that a significant energy
savings threshold based on FFC rather than site energy use is
appropriate. DOE also notes that a threshold based on FFC energy
savings is consistent with DOE's historic practice of presenting
projected energy savings from a rule in terms of FFC savings.
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\16\ National Research Council (2009), Review of Site (Point-of-
Use) and Full-Fuel-Cycle Measurement Approaches to DOE/EERE Building
Appliance Energy-Efficiency Standards: Letter Report. Washington,
DC: The National Academies Press (Available at:
www.nationalacademies.org/publications/12670).
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Similar to the approach taken in the February 2020 Process Rule
final rule, DOE has evaluated how various potential significant energy
savings thresholds would have impacted DOE's past rulemakings. 85 FR
8626, 8675 (Feb. 14, 2020). Based on this evaluation, DOE notes that a
threshold based on a 10-percent reduction in FFC energy use over a 30-
year period or a 2 quad reduction in FFC energy use over a 30-year
period would retain 91.5 percent of the energy savings from the program
while eliminating 35 percent of the rulemakings (30 of 86
rulemakings).\17\ This is a clear indication that establishing a
threshold for significant energy savings can yield enormous benefits
and reduce burdens without frustrating the energy conservation purposes
of EPCA. Manufacturers typically incur significant conversion costs to
redesign models for compliance with new or amended standards, and
higher production costs associated with amended standards are passed on
to consumers as higher up-front purchase costs. As discussed earlier in
this paragraph, DOE estimates that without a threshold, 35 percent of
DOE's rulemakings have imposed those costs on the market, while
contributing to less than 9 percent of the total energy savings from
the program.
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\17\ This evaluation is based on the FFC energy savings as
presented in the final rules published from 1989 through 2025. The
conversion of site to FFC energy use and energy savings varies by
rulemaking based on both the energy source considered for the
product or equipment at issue and on the site-to-FFC multipliers
current at the time of that analysis.
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Further, DOE notes that failure to meet the threshold in a
rulemaking for a covered product or equipment does not foreclose the
possibility of a future rulemaking for that same product/equipment
achieving significant energy savings. One of the purposes of a
threshold for significant energy savings is to prevent a process where
DOE amends an energy conservation standard every time there is an
incremental improvement in energy efficiency for a covered product or
equipment which does not rise to a ``significant'' level. For example,
the 2017 final rule for walk-in coolers and freezers was estimated to
save 0.85 quads FFC over 30 years, representing an 8-percent reduction
in FFC energy use. 82 FR 31808 (July 10, 2017). These energy savings
would not meet the threshold of significant energy savings proposed in
this NOPR. However, DOE's next walk-in coolers and freezers final rule
published in 2024 was estimated to save 1.6 quads FFC over 30 years,
representing a 6-percent reduction in FFC energy use. 89 FR 104616
(Dec. 23, 2024).\18\ These values also would not meet the proposed
thresholds for significant energy savings, but the combined energy use
reduction of the two final rules would represent over 2 quads of FFC
energy savings. This example indicates how the proposed energy savings
thresholds would allow DOE to continue establishing amended energy
conservation standards, when appropriate, while avoiding the burdensome
process of the market complying with frequent incremental changes to
DOE's standards. DOE has tentatively determined that this balance of
achieving significant energy savings while limiting the burden of
rulemakings with lower energy savings, either on a percentage or quads
basis, ensures that DOE's actions are consistent with EPCA while
providing certainty as to how DOE will apply statutory requirements.
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\18\ This final rule was subsequently withdrawn by DOE on May
20, 2025, after the President signed a resolution of disapproval
under the Congressional Review Act. 90 FR 21391.
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Based upon this analysis, DOE proposes to amend the current Process
Rule to include the provisions regarding significant energy savings
from the 2020 Process rule, but to consider ``significant energy
savings'' as at least a 10-percent reduction in FFC energy use over a
30-year period or a 2 quad reduction in FFC energy use over a 30-year
period. DOE also proposes to add this language specific to ASHRAE
equipment and ``significant additional conservation of energy'' in
section 9. DOE requests comment on these proposed thresholds and may
also consider alternative thresholds ranging from 5 to 15 percent or
from 0.5 quads to 5 quads FFC energy reduction over a 30-year period.
These other thresholds and an analysis of their application to past DOE
rulemakings can be found in the rulemaking docket.\19\ As discussed
earlier in this section, DOE has tentatively determined that these
proposed thresholds best balance the energy savings associated with the
program while limiting the burden associated with rulemakings projected
to save less energy, either on a percentage or quads basis. DOE also
requests comment on its tentative determination that thresholds should
be based on FFC energy use.
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\19\ See supporting table available in www.regulations.gov/docket/EERE-2025-BT-STD-0001.
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As discussed, DOE plans to review its analytical methods for
evaluating potential new or amended standards as part of a separate
process. To the extent that DOE's analytical methods may change in a
way that would impact any eventual energy savings threshold (e.g.,
[[Page 42050]]
analyzing energy savings over a time period other than 30 years), DOE
would consider any corresponding adjustments needed to the energy
savings thresholds in a subsequent proceeding. DOE requests comment and
information on any such alternative analysis and corresponding
adjustments, either as part of this proceeding or the separate
proceeding focusing on analytical methodologies.
DOE also recognizes that EPCA established separate sections for
consumer products and for certain industrial equipment,\20\ recognizing
the distinct uses and markets for these categories of equipment and
products. Additionally, the model redesign cycles and product and
equipment lifetimes also may be distinct between these categories,
impacting the tradeoff of energy savings and burden associated with
amended standards. DOE may consider an alternate approach under which
it establishes different thresholds for covered products and equipment.
To illustrate that approach, for example, DOE could alternatively
specify that ``significant energy savings'' for covered products means
at least a 10-percent reduction in energy use over a 30-year period or
a 1 quad reduction in FFC energy use over a 30-year period; whereas for
covered equipment significant energy savings may mean at least a 10-
percent reduction in energy use over a 30-year period or a 2 quad
reduction in FFC energy use over a 30-year period. DOE requests comment
on whether such an alternative approach may be appropriate, as well as
the specific thresholds that should be applied, for example thresholds
in the range from 5 to 15 percent or from 0.5 quads to 5 quads FFC
energy reduction over a 30-year period.\21\
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\20\ 42 U.S.C. 6291-6309 and 42 U.S.C. 6311-6317, respectively.
\21\ See supporting table available in www.regulations.gov/docket/EERE-2025-BT-STD-0001.
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DOE also requests comment on further alternative approaches, such
as setting distinct thresholds, in terms of percentage and total FFC
energy use reduction over a 30-year period (or as noted earlier over
alternative analysis periods), according to the type of covered
products and equipment in residential, commercial, and industrial
sectors. For example, would there be a benefit to establishing separate
thresholds for consumer heating and cooling equipment as compared to
consumer appliances (e.g., refrigerators, dishwashers, and clothes
washers and dryers)? DOE specifically requests comments on whether
specific thresholds should be applied to: (1) consumer heating and
cooling products; (2) consumer appliances (such as refrigerators,
dishwashers, and washers and dryers); (3) consumer water heating
products; (4) consumer electronics; (5) other covered products; (6)
commercial heating and cooling equipment; (7) commercial water heating
equipment; (8) commercial refrigeration equipment; and (9) other
covered equipment. DOE requests comment on this further disaggregated
threshold approach, and on whether the 10-percent and 2 quads FFC
energy use reduction over a 30-year period, or higher or lower
alternatives, may be appropriate for each product or equipment
grouping. DOE also acknowledges that implementation of such an approach
may require further clarification regarding specific product
classifications. DOE requests comment on whether further implementation
guidance would be helpful and any recommendations from affected
stakeholders on how to best implement such an alternate approach.
G. Process For Developing Energy Conservation Standards (Section 6)
This section was first established in the July 1996 Final Rule and
describes the process DOE follows in developing energy conservation
standards for covered products and equipment other than those covered
equipment subject to ASHRAE/IES Standard 90.1. The February 2020 Final
Rule created an ``early assessment'' process for seeking stakeholder
input prior to commencing a rule and committed to an initial rulemaking
stage prior to a proposed rule (e.g., an advanced notice of proposed
rulemaking (``ANOPR'') or a framework document and preliminary
analysis). This rule also established a threshold for ``significant
energy savings'' of 0.3 quads or 10 percent site savings over 30 years.
Subsequent amendments in the December 2021 and April 2024 Final Rules
removed the energy savings threshold requirement and the requirement
for a separate early assessment RFI but clarified that DOE will issue
one or more documents during the pre-NOPR stage of a rulemaking, which
could include a framework document, RFI, notice of data availability
(``NODA''), preliminary analysis, or ANOPR.
1. Early Assessment and Pre-NOPR Stages
Several commenters supported reinstating an early assessment stage
in the process for developing energy conservation standards or in
general support of a formal early assessment process for both energy
conservation standards and test procedure rulemakings.\22\
---------------------------------------------------------------------------
\22\ See also section IV.J.1 of this document with regard to
early assessments for test procedures.
---------------------------------------------------------------------------
AHRI expressed support for an early assessment process for the
amendment of existing standards. (AHRI, No. 28 at p. 8). NAHB
recommended that DOE reinstate the early assessment process for
soliciting stakeholder feedback well in advance of commencing an energy
conservation standards rulemaking, as this reduces regulatory burden.
(NAHB, No. 19 at p. 3). The Joint Gas Associations stated that a formal
early assessment process can increase the efficiency of DOE's
rulemaking process, as it could lead to a prompt, early decision in
favor of more productive use of rulemaking resources. (Joint Gas
Associations, No. 25 at p. 25). NEMA stated that the scope of coverage
for a rulemaking should be thoroughly researched and addressed in a
robust RFI phase to ensure clarity and consideration of all relevant
data and stakeholder input before the NOPR is issued. NEMA also stated
that this would reduce the likelihood of a rule that is inconsistent
with the statute and, thus, vulnerable to legal challenge. NEMA
recommended re-adoption of the approach in the 2020 Process Rule to
mandate use of an early assessment RFI and either an ANOPR or a
framework document with a preliminary analysis. (NEMA, No. 23 at pp. 7-
8).
Several commenters also expressed support for requiring a pre-NOPR
stage in the process for developing energy conservation standards;
however, there was no consistency in recommending what that stage
should be. Commenters stated that this requirement can be fulfilled
with either an ANOPR or framework document with a preliminary analysis
(AHRI, No. 28 at p. 8), an ANOPR or a preliminary analysis (APPA, No.
20 at p. 4; EEI, No. 35 at p. 4), or an ANOPR or a framework document
or a preliminary analysis (NAHB, No. 19 at pp. 3-4). The Joint Gas
Associations stated that the Process Rule should include multiple
avenues such as an ANOPR, NODA, RFI, or NOPR/SNOPR and that DOE should
explain why it determined which publication was appropriate (e.g., NODA
instead of ANOPR). (Joint Gas Associations, No. 25 at p. 26).
In response, DOE agrees with commenters that a formal early
assessment provides an important opportunity for public input and
provides regulatory certainty to stakeholders. As such, DOE is
proposing to return to the language in the 2020 Process Rule regarding
early assessment.
[[Page 42051]]
While commenters did not all agree on what stages of a rulemaking
should follow an early assessment, DOE has tentatively decided that
specifying limited pathways as opposed to numerous options provides
more regulatory certainty to stakeholders. As such, DOE also proposes
to return to the language in the 2020 Process Rule regarding publishing
either a Framework Document and Preliminary Analysis, or an ANOPR. DOE
requests comment on these proposals.
DOE notes that the procedural requirements of section 6 of Appendix
A do not apply to direct final rules. The procedural requirements for
direct final rules are specified in EPCA. (42 U.S.C. 6295(p)(4)).
2. Comment Periods
When developing energy conservation standards, the current Process
Rule specifies that the length of the public comment period for pre-
NOPR rulemaking documents may vary depending on the circumstances of
the particular rulemaking and will be determined on a case-by-case
basis. At the NOPR stage, the current Process Rule specifies that there
will be no less than 60 days for public comment on the NOPR, with at
least one public hearing or workshop, consistent with EPCA
requirements. (42 U.S.C. 6295(p)(2); 42 U.S.C. 6306; 42 U.S.C. 6316(a)-
(b)). See Sections 6(a)(6) and 6(b)(2) of appendix A. In contrast, the
February 2020 Process rule had included a minimum comment period of 75
calendar days for pre-NOPR and NOPR rulemaking documents. 85 FR 8626,
8705-8706 (Feb. 14, 2020).
The April 2025 RFI requested comments on whether and how the
Process Rule should be amended to modify public comment and review
procedures for rulemakings, consistent with EPCA's requirements. 90 FR
16093, 16098 (April 17, 2025).
In response to the April 2025 RFI, several commenters expressed
support for mandatory minimum comment periods in the Process Rule. AHRI
stated that taking the time to allow for meaningful input is more
likely to result in a streamlined process and better outcomes, and it
may also reduce the likelihood of litigation. (AHRI, No. 28 at p. 9).
BWC stated that a mandatory minimum comment period is ultimately
beneficial to DOE, as it will allow stakeholders the full amount of
time to potentially identify inaccuracies, issues, or errors that can
then be adjusted and make both test procedures and energy conservation
standards for covered products more robust. (BWC, No. 34 at p. 3). The
Joint Gas Associations stated that the minimum statutorily specified
opportunities for public input are generally inadequate and that longer
comment periods should be the norm and specified in the Process Rule.
(Joint Gas Associations, No. 25 at pp. 24-25).
Several commenters recommended specific comment period lengths. BWC
recommended that DOE re-adopt the February 2020 Process Rule
provisions, which would extend the mandatory length of comment periods
to 75 days for both NOPR and pre-NOPR notices. (BWC, No. 34 at p. 2).
AHRI stated that 75 days is an appropriate length of time to gather
comments in early phases of a rulemaking, but 60 days should be the
minimum. AHRI further stated that if DOE believes a particular step
dictates a shorter or longer comment period, it can deviate from the
Process Rule and provide an explanation in the notice. (AHRI, No. 28 at
pp. 9-10). AHRI also stated that if DOE shortens the comment period to
60 days, DOE should continue to freely grant reasonable requests for
extension. (AHRI, No. 28 at p. 10) Rinnai recommended minimum public
comment periods of 60 days for initial notices and 45 days for
supplemental notices. (Rinnai, No. 11 at pp. 3, 5, 10) Lennox stated
that the comment periods specified in the Process Rule should be
binding so as to allow for a reasonable minimum comment period in order
for stakeholders to properly review and respond to the document in
question. (Lennox, No. 26 at p. 2). Lennox recommended that NOPRs have
comment periods of at least 60 days from the date of publication in the
Federal Register. Lennox also recommended that pre-NOPR documents have
comment periods of at least 60 days (for the first pre-NOPR notice in a
docket) or 30 days (for subsequent notices if those subsequent notices
do not raise material new issues that require engineering or technical
analysis). Lennox also recommended that SNOPRs and other post-NOPR
documents have comment periods of at least 30 days. (Lennox, No. 26 at
pp. 8-9).
Other commenters stated that public comment periods specified in
the existing Process Rule are sufficient. The State Agencies stated
that the current public comment and review process is robust,
accessible, transparent, and has resulted in thousands of comments from
across the Nation to inform DOE proceedings. The State Agencies also
requested that if DOE does propose changing the public comment periods,
that it also provide justification and an opportunity for additional
public comment on how the proposed changes to the Process Rule would
result in an improved public comment and review process. (State
Agencies, No. 33 at p. 2). NEEA recommended that DOE should maintain
the current public comment and review process as codified in the
Process Rule that allows for early and meaningful public engagement.
The commenter stated that the current rule embeds EPCA's statutory
comment requirements and provides structured opportunities for
stakeholder input throughout the rulemaking process, including at the
proposal stage and, in some cases, earlier through pre-rulemaking
notices or stakeholder meetings. NEEA expressed opposition to any
changes that would diminish the structure, duration, or significance of
public comment periods. (NEEA, No. 36 at p. 2).
ACCA stated that minimum public comment periods alone are not
sufficient if the procedures themselves remain opaque or are overly
reliant on technical modeling that is inaccessible to small businesses.
(ACCA, No. 38 at p. 3).
In response, DOE has reviewed the comments received regarding the
appropriate comment periods for various documents. DOE has tentatively
determined that a minimum 75-day comment period best addresses the
public comments received, as it ensures stakeholders will be provided
with a meaningful opportunity for public comment on every rulemaking
document. Though several public comments indicate that a 60-day comment
period is typically sufficient for a NOPR, commenters representative of
a wide swath of affected entities also support reinstatement of the 75-
day comment period. Therefore, DOE proposes to reinstate the comment
periods from the 2020 Process Rule. Additionally, DOE already makes
available its analytical models and technical documentation, with at
least one public hearing or workshop, for all stakeholders to review
during the comment period. DOE has tentatively determined that this
approach is sufficiently accessible to all interested parties. Further
consideration of analytical methodologies will be addressed in a
separate process, as discussed in section IV.N.1 of this document.
3. Factors To Be Considered in Selecting a Proposed Standard
Section 6 of the Process Rule includes a list of factors to be
considered in selecting a proposed standard. This list is largely the
same in the current Process Rule as in the 2020 Process Rule, but DOE
is proposing to re-instate the language in the 2020 Process Rule
[[Page 42052]]
for consistency. In addition, DOE is proposing minor wording changes to
certain of the factors, including those discussed in the subsequent
paragraphs, consistent with statutory requirements and best practices.
a. Private Impacts on Consumers
Section 6(a)(5)(iv)(B) of the Process Rule specifies that at the
pre-NOPR stage, DOE will consider various factors when selecting a
proposed standard, including an analysis of private impacts on
consumers, including estimates of energy savings, consideration of
subgroups, and other assessments of the range of impacts. As discussed,
Executive Order 14154 states that it is the policy of the Department to
safeguard the American people's freedom to choose from a variety of
goods and appliances, including but not limited to lightbulbs,
dishwashers, washing machines, gas stoves, water heaters, toilets, and
shower heads. Consistent with this Executive order, DOE is proposing to
add protection of consumer choice to the list of factors DOE will
assess in considering the private impacts on consumer of any potential
standards level. As discussed in section IV. H of this document, DOE is
also proposing to add consideration of certain private economic impacts
to the existing paragraph.
b. Impacts on the Environment
Section 6(a)(5)(iv)(F) of the Process Rule specifies that at the
pre-NOPR stage, DOE will consider various factors when selecting a
proposed standard, including an analysis of environmental impacts and
estimated impacts on emissions of carbon and relevant criteria
pollutants. Under EPCA, the Secretary has discretion to weigh ``other
factors the Secretary considers relevant.'' (42 U.S.C.
6295(o)(2)(B)(i)(VII)). Previously, the Secretary made a determination
this consideration of environmental and emissions impacts was relevant.
Currently, however, given other considerations germane to 42 U.S.C.
6295(o), the Secretary has tentatively determined that the specifics of
section 6(a)(5)(iv)(F) of the Process Rule as written are no longer
relevant as an additional factor for his consideration, and instead,
DOE is proposing that this factor simply refer to ``Other factors the
Secretary considers relevant.'' This proposal is also consistent with
the policies specified in the Executive order. More specifically,
section 6 of Executive Order 14154 specifies policies for prioritizing
accuracy in environmental analyses, specifically instructing that for
Federal regulatory processes, all agencies shall adhere to only the
relevant legislated requirements for environmental considerations, and
any considerations beyond those requirements are eliminated.
H. Policies on Selection of Standards (Section 7)
This section was established in the July 1996 Final Rule and
describes the Department policies concerning the selection of new or
revised standards. The February 2020 Final Rule made minor amendments
to align with revisions elsewhere in in the Process Rule, while the
August 2020 Final Rule added a clarification that DOE would conduct a
comparative analysis across all trial standard levels when determining
whether a level was economically justified. The December 2021 Final
Rule amended this section to remove the requirement for a comparative
analysis and to remove a section related to considerations in assessing
economic justification.
1. Market Competition and Innovation
The April 2025 RFI requested comment on whether and how the Process
Rule should be updated to provide additional detail on how DOE's
rulemaking process can promote market competition and innovation within
the manufacturing and appliance industries and on DOE's historical
analysis of potential impacts of any lessening of competition under 42
U.S.C. 6295(o)(2)(B)(i)(V). 90 FR 16093, 16098 (April 17, 2025).
DOE received several comments in support of using standards to
promote market competition.
Lennox commented that DOE should support domestic manufacturers by
promulgating reasonable standards and enforcing compliance to prevent
the entry of low-cost, non-compliant imports. (Lennox, No. 26 at p. 5)
NEMA commented that competition benefits from reasonable and
consistent efficiency rules that provide a stable and level playing
field. NEMA further stated that predictability and consistency in the
Appliance Standards Program are essential to reduce regulatory burden.
In addition, the commenter argued that sudden changes can jeopardize
investments made and inventory already created, which rely on current
standards and test procedures. NEMA added that the testing of products
and certification is highly beneficial in protecting manufacturers and
consumers against misrepresentations of performance. (NEMA, No. 23 at
pp. 3-4, 6)
Ceres commented that Federal appliance standards are critical for
regulatory clarity, market consistency, and innovation incentives and
provide a reduction in complexity and cost associated with meeting a
patchwork of State-level regulations. Ceres added that for
manufacturers, this consistency simplifies product design, production
planning, and distribution logistics, thereby enabling more efficient
economies of scale and streamlining compliance processes compared to
having to meet different local energy efficiency rules. (Ceres, No. 22
at p. 1)
The Joint Advocates commented that efficiency standards promote
market competition and innovation and cited a study \23\ showing that
regulations can enhance competition by creating market pressure that
motivates innovation, leveling the playing field during transitions,
and providing certainty that investments in efficiency improvements
will be valued in the future. The Joint Advocates also pointed to
another study \24\ which concluded that as standards take effect, the
price of older, but still-compliant products drops, and manufacturers
are then incentivized to innovate so they can introduce new premium
models with novel features and higher efficiency, resulting in better
products that benefit all consumers. (Joint Advocates, No. 31 at p. 3)
---------------------------------------------------------------------------
\23\ M. E. Porter & C. van der Linde, ``Toward a New Conception
of the Environment-Competitiveness Relationship,'' Journal of
Economic Perspectives, 1995, Vol. 9, No. 4, pp. 97-118 (Available
at: www.aeaweb.org/articles?id=10.1257/jep.9.4.97) (Last accessed
July 31, 2025).
\24\ A. Brucal & M.J. Roberts, ``Do energy efficiency standards
hurt consumers? Evidence from household appliance sales,'' Journal
of Environmental Economics and Management, 2019, Vol. 96, pp. 88-107
(Available at: www.sciencedirect.com/science/article/pii/S0095069617307647) (Last accessed July 31, 2025).
---------------------------------------------------------------------------
DOE also received several comments indicating that changes to the
Process Rule are not needed to promote competition and innovation.
Ceres, the Joint Advocates, Lennox, and the State Agencies
commented that the existing Process Rule and/or current statute is
sufficient to protect competition and innovation. (Ceres, No. 22 at p.
1; Joint Advocates, No. 31 at p. 2; Lennox, No. 26 at p. 5; State
Agencies, No. 33 at p. 2)
Specifically, Ceres stated that the current statute already
promotes market competition and innovation by directing DOE not to
consider new standards or amendments that cannot be scaled to meet the
market and energy conservation needs. Ceres added that completely
changing the current Process Rule would ultimately reduce market
competition and product availability across the Nation and put U.S.
[[Page 42053]]
manufacturers at a disadvantage in the global marketplace. (Ceres, No.
22 at pp. 1-2)
The Joint Advocates commented that the Process Rule already
includes market competition and innovation protections, including the
requirement to consult with both the U.S. Attorney General and the
Department of Justice in evaluating any lessening of market
competition, as well as the requirement to consider the practicability
to manufacture, install, and service a given technology before giving
it further consideration in a rulemaking. The Joint Advocates added
that the Process Rule further states that DOE will not consider
technology options that cannot be scaled to meet the market need or
that are proprietary. (Joint Advocates, No. 31 at pp. 2-3)
The State Agencies commented that any potential changes to the
Process Rule must be analyzed across the full range of technologies
covered by the Appliance Standards Program and must consider
manufacturer innovation. The State Agencies stated that consideration
of market competition and innovation needs no further elaboration
within the Process Rule and is only appropriate at the individual
rulemaking level. (State Agencies, No. 33 at pp. 1-2)
DOE received several comments recommending specific changes to the
Process Rule to promote competition and innovation.
ACCA commented that recent policies have favored electrification,
ignoring the energy resilience benefits of dual-fuel systems and
significant barrier to full electrification. The commenter stated that
such policies risk increasing market concentration, as fewer
manufacturers are capable of producing compliant units and fewer
contractors are equipped to install them correctly. ACCA added that
pursuing full electrification could also raise costs, reduce service
availability, and unintentionally burden grid infrastructure with
additional seasonal loads. (ACCA, No. 38 at p. 2)
APPA stated that standards can create market distortions that
negatively impact competition and innovation. APPA commented that as
smart and artificial intelligence technologies become more prevalent,
DOE should ensure that regulations do not eliminate innovative
technologies or worsen supply chain issues. Specifically, with rising
demand and existing challenges for distribution transformers such as
higher costs and longer procurement times, the commenter urged DOE to
avoid adopting standards that worsen these issues for minimal
efficiency gains. APPA further stated that standards should not create
situations where only one U.S. manufacturer has patents to make the
product or key components of a product. (APPA, No. 20 at pp. 2-3)
Similarly, EEI commented that regulations should not eliminate
innovative technologies. As an example, EEI stated that DOE should use
annual energy metrics, where possible, instead of separate standby,
off, and active-mode metrics. EEI explained that annual energy metrics
support innovation by allowing manufacturers to consider trading off
higher standby energy use for a ``smart appliance'' with lower overall
annual energy use. (EEI, No. 35 at pp. 3-4)
NEMA commented that the Process Rule should explicitly require DOE
to consider how a rule will affect investment and whether it will harm
U.S. industry, innovation, and ultimately consumers. NEMA added that
DOE should consider the impact its decisions have on investment by
American companies related to innovation. (NEMA, No. 23 at pp. 3-4, 6)
After reviewing the comments received, DOE has tentatively
determined that the current Process Rule Objectives should be amended
to include additional provisions stating that it is DOE's policy to
promote market competition and innovation consistent with the
requirements of EPCA. See section IV.A of this document for further
discussion. DOE remains cognizant of these issues and notes that the
current statute and Process Rule already include mechanisms to consider
the potential impacts from industry concentration, manufacturing
capacity, employment, and other relevant issues. In response to ACCA,
DOE notes that potential standards for products using different fuels
are evaluated separately with their own economic justification. In
response to APPA, DOE notes that the screening analysis already
considers impacts related to proprietary technologies. In response to
EEI, DOE notes that it will consider the appropriate metric in
individual rulemakings, keeping in mind the requirements in EPCA
related to standby mode and off mode energy use at 42 U.S.C. 6295(gg).
In response to NEMA, DOE notes that it has received more specific
comments related to how DOE should analyze manufacturer impacts, as
discussed in section IV.N.2 of this document; the Department will
analyze these issues in a separate proceeding.
2. Analytic Approaches To Address Balancing Factors in EPCA
The April 2025 RFI requested comments on whether and how the
Process Rule should be updated to provide additional detail on how
DOE's rulemaking process satisfies the statutory requirements for
establishing new or amended energy conservation standards. 90 FR 16093,
16099 (April 17, 2025). DOE received comments related to how the
Process Rule should approach analyzing the potential effects of
efficiency levels, including incorporation of the statutory factors,
which inform the agency's choice of a standard level.
Several commenters supported the provisions in the current Process
Rule. The Joint Advocates and the State Agencies stated that the
current Process Rule and EPCA already outline the detailed statutory
criteria that DOE must follow in each rulemaking. (Joint Advocates, No.
31 at p. 1; State Agencies, No. 33 at p. 2) NEEA recommended that DOE
should maintain its current approach in the Process Rule to assess
economic viability. Specifically, the commenter encouraged DOE to
maintain a comprehensive assessment of economic impacts that considers
life-cycle cost savings, avoided energy system costs, macroeconomic
impacts, and economic impacts to consumers. NEEA further recommended
against redefining ``economically justified'' to have a narrow focus on
short payback periods or ``first cost analysis,'' which would
undervalue long-term economic benefits. NEEA added that overlooking
broader energy system costs and macroeconomic impacts will limit the
ability to accelerate production of energy-intensive industries and
limit economic growth potential. (NEEA, No. 36 at p. 3)
Several other commenters made specific recommendations regarding
additional thresholds or evaluations DOE should make when assessing
potential standards.
The Joint Gas Associations generally support an approach where DOE
evaluates the cost-effectiveness of a standard versus its possible
level of enhanced efficiency and added that any process of evaluation
must include balancing potential energy savings with the cost of
implementation. (Joint Gas Associations, No. 25 at p. 26)
When selecting a standard level, in addition to including a
definition for ``significant energy savings'' (See section IV.F of this
document for additional discussion on this issue), AHRI commented that
the Process rule
[[Page 42054]]
should also incorporate other factors including: (1) a cost-benefit
analysis for consumers and manufacturers into the definition of
``significant energy savings''; (2) thresholds or benchmarks that
explain how DOE evaluates marginal energy savings in relation to
consumer burden, product costs, and feature trade-offs; and (3) a
methodology for comparing energy savings as it relates to the cost of
compliance, particularly for products where existing efficiency levels
are already high or marginal gains in energy savings require a steep
expense. (AHRI, No. 28 at p. 11)
NAFEM commented that the Process Rule should specify a clear rule
regarding payback period (``PBP'') that can satisfy EPCA's requirement
that standards be economically justified. The commenter argued that
lengthy PBPs (sometimes exceeding the product's average lifetime) are
impractical and not economically justified for small businesses that
often operate on short planning horizons and may never recoup the cost
of higher-efficiency equipment. NAFEM added that lengthy PBPs would
lead small businesses to repair old equipment or purchase less-
efficient refurbished units, thereby undermining EPCA's energy
efficiency goals. (NAFEM, No. 13 at pp. 5-6)
NAHB commented that standards should be set strictly based on cost-
effectiveness to the consumer. NAHB added that greater weight should be
given to the 7-percent discount rate, as a 3-percent is not realistic
in the real estate development context. (NAHB, No. 19 at p. 5)
ONE Gas commented that DOE should implement a de minimis threshold
for consumer savings at both the individual covered product and
national levels. ONE Gas added that the de minimis test should be
applied in the Framework Document phase and resolved at the Preliminary
Analysis phase. (ONE Gas, No. 37 at p. 5)
Rinnai commented that the Process Rule should include provisions
requiring DOE to conduct an affordability analysis and not set
standards if some populations, such as low- or middle-income
households, face net costs or excessive payback periods. (Rinnai, No.
11 at p. 12, 13) In addition, Rinnai stated that the Process Rule
should require a quantitative assessment of impacts on low-income and
senior households, with explicit criteria that flag when negative
outcomes exceed defined thresholds. (Rinnai, No. 11 at p. 8) Further,
Rinnai commented that the Process Rule should require that a standard
not be set if analysis shows marginal or negative life-cycle cost
outcomes, payback periods close to the product lifespan, or
disproportionate burdens on low-income or senior consumers. (Rinnai,
No. 11 at p. 9)
The Joint Gas Associations commented that DOE's rules should not
harm any customers and should not increase costs for low-income and
senior households. The Joint Gas Associations added that the Process
Rule should include some criteria for fully evaluating the cost impacts
on customers, in particular low-income and senior households. (Joint
Gas Associations, No. 25 at pp. 17-18) The Joint Gas Associations
further commented that the Process Rule should require a minimum \25\
three-year payback period threshold for DOE to propose a new or revised
standard. (Joint Gas Associations, No. 25 at p. 27)
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\25\ DOE understands the reference to a ``minimum three-year
payback period'' in this comment to mean that DOE should only
establish standards with estimated payback periods of three years or
less.
---------------------------------------------------------------------------
The Joint Gas Associations recommended that the Process Rule should
state that DOE will utilize source energy when evaluating critical
energy policy decisions and that it will seek comments on the best
method to use when evaluating energy efficiency measures, which may not
always be the existing site-to-source conversion. (Joint Gas
Associations, No. 25 at pp. 19-21) In addition, the Joint Gas
Associations stated that any energy savings associated with fuel
switching should not be permitted to be used to justify a standard.
(Joint Gas Associations, No. 25 at p. 21)
APPA commented that DOE should ensure that standards do not result
in significantly higher upfront costs or greater total system energy
losses. (APPA, No. 20 at p. 2)
ACCA recommended that the Process Rule should incorporate field-
based efficiency data and installation quality metrics in the
Department's cost-benefit analysis and determination of significant
conservation of energy. (ACCA, No. 38 at p. 2) In response, DOE
anticipates further additions and refinements to the Department's life-
cycle cost analysis and payback period methodology, as well as all
energy conservation standards rulemaking analytical methodologies, will
be addressed in the forthcoming Analytic Framework update. Further
public input will be invited on suggestions to update and improve the
agency's subgroup and distributional impact analyses, such as those
involving low-income senior citizens and small entities. Further public
comment is also solicited in response to this proposal.
Statutory Factors and Analysis
Pursuant to EPCA, any new or amended energy conservation standard
for covered products (and at least certain types of equipment) must be
designed to achieve the maximum improvement in energy efficiency that
is technologically feasible and economically justified. (42 U.S.C.
6295(o)(2)(A); 42 U.S.C. 6316(a)). In determining whether a standard is
economically justified, EPCA requires DOE, to the greatest extent
practicable, to consider the following seven factors: (1) The economic
impact of the standard on the manufacturers and consumers; (2) the
savings in operating costs, throughout the estimated average life of
the products (i.e., life-cycle costs), compared with any increase in
the price of, or in the initial charges for, or operating and
maintaining expenses of, the products which are likely to result from
the imposition of 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 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 DOE finds
relevant. (42 U.S.C. 6295(o)(2)(B)(i); (p)). As part of its
consideration of these seven factors, DOE conducts and publishes an
analysis in a technical support document (also known as a regulatory
impact analysis (RIA)). This analysis accompanies the proposed and
final rules in fulfillment of the agency's statutorily required
responsibilities to provide the public with the opportunity to comment
on DOE's consideration of the factors for economic justification,
technological feasibility, and other factors required by EPCA. (See 42
U.S.C. 6295(p)). Furthermore, the new or amended standard must result
in a significant conservation of energy (42 U.S.C. 6295(o)(3)(B); 42
U.S.C. 6313(a)(6); and 42 U.S.C. 6316(a)) and comply with any other
applicable statutory provisions.
The Secretary determines whether a standard achieves the maximum
improvement in energy efficiency \26\ given that the standard must be
both technologically feasible and economically justified. This
determination is made after conducting analysis required by EPCA and
considering views and comments
[[Page 42055]]
furnished with respect to a proposed standard. To best inform this
determination, DOE proposes a ``walk up'' approach to evaluating
prospective standards. By taking a ``walk up'' approach, DOE can
compare each progressively more stringent standard (each increase in
energy efficiency and each incremental increase in costs) to both the
status quo and the standard just below it. This allows the agency and
interested public to assess at each possible standard level the
incremental increases in energy or water savings relative to the
incremental increases in costs, including those arising out of changes
in consumer choice and satisfaction. The 2020 Process Rule referred to
this framework as the ``comparative'' approach. To reflect the general
framework of that comparative approach, as well forthcoming analytic
updates consistent with 42 U.S.C. 6295(o)(2)(B), this proposal refers
to this concept as a ``walk up.''
---------------------------------------------------------------------------
\26\ ``or in the case of showerheads, faucets, water closets, or
urinals, water efficiency'' 42 U.S.C. 6295(o)(2).
---------------------------------------------------------------------------
As part of the EPCA analysis, DOE must estimate benefits of
possible higher efficiency standards, including those the statute
directs DOE to consider estimated energy savings and potential
operating cost savings over the average life of a covered product. (42
U.S.C. 6295(o)(2)(B)(i)(II)-(III), (VII)). In estimating these
anticipated benefits, DOE must also anticipate consumer behavioral
changes that may temper or increase energy or cost savings, such as
increased product usage (often referred to as the ``rebound effect''),
refurbishing of old products or purchase of used products, or
substitution effects like using more energy- or water-intensive
settings more frequently in response to negative impacts on product
performance, or reduced costs to controlling HVAC systems due to
Apps.\27\ (42 U.S.C. 6295(o)(2)(B)(i)(I)). In addition, under EPCA, DOE
must estimate the costs of possible higher efficiency standards,
including those the statute directs DOE to consider: increases in
price, initial installation and maintenance costs; lessening of the
utility or performance (such as potential negative impacts on product
cleaning performance or differences in the brightness (lumens), hue or
colors of light bulbs); lessening of market competition, such as
increases in market consolidation or other changes in price-setting
power, and other economic impacts to manufacturers and consumers. (42
U.S.C. 6295(o)(2)(B)(i)(I-II), (IV-VII)). In estimating these
anticipated costs, DOE would be analyzing consumer welfare impacts and
losses to consumers and producers from foregone consumption of good the
market would otherwise offer (also known as dead weight loss in
economic terms), and the behavioral changes that are likely to result
from possible standards. Consumer welfare in economic terms refers to
the general satisfaction and well-being consumers derive from their
purchases and use of products. In other words, DOE's statutory
considerations regarding impacts to consumers and manufacturers,
increases in prices, maintenance costs, changes in utility and
performance all translate to consumer welfare impacts and related
changes in consumer behavior. Under EPCA, DOE further considers losses
to society when producers are willing to offer a product at a
particular price and consumers are willing to purchase that product at
that particular price and that exchange will no longer occur as a
result of a proposed standard. In particular, under EPCA, DOE may not
prescribe new standards where the standard would likely result in
domestic unavailability ``in any covered product (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)). The unavailability of any of these
characteristics translates once again to consumer welfare impacts and
potential losses to society when the market is willing to make an
exchange but for the standard. In other words, the loss of features
such as consistently illuminated clocks in microwaves,\28\ the window
in an oven door,\29\ or glass doors on beverage coolers,\30\ changes to
the layout of residential refrigerators and clothes washers and dryers,
and dishwashers would limit consumer choices and impact consumer
satisfaction and well-being. The agency ``screened out'' these feature
losses from consideration in prior analyses, and requests comment on
how such screening can be improved. DOE's forthcoming analytic
framework RFI and update will also offer the public an opportunity to
suggest methodological and data changes the better capture these
consumer impacts.
---------------------------------------------------------------------------
\27\ See, for example, DOE's previous consideration of potential
negative impacts on clothes washer performance that could alter
consumers' usage patterns at certain higher efficiency levels
considered for the analysis. (89 FR 19026, 19117; March 15, 2024).
\28\ In the most recent energy conservation standards rulemaking
for microwave ovens, DOE ``screened out'' from its analysis any
consideration of automatic power-down of the clock display as a
technology option for reducing the standby power of microwave ovens
due to its impact on consumer utility. DOE found that while it is
uncertain the extent to which consumers value the function of a
continuous display clock, the loss of such function may result in
significant loss of consumer utility. 78 FR 36316, 36362 (June 20,
2023).
\29\ In the most recent energy conservation standards rulemaking
for conventional cooking products, DOE screened out from its
analysis any consideration of energy savings that could be achieved
through removal of the glass window in the oven door, in part due to
the loss of consumer utility, possible adverse impacts on cooking
certain types of delicate food items, and potential safety concerns.
See section 4.2.1.3 of the Technical Support Document accompanying
the February 14, 2024, direct final rule (89 FR 11434), available at
www.regulations.gov/document/EERE-2014-BT-STD-0005-12819.
\30\ In the most recent energy conservation standards rulemaking
for miscellaneous refrigeration products, DOE screened out from its
analysis any consideration of energy savings that could be achieved
through the replacement of glass doors with solid doors, finding
that solid doors would be much less desirable to consumers and the
loss of the glass doors would have an adverse impact on consumer
utility. See section 4.2.1.1 of the Technical Support Document
accompanying the May 7, 2024, direct final rule (89 FR 38762),
available at www.regulations.gov/document/EERE-2020-BT-STD-0039-0037.
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The main difference between the ``walk down approach'' and the
``walk up approach'' is that the walk down approach starts at the most
stringent possible standard and ``walks down'' to different levels of
stringency, presumptively stopping at the most-stringent standard that
DOE determines is economically justified. This approach favors
technological feasibility over economic justification, resulting in
more stringent standards than may be appropriate under EPCA's balancing
factors. In other words, under the walk down approach, DOE does not
interpret the statute as requiring a netting of the benefits and costs
in moving to a more progressively stringent standard. Meanwhile, the
proposed approach ``walks up'' from the status quo to increasing levels
of stringency. This approach allows both DOE and the public to compare
easily a proposed standard's proposed energy and operating savings and
economic impacts to the status quo and to the standard just below. For
example, if the installation costs of a proposed water heater standard
would increase by 106 percent relative to the status quo, the walk up
approach would ensure that this impact is shown clearly on the cost
side of the ledger. Also, other behavioral impacts that would temper
estimated energy savings would be included, such as when consumers
choose to repair or move to secondary markets when faced with such up-
front costs. In other words, the walk up approach allows for balancing
technological feasibility and economic justification with parity. At
each increment of increased stringency,
[[Page 42056]]
the agency must consider costs. In addition, with the agency's
forthcoming analytic update, the agency's cost and benefits estimates
are expected expand beyond engineering concepts to further capture
economic concepts such as consumer welfare and behavioral change
impacts. When technology is not feasible, then incremental cost can be
very high or even infinite. While DOE conducts an engineering-based
technological feasibility check as part of its existing process the
agency acknowledges that feasibility in economic terms is also related
to costs. Given this, the economic justification analysis also has some
collinearity to technological feasibility. For instance, it may be that
at higher TSLs, from an engineering perspective, the required
technologically has been determined `feasible' but that from an
economic perspective the production costs are so high as to prevent
widespread availability or consumption. Such technology would clearly
not be found to be economically justified and from a lay person's
market perspective might not be considered feasible. When technology is
feasible, it may still fail at economic justification, and EPCA
requires both conditions to be satisfied. The seven EPCA factors lay
out different aspects of potential economic impacts to affected
parties. DOE's analytic framework RFI will delve further into
methodological and conceptual tools aimed at a more complete and
updated analysis of these factors:
1. The economic impact of the standard on the manufacturers and
consumers: this factor broadly lays out economic impacts to
manufacturers and consumers should be taken into consideration in
setting conservation standards regardless of whether those impacts may
by readily quantifiable or not. Readily quantifiable effects include
potential energy and water savings assuming that consumers'
distribution of consumption of energy and water do not change over time
appreciably. Currently, DOE folds some of these impacts into the
agency's life-cycle and payback period analysis. Manufacturers'
compliance costs are also readily quantifiable using information
collected through government data collections, public comment, DOE's
tear-down and other engineering efforts, purchase of proprietary
information and others. There are other economic effects that are more
difficult to capture on both consumer and manufacturer sides.
Estimating changes in consumers' consumption of substitute (e.g., used
and refurbished appliances) and complimentary goods (e.g., dryers if
purchasing washers; detergent choices) as a result of a conservation
standard is more difficult. For example, if a clothes washer energy and
water conservation standard were to adversely impact cleaning or
rinsing performance, consumers that experience any such negative
impacts on product performance could potentially alter their usage
patterns, for example by using more energy-intensive settings more
frequently (e.g., Extra-Hot temperature setting); using more water-
intensive cycle options (e.g., Deep Fill option; extra rinse cycles);
using non-regulated cycles (e.g., Heavy Duty cycle); or re-washing
clothing that has not been cleaned sufficiently. Such changes to
consumer usage patterns may counteract the energy and water savings
that DOE has estimated would be achieved at the higher efficiency level
(89 FR 19026, 19117; March 15, 2024). Similarly, if the same standard
also affects how clothing is washed, then consumers may buy more
powerful and expensive detergent (complimentary good) in reaction.
Alternatively, if a new clothes washer standard materially increases
purchase and installation costs for that appliance, consumers may
choose not to purchase a clothes dryer when those purchases are very
often bundled as complimentary goods. This change could result in
losses to society from foregone market exchanges and losses in consumer
satisfaction where preferences would typically lean towards a bundled
purchase. In addition, new standards may cause manufacturers to divert
resources away from improving features that consumers want. While not
exhaustive, the above examples illustrate that quantitative estimates
of potential energy and water savings and compliance costs may not
capture important effects readily.
2. The savings in operating costs, throughout the estimated average
life of the products (i.e., life-cycle costs), compared with any
increase in the price of, or in the initial charges for, or operating
and maintaining expenses of, the products which are likely to result
from the imposition of the standard: DOE is already explicitly taking
this factor into consideration in the agency's life-cycle cost analysis
and payback period analysis and recognizes there are elements of
consumer behavior and welfare, as well as considerations of the useful
life of the appliance, that are not currently captured in this
analysis.
3. The total projected amount of energy, or as applicable, water
savings likely to result directly from the standard: DOE already
explicitly takes this factor into consideration in the agency's
lifecycle analysis and national impact analysis and recognizes there
are elements of consumer behavior and welfare, such as in earlier
stated examples, that may affect these estimates that are not currently
captured in this analysis.
4. Any lessening of the utility or the performance of the products
likely to result from the standard: consumers value different
attributes of products differently. Some may value the energy and/or
water efficiency savings more than the cycle time in clothes washers.
Others may value cycle time more than the energy and/or water
efficiency savings. Others may place value in how effectively any
residual detergent is rinsed from the clothing, or how much moisture is
removed from the clothing during the final spin portion of the wash
cycle. If changes in energy and/or water conservation standards were to
lead to a reduction in certain aspects of cleaning or rinsing
performance, then consumers may be less satisfied with their clothes
washers. These types of effects may be more difficult to assess
quantitatively than potential energy and/or water savings and
compliance costs and nonetheless should be addressed. On the other
hand, consumer purchases often reveal preferences for such functions,
and by statute, DOE must consider these changes in utility and
performance relative to products in existence at the time a regulation
being contemplated.
5. The impact of any lessening of competition, as determined in
writing by the Attorney General, that is likely to result from the
standard: lessening of competition is a concern that DOE takes
seriously. Increases in market power or significant market
consolidation would likely further reduce consumer choices and lead to
material increases in the prices of covered products. DOE currently
applies a market concentration index (HHI) in evaluating the lessening
of market competition. While this index is a helpful indicator, DOE is
considering other indicators of lessening competition. Market
competition can decline when fewer manufacturers participate in the
market or fewer manufacturers choose to produce some product
categories. When consumer purchases do not decrease by much as prices
rise (in economic terms: demand is relatively inelastic) and
competition decreases, manufacturers are able to set prices higher
without sharply reducing the number of units sold. For example,
consumers often replace large appliances such as water heaters, heat
pumps, air conditioners, or refrigerators when they break down, which
may result in less price flexibility for the consumer. The result is
greater benefits
[[Page 42057]]
for manufacturers (who sell fewer units at a higher price), reduced
benefits for consumers (who buy fewer units at a higher price), and
some loss to society (units that could have been produced and sold at
lower prices are not produced and benefit no one). To account for the
impacts of reduced competition, DOE is considering analysis that more
formally incorporates consumer responsiveness to changes in price
(price-elasticity of demand) and the likely price impacts in markets
where high consolidation already exists.
6. The need for national energy and water conservation: enhanced
energy efficiency, where economically justified, improves the Nation's
energy security and strengthens the economy. 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. DOE conducts a utility impact analysis to
estimate how standards may affect the Nation's needed power generation
capacity.
7. Other factors DOE finds relevant: In the past, the Secretary has
exercised discretion under factor seven for considerations such as
impacts of standards to certain subgroups such as small manufacturers
or low-income senior citizens. DOE's comparative analysis can be
applied to such distributional outcomes as well, and DOE continues to
explore other discretionary considerations. One such consideration may
be to explicitly state that the Secretary has determined that any
proposed standard for which costs (including consumer welfare losses
and losses to society from lost market exchanges) exceed benefits
(including energy and operating cost savings) will presumptively be
considered as not economically justified. More generally, the Secretary
has sufficient discretion to apply a ``walk up approach'' under EPCA.
Energy Conservation and the Energy Paradox
The potential for appliance and other covered product buyers to
voluntarily forego improvements in energy efficiency that seemingly
offer savings exceeding their initial costs is one example of what is
often termed the ``energy efficiency gap'' or ``energy efficiency
paradox.'' Economic theory predicts that, holding all else equal,
individuals will purchase more expensive energy-efficient appliances
and other covered products if they expect future savings on energy
expenditures to offset the higher upfront purchase costs.\31\ If buyers
fully internalize the expected energy savings that result from higher
efficiency in their appliances and other covered products purchase
decisions, manufacturers will presumably supply any improvements that
buyers demand, and appliances and other covered products prices will
fully reflect future energy cost savings that consumers would realize
from owning--and potentially reselling--more energy-efficient models if
secondary markets exist. In this case, a regulation that induces
increased energy efficiency of appliances and other covered products
will impose net private costs on appliance and other covered product
owners and can only result in social benefits through correcting other
market failures (e.g., imperfect information or internalizing other
negative spillover effects). If instead, regulations are issued based
on the premise that consumers systematically ``undervalue'' cost
savings generated by improvements in energy efficiency when choosing
among competing models, then more stringent energy efficiency standards
may lead manufacturers to adopt improvements in energy efficiency that
buyers would not choose despite the cost savings they offer.
---------------------------------------------------------------------------
\31\ These additional up-front costs include more than just the
cost of the technology necessary to improve energy economy; because
consumers have a scarcity of resources, it also includes the
opportunity cost of any other desirable features that consumers give
up when they choose the more energy-efficient appliances and other
covered products.
---------------------------------------------------------------------------
Whether the value of the resulting realized energy savings will
improve consumer welfare depends on if and why consumers appear to
undervalue future energy expenditures. If the apparent
``undervaluation'' is due to factors that are missing from the
analysis--e.g., tradeoffs with product functions and attributes such as
cleaning performance, increased cycle times when in energy saver mode
or changes in the starkness, warmth, or hue of light bulbs--these
hidden or missing costs may be offsetting some or all of the value of
energy savings and may not result in additional social benefits. The
appearance of such a gap, between the level of energy efficiency that
would minimize consumers' overall expenses and what they actually
purchase, is typically based on engineering calculations that compare
the initial cost of providing higher energy efficiency to the
discounted present value of the resulting savings in future energy
costs, and such analyses will not typically capture the above
variables. If instead undervaluation is due to consumer or manufacturer
inattention to future energy costs resulting from a market failure such
as an information asymmetry, then the value of energy savings is a
social benefit of the regulation. How potential buyers value
improvements in the energy efficiency of new appliances and other
covered products is therefore an important issue when assessing the
bene[filig]ts and costs of government regulation. There is a large
empirical literature examining this issue that comes to varying
conclusions about the extent that consumers value these future energy
expenditures. As noted in the Office of Management and Budget (OMB)
Circular A-4 (2003),\32\ ``individual preferences of the affected
population should be a guiding principle in the regulatory analysis.''
This literature and its implications for DOE's analysis will be
explored further in DOE's analytic framework update effort.
---------------------------------------------------------------------------
\32\ Office of Management and Budget. (2003). Circular A-4:
Regulatory Analysis: https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4.
---------------------------------------------------------------------------
Walk Up Analysis
A ``walk up'' analysis takes a step-wise approach to estimating
increasing levels of energy conservation and the related impacts on
consumers and manufacturers. Starting at the status quo (baseline), the
agency would analyze the increases in benefits (including energy
savings) and costs (including manufacturer costs) associated with
progressively more stringent TSLs. DOE would use these estimates to
identify a preferred option that is technically feasible and
economically justified. For the ``walk up'' analysis the Secretary
could determine economic justification by relying on either incremental
effects or by relying on net benefits. Both methods examine economic
justification by comparing the monetized benefits and costs at
different TSLs. Once these analyses are complete, the Secretary may
consider these estimates along with additional factors as noted above
in determining whether to set a standard and if so, what level of
stringency to propose. DOE requests comment on all aspects of the
proposed walk up approach.
Illustrative Example
In the following illustrative example, DOE presents an incremental
walk up approach under three scenarios: (1) where DOE is not accounting
for consumer welfare and market loss (dead weight loss) impacts; (2)
where DOE captures some but not all consumer
[[Page 42058]]
welfare and market lost impacts or such impacts are relatively small;
(3) where DOE robustly estimates consumer welfare and market loss
impacts and those impacts are substantial. In addition, DOE presents a
simple net benefits scenario.
The numbers used in the tables are for illustration only and do not
reflect estimates for any particular policy.
Table 1 shown below compares monetized energy savings with
monetized cost increases associated with tighter energy efficiency
levels but does not include all the economic impacts envisioned by the
statute (e.g., consumer welfare and dead weight loss). For example, in
going from the world without a standard (the baseline) to a proposed
TSL 1, assume benefits of $100 (i.e., estimated energy and operating
cost savings), and costs of $75 (i.e., cost increase and lost consumer
satisfaction from reduced choices). The incremental net benefit of
moving to TSL 1 equals $25. It follows that going from TSL 1 to TSL 2
has incremental benefits of $50 while the cost is $25 for an
incremental net benefit of $25. Similarly, TSL 3 has an incremental net
benefit of $0 and TSL 4 an incremental net benefit of -$25 (see table 1
of this document). In this scenario DOE might choose TSL 3 without
considering certain impacts to consumer welfare and losses from
foregone market exchanges.
In the second scenario, if consumer welfare effects such as more
handwashing of dishes, dislike of lightbulb colors and behavioral
changes in response to cost increases, are relatively small in
comparison to the energy savings, then including these effects may not
change incremental net benefits substantially (See Table 2 of this
document). Even in this scenario, TSL 3 is no longer desirable.
On the other hand, in the third scenario if consumer effects are
substantial enough to cause consumers to delay the purchase of covered
products, or buy used or refurbished covered products, or engage in
other major behavioral changes (see example in Table 3 of this document
where the costs double when taking into account consumer effects), then
this could significantly change the preferred TSL. In the illustrative
example in Table 3, the agency's preferred alternative may be to not
regulate.
This illustrative example demonstrates how important the
appropriate analytic framework is for analyzing DOE's EPCA factors as
part of either the standard selection process or in informing the
determination of whether to amend an existing regulation. In cases
where consumer and market impacts prove difficult to quantify, DOE may
need to rely on a strong qualitative record and/or public comment to
inform the Secretary's determination. Regardless of quantification or
monetization, such impacts should be DOE's analysis and should carry
weight in the consideration of what constitutes economic justification.
The forthcoming analytic framework RFI will solicit comment on
methodology and data efforts that may better capture these impacts.
BILLING CODE 6450-01-P
[GRAPHIC] [TIFF OMITTED] TP07JY26.151
Agency may choose a higher standard.
[[Page 42059]]
[GRAPHIC] [TIFF OMITTED] TP07JY26.152
Agency may choose a lower standard.
[GRAPHIC] [TIFF OMITTED] TP07JY26.153
BILLING CODE 6450-01-C
Agency may choose not to regulate.
Net Benefits
Under this approach, the preferred TSL would be the standard level
that maximizes the benefit of increasing the efficiency standard
stringency when considering the costs of that increase. In other words,
when the net benefit is maximized, the Secretary can presumptively make
the determination that a proposed standard is both technologically
feasible and economically justified. Under this option, TSL 1 would be
the agency's preferred TSL. DOE request comment on whether the net
benefit approach should be the presumptive application of the ``walk
up'' framework.
Following public comment and peer review, DOE plans to issue
analytic guidance that will aid the agency in quantifying potentially
important consumer and manufacturer effects that are not currently
quantified and offer transparency to the public on the details of the
agency's updated EPCA analytic approach.
3. Selection of Standard Level
In addition to addressing ``balancing the factors in EPCA'' as
described in the previous section, DOE also considered how to evaluate
EPCA's statutory requirements when constructing standard levels for
consideration. Many
[[Page 42060]]
of the comments received in response to the April 2025 RFI discussed in
section IV.H.2 of this NOPR are also relevant in evaluating how to
construct candidate standard levels. DOE has included those comments
again in the paragraphs that follow for consideration in this section.
Several commenters supported the provisions in the current Process
Rule. The Joint Advocates and the State Agencies stated that the
current Process Rule and EPCA already outline the detailed statutory
criteria that DOE must follow in each rulemaking. (Joint Advocates, No.
31 at p. 1; State Agencies, No. 33 at p. 2) NEEA recommended that DOE
should maintain its current approach in the Process Rule to assess
economic viability. Specifically, the commenter encouraged DOE to
maintain a comprehensive assessment of economic impacts that considers
life-cycle cost savings, avoided energy system costs, macroeconomic
impacts, and economic impacts to consumers. NEEA further recommended
against redefining ``economically justified'' to have a narrow focus on
short payback periods or first-cost analysis, which would undervalue
long-term economic benefits. NEEA added that overlooking broader energy
system costs and macroeconomic impacts will limit the ability to
accelerate production of energy-intensive industries and limit economic
growth potential. (NEEA, No. 36 at p. 3)
Several other commenters made specific recommendations regarding
additional thresholds or evaluations DOE should make when assessing
potential standards.
The Joint Gas Associations generally support an approach where DOE
evaluates the cost-effectiveness of a standard versus its possible
level of enhanced efficiency and added that any process of evaluation
must include balancing potential energy savings with the cost of
implementation. (Joint Gas Associations, No. 25 at p. 26)
When selecting a standard level, in addition to including a
definition for ``significant energy savings'' (See section IV.F of this
document for additional discussion on this issue), AHRI commented that
the Process rule should also incorporate other factors including: (1) a
cost-benefit analysis for consumers and manufacturers into the
definition of ``significant energy savings''; (2) thresholds or
benchmarks that explain how DOE evaluates marginal energy savings in
relation to consumer burden, product costs, and feature trade-offs; and
(3) a methodology for comparing energy savings as it relates to the
cost of compliance, particularly for products where existing efficiency
levels are already high or marginal gains in energy savings require a
steep expense. (AHRI, No. 28 at p. 11)
NAFEM commented that the Process Rule should specify a clear rule
regarding payback period (``PBP'') that can satisfy EPCA's requirement
that standards be economically justified. The commenter argued that
lengthy PBPs (sometimes exceeding the product's average lifetime) are
impractical and not economically justified for small businesses that
often operate on short planning horizons and may never recoup the cost
of higher-efficiency equipment. NAFEM added that lengthy PBPs would
lead small businesses to repair old equipment or purchase less-
efficient refurbished units, thereby undermining EPCA's energy
efficiency goals. (NAFEM, No. 13 at pp. 5-6)
NAHB commented that standards should be set strictly based on cost-
effectiveness to the consumer. NAHB added that greater weight should be
given to the 7-percent discount rate, as 3-percent is not realistic in
the real estate development context. (NAHB, No. 19 at p. 5)
ONE Gas commented that DOE should implement a de minimis threshold
for consumer savings at both the individual covered product and
national levels. ONE Gas added that the de minimis test should be
applied in the Framework Document phase and resolved at the Preliminary
Analysis phase. (ONE Gas, No. 37 at p. 5)
Rinnai commented that the Process Rule should include provisions
requiring DOE to conduct an affordability analysis and not set
standards if some populations, such as low- or middle-income
households, face net costs or excessive payback periods. (Rinnai, No.
11 at p. 12, 13) In addition, Rinnai stated that the Process Rule
should require a quantitative assessment of impacts on low-income and
senior households, with explicit criteria that flag when negative
outcomes exceed defined thresholds. (Rinnai, No. 11 at p. 8) Further,
Rinnai commented that the Process Rule should require that a standard
not be set if analysis shows marginal or negative life-cycle cost
outcomes, payback periods close to the product lifespan, or
disproportionate burdens on low-income or senior consumers. (Rinnai,
No. 11 at p. 9) DOE notes that suggestions of this nature can also be
offered in response to the Department's forthcoming Analytic Framework
update RFI.
The Joint Gas Associations commented that DOE's rules should not
harm any customers and should not increase costs for low-income and
senior households. The Joint Gas Associations added that the Process
Rule should include some criteria for fully evaluating the cost impacts
on customers, in particular low-income and senior households. (Joint
Gas Associations, No. 25 at pp. 17-18) The Joint Gas Associations
further commented that the Process Rule should require a minimum \33\
three-year payback period threshold for DOE to propose a new or revised
standard. Joint Gas Associations, No. 25 at p. 27)
---------------------------------------------------------------------------
\33\ DOE understands the reference to a ``minimum three-year
payback period'' in this comment to mean that DOE should only
establish standards with estimated payback periods of three years or
less.
---------------------------------------------------------------------------
APPA commented that DOE should ensure that standards do not result
in significantly higher upfront costs or greater total system energy
losses. (APPA, No. 20 at p. 2)
Upon review of the comments, DOE notes that it is addressing
procedural aspects of the Process Rule in this notice. DOE further
notes that with the current Process Rule and statutory criteria,
rulemaking analyses apply a primarily engineering-based approach to:
(a) balance the potential energy savings against the cost of
implementation; (b) perform a cost-benefit analysis for both consumers
and manufacturers, including marginal energy benefits and a comparison
of those benefits against the cost of compliance; (c) consider payback
periods in addition to other factors such as total life-cycle cost; (d)
consider discount rates determined from actual asset and debt holdings
for both consumers and businesses (in addition to discount rates
specified by the Office of Management and Budget); and (e) consider the
potential impacts to certain consumer subgroups such as low-income or
senior households.
In addition, DOE has tentatively proposed implementing presumptive
thresholds on certain consumer economic-related metrics. However, the
Secretary retains discretion under EPCA to weigh the seven factors and
make a determination that a rule that meets these thresholds (e.g.,
lower percent net cost, lower percent increase in total installed cost,
and lower simple payback period as a percentage of average lifetime)
would not be considered economically justified. The proposed thresholds
provide clarity and certainty to stakeholders regarding how the
Secretary proposes to weigh EPCA criteria at 42 U.S.C. 6295(o) related
to economic justification.
Specifically, DOE reviewed key analytical metrics assessed during
an energy conservation standards
[[Page 42061]]
rulemaking and has tentatively determined that the following three
factors, consistent with EPCA, best reflect protecting consumer choice
and affordability, and are applicable across rulemakings:
Maximum increase in installed cost relative to the
baseline total installed cost (%).
Maximum percentage of consumers for whom the standard
level is projected to result in net costs (%).
Maximum simple payback period relative to average product
lifetime (%).
These factors are already analyzed in each rulemaking as part of
the life-cycle cost and payback period analysis, and relate to one or
two of the factors EPCA prescribed for determining whether a standard
is economically justified:
1. The economic impact of the standard on the manufacturers and on
the consumers of the products subject to the standard; and
2. The savings in operating costs throughout the estimated average
life of the 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 products that are likely to result from the imposition of the
standard.
(42 U.S.C. 6295(o)(2)(B)(i)(I)-(II)).
Given that these economic thresholds are factors that DOE already
considers as required by EPCA, and that the Secretary weighs in
determining economic justification, DOE has tentatively determined that
adopting presumptive thresholds relating to economic justification is
justified under EPCA, just as setting a threshold for significant
energy savings is allowable.
DOE is proposing the following thresholds as a basis for
determining whether a potential standard level is not economically
justified (i.e., a potential standard exceeding the threshold would not
be justified) consistent EPCA:
Up to 10% increase in installed cost relative to the
baseline.
Up to 20% of consumers projected to incur net costs as a
result of a new or amended standard.
Maximum simple payback period as a percentage of average
useful lifetime of a covered product of up to 50%.
DOE welcomes comments and feedback on these proposed thresholds,
including whether higher or lower thresholds would be appropriate in
support of the Secretary's determination regarding economic
justification. Regarding payback period, DOE requests comment on
alternative threshold approaches, including whether a specific
duration, such as five years, would be more appropriate, or a
combination threshold that applies both payback period as a percentage
of average lifetime and a duration of five years, whichever duration is
less. Based on comments, DOE may adopt a value that is higher or lower
than the value proposed for each of these metrics, or DOE may adopt a
similar metric that would also or better achieve the goals of consumer
choice or affordability. DOE notes that, at any adopted level, these
thresholds would each represent a point in the analysis for identifying
a potential standard level as not being economically justified. As
noted earlier, the Secretary retains discretion under EPCA to weigh the
seven factors. Additionally, DOE is separately conducting an analytic
update to address methodological approaches in energy conservation
standards rulemakings. To the extent that any methodological changes
would impact the proposed metrics to be considered for economic
justification, DOE would evaluate whether the numerical thresholds
proposed in this NOPR require adjustment.
DOE proposes that these metrics be applied after the completion of
an LCC analysis in order to inform the Secretary's determination
regarding whether to regulate in consideration of whether EPCA's
requirement for economic justification can be met. The threshold
determination can also inform DOE's assessment of which efficiency
levels in each product class could become part of a trial standard
level. DOE welcomes feedback on how such thresholds could best be
implemented. DOE notes that the proposed threshold approach is also
consistent with E.O. 14154, ``Unleashing American Energy,'' 90 FR 8353
(Jan. 29, 2025), and the Presidential Memorandum of January 20, 2025,
``Delivering Emergency Price Relief for American Families and Defeating
the Cost-of-Living Crisis,'' 90 FR 8245 (Jan. 28, 2025).
In conjunction with the proposed threshold approach, the proposed
walk-up approach described earlier in this section builds on both DOE's
engineering analysis and the prior comparative framework. DOE
anticipates this proposed framework will allow the agency to estimate a
wider array of impacts resulting from candidate trial standard levels
and is a better read of the balancing factors required to determine
economic justification under EPCA. In particular, the walk up approach,
paired with DOE's forthcoming analytic update, will address
methodological approaches to modeling behavior changes driven by
changes in energy conservation standards. Ultimately, DOE anticipates
the Secretary will be able to utilize estimates that better reflect
EPCA's balancing factors for economic justification, as well as the
incremental impacts of each candidate standard in making determinations
regarding whether and what to regulate and at what level.
As stated previously, the December 2021 Final Rule removed a
section related to considerations in assessing economic justification.
86 FR 70892, 70908. DOE did not receive any comments directly related
to this section, but is also proposing to amend the Process Rule to add
back in this section as it appeared in the 2020 Process Rule in order
to provide additional clarity to stakeholders in terms of how the
Secretary makes decisions regarding economic justification, beyond the
proposed threshold approach described in this section.
I. Test Procedures (Section 8)
This section was established in the original July 1996 Final Rule
and describes the process by which DOE would establish test procedures
for covered products and equipment. The February 2020 Final Rule added
an early assessment process for test procedures and generally committed
that DOE would adopt consensus industry test procedures unless not
consistent with EPCA. Consistent with other amendments in that rule,
this section of the Process Rule was also amended to require that DOE
finalize a test procedure 180 days in advance of a standards proposal.
The December 2021 Final Rule clarified that DOE may revise consensus
industry test procedure standards for compliance, certification, and
enforcement purposes, and modified application of the 180-day period
between finalization of a test procedure and issuance of a standards
proposal by instead specifying a 180-day period between finalization of
a test procedure and the close of the standards proposal comment
period. The April 2024 Final Rule removed the requirement for an early
assessment stage, instead specifying that DOE would publish one or more
preliminary documents (e.g., an RFI or a NODA) related to the test
procedure.
1. Early Assessment and Pre-NOPR Stage
In response to the April 2025 RFI, DOE received two comments \34\
in general support of a formal early assessment process for both energy
conservation standards and test
[[Page 42062]]
procedure rulemakings, which were summarized in section IV.G.1 of this
document.
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\34\ (Joint Gas Associations, No. 25 at p. 25) and (NEMA, No. 23
at pp. 7-8).
---------------------------------------------------------------------------
As DOE discussed in section IV.G.1 of this document, DOE has
tentatively determined to amend the current Process Rule provisions to
revert to the 2020 Process Rule requirement of an early assessment
stage, and for test procedures where the early assessment indicates
that DOE should proceed with a rulemaking, the 2020 Process Rule
language also provides additional opportunities for early public input,
such as an RFI or NODA.
2. Comment Periods
When developing test procedures, the current Process Rule specifies
that the length of the public comment period for pre-NOPR rulemaking
documents may vary depending on the circumstances of the particular
rulemaking and will be determined on a case-by-case basis. At the NOPR
stage, the current Process Rule specifies that there will be no less
than 60 days for public comment on the NOPR, with at least one public
hearing or workshop. (See 42 U.S.C. 6293(b)(2) and 42 U.S.C. 6306). See
sections 8(a)(6) and 8(b)(2) of appendix A. The February 2020 Process
rule did not include provisions specific to comment period lengths for
test procedure rulemakings.
In commenting on the April 2025 RFI, AHRI stated that DOE should
provide at least 30 days for comment on a pre-NOPR test procedure
document and urged DOE to provide a 75-day comment period on the NOPR
to allow interested parties time to evaluate proposed test procedure
changes including collecting and analyzing test data, as lab time is
hard to come by. (AHRI, No. 28 at pp. 9-10)
DOE has tentatively determined that reinstating language regarding
test procedures from the 2020 Process Rule will allow for sufficient
opportunities for early input, as discussed in the previous section.
DOE also notes that guardrails are provided by the statutory
requirement to provide a minimum 60-day comment period on test
procedure NOPRs, while allowing DOE the ability to offer longer comment
periods should there be extenuating circumstances, such as the need for
additional laboratory time mentioned by AHRI. As such, DOE is not
proposing changes to the 2020 Process Rule language to more directly
address comment periods.
3. 180-Day Period
The February 2020 Process Rule specified that test procedure
rulemakings establishing methodologies used to evaluate proposed energy
conservation standards will be finalized at least 180 days prior to
publication of a NOPR proposing new or amended energy conservation
standards. 85 FR 8626, 8708 (Feb. 14, 2020). The December 2021 Final
Rule modified the calculation of the 180-day period. 86 FR 70892, 70912
(Dec. 13, 2021). Accordingly, the current Process Rule provides that
except as provided in paragraph (e)(2) of section 8 of Appendix A, new
test procedures and amended test procedures that impact measured energy
use or efficiency will be finalized at least 180 days prior to the
close of the comment period for a NOPR or a notice of proposed
determination (``NOPD''). See section 8(e)(1) of appendix A. The
exceptions are for test procedures developed by consensus or test
procedures limited to calculation changes. See section 8(e)(2) of
appendix A.
On this topic, the Joint Advocates stated that the current Process
Rule already specifies the timing between the finalization of a test
procedure and the end of the comment period for an ECS NOPR, which
allows stakeholders to gain familiarity with new test procedures prior
to providing comments on proposed standards. (Joint Advocates, No. 31
at p. 4)
In contrast, AHRI, the Joint Gas Associations, BWC, Lennox, NEMA,
Rinnai, and Zero Zone generally supported a return to prior language in
the Process Rule and expansion of the spacing between test procedure
and standards rulemakings to 180 days between the issuance or
publication of a test procedure final rule and the issuance or
publication of an energy conservation standards NOPR. (AHRI, No. 28 at
p. 12; BWC, No. 34 at pp. 2-3; Joint Gas Associations, No. 25 at p. 29;
Lennox, No. 26 at pp. 2, 10-11; NEMA, No. 23 at pp. 8-9; Rinnai, No. 11
at pp. 3-5; Zero Zone, No. 15 at p. 3) Lennox stated that this full
180-day period is necessary because manufacturers' assessment of test
procedures can involve extensive equipment testing, with significant
lab set-up and evaluation time. (Lennox, No. 26 at pp. 2, 10-11) The
Joint Gas Associations stated that adopting this proposal will ensure
that the test procedures are technically correct, that they can be
repeated, and that the new or amended standards can be meaningfully
reviewed. (Joint Gas Associations, No. 25 at p. 29) AHRI specified that
this spacing requirement would apply to test procedures that impact
energy use or efficiency. (AHRI, No. 28 at p. 12)
EEI and BHI generally stated that DOE should finalize test
procedures well before a proposed change to the corresponding standard.
(EEI, No. 35 at p. 4; BHI, No. 16 at p. 3) EEI stated that changes to
the test procedure after that point should be limited to issues that do
not impact estimated energy use, cost, or design, thereby allowing
stakeholders to clearly understand potential impacts and comment
appropriately. (EEI, No. 35 at p. 4) BHI stated that DOE has a record
of poor judgment in deciding what constitutes minor changes. (BHI, No.
16 at p. 3)
APPA stated generally that DOE should finalize test procedures for
products well before it issues an ANOPR or proposal for those products.
(APPA, No. 20 at p. 4) Similarly, NAHB stated that DOE should finalize
test procedures prior to issuing an ANOPR or proposal for new
standards--both for existing and new test procedures, because
significant changes to test procedures can significantly impact the
analyses performed for standards. (NAHB, No. 19 at p. 4) NAHB also
supported DOE finalizing all new or amended test procedures that impact
measured energy use or efficiency 180 days prior to close of a comment
period, so that stakeholders can clearly understand potential impacts
and comment appropriately. (NAHB, No. 19 at p. 5)
In response, DOE has tentatively determined to amend the language
in the current Process Rule to match the 2020 Process Rule language
that provides 180 days between a test procedure final rule and issuance
of a standards NOPR. DOE requests comments on this issue.
As discussed, section 8(e)(2) of appendix A provides exceptions to
the 180-day period for test procedures developed by consensus (See
section 8(e)(2)(i) of appendix A) or test procedures limited to
calculation changes (See section 8(e)(2)(ii) of appendix A). The
current regulatory text in this section of Appendix A contains a
formatting error whereby one of the provisions relevant to test
procedures developed by consensus is printed in section 8(e)(2)(ii) of
appendix A, which pertains to test procedures limited to calculation
changes. In this NOPR, DOE proposes to correct this formatting error.
As proposed, revised section 8(e)(2)(i) of appendix A would contain the
provisions specific to test procedure amendments limited to calculation
changes; and section 8(e)(2)(ii) of appendix A would contain the
provisions specific to test procedures developed by consensus. These
proposed changes are technical in nature only.
[[Page 42063]]
4. Industry Standards
The February 2020 Final Rule stated that DOE will adopt industry
test standards as DOE test procedures for covered products and
equipment, unless such methodology would be unduly burdensome to
conduct or would not produce test results that reflect the energy
efficiency, energy use, water use (as specified in EPCA), or estimated
operating costs of that equipment during a representative average use
cycle. 85 FR 8626, 8708 (Feb. 14, 2020). The December 2021 Final Rule
modified that provision. 86 FR 70892, 70928 (Dec. 13, 2021).
Specifically, the current Process Rule provides that DOE will adopt
industry test procedure standards as DOE test procedures for covered
products and equipment, but only if DOE determines that such procedures
would not be unduly burdensome to conduct and would produce test
results that reflect the energy efficiency, energy use, water use (as
specified in EPCA), or estimated operating costs of that equipment
during a representative average use cycle. DOE may also adopt industry
test procedure standards with modifications or craft its own procedures
as necessary to ensure compatibility with the relevant statutory
requirements, as well as DOE's compliance, certification, and
enforcement requirements. See section 8(d) of appendix A.
Several commenters indicated full support for DOE adopting industry
standards. (AHRI, No. 28 at pp. 5-6; BHI, No. 16 at p. 3; BWC, No. 34
at p. 3; NEMA, No. 23 at p. 9) BWC strongly supported harmonization of
DOE test procedures with industry standards to avoid redundant testing
and reduce burdens on manufacturers. BWC encouraged DOE participation
in industry working groups to raise concerns during the development of
test procedures, thereby minimizing future conflicts. (BWC, No. 34 at
p. 3) BHI stated that the 2020 Process Rule required DOE to use
consensus test procedures with minimum modification; BHI added that
this would streamline the rulemaking process, increase regulatory
certainty, and reduce potential introduction of errors. (BHI, No. 16 at
p. 3) NEMA recommended DOE return to the approach to industry standards
reflected in the 2020 Final Rule and adopt consensus industry test
standards without modification unless inconsistent with the law or
impracticable. (NEMA, No. 23 at p. 9)
AHRI supported adopting consensus and proven test procedures
already in use by industry and others as methods of test for all
applicable products and equipment. The commenter stated that the 2020
Process Rule deferred only to those consensus procedures that are fully
consistent with applicable law, thereby streamlining rulemaking and
regulatory burden. AHRI added that this policy promotes innovation,
accelerates market adoption, fosters competition, and reduces burden.
(AHRI, No. 28 at pp. 5-6) However, AHRI stated that the Process Rule
should clarify how reliance on consensus standards interacts with DOE's
test-procedure-waiver process.\35\ The commenter stated that when an
existing procedure fails to address a specific product configuration,
manufacturers may request a waiver, prompting DOE to amend its
procedure. AHRI added that if DOE principally relies on consensus
standards, those standards are not subject to the same waiver prompt.
AHRI stated that DOE should, therefore, establish a mechanism to ensure
that products granted waivers are subsequently incorporated into
updated procedures--either through the consensus standards body or, if
necessary, via DOE action. (AHRI, No. 28 at p. 6) AHRI also recommended
that DOE consider including an opportunity for DOE to adjust and
address test procedure amendments on an expedited basis, such as a
petition from stakeholders. The commenter stated that an expedited
process would not be intended to address sweeping changes to the method
of test but could fix errors or address burdensome practical challenges
in execution of the test that had not been anticipated during the
rulemaking stage. (AHRI, No. 28 at pp. 8-9)
---------------------------------------------------------------------------
\35\ DOE's current test procedure waiver process includes a
provision which directs DOE to publish a NOPR to amend its test
procedures so as to eliminate any need for the continuation of such
waiver, as soon as practicable after the granting of any waiver. As
soon thereafter as practicable, DOE will publish in the Federal
Register a final rule. 10 CFR 430.27(l).
---------------------------------------------------------------------------
Other commenters indicated that DOE should consider industry
standards but could make changes. (CA IOUs, No. 32 at p. 2; Joint Gas
Associations, No. 25 at p. 32; Rinnai, No. 11 at pp. 13-14) The Joint
Gas Associations stated they are wary of a revised Process Rule
mandating that industry standards must be used in test procedures in
instances not already addressed in the statute. The Joint Gas
Associations recommended that when making a determination on test
procedures, the Department should give consideration to the applicable
industry standard and work with stakeholders before automatically
mandating the use of a particular industry standard. (Joint Gas
Associations, No. 25 at p. 32) Rinnai supported use of industry
standards when developing test methods, but the commenter stated that
DOE should modify or decline to adopt an industry standard if doing so
is necessary to ensure accuracy, consumer transparency, or alignment
with EPCA. Rinnai stated that the Process Rule should provide
flexibility to consider such standards, solicit stakeholder input, and
adopt them only when supported by clear and convincing evidence.
(Rinnai, No. 11 at pp. 13-14) The CA IOUs stated that adopting industry
test procedures is widely regarded as best practice, but the commenters
acknowledged that these may not fully align with EPCA requirements and
may need to be modified or enhanced to ensure they comply with law and
are enforceable by being repeatable, reproducible, representative, and
reasonable. (CA IOUs, No. 32 at p. 2)
DOE has a long history of monitoring the committees developing
consensus standards, which allows DOE to evaluate whether the standards
meet both industry's needs to minimize burden and provide
representations to consumers and DOE's needs to comply with EPCA
requirements and support repeatability and reproducibility to ensure a
level playing field for manufacturers. This participation can also
allow industry standards to incorporate the substance of waivers and
address calculation changes. For this reason, upon review of comments,
DOE is proposing to reinstate much of the language from the 2020
Process Rule, which limits changes to industry standards to those
required for compliance with EPCA.
5. General
The April 2025 RFI requested comments on whether and how the
Process Rule should be updated to provide additional detail on how
DOE's rulemaking process satisfies the statutory requirements for
establishing new or amended test procedures. 90 FR 16093, 16099 (April
17, 2025).
DOE received several comments related to general requirements for
test procedures. AHRI stated that the Process Rule should clarify EPCA
requirements that test procedures are to be representative of average
use, not unduly burdensome, and repeatable and that the Process Rule
should require DOE to demonstrate that test procedures do not result in
indirect performance mandates. (AHRI, No. 28 at p. 3) NAFEM stated that
the Process Rule should take into account real world
[[Page 42064]]
operating conditions and requirements, particularly related to food
safety. (NAFEM, No. 13 at pp. 4-5) Heidi King Consulting stated that
any test procedure must appropriately reflect the purpose of the
product and its features, and that DOE should carefully consider when
it is appropriate to assess energy performance at the product level
versus the component level. (Heidi King Consulting, No. 30 at p. 4)
Upon review and in consideration of comments received, DOE has
tentatively determined to reinstate the 2020 Process Rule language.
J. ASHRAE Equipment (Section 9)
Section 9 of the Process Rule was created by the February 2020
Final Rule and describes the process DOE will follow for conducting
rulemakings for equipment subject to the ``ASHRAE trigger'' provisions
in EPCA that apply when ASHRAE Standard 90.1 is amended with respect to
standards, test procedures, or design requirements applicable to such
equipment. The April 2024 Final Rule added provisions to clarify
application of the 6- and 7-year lookback provisions for periodic
review of standards and test procedures in the context of ASHRAE
equipment.
1. Limited Circumstances and Clear and Convincing Evidence
The circumstances under which DOE will adopt a more-stringent
standard than the ASHRAE standard or a different test procedure are
laid out in the statute. DOE will issue a more-stringent standard than
the ASHRAE Standard 90.1 level if DOE determines, supported by clear
and convincing evidence, that the more-stringent standard would result
in significant additional conservation of energy and is technologically
feasible and economically justified. (42 U.S.C. 6313(a)(6)(A)(ii)(II)).
DOE will adopt an updated test procedure for covered ASHRAE equipment
so as to be consistent with related amendments to ASHRAE Standard 90.1,
unless such test standard would not meet the requirements of 42 U.S.C.
6314(a)(2)-(3) (i.e., a test procedure reasonably designed to reflect
energy efficiency, energy use, and estimated operating cost of a type
of industrial equipment (or class thereof) during a representative
average use cycle and is not unduly burdensome to conduct). (42 U.S.C.
6314(a)(4)(B)). If DOE makes such finding, by rule and supported by
clear and convincing evidence, the Department may establish an amended
test procedure that does meet these statutory requirements. (42 U.S.C.
6314(a)(4)(C)).
To reflect these statutory requirements, the February 2020 Process
included the statement that DOE will adopt the revised ASHRAE levels or
the industry test procedure, except in very limited circumstances. The
February 2020 Process Rule also included a description of what
qualifies as clear and convincing evidence.\36\ 85 FR 8626, 8708 (Feb.
14, 2020). Both the statement and the clear and convincing description
were subsequently removed from the Process Rule in the April 2024 Final
Rule, deferring instead to the statutory language. 89 FR 24340, 24354
(April 8, 2024). See section 9(a) and (b) of appendix A.
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\36\ The February 2020 Final Rule stated that with respect to
DOE's consideration of standards more-stringent than the ASHRAE
levels or changes to the industry test procedure, DOE will do so
only if it can meet a very high bar to demonstrate the ``clear and
convincing evidence'' threshold. Clear and convincing evidence would
exist only where the specific facts and data made available to DOE
regarding a particular ASHRAE amendment demonstrates that there is
no substantial doubt that a standard more stringent than that
contained in the ASHRAE Standard 90.1 amendment is permitted because
it would result in a significant additional amount of energy
savings, is technologically feasible and economically justified, or,
in the case of test procedures, that the industry test procedure
does not meet the EPCA requirements. DOE will make this
determination only after seeking data and information from
interested parties and the public to help inform the Agency's views.
DOE will seek from interested stakeholders and the public data and
information to assist in making this determination, prior to
publishing a proposed rule to adopt more-stringent standards or a
different test procedure. 85 FR 8626, 8708 (Feb. 14, 2020).
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The Joint Gas Associations stated that a revised Process Rule
should define the process used to adopt ASHRAE Standard 90.1 equipment
standards and define a mechanism for when a more-stringent equipment
efficiency standard over the ASHRAE level may be pursued. (Joint Gas
Associations, No. 25 at pp. 31-32)
ASHRAE and the Joint Gas Associations commented that DOE should
adopt language explaining that DOE will adopt the revised ASHRAE levels
or industry test procedure, except in very limited circumstances. The
Joint Gas Associations argued that this was the intent contemplated by
EPCA. (ASHRAE, No. 12 at p.2; Joint Gas Associations, No. 25 at pp. 31-
32)
The Joint Gas Associations stated that for consideration of
standards more stringent than the ASHRAE levels, DOE should be required
to meet a very high bar to meet the ``clear and convincing evidence''
threshold and should seek public comment to assist it in making that
determination. The commenters stated that to meet the ``clear and
convincing evidence'' threshold, DOE should be required to determine
that there is no substantial doubt that the more-stringent standard
would result in significant additional conservation of energy, is
technologically feasible and economically justified, or that the
industry test procedures do not meet EPCA requirements. (Joint Gas
Associations, No. 25 at pp. 31-32)
In response, DOE agrees that the intention of EPCA was for the
Department to only adopt standard levels more stringent than those in
ASHRAE Standard 90.1 in very limited circumstances. As such, for
clarity, DOE is proposing to add that language back into the Process
Rule and to largely reinstate the 2020 Process Rule language related to
ASHRAE, in combination with the previous description of clear and
convincing evidence. Specifically, DOE proposes to add the following
language in section 9(e) of the Process Rule:
For ASHRAE equipment, DOE will adopt the revised standard levels or
the industry test procedure contained or referenced in the latest
version of ASHRAE Standard 90.1, as contemplated by EPCA, except in
very limited circumstances.
With respect to DOE's consideration of standards more-stringent
than the ASHRAE Standard 90.1 levels or changes to the industry test
procedure, DOE will do so only if it can meet a very high bar to
demonstrate that it has met a ``clear and convincing evidence''
threshold. Clear and convincing evidence would exist only where the
specific facts and data available to DOE regarding a particular ASHRAE
amendment demonstrates that there is no substantial doubt that a
standard more stringent than that contained in the ASHRAE Standard 90.1
amendment is permitted because it would result in a significant
additional amount of energy savings and is technologically feasible and
economically justified, or, in the case of test procedures, that the
industry test procedure does not meet the EPCA requirements. DOE will
make this determination only after seeking data and information from
interested parties and the public to help inform the Agency's views,
and DOE will take this step prior to publishing a proposed rule to
adopt more-stringent standards or a different test procedure.
DOE has tentatively determined that this language reflects the
intent of EPCA while providing additional clarity to stakeholders and
ensuring the appropriate level of deference to the ASHRAE process. DOE
emphasizes that in discussing the need for ``clear and convincing
evidence'' in the context of more-stringent standard levels for ASHRAE
equipment, the Department is simply explaining the existing
[[Page 42065]]
requirements of the statute, rather than seeking to change or
reinterpret those requirements.
Rather than changing the definition in question, DOE has found this
language consistent with how that term has historically been
interpreted and defined in the civil context in Federal Circuit and
District Courts throughout the United States. Recently, the term
``clear and convincing evidence'' was addressed in a pair of cases
involving DOE. In American Public Gas Ass'n v. United States Department
of Energy, the D.C. Circuit stated, ``The requirement of `clear and
convincing evidence' as a prerequisite to informal rulemaking is
unusual, perhaps unique; we are aware of no other authorization for
rulemaking subject to this heightened evidentiary standard. The
standard is familiar, however, from other areas of the law: clear and
convincing evidence requires a factfinder (in this case the Secretary)
to have an `abiding conviction' that her findings (in this case that a
more stringent standard would result in significant additional
conservation of energy, would be technologically feasible, and is
economically justified) are `highly probable' to be true. Colorado v.
New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81 L.Ed.2d 247 (1984).''
22 F.4th 1018, 1025 (D.C. Cir. 2022); see also Am. Pub. Gas Ass'n v.
U.S. Dep't of Energy, 72 F.4th 1324, 1336 (D.C. Cir. 2023).
In addition, the Ninth Circuit Court of Appeals has defined the
``clear and convincing'' standard as requiring the evidence ``to be so
clear as to leave no substantial doubt [and] sufficiently strong to
command the unhesitating assent of every reasonable mind.'' Ittella
Foods, Inc. v. Zurich Ins. Co., 98 F. App'x 689, 691 (9th Cir. 2004)
(internal citations omitted). Similarly, the Eighth Circuit Court of
Appeals has defined, ``clear and convincing evidence'' as ``leav[ing]
no substantial doubt,'' Hunt v. Pan Am. Energy, 540 F.2d 894, 901 (8th
Cir. 1976), and the Second Circuit Court of Appeals stated, '' [c]lear
and convincing proof is highly probable and leaves no substantial
doubt,'' Dongguk Univ. v. Yale Univ., 734 F.3d 113, 123 (2d Cir. 2013)
(internal citations omitted).\37\ Further, the Handbook of Federal
Evidence, which consists of materials designed to aid in understanding
Federal evidentiary rules, also defines ``clear and convincing
evidence'' in civil cases as requiring that ``evidence be so clear as
to leave no substantial doubt'' and describes this standard of proof to
only be sustained if the evidence induces a reasonable belief that the
facts asserted are highly probably true. (Handbook of Federal Evidence,
section 301:5 Burden of Persuasion, Incidence and Measure in Civil
Cases (8th ed. 2018)).
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\37\ Federal District Courts in circuits around the country have
provided similar definitions of ``clear and convincing evidence'' in
the civil context. See Mandel v. Boston Phoenix, Inc., 492 F. Supp.
2d 26, 29 (D. Mass. 2007) (``The meaning of the term `clear and
convincing evidence'--evidence so clear as to leave no substantial
doubt.''),--is equally familiar and well-defined.''), Jersey Const.,
Inc. v. Pennoni Assoc., Inc., Civ. A. No. 91-7331, 1993 WL 2999
(E.D. Pa. Feb. 4, 1993) (citing Joseph's v. Pizza Hut of Am. Inc.,
733 F. Supp. 222, 223-24 (W.D. Pa.1989), aff'd, 899 F.2d 1217 (3d
Cir. 1990) (``Clear and convincing evidence is evidence that leaves
no substantial doubt . . . establishes not only that the proposition
at issue is probable, but also that it is highly probable.''); Hanna
Coal Co., Inc. v. I.R.S., 218 B.R. 825, 829 n.2 (W.D. Va. 1997)
(``Clear and convincing evidence leaves no substantial doubt in your
mind. It is proof that establishes in your mind, not only [that] the
proposition at issue is probable, but also that it is highly
probable.''); Gentry v. Hershey Co., 687 F. Supp. 2d 711, 724 (M.D.
Tenn. 2010) (``Evidence is clear and convincing when it leaves no
serious or substantial doubt about the correctness of the
conclusions drawn.''); Sala v. United States, 552 F. Supp. 2d 1157,
1162 (D. Colo. 2007) (``Clear and convincing evidence leaves no
substantial doubt in your mind. It is proof that establishes in your
mind, not only [that] the proposition at issue is probable, but also
that it is highly probable.''), Tobinick v. Novella, 108 F. Supp. 3d
1299, 1309 (S.D. Fla. 2015) (``The burden of proof by clear and
convincing evidence requires a finding of high probability. The
evidence must be so clear as to leave no substantial doubt. It must
be sufficiently strong to command the unhesitating assent of every
reasonable mind.'').
---------------------------------------------------------------------------
Regarding any argument that the ``clear and convincing evidence''
standard is a term of legal art, of which Congress was aware when they
adopted the language, and that DOE does not have the power to redefine
``clear and convincing evidence'' to make it closer to ``beyond a
reasonable doubt,'' as exhibited in the above paragraph, DOE is not
redefining the standard, and DOE's provision for ``clear and convincing
evidence'' is consistent with how it has been regularly defined in
Federal Courts for many years. Accordingly, DOE agrees with NRDC that
Congress was cognizant of the common law and accepted definition of
``clear and convincing evidence'' when implementing 42 U.S.C.
6313(a)(6)(A)(ii)(II); the definition of ``clear and convincing
evidence'' as evidence that is so clear as to leave ``no substantial
doubt'' can be traced to a 1899 California Supreme Court decision,
decided far before 42 U.S.C. 6313(a)(6)(A)(ii)(II) was enacted. Sheehan
v. Sullivan, 126 Cal. 189, 193 (1899) (defining clear and convincing
evidence as clear, explicit, and unequivocal; so clear as to leave no
substantial doubt). Again, this language has been reiterated by Federal
Courts in the many years since.
DOE requests comment on this proposal.
2. Timelines and Triggers
In the February 2020 Final Rule, the 2020 Process Rule expounded
upon the timelines in EPCA for amending standards for ASHRAE equipment,
combining timelines for standards and test procedures. 85 FR 8626, 8708
(Feb. 14, 2020). The April 2024 Final Rule added provisions to
separately address standards and test procedures and to clarify
application of EPCA's 6- and 7-year lookback provisions for periodic
review of standards and test procedures for ASHRAE equipment. 86 FR
70892, 70928-70929 (Dec. 13, 2021).
The Joint Gas Associations stated that the Department should
continue to follow the statutory timelines and procedural requirements
in EPCA for ASHRAE equipment when adopting the ASHRAE Standard 90.1
levels, rather than those set forth in any Process Rule. (Joint Gas
Associations, No. 25 at pp. 31-32) The Joint Advocates noted that for
ASHRAE equipment, the Process Rule separately defines the timelines for
ASHRAE trigger rulemakings. (Joint Advocates, No. 31 at p. 4) ASHRAE
stated that faster adoption by DOE of amended energy conservation
standards in ASHRAE Standard 90.1 would lead to lower energy costs for
consumers and businesses, and the commenter added that such approach is
in alignment with both OMB Circular A-119 and the National Technology
Transfer and Advancement Act (``NTTAA''), Public Law 104-113 (which
directs Federal agencies to adopt voluntary industry consensus
standards unless inconsistent with the law or impractical). (ASHRAE,
No. 12 at p. 2)
In response and in consideration of the comments received, DOE has
tentatively determined to largely reinstate the 2020 Process Rule
language.
The Scope section of the current Process Rule (section 2) states
that ASHRAE equipment is governed separately under section 9; as such,
the other provisions in the Process Rule do not apply.
The Joint Gas Associations stated that in the event that DOE
conducts a rulemaking to establish more-stringent standards for covered
ASHRAE equipment, DOE should follow the procedures established in a
revised Process Rule, while still complying with EPCA's ASHRAE-specific
deadlines. (Joint Gas Associations, No. 25 at pp. 31-32) ASHRAE stated
that DOE should strictly adhere to the ``7 Factor Test'' if
promulgating energy conservation
[[Page 42066]]
standards levels beyond ASHRAE Standard 90.1. (ASHRAE, No. 12 at p. 2)
In response, DOE notes that although the full Process Rule does not
currently apply to ASHRAE equipment, ASHRAE equipment have express
rulemaking timelines specified in EPCA, as well as EPCA provisions
related to the 7 Factor Test for economic justification. Additionally,
the clear and convincing evidence threshold for rulemakings regarding
ASHRAE equipment that would go beyond the levels set forth in ASHRAE
Standard 90.1 may require additional consideration throughout the
rulemaking process as compared to a rulemaking for non-ASHRAE
equipment. As such, DOE has tentatively determined that additional
language in the Process Rule may be needed. DOE is requesting
information and comments on possible improvements or considerations for
ASHRAE equipment.
The April 2024 Final Rule clarified in section 9(a)(3) of the
Process Rule that publication of ASHRAE Standard 90.1 is the
``trigger'' for DOE reviewing standards. 89 FR 24340, 24362 (April 8,
2024).
ASHRAE stated that the trigger for when DOE must consider updating
energy conservation standards for covered ASHRAE equipment is when the
full version of ASHRAE Standard 90.1 is updated and published. (ASHRAE,
No. 12 at p. 2)
In response, DOE agrees that this is consistent with DOE's
historical interpretation of what constitutes a trigger.
The February 2020 Final Rule specified that DOE's review in
considering amended standards based on action by ASHRAE to amend ASHRAE
Standard 90.1 was strictly limited to the specific equipment class for
which ASHRAE made a change. 85 FR 8626, 8708 (Feb. 14, 2020). The
current Process Rule does not include such statement. Instead, the
April 2024 Final Rule amended section 9(a)(3) of the Process Rule to
state that DOE considers an amendment of standard levels in ASHRAE
Standard 90.1 to be only those changes resulting in an increase in
stringency of standard levels relative to the current Federal standards
or the adoption of a design requirement. 89 FR 24340, 24362 (April 8,
2024).
The Joint Gas Associations stated that DOE's review in adopting
amendments based on action by ASHRAE should be strictly limited to the
specific standards for the specific equipment for which ASHRAE has made
a change. (Joint Gas Associations, No. 25 at pp. 31-32)
DOE agrees that this is historically the way that DOE has
proceeded; therefore, DOE has tentatively determined that it will
largely revert to this language as established in the 2020 Process
Rule. DOE requests comment on this approach, and also on whether
additional language regarding this topic would be appropriate in the
Process Rule.
K. Direct Final Rules (Section 10) and Negotiated Rulemaking
The Direct Final Rule section was established in the February 2020
Final Rule and describes how DOE would comply with EPCA requirements
specific to publication of direct final rules, including the
Department's interpretation of the term ``fairly representative of
relevant points of view'' as it applies to interested stakeholders. 85
FR 8626, 8708 (Feb. 14, 2020). The December 2021 Final Rule amended
this section to clarify that DOE will implement its direct final rule
authority under EPCA on a case-by-case basis including its evaluation
of the meaning of ``fairly representative,'' subject to the
circumstances of a particular rulemaking. 86 FR 70892, 70929 (Dec. 13,
2021). See section 10 of appendix A.
The February 2020 Final Rule also included a separate section
related to negotiated rulemakings, which specified that they could not
result in a direct final rule. 85 FR 8626, 8708-8709 (Feb. 14, 2020).
The December 2021 Final Rule removed that section, instead inserting in
the Objectives section of the Process Rule (section 1) a statement that
the Department encouraged consensus proposals, including those
developed in accordance with the Negotiated Rulemaking Act (``NRA''),
Public Law 104-320 (5 U.S.C. 561, et seq.). It also clarified in
section 10 of the Process Rule that consensus recommendations developed
in accordance with the NRA may result in a direct final rule. 86 FR
70892, 70925, 70929 (Dec. 13, 2021). See sections 1(g) and 10 of
appendix A.
Several commenters expressed support for negotiated rulemakings and
urged that the Process Rule should maintain procedures for their use.
Lennox stated that negotiated rulemakings should be a preferred route
for energy efficiency rulemaking by DOE. (Lennox, No. 26 at p. 3)
Lennox further stated that the Process Rule should require DOE to
actively explore negotiated rulemakings for all major new standards.
(Lennox, No. 26 at p. 11-12) BWC stated that DOE should be allowed to
use a negotiated rulemaking process during the early stages, involving
stakeholders who represent relevant viewpoints. (BWC, No. 34 at p. 4)
The Joint Gas Associations supported including procedures for
negotiated rulemakings in the Process Rule that provide for a convener
and promote full stakeholder participation throughout the rulemaking
process. The Joint Gas Associations stated that if used appropriately,
negotiated rulemakings can be an effective and efficient means of
promulgating new energy conservation standards. (Joint Gas
Associations, No. 25 at p. 35) Rinnai supported the use of a negotiated
process that allows DOE to identify and address technical, economic,
and practical concerns early in the process. Rinnai further stated that
participation should include regional utilities, national and small
manufacturers, consumer representatives, and State/local energy
officials. (Rinnai, No. 11 at pp. 13-14)
Several commenters recommended that negotiated rulemakings utilize
a neutral convener. The Joint Gas Associations recommended that a
revised Process Rule should make clear that, prior to initiating a
negotiated rulemaking, DOE will appoint a convener to: (i) identify
persons who will be significantly affected by a proposed rule; and (ii)
conduct discussions with such persons to identify their issues of
concern and to ascertain whether the establishment of a negotiated
rulemaking committee is feasible and appropriate in the particular
rulemaking. The Joint Gas Associations also supported DOE incorporating
provisions to ensure there is opportunity for public comment before the
negotiated rulemaking committee. The Joint Gas Associations stated that
the use of a facilitator and the opportunity for comprehensive public
input will ensure the participation of all relevant interests in the
process. (Joint Gas Associations, No. 25 at p. 35) Rinnai stated that
for negotiated rulemakings to be effective, there should be a neutral
convener to assess the feasibility of a negotiated rulemaking and to
identify all parties significantly affected by the rule. Rinnai further
stated that all stakeholders should be able to provide public comment
on committee drafts and deliberations before consensus is finalized
into regulation. (Rinnai, No. 11 at p. 13)
Several commenters supported the use of direct final rules
(``DFR'') after a consensus is reached during a negotiated rulemaking.
BWC stated that if consensus is reached, DOE can issue a DFR, bypassing
many administrative steps and saving time and resources. (BWC, No. 34
at p. 4) Rinnai recommended codifying in the Process Rule that DFRs are
only appropriate
[[Page 42067]]
where a representative cross-section of stakeholders--including
utilities, consumers, small businesses, and small manufacturers--have
actively participated in developing the proposed standard and
affirmatively support its adoption without further comment. (Rinnai,
No. 11 at p. 13) Rinnai also stated that negotiations should be
required to represent a consensus inclusive across various
constituencies and be subject to public scrutiny. Rinnai further stated
that negotiations should include robust engagement with the full
diversity of impacted stakeholders, particularly small and mid-sized
manufacturers, distributors, professional installers, and end users.
(Rinnai, No. 11 at p. 14) The Joint Gas Associations stated that at a
minimum, the DFR process should include larger concerns and small
businesses in the regulated industry/manufacturer community, energy
advocates, energy utilities, consumers, and States. The Joint Gas
Associations stated that a representative group, with respect to all
proposed standards applicable to appliances that use natural gas, must
include gas distribution utilities and their customers. Furthermore,
the Joint Gas Associations stated that any rules established through a
DFR or a negotiated rulemaking process must still adhere to the other
principles in EPCA, such as being economically justified,
technologically feasible, and demonstrate significant conservation of
energy. The Joint Gas Associations recommended that a revised Process
Rule should reflect and formalize this inclusive approach. (Joint Gas
Associations, No. 25 at pp. 33-34)
Rinnai stated that no stakeholder recommendation should be used as
the primary basis for a proposed rule unless it includes participants
that represent all segments of the affected industry (including small
manufacturers and utilities) and includes a mechanism for dissenting
views to be formally submitted. (Rinnai, No. 11 at p. 14)
Rinnai stated that analysis supporting negotiations should be
required to include a competitive impact assessment (i.e., examining
how any stakeholder recommendation may benefit one or more
participating entities). The commenter stated that this review should
examine whether the proposal would create market distortions, impose
barriers to entry, or provide disproportionate advantages to specific
market participants or technologies. Rinnai recommended that findings
should be publicly disclosed to ensure transparency and guard against
regulatory capture. (Rinnai, No. 11 at p. 14)
Upon review, DOE has tentatively determined that largely returning
to the language in the 2020 Process Rule regarding Direct Final Rules
and the Negotiated Rulemaking Process will provide more clarity to
stakeholders on how DOE will implement these mechanisms. DOE has also
tentatively determined, based on review of stakeholder comments, that
the text in the Objectives section of the Process Rule encouraging the
development of consensus proposals, including--in certain circumstances
and after careful consideration of fair representation--negotiated
proposals, is appropriate, and is further proposing to add language
noting that these proposals may proceed to a direct final rule in
appropriate cases.
DOE is requesting information and comments on possible improvements
or considerations for the process of negotiated rulemaking under EPCA.
DOE is also requesting comments on considerations for direct final
rules.
L. Principles for Distinguishing Between Effective and Compliance Dates
(Section 11)
This section was established in the February 2020 Final Rule and
provides clarification as to the distinction between the effective and
compliance dates of a final rule. 85 FR 8626, 8709 (Feb. 14, 2020).
This section has not been amended since its original establishment.
While DOE did not receive any comments related to this section, DOE
has tentatively determined that it would also be beneficial to clarify
the prescribed date of a rule as compared to the effective and
compliance dates. As noted in the current Process Rule, the effective
date is the date a rule is legally operative after being published in
the Federal Register. Under the Administrative Procedure Act, the
effective date must be at least 30 days after the date of publication
in the Federal Register. (5 U.S.C. 553(d)). For some rules, a longer
period is required (e.g., 60 days for a major rule under the
Congressional Review Act (5 U.S.C. 801(a)(3)) and 120 days for a direct
final rule issued under 42 U.S.C. 6295(p)(4)). The compliance date, on
the other hand, is the specific date when manufacturers are required to
use a new test procedure to make energy efficiency representations or
to meet a new energy conservation standard. For test procedures, the
compliance date is typically 180 days after publication in the Federal
Register. (42 U.S.C. 6293(c)(2)). For standards, the compliance date is
typically three or five years after publication in the Federal Register
for covered products but can vary under certain circumstances. (42
U.SC. 6295(m)(4)).
In addition to effective and compliance dates, the date a rule is
prescribed is also a significant date in EPCA. For instance, under
EPCA, petitions for review of a rule are required to be filed ``within
60 days after the date on which such rule is prescribed.'' (42 U.S.C.
6306(b)(1)). DOE's longstanding interpretation has been that the
prescribed date of a rule is the date the rule is published in the
Federal Register. This view is consistent with the court's
determination in Natural Resources Defense Council v. Abraham that
``publish'' and ``prescribe'' are ``interchangeable'' terms in EPCA.
355 F.3d 179, 196 (2d Cir. 2004). DOE proposes to add language
clarifying that the prescribed date for a rule issued under EPCA,
including direct final rules, is the date the rule is published in the
Federal Register.
M. Other Comments
DOE received several other comments not directly linked to any
specific section of the Process Rule. The Department summarizes and
addresses these comments in the paragraphs that follow. However, DOE is
not proposing any revisions in relation to these comments for the
reasons explained.
In the April 2025 RFI, DOE requested comments and information on
whether any changes to the Process Rule should be made, consistent with
statutory requirements, to reduce the regulatory burden associated with
test procedure and/or energy conservation standards rulemakings. 90 FR
16093, 16097 (April 17, 2025).
DOE received two comments related to changing timelines of
rulemakings in response to regulatory burden. BWC stated that DOE
should evaluate the cumulative regulatory burden on manufacturers early
in the rulemaking process, because manufacturers producing multiple
covered products can be overwhelmed by simultaneous rulemakings. BWC
stated that DOE should accept comments from manufacturers facing
cumulative regulatory burdens and consider delaying rulemakings if
manufacturers are overstretched by other ongoing DOE efforts. (BWC, No.
34 at p. 4) NAFEM commented that the Process Rule should require DOE to
align regulatory schedules across Federal agencies and State
regulations to reduce uncertainty and manufacturer burden in terms of
re-tooling product lines and costs for agency re-approvals, costs for
re-testing equipment and products, and costs to
[[Page 42068]]
modify sales and marketing literature. NAFEM argued that overlapping
and conflicting timelines create economic hardship, especially for
small manufacturers. (NAFEM, No. 13 at pp. 3-4)
In response, DOE notes that it must comply with statutory
requirements for the timing of rulemakings, and any adjustments to
rulemaking timelines to address regulatory burden must be done in
compliance with the statutory deadline for a given product. As such,
DOE is unable to address these requested changes to regulatory
timelines generally as part of the Process Rule.
Several other commenters discussed how to analyze cumulative
regulatory burden; these comments will be summarized and addressed in a
separate proceeding focused on the analytical methodologies used in
DOE's rulemaking process.
The April 2025 RFI asked whether and how the Process Rule should be
updated to provide additional detail on how DOE's rulemaking process
ensures protection of consumer choice in prescribing regulations for
covered consumer products and commercial/industrial equipment as
directed by EPCA. 90 FR 16093, 16097 (April 17, 2025)
Several commenters stated that EPCA and/or the current Process Rule
already prioritize the interests of American consumers and consumer
choice and that no changes to the Process Rule are needed. (NEEA, No.
36 at p. 3; Ceres, No. 22 at pp. 2-4; Lennox, No. 26 at p. 3; State
Agencies, No. 33 at p. 1; Joint Advocates, No. 31 at p. 2) Ceres added
that the current Process Rule provides market certainty critical for
manufacturers to determine appliance costs for consumers. Ceres stated
that without national standards, manufacturers would have to navigate
individual State requirements to offer their products across the
country, and that this may prevent some manufacturers from selling
products in individual States, thereby creating serious variances in
costs and products available from State to State. (Ceres, No. 22 at pp.
2-4)
NAHB expressed support for standards that reduce energy consumption
and allow markets to offer a robust range of products that meet
consumer preferences for functionality, cost, efficiency, and
aesthetics. NAHB stated that EPCA requires DOE to consider this exact
impact, but that the recent residential furnaces and consumer water
heaters rulemakings will adversely impact consumer choice. Accordingly,
the commenter recommended that compliance with these standards should
be postponed. (NAHB, No. 19 at pp. 2-3)
DOE agrees that its role in implementing EPCA should include
thorough assessment of the interests of American consumers and domestic
manufacturers, but DOE is open to comments regarding additional ways
DOE can address these interests. DOE notes that many other commenters
discussed consumer choice specifically in relation to adding more
clarification of how DOE interprets the EPCA provisions related to
features, product classes, and unavailability.\38\ These comments may
be considered in a separate proceeding related to that topic, if
appropriate. In response to NAHB, DOE notes that the referenced
rulemakings have already been completed and any change to the
compliance date is outside the scope of this Process Rule proceeding.
---------------------------------------------------------------------------
\38\ (ACCA, No. 38 at p. 1; AHRI, No. 28 at pp. 2-3; APPA, No.
20 at p. 5; BHI, No. 16 at pp. 2-5; Heidi King Consulting, No. 30 at
p. 4; Joint Advocates, No. 31 at p. 2; Joint Gas Associations, No.
25 at pp. 14-16; NAFEM, No. 13 at pp. 7-8; NEMA, No. 23 at pp. 5-6;
NRECA, No. 17 at p. 2; Rinnai, No. 11 at pp. 3, 6-7, 11-12; Strauch,
No. 18 at pp. 1-2; ONE Gas, No. 37 at pp. 3-4; WM Technologies, No.
14 at p. 2).
---------------------------------------------------------------------------
Rinnai recommended requiring identification and documentation of
lessons learned for any rule that is withdrawn under the Congressional
Review Act (``CRA'') or judicial invalidation. (Rinnai, No. 11 at p.11)
In response, DOE notes that its actions addressing rules being
withdrawn as a result of CRA or judicial invalidation are based on the
requirements of the CRA or the specific judicial decision. As such, DOE
is not proposing additional language in the Process Rule.
PHTA recommended that any amendments to the certification,
compliance, enforcement sections of Part 429 (which require a change to
the reporting requirements for manufacturers to demonstrate compliance)
be completed within the test procedure or energy conservation standard
rulemaking, and not a separate certification rulemaking. (PHTA, No. 27
at p. 2)
DOE notes that information collected in certification reports is
subject to approval from Office of Information and Regulatory Affairs
(``OIRA''), consistent with the requirements of the Paperwork Reduction
Act (``PRA''). DOE establishes reporting requirements consistent with
the PRA and OIRA requirements for the entire range of covered products.
DOE is considering how to best limit regulatory burden associated with
its appliance standards program, including approaches to limit the
paperwork and reporting burden associated with compliance certification
reporting requirements. DOE will propose any such action as part of a
separate proceeding related to certification requirements.
Zero Zone recommended that DOE review how it applies uncertainty
levels to analysis, test reporting and certification, and standard
levels. (Zero Zone, No. 15 at pp. 1-2)
In response, DOE notes that uncertainty levels are assessed on a
case-by-case basis in individual energy conservation standards and test
procedure rulemakings, as needed. Given the fact-specific nature of
such inquiry, DOE does not believe that a generalized statement in the
Process Rule would add significant value.
APPA and EEI stated that DOE should work with Congress to reform
the 3-year-lookback provision for ``no new standards'' determinations,
perhaps by providing that a new analysis should only be required if
there is a significant shipments increase. (APPA, No. 20 at p. 3; EEI,
No. 35 at p. 3) APPA commented that DOE should also work with Congress
to revise the ``six-year-lookback'' (for energy conservation standards)
and ``seven-year-lookback'' (for test procedures) requirements
contained in the Energy Independence and Security Act of 2007 (``EISA
2007'') amendments to EPCA and consider changing it to six or seven
years after the compliance date of a new standard. APPA argued that
this would provide more time to evaluate the real-world effects of new
standards before considering any amendments. (APPA, No. 20 at pp. 3, 5)
DOE acknowledges receipt of these comments and will consider
further updates to the Process Rule to reflect any future amendments to
EPCA, if adopted by Congress.
Lennox stated that the Process Rule should acknowledge DOE's
``error correction'' provisions and that these error correction
provisions should be strengthened. (Lennox, No. 26 at p. 11)
In response, DOE's error correction provisions are not part of the
Process Rule and DOE has tentatively decided to continue addressing
them separately. See 10 CFR 430.5. The error correction provisions
describe an optional process that the Secretary may choose to follow
for a final rule that establishes or amends energy conservation
standards, prior to publication of such rule in the Federal Register.
Because this is an optional procedure and because DOE is proposing in
this notice that the Process Rule would be binding on DOE, DOE has
tentatively determined that
[[Page 42069]]
addressing error correction provisions separately is appropriate.
However, DOE is requesting additional comments on whether the Process
Rule should reference the optional separate error correction
provisions.
Several commenters discussed stakeholder engagement and
transparency.
ACCA stated that DOE should provide plain-language summaries of
proposed standards and technical analyses. The commenter added that DOE
should expand opportunities for contractors, installers, and service
professionals--those closest to real-world performance--to contribute
data and recommendations during rulemakings. ACCA suggested that DOE
should establish a small business review panel within the program,
modeled on the Small Business Administration's Small Business
Regulatory Enforcement Fairness Act (``SBREFA'') panels, to evaluate
impacts early in the rulemaking process. (ACCA, No. 38 at p. 3)
APPA recommended that DOE increase its use of internet platforms
and hybrid meetings to maximize stakeholder input and reduce the cost
of rulemaking processes. (APPA, No. 20 at pp. 4-5) EEI recommended that
DOE should increase its use of internet platforms including hosting
hybrid or internet-only webinars during comment periods. (EEI, No. 35
at p. 4) NAHB encouraged DOE to focus on publicizing and justifying its
rationale for decision making throughout the rulemaking process; NAHB
noted that webinars and other public forums to solicit input can
increase confidence in the fairness and transparency of the rulemaking
process. (NAHB, No. 19 at p. 5) Rinnai recommended requiring disclosure
of all modeling assumptions, engagement with stakeholders through
technical workshops, and publishing intermediate results. Rinnai also
recommended requiring stakeholder webinars within 10 days of releasing
major data sets or modeling changes. (Rinnai, No. 11 at p. 10)
NRECA commented that DOE should account for key issues raised by
stakeholders and incorporate the information provided in its
rulemakings. (NRECA, No. 17 at p. 2) APPA commented that DOE should
ensure that it carefully evaluates information and analyses submitted
by stakeholders. (APPA, No. 20 at pp. 4-5) NAFEM commented that DOE
should participate in increased dialogue with industry. (NAFEM, No. 13
at p. 8)
Rinnai recommended requiring public availability of all life-cycle
cost (``LCC'') model files and key assumptions. (Rinnai, No. 11 at p.
10) Zero Zone stated that DOE should be required to share its models
and allow stakeholder review. (Zero Zone, No. 15 at p. 4)
NEMA recommended that DOE consider soliciting pre-NOPR information
at the earliest possible time, in order to guide the way forward, help
avoid wasting resources later, and reduce the likelihood of a rule that
is inconsistent with the statutory scheme and, thus, vulnerable to
legal challenge. (NEMA, No. 23 at p. 8)
The Joint Gas Associations stated that the Department should use
updated qualitative and quantitative analytical methods that fully
document for the public that its decisions are sound. These commenters
added that any results should be fully explained and capable of being
reproduced by stakeholders. (Joint Gas Associations, No. 25 at p. 18)
AHRI, NAFEM, and Zero Zone suggested that DOE should be required to
provide masked test data to all stakeholders, and AHRI and NAFEM
suggested that unmasked test data should be provided to the relevant
manufacturer. (AHRI, No. 28 at pp. 2, 7; NAFEM, No. 13 at pp. 6-7; Zero
Zone, No. 15 at pp. 2, 4) Zero Zone added that a Professional Engineer
should be required to review and approve the results. (Zero Zone, No.
15 at p. 4)
The Joint Advocates stated that the Process Rule currently
specifies opportunity for public comment, and DOE makes supporting
materials publicly available, including technical support documents,
government regulatory impact models, and the national impact analysis
(``NIA'') and LCC spreadsheets. Accordingly, the Joint Advocates
concluded that there is no need to amend these sections of the Process
Rule. (Joint Advocates, No. 31 at pp. 3-4) NEEA stated that DOE should
continue to publish its analyses and field formal comment periods and
stakeholder input opportunities across key rulemaking stages.
Additionally, NEEA recommended DOE continue to prioritize transparency,
accessibility, and consistency in how it solicits and incorporates
public feedback, and the commenter opposed any changes that would
diminish the structure, duration, or significance of public comment
windows. (NEEA, No. 36 at p. 2) NEEA recommended DOE maintain its
current commitment to transparent, peer-reviewed cost-benefit analysis,
including the publication of assumptions, data, and modeling tools.
(NEEA, No. 36 at p. 3)
Upon review, DOE agrees that the current Process Rule already
specifies appropriate opportunities for public comment and stakeholder
engagement. While DOE makes all spreadsheet models and technical
support documents publicly available for stakeholder review, the
Department welcomes the opportunity to further increase transparency
and reproducibility as part of the rulemaking record. DOE recognizes
that in isolation such documents may be difficult to navigate without
clear documentation manuals and access to underlying methodology and
data. DOE will explore opportunities to increase transparency further
through the Analytic Framework update. DOE already engages with
stakeholders via public hearings (including hybrid meetings) and
provides opportunities for stakeholders to submit relevant real-world
performance data and information and provide recommendations. DOE
responds to key issues raised by stakeholders and incorporates
information provided in its rulemakings, where appropriate. DOE also
has the ability to make additional materials available or to conduct
additional stakeholder engagement as necessary. To the extent that
commenters raised topics related to analytical methodologies, DOE
further discusses such comments in section IV.N.1 of this document, and
the Department will address these methodologies in a separate process.
As such, DOE is not proposing any revisions in response to these
comments at this time.
N. Topics Considered in Other Processes
1. Analytical Methodology
DOE received several comments in response to the April 2025 RFI
pertaining to the analysis conducted in support of the development of
energy conservation standards, including comments on the methodology
and development of input values related to the general approach,\39\ as
well as comments pertaining to specific analyses, including: (1) the
engineering analysis; \40\ (2) the markups analysis; \41\ (3) the
energy use and life-cycle cost analysis; \42\ (4) the environmental
[[Page 42070]]
analysis \43\ and full-fuel-cycle energy metrics; \44\ (5) the
monetization of emissions analysis; \45\ (6) the utility impact
analysis; \46\ and (7) the manufacturer impact analysis.\47\
---------------------------------------------------------------------------
\39\ (BHI, No. 16 at pp. 5-6; BWC, No. 34 at p. 5; Joint
Commenters, No. 24 at pp. 3-4; AHRI, No. 28 at pp. 2, 7-8,11-12;
Joint Gas Associations, No. 25 at pp. 23-24, 37-38; APPA, No. 20 at
p. 1; Joint Advocates, No. 31 at pp. 2-3; EEI, No. 35 at p. 2; State
Agencies, No. 33 at p. 2; Heidi King Consulting, No. 30 at pp. 1-3;
Lennox, No. 26 at pp. 6-7)
\40\ (Joint Gas Associations, No. 25 at p. 22; Strauch, No. 18
at p. 1; NAFEM, No. 13 at p. 8)
\41\ (Joint Gas Associations, No. 25 at p. 22; Lennox, No. 26 at
p. 7)
\42\ (ACCA, No. 38 at p. 2; AHRI, No. 28 at pp. 4, 7; EEI, No.
35 at p. 2; Joint Gas Associations, No. 25 at pp. 22-24; Joint
Advocates, No. 31 at p. 3; Lennox, No. 26 at p. 7; NAHB, No. 19 at
p. 4; NMHC and NAA, No. 29 at pp. 2-5; ONE Gas, No. 37 at pp. 2-3;
ONE Gas, No. 37 at pp. 2-3; Rinnai, No. 11 at pp. 3, 6-8)
\43\ (APPA, No. 20 at p. 5; Ceres, No. 22 at p. 5; NEEA, No. 36
at p. 3; EEI, No. 35 at p. 5)
\44\ (Joint Gas Associations, No. 25 at pp. 18-19; ONE Gas, No.
37 at pp. 4-5; Rinnai, No. 11 at pp. 3, 7-8)
\45\ (AHRI, No. 28 at p. 10; BWC, No. 34 at p. 5; Ceres, No. 22
at p. 4; State Agencies, No. 33 at p. 2; Strauch, No. 18 at p. 2;
NAHB, No. 19 at p. 5; NAFEM, No. 13 at p. 7; Zero Zone, No. 15 at p.
5)
\46\ (ONE Gas, No. 37 at p. 4)
\47\ (ACCA, No. 38 at p. 2; NAFEM, No. 13 at pp. 2-3; Rinnai,
No. 11 at pp. 3, 6)
---------------------------------------------------------------------------
DOE further received additional comments specific to the following
topics: (1) the approach to evaluate hard-to-quantify effects \48\ and
evaluate market failures; \49\ (2) the cumulative regulatory burden
analysis; \50\ (3) considerations of any potential supply chain
constraints; \51\ (4) fuel neutrality and analysis of fuel switching;
\52\ and (5) the need for retrospective review and validation of
existing standards prior to initiating new rulemakings.\53\
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\48\ (Heidi King Consulting, No. 30 at p. 5; Lennox, No. 26 at
p. 5; NEMA, No. 23 at p. 6-7; NRECA, No. 17 at p. 2)
\49\ (Joint Gas Associations, No. 25 at pp. 21, 22; Heidi King
Consulting, No. 30 at p. 3; Rinnai, No. 11 at p. 9)
\50\ (AHRI, No. 28 at p. 4; Lennox, No. 26 at p. 6; PHTA, No. 27
at pp. 1-2)
\51\ (APPA, No. 20 at pp. 2-3; EEI, No. 35 at pp. 2-3)
\52\ (Joint Gas Associations, No. 25 at pp. 11-15, 17; Rinnai,
No. 11 at pp. 9, 12)
\53\ (ACCA, No. 38 at p. 2; Joint Gas Associations, No. 25 at
pp. 26-28; NAHB, No. 19 at p. 4; Rinnai, No. 11 at p. 10)
---------------------------------------------------------------------------
Given the significant volume and range of comments which require
careful consideration, DOE has tentatively determined that the most
appropriate path forward is to propose minor amendments to these
methodology sections (e.g., sections 12 through 16) of the Process
Rule, but to address the detailed topics raised in these comments as
part of a separate process. DOE intends to separately undertake an
analytic framework RFI in which DOE will conduct a review of its
analytical methods, with the goal of ensuring that rulemaking analyses
incorporate best practices and address topics raised during peer review
\54\ of DOE's rulemaking process.
---------------------------------------------------------------------------
\54\ The National Academies of Sciences, Engineering, and
Medicine completed the peer review and transmitted to DOE its
report, ``Review of Methods Used by the U.S. Department of Energy in
Setting Appliance and Equipment Standards,'' (``NAS Report'') on
January 7, 2022. The report is available at https://www.nap.edu/catalog/25992/review-of-methods-used-by-the-us-department-of-energy-in-setting-appliance-and-equipment-standards.
---------------------------------------------------------------------------
2. Product-Specific Comments
Solaray commented that DOE should consider including solar thermal
water heating systems within the scope of its prioritization process
for energy conservation standards and consider solar water heaters
alongside conventional and hybrid technologies in future water heating
rulemakings, or as a standalone or primary heating source for water.
(Solaray, No. 8 at pp. 2-4)
In response, DOE plans to address the appropriate scope for water
heaters as part of any future rulemakings on water heaters.
O. Severability
These procedures, interpretations, and policies for consideration
of new or revised energy conservation standards and test procedures are
separate and severable from one another and capable of operating
independently. If any section or portion therein is stayed or
determined to be invalid, or the applicability of any section to any
person or entity is held invalid, it is DOE's intention that the
validity of the remainder of these procedures will not be affected and
will continue in effect, along with all applications thereof.
V. Procedural Issues and Regulatory Review
A. Review Under Executive Order 12866
Section 6(a) of Executive Order (``E.O.'') 12866, ``Regulatory
Planning and Review,'' 58 FR 51735 (Oct. 4, 1993), requires agencies to
submit ``significant regulatory actions'' to the Office of Information
and Regulatory Affairs (``OIRA'') in the Office of Management and
Budget (``OMB'') for review. OIRA has determined that this proposed
regulatory action constitutes a ``significant regulatory action'' under
section 3(f) of E.O. 12866. Accordingly, this proposed regulatory
action was submitted to OIRA for review under E.O. 12866.
B. Review Under Additional Executive Orders and Presidential Memoranda
DOE has examined this proposed rule and has tentatively determined
that it is consistent with the policies and directives outlined in E.O.
14154, ``Unleashing American Energy,'' 90 FR 8353 (Jan. 29, 2025); E.O.
14192, ``Unleashing Prosperity Through Deregulation,'' 90 FR 9065 (Feb.
6, 2025); and Presidential Memorandum, ``Delivering Emergency Price
Relief for American Families and Defeating the Cost-of-Living Crisis,''
90 FR 8245 (Jan. 28, 2025).
Preliminarily, this proposed rulemaking has also been determined to
be an ``E.O. 14192 deregulatory action'' because, within the
requirements of EPCA, it intends to reduce unnecessary burdens to
society by streamlining the regulatory framework and improving
efficiency for regulated entities and the interested public. The
primary impacts are from the proposal to make the Process Rule binding
for actions that would increase stringency, so that manufacturers and
other stakeholders have more certainty with respect to how individual
rulemakings will proceed in the future, within laid out boundaries. In
addition, the proposal re-instates a threshold for significant
conservation of energy, again giving manufactures and other
stakeholders more certainty with respect to how rulemakings will
proceed in the future in terms of new or amended standards while
continuing to meet DOE's responsibilities under EPCA. The proposal to
re-instate a comparative analysis among all analyzed TSLs would also
allow DOE to best determine economic justification, consistent with
statutory requirements, while promoting consumer choice and lowering
first cost of appliances. In addition, the proposal related to ASHRAE
equipment gives more certainty to manufacturers that DOE will only
adopt standard levels above ASHRAE in very specific circumstances,
allowing them to focus resources on adjusting to any revisions in
ASHRAE. These benefits are difficult to quantify due to the breadth of
products, and that most benefits will accrue in individual future
rulemakings. Nevertheless, DOE believes these benefits would be
substantial.
C. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996)
requires preparation of an initial regulatory flexibility analysis
(``IRFA'') for any rule that by law must be proposed for public
comment, unless the agency certifies that the rule, if promulgated,
will not have a significant economic impact on a substantial number of
small entities. As required by E.O. 13272, ``Proper Consideration of
Small Entities in Agency Rulemaking,'' 67 FR 53461 (August 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 DOE rulemaking process. 68 FR 7990. DOE
[[Page 42071]]
has made its procedures and policies available on the Office of the
General Counsel's website (www.energy.gov/gc/office-general-counsel).
This proposed rule would impose no regulatory obligations on the
public, including small entities, and it would not affect the ability
of any interested person, including small entities, to participate in
DOE's rulemaking process. Because this proposed rule to revise DOE's
Process Rule instead would only impose procedural requirements on the
Department itself, DOE certifies that this proposed rule would not have
a ``significant economic impact on a substantial number of small
entities,'' and, therefore, the preparation of an IRFA is not
warranted. Accordingly, DOE will transmit the certification and
supporting statement of factual basis to the Chief Counsel for Advocacy
of the Small Business Administration (``SBA'') for review under 5
U.S.C. 605(b).
D. Review Under the Paperwork Reduction Act of 1995
DOE is not amending its existing information collections through
this proposed rule. Under existing provisions, manufacturers of covered
products/equipment 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 such products/equipment, including any amendments
adopted for those test procedures, on the date that compliance is
required. DOE has established regulations for the certification and
recordkeeping requirements for all covered consumer products and
commercial equipment (see generally 10 CFR part 429). The collection-
of-information requirement for 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.
Specifically, this proposed rule, addressing clarifications to the
Process Rule itself, does not contain any collection of information
requirement that would trigger the PRA.
E. Review Under the National Environmental Policy Act of 1969
Pursuant to the National Environmental Policy Act (NEPA) of 1969
(42 U.S.C. 4321 et seq.), DOE has analyzed this action in accordance
with NEPA, as amended, DOE's NEPA implementing regulations (set forth
in 10 CFR part 1021), and DOE's NEPA implementing procedures (published
outside the Code of Federal Regulations on June 30, 2025 (Available at:
www.energy.gov/nepa/articles/doe-nepa-implementing-procedures-june-2025)). The actions formally identified in appendix A of subpart D to
part 1021 represent administrative and routine actions that are
excepted from NEPA based on the definition of ``major Federal action''
in section 111(10) of NEPA. DOE has tentatively determined that the
proposed amendments to the Process rule are administrative and routine.
DOE has tentatively determined that as an administrative and routine
action, this proposal is not a major Federal action significantly
affecting the quality of the human environment within the meaning of
NEPA and no further environmental review is needed.
F. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (August 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications. On March 14, 2000, DOE
published a statement of policy describing the intergovernmental
consultation process it will follow in the development of such
regulations. 65 FR 13735.
DOE has examined this proposed rule and has tentatively determined
that it would not have a substantial direct effect on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government. It will primarily affect the procedures by which DOE
develops proposed rules to revise energy conservation standards and
test procedures for covered consumer products and commercial/industrial
equipment. EPCA governs and prescribes Federal preemption of State
regulations as to energy conservation for the products that are the
subject of this proposed rule. States can petition DOE for exemption
from such preemption to the extent, and based on criteria, set forth in
EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive
Order 13132.
G. 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,'' 61 FR 4729 (Feb. 7, 1996), 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. Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any; (2) clearly
specifies any effect on existing Federal law or regulation; (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction; (4) specifies the retroactive
effect, if any; (5) adequately defines key terms; and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General. Section 3(c) of
Executive Order 12988 requires Executive agencies to review regulations
in light of applicable standards in section 3(a) and section 3(b) to
determine whether they are met or it is unreasonable to meet one or
more of them. DOE has completed the required review and tentatively
determined that, to the extent permitted by law, this proposed rule
meets the relevant standards of E.O. 12988.
H. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA'')
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, section 201 (codified at 2 U.S.C.
1531).
[[Page 42072]]
For a proposed regulatory action likely to result in a rule that may
cause the expenditure by State, local, and Tribal governments, in the
aggregate, or by the private sector of $100 million or more in any one
year (adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy.
(2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a proposed ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them. On March 18, 1997, DOE published
a statement of policy on its process for intergovernmental consultation
under UMRA. 62 FR 12820. DOE's policy statement is also available at
www.energy.gov/sites/prod/files/gcprod/documents/umra_97.pdf.
DOE examined this proposed rule according to UMRA and its statement
of policy and has tentatively determined that the rule contains neither
an intergovernmental mandate, nor a mandate that may result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any year.
Accordingly, no further assessment or analysis is required under UMRA.
I. 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 or policy that may affect family
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.
This proposed rule, which would amend the procedures DOE will
follow in conducting rulemakings for new or amended energy conservation
standards and test procedures, would not have any impact on the
autonomy or integrity of the family as an institution. Accordingly, DOE
has concluded that it is not necessary to prepare a Family Policymaking
Assessment.
J. 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 proposed rule would not result
in any takings that might require compensation under the Fifth
Amendment to the U.S. Constitution.
K. 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 proposed rule under the OMB and DOE
guidelines and has concluded that it is consistent with applicable
policies in those guidelines.
L. 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 is likely to have a
significant adverse effect on the supply, distribution, or use of
energy; or (2) 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 regulation be implemented, and
of reasonable alternatives to the action and their expected benefits on
energy supply, distribution, and use.
DOE has tentatively concluded that the regulatory action in this
document, which proposes clarifications to the Process Rule that guides
the Department in establishing and amending energy conservation
standards and test procedures, is not a significant energy action
because it would not 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 for this proposed rule.
M. Review Under the Information Quality Bulletin for Peer Review
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.'' Id. at 70 FR 2667.
In response to OMB's Bulletin, DOE conducted formal peer reviews of
the energy conservation standards development process and the analyses
that are typically used and has prepared a Peer Review report
pertaining to the energy conservation standards rulemaking
analyses.\55\ Generation of
[[Page 42073]]
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 \56\ and plans to consider any corresponding updates
needed to its analytical framework in a separate proceeding, as
discussed earlier in this document. Specifically, DOE plans to publish
a separate analytic framework RFI to seek public input and peer review
on any necessary updates to its rulemaking analytical methodologies.
---------------------------------------------------------------------------
\55\ The 2007 ``Energy Conservation Standards Rulemaking Peer
Review Report'' is available at www.energy.gov/cmei/articles/building-technologies-office-bto-peer-review-2007 (Last accessed May
11, 2026).
\56\ The report is available at www.nationalacademies.org/our-work/review-of-methods-for-setting-building-and-equipment-performance-standards (Last accessed Oct. 6, 2025).
---------------------------------------------------------------------------
VI. Public Participation
A. Participation in the Webinar
The time and date of the webinar meeting are listed in the DATES
section at the beginning of this document. Webinar registration
information, participant instructions, and information about the
capabilities available to webinar participants will be published on
DOE's website at: www.energy.gov/eere/buildings/public-meetings-and-comment-deadlines. Participants are responsible for ensuring their
systems are compatible with the webinar software.
B. Procedure for Submitting Prepared General Statements for
Distribution
Any person who has an interest in the topics addressed in this
document, or who is representative of a group or class of persons that
has an interest in these issues, may request an opportunity to make an
oral presentation at the webinar. Such persons may submit such request
to make a prepared general statement to
[email protected]. Persons who wish to speak
should include with their request a computer file in WordPerfect,
Microsoft Word, PDF, or text (ASCII) file format that briefly describes
the nature of their interest in this proposed rule and the topics they
wish to discuss. Such persons should also provide a daytime telephone
number where they can be reached to enable DOE staff to make follow-up
contact, if needed.
DOE requests persons seeking to make an oral presentation to submit
an advance copy of their statements at least one week before the
webinar. At its discretion, DOE may permit persons who cannot supply an
advance copy of their statement to participate, if those persons have
made advance alternative arrangements with the Building Technologies
Office. As necessary, requests to give an oral presentation should ask
for such alternative arrangements.
C. Conduct of the Webinar
DOE will designate a DOE official to preside at the webinar and may
also use a professional facilitator to aid discussion. The meeting will
not be a judicial or evidentiary-type public hearing, but DOE will
conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A
court reporter will be present to record the proceedings and prepare a
transcript. DOE reserves the right to schedule the order of
presentations and to establish the procedures governing the conduct of
the webinar. There shall not be discussion of proprietary information,
costs or prices, market share, or other commercial matters regulated by
U.S. anti-trust laws. After the webinar, interested parties may submit
further comments on the proceedings, as well as on any aspect of the
proposed rulemaking, until the end of the comment period.
The webinar will be conducted in an informal, conference style. DOE
will present a general overview of the topics addressed in this
proposed rule, allow time for prepared general statements by
participants, and encourage all interested parties to share their views
on issues affecting this proposed rule. Each participant will be
allowed to make a general statement (within time limits determined by
DOE), before the discussion of specific topics. DOE will permit, as
time permits, other participants to comment briefly on any general
statements.
At the end of all prepared statements on a topic, DOE will permit
participants to clarify their statements briefly. Participants should
be prepared to answer questions by DOE and by other participants
concerning these issues. DOE representatives may also ask questions of
participants concerning other matters relevant to this proposed rule.
The official conducting the webinar will accept additional comments or
questions from those attending, as time permits. The presiding official
will announce any further procedural rules or modification of the above
procedures that may be needed for the proper conduct of the webinar.
A transcript of the webinar will be included in the docket, which
can be viewed as described in the Docket section at the beginning of
this document and will be accessible on the DOE website. In addition,
any person may buy a copy of the transcript from the transcribing
reporter.
D. Submission of Comments
DOE will accept comments, data, and information regarding this
proposed rule before or after the webinar, but no later than the date
provided in the DATES section at the beginning of this document.
Interested parties may submit comments, data, and other information
using any of the methods described in the ADDRESSES section at the
beginning of this document.
Submitting comments via www.regulations.gov. The
www.regulations.gov web page will require you to provide your name and
contact information. Your contact information will be viewable to DOE
Building Technologies staff only. Your contact information will not be
publicly viewable except for your first and last names, organization
name (if any), and submitter representative name (if any). If your
comment is not processed properly because of technical difficulties,
DOE will use this information to contact you. If DOE cannot read your
comment due to technical difficulties and cannot contact you for
clarification, DOE may not be able to consider your comment.
However, your contact information will be publicly viewable if you
include it in the comment itself or in any documents attached to your
comment. Any information that you do not want to be publicly viewable
should not be included in your comment, nor in any document attached to
your comment. Otherwise, persons viewing comments will see only first
and last names, organization names, correspondence containing comments,
and any documents submitted with the comments.
Do not submit to www.regulations.gov information for which
disclosure is restricted by statute, such as trade secrets and
commercial or financial information (hereinafter referred to as
Confidential Business Information (``CBI'')). Comments submitted
through www.regulations.gov cannot be claimed as CBI. Comments received
through the website will waive any CBI claims for
[[Page 42074]]
the information submitted. For information on submitting CBI, see the
Confidential Business Information section.
DOE processes submissions made through www.regulations.gov before
posting. Normally, comments will be posted within a few days of being
submitted. However, if large volumes of comments are being processed
simultaneously, your comment may not be viewable for up to several
weeks. Please keep the comment tracking number that www.regulations.gov
provides after you have successfully uploaded your comment.
Submitting comments via email, hand delivery/courier, or postal
mail. Comments and documents submitted via email, hand delivery/
courier, or postal mail also will be posted to www.regulations.gov. If
you do not want your personal contact information to be publicly
viewable, do not include it in your comments or any accompanying
documents. Instead, provide your contact information in a cover letter.
Include your first and last names, email address, telephone number, and
optional mailing address. The cover letter will not be publicly
viewable as long as it does not include any comments.
Include contact information each time you submit comments, data,
documents, and other information to DOE. If you submit via postal mail
or hand delivery/courier, please provide all items on a CD, if
feasible, in which case it is not necessary to submit printed copies.
No telefacsimiles (``faxes'') will be accepted.
Comments, data, and other information submitted to DOE
electronically should be provided in PDF (preferred), Microsoft Word or
Excel, WordPerfect, or text (ASCII) file format. Provide documents that
are not secured, that are written in English, and that are free of any
defects or viruses. Documents should not contain special characters or
any form of encryption and, if possible, they should carry the
electronic signature of the author.
Campaign form letters. Please submit campaign form letters by the
originating organization in batches of between 50 to 500 form letters
per PDF or as one form letter with a list of supporters' names compiled
into one or more PDFs. This reduces comment processing and posting
time.
Confidential Business Information. Pursuant to 10 CFR 1004.11, any
person submitting information that he or she believes to be
confidential and exempt by law from public disclosure should submit via
email, postal mail, or hand delivery/courier two well-marked copies:
one copy of the document marked ``confidential'' including all the
information believed to be confidential, and one copy of the document
marked ``non-confidential'' with the information believed to be
confidential deleted. DOE will make its own determination about the
confidential status of the information and treat it according to its
determination.
It is DOE's policy that all comments may be included in the public
docket, without change and as received, including any personal
information provided in the comments (except information deemed to be
exempt from public disclosure).
VII. Approval of the Office of the Secretary
The Secretary of Energy has approved publication of this notice of
proposed rulemaking and announcement of webinar.
List of Subjects in 10 CFR Part 430
Administrative practice and procedure, Confidential business
information, Energy conservation, Household appliances, Imports,
Intergovernmental relations, Reporting and recordkeeping requirements,
Small businesses.
Signing Authority
This document of the Department of Energy was signed on June 30,
2026, by Audrey Robertson, Assistant Secretary (EERE) for Critical
Minerals and Energy Innovation, 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 July 2, 2026.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
For the reasons set forth in the preamble, DOE is proposing to
amend part 430 of chapter II, subchapter D, of title 10 of the Code of
Federal Regulations, as set forth below:
PART 430--ENERGY CONSERVATION PROGRAM FOR CONSUMER PRODUCTS
0
1. The authority citation for part 430 continues to read as follows:
Authority: 42 U.S.C. 6291-6309; 28 U.S.C. 2461 note.
0
2. Appendix A to subpart C of part 430 is revised to read as follows:
Appendix A to Subpart C of Part 430--Procedures, Interpretations, and
Policies for Consideration of New or Revised Energy Conservation
Standards and Test Procedures for Consumer Products and Certain
Commercial/Industrial Equipment
1. Objectives
2. Scope
3. Mandatory Application of the Process Rule
4. Setting Priorities for Rulemaking Activity
5. Coverage Determination Rulemakings
6. Process for Developing Energy Conservation Standards
7. Policies on Selection of Standards
8. Test Procedures
9. ASHRAE Equipment
10. Direct Final Rules
11. Negotiated Rulemaking Process
12. Principles for Distinguishing Between Effective and Compliance
Dates
13. Principles for the Conduct of the Engineering Analysis
14. Principles for the Analysis of Impacts on Manufacturers
15. Principles for the Analysis of Impacts on Consumers
16. Consideration of Non-Regulatory Approaches
17. Cross-cutting Analytical Assumptions
1. Objectives
This appendix establishes procedures, interpretations, and
policies that DOE will follow in the consideration and promulgation
of new or revised appliance energy conservation standards and test
procedures under the Energy Policy and Conservation Act (EPCA). This
appendix applies to both covered consumer products and covered
commercial/industrial equipment. The Department's objectives in
establishing these procedures include:
(a) Provide for early input from stakeholders. The Department
seeks to provide opportunities for public input early in the
rulemaking process so that the initiation and direction of
rulemakings is informed by comment from interested parties. Under
the procedures established by this appendix, DOE will seek early
input from interested parties in determining whether establishing
new or amending existing energy conservation standards will result
in significant savings of energy and is economically justified and
technologically feasible. In the context of test procedure
rulemakings, DOE will seek early input from interested parties in
determining whether--
(1) Establishing a new or amending an existing test procedure
will better measure the energy efficiency, energy use, water use (as
specified in EPCA), or estimated annual
[[Page 42075]]
operating cost of a covered product/equipment during a
representative average use cycle or period of use (for consumer
products); and
(2) Will not be unduly burdensome to conduct.
(b) Increase predictability of the rulemaking timetable. The
Department seeks to make informed, strategic decisions about how to
deploy its resources on the range of possible standards and test
procedure development activities, and to announce these
prioritization decisions so that all interested parties have a
common expectation about the timing of different rulemaking
activities. Further, when circumstances weigh towards doing so, DOE
will offer the opportunity to provide input on the prioritization of
rulemakings through a request for comment as DOE begins preparation
of its Regulatory Agenda each spring.
(c) Eliminate problematic design options early in the process.
The Department seeks to eliminate from consideration, early in the
process, any design options that present unacceptable problems with
respect to manufacturability, consumer utility, or safety, so that
the detailed analysis can focus only on viable design options. Under
the procedures in this appendix, DOE will eliminate from
consideration design options if it concludes that manufacture,
installation, or service of the design will be impractical, or that
the design option will have a material adverse impact on the utility
of the product, or if the design option will have a material adverse
impact on safety or health. DOE will also eliminate from
consideration proprietary design options that represent a unique
pathway to achieving a given efficiency level. This screening will
be done at the outset of a rulemaking.
(d) Fully consider non-regulatory approaches. The Department
seeks to understand the effects of market forces and voluntary
programs on encouraging the purchase of energy efficient products so
that the incremental impacts of a new or revised standard can be
accurately assessed and the Department can make informed decisions
about where standards and voluntary programs can be used most
effectively. DOE will continue to support voluntary efforts by
manufacturers, retailers, utilities, and others to increase product/
equipment efficiency.
(e) Conduct thorough analysis of impacts. In addition to
understanding the aggregate social and private costs and benefits of
standards, the Department seeks to understand the distribution of
those costs and benefits among consumers, manufacturers, and others,
as well as the uncertainty associated with these analyses of costs
and benefits, so that any adverse impacts on subgroups and
uncertainty concerning any adverse impacts can be fully considered
in selecting a standard. Pursuant to this appendix, the analyses
will consider the variability of impacts on significant groups of
manufacturers and consumers in addition to aggregate social and
private costs and benefits, report the range of uncertainty
associated with these impacts, and take into account cumulative
impacts of regulation on manufacturers. The Department will also
conduct appropriate analyses to assess the impact that new or
amended test procedures will have on manufacturers and consumers.
(f) Use transparent and robust analytical methods. The
Department seeks to use qualitative and quantitative analytical
methods that are fully documented for the public and that produce
results that can be explained and reproduced, so that the analytical
underpinnings for policy decisions on standards are as sound and
well-accepted as possible.
(g) Support efforts to build consensus on standards. The
Department seeks to encourage development of consensus proposals. In
certain circumstances proposals may also be developed in accordance
with the Negotiated Rulemaking Act (5 U.S.C. 561 et seq.) and as
outlined in section 11 of this appendix, for new or revised
standards because standards with representative, broad-based support
are likely to balance effectively the various interests affected by
such standards. These proposals may result in a direct final rule in
appropriate cases. DOE notes that the procedural requirements of
section 6 of this appendix do not apply to direct final rules. The
procedural requirements for direct final rules are specified in
EPCA. (42 U.S.C. 6295(p)(4)).
(h) Department policies. In accordance with EPCA, it is the goal
of the Department to preserve the availability 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, and in doing so to
safeguard the American people's freedom to choose from a variety of
goods and appliances (including but not limited to lightbulbs,
dishwashers, washing machines, gas stoves, water heaters, toilets,
and shower heads); to promote market competition and innovation
within the manufacturing and appliance industries; to ensure that
the global effects of a rule, regulation, or action shall, whenever
evaluated, be reported separately from its domestic costs and
benefits (energy savings and efficiency), in order to promote sound
regulatory decision making and prioritize the interests of the
American people; and to guarantee opportunities for public comment
and rigorous, peer-reviewed scientific analysis. (42 U.S.C. 6295(o)-
(p)). The Department additionally has the goal of eliminating
counterproductive requirements that raise the costs of home
appliances in a manner consistent with the requirements of EPCA,
which includes the consideration of energy savings relative to costs
to consumers and manufacturers and impacts to markets for covered
products. Id.
2. Scope
The procedures, interpretations, and policies described in this
appendix apply to rulemakings concerning new or revised Federal
energy conservation standards and test procedures, and related rule
documents (i.e., coverage determinations) for consumer products in
Part A and commercial and industrial equipment under Part A-1 of the
Energy Policy and Conservation Act (EPCA), as amended, except
covered ASHRAE equipment in Part A-1 are governed separately under
section 9 of this appendix.
3. Mandatory Application of the Process Rule
The rulemaking procedures established in this appendix are
binding on DOE for actions that are anticipated to increase the
stringency of a standard or increase the scope of products subject
to compliance with a standard. With respect to other actions, DOE
will satisfy the requirements in EPCA and may choose to apply
additional provisions in this appendix as may be appropriate so as
to maintain flexibility and to provide relief without undue delay in
appropriate cases. Certain actions as indicated may be exempt from
the rulemaking procedures established by this appendix and may
follow such expedited process as DOE may specify.
4. Setting Priorities for Rulemaking Activity
(a) In establishing its priorities for undertaking energy
conservation standards and test procedure rulemakings, DOE will
consider the following factors, consistent with applicable legal
obligations:
(1) Potential energy savings;
(2) Potential social and private costs and benefits;
(3) Applicable deadlines for rulemakings;
(4) Incremental DOE resources required to complete the
rulemaking process;
(5) Other relevant regulatory actions affecting the products/
equipment;
(6) Stakeholder recommendations;
(7) Evidence of energy efficiency gains in the market absent new
or revised standards;
(8) Status of required changes to test procedures;
(9) Potential to protect consumer choice in covered products and
equipment;
(10) Potential to eliminate counterproductive requirements that
increase the costs of appliances; and
(11) Other relevant factors.
(b) When circumstances weigh towards doing so, DOE will offer
the opportunity to provide input on prioritization of rulemakings
through a request for comment as DOE begins preparation of its
Regulatory Agenda each spring.
5. Coverage Determination Rulemakings
(a) DOE has discretion to conduct proceedings to determine
whether additional consumer products and commercial/industrial
equipment should be covered under EPCA if certain statutory criteria
are met. (42 U.S.C. 6292 and 42 U.S.C. 6295(l) for consumer
products; 42 U.S.C. 6312 for commercial/industrial equipment)
(b) If DOE determines to initiate the coverage determination
process, it will first publish a notice of proposed determination,
providing an opportunity for public comment of not less than 60
days, in which DOE will explain how such products/equipment that it
seeks to designate as ``covered'' meet the statutory criteria for
coverage and why such coverage is ``necessary or appropriate'' to
carry out the purposes of EPCA. In the case of commercial equipment,
DOE will follow the same process, except that the Department must
demonstrate that coverage of the equipment type is ``necessary'' to
carry out the purposes of EPCA.
[[Page 42076]]
(c) DOE will publish its final decision on coverage as a
separate notice, an action that will be completed prior to the
initiation of any test procedure or energy conservation standards
rulemaking (i.e., DOE will not issue any Requests for Information
(RFIs), Notices of Data Availability (NODAs), or any other mechanism
to gather information for the purpose of initiating a rulemaking to
establish a test procedure or energy conservation standard for the
proposed covered product/equipment prior to finalization of the
coverage determination). If DOE determines that coverage is
warranted, DOE will proceed with its typical rulemaking process for
both test procedures and standards. Specifically, DOE will finalize
coverage for a product/equipment presumptively at least 180 days
prior to publication of a proposed rule to establish a test
procedure, such as where an increase of stringency is contemplated
and to provide notice as contemplated under EPCA. And, DOE will
complete the test procedure rulemaking at least 180 days prior to
publication of a proposed energy conservation standard.
(d) If, during the substantive rulemaking proceedings to
establish test procedures or energy conservation standards after
completing a coverage determination, DOE finds it necessary and
appropriate to expand or reduce the scope of coverage, a new
coverage determination process will be initiated and finalized prior
to moving forward with the test procedure or standards rulemaking.
6. Process for Developing Energy Conservation Standards
This section describes the process to be used in developing
energy conservation standards for covered products and equipment
other than those covered equipment subject to ASHRAE/IES Standard
90.1.
(a) Early assessment. (1) As the first step in any proceeding to
consider establishing or amending any energy conservation standard,
DOE will publish a document in the Federal Register announcing that
DOE is considering initiating a rulemaking proceeding. As part of
that document, DOE will solicit submission of related comments,
including data and information on whether DOE should proceed with
the rulemaking, including whether any new or amended rule would be
cost-effective, economically justified, technologically feasible, or
would result in a significant savings of energy. Based on the
information received in response to the notice and its own analysis,
DOE will determine whether to proceed with a rulemaking for a new or
amended energy conservation standard or an amended test procedure.
(i) If DOE determines that a new or amended standard would not
satisfy applicable statutory criteria, DOE would engage in notice
and comment rulemaking to issue a determination that a new or
amended standard is not warranted.
(ii) If DOE receives sufficient information suggesting it could
justify a new or amended standard or the information received is
inconclusive with regard to the statutory criteria, DOE would
undertake the preliminary stages of a rulemaking to issue or amend
an energy conservation standard, as discussed further in paragraph
(a)(2) of this section.
(2) If the Department determines it is appropriate to proceed
with a rulemaking, the preliminary stages of a rulemaking to issue
or amend an energy conservation standard that DOE will undertake
will be a Framework Document and Preliminary Analysis, or an Advance
Notice of Proposed Rulemaking (ANOPR). Requests for Information
(RFI) and Notices of Data Availability (NODA) could be issued, as
appropriate, in addition to these preliminary-stage documents.
(3) In those instances where the early assessment either
suggested that a new or amended energy conservation standard might
be justified or in which the information was inconclusive on this
point, and DOE undertakes the preliminary stages of a rulemaking to
establish or amend an energy conservation standard, DOE may still
ultimately determine that such a standard is not economically
justified, technologically feasible or would not result in a
significant savings of energy. Therefore, DOE will examine the
potential costs and benefits and energy savings potential of a new
or amended energy conservation standard at the preliminary stage of
the rulemaking. DOE notes that it will, consistent with its
statutory obligations, consider both cost-effectiveness and economic
justification when issuing a determination not to amend a standard.
(b) Significant savings of energy. (1) In evaluating the
prospects of proposing a new or amended standard--or in determining
that no new or amended standard is needed--DOE will first look to
the projected energy savings that are likely to result. DOE will
determine as a preliminary matter whether the rulemaking has the
potential to result in ``significant energy savings.'' If the
rulemaking passes the significant energy savings threshold, DOE will
then compare these projected savings against the technological
feasibility of and likely costs necessary to meet the new or amended
standards needed to achieve these energy savings.
(2) Under its significant energy savings analysis, DOE will
examine both the total amount of projected energy savings and the
relative percentage decrease in energy usage that could be obtained
from establishing or amending energy conservation standards for a
given covered product or equipment. This examination will be based
on the applicable product or equipment type as appropriate and will
not be used to selectively examine classes or sub-classes of
products and equipment solely for the purposes of projecting whether
potential energy savings would satisfy (or not satisfy) the
applicable thresholds detailed in this rule. Under the first step of
this approach, the projected energy savings from a potential maximum
technologically feasible (``max-tech'') standard will be evaluated
against a threshold of 2.0 quads of FFC energy saved over a 30-year
period.
(3) If the projected max-tech energy savings does not meet or
exceed this threshold, those max-tech savings would then be compared
to the total energy usage of the covered product or equipment to
calculate a potential percentage reduction in energy usage.
(4) If this comparison does not yield a reduction in FFC energy
use of at least 10 percent over a 30-year period, the analysis will
end, and DOE will propose to determine that no significant energy
savings would likely result from setting new or amended standards.
(5) If either one of the thresholds described in paragraphs
(b)(2) or (b)(4) of this section is reached, DOE will conduct
analyses to ascertain whether a standard can be prescribed that
produces the maximum improvement in energy efficiency that is both
technologically feasible and economically justified and still
constitutes significant energy savings (using the same criteria of
either 2.0 quad of aggregate FFC energy savings or a 10-percent
decrease in FFC energy use, as measured in quads--both over a 30-
year period) at the level determined to be economically justified.
(6) In the case of ASHRAE equipment, DOE will examine the
potential energy savings involved across the equipment category at
issue.
(c) Design options--(1) General. Once the Department has
initiated a rulemaking for a specific product/equipment but before
publishing a proposed rule to establish or amend standards, DOE will
identify the product/equipment categories and design options to be
analyzed in detail, as well as those design options to be eliminated
from further consideration. During the pre-proposal stages of the
rulemaking, interested parties may be consulted to provide
information on key issues through a variety of rulemaking documents.
The preliminary stages of a rulemaking to issue or amend an energy
conservation standard that DOE will undertake will be a framework
document and preliminary analysis, or an advance notice of proposed
rulemaking (ANOPR). Requests for Information (RFI) and Notice of
Data Availability (NODA) could also be issued, as appropriate.
(2) Identification and screening of design options. During the
pre-NOPR phase of the rulemaking process, the Department will
develop a list of design options for consideration. Initially, the
candidate design options will encompass all those technologies
considered to be technologically feasible. Following the development
of this initial list of design options, DOE will review each design
option based on the factors described in paragraph (c)(3) of this
section and the policies stated in section 7 of this appendix (i.e.,
``Policies on Selection of Standards''). The reasons for eliminating
or retaining any design option at this stage of the process will be
fully documented and published as part of the NOPR and as
appropriate for a given rule, in the pre-NOPR documents. The
technologically feasible design options that are not eliminated in
this screening will be considered further in the Engineering
Analysis described in paragraph (d) of this section.
(3) Factors for screening of design options. The factors for
screening design options include:
(i) Technological feasibility. Technologies incorporated in
commercial products or in
[[Page 42077]]
working prototypes will be considered technologically feasible.
(ii) Practicability to manufacture, install and service. If mass
production of a technology under consideration for use in
commercially-available products (or equipment) and reliable
installation and servicing of the technology could be achieved on
the scale necessary to serve the relevant market at the time of the
compliance date of the standard, then that technology will be
considered practicable to manufacture, install and service.
(iii) Adverse impacts on product utility or product
availability.
(iv) Adverse impacts on health or safety.
(v) Unique-pathway proprietary technologies. If a design option
utilizes proprietary technology that represents a unique pathway to
achieving a given efficiency level, that technology will not be
considered further.
(d) Engineering analysis of design options and selection of
candidate standard levels. After design options are identified and
screened, DOE will perform the engineering analysis and the benefit/
cost analysis and select the candidate standard levels based on
these analyses. The results of the analyses will be published in a
Technical Support Document (TSD) to accompany the appropriate
rulemaking documents.
(1) Identification of engineering analytical methods and tools.
DOE will select the specific engineering analysis tools (or multiple
tools, if necessary to address uncertainty) to be used in the
analysis of the design options identified as a result of the
screening analysis.
(2) Engineering and life-cycle cost analysis of design options.
DOE and its contractor will perform engineering and initial life-
cycle cost analyses of the design options.
(3) Review by stakeholders. Interested parties will have the
opportunity to review the results of the engineering and life-cycle
cost analyses. If appropriate, a public workshop will be conducted
to review these results. The analyses will be revised as appropriate
on the basis of this input.
(4) New information relating to the factors used for screening
design options. If further information or analysis leads to a
determination that a design option, or a combination of design
options, has unacceptable impacts, that design option or combination
of design options will not be included in a candidate standard
level.
(5) Selection of candidate standard levels. Based on the results
of the engineering and initial life-cycle cost analysis of design
options and the policies stated in paragraph (c) of this section,
DOE will select the candidate standard levels for further analysis.
(e) Pre-NOPR stage--(1) Documentation of decisions on candidate
standard selection.
(i) If the early assessment and screening analysis indicates
that continued development of a standard is appropriate, the
Department will publish either:
(A) A notice accompanying a framework document and,
subsequently, a preliminary analysis or;
(B) An ANOPR.
The notice document will be published in the Federal Register,
with accompanying documents referenced and posted in the appropriate
docket.
(ii) If DOE determines at any point in the pre-NOPR stage that
no candidate standard level is likely to produce the maximum
improvement in energy efficiency that is both technologically
feasible and economically justified or constitute significant energy
savings, that conclusion will be announced in the Federal Register
with an opportunity for public comment provided to stakeholders. In
such cases, the Department will proceed with a rulemaking that
proposes not to adopt new or amended standards.
(2) Public comment and hearing. The length of the public comment
period for pre-NOPR rulemaking documents will vary depending upon
the circumstances of the particular rulemaking but will not be less
than 75 calendar days. For such documents, DOE will determine
whether a public hearing is appropriate. (Where DOE does publish a
pre-NOPR document for a deregulatory action, it may reduce the
comment period from the presumptive 75 days or required 60 days to
something less.)
(3) Revisions based on comments. Based on consideration of the
comments received, any necessary changes to the engineering analysis
or the candidate standard levels will be made.
(f) Analysis of impacts and selection of proposed standard
level. After the pre-NOPR stage, if DOE has determined preliminarily
that a candidate standard level is likely to produce the maximum
improvement in energy efficiency that is both technologically
feasible and economically justified or constitute significant energy
savings, further economic analyses of the impacts of the candidate
standard levels will be conducted. The Department will propose new
or amended standards based on the results of the impact analysis.
(1) Identification of issues for analysis. The Department, in
consideration of comments received, will identify issues that will
be examined in the impacts analysis.
(2) Identification of analytical methods and tools. DOE will
select the specific economic analysis tools (or multiple tools if
necessary to address uncertainty) to be used in the analysis of the
candidate standard levels.
(3) Analysis of impacts. DOE will conduct the analysis of the
impacts of candidate standard levels.
(4) Factors to be considered in selecting a proposed standard.
The factors to be considered in selection of a proposed standard
include:
(i) Impacts on manufacturers. The analysis of private
manufacturer impacts will include: estimated impacts on cash flow,
production, and inventory; assessment of impacts on manufacturers of
specific categories of products/equipment and small manufacturers;
assessment of impacts on manufacturers of multiple product-specific
Federal regulatory requirements, including efficiency standards for
other products and regulations of other agencies; and impacts on
manufacturing capacity, plant closures, and loss of capital
investment.
(ii) Private impacts on consumers. The analysis of consumer
impacts will include: estimated private energy savings impacts on
consumers based on national average energy prices and energy usage;
assessments of impacts on subgroups of consumers based on major
regional differences in usage or energy prices and significant
variations in installation costs or performance; sensitivity
analyses using high and low discount rates reflecting both private
transactions and social discount rates and high and low energy price
forecasts; behavioral changes in response to changes in product
utility, changes in covered product price, utility, performance,
feature, and product availability, such as changes to purchase rate
of products, substitution of other products, increases or decreases
in usage, and other impacts of likely concern to all or some
consumers, based to the extent practicable on direct input from
consumers; economically based estimates of life-cycle costs or
savings with sensitivity analysis; consideration of the increased
initial and operating costs to consumers and the time required for
energy cost savings to pay back these costs; and loss of utility and
consumer welfare. Specifically, DOE will consider: the incremental
installed cost as a percentage of the baseline total installed cost,
the simple payback period as a percentage of the average lifetime,
and the percentage of consumers for whom a standard level is
expected to result in net cost. DOE will also consider the
protection of consumer choice when analyzing the private impacts on
consumers.
(iii) Impacts on competition, including industry concentration
analysis.
(iv) Impacts on utilities. The analysis of utility impacts will
include estimated marginal impacts on electric and gas utility costs
and revenues.
(v) National energy, economic, and employment impacts. The
analysis of national energy, economic, and employment impacts will
include: estimated energy savings by fuel type; estimated net
present value of benefits to all consumers; and estimates of the
direct and indirect impacts on employment by appliance
manufacturers, relevant service industries, energy suppliers,
suppliers of complementary and substitution products, and the
economy in general.
(vi) Other factors the Secretary considers relevant.
(vii) Impacts of non-regulatory approaches. The analysis of
energy savings and consumer impacts will incorporate an assessment
of the impacts of market forces and existing voluntary programs in
promoting product/equipment efficiency, usage, and related
characteristics in the absence of updated efficiency standards.
(viii) New information relating to the factors used for
screening design options.
(g) Notice of proposed rulemaking--(1) Documentation of
decisions on proposed standard selection. The Department will
publish a NOPR in the Federal Register that proposes standard levels
and explains the basis for the selection of those proposed levels
and will post on its website a draft TSD documenting the analysis of
impacts. The draft TSD will also be posted in the appropriate docket
on www.regulations.gov. As required by 42 U.S.C. 6295(p)(1) of EPCA,
the NOPR also will describe the maximum improvement in energy
efficiency or
[[Page 42078]]
maximum reduction in energy use that is technologically feasible
and, if the proposed standards would not achieve these levels, the
reasons for proposing different standards.
(2) Public comment and hearing. There will be not less than 75
days for public comment on the NOPR, with at least one public
hearing or workshop. (42 U.S.C. 6295(p)(2) and 42 U.S.C. 6306).
(3) Revisions to impact analyses and selection of final
standard. Based on the public comments received, DOE will review the
proposed standard and impact analyses and make modifications as
necessary. If major changes to the analyses are required at this
stage, DOE will publish a Supplemental Notice of Proposed Rulemaking
(SNOPR), when required. DOE may also publish a NODA or RFI, where
appropriate.
(h) Final rule. The Department will publish a Final Rule in the
Federal Register that promulgates standard levels, responds to
public comments received on the NOPR, and explains how the selection
of those standards meets the statutory requirement that any new or
amended energy conservation standard produces the maximum
improvement in energy efficiency that is both technologically
feasible and economically justified and constitutes significant
energy savings, accompanied by a final TSD.
7. Policies on Selection of Standards
(a) Purpose. (1) Section 6 of this appendix describes the
process that will be used to consider new or revised energy
efficiency standards and lists a number of factors and analyses that
will be considered at specified points in the process. The
Department policies concerning the selection of new or revised
standards, and decisions preliminary thereto, are described in this
section. These policies are intended to elaborate on the statutory
criteria provided in 42 U.S.C. 6295 of EPCA.
(2) The procedures described in this section are intended to
assist the Department in making the determinations required by EPCA
and do not preclude DOE's consideration of any other information
consistent with the relevant statutory criteria. The Department will
consider pertinent information in determining whether a new or
revised standard is consistent with the statutory criteria.
(b) Screening design options. These factors will be considered
as follows in determining whether a design option will receive any
further consideration:
(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 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 significant adverse impact on the utility of the product/
equipment 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 U.S. at the time, it will not be considered further.
(4) Safety of technologies. If it is determined that a
technology will 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.
(c) Identification of candidate standard levels. Based on the
results of the engineering and cost/benefit analyses of design
options, DOE will identify the candidate standard levels for further
analysis. Candidate standard levels will be selected as follows:
(1) Costs and savings of design options. Design options will not
be used as the basis for candidate standard levels if the design
options result in:
(i) Life-cycle cost increases relative to the base case, using
typical fuel costs, usage, and private discount rates;
(ii) More than a 10 percent increase in installed cost relative
to the baseline total installed cost;
(iii) More than 20 percent of consumers projected to incur net
costs; or
(iv) A simple payback period as a percentage of average lifetime
of more than 50 percent.
(2) Further information on factors used for screening design
options. If further information or analysis leads to a determination
that a design option, or a combination of design options, has
unacceptable impacts under the policies stated in this appendix,
that design option or combination of design options will not be
included in a candidate standard level.
(3) Selection of candidate standard levels. Candidate standard
levels, which will be identified in the pre-NOPR documents and on
which impact analyses will be conducted, will be based on the
remaining design options.
(i) The range of candidate standard levels will typically
include:
(A) The most energy-efficient combination of design options;
(B) The combination of design options with the lowest initial
life-cycle cost estimate; and
(C) A combination of design options with an initial payback
period of not more than three years.
(ii) Candidate standard levels that incorporate noteworthy
technologies or fill in large gaps between efficiency levels of
other candidate standard levels also may be selected.
(d) Pre-NOPR stage. New information provided in public comments
on any pre-NOPR documents will be considered to determine whether
any changes to the candidate standard levels are needed before
proceeding to the analysis of impacts.
(e) Selection of proposed standard. Based on the results of the
analysis of impacts, DOE will select a standard level to be proposed
for public comment in the NOPR. As required under 42 U.S.C.
6295(o)(2)(A), any new or revised standard must be designed to
achieve the maximum improvement in energy efficiency that is
determined to be both technologically feasible and economically
justified.
(1) Statutory policies. The fundamental policies concerning the
selection of standards include:
(i) A trial standard level will not be proposed or promulgated
if the Department determines that it is not both technologically
feasible and economically justified. (42 U.S.C. 6295(o)(2)(A) and 42
U.S.C. 6295(o)(3)(B)). For a trial standard level to be economically
justified, the Secretary must determine that the benefits of the
standard exceed its burdens by, to the greatest extent practicable,
considering the factors listed in 42 U.S.C. 6295(o)(2)(B)(i). In
making such a determination, the Secretary shall compare the
benefits and burdens of the standard against the benefits and
burdens of the baseline case (``no new standards'' case) and in
incremental progression for all other trial standard levels under
consideration. This comparative (``walk up'') analysis includes
assessing the incremental changes in costs and benefits for each
TSL's benefits and burdens relative to other TSLs and as part of a
holistic analysis across all TSLs. (42 U.S.C. 6295(o)(2)(B)). The
Secretary will also consider, consistent with the statute, other
economic measures such as the life-cycle cost analysis, manufacturer
impact analysis, and other relevant measures.
(ii) If the Department determines that interested persons have
established by a preponderance of the evidence that a standard level
is likely to result in the unavailability in the United States of
any covered product/equipment type (or class) with performance
characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as products
generally available in the U.S. at the time of the determination,
then that standard level will not be proposed. (42 U.S.C.
6295(o)(4)).
(iii) If the Department determines that a standard level would
not result in significant conservation of energy, that standard
level will not be proposed. (42 U.S.C. 6295(o)(3)(B)).
(2) Considerations in assessing economic justification.
(i) The following considerations will guide the application of
the economic justification criterion in selecting a proposed
standard:
(A) If the Department determines that a candidate/trial standard
level would result in a negative return on investment for the
industry, would significantly reduce the value of the industry, or
would cause significant adverse impacts to a significant subgroup of
manufacturers (including small manufacturing businesses), that
standard level will be presumed not to be economically justified
unless the Department determines that specifically identified
expected benefits of the standard would outweigh this and any other
expected adverse effects.
(B) If the Department determines that a candidate/trial standard
level would be the
[[Page 42079]]
direct cause of plant closures, significant losses in domestic
manufacturer employment, or significant losses of capital investment
by domestic manufacturers, that standard level will be presumed not
to be economically justified unless the Department determines that
specifically identified expected benefits of the standard would
outweigh this and any other expected adverse effects.
(C) If the Department determines that a candidate/trial standard
level would not result in significant energy conservation, that
standard level will be presumed not to be economically justified.
(D) If the Department determines that a candidate/trial standard
level is not practicable to manufacture or has a negative impact on
consumer utility or safety, that standard level will be presumed not
to be economically justified unless the Department determines that
specifically identified expected benefits of the standard would
outweigh this and any other expected adverse effects.
(E) If the Department determines that a candidate/trial standard
level is not consistent with the policies relating to consumer costs
in paragraph (c)(1) of this section, that standard level will be
presumed not to be economically justified unless the Department
determines that specifically identified expected benefits of the
standard would outweigh this and any other expected adverse effects.
(F) If the Department determines that a candidate/trial standard
level will have significant adverse impacts on a significant
subgroup of consumers (including low-income consumers), that
standard level will be presumed not to be economically justified
unless the Department determines that specifically identified
expected benefits of the standard would outweigh this and any other
expected adverse effects.
(G) If the Department of Energy and the Department of Justice
determine that a candidate/trial standard level would have
significant anticompetitive effects, that standard level will be
presumed not to be economically justified unless the Department of
Energy determines that specifically identified expected benefits of
the standard would outweigh this and any other expected adverse
effects.
(ii) DOE will, consistent with paragraph (f) of this section,
account for the views expressed by the Department of Justice
regarding a given proposal's effects on competition.
(iii) The basis for a determination that triggers any
presumption in paragraph (e)(2)(i) of this section and the basis for
a determination that an applicable presumption has been rebutted
will be supported by substantial evidence in the record and the
evidence and rationale for making these determinations will be
explained in the NOPR.
(iv) If none of the policies in paragraph (e)(2)(i) of this
section is found to be dispositive, the Department will determine
whether the benefits of a candidate standard level exceed the
burdens considering all the pertinent information in the record.
(f) Selection of a final standard. New information provided in
the public comments on the NOPR and any analysis by the Department
of Justice concerning impacts on competition of the proposed
standard will be considered to determine whether issuance of a new
or amended energy conservation standard produces the maximum
improvement in energy efficiency that is both technologically
feasible and economically justified and still constitutes
significant energy savings or whether any change to the proposed
standard level is needed before proceeding to the final rule. The
same policies used to select the proposed standard level, as
described in this section, will be used to guide the selection of
the final standard level or a determination that no new or amended
standard is justified.
8. Test Procedures
(a) General. As with the early assessment process for energy
conservation standards, DOE believes that early stakeholder input is
also very important during test procedure rulemakings. DOE will
follow an early assessment process similar to that described in the
preceding sections discussing DOE's consideration of amended energy
conservation standards. (An early assessment stage may not be
warranted for deregulatory actions.) Consequently, DOE will publish
a notice in the Federal Register whenever DOE is considering
initiation of a rulemaking to amend a test procedure. In that
notice, DOE will request submission of comments, including data and
information on whether an amended test procedure rule would:
(1) More accurately measure energy efficiency, energy use, water
use (as specified in EPCA), or estimated annual operating cost of a
covered product during a representative average use cycle or period
of use without being unduly burdensome to conduct; or
(2) Reduce testing burden. DOE will review comments submitted
and, subject to statutory obligations, determine whether it agrees
with the submitted information. If DOE determines that an amended
test procedure is not justified at that time, it will not pursue the
rulemaking and will publish a notice in the Federal Register to that
effect. If DOE receives sufficient information suggesting an amended
test procedure could more accurately measure energy efficiency,
energy use, water use (as specified in EPCA), or estimated annual
operating cost of a covered product during a representative average
use cycle or period of use and not be unduly burdensome to conduct,
reduce testing burden, or the information received is inconclusive
with regard to these points, DOE would undertake the preliminary
stages of a rulemaking to amend the test procedure, as discussed
further in the paragraphs that follow in this section.
(b) Identifying the need to modify test procedures. DOE will
identify any necessary modifications to established test procedures
prior to initiating the standards development process. It will
consider all stakeholder comments with respect to needed test
procedure modifications. If DOE determines that it is appropriate to
continue the test procedure rulemaking after the early assessment
process, it would provide further opportunities for early public
input through Federal Register documents, including NODAs and/or
RFIs.
(c) Adoption of industry test methods. DOE will adopt industry
test standards as DOE test procedures for covered products and
equipment, unless such methodology would be unduly burdensome to
conduct or would not produce test results that reflect the energy
efficiency, energy use, water use (as specified in EPCA) or
estimated operating costs of that equipment during a representative
average use cycle.
(d) Issuing final test procedure modification. Test procedure
rulemakings establishing methodologies used to evaluate proposed
energy conservation standards will be finalized at least 180 days
prior to publication of a NOPR proposing new or amended energy
conservation standards, with the following exceptions:
(1) Test procedure amendments limited to calculation changes
(e.g., use factor or adder); or
(2) Test procedures developed in accordance with the Negotiated
Rulemaking Act or 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. Parties submitting a
consensus recommendation may specify a time period between
finalization of the test procedure and publication of a NOPR
proposing new or amended energy conservation standards or a notice
of proposed determination that standards do not need to be amended.
(e) Compliance date of test procedures. If required only for the
evaluation and issuance of updated efficiency standards, use of the
modified test procedures typically will not be required until the
implementation date of updated standards.
9. ASHRAE Equipment
(a) EPCA provides that ASHRAE equipment is subject to unique
statutory requirements and their own set of timelines. More
specifically, pursuant to EPCA's statutory scheme for covered ASHRAE
equipment, DOE is required to consider amending the existing Federal
energy conservation standards and test procedures for certain
enumerated types of commercial and industrial equipment (generally,
commercial water heaters, commercial packaged boilers, commercial
air-conditioning and heating equipment, and packaged terminal air
conditioners and heat pumps) when ASHRAE Standard 90.1 is amended
with respect to standards and test procedures applicable to such
equipment. Not later than 180 days after the amendment of the
Standard, the Secretary will publish in the Federal Register for
public comment an analysis of the energy savings potential of
amended energy efficiency standards. For each type of equipment,
EPCA directs that if ASHRAE Standard 90.1 is amended, not later than
18 months after the date of publication of the amendment to ASHRAE
Standard 90.1, DOE must adopt amended energy conservation standards
at the new efficiency level in ASHRAE Standard 90.1 as the uniform
national standard for such equipment, or amend the test procedure
referenced in ASHRAE Standard 90.1 for the equipment at issue to be
consistent with the
[[Page 42080]]
applicable industry test procedure, respectively, unless DOE
determines by rule, and supported by clear and convincing evidence,
that--
(1) A more-stringent standard would result in significant
additional conservation of energy and is technologically feasible
and economically justified; or (2) The test procedure would not meet
the requirements for such test procedures specified in EPCA. In such
standards case, DOE must adopt the more stringent standard not later
than 30 months after the date of publication of the amendment to
ASHRAE/IES Standard 90.1 for the affected equipment.
(b) For ASHRAE equipment, DOE will adopt the revised ASHRAE
levels or the industry test procedure, as contemplated by EPCA,
except in very limited circumstances.
With respect to DOE's consideration of standards more stringent
than the ASHRAE levels or changes to the industry test procedure,
DOE will do so only if it can meet a very high bar to demonstrate
the ``clear and convincing evidence'' threshold. Clear and
convincing evidence would exist only where the specific facts and
data made available to DOE regarding a particular ASHRAE amendment
demonstrates that there is no substantial doubt that a standard more
stringent than that contained in the ASHRAE Standard 90.1 amendment
is permitted because it would result in a significant additional
amount of energy savings, is technologically feasible and
economically justified, or, in the case of test procedures, that the
industry test procedure does not meet the EPCA requirements. DOE
will make this determination only after seeking data and information
from interested parties and the public to help inform the Agency's
views. DOE will seek from interested stakeholders and the public
data and information to assist in making this determination, prior
to publishing a proposed rule to adopt more-stringent standards or a
different test procedure.
(c) DOE's review in adopting amendments based on an action by
ASHRAE to amend Standard 90.1 is strictly limited to the specific
standards or test procedure amendment for the specific equipment for
which ASHRAE has made a change (i.e., determined down to the
equipment class level). DOE believes that ASHRAE not acting to amend
Standard 90.1 is tantamount to a decision that the existing standard
remains in place. Thus, when undertaking a review as required by 42
U.S.C. 6313(a)(6)(C), DOE would need to find clear and convincing
evidence, as defined in this section, to issue a standard more
stringent than the existing standard for the equipment at issue.
(d) For ASHRAE equipment, when determining whether a more
stringent standard for the equipment category at issue would result
in significant additional conservation of energy pursuant to 42
U.S.C. 6313(a)(6)(A)-(C), DOE will follow the process and thresholds
described in section 6(b) of this appendix, ``Significant Savings of
Energy.''
10. Direct Final Rules
(a) A direct final rule (DFR), as contemplated in 42 U.S.C.
6295(p)(4), is a procedural mechanism separate from the negotiated
rulemaking process outlined under the Negotiated Rulemaking Act (5
U.S.C. 563). DOE may issue a DFR adopting energy conservation
standards for a covered product provided that:
(1) DOE receives a joint proposal from a group of ``interested
persons that are fairly representative of relevant points of view,''
including a consensus recommendation developed in accordance with
the Negotiated Rulemaking Act (5 U.S.C. 561 et seq.). At a minimum,
to be ``fairly representative of relevant points of view'' the group
submitting a joint statement must include larger concerns and small
businesses in the regulated industry/manufacturer community, energy
advocates, energy utilities, as appropriate, consumers, and States.
However, it will be necessary to evaluate the meaning of ``fairly
representative'' on a case-by-case basis, subject to the
circumstances of a particular rulemaking, to determine whether
additional parties must be part of a joint statement in order to be
``fairly representative of relevant points of view.''
(2) This paragraph (a)(2) describes the steps DOE will follow
with respect to a DFR.
(i) DOE must determine whether the energy conservation standard
recommended in the joint proposal is in accordance with the
requirements of 42 U.S.C. 6295(o) or 42 U.S.C. 6313(a)(6)(B) as
applicable. Because the DFR provision is procedural, and not a
separate grant of rulemaking authority, any standard issued under
the DFR process must comply fully with the provisions of the EPCA
subsection under which the rule is authorized. DOE will not accept
or issue as a DFR a submitted joint proposal that does not comply
with all applicable EPCA requirements.
(ii) Upon receipt of a joint statement recommending energy
conservation standards, DOE will publish in the Federal Register
that statement, as submitted to DOE, in order to obtain feedback as
to whether the joint statement was submitted by a group that is
fairly representative of relevant points of view. If DOE determines
that the DFR was not submitted by a group that is fairly
representative of relevant points of view, DOE will not move forward
with a DFR and will consider whether any further rulemaking activity
is appropriate. If the Secretary determines that a DFR cannot be
issued based on the statement, the Secretary shall publish a notice
of the determination, together with an explanation of the reasons
for the determination.
(iii) Simultaneous with the issuance of a DFR, DOE must also
publish a NOPR containing the same energy conservation standards as
in the DFR. When publishing the DFR, DOE must solicit public comment
for a period of at least 110 days; then, not later than 120 days
after issuance of the DFR, the Secretary must determine whether any
adverse comments ``may provide a reasonable basis for withdrawing
the direct final rule,'' based on the rulemaking record. If DOE
determines that one or more substantive comments objecting to the
DFR provides a sufficient reason to withdraw the DFR, DOE will do so
and will instead proceed with the published NOPR (unless the
information provided suggests that withdrawal of that NOPR would
likewise be appropriate). In making this determination, DOE may
consider comments as adverse, even if the issue was brought up
previously during DOE-initiated discussions (e.g., publication of a
framework or RFI document), if the Department concludes that the
comments merit further consideration.
11. Negotiated Rulemaking Process
(a)(1) In those instances where negotiated rulemaking is
determined to be appropriate, DOE will comply with the requirements
of the Negotiated Rulemaking Act (NRA) (5 U.S.C. 561-570) and the
requirements of the Federal Advisory Committee Act (FACA) (5 U.S.C.
App. 2). To facilitate potential negotiated rulemakings, and to
comply with the requirements of the NRA and the FACA, DOE
established the Appliance Standards and Rulemaking Federal Advisory
Committee (ASRAC). Working groups can be established as
subcommittees of ASRAC, from time to time, and for specific
products/equipment, with one member representative from the ASRAC
committee attending and participating in the meetings of a specific
working group. (Consistent with 5 U.S.C. 565(b), committee
membership is limited to 25 members, unless the agency determines
that more members are necessary for the functioning of the committee
or to achieve balanced membership.) Ultimately, the working group
reports to ASRAC, and ASRAC itself votes on whether to make a
recommendation to DOE to adopt a consensus agreement developed
through the negotiated rulemaking.
(2) DOE will use the negotiated rulemaking process on a case-by-
case basis and, in appropriate circumstances, in an attempt to
develop a consensus proposal before issuing a proposed rule. When
approached by one or more stakeholders or on its own initiative, DOE
will use a convener to ascertain, in consultation with relevant
stakeholders, whether the development of the subject matter of a
potential rulemaking proceeding would be conducive to negotiated
rulemaking, with the agency evaluating the convener's recommendation
before reaching a decision on such matter. A neutral, independent
convenor will identify issues that any negotiation would need to
address, assess the full breadth of interested parties who should be
included in any negotiated rulemaking to address those issues, and
make a judgment as to whether there is the potential for a group of
individuals negotiating in good faith to reach a consensus agreement
given the issues presented. DOE will have a neutral and independent
facilitator, who is not a DOE employee or consultant, present at all
ASRAC working group meetings.
(3) DOE will base its decision to proceed with a potential
negotiated rulemaking on the report of the convenor. The following
additional factors militate in favor of a negotiated rulemaking:
(i) Stakeholders commented in favor of negotiated rulemaking in
response to the initial rulemaking notice;
(ii) The rulemaking analysis or underlying technologies in
question are complex, and
[[Page 42081]]
DOE can benefit from external expertise and/or real-time changes to
the analysis based on stakeholder feedback, information, and data;
(iii) The current standards have already been amended one or
more times;
(iv) Stakeholders from differing points of view are willing to
participate; and
(v) DOE determines that the parties may be able to reach an
agreement.
(4) DOE will provide notice in the Federal Register of its
intent to form an ASRAC working group (including a request for
nominations to serve on the committee), announcement of the
selection of working group members (including their affiliation),
and announcement of public meetings and the subject matter to be
addressed.
(b) DOE's role in the negotiated rulemaking process is to
participate as a member of a group attempting to develop a consensus
proposal for energy conservation standards for a particular product/
equipment and to provide technical/analytical advice to the
negotiating parties and legal input where needed to support the
development of a potential consensus recommendation in the form of a
term sheet.
(c) A negotiated rulemaking may be used to develop energy
conservation standards, test procedures, product coverage, and other
categories of rulemaking activities.
(d) A dedicated portion of each ASRAC working group meeting will
be set aside to receive input and data from non-members of the ASRAC
working group. This additional opportunity for input does nothing to
diminish stakeholders' ability to provide comments and ask relevant
questions during the course of the working group's ongoing
deliberations at the public meeting.
(e) If DOE determines to proceed with a rulemaking at the
conclusion of negotiations, DOE will publish a proposed rule or a
Direct Final Rule. DOE will consider the approved term sheet in
developing such proposed rule or Direct Final Rule. Further, any
potential term sheet upon which an ASRAC working group reaches
consensus must comply with all of the provisions of EPCA under which
the rule is authorized. DOE cannot accept recommendations or issue a
NOPR based upon a negotiated rulemaking that does not comply with
all applicable EPCA requirements, including those product- or
equipment-specific requirements included in the provision that
authorizes issuance of the standard.
12. Principles for Distinguishing Between Prescribed, Effective, and
Compliance Dates
(a) Dates, generally. The prescribed, effective, and compliance
dates for either DOE test procedures or DOE energy conservation
standards are typically not identical, and these terms should not be
used interchangeably.
(b) Prescribed date. The prescribed date is the date a rule,
including a direct final rule, is published in the Federal Register.
(c) Effective date. The effective date is the date a rule is
legally operative after being published in the Federal Register.
(d) Compliance date. (1) For test procedures, the compliance
date is the specific date when manufacturers are required to use the
new or amended test procedure requirements to make representations
concerning the energy efficiency or use of a product, including
certification that the covered product/equipment meets an applicable
energy conservation standard.
(2) For energy conservation standards, the compliance date is
the specific date upon which manufacturers are required to meet the
new or amended standards for applicable covered products/equipment
that are distributed in interstate commerce.
13. Principles for the Conduct of the Engineering Analysis
(a) The purpose of the engineering analysis is to develop the
relationship between efficiency and cost of the subject product/
equipment. The Department will use the most appropriate means
available to determine the efficiency/cost relationship, including
an overall system approach or engineering modeling to predict the
reduction in energy use or improvement in energy efficiency that can
be expected from individual design options as discussed in
paragraphs (b) and (c) of this section. From this efficiency/cost
relationship, measures such as payback, life-cycle cost, and energy
savings can be developed and further expanded to consider economic
concepts and impacts. The Department will identify issues that will
be examined in the engineering analysis and the types of specialized
expertise that may be required. DOE will select appropriate
contractors, subcontractors, and expert consultants, as necessary,
to perform the engineering analysis and the impact analysis. Also,
the Department will consider data, information, and analyses
received from interested parties for use in the analysis wherever
feasible.
(b) The engineering analysis begins with the list of design
options developed in consultation with the interested parties as a
result of the screening process. The Department will establish the
likely cost and performance improvement of each design option.
Ranges and uncertainties of cost and performance will be
established, although efforts will be made to minimize uncertainties
by using measures such as test data or component or material
supplier information where available. Estimated uncertainties will
be carried forward in subsequent analyses. The use of quantitative
models will be supplemented by qualitative assessments as
appropriate.
(c) The next step includes identifying, modifying, or developing
any engineering models necessary to predict the efficiency impact of
any one or combination of design options on the product/equipment. A
base case configuration or starting point will be established, as
well as the order and combination/blending of the design options to
be evaluated. DOE will then perform the engineering analysis and
develop the cost-efficiency curve for the product/equipment. The
cost-efficiency curve and any necessary models will be available to
stakeholders during the pre-NOPR stage of the rulemaking.
14. Principles for the Analysis of Impacts on Manufacturers
(a) Purpose. The purpose of the manufacturer analysis is to
identify the likely private impacts of efficiency standards on
manufacturers. The Department will analyze the impact of standards
on manufacturers with substantial input from manufacturers and other
interested parties. This section describes the principles that will
be used in conducting future manufacturing impact analyses.
(b) Issue identification. In the impact analysis stage (section
6(f) of this appendix), the Department will identify issues that
will require greater consideration in the detailed manufacturer
impact analysis. Possible issues may include identification of
specific types or groups of manufacturers and concerns over access
to technology. Specialized contractor expertise, empirical data
requirements, and analytical tools required to perform the
manufacturer impact analysis also would be identified at this stage.
(c) Industry characterization. Prior to initiating detailed
impact studies, the Department will seek input on the present and
past industry structure and market characteristics. Input on the
following issues will be sought:
(1) Manufacturers and their current and historical relative
market shares;
(2) Manufacturer characteristics, such as whether manufacturers
make a full line of models or serve a niche market;
(3) Trends in the number of manufacturers;
(4) Financial situation of manufacturers;
(5) Trends in product/equipment characteristics and retail
markets including manufacturer market shares and market
concentration; and
(6) Identification of other relevant regulatory actions and a
description of the nature and timing of any likely impacts.
(d) Cost impacts on manufacturers. The costs of labor, material,
engineering, tooling, and capital are difficult to estimate,
manufacturer-specific, and usually proprietary. The Department will
seek input from interested parties on the treatment of cost issues.
Manufacturers will be encouraged to offer suggestions as to possible
sources of data and appropriate data collection methodologies.
Costing issues to be addressed include:
(1) Estimates of total private cost impacts, including product/
equipment-specific costs (based on cost impacts estimated for the
engineering analysis) and front-end investment/conversion costs for
the full range of product/equipment models.
(2) Range of uncertainties in estimates of average cost,
considering alternative designs and technologies which may vary cost
impacts and changes in costs of material, labor, and other inputs
which may vary costs.
(3) Variable cost impacts on particular types of manufacturers,
considering factors such as atypical sunk costs or characteristics
of specific models which may increase or decrease costs.
(e) Impacts on product/equipment sales, features, prices, and
cost recovery. In order to make manufacturer cash-flow calculations,
it is necessary to predict the number of products/equipment sold and
their sale price. This requires an assessment of the likely impacts
of price changes on the number of products/equipment sold and on
typical features of models sold. Past analyses have
[[Page 42082]]
relied on price and shipment data generated by economic models. The
Department will develop additional estimates of prices and shipments
by drawing on multiple sources of data and experience including:
actual shipment and pricing experience; data from manufacturers,
retailers, and other market experts; financial models, and
sensitivity analyses. The possible impacts of candidate/trial
standard levels on consumer choices among competing fuels will be
explicitly considered where relevant.
(f) Measures of impact. The manufacturer impact analysis will
estimate the impacts of candidate/trial standard levels on the net
cash flow of manufacturers and model anticipated manufacturer
behavior in response to such standards, such as modeling
considerations of cost in compliance choices. Computations will be
performed for the industry as a whole and for typical and atypical
manufacturers. The exact nature and the process by which the
analysis will be conducted will be determined by DOE, with input
from interested parties, as appropriate. Impacts to be analyzed
include:
(1) Industry net present value, with sensitivity analyses based
on uncertainty of costs, sales prices, and sales volumes;
(2) Cash flows, by year; and
(3) Other measures of impact, such as revenue, net income, and
return on equity, as appropriate. DOE also notes that the
characteristics of a typical manufacturers worthy of special
consideration will be determined in consultation with manufacturers
and other interested parties and may include: manufacturers
incurring higher or lower than average costs; and manufacturers
experiencing greater or fewer adverse impacts on sales. Alternative
scenarios based on other methods of estimating cost or sales impacts
also will be performed, as needed.
(g) Cumulative impacts of other federal regulatory actions. (1)
The Department will recognize and seek to mitigate the overlapping
effects on manufacturers of new or revised DOE standards and other
regulatory actions affecting the same products or equipment. DOE
will analyze and consider the impact on manufacturers of multiple
product/equipment-specific regulatory actions. These factors will be
considered in setting rulemaking priorities, conducting the early
assessment as to whether DOE should proceed with a standards
rulemaking, assessing manufacturer impacts of a particular standard,
and establishing compliance dates for a new or revised standard
that, consistent with any statutory requirements, are appropriately
coordinated with other regulatory actions to mitigate any cumulative
burden.
(2) If the Department determines that a proposed standard would
impose a significant impact on product or equipment manufacturers
within approximately three years of the compliance date of another
DOE standard that imposes significant impacts on the same
manufacturers (or divisions thereof, as appropriate), the Department
will, in addition to evaluating the impact on manufacturers of the
proposed standard, assess the joint impacts of both standards on
manufacturers.
(3) If the Department is directed to establish or revise
standards for products/equipment that are components of other
products/equipment subject to standards, the Department will
consider the interaction between such standards in setting
rulemaking priorities and assessing manufacturer impacts of a
particular standard. The Department will assess, as part of the
engineering and impact analyses, the cost of components subject to
efficiency standards.
(h) Summary of quantitative and qualitative assessments. The
summary of quantitative and qualitative assessments will contain a
description and discussion of uncertainties. Alternative estimates
of impacts, resulting from the different potential scenarios
developed throughout the analysis, will be explicitly presented in
the final analysis results.
(1) Key modeling and analytical tools. In its assessment of the
likely impacts of standards on manufacturers, the Department will
use models that are clear and understandable, feature accessible
calculations, and have clearly explained assumptions. The Department
will also support the development of economic models for price and
volume forecasting. Research required to update key economic data
will be considered.
(2) [Reserved]
15. Principles for the Analysis of Impacts on Consumers
(a) Early consideration of impacts on consumer utility. The
Department will consider at the earliest stages of the development
of a standard whether particular design options will lessen the
utility of the covered products/equipment to the consumer. In
analyzing the impacts of candidate/proposed trial standard levels,
the Department will model consumer behavior and welfare impacts
arising out of these trial standard levels. See also paragraph (c)
of section 6 of this appendix.
(b) Impacts on product/equipment availability. The Department
will determine, based on consideration of information submitted
during the standard development process, whether a proposed standard
is likely to result in the unavailability of any covered product/
equipment type with performance characteristics (including
reliability), features, sizes, capacities, and volumes that are
substantially the same as products/equipment generally available in
the U.S. at the time. DOE will not promulgate a standard if it
concludes that it would result in such unavailability. In
conjunction with the modeling of manufacturer and consumer behavior
as a result of proposed standard levels, the Department will
endeavor to estimate losses to society as a result of foregone
production or unavailability.
(c) Department of Justice review. As required by law, the
Department will solicit the views of the Department of Justice on
any lessening of competition likely to result from the imposition of
a proposed standard and will give the views provided full
consideration in assessing economic justification of a proposed
standard. In addition, DOE may consult with the Department of
Justice at earlier stages in the standards development process to
seek its preliminary views on competitive impacts.
(d) Variation in consumer impacts. The Department will use
regional analysis and sensitivity analysis tools, as appropriate, to
evaluate the potential distribution of impacts of candidate/trial
standard levels among different subgroups of consumers. The
Department will consider impacts on significant segments of
consumers in determining standards levels. Where there are
significant negative impacts on identifiable subgroups, DOE will
consider the efficacy of voluntary approaches as a means to achieve
potential energy savings.
(e) Payback period and first cost. (1) In the assessment of
consumer impacts of standards, the Department will consider life-
cycle cost, payback period, and cost of conserved energy among other
variables to evaluate the savings in operating expenses relative to
increases in purchase price. The Department also performs
sensitivity and scenario analyses when appropriate. The results of
these analyses will be carried throughout the analysis and the
ensuing uncertainty described.
(2) If, in the analysis of consumer impacts, the Department
determines that a candidate/trial standard level would result in a
substantial increase in product/equipment first costs to consumers
or would not pay back such additional first costs through energy
cost savings in less than three years, the Department will assess
the likely impacts of such a standard on low-income households,
product/equipment sales and fuel switching, as appropriate.
16. Consideration of Non-Regulatory Approaches
The Department recognizes that non-regulatory efforts by
manufacturers, utilities, and other interested parties can result in
substantial efficiency improvements. The Department intends to
consider the likely effects of non-regulatory initiatives on
product/equipment energy use, consumer utility and life-cycle costs,
manufacturers, competition, and utilities, as well as the
distribution of these impacts among different regions, consumers,
manufacturers, and utilities. DOE will attempt to base its
assessment on the actual impacts of such initiatives to date, but
also will consider information presented regarding the impacts that
any existing initiative might have in the future. Such information
is likely to include a demonstration of the strong commitment of
manufacturers, distribution channels, utilities, or others to such
non-regulatory efficiency improvements. This information will be
used in assessing the likely incremental impacts of establishing or
revising standards, in assessing--where possible--appropriate
compliance dates for new or revised standards, and in considering
DOE support of non-regulatory initiatives.
17. Cross-Cutting Analytical Assumptions
In selecting values for certain cross-cutting analytical
assumptions, DOE expects to continue relying upon the following
sources and general principles:
(a) Underlying economic assumptions. The appliance standards
analyses will generally
[[Page 42083]]
use the same economic growth and development assumptions that
underlie the most current Annual Energy Outlook (AEO) published by
the Energy Information Administration (EIA).
(b) Analytic time length. The appliance standards analyses will
use two time lengths--30 years and another time length that is
specific to the standard being considered such as the useful
lifetime of the product under consideration. As a sensitivity case,
the analyses will also use a 9-year regulatory timeline in analyzing
the effects of the standard.
(c) Energy price and demand trends. Analyses of the likely
impact of appliance standards on typical users will generally adopt
the mid-range energy price and demand scenario of the EIA's most
current AEO. The sensitivity of such estimated impacts to possible
variations in future energy prices are likely to be examined using
the EIA's high and low energy price scenarios.
(d) Product/equipment-specific energy-efficiency trends, without
updated standards. DOE will model product/equipment-specific energy-
efficiency trends under no standard scenarios.
(e) Price forecasting. DOE will endeavor to use robust price
forecasting techniques in projecting future prices of products.
(f) Private discount rates. For residential and commercial
consumers, ranges of three different real discount rates will be
used. For residential consumers, the mid-range discount rate will
represent DOE's approximation of the average financing cost (or
opportunity costs of reduced savings) experienced by typical
consumers. Sensitivity analyses will be performed using discount
rates reflecting the costs more likely to be experienced by
residential consumers with little or no savings and credit card
financing and consumers with substantial savings. For commercial
users, a mid-range discount rate reflecting DOE's approximation of
the average real rate of return on commercial investment will be
used, with sensitivity analyses being performed using values
indicative of the range of real rates of return likely to be
experienced by typical commercial businesses. For national net
present value calculations, DOE would use the Administration's
approximation of the average real rate of return on private
investment in the U.S. economy. For manufacturer impacts, DOE
typically uses a range of real discount rates which are
representative of the real rates of return experienced by typical
U.S. manufacturers affected by the program.
(g) Social discount rates. Social discount rates as specified in
OMB Circular A-4 will be used in assessing social effects such as
costs and benefits.
(h) Direct and indirect impacts. DOE will endeavor to model and
estimate both direct and indirect costs and impacts resulting from
candidate and proposed trial standard levels.
[FR Doc. 2026-13674 Filed 7-6-26; 8:45 am]
BILLING CODE 6450-01-P